Safari Industries Q4 Results Review - Industry Leading Growth Continues: IDBI Capital

IDBI Capital Report

Safari Industries India Ltd.'s Q4 FY24 sales were in-line with our expectations. Revenues jumped 21% YoY (VIP Industries Ltd. had reported 14.6% YoY revenue growth) to Rs 3,651 million on account of strong improvement in tourism activities.

Gross margin expanded by 45 basis points YoY and 234 bps QoQ to 43.6% due to lower input cost and better product mix. Ebitda increased 10% YoY (VIP Industries reported 88% YoY decline) to Rs 569 million; as Ebitda margin contracted by 151 bps YoY to 15.6% led by higher other overheads.

Net profit increased by 11% YoY to Rs 389 million, primarily driven by higher depreciation expense, although offset by increased other income.

We now lower our FY25/FY26 EPS forecast by 15%/13%, respectively.

We now value the stock at a PER of 50 times FY26E EPS to derive a target price of Rs 2,535 (earlier Rs 2,607).

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