Motilal Oswal Lists 5 Stocks From Retail Sector, Recommends Buy For High Returns

Motilal Oswal in its December 2022 Results Preview Report has listed 5 stocks from the Retail sector to buy with attractive valuations. These 5 stocks include Aditya Birla Fashion and Retail, Campus Activewear, Metro Brands, Trent, and V-Mart Retail. Here are the key highlights of the stocks:

1. Aditya Birla Fashion and Retail Ltd. (ABFRL)

With a "Buy" Call, the brokerage has assigned Rs 380/share target price to the stock of ABFRL. With the given target price it would lead to 42% potential gains from its current level. ABFRL is a part of Aditya Birla Group. The company operates in the Fashion-retail sector. It is a midcap company with Rs 25,146.35 crore market capitalisation.

The stock on NSE last traded at Rs 267.95/share. Its 52 week low is Rs 221.30/share and 52 week high is Rs 359.50/share, respectively. Over the last 1 year the stock has fallen 13%. Whereas, in the last 3 and 5 years it has given 12.68% and 58.36% positive returns, respectively.

According to the brokerage, Expect revenue growth of 14.5% to INR34.2b YoY. Expect revenue from Madhura/Pantaloons to grow by 15%/ 17% in 3QFY23 YoY. Expect revenue from the Ethnic Wear segment to touch INR1.5b in 3QFY23 (up 30% YoY). Expect Madhura to add 63 EBO stores in 3QFY23.

2. Campus Activewear Ltd.

Motilal Oswal estimated a target price of Rs 590/share for the stock of Campus Activewear with a "Buy" call. With the given target price, it could give a return up to 53% from its current level. Campus Activewear is a midcap footwear company with a market capitalisation of Rs 11,785.45 crore.

The current market price (CMP) of the stock on NSE is Rs 386.90/share. Its 52 week high is Rs 639.30/share and 52 week low is 297.10/share, respectively. The stock was listed on May 09, 2022. Since its listing, it grew 2.11%. However, it has given a negative return over the last 3 months. It fell 9.18% in 1 month and 34.41% in 3 months, respectively.

According to the brokerage, Expect revenue to grow by 17% YoY to INR5.1b in 3QFY23. Expect PAT to grow by 14% YoY to INR623m. Expect raw material inflation to cool off, which may lead to improvement in margin.

3. Metro Brands Ltd.

Motilal Oswal assigns a buy on the stock of Metro Brands with a target price of Rs 1,050/share. It claims a potential upside up to 24% from its current level. Metro Brands is a midcap Footwear retail company with a market capitalisation of Rs 23,000.81 crore.

On NSE, the stock's last traded price on NSE is Rs 847/share, down 0.34%. Its week low is Rs 488.90/share and 52 week high is Rs 980.85/share, respectively. The stock was listed on NSE on 22 December 2021 and since listing it has given maximum 71.68% returns. In the last 1 year, it gave 66.75% positive returns.

According to the brokerage, Expect revenue to grow by 20% YoY to INR5.8b in 3QFY23. Expect PAT to grow by 15% YoY to INR1.2b. Expect 21 store adds in 3Q, taking the count to 693 stores.

4. Trent Ltd.

The brokerage placed a buy on the stock of Trent with a target price of Rs 1700/share. Stock purchased at the current market price would fetch a return up to 42% considering the given target price. Trent is a Tata Group's one of the leading branded retail industry companies in India. It is a midcap company with Rs 42,566.07 crore market capitalisation.

The Current market price of the stock is Rs 1,197.40/share. Its 52 week high is Rs 1,566/share and 52 week low is Rs 980/share, respectively. The stock has given 2.79% in 1 year. Whereas it has given 102.43% in 3 years and the highest 251.35% in 5 years, respectively.

According to the brokerage, Expect revenue to grow by 56.4% YoY in 3QFY23, led by strong SSSG and new store additions. Expect Westside/Zudio to add seven/30 new stores each in 3QFY23. Expect revenue from Westside/TRENT to grow by 23%/2.6x YoY, led by improved throughput and footprint additions. Expect PAT to grow by 23.6% YoY to INR1.6b.

5. V-Mart Retail Ltd.

Motilal Oswal has placed a Buy on the stock of V-Mart Retail with a target price of Rs 3,950/share. The brokerage with the given target price claims return up 41%. V-Mart is a complete family fashion store chain. With a market capitalisation of Rs 5,553.63 crore, it is a small-cap fashion retail company.

The stock last traded at Rs 2,809.35/share on NSE, down 0.79%. Its 52 week low is Rs 2,406.85/share and 52 week high is Rs 4,151/share, respectively. It has fallen 28.72% in the last 1 year. However, it gave 62.64% positive return in 3 years and 69.33% positive return in 5 years, respectively.

According to the brokerage, Expect moderate growth of 15.2% YoY impacted by inflationary impact on demand. Expect EBITDA margin to expand sequentially, aided by improved share of unlimited and seasonality impact. Expect the company to add 15 stores in 3QFY23, taking the total store count to 420.

Stocks, CMP, Target Price & Potential Upside

Stocks	CMP (Rs.)	Target Price (Rs.)	Potential Upside (%)
ABFRL	267.95	380	42
Campus Activewear	386.9	590	53
Metro Brands	847	1050	24
Trent	1197.4	1700	42
V-Mart Retail	2809.35	3950	41

Disclaimer

The stocks have been picked from the brokerage report of Motilal Oswal. 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 consult with certified experts before making any investment decision.