Fundamental Analysis

GALAXY SURFACTANTS

Ticker : 540935
BUY : Rs 1,621.00
Target : Rs 1,790.00

Galaxy Surfactants is engaged in the manufacturing and marketing of surfactants as well as speciality chemicals for the personal and home care industry. It produces a range of vital cosmetic ingredients, including active ingredients, ultraviolet (UV) protection, and functional products. On a standalone quarterly front, its net sales declined by 11.84 per cent to Rs 434 crore in Q4FY20 from Rs 492.26 crore in Q4FY19. The operating profit of the company declined marginally by 1.99 per cent to Rs 72.89 crore in Q4FY20 from Rs 74.37 crore in Q4FY19. On the other hand, its net profit saw a growth rate of 14.06 per cent to Rs 45.75 crore in Q4FY20 from Rs 40.11 crore in Q4FY19. Despite a decline in its revenue, the company has a healthy free cash flows and strong return ratios. Robust growth in speciality care ingredients is expected to not only aid its top-line growth but also expand margins in the future. We thus recommend a BUY.