Target: ₹3,100
CMP: ₹2,677.90
Doms Industries has reported another strong quarter amid a slowdown in the broader consumption space. Its Q2-FY25 revenue/EBITDA/PAT growth at 20/32/43 per cent yoy were ahead of BNP Paribas expectation. We raise our FY25-27E EPS by 3-5 per cent and expect Doms to double its earnings over FY24-27.
Doms completed the Uniclan acquisition on September 16, 2024, and it contributed 3 per cent to consolidated sales. Uniclan is seeing an annual sales run-rate of ₹180-200 crore currently. Also, 50 of Doms’ existing distributors have signed up for Uniclan product distribution. DOMS expects capacity utilization at Uniclan to increase to 85 per cent in FY26 from 60 per cent at the time of its acquisition.
Doms expects its core sales growth to accelerate in H2-FY25 and remains confident about demand even as new greenfield capacity comes on board starting Q3-FY26. Considering the growth visibility, we expect its premium valuations to sustain. We roll forward our valuation to Mar-27 and lift our target multiple to 60x (vs 55x earlier) – to the top-end of our consumer coverage (TTAN – 60x; NEST – 62x).