ICICI Direct's research report on Sudarshan Chemical
Sudarshan Chemical's Q3FY21 results were higher than I-direct estimates on all fronts. Revenues grew 19.6% YoY to Rs 506.4 crore (I-direct estimate: Rs 464.3 crore) led by 22.1% growth in pigment segment to Rs 477.1 crore amid revival in domestic demand and continuous traction in export markets. EBITDA margins improved 138 bps YoY to 15.7% (I-direct estimate: 15.7%) mainly due to lower other expenditure and partially offset by increase in raw material prices. PAT grew 38.4% YoY to Rs 39.2 crore (I-direct estimate: Rs 34.5 crore), in line with operational performance.
Outlook
We maintain BUY recommendation with a target price of Rs 605 (24x FY23E EPS of Rs 25.2) vs. earlier target price of Rs 550.
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