Arihant Capital's research report on Dollar Industries
Dollar industries has reported revenue growth of 21% YoY to INR 373 Cr and was above our estimate of INR 356 cr. Dollar man continued to lead revenue growth and its share in the total sales stood at 43%. In terms of geography, North India has a 44% share in revenue and East India has a 24% share in revenue. EBITDA for the quarter grew by 78% YoY and declined by 14% QoQ to INR 55 Cr as compared to our estimate of INR 61 Cr. EBITDA margin for the quarter came in at 14.9%, higher by 475 bps YoY. On a sequential basis, EBITDA margin has declined by 198bps due to higher staff cost and sub contract expenses. Company has reported profit growth of 85% YoY to INR 37 Cr and was lower than our estimate of INR 42 cr.
Outlook
We cut our FY23E/24E EPS estimates by 6%/7% respectively to factor in margin pressure. We downgrade our rating on the stock from Buy to Hold with a revised target price of INR 516 (Earlier INR 807), based on PE of 17x FY23E EPS of INR 30.
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