Buy KPR Mill; target of Rs 962 Sharekhan

Sharekhan's research report on KPR Mill

Garment volumes stood at ~70 million pieces in H1. With capacity utilisation at over 90%, the company is confident of ending FY24 with 150 million pieces in volumes. Business to grow at 12% CAGR over the next three years. Cotton prices have fallen to Rs. 55,000 per candy in India and are close to international prices. This will provide some support to demand for yarn & fabric products in the coming quarters. KPR’s EBIDTA margins will be better in H2 compared to H1 as the yarn & fabric business will benefit from lower input prices and some uptick in volumes, helping business margins to improve to double digits.

Outlook

We a retain Buy on KPR Mill with a revised PT of Rs. 962. Stock has corrected 8% from its recent high and trades at 23x/19x its FY25E/26E earnings.