Motilal Oswal's research report on Cello World
Cello World (CELLO) is the most diversified consumerware company and one of the top players in majority of its business segments. In this report, we have analyzed CELLO’s position against key players in its fastest-growing business segment, glassware. Since its foray into the consumer glassware segment in 2017, CELLO has quickly scaled up this business to generate revenue of INR2.8b vs. a total addressable market (TAM) of INR35b in FY23. The segment will be a key growth driver (26% CAGR over FY23-26) for the company amid evolving applications, capacity expansions in opalware and soda lime glassware, increase in SKUs, and import substitution. Under the consumer glassware segment, opalware/soda lime glassware dominate, with TAM of ~INR14b/INR15b. While La Opala dominates the opalware category, CELLO is also catching up with recent capacity expansions in Daman. Moreover, CELLO is the only large branded player that is expanding in soda lime glassware (higher TAM), while other players are expanding in borosilicate glassware (TAM of ~INR4B).
Outlook
CELLO is currently trading at 34x FY26E EPS with RoE/RoCE of 32%/39% in FY26E. We believe that the company will be able to successfully scale up new businesses and expand SKUs and distribution reach in order to evolve as a leading brand in the respective segments. We reiterate our BUY rating with a TP of INR1,100 (premised on 45x FY26E EPS).
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