Rossari Biotech Q4 Review - Inorganic Growth Is Key To Watch: ICICI Securities
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ICICI Securities Report
Rossari Biotech Ltd.’s Q4 FY21 Ebitda growth of 47% YoY to Rs 352 million came in line with our estimates; but helped by lower other expenses, while gross profit margin was under pressure on raw material price volatility.
Company remains confident of delivering strong revenue growth in FY22 on higher capacity and contribution from newer performance chemicals.
Raw material inflation pass-through should help improve gross profit margins (guided range: 32-38%).
The company has ambition for inorganic growth with strict criteria of debt-free company with more than 20% return on capital employed, which may not come cheap.
We are not sure on synergic benefit from the likely acquisition(s), and would evaluate them when announced.
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