Valuation Outpaces Reality: Time to Secure Profits in

ACUTAAS

Driven by stellar Q4 performance and anticipated execution of upcoming projects, the stock price of

surged nearly threefold over the past year and more than doubled in CY26 YTD. Consequently, it trades at an expensive premium of 40x FY28e EV/EBITDA, leaving no room for execution errors. The advanced pharmaceutical intermediates division remains the primary growth engine, commanding roughly 88 percent of the company's total sales. This strong performance is propelled by a robust ramp-up in CDMO operations, specifically sustained off-take from Fermion for intermediates bound for the blockbuster oncology drug Darolutamide. Underutilized Capacity Offers Runway: To cater to the thriving pharma intermediates pipeline, the company’s Ankaleshwar facility provides an extensive runway for future operations. Currently running at a low 31 percent utilization rate, the site possesses adequate capacity to absorb expanding market demand through FY28. Specialty Chemicals Rebound: The specialized chemical segments—spanning commodity, semiconductor, and battery chemistries—constitute 12 percent of sales. Backed by a strategic 55 percent stake in Baba Fine Chemicals, the division registered a strong Q4 recovery, expanding sequential operating margins from 12 percent to 29 percent. Future Battery & Tech Drivers: The company is aggressively positioning for long-term gains with the conclusion of its phase-one electrolyte additive capex at Jhagadia, fully secured by three-year contracts. Furthermore, a Rs 190 crore investment in South Korean JV Indichem aims to deepen key electronics-client relationships. Prudent Strategy and Outlook: While the company is projected to eclipse its medium-term top-line growth guidance of 25 percent, maintaining current high margins hinges entirely on successful project execution. Given that the current market price aggressively prices in these near-term tailwinds, partial profit-booking is highly recommended.