For 1QFY2020, Safari Industries (SIL) posted Strong Result top-line growth, though
it disappointed on bottom-line front. Revenue grew ~29% yoy to `203cr. On the
margin front, the company reported operating margin contracted by 364bps yoy.
On the bottom-line front, SIL reported de-growth of ~29% yoy to ~`9cr due to cost
Outlook and Valuation: Going ahead, we expect SIL to report a top-line CAGR of
~19% over FY18-20E to ~`813cr 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 ~23% over FY18-20E due to gradual improvement in operating margin. We
maintain our Buy recommendation on the stock with a Target Price of `646.

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