Balaji Amines Q1 Results Review - Lack Of Demand In Agrochem Impacted The Quarterly Performance: DRChoksey

DRChoksey Report

Balaji Amines Ltd. missed our revenue estimate significantly due to a steep fall in the price realization. The Ebitda missed our estimates primarily due to a lower-than-expected revenue and higher-than-expected operating expenses.

We believe the pharmaceutical market is showing positive momentum, which bodes well for future growth prospects. While the agrochemical market has experienced some softness in Q1 FY25, we expect conditions to stabilize and see improvements in the coming quarters.

We lower our FY25E/FY26E earning per share by 5.4% and 2.8%, respectively due to a continued decline in price realization. Currently, the stock is trading at price to earning multiples of 24.6 times and 18.6 times, based on FY25E/FY26E earning per share, respectively.

We assign a price to earning multiple of 21.5 times (maintained) on FY26E earning per share of Rs 119.5 (previously: Rs 122.9) to arrive at a target price of Rs 2,569/share.

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