Laxmi Organic Industries Ltd. – Comprehensive Investment Report

Laxmi Organic Industries Ltd.

BSE: 543277 NSE: LXCHEM

Value Pick Multibagger Best Stock for long term investment

Company Overview

Market Cap: ₹6,331 Cr.

Current Price: ₹229

52-Week High/Low: ₹326/₹212

Stock P/E: 46.5

Financial Highlights

Sales (FY24): ₹3,068 Cr.

Profit After Tax (PAT): ₹136 Cr.

ROCE: 9.40%

ROE: 7.36%

Future Growth Drivers

Capacity Expansion

Launch of India’s first 70KTA n-Butyl Acetate plant at Dahej by Q1 FY26
New 70KTA ethyl acetate production line at Lote, Maharashtra
Incremental CAPEX of ₹11,000 Mn across FY25-FY28

Strategic Initiatives

Focus on fluorospecialties and advanced diketene derivatives
Aim for 20% revenue contribution from new products by FY28
Backward integration into raw material production

Financial Projections

Revenue

FY24: ₹28,650 Mn → FY28E: ~₹57,000 Mn

Approximately 2x growth

EBITDA

FY24: ₹2,839 Mn → FY28E: ~₹7,666 Mn

Approximately 2.7x growth

ROCE

Targeted increase from 10% to 20% by FY28

Through efficient capital allocation

Competitive Landscape

Essentials

Largest domestic producer of ethyl acetate
Among top 3 global players (ex-China) in acetyl intermediates

Specialties

Dominant player in diketene derivatives
Among top 5 globally
Sole domestic supplier of electrochemical fluorination products

Inherent Risks

Market Risks

Commodity price fluctuations
Crude oil derivative dependency

Operational Risks

Regulatory approval delays
CAPEX timeline challenges
Execution risks

External Risks

Geopolitical trade uncertainties
Increasing competition
Export market volatility

Valuation Estimate

Target Price

₹275 – ₹300

Assumes EPS CAGR of ~20%

Valuation Metrics

Forward P/E: ~40
Current Stock P/E: 46.5
Dividend Yield: 0.26%

Investment Thesis

Laxmi Organic Industries Ltd. is a leader in acetyl intermediates and specialty chemicals, with a proven track record of strategic acquisitions and operational excellence. Its focus on innovation, sustainability, and cost efficiency positions it well for robust growth in the next 3-5 years.

With an ambitious plan to double revenues and triple EBITDA by FY28, the company offers significant upside potential for long-term investors.

Laxmi Organic: Pioneering Specialty Chemicals with Sustainable Growth Strategy