KR Choksey has given Buy recommendation for Balaji Amines with a target price of Rs. 5674 in its research report issued on Feb 04, 2022

KR Choksey’s research report on Balaji Amines

During the quarter, Balaji Amines Ltd reported revenue of INR 5,649 Mn (+44.07% YoY / +7.46% QoQ). Such robust performance was mainly driven higher realisations from Amines & specialty chemical segment (+42.39% YoY / +8.72% QoQ), followed by growth in Hotel division (+103.57% YoY / +54.05% QoQ). On operational front EBITDA in Q3FY22 stood at INR 1,587 Mn (+35.33% YoY / +20.99% QoQ), OPM got hit by 182bps YoY, but improved 314 bps QoQ to 28.10% in Q3FY22. Margins fell on account of rising input costs. Net Profit in Q3FY22 stood at INR 1,016 Mn showing an improvement of 28.77% on YoY basis and 15.32% on QoQ basis, with NPM at 17.99% (-214 bps YoY / +123 bps QoQ). Higher taxes dented the margins during the quarter. EPS during the quarter came at 27.64 against 23.14 in the same quarter last year.

Outlook

We maintain ‘BUY’ recommendation as we remain optimistic about the company’s growth prospects and apply P/E multiple of 28.4x to its FY24E earnings, which yields a target price of INR 5,674 per share (unchanged).

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