Motilal Oswal Forecasts Neutral Alkyl Amines at Target Price of Rs 1720
Motilal Oswal Maintains Neutral Rating for Alkyl Amines Chemicals
Alkyl Amines Chemicals (AACL) has reported a steady operating performance with a 4% year-over-year (YoY) increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) in 4QFY26. The company's ability to mitigate raw material cost pressures through price pass-throughs has resulted in a 70 basis points (bp) YoY improvement in EBITDA margin to 18.3%. Despite flat volume growth in FY26, the management expects a steady improvement in growth momentum, driven by rising demand from the pharma segment led by peptides, with a guided overall volume growth of 5-10%.
AACL's prospects are further strengthened by the anti-dumping duty (ADD) on acetonitrile, which is likely to aid price recovery and enhance the company's market position. Our research suggests that the company's operating performance will continue to improve, driven by the expected growth in demand from the pharma segment.
Key Estimates and Projections
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| Metric | FY26 | FY27 | FY28 |
|---|---|---|---|
| Revenue Growth | - | 6% | 6% |
| EBITDA Growth | 4% | 7% | 7% |
| PAT Growth | - | 9% | 9% |
We maintain our earnings estimates and value the stock at 40x FY28E earnings per share (EPS) to arrive at our target price of INR1,720. Based on our analysis, we reiterate our Neutral rating for Alkyl Amines Chemicals.
Investor Takeaway
Maintain Neutral rating with a target price of Rs 1720.
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