Hold Bombay Rayon; target of Rs 266: Firstcall Research

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Firstcall Research has recommended hold rating on Bombay Rayon Fashions with a target of Rs 266, in its April 24, 2013 research report.
 
"BRFL is a vertically integrated textile company, engaged in the manufacture of a wide range of fabrics and garments from state of the art production facilities. Apart from being the largest Shirt manufacturer in India, the company has successfully evolved into a multi-fiber manufacturing company producing fabrics such as Cotton, Polyester, Tencel, Modal, Lycra, Wool and various blends. The yarn dyed fabric, printing techniques, finishing, processing, weaving, stitching are a mark of excellence making every piece of fabric perfect. With fabric manufacturing facilities of 100 million meters per annum, garment manufacturing facilities of 60 million pieces per annum, being expanded to 90 million pieces per annum and a strong employee base of around 38,000. Bestseller group is one of the largest apparel player based out of Europe, owned by the Povlsen family, owns 37 percent in Bombay Rayon Fashions Limited. Bestseller present across 46 markets in Europe, the Middle East, Asia and Canada through approximately 3,000 chain stores and 12,000 external multi brand stores."
 
"Bombay Rayon Fashions Ltd achieved a turnover of Rs. 8187.40 million for the 3rd quarter of the current year 2012-13 as against Rs. 7009.32 millions in the corresponding quarter of the previous year. The company has reported an EBITDA of Rs. 2119.10 millions and a net profit of Rs. 472.00 million against Rs. 537.15 million reported respectively in the corresponding quarter of the previous year. The company has reported an EPS of Rs. 3.51 for the 3rd quarter as against an EPS of Rs. 3.99 in the corresponding quarter of the previous year."
 
"At the current market price of Rs.244.40, the stock P/E ratio is at 17.88 x FY13E and 19.20 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.13.67 and Rs.12.73 respectively. Net Sales and Operating Profit of the company are expected to grow at a CAGR of 14 percent and 18 percent over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 3.91 x for FY13E and 3.57 x for FY14E. Price to Book Value of the stock is expected to be at 1.06 x and 1.00 x respectively for FY13E and FY14E. We recommend ‘HOLD' in this particular scrip with a target price of Rs 266 for medium to long term investment," says Firstcall Research report.

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