About the stock: Mayur Uniquoters (MUL) is a leading player in technical textile domain, manufacturing synthetic leather (PVC, PU) for auto, footwear & apparels.
• In FY25, ~65% of sales came from automotive segment, while footwear segment constituted ~21% of sales with rest being constituted by others.
• In FY25, ~20% of sales came from Domestic Auto OEMs, ~29% from Export Auto OEMs, & 16% from Auto Replacement market (domestic).
Q4FY25 Results: Consolidated sales for Q4FY25 came in at ₹251 crore (up 13% YoY & 20% QoQ). Reported EBITDA for the quarter came in at ₹53 crore with corresponding EBITDA margin at 21.2% (down 128 bps QoQ) due to increase in other expenses. PAT in Q4FY25 stood at ₹41.5 crore (up 32% YoY & 36% QoQ). For FY25, sales came in at ₹880 crores (up 9.6% YoY) with EBITDA margins 21.7% (up 190 bps) and profit at ₹149.3 crores which is up by 22% YoY.
Investment Rationale
• Auto OEM exports – key enabler for growth over FY25P-27E: Mayur has always been a quality franchise supplying its product to marquee brands realizing healthy margins and return ratios. This is amidst company officials engaging with global marquee players to sell value added products especially in the automotive luxury car space to OEMs such as Mercedes, BMW among others. Exports remain a critical growth driver, and Mayur expects export OEM sales to grow at 25-30% annually. Automotive exports currently stand at ₹250 crores (FY25), and the company aims to reach ₹350 crores by FY27E. This we believe will drive superlative growth for MUL amidst healthy growth in its base business supplying PVC & PU products to domestic OEMs. In the domestic auto OEM space, the company is a key supplier of PVC products to credible names such as Maruti Suzuki, Hyundai Motors among others. While in the footwear segment its key clients include Bata, Relaxo among others.
• Healthy financials – double-digit growth, Cash positive B/S: With firm order pipeline both in domestic as well as export business, we expect sales at the company to grow at a CAGR of 11% over FY25P-27E amidst management’s guidance of 12-15% sales growth in FY26. With increasing share of high margin auto export business, operating leverage benefits and stable raw material pricing we expect margins to improve conservatively to 22% levels by FY27E. With improving scale of operations, core RoIC is seen surpassing 30% levels. On the B/S front, it has long been a debt free company with net cash on books at ~ ₹ 360 crores as of FY25P.
Rating and Target Price
• Growth was the only concern at Mayur. With growth now being delivered and company reasonably confident of the same in the near to medium term, we continue to be positive on the counter. We assign BUY rating on Mayur Uniquoters amidst healthy growth prospects especially in auto OEM export space, healthy margin & RoIC profile (20%+) & Cash positive B/S. We value Mayur at ₹ 665 i.e., 16x PE on FY27E.
