Shares of DOMS Industries Ltd surged more than 10 per cent to scale new highs during the trading session on Tuesday after a host of brokerage firms remained positive on the stock as the recently listed stationary player announced a strong set of numbers in the March 2024 quarter.
DOMS Industries' net profit grew 29 per cent on a year-on-year (YoY) basis to Rs 47 crore in the March-ended quarter and margins expanded by 40 basis points (bps) to 18.8 per cent for the quarter. DOMS Industries revenue rose 20 per cent YoY to Rs 403 crore in Q4FY24, while Ebitda grew 22 per cent YoY to Rs 76 crore.
Shares of DOMS Industries surged 10.11 per cent to Rs 2,035 on Tuesday, commanding a total market capitalization of close to Rs 12,000 crore. The scrip had settled 1847.55 in the previous trading session on Monday. After the quarterly earnings, brokerage firms continue to remain positive on the stock.
DOMS reported a strong quarter with sales growth of 20 per cent, which was largely driven by volumes. The company has been able to mitigate supply constraints by aggressively incurring capex to build new capacities and modernising and upgrading the existing ones, said IIFL Securities.
"With capacity expansion on track and scaling up of adjacent product categories coupled with steady growth in existing categories, we believe that the company is well placed to deliver a sales CAGR of 26 " over FY24-26ii. We upgrade our EPS estimates by 2 per cent," it added, while maintaining a 'buy' call on the stock and a target price of Rs 2,130 on it.
Shares of DOMS Industries were listed in December 2023, when the company raised a total of Rs 1,200 crore via IPO, issuing shares for Rs 790 apiece. The stock has rallied about 160 per cent from its issue price in just six months of its Dalal Street debut.
DOMS Industries posted strong Q4FY24 results, with topline, Ebitda and profit soaring 20 per cent, 23 per cent and 29 per cent, respectively. With stable raw material prices and higher operating efficiency, margins have improved 40 bps YoY to 18.8 per cent, above estimate, said Nuvama Institutional Equites.
"Better-than-expected execution, focused approach on 'kid products' launches and capacity expansion on track, shall continue to pave the road for steady growth. On the back of a strong performance and higher earning visibility, we are increasing our EPS estimates by 9 per cent," it added, maintaining a buy' tag and a target price of Rs 2,121, valuing the company at 50 times FY26E EPS.
DOMS delivered yet another strong quarter on revenue and profitability. Revenue performance was led by continued strength in the domestic market while export market performance was muted. This along with benign input costs and better product mix resulted in gross and EBITDA margins sustaining at healthy levels on sequential basis, said JM Financial.
"Given the superior growth trajectory & healthy RoIC, we expect the stock to trade at a premium multiple. We remain optimistic on the company’s ability to gain market share by focusing on innovations and leveraging end-to-end manufacturing capabilities. Any sharp correction in the stock should be looked at as an opportunity to add.," it said with a 'buy' call and a target price of Rs 2,000.
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