Archean Chemical Q1 Review - Logistic Issues Poses Challenge; Demand Scenario Remains Healthy: DRChoksey

DRChoksey Research Report

Archean Chemical Industries Ltd. remains on track to launch its bromine derivative products such as Clear Brine Fluids, PTA Synthesis, and specialty products in the second half of fiscal year 2025 (H2 FY25).

Concurrently, the recent acquisition of Oren Hydrocarbon is expected to become operational from H2 FY25E, with management aiming to achieve revenue exceeding Rs 2,000 million from this business.

We believe the downward trend in bromine prices has been arrested and should continue to improve. The volume recovery in industrial salt, supported by fixed contracts with customers, is expected to offset the underperformance of the first quarter and contribute to healthy full-year growth.

As the contribution of non-commodity revenue increases in the second half of FY25E and throughout FY26E, there should be a probable re-rating case for this counter.

We maintain Buy rating with a projected 34%/44% revenue/net profit compound annual growth rate during FY24-FY26E, driven by volume recovery in existing products and uptake in new derivative products.

We maintain the target price of Rs 943 valuing the stock at a price/earning of 17.5 times on FY26E earnings per share.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.