Dolat Capital is bearish on Khadim India has recommended sell rating on the stock with a target price of Rs 343 in its research report dated May 23, 2019.
Dolat Capital's research report on Khadim India
Khadim’s results were below our estimate in Q4FY19. The revenue grew 5.2% - below the management expectation, due to (1) 4% decline in retail business (2) a deceleration in SSSG, and (3) absence of price hikes in the quarter. COCO stores SSG stood at +2.5% while franchise business exhibited -5% de-growth in Q4FY19 due to decline in footfalls. We have reduced our EPS estimates from `26.7 and `30.1 for FY20E and FY21E, to `14.6 and `17.2, respectively.
We believe the company will take more time to recover from the deceleration in volume growth. Consequently, we have downgraded the stock to Sell, with a TP of ` 343 (20x FY21E).
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