Media Coverage Of Omkar Speciality Chemicals Ltd.

CRISIL maintains valuation grade of 5/5 to Omkar Speciality Moneycontrol (04/06/2012)

CRISIL Research has come out with its report on Omkar Speciality Chemicals . The research firm has maintained the fundamental grade of 3/5 to the company in its May 22, 2012 report.

Omkar Speciality Chemicals Ltd’s (Omkar’s) Q4FY12 results were largely in line with CRISIL Research’s expectations. Revenue grew 32% to Rs 410 mn vs. our estimate of Rs 407 mn. EBITDA grew 38% y-o-y to Rs 85 mn driven by 55 bps y-o-y margin expansion but this expansion was slightly below our expectations. PAT of Rs 48 mn was broadly in line with our estimates as it benefitted from higher other income and lower than expected taxes. While we maintain our fundamental grade of 3/5, our fair value estimate may change as we will be rolling over our valuation to FY14.

Q4FY12 and FY12 results- standalone

  • In Q4FY12, revenue grew by 32% y-o-y to Rs 410 mn indicating sustained traction in product demand. We believe that the sales momentum was driven by both existing and new clients added by the company in the previous quarter. We will provide more clarity post our call with Omkar’s management. For FY12, standalone revenue grew 57% y-o-y to Rs 1,669 mn in line with our estimate of Rs 1,667 mn.
  • In Q4FY12, EBITDA grew by 38% y-o-y to Rs 85 mn driven by margin expansion of ~78 bps to 20.7%. We believe that margin expansion was driven by traction in sales of highvalue added products. However, the margin expansion was slightly below our expectations. For FY12, standalone EBITDA margin was 19.9% vs our estimate of 20.1%.
  • In Q4FY12, PAT of Rs 48 mn was broadly in line with our estimates as higher other income and lower taxes benefitted PAT. FY12 standalone PAT was Rs 164 mn vs. our estimate of Rs 167 mn.

Valuations: Current market price reflects strong upside We continue to use the discounted cash flow approach to value Omkar and arrive at a fair value estimate at Rs 110 per share. At the current market price of Rs 68, the valuation grade is 5/5.

To read the full report click on the attachment

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report. The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

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