Galaxy Surfactants (Buy)
Galaxy Surfactants (Galaxy) organised its analyst meet on June 7 to update the investors regarding the growth path for mid term. According to the management, the trend in the home and personal care industry (or HPC, the focus industry for Galaxy) is growing with no Formaldehyde, no Sulphate and no Parabens especially for the baby care segment.
Galaxy highlighted that Indian baby care segment has been growing rapidly and is expected to reach c. ₹5,000 crore by 2022 (₹70 crore mn in 2009). Additionally, sales of men’s grooming products have reached ₹10,000 crore in India and is growing at 13 per cent annually. Galaxy has taken advantage of these trends and has developed specific patented products and processes that can provide Galaxy a competitive edge. Galaxy detailed three specific patented products — two products based on their in-house process and one unique process to provide broad spectrum preservative. Galaxy believes that such innovations with a clear understanding of the trends will continue to provide volume growth at a rate faster than the industry growth, EBIDTA growth at a rate higher than volume growth, PBT growth at rate faster than EBIDTA growth and PAT growth at a rate faster than PBT growth. We maintain buy with a target price of ₹1,425 with no changes to our estimates.