Prabhudas Lilladher's research report on DOMS Industries
We cut our FY26E/FY27E EPS estimates by 12%/7% as we re-align our top-line assumptions amid signs of growth fatigue in the core stationary business. DOMS reported an in-line performance with revenues of Rs5,087mn (PLe Rs5,067mn) and EBITDA margin of 17.3% (PLe 17.0%). However, growth in the core stationary business was at multi-quarter lows of 14%. Though we foresee near term growth challenges, the long-term story remains intact as the new development plan on 44-acres land parcel at Umbergaon is on track and the first building is expected to be ready by 3QFY26E. Further, phased expansion in capacities for pens, pencils, mathematical boxes, and paper stationary products will drive growth in the interim; further aided by consolidation of hygiene business.
Outlook
We expect sales/PAT CAGR of 24% over FY25E-FY27E and retain BUY on the stock with a TP of Rs3,087 (60x FY27E EPS; no change in target multiple).
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