Iifl Has ‘buy’ Tag On Vedant Fashions Shares, Sees Over 27% Upside

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Vedant Fashions (VFL) reported Q4FY22 results, which were significantly above IIFL’s estimate. The brokerage believes the beat in Q4 is driven by a faster than expected recovery and, therefore, broadly maintains its estimates.

The brokerage house has maintained its Buy rating on the newly listed stock with a twelve-month target price of 1,180 apiece, implying a potential upside of over 27% from current stock level. Vedant Fashions shares made market debut in February 2022, and are currently trading over 7% higher from its IPO issue price of 866 per share. 

“With a customer profile of mid-to-high income segments, Vedant Fashions is less likely to be impacted by a soft macro and remains well poised for growth delivery. Despite rich valuations, Vedant Fashions offers a unique model of growth and a high-returns profile in apparel retail,” IIFL’s note stated.

Vedant Fashions has increased its exclusive brand outlets (EBO) retail area, at a CAGR of 16% in the past few years (including Covid-impacted years), and expects to maintain the same run-rate along with a high single-digit SSS growth. With presence currently in 223 cities & towns in India, the firm has identified 150 new cities & towns, to expand its presence in the medium term, the brokerage added.

Vedant Fashions’ ‘Manyavar’ brand is a category leader in the branded Indian wedding and celebration wear market with a pan-India presence. The company’s other brands include Twamev, Manthan, Mohey, and Mebaz and it competes with Aditya Birla Fashion Retail, Trent, Metro Brands and TCNS Clothing Company.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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