Motilal Oswal retains Buy on Safari, citing Jaipur capacity and store expansion
The brokerage has set a ₹2,250 target price for Safari Industries, implying 50% upside, supported by premiumisation, retail expansion and a Jaipur capacity addition of 0.15 million pieces a month.
What happened
Motilal Oswal retained Buy ratings on luggage retailer Safari Industries and FMCG company Emami, citing Safari’s Jaipur capacity, premiumisation and store
Key facts
- Safari Industries target price: Rs 2,250; implied upside: 50%
- Jain Resource Recycling target price: Rs 460; implied upside: 42%
- Emami target price: Rs 525; implied upside: 34%
- Safari revenue growth: 11.5% YoY; volume growth: nearly 10%
- Safari expected revenue CAGR: 16%; Jaipur capacity addition: 0.15 million pieces per month
- Jain Resource Recycling revenue growth: 76% YoY to Rs 2,720 crore; copper business growth: 2.5x YoY
- Potential incremental EBITDA from value-added copper: about Rs 25,000 per MT
- Emami consolidated revenue growth: 15% YoY; underlying domestic volume growth: 8%; gross-margin contraction: 360 bp YoY to 65.8%
Why this matters
Safari’s retail footprint and manufacturing scale-up strengthen its competitive position, making premium luggage brands and distribution partnerships more strategically relevant.
What to watch
- Jaipur plant commissioning date, monthly utilisation and yield rates.
- Quarterly volume growth versus the reported nearly 10% baseline.
- Revenue growth trajectory relative to the brokerage's 16% medium-term CAGR expectation.
- Gross margin and EBITDA margin trend as new capacity and stores scale.
- Net store additions, same-store sales growth and payback period for new outlets.
- Inventory days, receivables and operating cash flow during the expansion cycle.
- Competitive pricing and promotional intensity from other luggage brands.
- Premium-product mix and average selling price growth.
- Accelerate Jaipur commissioning, distribution onboarding and production utilisation to prevent capacity from sitting idle.
- Prioritise company-operated and high-productivity retail locations, using store economics rather than headline store count to guide expansion.
- Push premium and differentiated product launches to protect average selling prices and reduce reliance on promotional volume.
- Use added capacity to improve in-stock rates in high-growth cities and expand selective export or institutional channels.
- Maintain inventory discipline during the capacity ramp to avoid channel stuffing and elevated working-capital needs.