Shares of Vedant Fashions Ltd ended higher on Friday after financial services firm Motilal Oswal initiated coverage on the ethnic wear firm. It assigned a buy call to the company with a 27% upside at Rs 1,400 against the Wednesday’s close of Rs 1099.65 on BSE. In the current session, Vedant Fashions shares hit an intraday high of Rs 1165 , rising 5.36% on BSE. Earlier, Vedant Fashions stock opened 2.77% higher at Rs 1136.35 on BSE. Vedant Fashions shares have gained 18.19 per cent in one year but lost 14.56 per cent since the beginning of this year. Market cap of Vedant Fashions stood at Rs 27,700 crore on BSE. Total 6093 shares of the firm changed hands amounting to a turnover of Rs 68.93 lakh in today’s session.
The stock hit a 52-week low of Rs 898.95 on March 30, 2022 and a 52 week high of Rs 1501 on October 6, 2022.
In terms of technicals, the relative strength index (RSI) of Vedant Fashions stock stands at 35.2, signaling it’s neither trading in the overbought nor in the oversold zone. The stock has a beta of 0.8, indicating low volatility in a year. Vedant Fashions stock is trading lower than the 5 day moving averages but lower than 20 day, 50 day, 100 day and 200 day moving averages.
Motilal Oswal listed out four key factors, which support its bullish stance behind the stock.
a) Strong design capabilities with data-driven decision making (leading to no discounted sales)
b) Tech-driven supply chain and auto replenishment model
c) Exclusive vendor ecosystem,
d) Franchise-based EBO expansion have helped scale up its business and achieve superior margins.
“The stock is trading at P/E and EV/EBITDA of 42.8x and 27.2x on FY25E, respectively. The Indian ethnic wear business is a difficult business to replicate, given its high customer needs and complex inventory management. This gives VFL an inherent competitive advantage,” said Motilal Oswal Financial Services.
On February 16, 2022, the stock made a tepid market debut. The shares of Vedant Fashions listed at a premium of 8.08% to their issue price on BSE. It made its market debut at Rs 936 on BSE.
The issue price of the IPO stood at Rs 866. On NSE, the stock listed at Rs 935, up 7.97% to the IPO issue price. Market cap of the firm rose to Rs 11,587 crore.
Vedant Fashions is a speciality retail sector company that caters to the Indian celebration wear market with a diverse portfolio of brands. The company markets its products under the brand name Manyavar, Mohey, and Mebaz.
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