Antique | Vedant Fashions 2QFY24 result update – 231102

Antique | Vedant Fashions 2QFY24 result update – 231102

Looking forward to a buoyant festive and wedding season

Vedant Fashion’s (VFL) performance was in line with our expectations. Revenue declined 12%, primarily on account of the significantly lower number of wedding dates during the quarter. Margin contraction was on account of the negative operating leverage. The company continued with its store expansion momentum by adding seven new stores during the quarter, taking its total store count to 669. Management remains optimistic about clocking mid to high single-digit SSSG (%) along with 16% sq. ft. addition. Though 1HFY24 has significantly lower wedding dates nationally, management remains positive and hopeful with the overall business outlook for the year, which will be majorly driven by 2HFY24. We note that 2HFY24 has 30%–40% higher wedding dates than in 1HFY24, which would drive overall demand. We expect revenue/ EBITDA/ PAT to grow at 17%/ 17%/ 18% CAGR over FY24–26E. We have marginally tweaked our EBITDA estimates. We introduce and roll forward to 1HFY26, arriving at a revised target price of INR 1,517 (valuing at 35x 1HFY26 EV/EBITDA. We maintain BUY recommendation on the stock.

Investment Summary

We expect healthy revenue/ EBITDA/ PAT CAGR of 17%/ 17%/ 18% over FY24–26E respectively with steady return ratios and FCF generation. Management remains optimistic about clocking mid to high single-digit SSSG (%) along with 16% sq. ft. space addition. We have marginally tweaked our EBITDA estimates. We introduce and roll forward to 1HFY26, arriving at a revised target price of INR 1,517 (valuing at 35x 1HFY26 EV/EBITDA). We maintain BUY recommendation on the stock.