Buy S Chand and Company; target of Rs 257: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on S Chand and Company

Though our FY24E EPS estimates are broadly intact, we increase our FY25E EPS estimates by 6% as full benefits of NEP implementation and benign paper prices will accrue over time. S Chand & Company (S Chand) reported decent performance in FY23 from working capital (188 days; best ever) and leverage (net debt of just Rs60mn) standpoint, but top-line was a miss at Rs6,103mn (management guidance of Rs6,400-6,500mn). For FY24E, management has guided top-line of Rs7,200-7,500mn with EBITDA margin of 16-18% backed by price hike, RM stabilization and increased volumes that would come from NCF roll-out.

Outlook

We expect sales/EBITDA CAGR of 13%/23% over FY23-FY25E and maintain ‘BUY’ on the stock with a revised TP of Rs257 (12x FY25E EPS). Volatile RM prices and delay in NCF roll-out is a key risk to our call.

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S Chand and Company - 01 -06 - 2023 - prabhu