Safari Industries (India) (SII IN) – Q1FY27 Result Update – Steady show despite RM inflation – BUY
Published on 05 Aug 2026
In a quarter marked with sharp RM inflation, SII IN reported a steady performance with EBITDA margin of 12.8% (PLe 12.0%) aided by 1) calibrated price hike, 2) backward integration benefit arising from captive manufacturing of wheels & trolleys at Jaipur and 3) liquidation of low-cost inventory. 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. Further, growth kicker is likely to come from licensing of Carlton (launch likely in October-26) and increase in utilization at Jaipur (capacity expansion to 6.5 lac pieces per month is complete). We expect 14% sales CAGR over the next 2 years with GM of 46.2%/46.8% and EBITDA margin of 12.5%/13.7% in FY27E/FY28E respectively. SII IN trades at 41x/31x our FY27E/FY28E EPS. Retain BUY with a TP of INR1,953 (40x FY28E EPS; no change in target multiple).
