Buy Sudarshan Chemical Industries, target price Rs 783: HDFC Securities

HDFC Securities has buy call on Sudarshan Chemical Industries Ltd. with a target price of Rs 783. The current market price of Sudarshan Chemical Industries Ltd. is Rs 670.8.

Time period given by analyst is six months when Sudarshan Chemical Industries Ltd. price can reach defined target.
Sudarshan Chemical Industries Ltd., incorporated in the year 1951, is a Mid Cap company (having a market cap of Rs 4672.84 Crore) operating in Chemicals sector.

Sudarshan Chemical Industries Ltd. key Products/Revenue Segments include Inorganic Pigments, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2021.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 474.59 Crore, down -18.02 % from last quarter Total Income of Rs 578.88 Crore and up 34.60 % from last year same quarter Total Income of Rs 352.60 Crore. Company reported net profit after tax of Rs 26.16 Crore in latest quarter.

Investment Rationale
The brokerage feels investors can buy the stock at CMP and add more on declines at Rs. 587 (18x FY23E EPS) for base case target of Rs 734 (22.5x FY23E EPS) and bull case target price of Rs 783 (24x FY23E EPS) over the next two quarters.

Promoter/FII Holdings
Promoters held 42.7 per cent stake in the company as of June 30, 2020, while FIIs held 9 per cent, DIIs 2.5 per cent and public and others 45.8 per cent.