Sharekhan has given Buy recommendation for Sumitomo Chemical India with a target price of Rs. 500 in its research report issued on Apr 08, 2022

Sharekhan’s research report on Sumitomo Chemical India

High global crop prices would help Sumitomo Chemical India Ltd (SCIL) to hike prices continuously to pass on elevated input costs. Moreover, the focus on high-margin PGRs/Herbicides and further synergies from Excel Crop Care to drive 411bps margin expansion over FY21-24E. SCIL reported a robust 44% y-o-y growth in its export revenue in 9MFY22. We are optimistic that high growth in this segment to sustain given the CRAMs opportunity from parent and high growth in Latin America. We expect SCIL’s revenue, EBITDA and PAT to clock a 13%/21%/21% CAGR over FY21-24E led by robust rise in in exports (revenue share to reach 28-30% by FY24E) and above-industry growth in Indian markets.

Outlook

We maintain a Buy rating on SCIL with an unchanged PT of Rs. 500 as a massive contract manufacturing opportunity from parent provides superior growth prospects and continue enjoying premium valuation over domestic peers. SCIL is our preferred pick in the agri-input space.

More Info

At 17:30 SUMITOMO CHEMICAL INDIA LIMITE was quoting at Rs 426.00, down Rs 0.70, or 0.16 percent.

It has touched an intraday high of Rs 436.55 and an intraday low of Rs 424.55.

It was trading with volumes of 34,287 shares, compared to its thirty day average of 31,069 shares, an increase of 10.36 percent.

In the previous trading session, the share closed down 0.36 percent or Rs 1.55 at Rs 426.70.

The share touched its 52-week high Rs 459.90 and 52-week low Rs 278.45 on 05 August, 2021 and 12 April, 2021, respectively.

Currently, it is trading 6.9 percent below its 52-week high and 53.76 percent above its 52-week low.

Market capitalisation stands at Rs 21,263.61 crore.

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