Anupam Rasayan sprints 7% on signing $90-mn LoI with Japanese MNC

Shares of Anupam Rasayan rallied 7 per cent to Rs 945 on the BSE on Wednesday after the speciality maker signed a letter of intent (LoI) with a prominent Japanese multinational. At 10:12 AM, the shares were quoting 3 per cent higher at Rs 911 as against a 0.12 per cent dip in the benchmark S&P BSE Sensex.

In an exchange filing, Anupam Rasayan said it has signed a Letter of Intent (LoI) with a leading Japanese multinational company worth revenue of nearly $90 million (Rs 743 crore) over next seven years.

The LoI is for the supply two advance intermediates using fluorination chemistry. These molecules will be manufactured in the company's existing as well as soon to be commercialised fluorination plants, it said in a statement, adding that the supplies will commence from FY25.

Anupam Rasayan will be the first company in India to manufacture these key molecules within the country, with applications in both the pharmaceutical as well as engineering fluids.

"This landmark LoI not only expands and diversifies our customer base but also solidifies our position in the Japanese markets as one of the most reliable partners for supplying specialised molecules to global majors," Anand Desai, managing director of Anupam Rasayan, said.

Anupam Rasayan India is engaged in the custom synthesis (CSM) and manufacturing of specialty chemicals in India. It has two verticals: Lifescience related specialty chemicals

comprising products related to Agrochemicals, Personal Care and Pharmaceuticals, and Other Specialty Chemicals comprising Specialty Polymer Additives. 

Operationally, the company's revenue declined 24.6 per cent year-on-year as well as quarter-on-quarter to Rs 295.5 crore in the October-December quarter. For 9MFY24, the revenue declined by 4.3 per cent Y-o-Y to Rs 1,074.1 crore.

Ebitda for the quarter declined by 28.9 per cent Y-o-Y (down 26.4 per cent Q-o-Q) to Rs 79.1 crore, while Ebitda margin contracted 162 bps Y-o-Y and 65 bps Q-o-Q to 26.8 per cent. Profit after tax, too, declined by 57.1 per cent Y-o-Y (down 54.8 per cent Q-o-Q) to Rs 18.4 crore.

"We believe the short-term demand will be weak due to global de-stocking but it will gradually normalise in the upcoming quarters and recovery will begin by Q3FY25. The company plans to diversify from the agro-chem business; therefore, the growth drivers are the pharma segment, polymers, and Japanese market business which will contribute incremental revenue in FY25 and FY26," said analysts at KR Choksey in their Q3 resulr review report.

The brokerage expects FY23-FY26 revenue CAGR to be 13.7 per cent, and the corresponding adjusted PAT CAGR be 18.8 per cent. "We apply a PE multiple of 35.0x to our FY26E EPS of Rs 28.8 and arrive at a target price of Rs 1,008 (Rs 990 previously). We maintain 'ACCUMULATE'," it said.