Buy Arvind; target of Rs 450: ICICI Direct
ICICI Direct is bullish on Arvind has recommended buy rating on the stock with a target price of Rs 450 in its research report dated November 05, 2018.
November 13, 2018 / 04:45 PM IST
ICICI Direct's research report on Arvind
NCLT has approved the demerger of Arvind Fashions and Anup Engineering from Arvind Ltd. The company has reported financials for its continuing business only. However, for the purpose of comparison, the company has provided the consolidated summary Revenues from the textile division (excluding advanced materials) grew 6.4% YoY to Rs 1488 crore mainly driven by 15%, 14% growth in the garmenting, woven division, respectively. The denim business continues to remain under pressure due to stiff competition and oversupply situation in the country. Denim segment reported 3% YoY growth (down 8% QoQ) to Rs 433 crore. The advanced material division reported strong revenue growth of 21% YoY to Rs 145 crore. The revenue trajectory for Brands & Retail division (B&R) slowed down in the quarter with growth of 9% YoY (13% adjusted growth) to Rs 1227 crore. A shift in the festive season and weak Onam sales impacted growth. Consolidated revenues grew 12% YoY to Rs 3053 crore EBITDA margins for B&R division improved 60 bps YoY to 6.2% on account of improved profitability in emerging brands and speciality retail. For textiles division, margins declined 70 bps YoY to 12.4% on account of reduced drawback rates. EBITDA margins for advanced material division improved significantly to 9.8% vs. 1.6% in Q2FY18.
We maintain our BUY recommendation on the stock with a revised target price of Rs 450.
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