Anand Rathi's research report on Safari Industries
Safari Industries reported revenue growth of 12.4% y/y to ~Rs4.7bn (in line with our estimate and 1.2% lower than street estimate) in Q4FY26. Revenue grew by ~15.5% in FY26 with volume growth of ~19%. Gross margin remained largely flat on y/y basis at ~49.3%, while EBITDA margin declined by ~129bps y/y to ~13% in Q4FY26 (vs. our estimate of ~11%). Revenue growth is expected to be in low double-digit in Q1FY27, as April and May saw low double-digit growth, led by strong domestic demand despite weak international demand due to Middle East conflicts. The company has undertaken ~4-6% price hike due to increase in the prices of key raw materials by ~40%. The impact will be seen from Jun-26 onwards following clearance of inventory leading low double-digit margin in Q1FY27.
Outlook
Hence, we upgrade our rating on the stock to BUY with a downwardly revised 12-mth TP of Rs2,000 (from Rs2,650 earlier), valuing it at 40x FY28e EPS.
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Safari Industries - 2005026 - anand