Anupam Rasayan CDMO scale-up and acquisitions underpin advanced materials growth outlook

Investment View and Valuation

Deven Choksey Research has changed its rating on Anupam Rasayan India Ltd. to ACCUMULATE, supported by the company’s transition from a conventional specialty-chemicals producer towards a diversified custom synthesis, CDMO and advanced-materials platform. The broker sees technological differentiation in hazardous and complex chemistries, including continuous-flow chemistry, photochemistry and fluorination, as a source of pricing power, Tier-1 customer stickiness and lengthy qualification barriers.

Anupam Rasayan is stated to be the first company globally to commercialise Ethyl Trifluoroacetate using continuous-flow chemistry. The broker values the company at 38 times FY28E forward PE. Applying this multiple to FY28E EPS of Rs 36.2 produces a target price of Rs 1,374, implying 12.1 per cent upside from the prevailing market price of Rs 1,226.

Q1 FY27 Financial Performance

Q1 FY27 reported revenue was Rs 655 crore, up 31.0 per cent year on year and 27.8 per cent quarter on quarter, driven by product commercialisation and expanding CDMO operations. Revenue was 9.4 per cent below Deven Choksey Research’s estimate.

EBITDA increased 12.4 per cent year on year and 27.4 per cent sequentially to Rs 162 crore. The EBITDA margin of 24.8 per cent was broadly in line with the broker’s estimate and was supported by high-value products. PAT was Rs 39 crore, down 13.3 per cent year on year and 21.2 per cent quarter on quarter, with a 5.9 per cent margin. Higher depreciation and finance costs following recent acquisitions affected profitability.

Gross profit was Rs 370 crore and gross margin was 56.5 per cent, helped by inventory changes, higher-value products, Tanfac integration and Jayhawk Fine Chemicals integration.

Business Mix and Product Pipeline

Management reported consolidated Q1 FY27 revenue of Rs 667.55 crore, up 36 per cent year on year, with exports comprising 36 per cent of revenue. Three molecules were commercialised during the quarter, taking the product portfolio above 125 products. More than 90 molecules remain under development across agrochemicals, pharma, semiconductors, EV batteries and Performance Materials.

FY26 revenue mix comprised Life Science Specialty Chemicals at 41 per cent, Performance Materials at 31 per cent, and other fluorinated products and Tanfac at 28 per cent. Management expects pharma and Performance Materials to outgrow agrochemicals.

Growth Drivers and Acquisition Strategy

• Tanfac: Provides access to fluorination inputs such as HF and KF. Tanfac HFC-32 commercialisation is targeted for Q3 FY27.
• Jayhawk Fine Chemicals: The completed acquisition of the US-based company had an enterprise value of about US$134 million. Jayhawk provides an approximately 800-acre site with below 10 per cent utilisation and is expected by management to add 10-15 per cent to overall revenue growth while advancing semiconductor, electronics and defence customer opportunities.
• Bliss GVS Pharma: Integration is underway, with acquisition completion expected by September 2026. Management targets utilisation of 60-70 per cent from about 30 per cent over two to three years, creating operating-leverage potential and cross-selling opportunities. Consideration of about Rs 1,600 crore is expected to be funded by about Rs 300 crore of debt and an equity-linked instrument for the balance.
• BASQUEVOLT: The letter of intent could generate about US$300 million over 10 years.

Growth Outlook and Broker Estimates

Management expects FY27 organic revenue growth of 20-25 per cent, with Jayhawk contributing a further 10-15 per cent. It does not expect major additional capex beyond balance-sheet investments.

Deven Choksey Research expects FY26-FY28 revenue, EBITDA and PAT CAGR of 39 per cent, 42 per cent and 56 per cent respectively. The outlook is supported by conversion of the Rs 17,500 crore letter-of-intent pipeline, Tanfac HFC-32 commercialisation targeted in Q3 FY27, and growth in US Performance Materials.

Key Risks

• Integration and execution issues related to acquisitions.
• Slower order or letter-of-intent conversion.
• Adverse product mix and input-cost movements.
• Fluctuations in end-market demand.
• Elevated leverage that could constrain profitability and growth.