So the acquisition of Baba Fine Chem seems to have gone haywire. Looks like they had only one (major) customer Heraeus who is facing challenges in its final product. Baba had revenue of Rs.47 crore in FY23 and Ami paid 4X EBIDTA (Rs.68 crores) for a 55 % stake. Last year, the management said Baba will grow 3 to 4 X in a year. But now it is making just Rs.5 crores per quarter in revenues. Quite a coincidence that Heraeus started facing challenges just when Ami took over one of their suppliers.
Ami is now trying to develop other products and tap other customers, but until they get anything concrete, this acquisition will have to be deeply discounted. The good thing – hopefully – is that at least the technology they got access to is still useful and relevant.
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