1 day ago
Nuvama Raises Galaxy Surfactants Target on Profit and Volume Outlook
Galaxy Surfactants makes ingredients used in home and personal care products.
Its shares rose after Nuvama gave the company a more positive outlook.
Nuvama kept its Buy recommendation and raised its price target.
Higher crude oil prices may make Galaxy’s palm-based ingredients more competitive.
Sales volumes in Africa, the Middle East and Turkey may also recover as supply problems ease.
The company is developing higher-value products for skincare, cosmetics and dermatology.
Its Vision 2030 plan aims to double volumes and increase EBITDA by 2.5 times by 2030.
Nuvama also warned about raw-material supply, customer concentration, supplier dependence and currency risks.
Galaxy Surfactants shares rose more than 6% on Thursday, 1 October, after Nuvama retained its Buy rating.
Nuvama raised its target price to ₹3,265 from ₹2,927 and increased its FY27 and FY28 EPS estimates.
Higher crude prices could improve the cost advantage of Galaxy’s palm-based, oleochemical surfactants over crude-linked alternatives.
A gradual recovery in Africa, Middle East and Turkey volumes could support earnings, following supply-related disruptions.
Expansion into higher-margin leave-on products and the Vision 2030 plan are key growth drivers, though several operational risks remain.
- Who
- Galaxy Surfactants and Nuvama Institutional Equities.
- What
- Nuvama retained its Buy rating and raised Galaxy Surfactants’ target price from ₹2,927 to ₹3,265.
- Where
- The outlook covers Galaxy’s business, including its Africa, Middle East and Turkey operations and Suez plant.
- When
- Thursday, 1 October; the articles do not specify the year.
- Why
- Nuvama cited improving profitability, a shift toward oleochemical surfactants, possible AMET volume recovery and growth in higher-margin products.
Key facts
- Brokerage rating
- Buy, retained by Nuvama Institutional Equities
- New target price
- ₹3,265
- Previous target price
- ₹2,927
- EPS estimate changes
- FY27 EPS raised 13.4%; FY28 EPS raised 11.5%
- AMET volumes
- About 60,000 tonnes currently, compared with around 90,000 tonnes at the FY21 peak
- Vision 2030 targets
- Volumes to double and EBITDA to increase 2.5 times by 2030
- Key risks
- No long-term raw-material contracts, key-customer dependence, single-supplier reliance and foreign-currency fluctuations
Sources
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