Shares of GMM Pfaudler Ltd climbed nearly 5% in early trading on January 10, following a bullish call by Ambit brokerage. The brokerage initiated a “Buy” rating on the stock with a target price (TP) of ₹2,300, representing a significant upside potential of 89% from the current levels.
Key Highlights from Ambit’s Report:
- Market Leadership: GMM Pfaudler holds over 40% of the global market share in glass-lined equipment, making it a dominant player in the industry.
- Growth Outlook: The company is expected to witness a revival in growth and margins by FY26/27, driven by a pick-up in chemical and pharmaceutical capital expenditures. Additionally, the expansion of its non-glass-lined (non-GL) and services segments will support this growth trajectory.
- Profitability Projections: Ambit estimates a robust 48% EPS CAGR for FY25-28E and a 9 percentage point improvement in RoCE during this period.
- Valuation: The current valuation discount of 25-35% to peers is anticipated to narrow as earnings recover. Ambit’s 2-year DCF-based TP of ₹2,300 implies a 35x one-year forward P/E.
As of 9:24 AM, GMM Pfaudler’s shares were trading at ₹1,274, up 4.58% or ₹55.85 on the NSE.
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