Hem Securities is bullish on Vaibhav Global and has recommended buy rating on the stock with a target price of Rs 240 in its August 23, 2013 research report.
Hem Securities' report on Vaibhav Global
"Vaibhav Global, a global retailer in fashion & lifestyle accessories has posted robust growth of more than 40 percent in its bottomline which stood at Rs 40.03 Cr in Q1FY14 as compare to Rs 28.06 Cr in Q1FY13. Also, topline of company has witnessed rise of approx 25.4 percent at Rs 250.61 Cr in Q1FY14 as compare to Rs 199.84 Cr in Q1FY13. Sequentially, PBIDT margin of company has shown significant rise from 1.98 percent in Q4FY13 to 13.78 percent Q1FY14."
"During Q1FY14 company‘s Home TV Network reaches over 100 Million households. In US, company‘s Home TV Network reaches 63 million households of total 116 million households while in UK, company‘s Home TV Network reaches 20 million household of total 25 million households . In Canada it reaches 18 million households, thus depicting wider presence of company in these markets."
"Company has shown fall in its debt level consecutively from last four years. Company’s debt has fallen from Rs 200 Cr in FY’10 to Rs 143.18 Cr in FY’13. Also, Operating cash Flow of company has seen consecutive rise from last 3- 4 years .It has risen from Rs 53.76 Cr in FY’11 to Rs 76.73 Cr in FY’13."
Valuation: "Vaibhav Global which has come out with strong financial performance in Q1FY14 has shown decent growth with its direct-toconsumer business model on home shopping and e-commerce platforms in US and UK business operations. Company's business model which is largely recession proof due to low pricing and wide product offerings seems attractive with great future potential. At a CMP of Rs 176.30, VGL trades at 5.94x of FY14E EPS of Rs 29.64 & 5.11x of FY15E EPS of Rs 34.47. We recommend ‘BUY’ on the stock with a target price of Rs 240 (appreciation of about 36 percent) in the medium to long term investment horizon," says Hem Securities research report.
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