Stylam Industries shares surged 4.75% to ₹3,201.65 per share at 12:52 PM, significantly outperforming the BSE Sensex which was down 0.47% at 73,891.57. The rally was triggered by HDFC Securities upgrading the stock to 'Buy' from 'Add' with a revised target price of ₹3,775 per share. According to reports from Business Standard, the brokerage's upgrade is based on 30x March 2028 consolidated earnings per share (EPS), up from 20x previously, citing resolution of governance concerns and stronger growth visibility.
The brokerage's upgrade comes after Stylam announced a stake sale by promoter families to Aica Kogyo Co. Ltd. in December 2025. As reported by Business Standard, Manav Gupta and family have fully exited by divesting their entire 27.12% stake, while Aica Kogyo launched an open offer to acquire an additional 26% from public shareholders at ₹2,250 per share but saw limited participation, acquiring only approximately 2.75% and taking its total stake to approximately 29.87%.
According to Business Standard reports, management is targeting at least 20-25% year-on-year revenue growth in the laminates segment for FY27, supported by new plant commissioning and recovery in domestic demand. The company expects acrylic revenues to reach ₹5-7 crore in FY27, against approximately ₹1.5 crore in FY26, with April sales exceeding ₹100 crore serving as a positive early indicator for Q1FY27 demand.
HDFC Securities has modeled 15%, 21%, 21%, and 19% compound annual growth rate (CAGR) in volume, revenue, EBITDA, and adjusted profit after tax respectively over FY26-28. As reported by Business Standard, the brokerage previously cut Stylam's valuation multiple from 30x to 20x due to concerns over strained promoter relations, but has now restored it to 30x following the governance resolution. The company has implemented laminate price hikes to offset elevated chemical costs, with management expecting operating leverage benefits and rupee depreciation to mitigate impact.
According to Business Standard, the brokerage flagged potential delays in commissioning or ramp-up of new plants, evolving relationship between erstwhile and new promoters, and exposure to new capital-intensive business as key risks. The upgrade reflects the resolution of governance concerns following the exit of one promoter group, with the leadership transition viewed positively by the brokerage. Management expects the domestic business to begin delivering from Q1FY27, with corrective measures already implemented.
