CMP : Rs 423
Shining bright
We initiate viewpoint coverage on Sudarshan Chemical Industries Limited (SCIL) with a Positive view and expect an upside of 18-20%.
The company is likely to deliver healthy revenue, EBITDA and earnings CAGR of 14.1%, 20.8% and 28.8%, respectively, over FY2019-FY2022E.
SCIL is the fourth-largest player globally in the colour pigment industry; Capex plan of Rs. 1,000 crore over the next 4-5 years will add to another Rs. 3,500-4,000 crore to revenue in the next five years, almost 3x its current revenue size.
Further, exit of two global peers from the space coupled with disruption in China would provide long runway for growth for the coming years.