Galaxy Surfactants - Robust Volume Growth Subject To Macroeconomic Stability: Motilal Oswal

Motilal Oswal Report

Galaxy Surfactants Ltd.'s is one of the leading players in the world of surfactants and specialty care ingredients, exclusively focused on catering to the home and personal care industry.

Nine out of the 10 Indian consumers incorporate Galaxy Surfactants or specialty care products at least once in their daily routine.

Valuation and view – maintain 'Buy'

• The continued focus on research and development (with an annual expenditure of Rs 400-500 million) and increased wallet share from its existing customers should drive volume growth. Margin is also expected to expand gradually.

• We estimate a volume compound annual growth rate of 8% over FY23-26E. This growth is led by robust volumes in the domestic market and a recovery in the specialty care products volumes in developed markets, where indications of growth have already begun to emerge.

• The stock is currently trading at ~25 times FY25E earnings per share of Rs 111.5 and ~15 times FY25E enterprise value/Ebitda. We value the company at 30 times Dec-25E EPS to arrive at a target price of Rs 3,760. We reiterate our 'Buy' rating on the stock.

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