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La Opala Q1 Results Review - Tracking Expectations: Nirmal Bang

Growth looks appealing, healthy balance sheet and consistent cash flow generation also augur well for La Opala.

<div class="paragraphs"><p>Dinnerware arranged on a table. (Source:&nbsp;Oleg Baliuk/ freepik)</p></div>
Dinnerware arranged on a table. (Source: Oleg Baliuk/ freepik)

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Nirmal Bang Report

Distribution expansion has been a key growth lever for La Opala RG Ltd. in the last two years and the reach continues to increase, as per the management.

We believe that the recent capacity addition by Borosil should not impact category growth as well as pricing. In fact, it should boost overall category growth and La Opala’s share in the tableware segment.

Entry into a new category like Borosilicate could enable La Opala to leverage its existing distribution and garner mind and wallet share.

Post earnings revision, we maintain 'Buy' on La Opala with a revised target price of Rs 540, indicating an upside of ~20% from current market price.

We value La Opala at 30 times price-to-earning on June-25E earnings. Overall, we are building in revenue/Ebitda/adjusted profit after tax compound annual growth rate of 19%/19%/23% over FY23-FY25E.

While growth looks appealing, healthy balance sheet and consistent cash flow generation also augur well for La Opala.

Click on the attachment to read the full report:

Nirmal Bang La-Opala-RG Q1FY24-Result-Update.pdf
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