Rossari Biotech

On an upper price band of Rs. 425, the company trades at 33x FY20 earnings of Rs. 65 cr which is above an industry average. The higher valuations are justified given better asset turnover ratio, working capital cycle and strong balance sheet compared to the peers. With doubling up of the capacity the company is poised for a significant long term growth; however it may face some turmoil in near term due to its exposure to textile industry which is struggling due to Covid-19. We opine investors to subscribe for the IPO for listing gains and Buy on Dips post listing for long term.