Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

BUY on Galaxy Surfactants - Highest volumes in a quarter - HDFC Securities

Posted On: 2020-11-18 03:03:14

Mr. Nilesh Ghuge & Mr. Harshad Katkar, Institutional Research Analyst, HDFC Securities

Our BUY recommendation on GALSURF with a price target of INR 2,265 is premised on (1) stickiness of business as 55% of the revenue mix comes from MNCs, (2) stable EBITDA margin at >12% since fluctuations in raw material costs (RMC) are easily passed on to customers, and (3) strong return ratios (RoE/RoIC of 24/20% in FY22E). 2Q EBITDA/APAT was 9/21% higher than estimates due to a 7% rise in sales and higher-than-anticipated other income.

Demand kicking in: 2Q revenue grew by 18/11% QoQ/YoY to INR 7bn, mainly due to a 22/10% QoQ/YoY growth in overall volumes. Demand has recovered well for both segments: Performance Surfactants (+15% YoY) and Speciality Care (+2% YoY).

Margins: Gross margin jumped by 211/305bps QoQ/YoY to 36.3% on the back of improving share of specialities, new products mix and higher capacity utilisations. EBITDAM grew 201/334bps QoQ/YoY to 16.9% owing to lower opex as a result of curtailed travel, fair and exhibition expenses.

Highest volumes ever: Total volumes grew by 22/10% QoQ/YoY to 63kT, owing to 13/15% QoQ/YoY growth in Performance Surfactants (66% of volume mix) volumes to 41kT and 39/2% QoQ/YoY growth in Speciality Care volumes to 22kT. Growth was driven by both the segments across geographies in 2Q. While India has made a strong comeback (+27% YoY volume growth), the momentum remains intact in AMET, which continues to grow ahead of the market (6% YoY). Rest of the World markets, too, are recovering sequentially.

Concall takeaways: Capex of INR 1.5bn to be spent on two major projects: the multi-purpose plant at Tarapur and expansion of the speciality plant at Jhagadia. Both these projects would be commissioned by 1QFY22. Capex guidance for FY22 at INR 1.3-1.5bn.

Change in estimates: We raise our FY21/22 EPS estimates by 8.7/3.7% to INR 78.0/93.7 to account better-than-anticipated performance in the quarter.

DCF-based valuation: Price target of INR 2,265 is based on Sept-22E cash flows (WACC 10%, Terminal growth 3.0%). The stock is trading at 19.8x FY22E EPS.

Shares of Galaxy Surfactants Ltd was last trading in BSE at Rs.1921.35 as compared to the previous close of Rs. 1842. The total number of shares traded during the day was 11483 in over 2370 trades.

The stock hit an intraday high of Rs. 1986.4 and intraday low of 1823. The net turnover during the day was Rs. 21927046.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

What do brokerages say on Burger King India Limited's IPO?

The Phoenix Mills - Potential fund infusion may usher in growth - ICICI Securities

Godrej Agrovet - Beneficiary of 60% increase in palm oil prices - ICICI Securities

Automobiles (wholesale) - Wholesale dispatches rise amidst modest retail trends - ICICI Securities

Oil & Gas - Sector Update - Dec 2020 - ICICI Direct

Phoenix Mills (Buy): Asset monetisation at favourable terms... - ICICI Direct

Aditya Makharia's views on November Auto Sales Number for November 2020 - HDFC Securities

Burger King India - IPO Review - ICICI Direct

Quant Pick - LIC Housing Finance - ICICI Direct

Tech Mahindra - Analyst Meet Update - ICICI Direct

Gladiator Stocks - Crompton Greaves Consumer Electricals - ICICI Direct

Derivatives Monthly Outlook - Nifty support at 12800 for ongoing momentum...

Quant Pick - Sun Pharmaceuticals - ICICI Direct

Monetary Policy - Expectation from YES Securities

Sector Update on Asset Management Companies - Subdued but improvement expected - HDFC Securities

Pre Monetary Policy View - Dec, 2020 - Lakshmi Iyer, President and CIO (Debt) & Head Products, Kotak Mutual Fund

Maintain REDUCE on Siemens - Smart recovery priced in - HDFC Securities

Banking Sector Credit Trends - Growth continues to moderate - HDFC Securities

Q2 FY21 GDP: Light at the end of the tunnel - YES Securities

Siemens - Q4 FY20 Result Update - YES Securities

Super action in Home Loans - SBIN, ICICIBC, AXSB, HDFC and LICHF gaining share - YES Securities

Polymer price tracker - Dec 1, 2020 - PVC prices continue to tread higher - ICICI Securities

Bajaj Finance - Company Update - Dec 2020 - ICICI Direct

Siemens Ltd - Healthy revival in orders and margins - ICICI Securities

Covid Recovery Pulse - Nov 30, 2020 - Festive positivity continues in auto retails, e-way bill generation improves...

Derivatives Weekly View (November 27): Momentum expected to continue in broader markets with Nifty support at 12800...

Derivatives Strategy - Positional Option - ICICI Direct

Preview on RBI Monetary Policy - December 2020 - Shanti Ekambaram, Group President - Consumer Banking, Kotak Mahindra Bank

10 things you should know about Burger King India Limited

Views of HDFC Securities and Acuité Ratings & Research on Q2FY21 GDP Numbers

Rollover Report for November 2020 - December 2020: Angel Broking

Initiating Coverage on Godrej Properties - The housing factory - HDFC Securities

Burger King IPO - Angel Broking

Rollover Analysis - Record foreign inflows pushes Nifty to 13k - YES Securities

Ceramic tiles industry - Market share gains sustain for top branded players - ICICI Securities

Gas sector - CGD: Competition to hit margins, volumes and lead to derating - ICICI Securities

Cement - Prices resilient in Q3; consensus upgrades to continue - ICICI Securities

Specialty chemicals - Price trend in Sep-20 - ICICI Securities

Timken India - Q2FY21 Company Update - ICICI Direct

Upgrade in target price of IDFC First Bank - Angel Broking

Laurus Labs stake acquisition in Richore Lifesciences - Angel Broking

Shares of Lakshmi Vilas Bank (LVB) suspended from trading - Angel Broking

Initiating Coverage on Sundram Fasteners - Fastening growth - HDFC Securities

Astral Poly Technik - Scalability to further improve with storage tanks foray - ICICI Securities

Vardhman Special Steel - Q2FY21 Company Update - ICICI Direct

Initiating Coverage - Advanced Enzyme Technologies - ICICI Direct

L&T - Secures Large Contract - Nov 25, 2020 - Angel Broking

Alembic Pharmaceuticals - Tentative Approval for JV - Angel Broking

Drug launch by Lupin - Tacrolimus Capsules - Angel Broking

Gujarat Gas - Nov 25, 2020 - Angel Broking

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019