Accumulate Future Retail; target of Rs 139: P Lilladher

Written By Unknown on Sabtu, 14 Februari 2015 | 18.00

Brokerage house Prabhudas Lilladher is bullish on Future Retail (FRL) and has recommended 'Accumulate' rating on the stock with a target price of Rs 139, in its research report dated February 12, 2015.

Prabhudas Lilladher's report on  Future Retail (FRL)

"FRL has reported 10.2% SSS growth in Value retailing and 7.5% in Home retailing with 36% EBIDTA growth in a tough operating environment. PBT from operations is Rs29m only due to high interest cost of Rs1.77b and depreciation of Rs1.3b. we expect We estimate that high single digit SSS growth and benefit of debt reduction (Rs12b) will enable FRL to report PAT of Rs1.5b in FY16 and Rs2.5b in FY17. Sustained high inventory (120 days in FY14) and further increase in Debt are major risks to our estimates. We are introducing FY16 and FY17 estimates and value the stock at Rs139/share on SOTP. Retain Accumulate (TP Rs 139)."

"Sales increased by 14.9% as Value retail (Big Bazaar, FBB and Food Bazaar) reported 10.2% (14% in 2Q) growth in SSSS as early Diwali and online retail impacted sales. Home retailing reported 7.5% SSS growth despite onslaught of online retail in the festive season. Lower discount festive sales enabled 80bps QoQ increase in gross margins and 120bps higher EBIDTA margins at 11.6%. PBT from operations was Rs29m due to interest burden of Rs 1.77b and depreciation of Rs 1.28b", says Prabhudas Lilladher research report.

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