'Buy' Cello Shares Maintains Motilal Oswal, Sees 15% Upside Potential — Here's Why

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Motilal Oswal Report

The last few quarters for Cello World Ltd. have been muted due to weak demand, higher costs, and initial gestation of the Falna plant. However, we expect the overall demand to improve in both consumerware and the writing instrument segment, coupled with improving efficiency in the new glassware unit.

We estimate Cello to deliver a compound annual growth rate of 15%/17%/18% in revenue/Ebitda/adjusted profit after tax over FY25-28. 

Cello is currently trading at 27x FY27E earnings per share with RoE/RoCE of 18%/19% in FY27E. Reiterate Buy with a target price of Rs 700 (premised on 32x FY27E EPS).

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