We see Anupam Rasayan (Anupam) as a direct beneficiary of the global boom in outsourcing, the government’s emphasis on ‘Make in India’ and the ‘China plus one’ strategy. With its growing chemical capabilities – organic and inorganic – and aggressive capacity addition, Anupam is a strong outsourcing partner for global agrochemical/pharmaceutical players.
Given its large investment of around ₹1,000 crore in place and a recent order adding around ₹475 crore/yr revenue visibility, we estimate a CAGR of 30% in FY22-25 revenue. PAT, meanwhile, would exceed a CAGR of 38% thanks to operating leverage.
This, coupled with a reduction in working capital, would increase RoCE from 11% to 18%.
Main risks: Anupam has a high concentration of customers, with the top ten contributing 80% of revenue. The loss of a customer can result in a loss of business which can harm revenue; Phenol and benzene are the main raw materials, and any sharp increase in RM and end product prices could further increase working capital requirements; and We model revenue ramp-up based on recent won orders and product launches. That said, order cancellations or delays can negatively impact revenue.