JM Financial starts coverage on KPR Mill with 'Buy'; check target price

JM Financial has set a target price of ₹1,215 per share, implying an upside potential of 21 per cent

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KPR Mill share price today: Domestic brokerage JM Financial has initiated coverage on KPR Mill, an integrated apparel manufacturer, with a 'Buy' rating, citing its scale, end-to-end integration and diversified geographic mix. 

 

According to analysts, KPR’s scale and end-to-end integration drive structural margin advantages across cycles. Internal consumption of yarn and fabric eliminates intermediate supplier margins and stabilises spreads, supporting consolidated Ebitda margin of 19-20 per cent. The company's captive renewable ecosystem, including 62MW wind, 40MW solar, and 90MW bagasse-based cogeneration, materially strengthens its cost competitiveness. Ebitda stands for earnings before interest, tax, depreciation, and amortisation.

 

Additionally, KPR’s sugar-ethanol business provides counter-cyclical earnings, supported by regulated ethanol pricing and assured OMC offtake. This diversification has helped cushion earnings volatility and contributed to sustained consolidated profitability.

 

JM Financial expects KPR's revenue, Ebitda, and PAT to grow at a CAGR of 14 per cent, 16 per cent, and 17 per cent over FY25-28E, respectively. Analysts valued the stock at 32x FY28E P/E multiple, resulting in a target price of ₹1,215 per share. The target indicates an upside potential of 21 per cent from the December 3, 2025, closing price of ₹1,006 on the NSE.

 

At 3:00 PM on Thursday, December 4, the KPR Mill stock was trading at ₹984.2, down over 2.2 per cent compared to the previous session's close on the NSE. In comparison, the NSE Nifty50 was up 67.95 points or 0.26 per cent at 26,053.05 levels. The company's total market capitalisation stood at ₹33,637.92 crore.

Here's why JM Financial has a positive stance on KPR Mill:

Fully integrated operations: According to analysts, KPR’s fully integrated textile operations, spanning spinning, knitting, processing, and garmenting, help reduce external sourcing, stabilise conversion costs, and optimise utilisation across cycles. Despite industry challenges like higher tariffs, volatile cotton prices, and weak yarn spreads, the company reported consolidated Ebitda margins of 19.5 per cent in FY25 and 19.2 per cent in 1HFY26, highlighting the resilience of its integrated business structure.

 

Garmenting remains the core growth engine: The brokerage highlighted that garmenting remains KPR’s core growth driver, supported by strong demand. The company has expanded garment capacity from 63 million pieces in FY14 to 200 million pieces by September 2025, with garments contributing 41 per cent of consolidated revenue in FY25. Planned expansions, including 50 million additional garments and 10 KTPA fabric capacity, each with ₹4 billion capex, are expected to support incremental growth over FY26–28.

 

Diversified geographic mix: According to JM Financial, KPR’s diversified export mix reduces US-centric risk, with Europe accounting for 60 per cent of export revenue, providing stability amid global market volatility. European buyers maintained steady orders, reflecting alignment with KPR’s essential, non-seasonal garments. Even during tariff disruptions, the company fulfilled US orders with minimal 2–5 per cent discounts and no cancellations, demonstrating limited financial impact and strong buyer continuity.

 

Sugar-ethanol operations: The company’s sugar-ethanol operations provided counter-cyclical support, contributing ₹11 billion to consolidated revenue in FY25. This segment acted as a natural hedge against textile margin pressures from weaker yarn spreads, helping the company maintain a consolidated Ebitda margin of 19.5 per cent in FY25. KPR installed 66 windmills with a total wind power capacity of 61.92 MW, allowing it to meet around 60 per cent of its power requirement. Simultaneously, it invested in a cogeneration cum sugar plant with a capacity of 30 MW and 5,000 TCD at Bijapur, Karnataka.   Disclaimer: Target price and stock outlook has been suggested by JM Financial. Views expressed are their own.