Balaji Amines tumbles over 10%; here’s why

Balaji Amines share price: Shares of Balaji Amines (NSE: BALAMINES) fell over 10 per cent on NSE on May 22, after the company’s five independent directors and Chief Financial Officer (CFO) resigned from their post on May 20, 2023. At closing, Balaji Amines' scrip stood at Rs 2,185 on the NSE.

“Mr. Naveena Thammishetty Chandra, Mr. Kashinath Revappa Dhole, Mr. Satyanarayana Murthy Chavali, Mr. Amarender Reddy Minupuri and Mrs. Vimala Behram Madon has resigned as Independent Directors of the Company from the closing hours on 20th May, 2023 and Mr. Hemanth Reddy Gaddam have also resigned as Whole-time Director & CFO of the Company with effect from closing hours on 20th May 2023 to focus on subsidiary Company, Balaji Speciality Chemicals Limited,” the filing read.

According to the company’s regulatory filing, Hemanth Reddy Gaddam has resigned from his post as a Wholetime Director and CFO to focus on the subsidiary company, Balaji Speciality Chemicals Limited as Director.

For the March quarter, the earnings release showed that the specialty chemical company registered a consolidated profit after tax (PAT) at Rs 405.68 crore for Q4FY23 against Rs 417.9 crore a year ago, which is a decline of 2.9 per cent. Balaji Amines' earnings before interest, taxes, depreciation, and amortisation (EBITDA) were down 2 per cent to Rs 624.36 crore as compared to Rs 637.39 crore a year ago. The company’s revenue from operations for the March quarter stood at Rs 476.9 crore, as compared to Rs 785.41 crore a year ago.

The company’s margin stood at 26.34 per cent against 27.27 per cent year-on-year (YoY).

“The fall in the margins was primarily on account of degrowth in Pharma active pharmaceutical ingredients (API), and Agro sector. We believe the performance of the company will improve gradually in the coming months, we anticipate a return to growth & margin levels similar to those achieved before the onset of the COVID-19 pandemic in due course, which we think is sustainable,” said D. Ram Reddy, Managing Director,” said D. Ram Reddy, Managing Director.

Edelweiss Wealth Research has given a ‘buy’ call on Balaji Amines for a target price of Rs 4,250 apiece.

“We expect Balaji Amines earnings to register robust 22 per centCAGR over FY23–25e owing to a strong pipeline of capacity additions under Phase II greenfield expansion plans and ramp-up of capacities added under Phase I,” the brokerage said.

"After registering the top of 3844 during the SEP 2022, since then the said counter has nose-dived resulting in 51 per cent cut in price. At the current juncture, it is trading below all key moving averages, which is a matter of concern and the reason for its weakness. One should avoid fresh longs and wait and watch," said Jigar S Patel - Senior Manager - Technical Research Analyst, Anand Rathi Shares and Stock Brokers.

Balaji Amines' share price history

On a year-to-date (YTD) basis, Balaji Amines stock has fallen over 22 per cent compared to Nifty50’s rise of 0.60 per cent. On a six-month basis, the stock declined over 29 per cent against Nifty50’s rise of over 0.34 per cent.

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