Bazaar Style Gets 'Buy' As JM Financial Initiates Coverage Citing Robust Operations
Baazar Style stock rose as much as 4.07% during the day to Rs 240 apiece on the NSE.
JM Financial initiated coverage on Bazaar Style Limited with a 'buy' rating and a target price of Rs 400. Bazaar Style's strong presence and high-growth market position enables the company to capitalise on opportunities, said the brokerage.
Baazar Style has rapidly expanded its retail network to 199 stores, covering over 1.8 million square feet across 170 cities as of December 2024. More than 75% of its stores are located in Tier 2, 3, and 4 towns.
The key risks cited by the brokerage include high revenue concentration, heavy reliance on apparel sales, increased competition and the dependency on a limited number of suppliers.
Robust Operations
Style Baazar offers a one-stop-shop solution for family needs at affordable prices, with a repeat sales rate exceeding 68%, the brokerage notes. The company's core strength is its ability to customise product assortments based on consumer preferences.
Its store layouts, effective merchandising and supply chain processes, paired with targeted marketing initiatives have contributed to addition of customers and retaining existing ones.
The brokerage also notes that the company is investing in system and process automation software to boost expansion and reduce operational costs.
Store Expansion Potential
Given its robust unit economics and low penetration levels, Bazaar Style has significant potential for store expansion, both in its focus markets and core regions, according to JM Financials.
The brokerage's calculations indicate that the company has the potential to add at least approximately 265 stores, considering the current economic and Gross Domestic Product per capita.
This is expected to improve with increasing per capita income and urban development. The company is expected to add 145 stores over fiscal years 2025 to 2027.
Baazar Style Share Price
Baazar Style stock rose as much as 4.07% during the day to Rs 240 apiece on the NSE. It was trading 1.57% higher at Rs 234.2 apiece, compared to an 1.10% advance in the benchmark Nifty 50 as of 12:26 a.m.
It had declined 24.32% in the last 12 months. The relative strength index was at 58.02.
Both of the analysts tracking the company have a 'buy' rating on the stock, according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 365.5, implying an upside of 56.2%.
