Mirza International - REDUCE - TP Rs.173 - Result Update - Kotak

- Mirza International Ltd Q2FY18 results were below our estimates on weak exports. Net revenue for the quarter declined 4% YoY to Rs 2.4 bn on account of 20% yoy decline in footwear exports business while domestic branded business grew by 77% yoy. MIL is focused on growing its domestic brand business through Redtape sports, mid-range products under Bond Street brand and a new brand to be launched in ladies sports shoes segment. The company has maintained its guidance to double its revenue in domestic brand business (Redtape exiting+ Bondstreet + Redtape sports) to Rs 4.5 bn in FY18. The exports for the quarter declined sharply by 20% primarily due to weak demand in UK market. The management expects improvement in exports business in coming quarter based on orders for Q3FY18 and targets to close FY18 exports revenue with marginal decline of 2-4%. We are positive on long term growth story of the company based on increasing focus on domestic market, but near term challenges in exports business is impacting the overall growth of the company. We also need to watch the performance of Bondstreet and Redtape sports shoes for FY18 which would play key role in achieving FY18 guidance. We maintain our EPS estimates and Reduce rating on the stock with revised target price of Rs 173 (Vs Rs 163 earlier) (assigned 17x on FY19E EPS of Rs 10.2)

Shares of MIRZA INTERNATIONAL LTD. was last trading in BSE at Rs.151.55 as compared to the previous close of Rs. 158.4. The total number of shares traded during the day was 80661 in over 1023 trades.

The stock hit an intraday high of Rs. 158.95 and intraday low of 150. The net turnover during the day was Rs. 12466494.

Source : Equity Bulls

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