Prabhudas Lilladher Expects Fine Organic Industries to Reach Rs 5353

Fine Organic Industries Sees Growth Amid Full Capacity Operations

Fine Organic Industries, a leading player in the organic chemicals sector, has reported a consolidated revenue of Rs6.3 billion in Q4FY26, marking a growth of 3% year-over-year (YoY) and 13% quarter-over-quarter (QoQ). The company's domestic demand witnessed improved performance during the quarter, while export markets remained steady.

Key Highlights

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The company's EBITDA margin expanded by 380 basis points (bps) QoQ, primarily driven by higher realizations. Notably, all manufacturing facilities are currently operating at full capacity, except for the Patalganga (food-grade) plant, which management expects to achieve full utilization by FY27.

Fine Organic Industries has been actively investing in its growth strategy, infusing equity of approximately Rs61.7 million into its Thailand joint venture (JV) and Rs4.9 million into its UAE subsidiary during Q3FY26 and Q4FY26, respectively. Additionally, the company acquired approximately 159.9 acres of land in the U.S. in June 2025 and expects to finalize the capital expenditure (capex) plan for its proposed manufacturing facility by Q2FY27.

The company's ongoing Rs7-7.5 billion greenfield special economic zone (SEZ) project is expected to commence commercial operations in H2FY28. We believe the upcoming SEZ facility and the planned U.S. manufacturing plant will act as key long-term growth catalysts for the company. The SEZ project is expected to deliver peak revenue potential of Rs26 billion, assuming an asset turnover of 3.5x, and should start contributing meaningfully to topline growth from FY28/FY29 onwards.

Outlook

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At current valuations, Fine Organic Industries trades at approximately 28x FY28 earnings per share (EPS). We maintain our 'BUY' rating with a target price of Rs5,353, valuing the stock at 32x FY28 EPS.