Safari Industries reported better than expected Q1FY22 result. Its sales/ EBIDTA were significantly above our estimates. Safari Industries’ net sales increased by 5x YoY to Rs 1,202 million on a very weak base of Q1FY21. Even EBIDTA improved to Rs71 million compared to loss in Q1FY21 and interest cost fell 49% YoY to Rs10 million. Hence, net profit improved to Rs 25 million (loss of Rs193 million in Q1FY21), but fell 60% QoQ as restriction in travel affected not only top-line but also logistics costs.

Commenting on the result review, IDBI Capital Equity Research said, "We raise our FY22/FY23 sales/EBITDA estimate by 23%/17% as we anticipate the improvement in travel and tourism which in turn should lead to higher luggage sales.  Hence, our FY22/FY23 EBITDA forecasts are higher by 34%/17%. We raise our target   PER multiple to value Safari stock as we foresee market share gains, strong improvement in sales and higher profitability over coming two-three years. We now value the stock at a PER of 40x (earlier 32x) FY23 EPS to derive a target price of Rs 888 (earlier Rs 557) and upgrade the stock to a Buy from Hold earlier." 

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