Buy Galaxy Surfactants, target price Rs 3520: Motilal Oswal

Motilal Oswal has buy call on Galaxy Surfactants with a target price of Rs 3520. The current market price of Galaxy Surfactants is Rs 3018.15. Time period given by analyst is one year when Galaxy Surfactants Ltd. price can reach defined target.

Galaxy Surfactants Ltd., incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 10659.29 Crore) operating in Chemicals sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 786.10 Crore, up 15.99 % from last quarter Total Income of Rs 677.74 Crore and up 19.71 % from last year same quarter Total Income of Rs 656.66 Crore. Company reported net profit after tax of Rs 78.68 Crore in latest quarter.

Investment Rationale
The brokerage expects the company to deliver volumes CAGR of ~10% over FY21–24E, higher than the management guidance of ~8%. The stock is trading at 28x FY23E EPS of INR107 and 18x FY23E EV/EBITDA. It values the stock at 33x FY23E EPS to arrive at TP of INR 3,520.

Promoter/FII Holdings
Promoters held 70.9 per cent stake in the company as of March 31, 2021, while FIIs held 3.6 per cent, DIIs 13.2 per cent and public and others 12.3 per cent.