KR Choksey has given Buy recommendation for Ami Organicss with a target price of Rs. 1229 in its research report issued on Aug 12, 2022

KR Choksey’s research report on Ami Organics

During Q1FY23, Ami Organics Ltd reported Revenue of INR 1,310 Mn (+15.87% YoY / -8.71% QoQ). The export market and more specifically innovative businesses, were responsible for such growth. On operational front EBITDA in Q1FY23 stood at INR 229 Mn (+38.67% YoY) but dipped marginally on QoQ basis by 11.25%, OPM improved by 288 bps YoY and was flat QoQ at 17.46% in Q1FY23. Higher energy prices and reduced EBITDA from the speciality chemicals sector weighed on the EBITDA margins. Net Profit in Q1FY23 stood at INR 149 Mn showing an improvement of 8.76% YoY and saw a dip of 30% QoQ, mainly due to lower tax accountability in Q4FY22. NPM came at 11.37%, marginal impact of 74bps on YoY basis and 347bps on QoQ basis. EPS during the quarter came at INR 4.08 vs INR4 .36 in the same period last year.

Outlook

At a CMP of INR 1,029 AOL is trading at a P/E multiple of 36.26x/27.22x its FY23E/24E earnings. 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.

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