Buy Liberty Shoes For Target Price Of Rs. 400: IndiaNivesh

If we overlook postponement of institutional order, then results are better than our estimates. Improved EBITDA margin and lower finance cost would have resulted in a better than expected bottom-line performance. As a result, we retain our estimates and await Q2FY15E performance to take a wholistic view.

At CMP of Rs 320, the stock trades at PE of 23.7x and 16.0x its FY15E and FY16E earnings of Rs 13.5 and Rs 20 per share respectively. The company plans to expand its reach aggressively by increasing its store count to from 520 currently to 800 over the next three years. Considering the strong brand recall, expansion plans and the company’s strategies to improve its growth rate, we are of the opinion that the valuation is attractive. We maintain our BUY rating on the stock with a target price of Rs 400 per share.

Download Liberty Shoes Q1FY15 Result Update