Technology

For 4QFY2018, Siyaram Silk Mills (SSM) posted good set of results, exceeding our expectations on both, top-line as well as bottom-line fronts. Revenues grew by ~12% yoy. On the operating front, the company reported operating margin improvement. On the bottom-line front, SSM reported growth of ~19% yoy to `52cr on the back of strong top-line growth and strong operating margin
improvement.

Outlook and Valuation: Going forward, we expect SSML to report a net sales CAGR of ~14% to ~`2,272cr and adj.net profit CAGR of ~14% to `150cr over FY2018-20E on back of market leadership in blended fabrics, strong brand building, wide distribution channel, strong presence in tier II and tier III cities and emphasis on latest designs and affordable pricing points. At the current market price, SSML trades at an inexpensive valuation. We have a buy recommendation on the stock and target price of `851.

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