Fine Organic Share Price Declines Following Weak Q2FY24 Results

Fine Organic Share Price Declines Following Weak Q2FY24 Results

VoM News Desk | October 31, 2023 | 12:49 PM IST | Breaking News | Follow on Google News

Fine Organic Share Price Declines Following Weak Q2FY24 Results

Fine Organic Share Price Declines Following Weak Q2FY24 Results

Fine Organic Industries witnessed a nearly 3% drop in its share price during early trading on Tuesday, October 31, after the company released its September quarter earnings. The stock opened at ₹4,485.05, a drop from its previous close of ₹4,591.05. By 9:20 am, the stock was trading at ₹4,485, reflecting a 2.31% decline.

The company reported a 49% year-on-year (YoY) decline in its consolidated net profit, recording ₹103.37 crore for Q2FY24. This is in contrast to the ₹202.63 crore net profit for the same period last year. The company’s revenue from operations also dropped significantly, down 41.2% YoY from ₹919.17 crore to ₹540.49 crore.

Poor Performance and Motilal Oswal Downgrade

Over the past year, Fine Organic share price has shown a poor performance, with a 22% decline. During the same period, the Sensex, an equity benchmark, increased by 6%.

Motilal Oswal Financial Services has downgraded Fine Organic, citing the stock’s rich valuation. They reported that the company’s performance would likely be affected in the near to medium term due to a lack of land for expansion, plants running at full capacity with no further debottlenecking opportunities, and delays in setting up additional capacities and starting the Thailand joint venture. The brokerage firm estimates a revenue, EBITDA, and PAT CAGR of 5%, 7%, and 9%, respectively, over FY23-25.

The stock is currently trading at nearly 43 times FY25E EPS (earnings per share) and about 30 times FY25E EV/EBITDA. Motilal Oswal states that the stock’s valuation is expensive, especially considering it’s expected to post earnings declines for the next two years (-39% in FY24E and -9% in FY25E).

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