Buy TCNS Clothing, target price Rs 1030: Emkay Global

Emkay Global has buy call on TCNS Clothing with a target price of Rs 1030. The current market price of TCNS Clothing Co. is Rs 575. Time period given by analyst is one year when TCNS Clothing Co. Ltd. price can reach defined target.

TCNS Clothing Co. Ltd., incorporated in the year 1997, is a Mid Cap company (having a market cap of Rs 3532.56 Crore) operating in Apparels sector.

TCNS Clothing Co. Ltd. key Products/Revenue Segments include Apparel and Other Operating Revenue for the year ending 31-Mar-2021.


Financials
For the quarter ended 31-03-2022, the company reported a Standalone Total Income of Rs 246.58 Crore, down -26.00 % from last quarter Total Income of Rs 333.21 Crore and up 3.09 % from last year same quarter Total Income of Rs 239.20 Crore. Company reported net profit after tax of Rs -5.80 Crore in latest quarter.

Investment Rationale
TCNS is a leader in the salwar-kameez industry, with design-sourcing edge, 2x-3x penetration potential and a strong online presence. Maintain Buy with a revised TP of Rs1,030 (Rs1,070 earlier) on 37x Jun’24E EPS (38x FY’24 earlier). The multiple reduction was due to 3M rollover and a 25bps increase in WACC.

Promoter/FII Holdings
Promoters held 32.26 per cent stake in the company as of 31-Mar-2022, while FIIs owned 17.01 per cent, DIIs 7.23 per cent.