Doms Industries Q1 Results Review - Capacity Addition, A Prime Growth Driver: ICICI Securities

ICICI Securities Report

Takeaways:

1. DOMS Industries Ltd. strong investments in writing instruments and scholastic art material in FY24 have yielded strong segmental growth YoY. We highlight DOMS reporting strong revenue growth in segments that had strong capacity expansion in past. Strong growth in both these segments underlines the same.

2. Ebitda margin scaled to 19.4% (plus 302 basis points YoY) led by operative leverage.

3. Unlike past acquisitions, largely revolving around stationery and art materials, DOMS acquired controlling stake in Uniclan Healthcare – manufacturer of baby care/hygiene products. This may aid in broadening its total addressable market.

4. Core pencil segment capacity is set to increase to ~8 million/day, from current 5.7 million/day by FY25-end.

We expect this to drive incremental growth for DOMS in FY26. We expect capacity addition to primarily drive strong growth in FY25/FY26. Maintain Buy.

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