Buy Sumitomo Chemicals; target of Rs 565: ICICI Direct

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ICICI Direct's research report on Sumitomo Chemicals

Incorporated in 2000, Sumitomo Chemical India (SCI) is present in the three business verticals of agro solutions (ASD), environmental health (EHD) and animal nutrition business (AND). SCI provides solutions for insecticide, herbicide, fungicide, plant growth regulator (PGR) under agro segment. Under animal nutrition, it manufactures methionine for feed additive use • In terms of revenue contribution, insecticide constitutes ~51% while ~19% is from herbicide, 9% from fungicide and 20% from other segments such as PGR, AND & EHD.

Outlook

We retain BUY rating on the back of better growth outlook from outsourcing opportunity of SCC Japan besides stable and enduring business model. We value Sumitomo Chemicals at 45x P/E FY24E EPS to arrive at a target price of Rs 565/share (earlier Rs 520/share).

For all recommendations report, click here

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Sumitomo Chemicals - 120822 - ic