Safari Industries (India) (SII IN) – Visit Update – Margin recovery key to re-rating – Hold
Published on 23 Feb 2026
We visited the production facility of SII IN at Jaipur and interacted with top management to get an update over the strategy aimed at tackling ongoing price war. The Jaipur plant has scaled rapidly (~85-90% utilization in 3QFY26) and SII IN plans to increase the capacity from 5 lac pieces per month to 6.5 lac pieces per month. Onsite survey indicates strong backward integration capabilities as wheels are now manufactured in-house while trolleys and handles are outsourced to an exclusive 3rd party vendor. Nonetheless, benefits of backward integration are not evident given stiff pricing environment. We maintain our estimates and 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. Despite recent correction in stock price, we would avoid bottom-fishing at CMP and await tangible recovery in margin profile before turning constructive. Retain HOLD on stock with a TP of Rs2,191 (40x FY28E EPS) as we do not rule out downside risk to our margin estimates.
