Vedant Fashions hits record high; stock surges 25% in one month

The stock has recovered 34 per cent from its 52-week low of Rs 793 hit on February 24, 2022.

Shares of the recently listed Vedant Fashions, the owner of ethnic wear brand Manyavar, hit a record high of Rs 1,065, on rallying 7 per cent on the BSE in Monday’s intra-day trade. The stock surpassed its previous high of Rs 1,025 touched on March 31, 2022. The stock made its market debut on February 16, 2022.

In the past one month, Vedant Fashions has outperformed the market by surging 25 per cent, as compared to a 11 per cent rise on the S&P BSE Sensex. The stock recovered 34 per cent from its 52-week low of Rs 793 hit on February 24, 2022. The company had raised Rs 3,150 crore via initial public offer (IPO) by issuing shares at price of Rs 866 per share.

Vedant Fashions is a category leader in the branded Indian wedding and celebration market under the brand ‘Manyavar’. It has a differentiated business model combining strengths of retailing with branded consumer play. With the company’s strong brand franchise, it looks to tap the large and growing Indian wedding and celebration wear market driven by increased spending, according to the analysts.

The company is a one-stop-shop destination with a wide spectrum of product offerings for every celebratory occasions. Apart from flagship brand Manyavar (which caters to mid-premium price point), it is further enhancing its leadership in premium and value segment of men’s Indian wedding wear through its other brands ‘Twamev’ and ‘Manthan’. It is also focusing on expanding presence in women’s wear through its brand Mohey.

The company generates healthy gross margins (~72 per cent plus) with no end of season sale or discounts offered on MRP. The Indian wedding and celebration market is relatively less price-sensitive compared to casual wear. The Indian wedding and celebration wear market is pegged at around Rs 1,020 billion (15-20 per cent branded penetration) while the branded space is expected to grow at a CAGR of 18-20 per cent by FY25.

For the nine month ended December 2021 (9MFY22), Vedant Fashions had posted 165 per cent year-on-year (YoY) growth in its consolidated net profit at Rs 226 crore, on back of strong operational performance. The company’s revenue from operations nearly doubled to Rs 745 crore from Rs 373 crore in 9MFY21. Ebitda margin however, remained unchanged at 51 per cent during the period.