Balaji Amines Crashed To 52-Week Low This Week: Why Analysts Remain Bullish On The Stock

Shares of Balaji Amines have slumped close to 19% since the start of the year. The sentiment around the stock was further dampened after the company’s earnings for the March quarter failed to meet expectations. However, analysts at Nuvama and KRChoksey remain positive on the stock owing to the speciality chemical company’s growth potential.

The Balaji Amines Analysts: The analyst team at Nuvama led by Thakur Ranvir Singh maintained their ‘buy’ rating for the stock with a price target of ₹3,090 – an over 40% from upside from the stock’s last closing price of ₹2,162.25.

Abhishek Agarwal at KRChoksey also maintained the ‘buy’ rating but slashed the price target to ₹3,191 from 3,790.

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The Balaji Amines Thesis: The analysts noted that the company’s performance in the March quarter was disappointing. However, the brokerage firms highlighted that the company faced several macro headwinds that impacted its performance.

ParticularsQ4FY23Q4FY22Q4FY23
Revenue from Operations471.4779585.9
EBITDA93.1197.2127.8
EBITDA margin19.76%25.31%21.81%
Net profits47.4108.762.6
Figures as reported by the company. All figures in ₹ crore.

In its research note, KRChoksey stated that Balaji Amines faced multiple macro headwinds such as pricing pressure, a correction in raw material prices, the unavailability of some key raw materials, and lower utilisation.

Analysts at Nuvama opine that these macro headwinds will continue to impact the company’s operating performance in H1FY24. Taking this into account, the research team cut its estimates for the company’s net profits in FY24 and FY25 by 12% and 10% respectively. However, the brokerage firm is hopeful of a turnaround in the latter half of the current financial year, analysts expect an uptick in volumes and improvement in demand.

Agarwal at KRChoksey also shared the view and said that the brokerage holds a positive view on the company in the medium and long term, owing to the ramp-up of new capacities, normalisation of raw material cost better operating leverage, and strategic investments in products that are substantial
imports or products with limited competition.

Price Action: Balaji Amines’ share price was up 0.08% to trade at ₹2,164 in the late hours of trading on Thursday.

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Posted In: Analyst ColorPrice TargetAnalyst RatingsBalaji AminesKRChokseyNuvama

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