DOMS Industries (DOMS) Stock Soars 10% to Record High, Surges 150% Above IPO Price

<ul>
    <li>DOMS Industries' share price surged by 10% during intraday trades on Tuesday, reaching an all-time high of ₹2035 on the NSE.</li>
    <li>The stock has provided multibagger returns, increasing by over 150% from its IPO price of ₹790.</li>
    <li>Analysts attribute the rise to strong Q4 performance and strategic expansions.</li>
</ul>
<p><strong>DOMS Industries' share price hits record high, delivering over 150% returns since IPO.</strong></p>
<h2><strong>Strong Q4: Margins at highest level since December 2022 quarter</strong></h2>
<p>DOMS Industries recently reported its Q4FY24 performance, showcasing a revenue of ₹403.7 Crore, a 20% year-on-year increase. The Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) stood at ₹76 Crore, growing 22.6% year-on-year with margins at 18.8%, an improvement from 18.4% in the previous quarter and 18.7% in the same quarter last year. The net profit reported was ₹46.9 Crore, a 29.6% year-on-year growth.</p>
<h3><strong>Analysts' Insights</strong></h3>
<p>Analysts at ICICI Securities noted that input price deflation and a better revenue mix contributed to the gross margin expansion. The EBITDA margins, which improved by 40 basis points sequentially to 18.8%, are the highest since the December 2022 quarter. They highlighted that all operating segments, except paper stationery, registered strong revenue growth year-on-year, particularly in art materials and office supplies. This strong performance indicates that the company is gaining market share in most segments.</p>
<h2><strong>Expansions and Acquisitions to Fuel Growth</strong></h2>
<p>To cater to rising demand, DOMS Industries has highlighted a capital expenditure (Capex) of ₹126 Crore for expanding its manufacturing facility. The company is steadily increasing its manufacturing capacity, focusing on the writing instrument segment, with an additional 100,000 square feet capacity expected to be commissioned by June 2024. Additionally, it is expanding capacities for the core pencil segment, which is likely to be commissioned before the end of FY25.</p>
<h3><strong>Strategic Acquisitions</strong></h3>
<p>DOMS Industries has also acquired a 51% stake in SKIDO Industries to strengthen its presence in the back-to-school market, planning to expand into school bags, pouches, and other related items. Analysts at ICICI Securities remain positive on DOMS due to its established competitive advantages, including strong distribution and manufacturing capabilities, high brand recall value, and a strategic partnership with FILA. They expect capacity additions and entry into allied business streams to drive strong growth in FY25-FY26.</p>
<h3><strong>Conclusion</strong></h3>
<p>DOMS Industries' impressive Q4 performance, strategic expansions, and acquisitions have positioned the company for continued growth. With strong revenue growth across most segments and significant capacity expansions underway, the company is well-placed to maintain its upward trajectory. Investors should keep an eye on DOMS Industries as it continues to deliver robust returns and expand its market presence.</p>