Fineotex Chemical Q1 Results Review- Long Term Remains Intact, With Moderate Growth, Stable Margins: DRChoksey

DRChoksey Research Report

After a strong financial year with highest ever quarterly Ebitda, Fineotex Chemical Ltd. had a relatively soft quarter in terms of revenue growth, but Ebitda margins remain intact at 26%. With multiple triggers coming into play for next year-

1. increasing cotton demand,

2. inorganic international opportunity,

3. expansion of cleaning and hygiene segment,

we believe the company is poised for a bright future ahead.

Currently, the stock is trading at 27 times for FY25E and 20 times FY26E earnings per share. With the successful recent fundraise, we have updated our estimates for the possible dilution and consequently lower our EPS estimate for FY26E by circa 8%.

Given the upcoming triggers and strong growth possibility we maintain our target P/E multiple of 30 times FY26E to arrive at a target price of Rs 529/share (previously 573/share).

Given the 50.7% upside from the current levels we recommend a “Buy” rating on the stock.

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