By DOMS Industries‘ share price surged over 5% on Monday, reaching a record high of ₹2,367.50 per share on the BSE. This impressive rally comes after brokerage firm Axis Securities initiated coverage on the stock with a bullish view. It’s the seventh consecutive day of gains for DOMS Industries, with the stock climbing over 10% in just one week.
Axis Securities has assigned a ‘Buy‘ rating to DOMS Industries shares, setting a price target of ₹2,670 per share, which represents an 18% upside from Friday’s closing price. The brokerage firm expressed strong confidence in the company’s future, citing its robust and consistent performance over the past several quarters.
Axis Securities highlighted DOMS Industries’ strategic expansion in under-penetrated small towns and markets in the east and south regions as key drivers for continued growth. The firm also pointed to the company’s sustained focus on new product development, capacity expansion, and entry into the larger pens category, which will broaden its product portfolio beyond the small pencil segment.
Another significant factor contributing to the bullish outlook is DOMS Industries’ entry into the fast-growing bags and toys segments. This diversification is expected to further accelerate the company’s growth. Axis Securities anticipates that DOMS Industries will achieve healthy revenue, EBITDA, and net profit growth of 25%, 26%, and 28% CAGR, respectively, over FY 2024-2027. This growth trajectory is expected to elevate the company’s return on capital employed (ROCE) from 22% in FY24 to 25% in FY27.
The brokerage firm believes that with improved visibility in earnings growth and a stronger return profile, DOMS Industries stock appears particularly attractive within the midcap space. The company’s strong market performance since its stock market debut in December 2023 has further fueled investor enthusiasm. During its IPO, DOMS Industries shares were listed at ₹1,400 per share, a significant premium of 77.2% to the issue price of ₹790.
Since its IPO, DOMS Industries’ share price has seen a robust rally, increasing more than 69% from its listing price and nearly 200% from its issue price. This impressive performance underscores the company’s ability to capitalize on market opportunities and execute its growth strategies effectively. As of 10:50 am on Monday, DOMS Industries shares were trading 2.58% higher at ₹2,312.10 per share on the BSE.
The market’s positive reception to Axis Securities’ coverage and the ongoing rally in DOMS Industries shares highlight the strong investor confidence in the company’s prospects. DOMS Industries’ strategic initiatives, including expanding its distribution network, focusing on new product development, and diversifying into new market segments, have positioned the company for sustained growth.
Investors are particularly optimistic about the company’s potential to achieve significant growth in revenue, EBITDA, and net profit over the next few years. The projected increase in ROCE further adds to the company’s attractiveness as an investment within the midcap space. The consistent upward trend in the share price reflects the market’s belief in DOMS Industries’ ability to deliver on its growth plans and continue its strong performance.
DOMS Industries’ recent stock performance and the positive outlook from Axis Securities underscore the company’s strong fundamentals and growth potential. With strategic expansions, product diversification, and a solid financial outlook, DOMS Industries is well-positioned to maintain its upward trajectory and deliver value to its shareholders. The ongoing rally and investor confidence suggest a promising future for the company in the midcap space.
