Safari Industries (India) (SII IN) – Q3FY26 Result Update – Margin succumbs – Downgrade to ‘HOLD’
Published on 11 Feb 2026
We cut our EPS estimates by 14%/13% for FY27E/FY28E and downgrade SII IN to a HOLD (earlier BUY) with a TP of Rs2,191 (earlier Rs2,570) valuing the stock at 40x FY28E EPS (earlier 45x) as we foresee margin headwinds amid rising competition, especially in the D2C space. SII IN reported weak operational performance with EBITDA margin of 10.9% (PLe 14.0%) due to elevated other expenses. After being at par since last two quarters, volume growth surpassed value growth in 3QFY26 indicating an unstable pricing environment. Consequently, EBITDA margin compressed 50bps YoY and 300bps QoQ to 10.9% in 3QFY26. Given stiffening competition in the industry amid rising prevalence of D2C brands and change of guard at top-level within peer-set, balancing growth & margins could be a challenging task for SII IN. We expect top-line CAGR of 17% over the next 3 years with EBITDA margin of 13.3%/13.7%/14.3% in FY26E/FY27E/FY28E. Downgrade to HOLD with a TP of Rs2,191 (40x FY28E EPS).
