LKP Securities
CELLO WORLD (BUY)
Target Price: ₹768CMP: ₹590.50Cello World Ltd (CWL) is a diversified consumerdurables player with presence across consumerhouseware (68.4 per cent), writing instruments(14.4 per cent), and moulded furniture (17.2 percent).Backed by the legacy "Cello" brand, the company hasscaled premium segments like opalware, glassware,and stainless steel drinkware, supported by 77 percent in-house manufacturing and a 1.5 lakh+ outletnetwork. Continued investments in localisation,premiumisation, and distribution expansionreinforce its position as a key beneficiary of the shifttowards branded, organised consumption.Key growth drivers include capacity scale-up inhigh-margin categories like opalware and glassware(targeting full utilisation by FY27), strategic entryinto steelware amid import bans, and gradualrecovery in the writing instruments segment.Despite near- term demand fluctuations, thecompany's fundamentals remain strong with about24-26 per cent EBITDA margin, 77 per cent in-housemanufacturing, and reach across 1.5 lakh+ outlets.We forecast 14/16/15 per cent revenue growth overFY25–27E and RoE/RoCE of 17/18 per cent,supported by average annual operating cash flows of₹240 crore.We initiate coverage with a Buy rating and a targetprice of ₹768, valuing the stock at 35x FY27E EPS of₹21.9.
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