Safari Industries (India) (SII IN) – Q4FY26 Result Update – GM springs a surprise – Upgrade to ‘BUY’
Published on 20 May 2026
We upgrade SII IN to a BUY (earlier HOLD) with a TP of Rs1,953 (40x FY28E EPS; no change in target multiple) as performance scorecard of 4QFY26 indicates margin revival is on the cards. SII IN reported better than expected performance with GM of 49.3% (PLe 45.8%) aided by backward integration benefit arising from captive manufacturing of wheels & trolleys at Jaipur and rationalization of schemes & discounts to channel partners. While we do not rule out near term margin headwinds amid inflation in RM prices, we believe the issue is transitory and once input costs stabilize, benefits of price hike (~4-6% taken in May-26) and captive manufacturing will be visible. We expect 14% sales CAGR over the next 2 years with of GM of 46.2%/46.8% and EBITDA margin of 12.5%/13.7% in FY27E/FY28E respectively. SII IN trades at 38x/29x our FY27E/FY28E EPS. Upgrade to BUY.
