KR Choksey has given Buy recommendation for Ami Organics with a target price of Rs. 1229 in its research report issued on May 19, 2022
KR Choksey’s research report on Ami Organics
During Q4FY22, Ami Organics Ltd(AOL) reported revenue of INR 1,435 Mn (+54.47% YoY / +1.70% QoQ). For FY22 topline was up by 52.70% YoY. The growth was driven by Pharma Intermediate business followed by Specialty chemicals post acquisition of facilities from Gujrat Organics (GOL). On operational front EBITDA in Q4FY22 stood at INR 258 Mn (+10.78% YoY) but dipped marginally on QoQ basis by 13.57%, OPM saw a dip of 709bps YoY and 318 bps QoQ to 17.98% in Q4FY22. Margins fell on account of rising input costs. Net Profit in Q4FY22 stood at INR 213 Mn showing an improvement of 38.31% YoY and 9.23% QoQ, with NPM at 14.94%, marginal impact of 173bps on YoY basis and improved 102bps on QoQ basis. EPS during the quarter came at 6.22 against 4.89 in the same quarter last year. The company has declared a final dividend of INR 3 per share.
We apply P/E multiple of 32.5x its FY24E earnings and thus continue to maintain our ‘BUY’ recommendation on the stock with the same target price of INR 1,229.