BUY: Brokerage Nirmal Bang Sees 26 pc Upside in Fineotex Chemicals Stock

The analysts at the domestic brokerage firm Nirmal Bang are bullish on the Finetox Chemical stock, seeing an upside potential of 26 per cent. Fineotex is a specialty chemicals producer and mainly caters to segments such as textile chemicals and cleaning & hygiene. The analysts have recommended a price target of Rs 483 at the current levels in the recently published report on 28th June. "We have modeled topline growth at 20% CAGR between FY24-26E with operating margins in the range of 27-28%. Based on this, the stock is currently trading at 29x / 24x to FY25E / FY26E EPS. We assign 30x to FY26E EPS to arrive at a target of Rs. 483/share with an upside of 26% over the CMP," it said in its research report. The company has delivered healthy financials over the last few years despite macro challenges that impacted overall chemical industry financials, it said, adding in FY24, it has delivered healthy volume growth of ~25% where capacity utilization stood at ~72%. While industry has witnessed impact on volumes mainly due to subdued demand from global markets. International revenue contribution maintained at 22% of FY24 revenue.The company recently approved a fund raise through an issue of share warrants and equity shares worth Rs 218 crore to fund the company’s expansion of business through organic/inorganic growth and working capital requirement. The same is proposed at an issue price of Rs 387.4 each per unit that gives a positive indication. Overall, the company is expected to dilute 11.6% of its equity in the future.(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. Times Now Digital suggests its readers/audience to consult their financial advisors before making any money related decisions.)