Hold Vaibhav Global; target of Rs 347: Nirmal Bang

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26 Aug, 2025 12:21

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Nirmal Bang report on Vaibhav Global:

Target achieved; Upgrade on further re-rating: We had initiated Vaibhav Global at a price of Rs. 133 on 16th January 2013, with a target price of Rs. 213 per share which got achieved on 18th September 2013. We recommend investors to continue to Hold the stock for further gain. We feel the discounted sale retailing on TV channel in US and UK business is highly scalable and will help company to grow its revenue and PAT by 18.6% and 39.6% CAGR during FY13 to FY15E respectively without any big investment. We expect VGL to report EPS of Rs. 27.1 and 34.7 in FY14E and FY15E respectively. ROCE is expected to improve from 19.2% in FY13 to 34.7% in FY14E and 37.8% in FY15E.

With the ability to grow strong and focus on the discounted segment where it differentiated with its competitor like HSN and QVC (Liberty Interactive Corp), we feel that VGL valuation can further improve going forward. During FY13, VGL has repaid Rs. 30 crore of debt from the cash generated from operation and plan to make the company debt free in next two years. We like asset light business model of VGL which can generate high ROCE and free cash flow of Rs. 73.1 crore in FY14E and Rs. 81.2 crore in FY15E.

Earlier we have valued Vaibhav Global at 8x PE (FY14E) basis but now we increasing the multiple to 10x PE for FY15E owing to consistent improvement in quarterly performance, improvement in US economy plus currency depreciation, makes Vaibhav Global a prime candidate for further re-rating. We continue to recommend HOLD rating with a target price of Rs. 347 per share (FY15E EPS of 10x PE).

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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