Stylam Industries Ltd reported a consolidated revenue of ₹2.7 billion for Q4 FY25, marking an 11% year-on-year increase and 2% ahead of estimates. Laminate volumes rose 13% YoY, supported by a robust 22% growth in the domestic market. The acrylic solid surface segment remained largely flat, though the recent anti-dumping duties on imports are expected to gradually improve utilization rates.
EBITDA margin declined to 16.2%, down 369 basis points YoY and 188 basis points QoQ, primarily due to higher input costs and an unfavorable product mix in the domestic segment. Realizations were affected, particularly in the domestic market where per-sheet revenue dropped to ₹472.
The commissioning of the new plant has been pushed to September 2025 from the previously expected March 2025 timeline. Given the delay and cost pressures, EBITDA estimates for FY26 and FY27 have been reduced by 7% and 8%, respectively. Despite this, Stylam remains well-positioned for long-term growth, with exports expected to lead revenue expansion. The stock is rated ‘Long’ with a revised target price of ₹2,408 for June 2026, based on 24x one-year forward earnings (~₹100 EPS).
In Q4 FY25, laminate volumes reached 3.5 million sheets, up 13% YoY. Export revenues grew 12% YoY during the quarter and 20% for the full year. Stylam’s strong positioning in international markets pushed its FY25 export-to-domestic revenue mix to a decade-high 71:29. Management is aiming to reach ₹12 billion in export revenue over the next two years, while current projections assume ₹10 billion.
The upcoming plant, expected to support further export-led growth, is anticipated to add ₹7.5–8 billion in revenue at full utilization. Management is also exploring a strategic tie-up with a Taiwanese acrylic manufacturer, which could enhance the currently stagnant acrylic segment.
Margins came under pressure due to a 30% YoY spike in raw material costs and a weaker sales mix. However, the company plans to focus more on value-added products such as thicker laminate sheets for export markets, which continue to show strong demand. EBITDA margins are expected to improve to 18.5–19% by FY28, driven by this strategic product focus and increased exports.
Stylam’s current laminate production capacity is 16 million sheets per annum with 88% utilization. The ongoing expansion of 4.8 million sheets is in its final stages and expected to be operational by September 2025. The company remains net debt-free, with gross borrowings at ₹361 million as of March 2025. Of the planned ₹2.6 billion capex for the new plant, ₹1.2 billion has already been spent. Potential challenges include disruptions to export routes (e.g., Red Sea tensions), a weaker domestic housing market, currency fluctuations, intensifying competition in international markets, and the sector’s reliance on real estate trends.
