Vedant Fashions (VFL) reported a revenue/PAT decline of 4%/9% YoY (in line) to INR3.1b/INR919m in 1QFY24. The strong footprint growth of 22% YoY to 1.56m sqft partly compensated for weak SSSG as sales to customers declined 16% YoY due to fewer wedding dates. We largely maintain our FY25E EBITDA/PAT as demand is expected to recover in 2HFY24. We factor in a revenue/EBITDA CAGR of 17% each on the back of a 15% CAGR in the footprint expansion. A demand recovery in 2HFY24, continued footprint expansion and positive commentary for emerging brands (Mohey and Twamev) could further support growth momentum. We retain our BUY rating with a TP of INR1,400.
OutlookWe ascribe a P/E of 57x on FY25E EPS and arrive at a TP of INR1,400. We maintain our BUY rating.
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