Buy Siyaram Silk, company to report net sales CAGR of 12%: Amarjeet Maurya

By Amarjeet Maurya Sr. Equity Research Analyst, Mid-Caps at Angel Broking

Siyaram Silk Mills has strong brands which cater to premium as well as popular mass segments of the market. Further, SSML entered the ladies' salwar kameez and ethnic wear segment. Going forward, we believe that the company would be able to leverage its brand equity and continue to post strong performance. The company has a nationwide network of about 1,600 dealers and business partners.

It has a retail network of 160 stores and plans to add another 300-350 stores going forward. Further, the company's brands are sold across 3,00,000 multi-brand outlets in the country.

Siyaram Silk Mills Ltd: Rating: Buy | Target: Rs 851| Return 41%

Going forward, we expect SSML to report a net sales CAGR of 12 percent to Rs 1,981 crore and adj.net profit CAGR of 16 percent to Rs 123 crore over FY2017-19E on back of market leadership in blended fabrics, strong brand building, wide distribution channel, strong presence in tier II and tier III cities and emphasis on latest designs and affordable pricing points.