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Rossari Biotech has been performing entity on persistent basis showcasing ~41% topline CAGR, ~56% EBITDA CAGR & 60% PAT CAGR over FY17-FY20. Since there are no listed companies with the same business model, we have considered other listed entities in the specialty chemical business such as Fine Organics, Galaxy Surfactants, Aarti Industries etc. which trade at FY20 P/E multilplies of ~25x-31x.
At the offer price band of Rs 423- 425 Rossari Biotech is commanding a ~33.1x P/E & ~19.9x EV/EBITDA on FY20 figures which is inline with peers mentioned above. We believe company’s diversified product offerings, increasing demand for the products, growth prospects on the greater capacity (new upcoming facility), superior return ratios and stable asset quality justifies its valuation. We thus advise investors with a long-term investment horizon to SUBSCRIBE to the issue