Vishnu Chemicals Ltd. is a chemicals-focused small-cap company with a market capitalization of Rs. 1,805 crores. Vishnu Chemicals stock rises from 353.35 1,511.50 on the NSE in a year, shows a multibagger return of 328.98%. The stock has gained 5.00 per cent in today’s trading and it has been rising since last 5 days, in that time it was giving a return of 13.65 per cent. It also reached the intraday high of 1,511.5 in today’s session.
Focusing on strong growth going forward, brokerage firm Anand Rathi has maintained a buy rating on the stock for a target price of INR 2,116 per share, which means a potential growth of 39.99% from the current market price.
“The company recorded strong results in Q4FY22, which were above the expectations. Earnings reflect the trickle down impact of operational initiatives undertaken by the Company, including backward integration in the Chromium segment and capacity expansion in the Barium segment. We expect strong growth momentum to continue as its capital expenditure exercise is completed. This will facilitate expansion in operating margin over the next 2 years. Also, the topline will benefit from a 50 per cent expansion in the capacity of the barium plant. Considering its strong growth, we value the company at a P/E multiplier of 15x of FY24E EPS of Rs 141.1 and revised our target price to Rs 2,116 per share (earlier TP: Rs 1,892 per share) We do. Accordingly, we reiterate our BUY rating on the shares of Vishnu Chemicals Limited,” Anand Rathi has said.
The company completed its key capital expenditure cycle, which included backward integration into its chromium facility and expansion of its barium plant capacity. Both operations were tested in Q3FY22 and commercialized by Q4FY22. According to the brokerage, the Chromium vertical contributed about 85% of the consolidated revenue, while the remaining 15% was attributed to the Barium segment.
The company reported excellent results for Q4FY22, with consolidated revenue growing 56 per cent year-on-year and up 12 per cent quarter-on-quarter to INR 336 crores. with 1075 crores in FY22, the firm reached 1000 crore revenue milestone for the first time. In FY22, the firm posted its highest ever EBITDA and EBITDA margins 161 crore and 15.0 per cent. Profit After Tax (PAT) increased by 136 percent FY21 to . 34 crore in 81 crore in FY22. The company’s consolidated debt to equity ratio stood at 1.3 in FY12, from 1.7 in FY11. The consolidated return on capital increased to 25% in FY12 from 13% in FY2011, while the consolidated return on equity increased to 29% in FY12.
In Q4FY22, EBITDA climbed by 106 per cent YoY and 16 per cent QoQ to INR 53 Cr, while PAT increased by 163 per cent YoY and 16 per cent QoQ to INR 29 Cr and PAT margin increased by 345 basis points YoY and 29 basis points QoQ to 8.5 Gives marks up to a percentage. Owing to the projected growth in demand, the firm is expanding its existing capacity in chromium chemicals to 10,000 TPA, which is to be completed by the first half of FY23. Along with the barium chemical business, the company is considering brownfield expansion to launch a new, higher-margin specialty chemical with a target date of completion for H1FY24.
The Board of Directors has recommended a dividend of INR 2 for each equity share with a face value of INR 2, subject to the approval of the shareholders. The stock is trading above the 5 day, 10 day, 12 day, 20 day, 26 day, 50 day, 100 day and 200 day moving averages at today’s closing price. Stock reached 52-week high of 1511.50 52-week low of 1,799 on March 28, 2022 314.05 on May 17, 2021, which means it is now trading 15% below its 52-week high.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.