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ICICI Securities Report
Galaxy Surfactants Ltd.'s Q4 FY24 Ebitda/kg stood at Rs 16.9, down 27.2% YoY, was hurt from higher freight cost and lower volumes due to the Red Sea issue. The company guides for volume growth of 6–8% in FY25 with an upside bias, as Africa, Middle East and Turkey and rest of world may possibly contribute more, should the disturbances cease to escalate and/or dissipate.
However, Galaxy Surfactants has increased its Ebitda/kg guidance by Rs 1 to Rs 20.5–21.5/kg - we anticipated this and have penned it down in our earlier note.
We were concerned about volumes moderating; however, Galaxy Surfactants appears quite confident about sustaining it.
We raise our FY25E/26E EPS by ~3% each, baking in higher other income. Our revised target price is now Rs 2,520 (from Rs 2,440), valuing Galaxy Surfactants at a PE multiple of 22 times FY26E EPS (unchanged). Maintain Hold.
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