Are Anupam Rasayan shares poised for long-term gains on Jayhawk deal?

ET Intelligence Group: Anupam Rasayan, a specialty chemicals maker, has gained 22% on bourses in the past month including 6% increase since December 8 after the company announced the acquisition of the US based Jayhawk Fine Chemicals for $150 million.

The acquisition will give Anupam Rasayan a manufacturing foothold in the US, providing access to key end-markets and leading global customers. It will also strengthen its polymer portfolio with high-value dianhydrides and polyimide intermediates used in semiconductors and high-performance materials.

“Jayhawk accelerates our forward-integration journey by five-seven years and positions Anupam Rasayan as an end-to-end global contract development and manufacturing organisation (CDMO),” Gopal Agrawal, CEO of Anupam Rasayan India told ET.

The acquisition implies that the enterprise value of Jayhawk is at nine times operating profit before depreciation and amortisation (Ebitda) for the calendar year 2024. The transaction will be funded through a mix of internal accruals, debt and a quasi-equity investment of roughly $110 million from a global investment management fund. Jayhawk reported revenue of around $78 million in 2024 and will become a wholly owned subsidiary of Anupam.

“As the acquisition is funded largely through internal accruals and structured equity rather than heavy leverage, every incremental dollar of Ebitda will translate into earnings, making this transaction EPS (earnings per share) accretive from day one,” added Agrawal. The management expects to complete the deal by the end of January 2026.

The acquisition will significantly lift the US share in Anupam’s total exports to around 30% by FY27 from just over 3% currently. In addition, total exports will likely form 70-75% of revenue compared with 60% by similar comparison.

Anupam’s revenue grew by 149% year-on-year to ₹731.4 crore in the September quarter, driven by liquidation of older inventory which accounted for about 25-30% of sales, while net profit jumped 86.6% to ₹57.2 crore. Ebitda margin fell by 800 basis points to 20% due to dispatches from older inventory. The company expects margin to normalise at around 25% from the December quarter as new contracts and pricing structures take effect. The company’s export business remains insulated from recent US tariff actions, as most of its products fall under exempt categories.