Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/stylam-industries-ltd" target="_blank" data-smartkarma-citation="entities:13492:1" rel="noopener">Stylam Industries (SYIL IN)</a> reported its best-ever EBITDA margin of 22.3% Vs 16.8% due to a raw material price decline. Revenues continued to remain soft, with growth of -8% YoY.</li>
<li>The company completed its brownfield expansion to increase the plant capacity by 40% and is now embarking on a capacity expansion of 200 crores in FY25, effectively doubling its revenues. </li>
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<a href="https://www.smartkarma.com/entities/stylam-industries-ltd" target="_blank" data-smartkarma-citation="entities:13492:1" rel="noopener">Stylam Industries (SYIL IN)</a> trades at 22x/19x FY24e/25e, with a potential for doubling of revenues over the next 3-5 years.</li>
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Stylam Industries (SYIL IN) reported its best-ever EBITDA margin of 22.3% Vs 16.8% due to a raw material price decline. Revenues continued to remain soft, with growth of -8% YoY.
The company completed its brownfield expansion to increase the plant capacity by 40% and is now embarking on a capacity expansion of 200 crores in FY25, effectively doubling its revenues. 

Stylam Industries (SYIL IN) trades at 22x/19x FY24e/25e, with a potential for doubling of revenues over the next 3-5 years.


Stylam Industries (SYIL IN) 3QFY24: Concall Highlights, Margin Expansion

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<a href="https://www.smartkarma.com/entities/stylam-industries-ltd" target="_blank" data-smartkarma-citation="entities:13492:1" rel="noopener">Stylam Industries (SYIL IN)</a> is a play on the Indian laminate space with a 25% CAGR growth predicated on growth in both international and domestic markets.</li>
<li>The stock trades at 23.6x/19x FY24e/25e. While this is not cheap by any stretch of the imagination, the company is a high grower/best in class amongst its competitors. </li>
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<a href="https://www.smartkarma.com/entities/stylam-industries-ltd" target="_blank" data-smartkarma-citation="entities:13492:1" rel="noopener">Stylam Industries (SYIL IN)</a>  is completing an expansion to increase capacity by 40% in FY24 and expanding in a new segment that can double its revenue over FY23-25e. </li>
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Stylam Industries (SYIL IN) is a play on the Indian laminate space with a 25% CAGR growth predicated on growth in both international and domestic markets.
The stock trades at 23.6x/19x FY24e/25e. While this is not cheap by any stretch of the imagination, the company is a high grower/best in class amongst its competitors. 

Stylam Industries (SYIL IN)  is completing an expansion to increase capacity by 40% in FY24 and expanding in a new segment that can double its revenue over FY23-25e. 


Stylam (SYIL IN): Laminate Growth Play In India with 25% CAGR Growth

External broker reports(aggregated public sources), HDFC Securities

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External broker reports(aggregated public sources)

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<ul><li>We recently met Stylam’s promoter, Jagdish Gupta, MD, and Kishan Nagpal, CFO, during a visit to their manufacturing plant, which is Asia’s largest single-location manufacturing facility in Chandigarh</li><li>The management senses a revival in export market demand and expects an uptick in domestic demand soon</li><li>For exports, it expects Q3FY24 volume to take a hit owing to the war situation in Israel</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We recently met Stylam’s promoter, Jagdish Gupta, MD, and Kishan Nagpal, CFO, during a visit to their manufacturing plant, which is Asia’s largest single-location manufacturing facility in ChandigarhThe management senses a revival in export market demand and expects an uptick in domestic demand soonFor exports, it expects Q3FY24 volume to take a hit owing to the war situation in IsraelContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Stylam Industries: Demand to Revive Soon, Expansion on Track. Maintain BUY

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<li>While the profitability of <a href="https://www.smartkarma.com/entities/stylam-industries-ltd" target="_blank" data-smartkarma-citation="entities:13492:1" rel="noopener">Stylam Industries (SYIL IN)</a> is growing healthily (&gt;30% YoY) in H1 FY24 due to margin expansion, revenues are trending at -4.5% YoY.</li>
<li>The company became net cash in H1 FY24 (73 crore INR)  and zero gross debt. A strong balance sheet would aid in the company's expansion plans. </li>
<li>Trading at 23x/18x FY24e/25e, we see strong growth ahead for the company as it cements its position as one of India's top laminate export players. </li>
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While the profitability of Stylam Industries (SYIL IN) is growing healthily (&gt;30% YoY) in H1 FY24 due to margin expansion, revenues are trending at -4.5% YoY.
The company became net cash in H1 FY24 (73 crore INR)  and zero gross debt. A strong balance sheet would aid in the company's expansion plans. 
Trading at 23x/18x FY24e/25e, we see strong growth ahead for the company as it cements its position as one of India's top laminate export players. 


Stylam Industries (SYIL IN): Sluggish Exports, FY25 To See Improvements With Expansion

<ul><li>In Q2FY24, Stylam’s revenue fell 5% YoY owing to global turmoil, lower NSR, and a cool-off in ocean freight rates.</li><li>However, EBITDA rose 18% YoY on continued cool-off in raw material prices and lower other expenses.</li><li>EBITDAM recovers for the sixth consecutive quarter to 19.9% (up 385/145 bps YoY/QoQ)— its best in the past nine quarters.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

In Q2FY24, Stylam’s revenue fell 5% YoY owing to global turmoil, lower NSR, and a cool-off in ocean freight rates.However, EBITDA rose 18% YoY on continued cool-off in raw material prices and lower other expenses.EBITDAM recovers for the sixth consecutive quarter to 19.9% (up 385/145 bps YoY/QoQ)— its best in the past nine quarters.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Stylam Industries - Strong Margin Offsets Weak Volume Offtake

India

Stylam Industries Ltd. manufactures high-pressure laminates.  The Company produces laminates in many colors and that simulate wood grain and metals.

Stylam Industries (SYIL IN)