Sell Alkyl Amines Chemicals, target price Rs 2375: HDFC Securities

HDFC Securities has sell call on Alkyl Amines Chemicals Ltd. with a target price of Rs 2375. The current market price of Alkyl Amines Chemicals Ltd. is Rs 2639.8. Time period given by analyst is year when Alkyl Amines Chemicals Ltd. price can reach defined target.

Alkyl Amines Chemicals Ltd., incorporated in the year 1979, is a Small Cap company (having a market cap of Rs 13502.53 Crore) operating in Chemicals sector.

Alkyl Amines Chemicals Ltd. key Products/Revenue Segments include Amine Derivatives, Speciality Chemicals, Other Operating Revenue, Export Incentives, Scrap, Gases Industrial for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company has reported a Standalone Total Income of Rs 429.06 Crore, up 12.55 % from last quarter Total Income of Rs 381.23 Crore and up 11.86 % from last year same quarter Total Income of Rs 383.58 Crore. Company has reported net profit after tax of Rs 46.42 Crore in latest quarter.


Investment Rationale
The brokerage maintains SELL on Alkyl Amines with a price target of INR 2,375 (WACC 11%, terminal growth 5%). The stock is currently trading at ~38x FY24E EPS. It believes that the current valuation already factors in positives from the potential volume growth, post doubling of the acetonitrile plant capacity and ~40% additional capacities of the aliphatic amines plant. The rising raw material prices are looking as a dampener and can continue to put pressure on the margins in the near term. EBITDA/APAT were 16/7% above estimates, owing to a 10% rise in sales, lower-than-expected opex, offset by higher-thanexpected depreciation and tax outgo.


Promoter/FII Holdings
Promoters held 72.03 per cent stake in the company as of 31-Mar-2022, while FIIs owned 2.22 per cent, DIIs 1.05 per cent.