Prabhudas Lilladher has given Buy recommendation for Fine Organic Industries with a target price of Rs. 4400 in its research report issued on Jan 05, 2022

Prabhudas Lilladher’s research report on Fine Organic Industries

FINEORG is India’s largest oleochemical based (green) polymer and food additives manufacturer and is amongst top 5-6 successful players globally. It operates at the top end of oleochemicals value chain (limited competition) and has sufficient capacity in place for growth till FY24E (~60% capacity expansion since FY19) to leverage the increasing adoption of green chemicals worldwide. We expect 24% revenue CAGR and 41% earnings CAGR over FY21-24E (20% CAGR over FY20-24E – on pre-covid base) as RoCE expands to 33% (19% in FY21, 32% avg over FY16-20). Net cash balance sheet (Rs 1.5 bn) coupled with strong OCF generation (Rs 6 bn exp. over FY22-24E) will enable self sustained growth. While there have been margin pressures on unprecedented raw material inflation, the long term earnings growth is structural in nature and offer a niche proxy play on consumption oriented industries (food, plastics, cosmetics, pharma, feed nutrition, coatings, rubber etc).

Outlook

We initiate coverage on Fine Organic Industries Ltd (FINEORG) with BUY rating at TP of Rs 4400, 28x FY24E EV/EBITDA (implied PE of 40x FY24E).

More Info on Trent

At 15:26 hrs Fine Organics Industries was quoting at Rs 3,780.50, down Rs 48.95, or 1.28 percent.

It has touched an intraday high of Rs 3,840.00 and an intraday low of Rs 3,763.10.

It was trading with volumes of 570 shares, compared to its thirty day average of 5,701 shares, a decrease of -90.00 percent.

In the previous trading session, the share closed up 1.10 percent or Rs 41.60 at Rs 3,829.45.

The share touched its 52-week high Rs 4,040.00 and 52-week low Rs 2,130.00 on 15 December, 2021 and 19 March, 2021, respectively.

Currently, it is trading 6.42 percent below its 52-week high and 77.49 percent above its 52-week low.

Market capitalisation stands at Rs 11,591.00 crore.

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