Raymond - CMP: Rs.375; Target Price: Rs.494 per share - Karvy

Raymond has implemented a turnaround and trouble shooting strategy from FY10 onwards to focus on four core brands. It operates the retail store under formats i.e. TRS and Exclusive Brand Outlets (EBOs), and "Made-to-Measure" Store. It has a strong distribution network with 867 retail stores and over 18,000 touch-points across India. The Files & Auto-Component segments contribute about 13-14% to Raymond's overall revenue, and we expect these two segments to retain their existing share, going forward.

We expect Raymond to post an EPS of Rs. 26.7 and Rs. 35.3 in FY13E and FY14E, respectively.

We initiate coverage on Raymond with "BUY" recommendation with a target price of Rs. 494 per share - valuing at 14x FY14E EPS - representing 32% upside from the CMP.

Source : Equity Bulls

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