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Healthy Growth Momentum Continues

In Q2FY27, SIRCA delivered a strong operating performance, with revenue growing 22.1% YoY, supported by the Wembley range, continued traction in acrylic and PU systems and steady OEM demand. However, EBITDA margin declined by 269bps YoY to 18.2% due to higher input cost, despite calibrated price increases partly offsetting the impact. The company continued to advance its localisation strategy through the scaling up of acrylic and polyester formulations, which is expected to support cost-optimisation and reduce import dependence. The management remains focussed on expanding Wembley’s panIndia presence, strengthening distribution and driving margin recovery. We anticipate a gradual improvement in earnings, as pricing actions flow through in H2FY27E.

We forecast SIRCA’s Revenue/EBITDA/PAT to respectively expand at 20.8% / 21.7% / 25.2% CAGR over FY26–29E.

Revenue Growth Remains Strong, Margin Dips

* Revenue grew 22.1% YoY and 23.2% QoQ to INR 1,602 Mn (beating CIE estimate by 5.3%)

* EBITDA was up 6.4% YoY and 20.4% QoQ to INR 292 Mn. EBITDA margin declined 269/42 bps YoY/QoQ to 18.2% (missing CIE estimate by 80 bps)

* PAT grew 12.2% YoY and 25.4% QoQ to INR 203 Mn (in line with CIE estimate of INR 201 Mn)

Valuation & View

We retain our 'BUY' rating on SIRCA, valuing the company on a P/E-based framework: we apply a target multiple of 32.0x on FY28E core EPS of INR 17.5/share to arrive at a target price of INR 560/share (maintained). Our TP implies a PEG of 1.27x, given an earnings CAGR of 25.2% over FY26–FY29E.

Key Risks

A possible slowdown in the real estate market, furniture, renovation, interior fitouts and probable predatory pricing could affect SIRCA’s business.

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SEBI Registration no.: INZ 000160131