Jefferies bullish on this smallcap textile stock, Rs 185 target implies 38% upside
Published on 05/06/2025 01:34 PM
Foreign brokerage Jefferies is bullish on smallcap textiles stock with a multibagger return of 281 per cent in the last 5 years. The brokerage has recommended buying the stock for a target of Rs 185, implying gains of 38.16 per cent return in the scrip. The brokerage has mentioned the company's expansion into newer categories over time as the rationale behind its views.
Further, it expects the textile company to deliver 18 per cent EPS CAGR over FY25-28e, even as FY26 would be muted due to near-term tariff uncertainty.
The company's Q4 PAT declined 10 per cent on-year to Rs 132 crore in the March quarter, while revenue rose 2.74 per cent on-year to Rs 2,645.90 crore during the period under review.
EBITDA for the fourth quarter of FY25 was Rs 318 crore as compared with Rs 400 crore in the corresponding period last fiscal year. EBITDA margin reduced to 12 per cent in Q4 FY25 as against 15.3 per cent in Q4 FY25.
On the segmental front, the Home Textile business reported revenue of Rs 2,452.56 crore, up 1.27% YoY, while the Flooring business recorded revenue of Rs 195.76 crore in Q4 FY25, reflecting a de-growth of 8.05 per cent.
Net debt stood at Rs 1,603 crore as of March 2024, higher by Rs 248 crore compared to Rs 1,354 crore in March 2023, but lower by Rs 56 crore from Rs 1,658 crore reported in December 2024.
On a full-year basis, the company's net profit slipped 6.15 per cent to Rs 639.16 crore on an 8.94 per cent rise in net sales to Rs 10,545.09 crore in FY25 over FY24.
On the capex front, the company stated that it spent Rs 106 crore in Q4 FY25, primarily towards the Towel project at Anjar. The total capex for FY25 stood at Rs 701 crore.
At 1:30 pm, the stock was holding on firmly to the green, trading 4.0 per cent higher for the day at Rs 139.3 apiece on BSE.
Earlier on Thursday, Zee Business Managing Editor Anil Singhvi recommended buying the Welspun Living stock for targets of Rs
137, Rs 140 and Rs 142 with a stop loss at Rs 130 per share.
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