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Motilal Oswal Report
Vedant Fashions Ltd. saw a weak quarter with revenue/profit after tax declining 12%/29% YoY (16% miss), owing to a shift in the festive period and reduced number of weddings.
This resulted in sales to customer and same-store sales declining 8.2%/18% YoY, partially offset by 7% store additions.
We have revised down our FY24/25E profit after tax by 5%, on the back of weak consumption trends, factoring revenue/PAT compound annual growth rate of 13%, led by footprint expansion.
Vedant Fashions' rich valuations of 57.7 times price/earnings on FY25E and concerns around demand revival leave limited upside potential.
Subsequently, we downgrade the stock to 'Neutral', with a target price of Rs 1,250.
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