RAYMOND Share Price Target - Broker Reports - 2019
Karvy Stock Broking
Price @ Call: 775.68
The simplification of the group structure will have a positive impact on the share priceas the two listed entities will provide a clear picture of the individual businesses. We factor the impact of the capital infusion in our model, and raise our target valuation to 24x (closer to the 5 year avg one year fwd P/E) on FY21E EPS of Rs. 34.4 and retain our “HOLD” rating, with a target price of Rs. 850. Key risks to the call are, slower than expected pace in receiving approvals for the land, and the demerger process.
The ‘in principle’ sale of land parcel of 20 acres brought buoyancy in terms of valuations despite the subdued demand scenario. The stock currently trades at a one year fwd P/E of 17x and we value the stock at 19x on FY21E EPS of Rs.33.4. One of the key parameters the market is looking for is in the company’s efforts in deleveraging the balance sheet through the monetization of non-core assets. Positive outcomes on the same in the coming quarters will result in significant valuation upgrades. Lower raw material prices, slower than expected pickup in economy lands a threat of pricing and negative portfolio mix to our estimates.
Management continues to be committed on profitable growth but the macro factorsweighing down the industry is slowing down the growth. The credit crunch and the lower consumer demand have resulted in valuation downgrades for the midcap consumer discretionary companies. The stock currently trades at a P/E of 16x on FY21E EPS and we value it at a P/E of 17x on FY21E earnings arriving at a target price of Rs. 637. We expect valuation upgrades as more clarity emerges regardingthe hiving off of non core assets. Further increase in raw material prices and lowergrowth in demand across trade channels could add further risk to our call.
RAYMOND Share Price Target - Broker Reports - 2018
Price @ Call: 793.35
Valuation. We upgrade our rating to a Buy with a target price of `1,192 (earlier `1,280) on 12x FY20e EV/EBITDA. The recent fall in the stock price has stepped up the potential to 49% (without considering the land value, our target price comes to `1,002, offering 25% potential from the ruling price), Hence, despite our downward EBITDA revision, we upgrade our rating. Risks: Great concentration on men’s formal wear, rising input costs.