Safari Industries Q3 Results Review - Expansion Plan On Track: Prabhudas Lilladher

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Prabhudas Lilladher Report.Safari Industries India Ltd.’s operational performance was broadly in-line with our estimate despite better than expected gross margin of 48.0% (our estimate: 45.0%) amid higher rent, freight, advertising and promotion and pre-operationalisation expense pertaining to upcoming plant in Jaipur. The expansion plan is on track and ~40-50% of the amount earmarked towards new plant is likely to be spent in FY24E itself. Capacity expansion will emerge as key earnings lever as freight cost will reduce given demand emanating from Northern belt will get catered from the new plant. Further, rising share of own manufacturing will result in better control over sourcing and lead to improvement in working capital. Consequently, we increase our gross margin estimate to 46.1%/46.2%/46.7% in FY24E/FY25E/FY26E but our overall earnings per share estimates are broadly intact (excluding the dilution impact from preferential issue) as we re-align our indirect cost assumptions. We maintain our positive stance on Safari and expect sales/PAT compound annual growth rate of 24%/30% over FY23-FY26E. Maintain ‘Buy’ with a target price of Rs 2,271 valuing the stock at 45 times Sep-25E EPS (no change in target multiple)..Click on the attachment to read the full report:.S Chand And Company Q3 Results Review - Net Cash Flow Roll Out Begins: Prabhudas Lilladher.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Safari Industries Q3 Results Review - Expansion Plan On Track: Prabhudas Lilladher

Capacity expansion plan at Jaipur is on track and ~40-50% of the ear-marked capex is likely to be expended in FY24E itself.

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