Accumulate Emmbi Industries; target of Rs 118: KR Choksey

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26 Aug, 2025 12:21

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Emmbi Industries reported revenue growth of 23.9% YoY/25.8% QoQ to INR 925 mn, mainly on the back of good growth in exports. EBITDA has seen a growth of 1.7% YoY/14.8% QoQ to INR 87 mn, while EBITDA margin contracted by 206 bps YoY/90 bps QoQ on account of higher other expenses. Due to higher freight costs (shipping rate) in the international markets, which has seen an uptick of nearly 50% in the month of March only, other expenses has seen a 32.5% YoY/29.4% QoQ increase, thereby impacting EBITDA margin both on YoY and QoQ basis. Reported PAT has seen a strong growth of 30.2% QoQ to INR 31 mn, however on YoY basis, PAT has seen a decline of 18.2% due to higher tax expenses (718.3% YoY increase) compared to corresponding quarter of previous year.

We have rolled over our target P/E multiple to FY23E and now value the stock at 8.5x on its FY23E EPS of INR 13.9/share which yields a target price of INR 118 per share (earlier INR 92 per share), a potential upside of 23.1% over the CMP. Accordingly, we upgrade our rating on the stock from ‘ACCUMULATE’ to “BUY”.

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