Dolat Capital recommended accumulate rating on Adlabs with a target price of Rs 50 in its research report dated May 18, 2018.
Dolat Capital's research report on Adlabs
Adlabs Q4FY18 results were broadly in-line with our estimates. The company reported 6% rise in footfalls from 398K to 422K. Despite unfavorable base of 25% increase the rise in footfalls can be attributed to price pass on to the consumers post-GST and improved business conditions. The company has passed on the prices to the tune of SGST (9%) which the company will be refunded by the state of Maharashtra for the capital investment made in the state. Going ahead, we believe that the footfall growth would continue in the coming years benefiting from the favorable base and changing economies. The company measures to reduce its debt will reduce the losses going ahead.
Valuing at 9x EV/EBITDA to arrive at a TP of ` 50. Maintain Accumulate.
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