Manyavar Q2 Results Review - SSSG Below Expectations; Demand Outlook Healthy: ICICI Securities
The company added 23 stores on net basis in Q2 FY23, taking the total to 626 stores globally and 612 stores in India.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Vedant Fashions Ltd.’s (Manyavar) Q2 FY23 Ebitda at Rs 1.2 billion (up 27% YoY) was a tad below consensus expectations. Revenue at Rs 2.5 billion grew 24% YoY (low base).
Customer revenue was ~Rs 29 billion implying up 20% YoY and 20% three-year compound annual growth rate. Same-store sales growth was 4.1% YoY. It added 23 stores (16 shop-in-shop and seven exclusive brand outlets) on net basis in Q2 FY23, taking the total to 626 stores globally and 612 stores in India.
Management is guiding for store expansion of ~16% CAGR over next two-three years. First-mover advantage, scale efficiencies and no discounts on Manyavar drives higher gross margin (~75% on end-customer sales) versus most other listed brands (which operate at 45-60%).
This, in our view, is the key differentiation enjoyed by Vedant Fshions versus peers, which in turn results in higher profitability (more than 30% Ebitda margins pre-Ind Accounting Standard 116), more than 40% return on invested capital /return on capital employed and superior free cash flow generation.
Click on the attachment to read the full report:
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.