Rossari Biotech Q1 Results Review - Steady Performance: ICICI Securities

ICICI Securities Report

Rossari Biotech Ltd.'s Q1 FY25 HPPC revenue growth (+21% YoY) was led by both agro and non-agro segments, including institutional business. Textile segment revenue grew by a healthy 21% YoY driven by strong off-take in volumes, but animal health and nutrition continues to struggle with revenue decline of 5.3% YoY.

Its gross profit margin improved by 190 basis points QoQ, but Ebitda margin dipped 20bp QoQ to 13.3%, restricting Ebitda growth to just 12.4%.

Rossari has been investing in manpower which may continue for another two years as it expands businesses. Its other expenses have also grown due to higher freight, travel and maintenance costs.

We keep our EPS estimates unchanged, but increase our target price to Rs 885 (versus Rs 810) as we increase price/earnings multiple to 25 times (versus 23 times). Maintain Add.

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