Stanley Lifestyles makes strong debut; lists at 35% premium to issue price

Shares of super-premium and luxury furniture maker Stanley Lifestyles listed at 499, a 35% premium against its issue price of Rs 369 on the BSE on Friday.

Shares of super-premium and luxury furniture maker Stanley Lifestyles made a strong stock market debut, by listing at Rs 499, a 35 per cent premium against its issue price of Rs 369 on the BSE on Friday. On the National Stock Exchange (NSE), the stock listed at Rs 494.95, up 34 per cent from its issue price.

The stock, thereafter, hit a high of Rs 510, and was up 38 per cent against its issue price. At 10:02 am; the stock was trading at Rs 497.95, after hitting a low of Rs 490 in intra-day trades on the BSE. A combined nearly 9 million shares changed hands on the NSE and BSE.

The initial public offering (IPO) of Stanley Lifestyles had received a robust response from investors, and the issue was subscribed 97.16 times. Qualified institutional buyers provided the major support amongst the participants, bidding 215.62 times the portion set aside for them, followed by non-institutional investors (high networth individuals) who bought 121.42 times the allotted quota, while retail investors picked 19.08 times the reserved portion.

Stanley Lifestyles has been a prominent player in the furniture industry since more than a decade and serves the customers from super premium to ultra-luxury segments. While it has gained a significant market share throughout its journey, it has a long term vision to be available across customer segments at all price points.

Stanley Lifestyles has delivered revenue growth at 46 per cent CAGR and EBITDA growth at 67 per cent CAGR between FY21-23. It expects organic growth of 25-30 per cent over the medium term. Based on its 9MFY24 annualized performance, analysts at Nirmal Bang Securities expects flat revenue growth for FY24E. In terms of profitability ratios, company’s ROE and ROCE stood at 11.8 per cent / 9.6 per cent for annualized 9MFY24, respectively.

Stanley Lifestyles is looking to improve its localisation in terms of sourcing of raw materials which is currently being imported from Europe and South East Asia. Currently, 20 per cent of its raw materials are sourced from domestic market which is expected to improve gradually up to 70-80 per cent over the next few years. This will have a positive impact on company’s overall earnings, the brokerage firm had said in the IPO note.

Stanley Lifestyles has evolved its products over the last few years operating at a significant scale while maintaining such a high level of profitability covering the mass, luxury and ultra luxury segments. With improved lifestyle, growing number of households, second homes trend will continue to drive growth and the management is committed to expand market share and increase customer base over the next few years, according to analysts at Reliance Securities.

The brokerage firm Geojit Financial Services said Stanley Lifestyles benefits from strong brand recognition, manu-retail model, expansion of new stores, an increasing number of affluent households, and favourable trends in the real estate sector. These factors are expected to drive significant growth for the company in the future.

Stanley Lifestyles plans to spend Rs 90 crore to open 24 new stores between FY25–FY27, which will significantly contribute to the company’s topline. Industry growth for the luxury/super-premium furniture and home goods market is set to grow at a CAGR of 34 per cent from USD 1.5 billion to USD 4.8 billion between F23-FY27 periods. Stanley is well placed to encash on the healthy growth opportunity in premium furniture market, according to SBI Securities.