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Equity Bottom-Up

<ul><li>We upgrade Ami Organics Ltd (AOL) to BUY from ADD with a target price of INR1,600, owing to (1) ramp-up in Fermion contract in ensuing quarters, (2) expansion of its specialty chemicals portfolio with entry into battery chemical manufacturing, and (3) balance sheet turning net cash of INR 3.85bn in Q1FY25</li><li>The stock is currently trading at 42/28 FY25/26E EPS</li><li>We expect the EBITDA margin to improve by 508bps from 17.9% in FY24 to ~23% in FY26E, owing to (1) an increase in better-margin CDMO contribution to 25% from 12% in FY24 and (2) a ramp-up in capacity utilisation of speciality chemicals plant and advanced pharmaceutical intermediates units.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We upgrade Ami Organics Ltd (AOL) to BUY from ADD with a target price of INR1,600, owing to (1) ramp-up in Fermion contract in ensuing quarters, (2) expansion of its specialty chemicals portfolio with entry into battery chemical manufacturing, and (3) balance sheet turning net cash of INR 3.85bn in Q1FY25The stock is currently trading at 42/28 FY25/26E EPSWe expect the EBITDA margin to improve by 508bps from 17.9% in FY24 to ~23% in FY26E, owing to (1) an increase in better-margin CDMO contribution to 25% from 12% in FY24 and (2) a ramp-up in capacity utilisation of speciality chemicals plant and advanced pharmaceutical intermediates units.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>We retain our ADD rating on Ami Organics Ltd (AOL), with a target price of INR 1,360 (WACC 11%, terminal growth 6%), on the back of (1) expansion of its speciality chemicals portfolio, (2) Fermion contract revenue accruing from Q4FY24, and (3) strong advanced pharma intermediates product pipeline</li><li>The stock is currently trading at 37x FY25E EPS</li><li>We expect the EBITDA margin to improve by 222bps, from 20% in FY23 to 22% in FY26E, owing to a ramp-up in capacity utilisation in the speciality chemicals business and an increase in the value-added items in the product portfolio.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We retain our ADD rating on Ami Organics Ltd (AOL), with a target price of INR 1,360 (WACC 11%, terminal growth 6%), on the back of (1) expansion of its speciality chemicals portfolio, (2) Fermion contract revenue accruing from Q4FY24, and (3) strong advanced pharma intermediates product pipelineThe stock is currently trading at 37x FY25E EPSWe expect the EBITDA margin to improve by 222bps, from 20% in FY23 to 22% in FY26E, owing to a ramp-up in capacity utilisation in the speciality chemicals business and an increase in the value-added items in the product portfolio.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Ami Organics: Focus on Increasing Value-Added Products. Maintain ADD

Ami Organics - Focus on Increasing Value-Added Products. Maintain ADD

Thematic (Sector/Industry)

<ul><li>Aurobindo Pharma: EBITDA (+41% YoY) was in line with our/consensus estimates as 10% sales growth (-3% QoQ US, +8% EU, and +53% YoY in growth markets), higher gross margin (+544 bps YoY), was offset by higher staff (+13%) and SG&amp;A (+22% ex-R&amp;D – remediation cost of USD 9 mn and Pen-G plant opex, R&amp;D was -13% YoY)</li><li>ARBP expects (1) steady growth in the US oral solid, led by new launches and volume gain, (2) specialty/injectable to improve QoQ and it targets reach USD 600 mn sales globally in FY25 (~USD 141 mn in Q1FY25), (3) EU sales at Euro 880-900 mn on new launch visibility, (4) EBITDA margin of 21-22% in FY25 (21.4% in Q1) on reduction in remediation spend and Pen-G plant scale-up led leverage, and (5) tax rate at 27-28% in FY25</li><li>Factoring Q1, we have raised our EPS by 3/2% for FY25/26E and revise the TP to INR 1,520 (20x Q1FY27E from 18x)</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Aurobindo Pharma: EBITDA (+41% YoY) was in line with our/consensus estimates as 10% sales growth (-3% QoQ US, +8% EU, and +53% YoY in growth markets), higher gross margin (+544 bps YoY), was offset by higher staff (+13%) and SG&amp;A (+22% ex-R&amp;D – remediation cost of USD 9 mn and Pen-G plant opex, R&amp;D was -13% YoY)ARBP expects (1) steady growth in the US oral solid, led by new launches and volume gain, (2) specialty/injectable to improve QoQ and it targets reach USD 600 mn sales globally in FY25 (~USD 141 mn in Q1FY25), (3) EU sales at Euro 880-900 mn on new launch visibility, (4) EBITDA margin of 21-22% in FY25 (21.4% in Q1) on reduction in remediation spend and Pen-G plant scale-up led leverage, and (5) tax rate at 27-28% in FY25Factoring Q1, we have raised our EPS by 3/2% for FY25/26E and revise the TP to INR 1,520 (20x Q1FY27E from 18x)Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Aurobindo Pharma, Berger Paints, Metro Brands

India

Ami Organics Limited operates as a diligently managed pharmaceutical company. The Company specializes in varied products, custom synthesis, and contract manufacturing. Ami Organics serves customers in India.

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AMI Organics Ltd (AMIORG IN)

Ami Organics: Fermi-ON. Upgrade to BUY

We upgrade Ami Organics Ltd (AOL) to BUY from ADD with a target price of INR1,600, owing to (1) ramp-up in Fermion contract in ensuing quarters

HDFC Securities

Ami Organics: Fermi-ON

We upgrade Ami Organics Ltd (AOL) to BUY from ADD with a target price of INR1,600, owing to (1) ramp-up in Fermion contract in ensuing quarters

HDFC Securities

Ami Organics: Focus on Increasing Value-Added Products. Maintain ADD

We expect the EBITDA margin to improve by 222bps, from 20% in FY23 to 22% in FY26E, owing to a ramp-up in capacity utilisation in the speciality...

HDFC Securities

Ami Organics - Focus on Increasing Value-Added Products. Maintain ADD

We expect the EBITDA margin to improve by 222bps, from 20% in FY23 to 22% in FY26E, owing to a ramp-up in capacity utilisation in the speciality...

HDFC Securities

HSIE Results Daily: Aurobindo Pharma, Berger Paints, Metro Brands

EBITDA (+41% YoY) was in line with our/consensus estimates as 10% sales growth (-3% QoQ US, +8% EU, and +53% YoY in growth markets)

HDFC Securities

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