Shaily Engineering Q4 Review - Strong Traction In Healthcare Division To Drive Robust Outlook: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Shaily Engineering Plastics Ltd. reported a healthy quarter (revenue/Ebitda/ Profit after tax grew 27%/38%/95% YoY and 8%/9%/33% QoQ). Despite surge in gross margin (46.8%, up 284bps QoQ), Ebitda margin came flattish QoQ at 20.3% due to surge in other expenses. A 27% YoY revenue growth was driven by 30% surge in overseas (including U.K subsidiary) and 18% rise in domestic sales.Volume grew 17% YoY; plant utilization stood low at 40%. CFO (Rs 923 million) stood healthy at ~75% of Ebitda. While non-healthcare divisions are seeing healthy traction in business, the healthcare division revenue is expected to surge 50-60% in FY25 with fast growth likely to sustain for next 5-10 years. It aims to sell 17 million+ injector devices in FY25 (FY23/FY24: ~7 million/12 million). Shaily Engineering Plastics current infrastructure can manufacture 60-70 million devices with a small capex.U.K innovation center is strengthening Shaily Engineering Plastics presence in the global healthcare market. We increase earnings estimates by 7-12% owing to expectation of better cash flows. Based on its strong order book and guidance received from key customers, we expect Shaily Engineering Plastics to report robust 26%/31%/43% compound annual growth rate in revenue/Ebitda/ Profit after tax over FY24-26E (FY19-24: 14%/17%/24%) with Ebitda margin inching towards 20%.With no major capex planned (till capacity utilization reaches 75% from ~40% in FY24) and prudent working capital management, we expect healthy FCFs and return on capital employed to reach ~22% in FY26E. Shaily Engineering Plastics scrip has run up ~30% since our initiation (IC note) on 2nd April 2024.We remain constructive on Shaily Engineering Plastics and maintain 'Buy' with a higher target price of Rs 769 (30 times FY26E Price/earning, earlier Rs 720 at 30 times)..Click on the attachment to read the full report:.Opt For Contra Long Trades As Nifty Recoups To Support Levels, Says Analyst .DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Shaily Engineering Q4 Review - Strong Traction In Healthcare Division To Drive Robust Outlook: Systematix

We remain constructive on Shaily Engineering Plastics and maintain 'Buy' with a higher target price of Rs 769 (30 times FY26E Price/earning, earlier Rs 720 at 30 times).

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Shaily Engineering Q4 Review - Strong Traction In Healthcare Division To Drive Robust Outlook: Systematix

We remain constructive on Shaily Engineering Plastics and maintain 'Buy' with a higher target price of Rs 769 (30 times FY26E Price/earning, earlier Rs 720 at 30 times).

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