Buy Safari Industries (India), target Rs 650: Angel Broking

Angel Broking has a buy call on Safari Industries (India) with a target price of Rs 650.

The current market price of Safari Industries (India) is Rs 530.65.

Time period given by the brokerage firm is one year when Safari Industries (India) price can reach defined target.

Safari Industries Ltd (Safari) is the third largest branded player in the Indian luggage industry.

The restructuring has helped it in posting a CAGR of 42 per cent in revenue and 46 per cent in PAT over 2012-17.

It has also now captured nearly 14 per cent market share in a nearly Rs 2,600 crore branded luggage market.


Its margins have more than doubled from 4.1 per cent in FY2014 to 9.1 per cent in M9FY2018, driven by launch of new product categories and business.

We expect it to maintain 9 per cent+ margins from FY2018 onwards led by regular price hikes, shift towards organized player and favorable industry dynamics.

Angel Broking expects its revenue to grow by 23 per cent CAGR over FY2017-20E on the back of growth in its recently introduced new products.

Safari currently trades at a P/E of 40x FY2019E and 30x its FY2020E EPS which looks attractive looking at its strong brand play story emerging in the luggage industry.