Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

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

Posted On: 2020-11-18 03:03:14 (Time Zone: Arizona, USA)


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 feedback@equitybulls.com


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. www.equitybulls.com, 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. www.equitybulls.com 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:

CESC Q4FY21 Results Review Report - Loss decline, strong CF make valuation attractive - HDFC Securities

White Goods & Durables - Analysis of pressure cooker market: TTK Prestige is key beneficiary - ICICI Securities

CESC - Good earnings in a challenging environment - ICICI Securities

Somany Ceramics - Walking the talk - ICICI Securities

DB Corp - Rise in newsprint price adds to risk - ICICI Securities

CEAT - Market share ambitions remain strong - ICICI Securities

Consumer Staples & Discretionary - Worm's world view #32: Conversations with paint dealers regarding price hikes - ICICI Securities

Oil & Gas - Oil, gas & spot LNG surge to bring gains for GAIL & OIL - ICICI Securities

Asset Management Companies - Positive trends to support earnings - ICICI Securities

Q4FY21 Result Update - Lemon Tree Hotels - ICICI Direct

Q4FY21 Company Update - Globus Spirits - ICICI Direct

Q4FY21 Result Update - DB Corp - ICICI Direct

Q4FY21 Result Update - Somany Ceramics - ICICI Direct

KEC International: Company Update - Building on diversification - HDFC Securities

LIC Housing Finance - Q4 FY21 Result Update - YES Securities

Entertainment Network Ltd - Beating on solutions business - ICICI Securities

Asahi India Glass - Operating leverage, product mix aid margins - ICICI Securities

Whirlpool of India - Market leading revenue growth - ICICI Securities

Lemon Tree Hotels - Wait for recovery gets longer - ICICI Securities

LIC Housing Finance - Stupendous growth momentum; needs to shore up provisioning and capital buffer - ICICI Securities

Quant Pick - Bank of Baroda - ICICI Direct

Company Update - Amara Raja Batteries - Investor Event Outcome - ICICI Direct

Q4FY21 Result Update - Bhel - ICICI Direct

Q4FY21 Company Update - NRB Bearings - ICICI Direct

CESC - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Entertainment Network India - ICICI Direct

LIC Housing Finance Results Review Report - Balance sheet beefs up; P&L to stay soft - HDFC Securities

Jubilant FoodWorks 4QFY21 Results Review Report - Missing excitement; recovery priced in - HDFC Securities

BFSI Sector Update - MFI Consultation Paper Takeaways - Incrementally positive for NBFC-MFIs - HDFC Securities

Q4FY21 Result Update - JK Cement - ICICI Direct

Q4FY21 Result Update - Minda Industries - ICICI Direct

Stock Tales - Indo Count Industries - ICICI Direct

IPO Review - Krishna Institute of Medical Sciences Ltd - ICICI Direct

Q4FY21 Company Update - Greenply Industries - ICICI Direct

IPO Review - Dodla Dairy Ltd - ICICI Direct

Lemon Tree Hotels - Q4FY21 First Cut - ICICI Direct

Jubilant Foodworks - Q4FY21 investor call takeaways - YES Securities

Greenply Industries Ltd - Q4 FY21 Result Update - YES Securities

Whirlpool of India Ltd - Q4 FY21 Result Update - YES Securities

New India Assurance Report - CoRs disappoint yet again - HDFC Securities

Maintain BUY on Kajaria Ceramics - Performance shines through; outlook bright - HDFC Securities

Retain ADD on Deccan Cement - Volume strong; high other expense dents margin - HDFC Securities

Reiterate ADD on NHPC - Lower generation impacts earnings - HDFC Securities

Maintain BUY on JK Cement - Robust volume and utilisation - HDFC Securities

Maintain BUY on DLF - Gaining traction - HDFC Securities

Maintain BUY on Capacite Infraprojects - Marginal miss - HDFC Securities

DLF Ltd - Q4 FY21 Result Update - YES Securities

Greenply Industries Ltd - Q4FY21 first cut - YES Securities

Coal India - Coal makes a comeback - ICICI Securities

Kajaria Ceramics - Q4FY21 beat largely priced in - ICICI Securities


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

disclaimer copyright © 2005 - 2020