Doms Industries shares rise as Prabhudas Lilladher initiates with 'buy'

Doms Industries has already had a remarkable year, rallying a staggering 133 percent on year-to-date basis.

Shares of Doms Industries Limited advanced over a percent to Rs 2,967 in morning trade on October 21, extending gains for a second session in a row, after Prabhudas Lilladher initiated coverage with a 'buy' call as it sees various levers for growth.

With a 'buy' call and a price target of Rs 3,349, the domestic brokerage forecasts an upside potential of 14.5 percent from the last close of Rs 2,924 on the NSE. Doms Industries has already had a remarkable year, rallying a staggering 133 percent on year-to-date basis.

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The brokerage highlights the company’s strong brand recognition, driven by its consistent product innovation. DOMS' well-established distribution network, which spans across India, plays a key role in its market reach and penetration, analysts said.

Additionally, DOMS' backward integration strategy provides a competitive advantage, enhancing its cost structure and operational efficiency. The company’s superior research and development capabilities, supported by its collaboration with FILA, have further strengthened its technical expertise, allowing it to stay ahead of competitors.

Looking ahead, DOMS Industries is expected to see a revenue and PAT compound annual growth rate (CAGR) of 26 percent and 28 percent, respectively, over FY24-FY27. Its recent entry into the diaper market, along with plans to expand into ancillary categories such as footwear, apparel, confectioneries, and sports gear, broadens its addressable target market. These developments present significant growth potential for the company in the coming years.

Back in April, BNP Paribas also initiated coverage with an 'outperform' rating suggesting that the company is a top school stationery and art materials firm in India, and has doubled its sales in recent years without any hefty ad spending. Popular with kids, its success stems from innovation and in-house manufacturing, offering value and strong margins.

In the first quarter, the company reported a rise of 49.5 percent in consolidated net profit to Rs 54.3 crore, while its revenue rose 17.3 percent at Rs 445 crore.

At about 9:20 am, Doms Industries' share price was trading at Rs 2,948, higher by 0.8 percent from the last close on the NSE.

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