Ace investor Ashish Kacholia-backed speciality chemical company – AMI Organics shares have the potential to grow by 14 per cent on the robust business outlook, a domestic brokerage firm Hem Securities said in its report while recommending to Buy stance on the stock with target of Rs 1100.

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AMI Organics has crossed a milestone of Rs 500 crore sales in FY22. The growth was driven by the impressive 32 per cent YoY growth in the Pharma Intermediate business coupled with the multi-time expansion of the specialty chemicals business, the domestic brokerage said.

Ashish Kacholia, who is also fondly called as Big Whale of the Indian stock market, holds 776,474 equity shares, which translates into over a 2 per cent stake in AMI Organics, as per the latest shareholding pattern of the company available on the exchanges.

Hem Securities said, “The management remains committed to a 25 percent CAGR growth in the top line for the medium term. Incremental demand for pharma intermediates for the next 12 months is well supported by its USFDA-approved plant in Sachin, which is running at 65 percent utilisation.”

The management is also hopeful about more capacity getting freed (7-10 percent capacity addition) as the company shifts to continuous flow chemistry. Further, the Ankleshwar facility expansion would enhance the capacity of its pharma intermediates business, Hem Securities added.

Currently, the stock is trading at a premium multiple of 28x FY24E, compared to the sector. This however is justified, given the higher than-industry/molecule growth, which is largely contributed by new products, according to the brokerage.

The stock on Friday closed almost 4 per cent higher to Rs 965 per share levels as compared to 0.09 per cent fall in the S&P BSE Sensex. The counter in the last 5 sessions has surged over 11 per cent as against flat with positive bias BSE Sensex.