Stylam Industries’ adjusted profit declined by 25% due to higher finance costs & forex loss

In Q1FY26, Stylam’s revenue grew 17% YoY to INR 2.8bn. EBITDA margin improved by 140bps YoY as gross margin slightly inched up (up 10bps YoY) on op-lev gain. Owing to higher EBITDA and lower depreciation offset by higher finance cost, lower other income and increase in tax rate, APAT declined 1% YoY. Adjusted for forex loss, APAT grew by ~25% YoY.

Earlier in Q4FY25 concall, Stylam had guided for ~20/40% export revenue growth in FY26/27E. The brownfield laminates plant expansion is delayed again by a month and is now expected to be commissioned by Oct 2025. Factoring in the Q1 healthy margin, we increase our APAT estimate by 4% for FY26E, while we maintain our FY27E estimate. We are projecting 22/25/26% revenue/EBITDA/APAT CAGR for FY25-27E, aided by ramp-up of brownfield expansion. Considering promoter’s strained relationship, we maintain our REDUCE rating, with an unchanged target price of INR 1,700/sh (15x Mar-27E EPS).

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 Source: HDFC Securities Institutional Equities

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