Motilal Oswal's research report on Cello
CELLO has been witnessing muted performance for the last few quarters due to a weak demand scenario amid a consumption slowdown. Further, the geopolitical stress has been affecting exports of writing instruments, and a new glassware facility at Falna (Rajasthan) has incurred higher initial costs that hit CELLO’s profitability. However, with consumption gradually picking up both for consumerware and writing instrument businesses and improving efficiency in the new plant, we expect CELLO’s performance to improve going forward.
Outlook
CELLO is currently trading at 27x FY27E EPS with RoE/RoCE of 18%/19% in FY27E. We reiterate our BUY rating with a TP of INR700 (premised on 32x FY27E EPS).
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