Vedant Fashions Ltd. share price target

VFL is navigating a prolonged slowdown; the management largely attributes it to macro factors (slowdown in hiring by IT companies, weak discretionary demand in the mid-premium category, etc.) and, to a lesser extent, to higher organized competition in the ethnic wear space.

Vedant Fashion’s (VFL) 2Q performance was impacted by GST-linked dispatch disruptions, creating a ~6% delta between primary and secondary sales. However, the company has been struggling to revive growth sustainably, with its 1HFY26 revenue tracking 5% below 1HFY23 levels.

Vedant Fashions Ltd (VFL), established in 2002 in Kolkata, is a leading player in India's celebration wear market, anchored by flagship brand Manyavar. Through its five brands Manyavar, Mohey, Twamev, Manthan, and Mebazthe company offers ethnic wear for men, women, and children. VFL operates 662 exclusive brand outlets (EBOs) across India and 16 EBOs in 12 global cities, spanning ~17.9 lakh sq. ft., with a presence across 26 Indian states...

Vedant Fashions (VFL) reported a muted performance in 3QFY25, with YoY flat EBITDA and PAT (11-12% miss) due to weak SSSG (2.6%) and higher other expenses.

Vedant Fashions (VFL) delivered good quarter with revenue/PAT rising 23%/37% YoY (10%/21% beat) driven by strong SSS growth of 17% YoY, lower base (-12% YoY in 2QFY24), and a favorable shift in festive dates.

We visited Mohey EBO in Jayanagar, Bangalore to get first-hand insights on Vedant Fashion’s (VEDANT) ability to unlock value in women’s wedding and celebration wear market opportunity.

2QFY24 result was weak, impacted by higher base, shift in festivals to 3Q and lower number of wedding days due to Adhika-masa (18th July to 16th Aug – once in a 3-year event). As per dhrik-panchang, there were no wedding days in 2QFY24 vs 6 in 2QFY23.

Result was weak, impacted by significantly lower number of wedding days. Steep decline in SSSG (-22% YoY) compared to 22% higher retail area is concerning. This is the steepest decline in SSSG compared to other retail companies that have reported 1Q results so far.

In-line result. We liked strong SSSG (at 16% vs 4QFY20) led revenue growth. The quarter had benefits of deferred wedding days from Q3FY23 to Q4FY23.

Vedant Fashion’s soft SSSG (negative YoY, low single digit vs pre-covid) has been underwhelming in Q3FY23. This may be due to a significant shift in wedding days to Q4FY23 (~10 days in 3Q vs >30 days in 4Q).

Vedant Fashions’ (MANYAVAR) Q2FY23 EBITDA at Rs1.2bn (up 27% YoY) was a tad below consensus expectations. Revenue at Rs2.5bn grew 24% YoY (low base).

Vedant Fashion Ltd. (VFL) founded by Kolkata-based first-generation entrepreneur Ravi Modi is a play on the branded Indian wedding and celebration wear (IWCW) market, which seems relatively less price-sensitive. Its flagship brand Manyavar commands dominant position in the branded IWCW market and has emerged as a ‘category leader’ and a ‘brand of first recall’.

IPO Note

Vedant Fashions is the largest company in India in the men's Indian wedding and celebration wear segment in terms of revenue, OPBDIT and profit after tax for the Financial Year 2020. Company's Manyavar' brand is a category leader in the branded Indian wedding and celebration wear market with a...

Issue Snapshot: Issue Open: Feb 04 Feb 08, 2022 Price Band: Rs. 824 866 *Issue Size: Rs 3149.2 cr (Entirely Offer for sale) Reservation for: QIB Upto 50% eq sh Non Institutional atleast 15% eq sh Retail atleast 35% eq sh Face Value: Rs 1 Book value: Rs 35.45 (Sep 30, 2021) Bid size: - 17 equity shares and in multiples thereof 100% Book built Issue Vedant Fashions Limited - IPO Note

Vedant Fashions Ltd. (VFL) is the largest company in India in the men's Indian wedding and celebration wear segment in terms of revenue, OPBDIT and net profit for FY20. 'Manyavar' brand is a category leader in the branded Indian wedding and celebration wear market with a Pan-India presence. It has established a multi-channel network and introduced brands by identifying gaps in the under-served and high-growth Indian wedding and celebration wear category. VFL focuses on spreading India's vibrant culture, traditions and heritage through aspirational yet value for money brands at a diverse range of price points. The company offers a one-stop destination with a wide spectrum of product offerings for every celebratory occasion and aim to deliver an aristocratic yet seamless purchase experience to customers through its aesthetic franchisee-owned exclusive brand stores....