Accumulate Acutaas Chemicals; target of Rs 3773: Prabhudas Lilladher

Prabhudas Lilladher's research report on Acutaas ChemicalsOver the last 5 years, the company has delivered a strong growth track record, with revenue/EBITDA/PAT CAGR of 32%/43%/46%. We expect the growth trajectory to sustain, with revenue/EBITDA/PAT projected to grow at 25%/24%/24% CAGR over FY26–2…

Prabhudas Lilladher's research report on Acutaas Chemicals

Over the last 5 years, the company has delivered a strong growth track record, with revenue/EBITDA/PAT CAGR of 32%/43%/46%. We expect the growth trajectory to sustain, with revenue/EBITDA/PAT projected to grow at 25%/24%/24% CAGR over FY26–28E, led by the ramp-up of the Fermion contract, commercialization of 4 additional CDMO molecules, and increasing contribution from battery and semiconductor chemicals. Supported by strong process chemistry capabilities, backward integration, and expanding presence in high-entry-barrier specialty chemicals, ACUTAAS is well placed to deliver sustained earnings growth. At CMP, the stock trades at 52x FY28E EPS and 38x FY28E EV/EBITDA; we are positive on its growth visibility and improving business mix. However, considering the recent sharp rally in the stock, further upside would be subject to timely execution of projects. Initiate with ‘Accumulate’.

Outlook

We initiate coverage on ACUTAAS with ‘Accumulate’ rating and TP of INR3,773, based on 56x FY28E EPS.

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Acutaas Chemicals - 0107026 - prabhu