The shares of Small-cap company specializing in manufacturing and exporting high-pressure laminates (HPL), compact laminates, acrylic solid surfaces, and other decorative surfacing solutions, is in focus after leading Indian brokerage firm HDFC Securities initiated a Buy Target on it with a 50 percent Upside Potential.
Price action
With a market capitalization of Rs. 2,851.77 crores on Friday, the shares of Stylam Industries Limited jumped upto 3.8, making a high of Rs. 1694.75 per share compared to its previous closing price of Rs. 1620.35 per share.
What Happened
Stylam Industries Limited, engaged in manufacturing and exporting high-pressure laminates (HPL), compact laminates, acrylic solid surfaces, and other decorative surfacing solutions, is in focus after the leading Indian brokerage firm HDFC Securities initiated a “Buy” Target of Rs. 2,523 on it with an upto 50 percent Upside Potential.
The reasons for the “Buy” target
HDFC Securities expects a 6 percent year-on-year volume growth for Stylam Industries in the laminates sector. However, due to the ongoing global economic uncertainty, the export performance of laminate companies could be impacted negatively. Consequently, HDFC Securities has lowered its target multiple for Stylam Industries to 20x EPS, down from 25x. They continue to maintain their existing ratings on all stocks under coverage.
Recent Ongoing Development
Stylam Industries is expanding its manufacturing capacity with a new plant in the Panchkula district, Haryana. This will be the company’s third laminates plant, and its operations are expected to begin in June 2025.
Shareholding Pattern
As of December 31, 2024, promoters held a 52.19 percent stake in the company, while Foreign Institutional Investors (FIIs) owned 3.94 percent, and Domestic Institutional Investors (DIIs) held 11.59 percent.
Key Insights
The company has a P/E ratio of 21.42, below the industry average of 25.24. It maintains a low debt-to-equity ratio of 0.01 and has achieved an average 3-year net profit growth of 28.10 percent, indicating strong financial health and growth potential.
Financials
The company’s revenue rose by 18.36 percent from Rs. 216.54 crore to Rs. 256.3 crore in Q3FY24 -25. Meanwhile, Net profit fell from Rs. 31.33 crore to Rs. 29.82 crore during the same period.
Written by Sridhar J
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