Shares of Doms Industries Ltd., the domestic player in the branded ‘stationery and art’ products market, surged another 11% on Tuesday (June 18) to hit a record high of ₹2,134.50.
With today’s surge, the stock has risen nearly 3x from its IPO price of ₹790. The company made its stock market debut in December 2023.
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After visiting DOMS’ manufacturing facility in Gujarat’s Umbergaon, domestic brokerage firm JM Financial assigned a ‘Buy’ rating on the counter with a target price of ₹2,000 per share.
On the business front, the company reiterated its focus on continued innovations and the importance of making product the winner.
According to JM Financial, the management is comfortable with 16-17% operating margins, and growth driven by customer satisfaction remains the top priority.
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Doms Industries would be content with topline growth ‘higher-than-industry’, as per the promoter Santosh Rasiklal Raveshia. The brokerage wrote in its note that the promoter hinted that the company may explore other avenues in future, but would be confined to the ‘Kids’ category.
JM Financial indicated that the company may enter into toys and bags segment.
Given the superior growth trajectory and healthy return ratios, the brokerage expects the stock to trade at a premium multiple. It remains optimistic on the company’s ability to gain market share by focusing on innovations and leveraging end-to-end manufacturing capabilities.
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Any sharp correction in the stock should be used as an opportunity to ‘Add’, JM Financial said.
Further, JM Financial highlighted that innovation remains the DNA of the company. The company has a 50-member team involved in designing and R&D. The team focusses on developing products, keeping in mind latest trends and profitability.
“A combination of strong innovation and enhanced manufacturing capabilities will enable DOMS to gain shelf space among retailers, add newer touch points and drive overall growth,” it noted.
Shares of Doms Industries are trading 3.49% higher at ₹1,990.30 apiece on the NSE during today’s late afternoon deals. The stock is up 50% in the last six months.
