Safari Industries (India) (SII IN) – Q2FY27 Result Update – Capacity expansion to drive growth – BUY
Published on 06 Nov 2026
We cut our EPS estimates by 7%/7%/6% for FY27E/FY28E/FY29E as we fine-tune our top-line growth and EBITDA margin assumptions. SII IN reported a modest top-line growth of 9.1% due to capacity constraints and festive shift while operational performance was weak with EBITDA margin of 10.3% (PLe 11.5%) amid stiff competition and persistent RM inflation. SII IN has outlined a capex plan of INR2,300mn to increase the capacity by 6lac pieces per month through de-bottlenecking existing units at Jaipur and Halol. There is an embedded provision (land will be acquired) to increase the capacity by additional 33% at the same location, if required. Proposed expansion will be complete by June-28 and is expected to lend cost competitiveness. Led by capacity expansion we expect topline CAGR of 13% over the next 3 years with EBITDA margin of 12.0%/13.2%/13.4% in FY27E/FY28E/FY29E respectively. Retain BUY with a TP of INR1,610 (33x Sep-28E EPS; earlier 35x). We have realigned our target multiple amid growth and margin reset the business is witnessing amid excessive price wars.
