Fine Organic Industries Ltd. share price target

The global oleochemicals market, valued at USD37.9b in CY23 and projected to reach USD65.4b by CY30, presents healthy opportunities for Fine Organic Industries (FINEORG).

Fine Organic Industries (FINEORG) reported higher-than-estimated EBITDA at
INR1.3b (-29% YoY) in 4QFY24. EBITDAM contracted 140bp YoY to 25.4%, while
gross margin improved 450bp YoY to 43.6%, primarily due to stable vegetable
oil prices.

Fine Organic Industries (FOIL) overall Q3FY22 performance came slightly above our estimates. The company reported revenue of INR 4,634mn with a 54.8% YoY increase, which was 8.6% above our estimate of INR 4,266mn. The revenue growth was driven by better realization supported by the price increase and strong volume growth. Export volume grew at a better pace with a contribution of 59%. However, domestic sales picked up at slower pace during the quarter due to the Covid19 (3rd wave) led restrictions. The company continued re-negotiating with its customers by accepting incremental business at cost-plus pricing to protect and recover from RM price volatility and higher freight costs. Despite 118bps contraction in the Gross margin, EBITDA margin managed to improve by 145bps to...

Fine Organic (FINEORG) reported a beat on our estimates, with the EBITDA margin recovering to 17% in 2QFY22 (after being subdued in the last three quarters). As per our understanding, the volatility in key vegetable oil prices has reduced in the recent quarter, with prices peaking around current levels. Customers have accepted the current environment of high prices. Lower volatility may result in better ability to pass on prices to consumers. FINEORG has long-standing relationships with its suppliers, which enables it to source raw materials at competitive prices. Based on the aforementioned and the...

Fine Organic Industries (FOIL) posted revenue of INR 3,576mn with a 49% YoY increase, which was 5.6% above our estimate of INR 3,387mn. The revenue growth was mainly driven by better realization supported by the price increase and partially due to new product introduction. Export volume grew at a better pace with a contribution of 62% compared to 55% in Q1FY21. However, domestic sales did not pick up and remained flat during the quarter due to the lockdown restrictions. FOIL has witnessed a increase in key raw material costs along with higher freight cost. Despite taking price increase by re -negotiation with some of its customers, continued increasing input cost severely impacted its gross margins by 673bps (YoY), which resulted in 732bps (YoY) contraction in EBITDA margin to 14.5%...

Demand outlook strong; margins to remain subdued Motilal Oswal values your support in the Asiamoney Brokers Poll 2021 for India Research, Sales, Corporate Access and...

Fine Organic Industries (FOIL) posted revenue of INR 3,229mn with a 30.6% YoY increase, which was 9.2% above our estimate of INR 2,958mn. The revenue growth was mainly driven by better realization supported by the price increase. FOIL has witnessed a sharp increase in key raw materials...

Fine Organic Industries Limited (FOIL) is the largest Oleo Additives player in India and a dominant player globally. FOIL has a strong moat in Oleochemicals including High Entry Barriers, High Customer Stickiness, High Return Ratios and Strong R&D; Capabilities. FOIL is in the midst of doubling its capacity, thus helping it to improve share of Cosmetics, Feed and Food additives which will be margin accretive. Given FOIL's strong earnings visibility from new capacities and consistent 30%+ return ratios, which reflect its robust business model, we believe it is truly deserving of a premium valuation other specialty chem peers. We thus value FOIL at INR 3,300 on 26x EV/EVITDA on FY23E which gives an upside of 15% from the CMP. At current valuation of 32x / 24x FY22E / FY23E EV/EBITDA. Key risks include RM Fluctuations, Forex Fluctuation and breach of IP....

as higher R&D; cost, stringent regulations, long gestation period for product approval making this an oligopolistic industry with select few players globally. With growing awareness about the use of green additives, the demand for oleochemical-based additives is set to surge going forward....

is the largest manufacturer of oleochemical-based additives (chemicals derived from natural oils and fats of plant origins) in India, with a strong global presence .Having started off as a manufacturer of 2 products in 1973, the company has gradually scaled it up to 400+ products currently. Company is a strong global competitor in oleochemical based additives and...

Fine Organic Industries (FOIL) posted revenues of INR 2,473mn with 13% YoY decline which was below our estimate of INR2,734mn mainly due to loss of sales during last two week of March led by COVID 19 outbreak and logistic challenges in domestic as well as in many other countries. In the near term revenue outlook remains cloudy as management expects regaining pre Covid operational level can be possible post AugSep due to slow recovery in existing business and challenging environment in new business development. On the back of favourable product mix, Gross margin expanded by 505bps, which resulted in 226bps (YoY) improvement in EBITDA margin to 23.2%(est. 22.1%) in Q4FY20. Commissioning of new capacity (Ambernath 3) resulted in a sharp increase (178% YoY) in...

Fine Organic Industries (FOIL) standalone earnings came 20% below our estimate partially due to maintenance shutdown (one week) and vigilant step by management to reduce its utilization level in existing plants from over 90% to ~80-85% level. The company posted revenues of INR 2,659mn with 1.9% YoY growth which was below our estimate of INR3,018mn. Despite of 380bps improvement in gross margin. EBITDA margin improved by only 159bps on YoY basis and contracted by 207bps on sequential basis mainly due to higher employee cost (14.9% YoY) and other expenses(13.6%YoY). PAT came below our estimate at INR368mn (est INR459mn) impacted by lower other income, higher interest cost and higher depreciation related to new plant (Ambernath 3)....