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Orchid Chemicals (Orchid) reported in-line numbers for 2QFY2012. Going
forward, for FY2012, management has guided 25% revenue growth to
US$500mn, EBITDA margin at ~24% and EPS of `30 on current equity.
The company plans to raise `1,000cr primarily to repay FCCBs due in February
2012; the balance amount would be used to repay debt and pursue organic and
inorganic opportunities. We maintain our Buy view on the stock.
In-line set of numbers: For the quarter, on a consolidated level, Orchid reported
net sales of `459cr (`413cr), up 24.6% yoy. The company’s gross margin dipped
by 240bp yoy to 50.9%; however, OPM expanded by 3.8% to 21.2%, much
lower than expectation of 17.4%. The rise in operating profit was on account of
muted rise in other expenses, which dipped by 6.8% yoy during the quarter.
Further, higher interest expenses during the quarter led to a dip in net profit,
which came in at `20.7cr vs. our expectation of `39cr.
Outlook and valuation: We expect Orchid to post net sales of `2,143cr with
EBITDA margin of 21.8% in FY2012E. The stock is currently trading at 6.1x
FY2012E and 4.7x FY2013E earnings. We maintain our Buy rating on the stock
with a revised target price of `270
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Orchid Chemicals (Orchid) reported in-line numbers for 2QFY2012. Going
forward, for FY2012, management has guided 25% revenue growth to
US$500mn, EBITDA margin at ~24% and EPS of `30 on current equity.
The company plans to raise `1,000cr primarily to repay FCCBs due in February
2012; the balance amount would be used to repay debt and pursue organic and
inorganic opportunities. We maintain our Buy view on the stock.
In-line set of numbers: For the quarter, on a consolidated level, Orchid reported
net sales of `459cr (`413cr), up 24.6% yoy. The company’s gross margin dipped
by 240bp yoy to 50.9%; however, OPM expanded by 3.8% to 21.2%, much
lower than expectation of 17.4%. The rise in operating profit was on account of
muted rise in other expenses, which dipped by 6.8% yoy during the quarter.
Further, higher interest expenses during the quarter led to a dip in net profit,
which came in at `20.7cr vs. our expectation of `39cr.
Outlook and valuation: We expect Orchid to post net sales of `2,143cr with
EBITDA margin of 21.8% in FY2012E. The stock is currently trading at 6.1x
FY2012E and 4.7x FY2013E earnings. We maintain our Buy rating on the stock
with a revised target price of `270
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