GMM Pfaudler posted a strong performance in the fourth quarter on May 25 with revenues at Rs 866 crore, up 24 percent year on year. The earnings before interest, tax, depreciation and amortisation (EBITDA) grew 35 percent to Rs 96 crore. EBITDA margins improved 90 bps to 11.1 percent versus 10.2 percent in the corresponding quarter of last year.

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The net profits more than doubled to Rs 36 crore in the fourth quarter. This includes Rs 19 crore of exceptional Mumbai property sales. The stock is trading 1 percent higher on the exchanges at noon on May 26.

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GMM Pfaudler won Rs 792 crore orders in the fourth quarter and a total of Rs 3,392 crore orders in FY23, up 15 percent, ending the year with an order backlog of Rs 2,162 crore, up 12 percent.

The company said that despite the challenging global environment, it has a strong opportunity pipeline and outlook remains positive. Mr. Tarak Patel, Managing Director said, “During the year, we completed the acquisition of Hydro Air Research Italia S.r.l, Italy, JDS Manufacturing Inc., USA and Mixel Group (France & China), which reinforces our strategy of expanding our product portfolio.”

The Board recommended a final dividend of Rs 1 per equity share and total dividend for FY23 (including interim dividend) would be Rs 2 per equity share.

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The company had earlier set a target for FY25 revenues of Rs 3,700 crore and EBITDA of Rs 630 crore. Axis Capital says the revenue target is achievable with implied 8 percent revenue CAGR over the next two years. However, achieving the EBITDA guidance is challenging as it implies a 17 percent EBITDA margin guidance. The brokerage adds "This would be premised on standalone margin improving from 15.9 percent in FY23 to 20 percent

in the next two years and others margin improving from 12.4 percent in FY23 to 15 percent plus over the next couple of years." Axis Capital has a Buy rating on the stock with a target price of Rs 2,600 implying 77 percent upside.

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