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ICICI Direct Sticks To This Retail Sector Stock, Suggests Buy For Good Gains In 12 Months

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ICICI Direct has picked retail sector stock, Aditya Birla Fashion and Retail Ltd (ABFRL) with a target price of Rs 380 apiece. The current market price of the stock is Rs 310 with an intraday decline of 0.67%. The analyst has given a target time of 1-year when the stock will reach its specified target price. If you buy the stock at the current market price, you can potentially get 23% gain in 12 months.

 

It is worth noting that ABFRL acquired eight digital first (D2C) apparel and lifestyle brands across categories such as women western wear, casual wear and kids wear. The acquisition of the D2C brands (through its wholly subsidiary brand, TMRW) is ABFRL's initial step towards building a portfolio of new-age, digital brands across categories in fashion, beauty and lifestyle segments. Check details below:

1. Aditya Birla Fashion and Retail Stock Outlook & Return

1. Aditya Birla Fashion and Retail Stock Outlook & Return

The last trading price of the stock is Rs 310 apiece with 0.67% intraday decline. The stock's 52-week high is Rs 359 apiece amd 52-week low is Rs 221 apiece, respectively. The company has a market capitalisation of Rs 29,431 crore. The stock has given 87% return in the last 5-years, 37% return in last 3-years, 22% in last 1-year, and over 2% in last 3 months.

2. Valuation
 

2. Valuation

According to ICICI Direct, "We value ABFRL at Rs 380 i.e. 2.5x FY24E EV/Sales." Stock price of ABFRL has appreciated at a CAGR of ~15% over the last five years. ABFRL has strengthened its B/S through recent equity infusion with net debt declining sharply from Rs 2500 crore (in FY20) to ~Rs 230 crore. We remain structurally positive and maintain BUY rating on the stock, said the analyst.

3. Key Triggers For Future Price Performance

3. Key Triggers For Future Price Performance

Multiple strategic initiatives like entry into footwear by acquiring Reebok's India operations, acquisition of majority stake in Masaba to foray into beauty category, launch of premium menswear ethnic brand Tasva and setting up a separate platform to build a portfolio of D2C brands to add value over the medium to long term.

4. About The Stock

4. About The Stock

ABFRL combines Madura's portfolio of leading power brands (Allen Solly, Van Heusen, Louis Philippe and Peter England) with Pantaloons' forte of largest value fashion retailer. The company has robust distribution network having, 3197 brand stores along with 396 Pantaloons stores.

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

Story first published: Tuesday, November 29, 2022, 17:22 [IST]
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