NSE: ARVINDFASN | BSE: 542484 | ISIN: INE955V01021
INDUSTRY : Other Apparels & Accessories
175.10 2.30 (1.33%)
NSEJul 07, 2020 15:31
The 1 reports from 1 analysts offering long term price targets for Arvind Fashions Ltd. have an average target of 460.00. The consensus estimate represents an upside of 162.71% from the last price of 175.10.
|Summary||Date||Stock||Broker||Price at Reco.||Target||Price at reco|
Change since reco(%)
|2020-02-12||Arvind Fashions Ltd.||HDFC Securities||396.70||460.00||396.70 (-55.86%)||162.71||Buy|
Given the brand equity of AFL's power brands (60% of sales), a recovery in this segment is a foregone conclusion. This coupled with multiple margin levers and an increasingly lighter expansion strategy should ensure AFL's return profile has a U-shaped recovery. (6.3% by FY22 vs -3.7% in FY20E). We remain circumspect on the value fashion play though, given AFL's lack of execution history. Valuations at <1x FY20E Power brand sales seem undemanding. While we maintain our estimates, a DCF-roll-over to FY22 leads to a marginal revision in TP to Rs. 460/sh (earlier Rs. 450), implying 11x F22 EV/EBITDA). Reiterate BUY. Near double-digit (-9.8%) top-line de-growth was par for the course for Arvind Fashion (AFL) as FY20 is all about 1. fixing working capital woes in brands biz via reducing reliance on long-credit cycle accounts (MBOs), 2. Reining in losses of the value fashion play Unlimited. 3). Non-core brand exits.