ICICI Securities has issued a buy rating on Cello World with a target price of ₹600 in its research report dated February 16, 2026. According to reports from Moneycontrol, the brokerage has revised its target price down from the earlier ₹700, implying a target P/E of 30x FY28E EPS. The recommendation comes despite the company's recent revenue challenges, with ICICI Securities maintaining confidence in the stock's long-term prospects.
The company's Q3FY26 performance was weaker than expected, primarily due to post-festive seasonality and pricing pressure in the moulded furniture segment. As reported by ICICI Securities, Cello World continues to face revenue disappointments, with tough macroeconomic conditions being one of the attributable factors. However, the brokerage notes that consensus may have some concerns regarding execution capabilities.
ICICI Securities identifies several factors supporting optimism for Cello World's future performance. The steel products manufacturing facility is expected to commence in Q4FY26, which will reduce supply constraints through backward integration and improve cost economics. Additionally, the company's demand recovery in writing instruments led to revenue growth of 11.1% YoY, with the acquisition of the Cello brand in pens positioning the company well for FY27-28 growth.
According to ICICI Securities' analysis, Cello World is projected to report revenue and PAT CAGRs of 12.5% and 17.1% respectively over FY26-28E. The brokerage expects the company to achieve RoCE above the cost of capital during this period. Commodity price reductions are also indicated as a possibility for margin expansion in FY27-28, supporting the positive outlook for the company's financial performance.
