Buy Dollar Industries; target of Rs 569: Arihant Capital

"India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business," JM Financial research report.

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26 Aug, 2025 12:21

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Arihant Capital's research report on Dollar Industries

Dollar Industries or DIL, over the years has transformed itself from mass market brand (86% in FY07) to a house of brands focusing mainly on mid-market and premium segment which as on FY21 contributed 43% and 24% respectively. We believe that the company is riding on key pillars to drive growth; A) Increasing penetration in its existing mass and mid market brands like ‘Dollar’ and ‘Big Boss’, B) Expanding its women’s product portfolio brand under ‘Missy’, C) Customer preference for leisure wear and active wear, which would drive athleisure’s share, given its affordable price points, D) Scaling up of premium & super premium segment under Pepe Jeans JV, E) Streamlining its Working Capital under Project Lakshya, F) Capex of INR1.05bn-1.1bn will be incurred over the next 1-1.5 years on doubling spinning capacity, the socks unit, and integration of 6 warehouse facility, and G) Investment in digital transformation to strengthen the supply chain, coupled with increasing share from online sales.

Outlook

The Company is radically trying to change the way it operates by transforming itself to a value-driven, innovation inspired, asset light and brand powered company. We initiate coverage with a BUY rating at a TP of INR569 per share; valued at PE 25x and EV/EBITDA of 16x FY23E; provides an upside of 55%.

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