Ami Organics is a small-cap company with a market capitalisation of Rs 3900 crore and a free float of Rs 2100 crore. The Company is engaged in the production of pharmaceuticals and chemicals.
Sonal Bhutra of CNBC TV18 has done a deep dive into the financials, the business & the road ahead for Ami Organics with the company’s Executive Chairman & MD, Naresh Patel. Naresh Patel explained the Growth Outlook, Electrolyte & Semiconductor Opportunities.
As of 31st December 2023, the promoters hold 39.41% of the equity capital while the public holds 60.59%. Amongst the public, the following are the prominent shareholders:
| Shareholder | Nos | (%) | |||
| Mutual Funds | 20,05,004 | 5.44 | |||
| Uti – Healthcare Fund | 4,34,226 | 1.18 | |||
| Icici Prudential Pharma Healthcare And Diaganostics (P.H.D) Fund | 4,41,022 | 1.20 | |||
| Foreign Portfolio Investors Category I | 42,25,753 | 11.46 | |||
| Bofa Securities Europe Sa – Odi | 4,30,874 | 1.17 | |||
| Morgan Stanley Asia (Singapore) Pte | 8,48,840 | 2.30 | |||
| Government Pension Fund Global | 10,92,000 | 2.96 | |||
| Malabar India Fund Limited | 11,80,648 | 3.20 | |||
| Resident Individuals holding nominal share capital in excess of Rs. 2 lakhs | 45,15,451 | 12.24 | |||
| Vanaja Sundar Iyer | 6,00,000 | 1.63 | |||
| Dhwani Girishkumar Chovatia | 13,69,516 | 3.71 | |||
| Ashish Kacholia | 7,76,474 | 2.11 | |||
| Bodies Corporate | 38,42,088 | 10.42 | |||
| Plutus Wealth Management Llp | 30,00,000 | 8.13 |
Ravi Dharamshi’s VALUEQUEST INVESTMENT ADVISORS PRIVATE LIMITED had bought 321650 and 367350 shares in two bulk deals on 21st December 2023 at the price of Rs 1030. However, the present holding in not known.
Samit Vartak’s SAGEONE INVESTMENT ADVISORS LLP bought 250000 shares in a bulk deal on 23rd February 20244 at Rs 1075.
Saurabh Mukherjea has provided a cogent rationale in January 2024 as to why he added Ami Organics to the Little Champs portfolio.
“Ami Organics Ltd (Ami) is a Surat based pharma intermediates and specialty chemicals manufacturing company. The key investment thesis surrounding the stock are:
– Wide chemistry skillset and large pharma intermediate portfolio – Over the years, the Company has created skill and competency in handling multiple chemistries allowing it to offer multiple routes of synthesis for any given intermediate. This enables the Company in partnering with a higher number of clients who have used varied routes of synthesis for their dossier filings. In addition to its wide chemistry capabilities, the Company has a big basket of products (~350-400) which provides visibility on growth as more and more of the products get commercially scaled up.
– Diversification – Ami Organics has made 3 key decisions to diversify and reduce their dependence on pharma sector – (i) entered larger volumes specialty chemicals through acquisition of Gujarat Organics Ltd; (ii) entered semiconductor chemicals segment through acquisition of majority stake in Baba Fine Chemicals; and (iii) developed and introduced EV battery electrolyte additives. As a result, company has now around 25% of its revenues coming from non-pharma industries. Furthermore, with scale up in semiconductor and electrolyte segments, the blended margins are expected to improve.
– Resilient financial track record – In last five years (till FY23), company has grown its revenues at 27% CAGR (Rs. 617 crores, including acquisitions), EBIDTA at 32% CAGR and PAT at 35% CAGR. The Company has maintained average EBIDTA margin of ~ 20% in last five years and average pre-tax ROCE of ~ 26%.”
Saurabh revealed on CNBCTV18 that his fund bought the stock at Rs 1050.
HDFC Securities and KR Choksey have recommended a buy of Ami Organics on the rationale that the back of (1) expansion of its speciality chemicals portfolio, (2) contribution from longterm contracts which shall start contributing to revenue from 4QFY24, and (3) strong product pipeline in its advanced pharma intermediate business.
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