Buy Aditya Birla Fashion and Retail; target of Rs 130: ICICI Securities
ICICI Securities is bullish on Aditya Birla Fashion and Retail has recommended buy rating on the stock with a target price of Rs 130 in its research report dated May 28, 2020.
Broker Research
May 28, 2020 / 12:20 PM IST
ICICI Securities research report on Aditya Birla Fashion and Retail
Key takeaways from Aditya Birla Fashion and Retail (ABFRL)’s Q4FY20 results: 1) focus on cost reduction through aligning rental cost in-line with revenues, curtailing discretionary spends by 50-70% and optimise employees/other costs; 2) preserving cash through rationalising capex (by ~60-70%) and optimising working capital; 3) proposing Rs10bn rights issue to de-leverage balance sheet; 4) ABFRL’s >1,300 stores (out of 3,041 stores) have started partial operations as of now.
Outlook
Factoring-in higher demand impact due to Covid-19, we reduce our FY21E and FY22E EBITDA by 29% and 11% respectively, target multiple to 18x (earlier 20x) and target price to Rs130/sh (earlier Rs180/sh) based on 18x FY22E EV/E. Maintain BUY, as concerns around weak H1FY21E seems adequately priced-in.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.