Prabhudas Lilladher is bullish on Future Retail has recommended buy rating on the stock with a target price of Rs 512 in its research report dated July 31, 2019.
Prabhudas Lilladher's research report on Future Retail
We cut our EPS estimate of FY20 and FY21 by 5.8% and 7.7% respectively of which 4.5% is due to impact of IndAS 116. FRL has sustained growth momnetum in the challenging environment mainly led by small format stores which grew sales by 50% YoY with 11.3% SSG in 1Q led by improved and efficient product assortments and higher product availibilty despite non-performance in the sothern market. We remain positive on FRL led by 1) strong growth momentum in small format stores with reduction of losses to -2% in 1Q from 3.5% in 4Q (expected breakeven in exit of FY20) and 3) expected improvement in cash flows post acquisition of store infra from FEL.
We estimate PAT growth of 20.1% in FY20 and flattish in FY21 due to tax impact (33.7% PBT CAGR) over FY19-21 and value the stock at Rs512 based on 30xFY21EPS. Maintain BUY.
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.