Steady set of numbers, Maintain BUY!
Stylam Industries Ltd (SYIL) registered a steady set of numbers. Company's revenue stood at Rs2.34Bn (Vs our est of Rs2.31Bn), reporting a growth of 32%YoY & a decline of 5%QoQ. Exports revenue (66%sales) stood at 1.54Bn,registering a 35%YoY growth & a 6% sequential decline. Domestic revenue (34%sales) grew by 16%YoY & degrew marginally by 2.4%QoQ. Laminates vols came in at 3.01mn sheets in Q3FY23, a growth of 25.4%YoY & decline of 6%QoQ. Realization improved by 2%YoY & remained flattish QoQ to Rs752/sheet. Margins for Q3FY23 came in at 16.8% as compared to 18.7% (revised nos)/16.1% in Q3FY22/Q2FY23 respectively. Absolute EBITDA stood at Rs394Mn, a growth of 19%YoY & remained flat sequentially. Net Debt stood at Rs470Mn as on Dec'22. Working capital cycle during the quarter expanded to 96days Vs 82days in previous quarter, owing to increase in receivable & inventory days & contraction in payable days.
We continue to remain positive on the company's growth plan & reckon SYIL's laminates volumes to grow by 23%CAGR over FY22-FY24E. Incremental 40% capacity, should further boost company's performance. Acrylic biz will also accelerate SYIL's top-line growth from coming fiscal. Hence, we expect revenue growth of 33% over FY22-FY24E. We reckon EBITDA margins to improve steadily & come in at 15.5%/16.5% in FY23E/FY24E respectively. We reiterate our BUY rating on the stock with a target price of Rs1,534 (revised upwards by 7%), valuing the company at P/E(x) of 20x on FY24E EPS of Rs76.7.
- Revenue for the quarter stood at Rs2.34Bn, reporting a growth of 32%YoY but declined by 5%QoQ. (est Rs2.31Bn).
- Sales vols stood at 3.01mn sheets (Vs est of 3mn sheets), reporting a growth of 25.4%YoY growth & a decline of 6%QoQ. ASP came in at Rs752/sheet, as compared to Rs737/Rs751 in Q3FY22/Q2FY23 respectively.
- Acrylic revenue stood at Rs75Mn in Q3FY23 Vs Rs60Mn in previous quarter.
- EBITDA margins came in at 16.8% as compared to 18.7% (as per revised numbers) in Q3FY22 & 16.1% in Q2FY23, improving by 70bps owing to lower other expenses as %sales. Margins were better than our expectations by 130bps. Absolute EBITDA stood at Rs394Mn, registering a growth of 19%YoY & remained flat QoQ.
- Net profit stood at Rs240Mn (Vs est of Rs222Mn), a growth of 54%YoY & flat sequentially.
Shares of Stylam Industries Limited was last trading in BSE at Rs. 1088.25 as compared to the previous close of Rs. 1062.75. The total number of shares traded during the day was 3948 in over 629 trades.
The stock hit an intraday high of Rs. 1095.00 and intraday low of 1065.05. The net turnover during the day was Rs. 4271144.00.