NSE Symbol: GALAXYSURF

Add Price: INR 2,035

Industry Group: Chemicals Specialty

Market Cap: INR 7,180 crore

50-Day Avg. Volume: INR 8.8 crore

Buy Range: INR 2,012 – INR 2,113

Company Overview:

The company is a leading player in the world of surfactants and specialty care ingredients, exclusively focussed on catering to the Home and Personal Care Industry. The company’s products cater to some of the largest global brands in the FMCG sector and find applications in skin care, hair care, oral care, body wash, sun care, household cleaners and fabric care segments. It has more than 100 products (and product variants) to serve 1000 customers across the globe. The company has six manufacturing sites in India, one in Egypt and one in the USA.

O’Neil Methodology and technical viewpoint:

The stock broke out of a stage-two cup-with-handle base on good volume, turning actionable.
Relative Strength, which indicates the price performance compared with the market, is at 53, and buyer demand at B.
EPS strength of 96 indicates a robust fundamental profile.

Recent Financial Performance:

Total volume for Q2FY21 grew 10.4% y/y to 63,026. Sales increased 11.2% to Rs 723 crore.
During the quarter, it has registered its highest quarterly volume EBITDA and PBT. EBITDA has crossed Rs 100 crore for the first time.
PAT increased 21.9% to Rs 81 crore.

Growth Drivers:

Personal & Home Care is a high entry business. These products require extensive chemical engineering and in-house execution. Each product requires a wide spectrum of ingredients. These go under stringent quality control benchmarks and certification.
The company has a strong focus on R&D and innovation, as a part of the “consumer to chemistry approach.”
Two-pronged market strategy to drive growth in both matured and emerging markets. India’s market grew 11.7% in H1FY21 and Africa, Middle East, and Turkey grew by 8.1%.
The company focuses on both existing customers and prospective customers. It tries to increase wallet share from existing customers.
The company is strong on its fundamentals, the debt/equity ratio has come down from 1.1 in FY15 to 0.7 in FY17, and 0.4 in FY20. Return on equity has been above 20% in the last six financial years. It peaked at 28.8% in FY17.

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