Vedant Fashion shares were down 1.56 percent at Rs 1216.20 at 10.03 am as the company's net profit fell 8 percent year-on-year to Rs 91.9 crore in Q1FY24.
Sales also fell 4 percent year-on-year to Rs 311 crore in the April-to-June quarter. Low sales were due to fewer wedding dates in Q1FY24, said Nuvama Institutional Equities in a report dated July 28. The April-to-June quarter had only 22 auspicious wedding dates as compared to 37 in the same period last year.
The same phenomenon happened in Q1FY17, when there was a smaller number of auspicious wedding dates. However, Vedant Fashion registered a 17-percent growth back then as majority of the shopping happened in second half of the year.
What analysts are saying
Morgan Stanley has an overweight rating on the stock with a target price of Rs 1,335. The foreign brokerage firm said that it sees progress on scaling of new brands especially ‘Twamev’.
Nuvama Institutional Equities has a buy rating on the stock with a target price of Rs 1,457. The brokerage firm sees Vedant Fashion’s performance rebounding in the later half year of FY24. However, the brokerage firm has cut its earnings estimate by 2 percent for FY24 factoring a muted performance in the April-to-June quarter and a bleak outlook in July-to-September quarter.
Store additions
Same store sales fell 22 percent in the April-to-June quarter, while secondary revenues fell 16 percent during the same period, said Nuvama Institutional Equities.
Vedant Fashion expanded its retail footprint presence by adding around 85,000 sqft retail area in Q1FY24, and added 13 new stores. It includes three exclusive Twamev flagship stores in Bengaluru, New Delhi, and Hyderabad.
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