*Sanghi Industries Q4FY21 result update: “Sustainable Approach” Now Getting-into ‘Habit & Intent’. Maintain BUY*
• Sanghi Industries once again reported an unexpected and truly robust set of operating numbers.
• Volumes were 10% better; blended realisations 1% higher and opex/tonne 6% lower. EBITDA beats us by 35%. EBITDA/tonne beats us by 23% at Rs1,252.
• Trial runs of the new capex is now commissioned. Commercial production to be announced in phases as and when the technical and performance guarantees are met
• It was categorically said that the company has significant head room even on the existing capacity and hence it won’t rush to announce commercial production of new unit.
• Given directionally improving and sustainable better performance for many quarters in a row – we upgrade our target multiple to 9x.
• On FY23, it trades at US$ 65 EV/tonne and at target it will be at US$ 80. We maintain BUY with PO of Rs80.