Centrum's report on Sarla Performance Fibers
Consolidated revenue was up a mere 1.1% at Rs 746mn while standalone revenue rose 9.1% YoY to Rs 655mn. Operating profit increased 3.7% to Rs 180mn with margins expanding by 61bps to 24.1%. The consolidated gross margin stood at 62.7% (up 65bps YoY) while the standalone gross margin was at 55.3%.
Outlook
We maintain our Buy rating on Sarla Performance Fibers and TP of Rs 77 as we value the company on conservative Adj OCF/EV yield. The yarn manufacturer’s standalone business continues to grow at a healthy rate and volumes have bounced back to high single digits due to de-bonding of the Vapi unit.
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