Ami Organics - Fermi-ON: HDFC Securities

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HDFC Securities Institutional Equities

We upgrade Ami Organics Ltd. to Buy from Add with a target price of Rs 1,600, owing to-

ramp-up in Fermion contract in ensuing quarters,
expansion of its specialty chemicals portfolio with entry into battery chemical manufacturing, and
balance sheet turning net cash of Rs 3.85 billion in Q1 FY25.

The stock is currently trading at 42/28 FY25/26E earnings per share. We expect the Ebitda margin to improve by 508bps from 17.9% in FY24 to ~23% in FY26E, owing to-

an increase in better-margin CDMO contribution to 25% from 12% in FY24 and
a ramp-up in capacity utilisation of speciality chemicals plant and advanced pharmaceutical intermediates units.

We expect Ami Organics’ PAT to grow at a 38% CAGR over FY24-26E, led by a 29% CAGR in Ebitda.

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HDFC Securities Insitutional Equities Ami Organics - Update.pdf

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