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Published: May 28, 2024
Updated: May 28, 2024

DOMS Industries: A 160% IPO Surge, Strong Q4 Performance, and Future Prospects

Impressive Market Debut and Recent Gains:

DOMS Industries has been on an impressive upward trajectory since its IPO in December 2023. Initially priced at Rs 790 per share, the stock has surged 160% within six months, closing at Rs 2,035 on Tuesday after a 10% jump. This rise has brought the company’s market capitalization to approximately Rs 12,000 crore.

Strong Financial Performance in Q4 FY24:

The company's recent financial results have been a significant factor in its stock performance. DOMS Industries reported a 29% year-on-year (YoY) increase in net profit for the March-ended quarter, reaching Rs 47 crore. Revenue also saw a 20% YoY rise to Rs 403 crore, while EBITDA grew by 22% YoY to Rs 76 crore. Additionally, the company's margins expanded by 40 basis points to 18.8%, demonstrating improved operating efficiency and stable raw material prices.

Brokerage Firms' Positive Outlook:

Several brokerage firms have expressed optimism about DOMS Industries following its robust quarterly performance. IIFL Securities highlighted the company’s strategic capacity expansions and product category diversification, forecasting a 26% compound annual growth rate (CAGR) in sales from FY24 to FY26. They upgraded their earnings per share (EPS) estimates by 2% and maintained a 'buy' rating with a target price of Rs 2,130.

Nuvama Institutional Equities also praised the company's better-than-expected execution and focus on launching 'kid products', along with capacity expansion plans. They increased their EPS estimates by 9% and set a target price of Rs 2,121, valuing DOMS Industries at 50 times its FY26 estimated EPS.

JM Financial echoed similar sentiments, emphasising the company's superior growth trajectory and healthy return on invested capital (RoIC).They recommended viewing any significant stock price correction as a buying opportunity, setting a target price of Rs 2,000.

Should You Buy?

DOMS Industries has demonstrated significant growth and strong financial health since its IPO. The company's strategic expansions, product diversification, and improved margins make it an attractive investment. Brokerage firms remain bullish on its future prospects, suggesting potential investors consider adding this stock to their portfolios, especially on any price dips.