Outlook & Valuation: At the upper end of the price band, Rossari demands PE
multiple of 32.1x F.Y.20 fully diluted EPS. None of the listed chemical companies
has the same business as Rossari. Its specialty chemical peers such as Galaxy
Surfactants, Fine Organics, Aarti industries, Atul and Vinati Organics are currently
trading at F.Y.2020 P/E multiples of 24.0x, 36.6x, 30.5x, 20.6x and 30.9x
respectively. We believe Rossari will command premium over most of its chemical
peers as it is net debt free as well as it has better asset turnover, working capital
days, ROE and ROCE better than most of its peers. In the last three years Rossari
have reported 32% and 66% revenue and PAT CAGR due to the strong promoter
and management team. As we are positive on the future outlook for the industry
as well as the company, we would recommend to “Subscribe” to the issue.
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