Stocks for 2022: Fell over 30% from highs but this Ashish Kacholia-owned pharma pick is a value buy for New Year

Ami Organics Ltd which made its debut on D-Street on 14 September 2021 with listing day gains of over 50 per cent failed to hold on to the gains and slipped below the Rs 1000 mark in November.

Ace investors Ashish Kacholia who is known to pick multibaggers from the small & midcap space hold 1.35 per cent stake in the pharma company, according to September quarter shareholding data as on BSE.

The stock with a market capitalization of Rs 3500 crore hit a high of Rs 1438 on 22 September, but it failed to hold on to the momentum and fell over 30 per cent to Rs 983 recorded on 28 December.

Technically, the stock is trading above the 30-Days Moving Average but below the 50-DMA, but experts feel that the stock will play catch up in 2022 and aim for a target of Rs 1,354 that translates into an upside of nearly 40 per cent from Rs 983 recorded on 28 December.

“Ami Organics Limited that has a presence in high growing and niche markets is set to continue to post better growth in mid-term. We initiate our coverage on the stock with a BUY rating and a target price of 1,354 per share,” brokerage firm AnandRathi said in a note.

Ami Organics Limited (AMIORG) is an R&D driven manufacturer of speciality chemicals focused on two business segments, mainly pharmaceuticals advance intermediates also known as pharma intermediates and specialty chemicals.

Earlier in December, Ami Organics in its filing to exchanges said, “Company intends to restructure the Ankleshwar production facility and utilize the same for the expansion of pharma intermediate business to support future growth requirement.”
Also Read: This speciality chemical company shares close over 8% higher amid restructuring plan of one its units

The company is one of the major manufacturers of Pharma Intermediates for certain key APIs, including Dolutegravir, Trazodone, Entacapone, Nintedanib and  Rivaroxaban which find application in certain high-growth therapeutic areas, commanding significant market share both in India as well as globally.

During the half-year results, the company has posted a growth of over 50 per cent in its consolidated revenues at Rs 2,354 million (Including Rs 400 million from GOL in H1FY22, H1FY21 numbers doesn’t include GOL numbers,).

The operating margins for the company stood at 21 per cent at Rs 495 million while its PAT margins stood at 13.2 per cent at Rs 312 million, said the note.

The company’s business is backed by strong and diversified product portfolio ably supported by strong R&D and process chemistry skills which enables it to create entry barriersin the chemicals manufacturing industry.

Going ahead, the brokerage firm highlights that the company plans to increase its utilisation levels at its newly acquired facility and further plans to incrementally add capacities to aide growth through launch of new products and increase in volumes in existing products.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)