Performance on Expected Lines, Eyes on Synergies Moving Ahead!
The company has demonstrated strong volume growth over the past few quarters and is expected to rebound once the current near-term uncertainties subside. It is also focusing on increasing the share of value-added products, which, along with rising international demand and the addition of new businesses, supports its long-term growth prospects. While value-added products and exports generate higher margins, the combination of increasing volumes and improved capacity utilisation is expected to enhance operating leverage, as fixed costs remain largely unchanged, thereby driving margin expansion.
Valuation & Recommendation
We continue to value the stock at 25x its FY27 EPS and revise our target price to Rs 1,350/share (earlier Rs 1,340/share), implying an upside of 37% from the CMP. We believe that despite the short-term dip in performance, the current valuations remain attractive. Accordingly, we maintain our BUY rating on the stock.
