Motilal Oswal has started covering Midwest Granite and gave it a “Buy” rating, sending the shares up about 5% during the day.
Why the rating matters
The broker set a price target of Rs 2,000 per share, which is roughly 23% higher than the last closing price of Rs 1,625.40.
Company snapshot
- India’s largest producer and exporter of premium Black Galaxy granite.
- Operates 20 mines and is fully integrated across the granite supply chain.
- Revenue of about Rs 6.3 billion in FY 25, growing at a 21% annual rate over the past five years.
- EBITDA margin of 27.4% with a 44% CAGR, outpacing peers.
Growth outlook
The brokerage expects Midwest’s revenue to grow at a 36% CAGR and EBITDA at a 47% CAGR from FY 25 to FY 28, helped by its Quartz and HMS businesses. Adjusted profit after tax could rise 56% over the same period.
Financial health
- Net debt of Rs 2.2 billion in FY 25 (net‑debt‑to‑EBITDA = 1.3×).
- Debt ratio is projected to drop below 1× as operating profit climbs.
- Valuation based on 13× FY 28 estimated EV/EBITDA leads to the Rs 2,000 target.
Recent performance
Since listing in October 2024, the stock has risen about 48%.
What investors should consider
Midwest’s strong margin expansion and low debt levels make it an attractive pick, but remember to review your own risk tolerance.
Disclaimer
Remember, this is just an analysis, not a prediction. Do your own research before making any investment decisions.