Buy Archean Chemical Industries; target of Rs 943: KR Choksey

About this update from Archean Chemical Industries Ltd.

KR Choksey's research report on Archean Chemical IndustriesArchean chemical reported lower than expected revenue and profits in Q1FY25. It recorded 25% fall in revenue on sequential basis largely due to loss of two weeks in the shipment movement during the quarter as the company shifted its logistics from Jakhau to Mundra as a regular practice during monsoon and it led to lower volume offtake in the quarter due to shipment challenges • Despite the pressure on revenue, the EBITDA margin improved sequentially to 33.47% in Q1FY25 vs 30.69% in Q4FY24 on account of meaningful shift in power consumption from co-generation plant to grid system and other operational efficiencies • The demand outlook remains steady in the domestic market and continues to improve on the export front while the extent of recovery remains contingent on various external factors.OutlookWe believe, the volume recovery in Industrial salt, meaningful contribution from bromine derivatives and Oren in H2FY25 should lead to material growth on the volume, revenue and profit front for FY25E. We maintain BUY rating with a target price of INR 943 at a P/E multiple of 17.5x on FY26E EPS.For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Archean Chemical Industries - 080824 - kr

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