Buy EMMBI Industries; target of Rs 139: KR Choksey

KR Choksey is bullish on EMMBI Industries has recommended buy rating on the stock with a target price of Rs 139 in its research report dated August 17, 2022.

Broker Research

August 18, 2022 / 18:34 IST

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

26 Aug, 2025 12:21

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KR Choksey's research report on EMMBI Industries

In Q1FY23, Emmbi’s revenue grew 1.6% YoY to INR 1,058 mn. Though on QoQ basis revenues declined by 3.0%. EBITDA has seen a decline of 4.7% YoY/17.3% QoQ to INR 106 mn. The fall in EBITDA was due to higher other expenses, which increased 44.1% YoY to INR 251 mn for the quarter. EBITDA margin also contracted by 66 bps YoY and 173 bps QoQ to 10%. PAT has seen a de-growth of 32.3% YoY/34.0% QoQ to INR 30 mn. PAT margin contracted by 143 bps YoY/134 bps QoQ to 2.9%. Emmbi is embarking on the path to become a zero-waste company by FY23. The company is right on track for the same and is confident to reach the ambitious target.

Outlook

At CMP of INR 91, shares of the company are trading at a P/E of 4.6x/4.1x its FY23E/FY24E EPS. We continue to value the stock at 6.25x on its FY24E EPS of INR 22.2/share, which yields a target price of INR 139 (unchanged) giving an upside potential of 52.4%. Accordingly, we maintain our ‘BUY’ rating on the stock.

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