Cello World Q1 Results Review - Soft Demand Recovery In H2 Crucial For Optimistic: ICICI Securities

ICICI Securities Report

Cello World Ltd. reported modest revenue growth of 6.1% YoY (in-line with industry’s growth rate) amid weak consumer demand. Gross margin scaled up to 53.8%, led by better product mix and thrust on value-added premium products. It has sharply increased brand investments in Q1.

We note this may aid Cello in gaining market shares. The company guides for 15– 17% revenue growth in FY25 (despite soft Q1), implying a sharp demand revival in H2FY25. We believe the upcoming festive season may offer early signs of a demand upswing.

Apart from demand revival, we believe production rampup at its glassware plant, expansion of opalware unit and price-led growth may aid in attaining guided revenue growth in FY25. Maintain 'Buy'.

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