Bharat Rasayan hits a new high

Bharat Rasayan hit a new 52-week high at Rs.1730, up 16.5%. It has come off the high but remains firmly in the green, up some 13%.

The company is engaged in the manufacture of Technical Grade Pesticides / Intermediates and was established as a backward integration project.

As mentioned in our Market Whispers column, “the company has an annual capacity of 20,000 TPA and exporting to over 60 countries. It has posted good set of earnings for Q1FY17 with PAT rising to Rs. 14.5 cr. from Rs. 8.2 cr. YoY, showing growth of 77% YoY. This was led by income growth of 45% YoY to Rs. 167 crores and OPM expansion of 90 bps to 14.5% from 13.6% YoY. EPS for Q1FY17 is placed at Rs. 34.18. Company is set to report even better earnings for Q2FY17, which is seasonally the best quarter for the company, and FY17 EPS is seen closer to Rs. 110, which was at Rs. 79.74 in FY16, implying growth of over 38%. Share ruling at Rs. 1,485 is trading at PE multiple of near 14x on current year’s earnings and can move to Rs. 1,600 in the next 1 month. It is a thinly traded stock due to high Promoter stake of 75% and low equity of Rs.4.25 crores only.

Advice from our Editor, Mr.SP Tulsian, “Avoid riding and chasing momentum. Buy as an investor.”