Outlook & Valuation
With the increase in dyestuff & dye intermediate capacity and steady ramp up in Trion utilization, we expect revenues to pick up in FY19. Focus on operating cost reduction by implemention of Thionyl Chloride and captive power plant would help in margin expansion. Increasing proportion of high margin speciality chemical business and higher captive consumption for increasing dyestuff production will boost EBITDA margin to +19% in FY19. Bodal is expected to report a healthy PAT CAGR of ~17-18% between FY17-FY19E. We maintain buy rating with target price of INR 258 valuing core business at 18x of FY19E earnings.