- 09 Aug 2024
- ICICI Securities
Margin expansion leads to outsized PAT gains
MAYURUNIQ - 633 Change: 12.85 (2.07 %)News: Consolidated sales for Q1FY25 came in at ₹213 crore (up 6% YoY, down 3% QoQ). Reported EBITDA for the quarter came in at ₹48.2 crore with corresponding EBITDA margin at 22.6% (up 390 bps QoQ). PAT in Q1FY25 stood at ₹37.4 crore (up 23% YoY, 16% QoQ), aided by improvement in margins as well as higher other income. The company’s board has approved a proposal to buy-back 5 lakh equity shares of the company (~1.14% of outstanding shares) for an aggregate amount of ₹40 crore at ₹800 per share with record date for the same pegged at 23rd August 2024.
Views: Topline performance for the quarter was short of expectations however EBITDA margins surprised on the positive side, led by gross margin expansion. We await management commentary on ramp up of auto exports segment which is the key monitorable for the stock going forward. We maintain a positive stance on this stock, given its consistent delivery of healthy margin of ~20%, a capital efficient business model (ROIC: +20%), technology risk immune product profile and cash positive B/S. The company is one of the prominent players in the technical textile domain, producing synthetic leather (PVC, PU) for automotive, footwear & apparels etc and drives ~50-60% of sales from automotive segment supplying to top players like Maruti, Hyundai, Ford.
Impact: Positive