Stylam Industries - Growth To Pick Up From FY26: HDFC Securities

HDFC Securities Institutional Equities

We like Stylam Industries Ltd. for its industry-leading growth (~two times versus industry) and Ebitda margin (~20%), healthy balance sheet (net cash), and impressive return ratio (return on equity ~25%).

We have modelled 17/22/20/20% volume/revenue/Ebitda/adjusted profit after tax compound annual growth rates for FY24-27E. We expect strong laminate volume growth for the company in FY26/27 on the back of a pick-up in demand and ramp-up of sales from ongoing brownfield expansion.

So, we expect a strong 25% revenue CAGR during FY25-27E. Sensing growth in the pipeline, quick ramp of sales from ongoing expansion and further diversifying export mix (higher U.S. share), we increase our valuation multiple to 25 times Sep-26E EPS, versus 22 times earlier.

We maintain our Buy rating with a higher target price of Rs 2,875/share (25 times Sep-26E consolidated EPS).

Stylam is our top pick in building material sector.

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