ICICI Direct’s research report on Kewal Kiran ClothingStore closures owing to Covid-19 disruptions and nearly non-existent demand for jeans as a category (~60% of sales) led revenues to decline significantly by 94% YoY to Rs 7.0 crore in Q1FY21. Gross margins declined sharply to 41.7% vs. 55.6% in Q1FY20. Cost control measures restricted EBITDA losses, to a certain extent. Employee expenses declined 30% YoY to Rs 10.7 crore while the company significantly curtailed selling & distribution expenses (Rs 1.1 crore vs. Rs 16.9 crore in Q1FY20). Subsequently, KKCL reported EBITDA loss of Rs 16.2 crore vs. EBITDA profit of Rs 22.5 crore. Other income grew 2.1x YoY to Rs 5.7 crore (up 47% QoQ). Net loss was at Rs 8.8 crore vs. 14.1 crore in Q1FY20. On the balance sheet front, trade receivables declined 24% YoY to Rs 130.3 crore leading to release in cashflows. The company continues to be net cash positive, with cash and investments worth Rs 227.5 crore as on Q1FY21.OutlookGiven the unprecedented and challenging scenario, we downgrade the stock from BUY to HOLD with a revised target price of Rs 755 (13.0x FY22E EPS, previous target price: Rs 820).For all recommendations report, click hereDisclaimer: The views and investment… Read full this story
- Gatland warns no-holds barred as Wales target record
- Turkish clothing, textile sector eyes $29B in exports
- Acid attack victim 'may have been targeted by someone he knows'
- January inflation to hit Bank of England target following energy price cap
- Bank holds interest rates as ‘intensified’ Brexit uncertainty hits growth
- Israel carries out strikes against Iranian military targets in Syria
- 'Yellow vests' demand the right to hold referendums
- CPI falls to 2.7% in Dec, under MNB mid-term target
- CPI falls to 2.7% in December, under MNB mid-term target
- Skint Katie Price set to launch clothing brand named after disabled son Harvey Price as she teases release of Junior & Jett range
Hold Kewal Kiran Clothing; target of Rs 755: ICICI Direct have 306 words, post on www.moneycontrol.com at August 3, 2020. This is cached page on Business Breaking News. If you want remove this page, please contact us.