Safari Industries Q1 Review - Result Beat; Market Share Gains Continues: IDBI Capital

IDBI Capital Report

Safari Industries India Ltd.'s Q1 FY24 result was better than our expectations. Revenues jumped 46% YoY (VIP Industries Ltd. had reported only 8% YoY growth) to Rs 4,263 million on account of strong improvement in tourism activities.

Gross margin increased by 240 basis points YoY to 40.8% led by price hike amidst stable input cost. Ebitda jumped 71% YoY (VIP Industries reported 22% YoY growth) to Rs 713 million; Ebitda margin expanded 250 bps YoY to 16.7%.

Safari has ventured into premium range under the brand name Urban Jungle- which has received strong initial response (given strong industry tailwinds).

We raise our sales estimates for FY24-25 by 6-8% given strong result beat in Q1 FY24. Our FY24/FY25 Ebitda stands revised upwards by 8%/12%.

We now the stock at a price-to-earning ratio of 45 times FY25E (earlier 40 times FY25) earnings per share to derive a target price of Rs 4,089 (earlier Rs 3,223).

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