Anand Rathi's research report on Stylam Industries
Far better realizations led to Stylam’s Q1 revenue surging 16.7% y/y to Rs 2.8bn, even as offtake was lower. Gross profit rose 16.8% y/y to Rs1.3bn. Economies of scale boosted EBITDA 26.4% y/y to Rs529m. The rise in operating profit was curtailed by other income/ finance cost lower/higher 81bps/243bps y/y to 0.3%/2.6% of sales, and tax incidence at 31.5% (25.1% of PBT a year back). This led to PAT down 0.3% y/y to Rs283m. The commissioning of the third laminate plant is in progress and will be operational by Oct’25. We introduce FY28e and expect 15.8%/21.9% revenue/PAT CAGRs over FY25-28.
Outlook
We retain our Buy recommendation on the stock, with a TP of Rs 2,368, 20x the average of FY27e/FY28e (earlier Rs 2,276, 20x FY27e EPS).
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