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Anand Rathi
Ami Organics (Buy)
Target: ₹1,354
CMP: ₹1,057.7
Ami Organics is one of the major manufacturers of pharma intermediates for certain key APIs, including Dolutegravir, Trazodone, Entacapone, Nintedanib and Rivaroxaban that find application in certain high-growth therapeutic areas, commanding significant market share both in India and globally.
During the half year results the company posted a growth of 51.1 per cent in its consolidated revenues at ₹235.40 crore (including ₹40 crore from GOL in H1FY22, H1FY21 numbers don’t include GOL numbers,). The operating margins stood at 21 per cent at ₹49.50 crore while the PAT margins stood at 13.2 per cent at ₹31.20 crore. 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 barriers in the chemicals manufacturing industry.
Going ahead, the company plans to increase utilisation levels at its newly acquired facility and further to incrementally add capacities to aid growth through launch of new products and increase in volumes in existing products.
With presence in high growing and niche markets Ami Organics Limited is set to continue to post better growth in the mid term. We initiate our coverage on the stock with a Buy rating and a target price of ₹1,354.
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