Buy DOMS Industries; target of Rs 2650: ICICI Securities

ICICI Securities is bullish on DOMS Industries recommended buy rating on the stock with a target price of Rs 2650 in its research report dated August 14, 2024.

Broker Research

August 23, 2024 / 12:02 IST

Buy

26 Aug, 2025 12:21

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ICICI Securities research report on DOMS Industries

Takeaways: (1) DOMS’ strong investments in writing instruments and scholastic art material in FY24 have yielded strong segmental growth YoY. We highlight DOMS reporting strong revenue growth in segments that had strong capacity expansion in past. Strong growth in both these segments underlines the same. (2) EBITDA margin scaled to 19.4% (+302bps YoY) led by operative leverage. (3) Unlike past acquisitions, largely revolving around stationery and art materials, DOMS acquired controlling stake in Uniclan Healthcare – manufacturer of baby care/hygiene products. This may aid in broadening its total addressable market. (4) Core pencil segment capacity is set to increase to ~8mn/day, from current 5.7mn/day by FY25-end. We expect this to drive incremental growth for DOMS in FY26. We expect capacity addition to primarily drive strong growth in FY25/FY26. Maintain BUY.

Outlook

We model DOMS to report revenue and PAT CAGRs of 30.8% and 33.4%, respectively, over FY24-26E. We also model RoE to be >20% over FY24-26E. We maintain BUY on DOMS with a DCF-based revised target price of INR 2,650 (earlier INR 2,280; implied P/E of 60x FY26E).

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