Shares of Anupam Rasayan rose over 5 percent on Friday after global brokerage Jefferies initiated a ‘buy’ rating on the specialty chemicals company’s stock.

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At 12:05 pm, the stock was trading 2 percent higher at Rs 882.10 on BSE.

Jefferies has set a target price of Rs 1,040, meaning it sees a 16.99 percent upside in Anupam Rasayan shares, which were quoted at Rs 888.95 on BSE at the time of writing.

According to the brokerage firm, the company is well-positioned to benefit from 'China + 1' with its diversified chemistry expertise. The strong order pipeline of Anupam Rasayan offers medium-term growth visibility, the brokerage said.

It has forecast revenue/EBITDA/profit CAGR of 33 percent/29 percent/31 percent over FY22-24 and said that valuation is favourable after a 16 percent correction.

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Anupam Rasayan made its market debut in March 2021 at a discount of 6.3 percent on BSE. It finished the listing day at a 5.2 percent discount. Its IPO worth Rs 760 crore was subscribed 44.1 times.

The reserved portion for retail investors was subscribed 10.77 times and that of non-institutional investors is 97.42 times and qualified institutional buyers 65.74 times. Employees put in 1.71 times more bids compared to the reserved portion.

In the quarter ended December 31, 2021, Anupam Rasayan recorded a quarterly net profit of Rs. 37.90 crore, up 75.1 percent from Rs. 21.65 crore during the same period a year ago.

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The firm began operations in 1984 with conventional products and now it makes specialty chemicals that involve multi-step synthesis and complex chemistries. It has six multi-purpose manufacturing facilities based in Gujarat with a combined aggregate installed capacity of around 23,396 metric tonnes.

Earlier in January, the chemicals maker announced it has signed a Letter of Intent (LoI) worth $95 million (about Rs 700 crore) with a multinational crop protection firm for the supply of new life science-related active ingredients.

The firm’s CFO Afzal Malkani told CNBC-TV18 that the tenure of this LOI is for five years and per annum revenues will be Rs 140 crore.

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