Ami Organics Ltd share Price Today

Chemical stocks has been in limelight since beginning of April after being out of favour for several months as risk-reward turned favourable. Within the small cap Chemical stocks we remain constructive of Ami Organics as it has generated a breakout above the last 16 month range (₹1110-825) offering fresh entry opportunity

The stock post its quarterly numbers has also generated a breakout above the bullish Flag formation with strong volume of more than six times the 50 days average volume of 0.78 lakhs share per day highlighting larger participation at the breakout area and continuation of the up move

Structurally, it has witnessed a faster retracement of the last falling segment as 28 weeks decline (₹1154-861) was completely retraced in just eight weeks. A faster retracement signal a robust price structure

We expect the stock to head towards ₹ 1290 levels in coming months being the 80% retracement of entire breather (₹ 1418-765)

Pharmaceutical company Ami Organics announced Q3FY24 results:

Financial Highlights for Q3FY24:

• Revenue from operations for Q3FY24 grew by 9.2% YoY to Rs 1,664 million. The gross margin for the quarter was at 42.9% as compared to 46% in Q3FY23 and 41% in Q2FY24. Gross margins contracted 303 basis points YoY but expanded by 190 bps sequentially. Gross margins were driven by unfavourable product mix and pricing pressure.
• EBITDA for the quarter came at Rs 265 million, down 13.9% YoY compared to Rs 308 million in Q3FY23 and up 6.8% QoQ compared to Rs 248 million in Q2FY24.
• EBITDA margin for the quarter was at 15.9% as compared to 20.2% in Q3FY23 and 14.4% in Q2FY24. EBITDA margins degrew by 430bps YoY and grew by 153 bps sequentially. EBITDA margins were largely driven by gross margins.
• PAT for the quarter was Rs 178 million. The PAT margin for the quarter was 10.7%

Commenting on the results, Mr. Naresh Patel, Executive Chairman & Managing Director, Ami Organics Limited, said, “In the face of a challenging landscape of the chemical industry, I am pleased to report that we have been able to deliver quality growth in Q3FY23 with our revenue from operations growing 9.2% YoY to Rs. 1,664million. This growth is underpinned by robust volume growth of 25%, indicating strong business traction.

During the quarter, we further solidified our relationship with Fermion by signing an agreement for two additional advanced intermediates for their APIs. This milestone reflects AMI Organics’ prowess in fostering enduring client relationships, ably supported by strong R&D and manufacturing strengths. Additionally, we also inaugurated a state-of-the-art, technology-driven plant at our Ankleshwar site, designed to meet the growing demand in the pharmaceutical intermediate business. I am also excited to share that we have signed an MOU with a global manufacturer of electrolytes for the manufacturing of electrolytes for battery cells and allied materials. In this context, we have also signed an MoU with the Government of Gujarat for investment amounting up to Rs 300 crores for setting up of a dedicated manufacturing facility for electrolytes business in Gujarat.

Despite the industry headwinds, we remain confident of closing the year with healthy growth. I would also like to highlight that the various initiatives we have taken in FY23 and FY24 enhances our revenue visibility for FY25 and beyond, bolstering our confidence in our potential for stronger growth in coming years.”

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