KR Choksey's research report on Balaji Amines
During the quarter, Balaji Amines Ltd reported robust revenue of INR 7,790 Mn (+88% YoY / +37.80% QoQ). Such robust performance was mainly driven higher realisations from Amines & specialty chemical segment (+77.41% YoY / +29.68% QoQ), followed by growth in Hotel division (+50% YoY). On operational front EBITDA in Q4FY22 stood at INR 1,970 Mn (+52.86% YoY / +24.12% QoQ), OPM got hit by 584bps YoY and 281 bps QoQ to 25.29% in Q4FY22. Margins fell on account of rising input costs. Net Profit in Q4FY22 stood at INR 1,308 Mn showing an improvement of 47.34% on YoY basis and 28.79% on QoQ basis, with NPM at 16.80% (-465 bps YoY / -119 bps QoQ). Higher taxes dented the margins during the quarter. EPS during the quarter came at 33.56 against 26.08 in the same quarter last year. The company recommended a final dividend of INR 6 per share during the quarter.
Outlook
We maintain ‘BUY’ recommendation and apply P/E multiple of 23.5x to its FY24E earnings. We expect moderation in our estimated margins and hence we have reduced our estimated FY24 EPS slightly by 9%, with revised target price of INR 4,313 per share (earlier 5,674).
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