Axis Securities: Safari Industries Posts A Washout Q1; Uncertain Times Ahead 
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Axis Securities: Safari Industries Posts A Washout Q1; Uncertain Times Ahead 

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Axis Securities Report

Safari Industries India Ltd. Q1 FY21 result was an all round miss versus our estimates. Q1 which is typically a peak season for the company was adversely hit by the pandemic leading to a revenue decline of 90% YoY tp Rs 20 crore (Rs 50 crore our estimate).

Benign raw material prices and better product mix led to gross marign expansion of 440 basis points YoY to 44.2% (43.5% our estimate).

Desptie healthy gross margin performance, the company reported loss at the operating level. Ebitda Loss was Rs 19 crore owing to higher fixed costs on account of a lower topline.

As a result, the reported net loss stood at Rs 19 crore versus a net profit in Q1 FY20.

While, management indicated a month on month improvement in demand, uncertainty on growth continues given the fluid situation regarding Covid-19 and its containment.

To factor in near term pressure on demand we revise FY22 revenue/profit after tax estimates downwards by 4%/12%.

Click on the attachment to read the full report:

Axis Securities SafariIndustries Q1FY21 Result Update.pdf

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