La Opala- Capacity Addition, New Product Category Provides Growth Visibility Over Medium-Term: HDFC Securities

BQ Prime’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 BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..HDFC Securities Retail Research.Given the size of India’s opal ware sector, the vast under-penetrated population, consistent population growth and rising aspirations of the fast expanding middle class, we believe that opalware remains one of the most sustainable consumption stories in India. La Opala RG Ltd. is a leader in mass and premium product categories, which are mainly led by aggressive branding and strong distribution. The company has been consistently operating at best-in-class margins of 35% plus, which is the highest in the entire consumer discretionary space. This has resulted in a strong debt-free balance sheet and decent return ratios. It has constantly leveraged its superior brand recall through product launches in both value-for-money and premium segments. We expect the company to benefit from its leading position in the opalware and tableware segments, while we expect premium product launches to de-risk its revenue stream. Significant capacity addition, venturing into new product category (borosilicate glass), favorable consumer demand provides growth visibility over medium term..Key triggersRevamped distribution strategy,Entry into borosilicate glass category,Capacity addition to drive the growth,Balance sheet to remain lean..Key Risks Higher competition,Removal of anti-dumping duty on opalware imports,Volatility in raw material price..About the companyLa Opala, incorporated in 1987, is promoted by the Jhunjhunwala family. It is one of the leading players in tableware products (opal and glass) in India. The company’s production facilities are located at Madhupur, Jharkhand and Sitarganj, Uttarakhand, for opal ware segment and glassware segment. Both the plants have European technology and equipment from the best manufacturers in the world, reflecting higher asset utilization, faster investment returns, and faster processes. The company is a leader in the Indian tableware market, whose products are favorites in countries like US, UK, France, Turkey, the Middle East and other South East Asian countries..Click on the attachment to read the full report:.Som Distilleries - To Increase Market Share Through Product Innovations, Capex: HDFC Securities.DISCLAIMERThis report is authored by an external party. BQ Prime 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 BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

La Opala- Capacity Addition, New Product Category Provides Growth Visibility Over Medium-Term: HDFC Securities

Company has been consistently operating at best-in-class margins, which is the highest in entire consumer discretionary space.

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