Buy Cello World; target of Rs 686: Prabhudas Lilladher

Prabhudas Lilladher's research report on Cello World

We visited CELLO’s new glassware facility at Falna, Rajasthan, and interacted with the management to gain insights on the outlook for Consumerware segment with the ramp-up of the facility and recent ADD on vacuum insulated flasks and other stainless steel vacuum vessels imported from China, and export pick-up in the Writing Instruments and Stationery segment. CELLO has been engaged in the glassware products business for 6 years, initially relying on imports. Thus, the company has developed a deep understanding of the glassware market, including customer preferences and the dynamics of product lines, pricing and distribution. With the commissioning of Falna facility, total production capacity for Opalware & Glassware has increased to ~45,000tpa for Opalware & Glassware (Daman & Falna).

Outlook

We estimate revenue/EBITDA/PAT CAGR of 10.4%/10.8%/12.5% for FY25-28E. We assign SOTP-based TP of Rs686 (Rs678 earlier), implying PE of 33x Sep’27E. Maintain ‘Buy’.