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The total revenues for FY 21 increased by 41% to Rs 341.99 crore from Rs 242.49 crore in FY20 with rise in selling volumes due to growth of domestic and export demand. Ami posted an increase of 96% in PAT increasing to Rs 54crore as against Rs 27 crore for FY20. However, the company recorded a growth of 1.5% in revenues, and profits grew by 18% for FY20 when compared to FY19.
The profitability margins are showing an increasing trend since the last three fiscals as seen in the table. Debt is 0.83x of equity as on 31st March 2021; it’s at a higher side due to acquisition of Gujarat Pharma. Return on net worth is strong at 32.81%, 24.57%, and 28.34% for FY21, FY20, and FY19 respectively.
| Particulars | FY21 | FY20 | FY19 |
| Total Revenue | 341.99 | 242.49 | 238.9 |
| PAT | 53.99 | 27.47 | 23.30 |
| EBITDA | 81.54 | 43.86 | 42.46 |
| Total Assets | 413.27 | 231.89 | 213.15 |
| Cash and Bank | 2.69 | 3.82 | 0.49 |
| Cash generated from operations | 27.15 | 27.08 | 14.84 |
| EBITDA Margin | 23.84% | 18.09% | 17.77% |
| Net Margin | 15.79% | 11.33% | 9.75% |
With an EPS of 17.14 as of 31st March 2021, the Issue is priced at 35.59x calculated at the upper price band of Rs 610 per share. The P/BV is 11.51 at a NAV of Rs 52.99 per share. The average sector P/E is 48.91 indicating a reasonable valuation of the IPO.
| Particulars | Hikal | Valiant | Vinati Organics | Neuland | Atul Ltd | Ami Organics |
| Face Value per share | 2 | 10 | 1 | 10 | 10 | 10 |
| Total Income for FY21 (INR Crores) | 1720.44 | 754.81 | 954.26 | 936.9 | 3731.5 | 340.61 |
| EPS | 10.8 | 40.97 | 26.2 | 62.85 | 221.17 | 17.14 |
| NAV per share | 75.7 | 184.97 | 150.16 | 612.99 | 1293.31 | 52.99 |
| Return on Net worth | 14.27% | 22.81% | 17.45% | 10.25% | 17.14% | 32.35% |
| P/E | 49.52 | 33.78 | 75.51 | 31.6 | 40.86 | 35.59 |
Conclusion
The Indian market is expected to grow at around a CAGR of 10% between 2020 and 2025 fuelled by a substantial increase in Indian API domestic consumption.
Speciality chemicals portfolio is expected to be further enhanced with the acquisition of Gujarat Pharma. The specialty chemicals manufactured by the facilities acquired as part of the Acquisition is used in sectors like cosmetics, preservatives, and agrochemicals.
There is a risk of sustainability of margins in the future as a huge rise is seen in the revenues in the pre IPO year. Also, Ami is a small company when compared to its peers. Looking at all the above factors one may subscribe for the long term.
Review By CA Priyanka Choudhary on 14th Aug 2021
About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.
