Fineotex Chemical Ltd. share price target

Range of specialty chemicals for entire textiles value chain (cleaning , dyeing, printing, finishing process) & over 1500+ SKUs across all product categories.

FCL reported a revenue of INR 1,457 Mn, a growth of 2% QoQ, flat YoY. Gross Margins remained flat declining by 36bps, coming in at 38.22%.EBITDA margins (excl. OI) were maintained on a QoQ basis, coming in at 25%, with a 133bps decline on a YoY basis, margins were in line with our expectations.

FCL reported a revenue of INR 1,419 Mn, a growth of 7% YoY, revenue declined by 7% QoQ, we believe revenue growth was impacted due to lower realizations, but volume growth has been maintained.
Gross Margins improved by 170 bps on a YoY basis, coming in at 38.5%.

FCL has continued its upward trajectory with EBITDA margin coming in at 26% for FY24 vs 22% for FY23; Sales and PAT grew by 10% and 35% for FY24
For Q4FY24, FCL's revenue increased 11% YoY (+11% QoQ) to INR 1,530 Mn (vs our estimate of INR 1,725 Mn)

For Q3FY24, Fineotex Chemical’s(FCL) posted a revenue of INR 1385 million growing by 26% YoY and -5% QoQ on a consolidated basis. For 9MFY24 revenue stood at INR 4160 million, growing by 10%.

EBITDA Margin improved to 29% in Q3FY24 from 26% in the previous quarter. This was aided by lower COGS which declined to INR 864 MN or 62% of Revenue from 63% for the same period in previous financial year.

FCL has showcased a strong track record of growth in revenues with 3 year Revenue CAGR of 38% as on FY23 supported by robust margins, average 5 year PAT margins coming in at 15% as on FY23. FCL is a growing specialty chemical manufacturer with international strategic partnerships with Eurodye-CTC, Belgium & HealthGuard Australia which will drive further growth opportunities for the company both in India & abroad.

In our interaction with Fineotex Chemicals the management indicated that 1) rising preference among companies to diversify supplies beyond China, augurs well for Indian textiles players and Fineotex and 2) increased demand for chemical treatments like water and oil repellant properties, anti-microbial properties etc. along with tailored solutions to textile majors also bode well for its growth plans in domestic and export markets. Capacity expansion will be commissioned by Q1FY22 which management expects can potentially double revenues by FY24. Margins are likely to improve as Fineotex targets...

We recently met Sanjay Tibrewala, Executive Director of Fineotex Chemicals, to understand the overall nuances, salient characteristics of the speciality chemical space in the textile industry, Fineotex' s market position and prospects, going forward. Fineotex has 22,000 tonne capacity across two facilities in India (15,500 tonne) and Malaysia (6,500 tonne). It manufactures over 400 different products with established presence across the entire textile value chain ranging from pre-treatment, dying, printing and finishing processes thereby making it a one-stop shop...

Fineotex Chemicals Ltd. (FCL) is head quartered in Mumbai and involved in the manufacturing specialty chemicals and enzymes. The company has founded in 1979 by Mr. Surendra Kumar Tibrewala and has manufacturing facilities at Navi Mumbai and Malaysia with combined manufacturing capacity of 22,000 MT/pa. The Company manufactures chemicals for the entire value chain for the textile industry including pretreatment, dyeing, printing and finishing process. The company also manufactures other chemicals for various industries like agro, adhesives, construction, water treatment etc. It has more...

Decent Performance under Macroeconomic Pressure; Business Traction to Continue: Fineotex Chemical recorded decent set of result as consolidated sales grew by 1.1% YoY (largely in line) to Rs. 298 Mn in Q3FY17 as against ofRs. 294 Mn in Q3FY16. In such a challenging business environment, the consolidated sales volume surged by ~ 10.0% YoY on the back of high demand from end users and increased client portfolio during the period.

H1FY17 Performance in-line amidst Persisting Uncertainty: The companys consolidated revenue in H1FY17 has grown by 3.8% to Rs. 590 Mn as against Rs. 568 Mn in H1FY16. However, it has registered mild de-growth by -0.8% QoQ basis wherein revenue de-grew to Rs. 294 Mn from Rs. 296 Mn. The mildde-growth has been on account of currency exchange rate fluctuations loss occurred during the aforesaid quarters and lower demand for high value addedproducts due to seasonal effect.

Long Term Strategic Growth Drivers in Place: Increased focus on specialty chemical to boost operating margin - FineotexChemical Limited (FCl) has posted consolidated revenue growth at CAGR of 8.0% over the period of FY12-16. EBITDA recorded significant growth at CAGR of 37.3%during same period whereas EBITDA margin has also grown by 819bps YoY to 24.7% in FY16 due to overall decline in raw material cost by 618 bps YoY. PAT Marginhas grown by 301 bps YoY in FY16.