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Stylam Industries - Weak Q4 Margins To Gradually Recover In FY23: Systematix

Stylam Industries - Weak Q4 Margins To Gradually Recover In FY23: Systematix

<div class="paragraphs"><p>High pressure laminates manufactured at Stylam Industries Ltd. (Source: Company website)</p></div>
High pressure laminates manufactured at Stylam Industries Ltd. (Source: Company website)

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Systematix Research Report

Stylam Industries Ltd. reported weak operating performance in Q4 FY22 as its revenue grew a meagre 6% YoY (despite 15% volume growth) and Ebitda margin contracted to 11.1% (FY22: 15.8%), mainly due to inadequate price hikes amid input cost pressures.

Management is hopeful of healthy demand continuing (both domestic and exports) and expects margins to recover gradually in FY23 on softening prices of key raw materials and sea freight.

After stabilisation, its new acrylic solid surface panels plant should significantly contribute to revenues starting from FY23.

With the large capex behind, operating leverage would drive Stylam’s margins and return ratios.

On these assumptions, we estimate revenue/profit after tax compound annual growth rate of 23%/30% over FY22-24E, with 21% return on equity, 29% return on capital employed and healthy free cash flows.

Click on the attachment to read the full report:

Systematix Stylam Industries Q4FY22 Result Update.pdf

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