Feb'25 View on Cello World Ltd

Cello World is a leading Indian consumer product company mainly dealing in writing instruments and stationery, molded furniture, consumer housewares, and related products. After falling from 1000 level the stock is languishing at 610 level and looks to cross 800 on back of following strong data • Molded furniture sales grew 5.9%/19.1% yoy/qoq to Rs93.1 cr (~5.9% beat). • Q3FY25—miss on all counts, largely due to glassware (GW) furnace delay. • Consolidated revenues grew 5.7% yoy to Rs556.8 cr (~1% miss). • Consumerware sales grew 7.6% yoy to Rs386.4 cr (~2.6% miss), whereas writing instruments declined ~3.5% yoy to Rs77.3 cr (~0.5% miss). • Considering the current demand scenario, Cello expects a 12-14% growth in FY26E, with 3.5-4.0% additional revenue from a new GW unit. • We cut estimates by 4-7% and revise our DCF-based Fair Value to Rs815 (implies ~40X FY27E P/E). Retain ADD.