Rossari Biotech

Oct 28, 2023

KR Choksey recommended accumulate rating on Rossari Biotech with a target price of Rs 843 in its research report dated October 27, 2023. Broker Research Accumulate KR Choksey's research report on Rossari Biotech On a consolidated basis, Rossari Biotech reported revenue of INR 4,835 Mn in Q1FY24, up by 13.6% YoY and 17.7% QoQ. This is driven by strong double-digit growth in the Home, Personal Care, and Performance Chemicals (HPPC) segment. For H1FY24, revenue grew 3.9% YoY to INR 8,941 Mn. EBITDA for the quarter grew by 12.4% YoY and 10.1% QoQ to INR 636 Mn, primarily led by higher revenue. EBITDA margin contracted by 15 bps YoY and 92 bps QoQ to 13.1%. For H1FY24, EBITDA improved by 6.2% YoY to INR 1,213 Mn. Net Profit reported at INR 329 Mn for the quarter, higher by 37.8% YoY and 12.8% QoQ. NPM stood at 6.8% (+119 bps YoY/-30 bps QoQ). Net Profit for H1FY24 grew by 18.2% YoY to INR 622 Mn. Outlook We lower our target price to INR 843/share (P/E multiple of 26.0x to FY25E EPS) from INR 982/share, to account for the EPS reduction, and downgrade our rating to ACCUMULATE (upside: 13.0%). Despite top-line momentum, the persistent margin pressure raises near-term concerns. We view current levels as a good opportunity to add to existing positions, with modest upside.