HDFC Securities is bullish on Alkyl Amines has recommended buy rating on the stock with a target price of Rs 3355 in its research report dated August 17, 2020.
HDFC Securities' research report on Alkyl Amines
1Q EBITDA/APAT was 95%/2.2x above estimates, owing to the lower-than-anticipated impact of COVID-19 on sales volumes and higher-than-anticipated margins. Margins were largely driven by three products, viz. pharma grade-Acetonitrile, DMA-HCL and Isopropyl amine.
Outlook
Our BUY recommendation on AACL with a TP of INR 3,355 is premised on (1) robust demand from pharmaceutical and agrochemical customers that form ~70% of AACL’s revenue mix, (2) rising domestic market share in Methyl Amines, (3) impending capacity expansion for (high-margin) Acetonitrile, and (4) production linked incentive scheme that provides the right tailwinds for long-term volume growth.
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