Anand Rathi is bullish on Kewal Kiran Clothing has recommended buy rating on the stock with a target price of Rs 1704 in its research report dated October 26, 2018.
Anand Rathi's research report on Kewal Kiran Clothing
In H1 FY19 Kewal Kiran?s net revenue grew ~4% y/y, to `2,582m. The EBITDA margin expanded 417bps to 26.8%. The RoCE improved 386bps to 30% up from 26% last year. However, due to vigorous expansion in LFS and e-commerce, the cash-conversion cycle lengthened to 144 days, from 103 in FY18. The recent fall in the stock price lead us to upgrade our rating to a Buy, with a revised target of `1,704.
We introduce FY21e and roll-over our valuation to FY21. The stock price has fallen ~15% in the last quarter, leading us to upgrade our rating to a Buy with a revised target of `1,704 valuing it at 15x FY21e EV/EBITDA.
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