Future Retail share price gained 2.6 percent intraday Tuesday after global brokerage house Nomura has maintained its buy rating on the stock with increased target price at Rs 619 (from Rs 560 per share).
The research firm said it remained bullish on growth prospects and the acquisition of Hypercity was a step in the right direction.
It has raised revenue estimates for Future Retail by 2 percent & 6 percent for FY18 & FY19 post Hypercity acquisition, respectively.
"EBITDA (earnings before interest, tax, depreciation and amortisation) estimates hiked by 3 percent for FY19 but EPS estimates decreased due to additional share issuance," it said.
Profitability is expected to improve backed by cost savings and operating leverage, it feels.
Nomura said Future Retail remained one of the key ideas in the India retail space and would be key beneficiary of growth revival in urban India.
Last week, Kishore Biyani-led Future Retail had announced that it would acquire Hypercity (for Rs 655 crore) that operates 19 large format premium stores in some key cities from the K Raheja group firm Shoppers Stop.
At 11:58 hours IST, the stock price was quoting at Rs 541, up Rs 11.10, or 2.09 percent on the BSE.
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