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Target: ₹484
CMP: ₹411.25
La Opala clocked the best quarter in terms of sales and profitability. Sales stood at ₹134.9 crore (+46 per cent y-o-y), EBITDA of ₹53.2 crore (+50 per cent y-o-y) and PBT of ₹51.6 crore (+42 per cent). Sales, EBITDA and PAT grew at CAGR of 26 per cent/25 per cent/16 per cent respectively over Q2-FY20-23.
Strong demand in domestic market continued in Q2-FY23, led by healthy organic demand for opalware category. Demand remained healthy equally across urban and tier-II/III towns. Export markets struggled a bit during the quarter and its contribution declined to 13-14 per cent in Q2-FY23 vs 16-17 per cent of total sales in FY22.
As per the feedback from the management, demand trend remains strong even in Q3. We expect Q3 to be at least as good as Q2. H2 usually makes up about 55 per cent of the total sales for La Opala. Significant capacity addition, venturing into new product category, favourable consumer demand are expected to provide growth impetus to the company over the next three years. Balance sheet remains lean with liquid investment and cash of ₹390 crore at the end of H1-FY23.
We maintain our bullish stance and Buy rating with a new TP of ₹484.
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