Nuvama has maintained a ‘Buy’ rating on DOMS with a target price of ₹3,210/share, reflecting a potential upside of 15.4% from the current market price (CMP) of ₹2,780.00.

Key Takeaways from Management Meet:

  1. Demand Recovery:
    • Management noted signs of recovering demand across core segments, driving optimism for FY25.
  2. Capacity Utilization:
    • Existing capacities remain optimally utilized, ensuring operational efficiency.
  3. Revenue Growth:
    • Core business revenue is expected to grow 20% YoY in FY25E.
    • Consolidated revenue growth projected at 23-25% for FY25E.
  4. Uniclan Revenues:
    • Revenues are set to rise significantly with the addition of a third production line, although EBITDA margins for Uniclan are expected to remain within 5–7%.
  5. New Capacities:
    • New pencil manufacturing capacities will come online partially in Q4FY25E and fully by Q1FY26E, adding to future growth potential.
  6. Margins:
    • Overall EBITDA margin is expected to be 17–17.5% in FY25E, reflecting stable profitability.
  7. Earnings Revision:
    • Due to low-margin guidance, Nuvama has revised its FY25E/26E/27E EPS downward by 3%/6%/7%, respectively.

Nuvama highlights DOMS’ robust revenue growth outlook, driven by recovering demand, capacity expansion, and operational efficiency. While low-margin guidance has led to a slight earnings revision, the company’s long-term growth prospects remain strong, making it an attractive investment opportunity.

Disclaimer: The above analysis is based on provided data and is for informational purposes only. It does not constitute financial advice. Readers should consult their financial advisors before making investment decisions

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