Galaxy Sur­fac­tants (Buy)

The Hindu Business Line - - MARKET RADAR -

CMP: ₹1,148.8

Tar­get: ₹1,425

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.

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