Stylam Industries Q2 Results Review - Beat On All Fronts; Upgrade To 'Buy': Yes Securities

Yes Securities Report

Stylam Industries Ltd. reported a strong set of numbers for Q2 FY25, an all-round beat on our estimates. Company’s revenue grew by 12%YoY which was primarily driven by 11% improvement in ASP while total volumes remained flattish. Expansion in ASP was largely owing to better product-mix.

Exports, which constitute 72% of sales, registered a stellar growth of 24.5%YoY to Rs 1.88 billion (two-year compound annual growth rate stood at 7%). Domestic sales (28% of sales), declined by 11% YoY. Notably the domestic biz run-rate has been at ~Rs 750 million for past 13-quarters.

During the quarter, one plant operated at 90% utilization and other plant operated at ~80-85% utilization level. Gross margins improved from 46.8%/44.5% in Q2 FY24/Q1 FY25 to 49% in Q2 FY25 which led to expansion in Ebitda margins from 20.2%/17.3% in Q2 FY24/Q1 FY25 to 20.7%.

Hence, company registered an Ebitda growth of 15%YoY to Rs 544 million. Finance cost was elevated for the quarter owing to short-term debt of Rs 66.7 million undertaken over H1 FY25, which capped the bottom-line growth.

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