A leading chemical stock came under pressure after global brokerage firm Jefferies reduced its target price by 48 percent, citing operational challenges and performance concerns. The downgrade has brought investor focus back on the company’s near-term outlook.
During Monday’s trading session, the shares of Anupam Rasayan India Ltd reached an intraday high of Rs.995.00 per share, rising 3 percent from the previous close of Rs.938.70 per share.
Brokerage Overview
Global brokerage firm Jefferies has reiterated its ‘Underperform’ rating on Anupam Rasayan India Ltd., setting a price target of Rs.520 per share. This revised target suggests a potential downside of approximately 48 percent from the current market price. According to the brokerage, the stock is currently trading near its historical average valuations, which, in their view, presents an unfavorable risk-reward profile for investors at this stage.
Despite maintaining a cautious stance, Jefferies acknowledged that Anupam Rasayan’s performance in terms of revenue, EBITDA, and net profit surpassed its expectations for the quarter. This outperformance was largely attributed to early signs of recovery in the agrochemicals segment and growing momentum in new pharmaceutical molecule contracts, both of which contributed positively to the company’s financials.
However, the brokerage flagged concerns on the operational front. It pointed out a significant deterioration in the company’s working capital position, despite a decline in overall revenue in FY25. This strain on working capital led to negative operating cash flows and an increase in net debt levels. Jefferies noted that these financial pressures could weigh on Anupam Rasayan’s balance sheet and overall financial health in the near term.
Jefferies expects Anupam Rasayan to report a 17 percent compound annual growth in consolidated revenue and a 39 percent CAGR in profit after tax over the period from FY25 to FY27. These projections are supported by a low earnings base, which is likely to drive stronger percentage growth.
Despite this, the brokerage raised valuation concerns. It noted that the stock is currently trading at 58.3 times its one-year forward price-to-earnings ratio, which is the highest among chemical companies in its coverage. This valuation is more than three standard deviations above the company’s historical average, suggesting limited room for upside.
Anupam Rasayan is a leading custom synthesis company with a 41-year legacy, specializing in multi-step chemical reactions. It serves 75 global clients, including 31 multinational corporations, across the chemical and agrochemical sectors.
The company operates six manufacturing units with a total capacity of around 30,000 metric tonnes. It boasts strong R&D support with 90+ professionals and a robust supply chain driven by backward integration, delivering 79 complex products with a team of over 1,705 employees.
Anupam Rasayan serves several renowned global clients such as Syngenta, ADAMA, Sumitomo Chemical, DuPont, and Nissei Corporation, reflecting its strong international presence and trust in its custom synthesis capabilities.
Also read: Fintech stock jumps 3% after getting relief of ₹5,712 Cr from Supreme Court for GST dispute
Financial Performance
According to its latest financial results, Anupam Rasayan reported consolidated revenue of Rs.500 crores in Q4 FY25, reflecting a 24.94 percent year-on-year increase from Rs.401 crores in Q4 FY24 and a 28.21 percent rise compared to Rs.390 crores in Q3 FY25.
The company’s net profit for Q4 FY25 came in at Rs.63 crores, up 57.5 percent from Rs.40 crores in the same quarter last year and 16.67 percent higher than Rs.54 crores reported in Q3 FY25.
In terms of business segments, the company derives the majority of its revenue from the agrochemical sector (51 percent), followed by pharmaceuticals (22 percent), personal care (14 percent), and performance materials (13 percent).
Written by – Siddesh S Raskar
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
