This post on Laxmi Organic IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Laxmi Organic IPO or not.
Related Posts : Laxmi Organic IPO Review
Laxmi Organic IPO: Grey Market Premium etc.
- 15-03-21 GMP 90-95
Subscription: Laxmi Organic IPO ( x times)
Consolidated Brokerage Views on Laxmi Organic IPO
Anand Rathi: “At the upper end of the IPO price band, it is offered at 49.81x its FY20 earnings, with a market cap of Rs. 3428 crores. The company has strong presence in Acetyl Intermediaries & Specialty Intermediates business; further it is establishing Fluorospecialty chemicals business. The company also plans expand and optimise its capacity and product portfolio. Considering the growth prospects – we give this IPO a “Subscribe (Long Term)” rating”
Angel Broking :”Based on FY2020 earnings the IPO is priced at a PE of 42x at the upper end of the price band along with a good ROE of 16.4%. The company is the largest manufacturer of ethyl acetate with over 30% market share in the Indian ethyl acetate market and the only manufacturer of diketene derivatives in India with a diversified customer base. Looking at the competitive advantage and strong growth potential we are assigning a “SUBSCRIBE” recommendation to the issue.”
Ashika Research: Given the growth prospects in the industry, long-standing relations with marquee global customers, ,will drive the company’s performance going forward. Hence, we recommend our investors to “SUBSCRIBE” the issue from long term investment perspective.
Capital Market : ” Score 48/100 ; For FY2020, consolidated EPS on post issue equity was R 1.8. The upper price band of R 130 discounts the FY20 EPS by 71.9 times and annualized H1FY21 EPS of R 3.4 by 38.2 times. Listed industry peers of the company are Aarti Industries, Atul, Fine Organic industries, Navin Fluorine International, Rossari Biotech and SRF.”
Choice Equity Broking: “At higher price band of Rs. 130, the company is demanding a P/E valuation of 77.2x (to its restated FY20 EPS of Rs. 1.7), which is at a significant premium to the peer average of 43.4x. However, if we annualize the H1 FY21 EPS, the demanded valuation P/E comes out to be 37.7x. Considering the sectoral tailwinds and demanded aggressive valuation, we assign a “Subscribe with Caution” rating for the issue.”
Geojit: “We assign a Subscribe rating, with a long term perspective, on the back of healthy growth in the OEM segment due to lower base and reduction in debt.”
Prabhudas Lilladher: “We recommend Subscribe on Laxmi Organic’s IPO with a long term perspective given its striking growth plans led by 1) scheduled new acquisitions, 2) expansion of core business, 3) entry in high margin fluoro chemistry segments and 4) long term contracts for specialty intermediates.”
Religare : “The company is also planning to expand its product portfolio as well as increase the global presence (currently ~23-25% of revenue) while maintaining the current market share. On the valuation front, the company is valued at 45x FY20 EPS. We have a positive view on Laxmi Organic and investors can Subscribe for the long term.”
SMC: “Score 3/5 ; Laxmi Organics is a leading manufacturer of Acetyl Intermediates and Specialty Intermediates and has good experience in large scale manufacturing of chemicals. The company has a global footprint with customers in 30 countries including but not restricted to China, Russia, Singapore, UAE, UK, USA, Netherland, etc. Considering its long-standing relations with leading global customers and it plans to shift for high margin specialty chemicals business, it is expected that the company would see good growth going forward.”
SP Tulsiyan website: “Company’s fundamentals remain strong and it is on a steady growth path, thanks to rising capacity utilization and planned expansion. Financials are likely to show good growth from FY23E onwards, hence one can invest in the IPO with a long term view.”
Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.