Sharekhan's research report on Kewal Kiran Clothing
In Q3FY2019, Kewal Kiran Clothing Limited (KKCL) recorded a mixed performance with revenue increasing by 17.7% y-o-y due to higher volumes during the festive season. OPM declined by 270 BPS to ~14%. KKCL maintains its OPM target of above 20% for FY2019 and will differ in giving heavy discounts; Management has indicated that demand environment is good and is confident of reporting decent growth going ahead.
Outlook
We maintain our Hold rating on the stock with an unchanged PT of Rs. 1,415, as consistent volume growth will be a key trigger for the company. Investors with a long-term view and looking for a lean balance sheet company in the apparel space can stay invested in KKCL.
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