Buy Future Lifestyle Fashion; target of Rs 536: Edelweiss

Edelweiss' research report on Future Lifestyle Fashion

Future Lifestyle Fashion’s (FLF) Q4FY18 revenue, EBITDA and PAT came in line with our estimates. Key highlights: i) 4.8% YoY SSSG came on a strong base of 19.7% (versus -1% and -6% SSSG for Shoppers Stop and Pantaloons, respectively), aided by 13.7% SSSG in Brand Factory; ii) SSSG for Central came at 1% YoY, partially owing to strong base of 23.3% and strategy to have lower sale days of ~4 weeks vs.

Outlook

On account of sharpened focus on power brands, strong SSSG and margin expansion trajectory, we increase target multiple to 16x FY20E EV/EBITDA (earlier 12x) to arrive at a revised TP of INR536 (earlier INR439). Maintain ‘BUY/SO’. At CMP, stock is trading at 13.3 FY20E EV/EBITDA.