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Buy EMMBI Industries; target of Rs 139: KR Choksey

KR Choksey is bullish on EMMBI Industries has recommended buy rating on the stock with a target price of Rs 139 in its research report dated May 18, 2022.

May 19, 2022 / 01:18 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

 
 
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KR Choksey's research report on EMMBI Industries


In Q4FY22, Emmbi’s revenue grew 17.9% YoY to INR 1,091 mn. Though on sequential basis revenue was marginally down by 0.5% QoQ. For FY22 revenue stood at INR 4,356 mn, a growth of 59% YoY. EBITDA has seen a growth of 47% YoY to INR 128 mn. On QoQ basis EBITDA was mostly flat, up by 1% QoQ. EBITDA margin saw an expansion of 233 bps YoY and 18 bps QoQ to 11.7%. PAT has seen a strong growth of 49.9% YoY to INR 46 mn. However on QoQ basis PAT suffered a decline of 9.3%. PAT margin expanded by 90 bps YoY to 4.2%, though on QoQ basis it suffered a decline of 41 bps.



Outlook


We now value the stock at 6.25x (earlier 7.3x) on its revised FY24E EPS of INR 22.2/share (earlier INR 19.2/share), which yields a target price of INR 139 (unchanged) giving an upside potential of 50.7%. Accordingly, we maintain our ‘BUY’ rating on the stock .

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first published: May 19, 2022 01:18 pm
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