For 3QFY2019, Safari Industries (SIL) posted Strong Result top-line growth, though it disappointed on bottom-line front. Revenue grew ~39% yoy to `144cr. On the margin front, the company reported operating margin contracted by 444bps yoy. On the bottom-line front, SIL reported de-growth of ~27% yoy to ~`5cr due to cost pressures and higher taxes.
Outlook and Valuation: Going ahead, we expect SIL to report a top-line CAGR of ~36% over FY18-20E to ~`774cr 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 ~56% over FY18-20E due to gradual improvement in operating margin. We maintain our Buy recommendation on the stock with a Target Price of `1000.

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