Galaxy Surfactants Ltd., incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 10785.51 Crore) operating in Chemicals sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 786.10 Crore, up 15.99 % from last quarter Total Income of Rs 677.74 Crore and up 19.71 % from last year same quarter Total Income of Rs 656.66 Crore. Company reported net profit after tax of Rs 78.68 Crore in latest quarter.
Investment Rationale
Net profit continues to grow strong at 25% YoY. The brokerage sees risk of normalisation in gross profit/kg capping the net profit growth in FY22. It remains excited about new green product launches which will help GSL strengthen its market position in specialty care products. It is incrementally seeing tier-1 customers emphasising reduction in carbon footprint; GSL seems prepared for this transition. Despite strong performance in Q4FY21, it broadly retains EPS estimates as it factors gross profit normalisation in FY22. However, it upgrades target price to Rs3,102 (from Rs2,583) as it raises P/E multiple to 30x (from 25x); It downgrades rating to HOLD (from Buy) on the recent rally in stock price and like muted FY22 earnings.
Promoter/FII Holdings
Promoters held 70.9 per cent stake in the company as of March 31, 2021, while FIIs held 3.6 per cent, DIIs 13.2 per cent and public and other 12.3 per cent.
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