Add Fine Organic Industries, target price Rs 5157: HDFC Securities

HDFC Securities has add call on Fine Organic Industries with a target price of Rs 5157. The current market price of Fine Organic Industries is Rs 4777.7.

Fine Organic Industries., incorporated in the year 2002, is a Mid Cap company (having a market cap of Rs 14642.59 Crore) operating in Chemicals sector.

Fine Organic Industries key Products/Revenue Segments include Speciality Chemicals, Scrap and Others for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 774.70 Crore, down -17.46 % from last quarter Total Income of Rs 938.52 Crore and up 64.83 % from last year same quarter Total Income of Rs 469.98 Crore. Company has reported net profit after tax of Rs 106.98 Crore in latest quarter.

The company’s top management includes Mr.Mukesh Maganlal Shah, Mrs.Pratima Madhukar Umarji, Mr.Parthasarathi Thiruvengadam, Mr.Mahesh Pansukhlal Sarda, Mr.Kaushik Dwarkadas Shah, Mr.Prakash Krishnaji Apte, Mr.Bimal Mukesh Shah, Mr.Tushar Ramesh Shah, Mr.Jayen Ramesh Shah, Mr.Nikhil Dattatraya Kamat. Company has B Y & Associates as its auditors. As on 31-12-2022, the company has a total of 3 Crore shares outstanding.

Investment Rationale
The brokerage's ADD recommendation on Fine Organics with a TP of INR 5,157 is premised on leadership in oleo-chemical-based additives in the domestic and global markets with a loyal customer base; unique business model with high entry barriers; diversified product portfolio; and pricing power. Q3 EBITDA/APAT were 19/28% below our estimates, owing to higher-than[1]expected raw material costs, higher-than-expected operating expenses, and higher-than-expected tax outgo.

Promoter/FII Holdings
Promoters held 75 per cent stake in the company as of 31-Dec-2022, while FIIs owned 5.91 per cent, DIIs 11.51 per cent.