PL First Cut – Safari Industries | 2QFY24

PL First Cut – Safari Industries | 2QFY24 – Jinesh Joshi – Research Analyst, Prabhudas Lilladher Pvt Ltd

Safari Industries | 2QFY24 First Cut | Results largely in line – Recommends a bonus, declares an interim dividend and announces capex of Rs2,150mn| BUY |

✳️Top-line increased 17.5% YoY to Rs3,700mn (PLe Rs3,779mn;) as against Rs3,149mn/Rs4,267mn in 2QFY23/1QFY24 respectively.

✳️Gross profit increased 37.8% YoY to Rs1,684mn (PLe Rs1,625mn) with a margin of 45.5% (PLe 43.0%) as compared to a margin of 38.8%/45.1% in 2QFY23/1QFY24 respectively.

✳️EBITDA increased 51.5% YoY to Rs635mn (PLe Rs612mn) with a margin of 17.2% (PLe 16.2%) as against 13.3% in 2QFY23 and 18.5% in 1QFY24. Pertinent to highlight that Safari’s EBITDA margin of 17.2% was much higher than VIP (9.7%).

✳️PAT increased by 53.3% YoY to Rs398mn (PLe Rs368mn) with a margin of 10.7% (PLe 9.7%) as compared to a margin of 8.2%/11.7% in 2QFY23/1QFY24.

✳️The Board of directors have declared an interim dividend of Rs2.5 per equity share and recommended a bonus in the ratio 1:1. Safari has also announced a capex of Rs2,150mn for setting up an integrated greenfield manufacturing unit.

✳️We retain BUY on the stock with a TP of Rs4,559. The stock currently trades at 57x/46x our FY24E/FY25E EPS.