Archean Chemical – Specialty Chemical Leader

detailed initiating coverage report on Archean chemical by DRChoksey.
DRChoksey_Initiating_Coverage_on_Archean_Chemical_Ltd_with_24%_UPSIDE.pdf (876.4 KB)

next leg of growth will come from bromine derivatives, 50% capex spending is done and benefits will come from FY25.
below is valuation summary
Archean Chemical demonstrated strong resilience in FY24,
maintaining a 35% margin despite revenue and profit growth
moderation. The industrial salt segment’s robust performance
offset declines in bromine revenue. With INR 130-140 crore
already spent on capex, benefits from the bromine derivative
business are expected to materialize starting FY25E. We
project a CAGR of 34% in revenue and 44% in net profit
during FY24-FY26E, driven by volume recovery and new
product lines. Valuing the stock at a P/E multiple of 17.5x
on FY26E EPS, we recommend a BUY with a target price of
INR 943.