Nirmal Bang's report on Monte Carlo Fashions : Subscribe

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->

Monte Carlo Fashions (MCFL) is owned by Oswal Woollen Mills (OWML)and recognized as “Super Brand “since last September 2004 derives 45.62% of sales from woollen segment and 43.3% of sales from cotton segment. The company enjoys a wide distribution network with 196 Monte Carlo Exclusive Brand Outlets in India, 2 in Dubai and 1 in Nepal. The company has also supplied products to over 1300 Multi Brand Outlets (MBO) through commissioned agents. The company operates two manufacturing facilities in Ludhiana (Punjab), one for woolen apparel products and one for cotton apparel products.

Valuation and Recommendation

Between FY12-14 Monte Carlo’s revenues grew at CAGR of 16% while EBIDTA grew at a CAGR of 7%. Going forward, we expect the company to continue exhibiting high growth trend until the company reaches a reasonable mature stage of business cycle. Moreover, the high growth in the industry coupled with shift from unorganized to organized player will also fuel and support growth for company. As the apparel industry size is expected to grow at a CAGR of 9% by 2023, we expect Monte Carlo to post numbers well ahead of industry growth.

At the given price band of Rs 630-Rs 645, Monte Carlo will trade at PE of 24.68x – 25.26x on its post issue diluted FY14 EPS of Rs25.5/sh and EV/EBIDTA of 14.2-14.6x. We recommend subscribing the issue for listing gain as well as long term view.

LINK

http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=1244093&num=0