For 2QFY2020, Safari Industries (SIL) posted Strong Result top-line and bottom-line
growth. Revenue grew ~31% yoy to `170cr. On the margin front, the company
reported operating margin improvement by 98bps yoy. On the bottom-line front,
SIL reported de-growth of ~30% yoy to ~`8cr due to Strong top-line and operating
performance.
Outlook and Valuation: Going ahead, we expect SIL to report a top-line CAGR of
~26% over FY19-21E to ~`910cr on the back of diversified product portfolio
(catering to customers from all segments), and strong distribution network with high
brand recall. Moreover, we believe that SIL’s bottom-line is set to grow at a CAGR
of ~36% over FY11-21E due to gradual improvement in operating margin. We
maintain our Buy recommendation on the stock with a Target Price of `717.
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