This newly listed specialty chemical stock gets over 37 percent upside target from Anand Rathi

29 Dec , 2021 By : Kanchan Joshi

Ami Organics is one of the major manufacturers of Pharma Intermediates for certain key APIs, including Dolutegravir, Trazodone, Entacapone, Nintedanib and Rivaroxaban which find application in certain high-growth therapeutic areas, commanding significant market share both in India and globally.

With the presence in high growing and niche markets, Ami Organics Limited is set to continue to post better growth in mid term, as per brokerage house Anand Rathi. It has initiated coverage on the specialty chemical stock with a Buy rating and a target price of Rs1,354 per share.

“Going ahead the company plans to increase its utilisation levels at its newly acquired facility and further plans to incrementally add capacities to aide growth through launch of new products and increase in volumes in existing products," the brokerage note stated.

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 barriersin the chemicals manufacturing industry, Anand Rathi added.

Under its Speciality Chemical segment, Ami Organics manufactures key starting raw materials for Agrochemicals and Fine Chemicals companies. It has recently acquired two facilities from Gujarat Organics Ltd. (GOL), which help to foray into preservatives and other specialty chemicals used in manufacturing of cosmetics, dye, polymers and agrochemicals.

The company is the largest manufacturer and supplier of some of the Intermediates such as Trazodone, Dolutegravir, Entacapone, Nintedanib, Pazopanib, Apixaban with market share as high as 90% in some products.

During the half year results, the company has posted a growth of 51% in its consolidated revenues whereas the operating margins for the company stood at 21% while its PAT margins stood at 13.2%, the brokerage highlighted.

Shares of Ami Organics made stock market debut in September this year. The stock currently trades around Rs983 apiece from its issue price of Rs610.