Omkar Speciality Chemicals Q4 PAT up by 120.50%

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.

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