Mulitbagger Stock: DOMS Industries surges 105% in CY24, trades 233% above IPO price

Multibagger Stock: DOMS Industries, a recent entrant on Dalal Street, has witnessed a remarkable surge in its share price since listing, significantly multiplying investors’ wealth over a short period. Impressively, the stock has maintained its unstoppable rally even during periods of market sell-off.

So far this year, the company’s shares have soared from ₹1,250 apiece to the current trading price of ₹2,572, marking a stellar rise of 105%. Notably, the stock closed positively in the last 11 months. It recorded its best monthly gain in April of 17%, followed by July when it rose 16%.

However, the rally did not extend into December, as the stock declined by 14% following the sale of a 4.57% stake by the company’s promoter, FILA, on December 18. This move aimed to increase the company’s free float, enhance share liquidity, and attract new investors.

Can DOMS shares rally more?

Despite the temporary dip, analysts remain bullish on the stock due to DOMS Industries’ significant presence in the stationery and art products segment, which is expected to grow robustly in the coming years. This growth is expected to be driven by rising global literacy rates, increasing demand for office supplies, and rapid industrialisation.

It is estimated that the Indian stationery and art materials market is projected to expand at a 13% CAGR from FY23 to FY28, increasing from ₹38,500 crore in FY23 to ₹71,600 crore by FY28.

DOMS Industries designs, develops, manufactures, and sells a wide range of high-quality stationery and art products. Its offerings are categorized into seven segments: scholastic stationery, scholastic art material, paper stationery, kits and combos, office supplies, hobby and craft items, and fine art products.

As of March 2024, the company boasts a reach of 122,500 retail outlets, supported by 120 super-stockists and 4,300 distributors across 29 states and union territories. 

In its recent note, Axis Securities retained its ‘buy’ rating on the stock and lifted the target price to ₹3,120 apiece from the previous price target of ₹2620. 

At current levels, the stock is trading 233% above its issue price of ₹790 apiece.

Growth drivers for Indian stationery and supplies industry

India’s focus on providing education to all children, especially at the primary and secondary levels, has fueled the demand for stationery items. Various initiatives aimed at promoting learning have significantly increased the overall demand for educational supplies.

Furthermore, the demand for stationery items is being driven by the rising middle class and increasing disposable income, which is expected to bolster the growth of the industry as more consumers are willing to spend on higher-quality stationery products.

Indian consumers are increasingly opting for premium, multifunctional stationeries that cater to aesthetics while meeting organisational needs. The industry has also been observing a rise in corporate gifting, often seeking customised stationery products, further increasing the demand for premium offerings.

Additionally, stationery combo sets have gained popularity among children, prompting manufacturers to design more appealing stationery kits to cater to this demographic and boost sales.

Besides, a significant number of students are opting for private coaching classes at both school and university levels. This has led to the proliferation of coaching institutions, resulting in a substantial increase in per-person spending on stationery items.

As of FY24, the Indian coaching industry’s market size stands at approximately ₹65,000 crore, which is expected to reach around ₹1,34,000 crore by FY29, as per recent estimates, likely fueling more demand for stationery products in India.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.