Galaxy Surfactants Q4 Review - Risk Of Gross Profit/Kg Normalisation: ICICI Securities
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ICICI Securities Report
Galaxy Surfactants Ltd.’s Q4 FY21 gross profit/kilogram was strong at Rs 45 (up 10.6%), but we see this tapering in coming quarters.
Ebitda/kg of Rs 18.6/kg was impacted from higher cost inflation (which is unsustainable).
Net profit continues to grow strong at 25% YoY.
We see risk of normalisation in gross profit/kg capping the net profit growth in FY22.
We remain excited about new green product launches which will help the company strengthen its market position in specialty care products.
We are incrementally seeing tier-I customers emphasising reduction in carbon footprint; the company seems prepared for this transition, in our view.
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