Top 2 chemical stocks to 'accumulate' post Q2 results, as recommended by Nirmal Bang
1 min read . Updated: 31 Oct 2022, 11:00 AM IST
Premium- Nirmal Bang has Accumulate ratings on two chemical stocks - Navin Fluorine International and Anupam Rasayan India
Domestic brokerage and research firm Nirmal Bang has ‘Accumulate’ ratings on two chemical stocks - Navin Fluorine International and Anupam Rasayan India after their respective earnings for the second quarter ended September 2022 of the current fiscal or Q2 FY23.
Chemical stocks to Accumulate as recommended by Nirmal Bang -
Navin Flourine: “We came out positive from the recent management meeting with Navin Fluorine International Ltd (NFIL), wherein the major discussion revolved around the company’s medium to long-term growth prospects, BU-wise growth visibility, new avenues of growth, capex outlook and capital allocation strategy etc," the note stated while maintaining Accumulate rating on Navin Fluorine shares with a target price of ₹4,500 apiece.
The management has maintained that pipeline for CY23 is extremely strong for the CDMO business and should start getting reflected from 4Q FY23, it highlighted.
“Most importantly, around $100 mn CDMO revenue visibility by FY25-end remains unchanged. The share of fluorine-containing small molecules in the innovators’ pipeline is significantly higher at ~45% (vis-àvis 29% share in the novel drug approvals). We believe that NFIL is dealing with 7-8 of these innovators (either directly or indirectly), and a large part of the incremental business can come from existing clients," the brokerage said.
Anupam Rasayan: The brokerage has maintained Accumulate tag on Anupam Rasayan India Ltd (ARIL) after raising target price (TP) a tad to ₹863 per share.
“We have raised FY23E and FY25E EPS estimates by 8.8% and 7.9%, respectively, but there is a cut in EPS of FY24E by 2.7% (as the equity dilution offsets the +ve PAT growth). The new EPS estimates, which include the 6.5% dilution post QIP, are based on the beat in 1HFY23 results and the increase in capex guidance post the recent QIP worth ₹4.97 bn. During the earnings call, the management was upbeat on the future prospects of CSM based on an increase in capex plan, driven by healthy traction in enquiries/orders (especially from Europe) in outsourcing complex synthesis/molecules," it added.
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