Shares of Sharda Cropchem have gained 10.95 per cent in the last five trading days, outperforming the benchmark Sensex, which has gained 0.35 per cent. Despite the 8.92 per cent fall in the BSE Sensex in the last six months, the stock has given a multibagger return of 110.84 per cent. The stock is up 98.43% year over year (YTD), which includes a multibagger return of 105.53 percent versus the benchmark’s 1 year increase of 8.22%. Following the company’s Q4 results, brokerage firm Anand Rathi is bullish on the stock and has given a buy rating for the target price. 835 per share against the current market price 706.
For the fiscal year ended March 31, 2022, the company’s consolidated revenue from operations grew by 31.8 percent year-on-year 1,434.5 crore in the fourth quarter of FY 2012 1088.13 cr and 49.4 percent to 3,579.8 crore in FY22 which was 2395.60 in March 31, 2021. In 4Q FY2, the company’s net profit, or profit after tax (PAT), grew by 32.2 per cent from 177.0 crore 133.93 crore in the year-ago quarter. The company reported EPS of Rs 19.62 for the quarter ended March 31, 2022 as against Rs. 14.84 for the corresponding quarter of the previous year. The Board of Directors of the company has also recommended a final dividend of with a face value of Rs.3 per share 10 for the financial year 2021-22, subject to the approval of the shareholders.
“On 24% volume and 25% pricing growth, Saradha’s revenue/PAT grew 49%/52% in FY22. Management spoke of 15-20% revenue growth in FY23 with 20-22% EBITDA margin supported by strong agricultural demand globally. We are positive about Sharda’s future performance given the increased registrations, a growing share of high-margin products and deep market penetration. In addition, internally funded capex and FCF will strengthen its balance sheet. We expect its revenue/profit to be 15%/16 per cent CAGR in FY22-24,” said brokerage firm Anand Rathi.
According to the management, the capex in FY24 is expected to be in the range of Rs 3.8 billion to Rs 4 billion. According to the company, short-term supply and logistics issues will not have a significant impact on Q1 FY23 performance, but if the lockdown continues in China, it will have a short-term impact on supply, the management said. Management has also said that it is seeing positive traction in old and new products. The company is expanding its range of products in each area for future growth.
Anticipating higher growth momentum, a strong balance sheet, free cash flow and strong return ratio in FY 22-24, Anand Rathi has maintained his buy rating on the stock with a revised target price of Rs. The 835 is based on 16x FY24e.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.