Buy Cello World; target of Rs 460: Anand Rathi

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Cello World's revenue growth is expected to be driven by a shift in consumer demand towards premium products, with the company targeting 10% y/y revenue growth in FY27e.
  • Margin improvement is anticipated due to operational efficiency, with the management expecting an improvement in EBITDA margin going forward.
  • The company's writing instruments segment is expected to drive growth, with a focus on introducing margin-accretive products and improving the product mix.
  • Cello World's consumerware segment is expected to benefit from the ramp-up of the SS bottle plant and the resumption of the glassware plant in Dec-26.

Thesis Validation Checklist

  • Investors should watch for revenue growth, margin expansion, and improvement in operational efficiency over the next 12 months to validate the investment thesis.
  • Key signals to monitor include the company's ability to achieve its revenue growth targets, improvement in EBITDA margin, and successful ramp-up of the SS bottle plant.
  • Additionally, investors should track the company's progress in introducing new products, improving product mix, and enhancing its distribution network.