Astec Lifesciences is a stock to track…looks interesting from a long term point of view
- New MD Anurag Roy has a good background (Manchester Organics – a subsidiary of Navin Fluorine)
- R&D head – was there in Deccan Fine Chemicals, another big agrochemical company
- Company investing heavily in R&D and will do so going ahead
- Transitioning from commodity business to a CDMO player in agrochemicals
- Godrej Group company
- CDMO revenue growing at a brisk pace; management guides for 25-30% growth YoY post FY25 as well
Seems to be going on the same path as PI Industries and Navin Fluorine
near term – next 1 yr could be painful…molecules in legacy business facing huge downward pressure in prices due to destocking and Chinese dumping…let’s c when that bottoms out
CDMO business revenue will reach approx 350 crs by FY25…according to the management, margins would be 25-30% in this segment in the coming years
When I look at Navin Fluorine from 2016-17 and see how the execution played out and how the stock price moved; i feel Astec can do the same if it executes well
Current mkt cap is 2000 crs; if execution happens nicely, can be a wealth creator
DISC : Took tracking position … waiting for stock price at settle before incremental allocation…
On lower side : Rs 900 looks good support
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