Results are out and they are disappointing. However, they are on course of achieving Rs. 2500 cr topline guidance given during year start.
I won’t talk about results as everyone can just read through the PDF. They didn’t have investor call this time. However, MD of the company did came on new channels.
He is guiding for Rs. 4000 cr topline by FY25 based on upcoming capex which will fully be operational by FY24 end. EBIDTA Margin guidance is of ~22% ± 2%. Thats the normalized margin which shoot upto 30% in recent past.
Currently, business is trading at 13.5x Q3 EBIDTA annualized. (Alkyl is trading at 45x)
If Balaji achieve Rs. 4000 cr topline (which seems doable), at 22%, EBIDTA would be Rs. 880 cr. Assuming an EBIDTA multiple of 15x, we are looking at ~37% CAGR growth over next 2 yrs. If the sentiments improve, multiple can also move towards Alkyl’s levels.
I am not factoring in debottlenecking which helps is operational leveraging. I am also not factoring in increased capacity utilization. Neither am I factoring in holding company discount. (I feel impact should not be large on BAL valuations).
PS: I am using Mcap / EBIDTA multiple instead of EV as they are debt free.
Disc: I am invested, hence totally biased 
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