INSUBCONTINENT EXCLUSIVE:
Anand Rathi has a buy call on Raymond with a target price of Rs 1,192.
The current market price of Raymond is Rs 803.95.
Time period given
by the brokerage is one year when Raymond price can reach the defined target
Investment rationale by Anand Rathi:Lower revenue growth because of the high base: Consolidated revenue grew 4.5 per cent y/y (GST-adjusted
nearly 8 per cent) to Rs 12.5bn, a shade below our estimate
The consolidated EBITDA margin expanded 230bps y/y to 5.5 per cent driven by the gross margin expansion, lower ad-spend and other expenses
cent GST-adjusted), both on a high base
PAT was an encouraging Rs 19m, up from the Rs 59m net loss a year ago.
Strong operational performance: Despite a 250bp contraction in the
-2.2 per cent a year ago) and more cost savings
Ahead, backed by its store expansion, brand and product initiatives and the start of the festival season in Q2 FY18, we are sanguine about
Due to rising raw material prices, we have lowered our FY19e and FY20e textiles margin to 15 per cent and 16 per cent respectively
(previously 16.5 per cent and 17.5 per cent)
We expect a nearly 13 per cent revenue CAGR and EBITDA margin expansion of 141bps over FY18-20.
Valuation: We upgrade our rating to a Buy
with a target price of Rs 1,192 (earlier Rs 1,280) on 12x FY20e EV/EBITDA
The recent fall in the stock price has stepped up the potential to 49 per cent (without considering the land value, our target price comes
to Rs 1,002, offering 25 per cent potential from the ruling price), Hence, despite our downward EBITDA revision, we upgrade our
