Shares of Safari Industries surged nearly 6 percent to an all-time high of Rs 2,485 in early trade on August 30, driven by a spurt in volumes in the counter. Trading volumes in the counter rose as one lakh shares changed hands on the exchanges so far, higher than the one-month daily traded average of 73,000 shares.
At 10.56 am, shares of Safari Industries were trading at Rs 2,421 on the NSE, still up close to 3 percent despite coming off the day's high. Shares of the company are up over 17 percent in the past month.
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Earlier this month, Safari Industries reported a 9.4 percent year-on-year decline in net profit for the quarter at Rs 44.4 crore. Despite the weak bottomline, the company’s revenue for the June quarter grew by 5.5 percent to Rs 450 crore. However, the EBITDA margin also contracted sharply by nearly 400 basis points, dropping to 14.6 percent from 18.5 percent in the same period last year.
Regardless of the weak quarterly earnings, the company still fared much better than industry rival VIP Industries, which reported a steep 93 percent decline in its net profit to merely Rs 4 crore.
A major bone in the throat for VIP Industries, which could turn into an advantage for Safari, lies in their respective exposures to Bangladesh. VIP Industries relies on its eight plants in the country, with 30-35 percent of its capacity sourced from there, while Safari's dependence is lower, as it procures goods from third-party vendors. Managing inventory liquidation and addressing issues in Bangladesh will be crucial as the festive and travel season approaches.
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