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* Ami Organics Limited has reported a growth of 20.2% in its consolidated revenues at ?1,470 million in Q2-FY23 as against ?1,223 million in Q2-FY22. The performance wan driven by growth in the Advance Pharma Intermediate business while specialty chemicals business remained flat in terms of growth.

* On the profitability front, the company’s consolidated operating margins (Ex. Other Income) stood 19.1%% at ?281 million in Q2- FY23 as against 22.4% at ?274 million in Q2-FY23. The decline in operating performance was mainly attributable to increase in overall operating cost. However, on sequential basis the company has shown improvement in operating margins. The consolidated PAT margins for the company during the quarterstood 13.6% at ?200 million as against 14.7% at ?180 million in Q2-FY22.

* On segment basis, Pharma Intermediates segment registered a growth of 29.2% at ?1,249 million in Q2-FY23 as against ?967 million in Q2-FY22. The Specialty Chemicals segment remained flat to ?220 million in Q2-FY23 as against ?220 million in same quarter previous year.

* During the quarter, the company has completed development of Methyl salicylate and has successfully erected Flow reactor at Jhagadia plant which is expected to start production from Q3FY23. The company has also undertaken increase in volume capacity by 3x. In its electrolyte additive the company is expecting commercial trial order in November 2022 and commercial orders to start from the first half of the calendar year 2023. The products are in various stages of qualification with customers in China, Korea, India, and Europe The company has also received trial order for agrochemical intermediate and agrochemical intermediate product which is to get commercialized in Q3-FY23.

* The company’s planned capex of about ?1,900 million in its intermediates business is progressing as per schedule and is in civil construction stage with equipment ordering completed. The new facility is expected to be ready by December 2023. For the current financial year the management has maintained the guidance.

* With the presence in high growing and niche markets Ami Organics Limited is set to continue to post better growth in mid to long term. We have incorporated current financials and updated our numbers for the company. We continue to remain positive on the stock and maintain our BUY rating on the stock with a target price of ?1,282 per share.

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