Anupam Rasayan India, a specialty chemicals manufacturer, continued its upward trajectory on Monday as its shares rallied 7.85% to reach ₹1,066 apiece. This impressive rise also led the stock to mark a new 52-week high in today's trade.
The company is one of the leading players in India's specialty chemicals industry, specializing in custom synthesis and manufacturing.
In CY22, the company's shares underperformed the market, losing 31% of their value, steadily falling from ₹990 apiece to ₹679.
However, the shares have made a strong comeback in 2023, registering a gain of almost 55.71% so far. Notably, the majority of these gains occurred in March, with a remarkable rally of 34.13%.
The stock experienced a significant surge of 83.36% from its low of ₹577 apiece in February 2023 to reach the current market price of 1,058.
The spike in the stock began after the company delivered a solid performance in the October-December quarter of FY23. Since its Q3 FY23 announcement on January 27, the stock has gained 77% thus far.
Anupam Rasayan is focusing on growing its product portfolio in fluorination chemistry, with a plan to launch 14 molecules over the next 12 to 18 months. It also plans to launch five molecules in Q4 FY23 alone, said domestic brokerage firm KR Choksey in its Q3FY23 result update report, dated February 03.
Additionally, the company has a robust pipeline of LOIs and contracts worth Rs. 2,620 crore, which offers clear revenue visibility for the next five years, it added.
The brokerage highlighted that, unlike other chemical companies, Anupam Rasayan is profiting from the European energy crisis as it has secured two new contracts worth ₹100 crore with a European agrochemical company.
The Indian chemical industry is experiencing a shift in trend as local players are being chosen as preferred manufacturing partners for key products that were earlier made in Europe, it noted.
Moving ahead, the company aims to expand its product portfolio in the pharma and agrochemical segments by manufacturing active ingredients that are currently produced in Japan and Europe, launching new active ingredients, developing key intermediates for new launch active ingredients, and providing import substitutes for "Pharma Key Starting Materials."
Anupam Rasayan has invested ₹100 crore till 9MFY23 out of the total planned capex of ₹170–180 crore in FY23. Further, capex of ₹300 crore and ₹250 crore will be incurred during FY24 and FY25, respectively, said the brokerage.
The company delivered a stable performance in the December quarter despite macro challenges and the shutdown of one of its units.
"We are positive on the company’s long-term growth trajectory on the back of a robust product launch pipeline, especially in high-value fluorination chemistry. We estimate revenue, EBITDA, and PAT CAGR of 32%, 31%, and 35% over FY22–25," said KR Choksey.
Following the company's Q3FY23 performance, the brokerage maintained its “buy” call on the stock with a target price of ₹839 apiece.
Meanwhile, in an exchange filing on March 23, the company said that it had been awarded a letter of intent (LoI) for the next six years from a leading Japanese chemical company, worth ₹984 crore, to supply new age advance intermediate for life science active ingredient.
"We are excited to announce that we will be the primary supplier globally for this new-age, high-value, advance intermediate to the Japanese customer. We are happy to add yet another marquee Japanese multinational in our customer portfolio," said the company's MD, Anand Desai.
7 analysts polled by MintGenie on an average have a 'strong buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.