During FY22-25, Safari Industries recorded a CAGR of 36%/60%/65% in revenue/Ebitda/PAT, with a 12.7% Ebitda margin. The brokerage models a revenue/ Ebitda/APAT CAGR of 16%/25%/27% over FY25-FY28, led by volume growth and an improving margin profile.
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Motilal Oswal Report
Safari Industries India Ltd., a leading player in the mass-luggage industry with ~30% share between the top three players, has outpaced industry growth and reported a revenue CAGR of 36% over FY22-25.
During FY22-25, Safari Industries recorded a CAGR of 36%/60%/65% in revenue/Ebitda/PAT, with a 12.7% Ebitda margin. We model a revenue/ Ebitda/APAT CAGR of 16%/25%/27% over FY25-FY28, led by volume growth and an improving margin profile.
Management aims to double revenue (Rs 40 billion) over the next four-five years while maintaining gross margins of ~45- 47% and Ebitda margins of ~14-16%, based on the current outlook.
We expect Safari Industries to deliver industry-beating growth and expand its market share by focusing on-
building the Urban Jungle brand along with Safari Industries-Select (premium positioning),
ramping up capacity utilization at Jaipur,
developing in-house manufacturing of ancillary components, and
adding 50 exclusive brand outlets every year.
With strong operating performance, improving free cash flow to Rs 2.7 billion in FY28E, and an expansion in RoE to 19.4% in FY28E from 16.1% in FY25, we reiterate our Buy rating with a DCF-based target price of Rs 2,700 (based on an implied P/E of 50x on Sep'27).
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