Buy Acutaas Chemicals; target of Rs 4693: Prabhudas Lilladher

What happened

Prabhudas Lilladher maintained a Buy rating on Acutaas Chemicals with a target price of Rs 4,693. Acutaas reported consolidated revenue of INR4.4bn, up 43% year-on-year and 33% quarter-on-quarter, driven by 53% year-on-year growth in Advanced Intermediates.

Confirmed

Global impact / market context

The Buy rating and Rs 4,693 target imply the analyst expects the stock to rise. Revenue growth of 43% suggests strong demand for Acutaas products, which could support future profit if costs stay controlled and new contracts ramp up as planned.

Analyst inference

The stock trades at 48x FY28E EPS, meaning investors pay 48 times estimated profit per share, a rich valuation. The analyst values it at 53x Sep'29E EPS, so the target depends on earnings growing enough to justify that premium.

Analyst inference

What to watch

1. Management expects CDMO revenue to reach INR10bn in FY27, a year ahead of earlier guidance, and anticipates doubling CDMO revenue by FY30; watch whether these targets are met. Confirmed
2. Watch the ramp-up of the Fermion contract and commercialisation of four additional CDMO molecules in H2FY27, which the analyst cites as key growth drivers for sustained earnings. Proposed
3. Specialty Chemicals revenue fell 20% year-on-year from phasing out lower-value products, and BFC shipments paused after a US customer ownership change; recovery here would reduce reliance on CDMO growth. Analyst inference

Evidence

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