DOMS Industries (DOMS IN) – Q2FY27 Result Update – Focusing on volume led growth – BUY
Published on 04 Nov 2026
Given persistent volatility in RM prices, we cut our EPS estimates by ~6% for FY28E/FY29E. While DOMS IN’s revenue performance was broadly in line with our estimates, EBITDA margin contracted 510bps YoY to 12.4% (PLe 11.9%) amid sharp RM inflation. Going forward, commissioning of 1st building at Umbergaon should support incremental volumes. Additionally, there are 2 more buildings where machinery installation is underway, providing further headroom for capacity-led growth in FY28E and beyond. Further, we believe the current margin pressure (EBITDA compression of 520bps in 1HFY27) is largely transitory (RM induced). Accordingly, we expect the pace of margin recovery to be equally swift once inflation in crude-linked inputs subside. Thus, we expect EBITDA margins to recover from 12.7% in FY27E to 16.6%/17.7% in FY28E/FY29E, respectively. DOMS IN currently trades at 37x/29x over our FY28E/FY29E EPS estimates. We maintain BUY on the stock with TP of INR2,604 (45x Sep-28E EPS; no change in target multiple).
