Vedanta Fashions (VFL) reported fourth quarter results of the financial year, which were well above IIFL’s estimates. The brokerage believes that the beat in Q4 is a faster than expected recovery and hence, broadly maintains its estimates.
The brokerage house has maintained its buy rating on the newly listed stock with a target price of 12 months 1,180 each, indicating a potential increase of over 27% from current stock levels. Shares of Vedanta Fashion debuted in the market in February 2022, and are currently trading at 7% above its IPO issue price 866 per share.
“With a customer profile in the mid to high income group, Vedanta Fashion is less likely to be impacted by the softer macro and is well poised for growth delivery. Despite the rich valuations, Vedanta Fashion offers a unique model of growth and high return profile in the apparel retail sector,” the IIFL note said.
Vedanta Fashion has grown its Exclusive Brand Outlet (EBO) retail segment at a CAGR of 16% over the past few years (including the Covid-affected years), and expects to maintain the same run-rate with high single-digit SSS. Is. Growth. The brokerage said that currently with presence in 223 cities and towns in India, the firm has identified 150 new cities and towns to expand its presence in the medium term.
The ‘Manyavar’ brand of Vedanta Fashions is a category leader in the branded Indian Wedding and Celebration Wear market with a pan India presence. The company’s other brands include Twmv, Manthan, Mohe and Mebaaz and it competes with Aditya Birla Fashion Retail, Trent, Metro Brands and TCNS Clothing Company.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.