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.
Outlook
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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