Motilal Oswal has issued a buy rating on Safari Industries with a target price of ₹2,600, as reported in their research report dated February 10, 2026. The brokerage maintains its bullish stance on the company despite Q3FY26 results that missed analyst estimates. According to the report, the target price is based on a DCF-based valuation implying a P/E ratio of 46x on FY28.
According to Motilal Oswal's analysis, Safari Industries' Q3FY26 revenue grew 15.7% year-on-year to ₹5.1 billion, supported by approximately 20% YoY volume growth. However, the company's EBITDA and PAT grew 10.5% and 5.6% YoY respectively. The brokerage noted that heightened competition to chase volumes led to elevated discounting across both offline and online channels during the quarter.
As reported by Motilal Oswal, the offline channel delivered approximately 22% growth while e-commerce grew slower at 12-15%. Management indicated that the slower e-commerce growth was attributed to the competitive pricing environment. Despite the challenging quarter, management expects healthy volume momentum to continue in Q4 as well.
According to the research report, Motilal Oswal expects Safari Industries' revenue momentum to outpace the industry with a +16% CAGR. The brokerage anticipates this growth will be driven by improving capacity utilization at the new Jaipur plant. EBITDA margins are likely to be in the range of 13.5-14.5% over the next two years, as reported in the analysis.
As mentioned in the report, Motilal Oswal has identified key risks including delayed capacity expansion and sudden rise or discounting by regional competition. The brokerage has trimmed earnings estimates while reiterating the buy rating, reflecting a cautious but optimistic outlook on the company's prospects.
