Buy DOMS Industries; target of Rs 3085: Prabhudas Lilladher

Prabhudas Lilladher's research report on DOMS Industries

DOMS IN reported better-than-expected performance with revenues of Rs5,679mn (PLe Rs5,500mn) and EBITDA margin of 17.5% (PLe 17.3%) aided by healthy volume growth in stationary segment amid new product launches within categories like scholastic stationery, kits & combos and office supplies. Even hygiene business reported healthy revenues of Rs474mn (PLe Rs400mn) with an EBITDA margin of 8.1% (PLe 7.5%). The new development plan on 44- acres land parcel at Umbergaon has witnessed slight delay due to extensive monsoons (Rs1,500mn incurred towards capex in 1HFY26) and commercial production is expected to begin by 1QFY27E. Aided by capacity expansion in core stationery business, widening product basket (SKU count is up by ~300 in last 1 year), and strengthening distribution network (retail touch points are up by ~10K in last 1 year) we expect sales/PAT CAGR of 22%/24% over FY25- FY28E.

Outlook

We broadly maintain our estimates and maintain BUY on the stock with a TP of Rs3,085 (60x FY27E EPS; no change in target multiple).