Image source: © 2025 Krish Capital Pty. Ltd.

Highlights

  • Rothschild & Co Redburn issues a BUY rating with a 64.77% upside, targeting AUD 86.42.

  • Croda delivers 7% Group sales growth and 12% operating profit growth in H1 FY25.

  • Cost-saving targets raised to £100 million by 2027, reflecting aggressive operational optimisation.

Croda International Plc (LSE:CRDA), a UK-based specialty chemicals company known for applying smart science to create high-performance ingredients, has received a notable BUY rating from Rothschild & Co Redburn. Analyst Artem Chubarov expects the company’s shares to reach AUD 86.42, implying a 64.77% upside from current levels. This vote of confidence might be driven by Croda's resilient performance and consistent strategic execution across all its business segments.

Sales and Profit Growth Across Key Divisions

In its results for the half-year ending 30 June 2025, Croda delivered 7% sales growth at constant currency, driven by volume increases across its three core divisions:

  • Consumer Care rose 7%, with standout performance in Fragrances & Flavours (+17%) and Home Care (+7%).

  • Life Sciences grew 9%, benefitting from demand in Seed (+17%) and Crop (+12%) segments.

  • Industrial Specialties posted a modest 4% increase.

Adjusted operating profit rose 12% at constant currency, reaching an adjusted margin of 17.2%, up from 16.6% in H1 2024. This margin expansion reflects the Group’s focus on operational efficiency, volume recovery, and cost-saving initiatives.

Operational Efficiencies Fuel Profitability

Croda’s strategic transformation is also bearing fruit operationally. The company reported around £10 million in cost-saving benefits in the first half of FY25 through its efficiency programme, and it has now increased its annualised cost savings target from £40 million to £100 million by the end of 2027.

In addition, Croda has initiated a review of its production and distribution assets to optimise capacity and unlock further gains in productivity.

Investment-Driven Returns and Resilient Balance Sheet

Croda continues to improve returns on recent investments. Sales of ceramides—acquired in 2023—were up nearly 50% in constant currency. The Group is now reducing investment intensity, with capex moderating as major projects near completion.

Financially, the Group maintains a balance sheet with a leverage ratio of 1.5x EBITDA (well within its 1–2x target range), and has increased its interim dividend by 1p to 48.0p.

Outlook

Despite a volatile macroeconomic and political backdrop, Croda remains confident in its guidance. For FY25, the Group continues to forecast adjusted profit before tax of £265–295 million at constant currency. The company will provide its next update on 16 October 2025.