Anupam Rasayan India (ANURAS IN)

Rating: Not Rated | CMP: Rs879 | TP: NA

October 4, 2023 Fluorination chemistry likely to drive growth

Management Meet Update We met Mr. Anand Desai (MD) and Mr. Ravish Chaudhary (Sr. manager –
Corporate strategy & Investor Relations) of Anupam Rasayan (ANURAS) who
highlighted that with India’s CSM industry likely to grow at double digit CAGR
over next couple of years, primarily driven by increased demand coupled with
shift in manufacturing operations from China is driving demand for company’s
Key Financials - Consolidated products and solutions. The company is also increasing its focus on fluoro
Y/e Mar FY20 FY21 FY22 FY23
based chemicals and planning to launch over 12-14 molecules over next 12-18
Sales (Rs. m) 5,289 8,074 10,508 16,019
EBITDA (Rs. m) 1,349 1,938 2,970 4,314 months. We believe ANURAS is well placed to benefit in the long term given 1)
Margin (%) 25.5 24.0 28.3 26.9 its focus on commercialization of new products, 2) strong order book/LOI’s
PAT (Rs. m) 530 703 1,522 2,168
worth Rs76,690 mn and 3) expansion in fluorination chemistry. The stock
EPS (Rs.) 6.9 8.6 15.2 20.9
Gr. (%) 5.2 23.3 77.8 37.4 trades at PE of 39.6x/27.7x FY24E/FY25E bloomberg estimates. Not rated.
DPS (Rs.) - - - 1.5
Yield (%) - - - 0.2 Strong revenue outlook on back of robust LOI’s: During 1QFY24, the company
RoE (%) 9.6 6.5 9.2 10.6
RoCE (%) 8.4 7.5 8.8 10.7 had signed 3 LOI’S worth Rs40,660mn with a contract period of 5-7 years and
EV/Sales (x) 19.4 18.4 12.0 9.3 currently total order book stands at Rs76,990mn which provides strong revenue
EV/EBITDA (x) 104.4 72.1 50.2 32.7
visibility for next couple of years. Management iterated 25% CAGR over next 2-3
PE (x) 125.8 102.0 57.4 41.8
P/BV (x) NA 5.5 5.1 4.0 years, owing to its strong product pipeline.

New product launches to propel growth: In 1QFY24, company commercialized 2

new molecules taking the total number of products to 55. For FY24, company plans
to commercialize 10 new molecules. Currently there are more than 90+ molecules at
R&D and pilot pipeline. Additionally, the company is focusing on expanding its
Key Data ANUY.BO | ANURAS IN
52-W High / Low Rs. 1,250 / Rs. 570 fluorination product portfolio; management highlighted that revenue contribution from
Sensex / Nifty 65,512 / 19,529
fluoro-based is expected to increase to 20% in FY24 and 30% by FY27 from current
Market Cap Rs. 93.9bn/ $ 1,127.7m
Shares Outstanding 107.6m 15%.
3M Avg. Daily Value Rs. 186.1m

Capex to support overall growth: Owing to strong product pipeline company

announced a total capex outlay of Rs6700mn. Out of this capex, Rs2500mn capex
will be used for contracts/LOI’s and rest will be used for fluorination. By the end of
Shareholding Pattern (%) 1QFY24, company had spent Rs1240mn and the rest will be invested in 12 months.
Promoter’s 60.77 As on 31st March 2023, cash on the books was Rs5510mn. This coupled with strong
Foreign 9.79 cash flow from operations will be sufficient for capex.
Domestic Institution 3.74
Public & Others 25.69
Promoter Pledge (Rs bn) -
Focusing on improving working capital: The inventory days had reduced from 290
in FY22 to 250 FY23. This has helped the company to improve its cash flow from
operations. Further, company had highlighted that the inventory days is expected to
come down to 220 in FY24.

Stock Performance (%)

1M 6M 12M
Absolute (12.1) 4.1 18.4
Relative (12.1) (8.2) 5.4

Swarnendu Bhushan
[email protected] | 91-22-66322260

October 4, 2023 1
 Anupam Rasayan India

Strong revenue growth over the years Revenue- Break Down

Revenue (Rs Mn) YoY gr. (RHS) Domestic Exports

10,252
18,000 16,019 0.6 12,000
16,000
0.5 10,000
14,000

5,970

5,767
12,000 10,660 0.4 8,000

4,703

4,690
10,000

3,599
8,109

3,406
3,011
0.3 6,000
8,000

2,037

2,004

1,690
5,015 5,289

1,378
6,000 0.2 4,000
3,414
4,000
0.1 2,000
2,000
- 0 -
FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23

Source: Company, PL Source: Company, PL

Stable EBITDA margins Return profile

EBITDA (Rs Mn) EBITDA Margin (%) ROE ROCE

5,000 30% 14%

4,314
25% 12%
4,000
2,970 10%
20%
3,000 8%
1,936 15%
2,000 6%
1,349 10%
931 4%
1,000 735
5% 2%
- 0% 0%
FY18 FY19 FY20 FY21 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23

Source: Company, PL Source: Company, PL

Strong Revenue Visibility over next couple of years

Source: Anupam Rasayan Investor Presentation

October 4, 2023 2
 Anupam Rasayan India

Price Chart Recommendation History

(Rs)
No. Date Rating TP (Rs.) Share Price (Rs.)
1,400
1,200
1,000
800
600
400
200
0
May-23

May-23
Jan-23

Jan-23

Jun-23
Mar-23

Jul-23
Oct-22

Apr-23
Nov-22

Dec-22

Aug-23

Sep-23
Analyst Coverage Universe
Sr. No. Company Name Rating TP (Rs) Share Price (Rs)

1 Aarti Industries Hold 495 473

2 Bharat Petroleum Corporation Hold 353 352

3 Bharti Airtel Accumulate 935 890

4 Clean Science and Technology Hold 1,206 1,298

5 Deepak NIitrite Reduce 1,803 2,092

6 Gujarat Fluorochemicals Accumulate 3,230 3,125

7 Gujarat Gas Accumulate 516 455

8 Gujarat State Petronet BUY 327 276

9 Hindustan Petroleum Corporation Hold 263 261

10 Indian Oil Corporation Hold 97 92

11 Mahanagar Gas Hold 1,056 1,056

12 Navin Fluorine International Accumulate 5,064 4,544

13 NOCIL Hold 230 228

14 Oil & Natural Gas Corporation BUY 218 177

15 Oil India BUY 341 277

16 Reliance Industries BUY 2,898 2,444

17 SRF Hold 2,143 2,371

18 Vinati Organics Accumulate 1,955 1,815

PL’s Recommendation Nomenclature (Absolute Performance)

Buy : >15%
Accumulate : 5% to 15%
Hold : +5% to -5%
Reduce : -5% to -15%
Sell : < -15%
Not Rated (NR) : No specific call on the stock
Under Review (UR) : Rating likely to change shortly

October 4, 2023 3
 Anupam Rasayan India

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Date: 2023.10.04 13:59:25 +05'30'