Sohum Asset Managers CIO Sanjay Parekh expects another 3-5% market correction as high crude oil prices, rupee weakness and geopolitical tensions continue to weigh on sentiment. Despite this caution, Parekh believes the sell-off will create phenomenal opportunities for contrarian investors. The firm has increased large-cap allocation from 72% to 83%, focusing on market leaders like Reliance Industries, Maruti Suzuki, Mahindra & Mahindra, Bajaj Finance and Sun Pharmaceutical Industries. While markets fell around 9% since January, Sohum's portfolio declined only a little over 3%, demonstrating the effectiveness of this defensive strategy.
Anand Rathi has joined the growing chorus of positive analysts on Safari Industries, issuing a BUY rating with a target price of ₹2,000 in its latest research report dated May 19, 2026. This adds to the existing bullish sentiment from Prabhudas Lilladher (₹1,953 target) and Motilal Oswal (₹2,250 target), creating a consensus of positive outlooks despite varying price targets. The downwardly revised 12-month target of ₹2,000 from Anand Rathi's earlier ₹2,650 reflects market conditions, while maintaining confidence in the company's long-term prospects. The company currently trades at 38x/29x the brokerage's FY27E/FY28E EPS estimates, with the valuation premium justified by margin improvement trajectory and backward integration advantages.
Safari Industries India reported revenue growth of 12.4% year-on-year to ₹4.7 billion in Q4FY26, which was in line with estimates but 1.2% lower than street estimates. The company achieved volume growth of approximately 19% for the full fiscal year FY26, demonstrating strong operational performance. Gross margin remained largely flat at 49.3% on a year-on-year basis, while EBITDA margin declined by 129 basis points to 13% in Q4FY26, compared to Prabhudas Lilladher's estimate of 11%. According to Anand Rathi, revenue growth is expected to be in low double-digit in Q1FY27, with April and May showing strong domestic demand despite weak international demand due to Middle East conflicts.
The company has implemented price hikes of 4-6% to counter rising raw material costs, with the impact expected to be visible from June 2026 onwards following inventory clearance. As reported by Anand Rathi, raw material prices have increased by approximately 40%, necessitating these pricing adjustments. The company continues its strategic initiatives including building the Urban Jungle brand, adding capacity at Jaipur, introducing new stock keeping units, and adding 4-5 EBOs every month. These measures are designed to expand market share and maintain competitive positioning despite the challenging cost environment.
Looking ahead, Prabhudas Lilladher expects 14% sales CAGR over the next 2 years, with gross margin of 46.2%/46.8% and EBITDA margin of 12.5%/13.7% in FY27E/FY28E respectively. Anand Rathi notes that low double-digit margin is expected in Q1FY27 due to the impact of price hikes and raw material cost increases. Both brokerages acknowledge that competitive pressures from established players like VIP and Samsonite, combined with emerging D2C players, represent significant challenges. However, the strong domestic demand environment and the company's strategic positioning in the wheels and trolleys manufacturing sector support the positive long-term outlook across all analyst reports.
