4 Retail Stocks To Buy That Have A Good Potential For An Upside

Broking firm Emkay Global has come up with its latest report on the consumer goods and retail space. Here are 4 stocks that the brokerage has recommended as a buy for investors.

Aditya Birla Fashion and Retail

Current market price	Target price	Upside potential
Rs 308	Rs 400	30%

Emkay Global expects relatively better growth performance at 18%, led by strong recovery in Feb-Mar'22 after a weak Jan.

"Growth should be led by 20% growth in Madura and 12% growth in Pantaloons.  Though gross margins should remain stable, EBITDA margin should see a decline of ~400bps, led by weak Jan and higher rentals due to no concessions (Rs2.1bn vs. Rs0.9bn YoY). Expect lower interest costs (Rs 0.9 billion vs. Rs 1.2 billion YoY) to help Aditya Birla Fashion and Retail deliver a lower PAT loss in Q4 vs. last year," the brokerage has said.

Westlife Development

Current market price	Target price	Upside potential
Rs 493	Rs 700	43%

 Emkay Global expects strong 26% revenue growth, driven equally by volume and realization growth.

"Volume growth is expected to be driven by women/athleisure and growth turnaround in the mens inner-wear segment. Expect price hikes and operating leverage to offset RM cost inflation and higher marketing spends, leading to 30 bps improvement in margins," the brokerage has said.

Jubilant Foodworks

Current market price	Target price	Upside potential
Rs 2757	Rs 3150	13%

Emkay Global expects 13% topline growth, led by healthy store additions (65/200 stores in Q4/FY22) and flat SSG performance.

" Expect price hikes, lower promotions and absence of one off Covid-related costs to more than offset the impact of RM inflation and investments in new initiatives, leading to ~50bps EBITDA margin improvement.  Expect higher depreciation/interest costs on strong store additions in FY22 to lead to lower PAT growth," the brokerage has said.

TCNS

Recommended price	Target price	Upside potential
Rs 777	Rs 1030	38%

Emkay Global expects relatively weaker topline growth of 3% in Q4, led by slower recovery in the ethnic category, in line with recent trends in the pandemic.

"However, channel checks suggest that per-store recovery has been much faster in Mar'22 than previous lockdown periods. EBITDA margins should decline by ~400bps due to lower rental concessions (350bps impact). The decline in other income to Rs 40 mn from Rs 181mn should lead to higher PAT loss as well," the brokerage has said.