Like Aditya Birla Fashion over Arvind: Himanshu Nayyar

Himanshu Nayyar, VP-Consumer & Retail at Systematix Shares & Stocks told CNBC-TV18, "Both Arvind as well as are longer term stories, but if you talk from a one-year perspective, Arvind has already seen a run-up post the deal that they had with multiples private equity where they disposed of 10 percent stake in their branded business. So, the stock has already moved up by 20 percent in the last six months. That is why a limited upside from a one-year perspective. But both, Arvind as well as ABFRL are very strong branded apparel plays. But out of the two, we like ABFRL better from a one-year perspective today."
 
"Both,  as well as Future Retail's price-earnings ratio (P/E) would not be the right way to look at them because both of these companies are not paying taxes because they are carrying accumulated losses from the acquisitions that they did. So, a better way to compare would be an enterprise value (EV), earnings before interest, taxes, depreciation and amortisation (EBITDA) basis which we are using to value these companies. So, currently, Avenue Supermarts, the D-Mart company is trading at 25 times FY19. Future Retail would be trading at close to about 16 times FY19 and even Aditya Birla Fashion would be trading at close to 16-17 times FY19 EV/EBITDA. So, in both these two, we see that valuation discount with D-Mart narrowing quite significantly over the next one year."