Capex on track, receivables & debt increase, strong earnings in FY18-20E. Over FY20-23, AIL plans to spend | 200-250 crore to significantly expand its nitrile rubber (~15000 T) and synthetic latex (~40000 T) capacity. The H1FY19 balance sheet witnessed some deterioration in working capital as receivables plus inventories have increased by ~| 27 crore. Short-term debt has also increased by ~| 13 crore to | 30.3 crore. Going forward, we expect AIL to deliver accelerated earnings of 14.9%, 14.4% and 14.5% in sales, EBITDA and PAT, respectively, in FY18-20E. AIL may face some margin volatility due to fluctuating prices of its key raw materials like Styrene, Butadiene and Acrylonitrile rubber. The company intends to partly offset this impact via efficient raw material purchase and increase the contribution of high margins exports. Accordingly, we remain positive on AIL. We value the company at 22x FY20E earnings to arrive at a target price of | 540/share. We maintain BUY recommendation on the stock.