Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    

| More

Subscribe to Rossari Biotech IPO - Angel Broking

Posted On: 2020-07-13 05:18:47

Mr. Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd

Rossari Biotech is one of the leading specialty chemicals manufacturing companies in India providing customized solutions to specific industrial and production requirements of the customers. It caters to the FMCG, apparel, and poultry & animal feed industries which contributed 46.8%, 43.7% and 9.5% respectively to F.Y.20 revenue.

Positives: (1) It is the largest textile specialty chemical manufacturer in India. (2) It has experienced promoters along with strong management team. (3) Company also has proven track record of robust financial performance. (4) Surge in home, personal care and performance chemicals (sanitizers, cleaning products) demand due to covid-19. (5) Doubling of capacity to 252,500 MTPA by F.Y.21 end from 120,000 MTPA as on F.Y.20 end. Post the increase in capacity, Company will have to incur just maintenance capital expenditure for the next 3-4 years. (6) Only 10% of sales are dependent on imported raw material, of which less than 5% comes from China.

Investment concerns: (1) Slowdown in demand especially from textile industry. (2) Revenue is dependent on top 5 customers which contributed 43.9% of revenue for F.Y.19-20. (3) Delay in addition of new capacity or lower utilization ratio of new capacity to be added than expectation (4) Company is not able to maintain its ROE, ROCE, working capital days and EBIDTA margins.

Outlook & Valuation: At the upper end of the price band, Rossari demands PE multiple of 32.1x F.Y.20 fully diluted EPS. None of the listed chemical companies has the same business as Rossari. Its specialty chemical peers such as Galaxy Surfactants, Fine Organics, Aarti industries, Atul and Vinati Organics are currently trading at F.Y.2020 P/E multiples of 24.0x, 36.6x, 30.5x, 20.6x and 30.9x respectively. We believe Rossari will command premium over most of its chemical peers as it is net debt free as well as it has better asset turnover, working capital days, ROE and ROCE better than most of its peers. In the last three years Rossari have reported 32% and 66% revenue and PAT CAGR due to the strong promoter and management team. As we are positive on the future outlook for the industry as well as the company, we would recommend to "Subscribe" to the issue.

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:

Auto Sales Numbers - July 2020 - Acuité Ratings & Research

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

Mahindra Logistics - Q1FY21 Result Update - ICICI Securities

RBI monetary policy - Views from Mr Mandar Pitale - Head, Treasury, SBM Bank India

Phoenix Mills - Q1FY21 Result Update - ICICI Securities

Alkem Laboratories - Gladiator Stocks - ICICI Securities

Ajanta Pharmaceuticals - Q1FY21 Result Update - ICICI Securities

Torrent Power - Quant Pick - ICICI Securities

Security & Intelligence Services - Q1FY21 Company Update - ICICI Securities

Torrent Pharmaceuticals - Q1FY21 Result Update - ICICI Securities

Covid Recovery Pulse - Average daily auto registrations, E-Way bill generation shows recovery signs - ICICI Securities

Bharti Airtel - Q1FY21 Result Update - ICICI Securities

Sagar Cement - Q1FY21 Result Update - ICICI Securities

Dabur India - Q1FY21 Result Update - ICICI Securities

Mastek Ltd - Q1FY21 Company Update - ICICI Securities

Dr Reddy's Laboratories - Q1FY21 Result Update - ICICI Securities

Kewal Kiran Clothing - Company Update - ICICI Securities

Maruti Suzuki India - Q1FY21 Result Update - ICICI Securities

State Bank of India - Collection efficiency trends allude to lower asset vulnerability - ICICI Securities

SRF Limited - Packaging film margin zooms - ICICI Securities

Karur Vysya Bank - Earnings improve, but concerns persist - ICICI Securities

Core Sector Output & Fiscal Deficit: Acuité Ratings & Research

Maintain ADD on Colgate Palmolive - Toothpaste returning to growth, beat in the margin - HDFC Securities

Pre-Monetary Policy View - Lakshmi Iyer, Chief Investment Officer - Debt & Head Products, Kotak Mahindra Asset Management Company

SBI - 1QFY21 - Angel Broking

State Bank of India - Q1FY21 Results - YES SECURITIES

Maintain BUY on CDSL - Market share gain impressive - HDFC Securities

REDUCE on RBL Bank - Near-term pain inevitable - HDFC Securities

Maintain BUY on Orient Cement - Healthy performance despite sharp volume decline - HDFC Securities

Pre-Monetary Policy View - Sudhakar Shanbhag, CIO, Kotak Mahindra Life Insurance Company Limited

Maintain BUY on Maruti Suzuki - Improving outlook - HDFC Securities

Maintain REDUCE on Dr. Reddy's Labs - Strong beat, positives in the price - HDFC Securities

Reliance Industries - 1QFY21 - Angel Broking

ADD on Interglobe Aviation - Delayed recovery - HDFC Securities

Views on Reliance Industries Q1FY21 Results: Mr. Deepak Jasani, Head Retail Research, HDFC Securities

HDFC Ltd - 1QFY21 - Angel Broking

Bharti Airtel - 1QFY21 - Angel Broking

Loan Moratorium & Impact on Banks & NBFCs - Acuité Ratings & Research

Maintain REDUCE on Hexaware Technologies - Protracted recovery path - HDFC Securities

ADD on IndusInd Bank - Equity raise an additional positive - HDFC Securities

Maintain ADD on Multi Commodity Exchange - Strong recovery in volume - HDFC Securities

Maintain REDUCE on Nestle India - Muted 2Q; hit by supply disruptions - HDFC Securities

Maintain BUY on Tech Mahindra - Recovery on the cards - HDFC Securities

Maintain BUY on UltraTech Cement - Well rounded performance! - HDFC Securities

Maintain ADD on United Spirits - Weak show; gradual recovery expected - HDFC Securities

Greenlam Industries - Exports continue to drive outperformance - ICICI Securities

InterGlobe Aviation - No qualms on survival is the investment thesis - ICICI Securities

Thermax - Tempered by global macro challenges - ICICI Securities

Kewal Kiran Clothing - Strong balance sheet to cushion downside - ICICI Securities

CEAT - Tight cost control supports performance - ICICI Securities

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

disclaimer copyright © 2005 - 2019