Rakesh Jhunjhunwala Portfolio: This specialty chemical stock in Rakesh Jhunjhunwala’s portfolio can double your money in one year, as per brokerages. They believe incremental revenue growth with the commencement of new facilities will help the stock outperform going forward.
As per brokerages, Jubilant Ingrevia can clock up to 125% return in the next one year. Ingrevia had previously announced a capex of ~ INR 900Crs and in Q4FY22 announced an additional capex of INR 1250crs. Both these capex programs largely focus on Speciality Chemicals business with ~60% of the funds committed to the same.
Big Bull of the Indian stock market, Rakesh Jhunjhunwala and wife Rekha Jhunjhunwala together hold 4.7% stake, aggregating to 7,520,000 shares, in the specialty chemical company, as per BSE corporate filings of Jubilant Ingrevia.
The company’s presence in the volatile business of ethyl acetate and acetic anhydride, expected contraction in margins of commodity business and lack of confidence in successfully ramping up the di-ketene and AI intermediates emerged as the key concerns during investor meetings.
Edelweiss research note retained a buy on Jubilant Ingrevia with a target price of Rs 1006 per share, which translates into 124.5% upside on Thursday’s low of Rs 448.20 per share.
It said JIL is in a transitory phase, moving from commodity to speciality. Its solid relationships with global pharma and agrochemical leaders and a strong sector tailwind would facilitate growth in agrochemical intermediates/CDMO space, said the Edelweiss note.
“The commodity chemicals business shall continue to support cash flows. We value JIL’s specialty chemicals business at 25x FY23E EV/EBITDA and commodity business at 10x FY23E EV/EBITDA, which yields an SoTP-based TP of INR1,006; retain ‘BUY’,” it said.
Maintaining a buy tag for Jubilant Ingrevia, brokerage firm Monarch Networth Capital set the target price of the stock at Rs 890 per share.
It was of the view that Ingrevia can grow on FY22 base, on the back of the new capex initiatives commercializing over FY23 and FY24.
“We expect Ingrevia’s operating profitability to sustain and increment over the near to medium term, given its expanding portfolio of value-added products, and a favorable pricing scenario in the nutrition and Spec chem segments,” the brokerage added.
On Thursday, shares of Jubilant Ingrevia closed with three and half per cent gain to Rs 464 per share on the BSE