DOMS reported revenue/Ebitda/PAT growth of 26%/16.2%/7.3% YoY. Adjusting for Uniclan acquisition, DOMS reported revenue growth of 13.4% YoY. While gross margins were flat YoY, EBbitda margin contracted 146 bps due to higher other expenditure.
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While DOMS Industries Ltd. guides for 18–20% revenue growth in FY26, we believe there are upside risks such as:
capacity expansion from Q3 FY26;
strong consumer acceptance of Wowper and rollout of wet wipes; and
innovation/launches of products of Skido and Clapjoy.
While the Uniclan (hygiene) business has relatively lower margins that DOMS, we believe it offers strong medium–long-term growth tailwinds. There is vacant space in hygiene products at affordable price points.
Leveraging DOMS' distribution/innovation abilities, Uniclan can be a strong value driver for DOMS over FY25–27.
We believe, steady launches of differentiated products and distribution expansion are key monitorables. Since DOMS has products for age groups starting from infants to college going students to office supplies, the company has created multiple growth tailwinds; its customer acquisition cost too is likely lower than peers who operate in select segments of stationery.
We cut FY26–27E EPS by 9.6–13.4% to factor in muted Q4 FY26 and guidance. We remain constructive. Maintain Add.
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