Brokerage Motilal Oswal has kept its 'Buy' rating on Indo Count Industries, setting a target price of Rs 550. The textile company posted a 26% revenue jump in Q1 FY27, supported by strong growth in its new business segments. Investors are now tracking the company's ability to navigate operational hurdles and maintain its growth trajectory amid wider market volatility.
Motilal Oswal has reiterated a 'Buy' recommendation on Indo Count Industries with a target price of Rs 550. This outlook follows the company's recent first-quarter results for fiscal year 2027, which highlighted a solid performance despite some operational challenges.
Indo Count reported a consolidated revenue of Rs 1,224 crore in the first quarter, reflecting a 26% increase compared to the same period last year. Profitability also improved, with net profit rising between 62% and 67% year-on-year to reach approximately Rs 63.22 crore. A significant driver for this growth has been the company’s new business segments, which grew nearly three times in scale and now contribute about one-third of the total revenue.
Despite the strong financial growth, the stock has experienced volatility, currently trading in the range of Rs 382 to Rs 391. The company has faced some headwinds, including a temporary suspension of operations at its Bhilad facility in late July 2026 due to regional flooding. While the unit has partially resumed operations, managing production capacity remains a key focus. Additionally, the company dealt with a slight decline in bed linen volumes during the quarter, which management attributed to container unavailability and logistics issues.
Looking ahead, Motilal Oswal projects a compound annual growth rate of 21% in revenue for the company between fiscal year 2026 and 2028. This expectation is built on the belief that the new business divisions will continue to scale up, improving operating leverage—a measure of how efficiently the company turns revenue into profit as it grows. The brokerage values the stock at 15 times its projected enterprise value to operating profit (EBITDA) for fiscal year 2028.
Investors should keep in mind that the business carries specific risks. These include potential fluctuations in commodity prices, which can impact raw material costs, and customer or geographic concentration, where a significant portion of business relies on specific clients or markets. Broader macroeconomic factors, such as potential tariffs or changes in trade policy in the US textile market, also remain an area for monitoring.
For shareholders, a near-term event to track is the upcoming dividend. Indo Count has declared a final dividend of Rs 1.50 per share, with the ex-dividend date set for August 17, 2026. Market watchers will also look for updates on the full normalization of the Bhilad plant and the sustainability of the new business segment's growth in the coming quarters.