Sudarshan Chemical - Giant Leap Towards Becoming A Global Leader In Pigments: Dolat Capital

Dolat Capital Report

Sudarshan Chemical Industries Ltd. has secured a definitive agreement to acquire the Germany based Heubach Group for a total consideration of €127.5 million (Rs 11.8 billion) on a debt-free basis, in a combination of an asset and share deal.

Cash infusion of ~Rs 9.25 billion (€100 million) for working capital, restructuring and meeting regulatory requirements, would be additional. Sudarshan Chemical is one of the most profitable pigment companies globally, with low cost manufacturing expertise and superior working capital management, which along with other synergies should help drive improved profitability for the unified entity.

We remain positive on Sudarshan Chemical and retain our estimates, projecting Heubach's operating profits separately for FY26/FY27E based on limited financial disclosures, thus far.

We view this acquisition as a positive step for Sudarshan Chemical, propelling the company to become the second-largest pigment player globally and expect it to be value accretive over the medium to long term, as the synergies unfold.

We arrive at SoTP-based target price of Rs 1330 (Mar’26) for the combined entity versus Rs 1105, and maintain our ‘Buy’ rating.

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