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Buy Monte Carlo Fashions; target of Rs 563: KRChoksey

KRChoksey is bullish on Monte Carlo Fashions and has recommended buy rating on the stock with a target price of Rs 563 in its research report dated November 9, 2015.

November 10, 2015 / 12:52 PM IST
 
 
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KRChoksey's research report on Monte Carlo Fashions

Monte Carlo launched in 1984 as an exclusive woolen brand by Oswal Woolen Mills Limited (“OWML”), “Monte Carlo” has emerged as one of the leading Indian apparel brands. Monte Carlo’ has been recognized as a ‘Super brand’ for woolen knitted apparel in each edition of Consumer Super brands India since its first edition in September 2004. Launched as an exclusive woolen brand, Company has successfully diversified with a comprehensive line of woolen, cotton & cotton blended, knitted and woven apparel and home furnishing under the ‘Monte Carlo’ brand.

Monte Carlo has a strong financials with healthy return ratio like ROE of around 14-16% for FY15-FY17E and also the company has negligible portion of debt (which is equal to debt-free) with debt-equity is 0.2x FY17E. We are expecting minimal Capex for next two years which will keep return ratios higher for the company. At CMP of INR 438, the stock is trading at PE of 11.2x FY16E and 8.6x FY17E. We are recommending “BUY” on the stock and valuing company 11.2x its FY17e EPS of INR 50.7 and with the target price of INR 563 which gives an upside of 28.5% from current levels.

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first published: Nov 10, 2015 12:52 pm

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