Shares of multibagger Stylam Industries Ltd are trading at record high. The small cap stock touched an all-time high of Rs 1745 on June 8 on BSE. Brokerage Systematix expects the stock to hit Rs 1976 mark in a year, boosted by robust outlook and regular earnings upgrade for the stock.
The stock of the laminates maker has rallied over 1021% in the last three years. The stock, which closed at Rs 154 on June 8, 2020 rose to a high of Rs 1721 on the BSE on June 8, 2023).
Market cap of the firm stood at Rs 2916 crore in the previous session.
An amount of Rs 1 lakh invested in the shares of Stylam Industries three years ago would have turned into Rs 11.17 lakh today. In comparison, Sensex has risen 82.86 per cent during the period.
In terms of technicals, the relative strength index (RSI) of the Stylam Industries stock stands at 77.1, signaling it's trading in the overbought zone. Stylam Industries shares have a beta of 0.7, indicating low volatility in a year. Stylam Industries shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The stock has risen 87.54% in one year and gained 53% since the beginning of this year. The share has climbed 21% in a month.
Systematix said, “Stylam Industries’(SYIL) management reiterated its positive stance on the company’s outlook at its meetings with investors. Plant modernization and line balancing processes are on; the new ultra-modern greenfield plant at Rs 150 crore capex (Rs 5 00 crore plus revenue potential) is likely to be operational by March 24. It also retained its guidance of Rs 300 crore plus revenue from its acrylic solid surface product over the next 2-3 years. Greater mix of value-added SKUs will further boost SYIL’s market positioning, margins and return ratios. While concerns of global economic slowdown may temporarily pause volume growth (not yet witnessed),easing prices of key raw materials(phenol and formal dehydedown 25% in 3-monthand 50% in a year)would support margins and earnings. On these factors, we further upgrade FY24E/25Eearnings by 5-7% (a similar upgrade post 4Q result, report link) and estimate laminate-volume/revenue/EBITDA/PAT CAGR at 19%/23%/29%/32%over FY23-25E with strong 17.5% EBITDA margin (4Q: 17.1%)and RoE/RoCE(~24%/34%).Our revised target price of Rs 1,976 (20x FY25E P/E vs. 18x earlier) has further re-rating potential owing to robust outlook and regular earnings upgrade.”
Six promoters held 54.61 per cent stake or 92.55 lakh shares in the firm and 13,907 public shareholders owned 45.39 per cent for the quarter ended March 2023. Of these, 12914 resident individuals held 26.03 lakh shares or 15.36% stake with capital up to Rs 2 lakh. Only eight resident individuals with 5.26% stake held capital above Rs 2 lakh for the quarter ended March 2023. 307 NRIs held 2.26% stake or 3.83 lakh shares in Q4 of the last fiscal.
Financial Performance
In the March 2023 quarter, the firm reported a 61.29% rise in profit to Rs 26.79 crore against Rs 16.61 crore profit in the corresponding quarter of previous fiscal. Revenue climbed 31.80% to Rs 236.83 crore in the March quarter against Rs 179.69 crore in the March 2022 quarter. Operating profit zoomed 103.67% to Rs 40.53 crore for the quarter ended March 2023 against Rs 19.90 crore in the corresponding quarter of the previous fiscal.
On an annual basis, net profit zoomed 57.63% to Rs 95.98 crore for the fiscal ended March 2023 against Rs 60.89 crore for the fiscal ended March 2022. For the fiscal ended 2021, net profit stood at Rs 55.11 crore.
Revenue climbed 44.40% to Rs 952.13 crore in the March 2023 fiscal against Rs 659.35 crore for the fiscal ended March 2022. For the fiscal ended 2021, sales stood at Rs 475.85 crore.
About the Company
Stylam Industries is engaged in manufacturing of laminates, solid surface panels and allied products. The company’s products include high-pressure laminates, performance laminates (HPL), specialty laminates, exclusive surfaces, acrylic solid surfaces and compact laminates. Its high-pressure decorative laminates are available in a range of colors in solids and woodgrains designs, many evergreen and new texture finishes. Its performance laminates products include electrostatic dissipative laminates (ESD), chemical resistant laminates and fire retardant laminates.
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