Rekha Jhunjhunwala-owned stock gets two 'Buy' calls; up to 77% upside seen

Rekha Jhunjhunwala stocks: Rekha Jhunjhunwala, wife of Late Rakesh Jhunjhunwala, owned 3.65 per cent stake in Baazar Style Retail at the end of the December 2024 quarter

Rekha Jhunjhunwala portfolio stocks: Rekha Jhunjhunwala-backed Baazar Style Retail may reward investors with over 70 per cent returns over the next one year, believe analysts at Nuvama Professional Clients Group. The optimism, they said, stems from the retail store's expansion strategy and better store economics.

 

"Baazar Style Retail is one of the fastest growing value retail players in East India, catering to the neo-middle class in Tier II and III cities. We believe stock is a strong candidate for a valuation re-rating on better store economics, aggressive growth plans (adding 40-50 stores/year), and size of the opportunity," Palash Kawale of Nuvama Professional said in a coverage initiation report.

 

 

The research house has assigned a 'Buy' rating to the stock with a share price target of ₹388, implying a 72-per cent upside from the stock's previous closing price on the BSE.

 

Baazar Style's store expansion

According to the Nuvama report, Baazar Style has rapidly expanded its footprint in Eastern India, opening stores at record pace. From two stores in the financial year 2013-14 (FY14), it has grown its footprint to 213 outlets over the past decade. The retail store's cluster-based expansion strategy, better store selection, and a well-curated product assortment enabled deeper penetration in its core markets, it said.

 

Going ahead, Nuvama expects Baazar Style to add 43 and 50 stores annually in FY26 and FY27, respectively, which should drive revenue growth following a 70:30 distribution between its core and focus markets.

 

In addition to the rapid store expansion, Baazar Style's revenue per square foot (throughput) saw a 20 per cent growth rate, along with a strong same store sales growth (SSSG) print, on the back of its focus on private labels, a shift to organised market from unorganised retail, and better inventory turnover.

 

"The improvement in store throughput led to better store economics and healthy revenue growth (31 per cent CAGR) over FY21–25. With SSSG estimated at 8 per cent and 7 per cent in FY26 and FY27, we expect a revenue CAGR of 29 per cent over FY25–27," Nuvama Professional's report highlighted.

 

Strong retail industry tailwinds

Apart from a healthy financial outlook, analysts believe India's value retail space offers strong growth potential to Baazar Style given the large consumer base at the lower end of the income spectrum.

 

With scalability, total addressable market, store economics, and return on capital employed (RoCE) being key valuation metrics, the report highlights that Baazar Style fits perfectly on these metrics and should scale up its footprint in coming years.

 

"The contribution of organised value retail to the total was ~10 per cent/~15 per cent in FY18/FY23, with projections indicating it can reach ~23 per cent by FY27. This growth will significantly boost the apparel market, the fastest-growing category in organised retail, potentially driving a valuation re-rating for the industry," it said.

 

About Bazaar Style Retail

Style Baazar is one of the leading value fashion retailers in India with a strong presence in Eastern India, offering a one stop-shop family experience with comprehensive product offerings in both Apparel and General merchandise categories at affordable prices.

 

It is promoted by Bhagwan Prasad, Rohit Kedia, Shreyans Surana, Rajendra Kr Gupta (Promoter Group), Shakuntala Devi (Promoter Group), and Rekha Kedia (Promoter Group), among others.

 

Rekha Jhunjhunwala, wife of Late Rakesh Jhunjhunwala, is among the notable public shareholders, owning 3.65 per cent stake at the end of the December 2024 quarter.

 

The stock debuted on the stock exchanges on September 6, 2024. It is currently trading below its IPO issue price of ₹389 per share.

 

"We expect Baazar Style to deliver Revenue/Ebitda/PAT (Pre Ind AS 116) CAGR of 30 per cent/36 per cent/50 per cent over FY24-27E and RoE/ROIC to improve from 14 per cent/11 per cent in FY24 to 22 per cent/19 per cent by FY27 led by improving profitability and reducing working capital days, said analysts at JM Financial in their coverage initiation reported dated March 17, 2025.

 

It, too, has ascribed a 'Buy' rating on the stock with a share price target of ₹400, implying 77.14 per cent upside from here on.

 

The stock, it said, is trading at ~10x FY27 EV/Ebitda and ~17x FY27 EPS (Pre Ind AS 116), which is a discount of 20-65 per cent and 40-70 per cent on P/E and EV/Ebitda basis, respectively.

 

Consistent execution, improving profitability and working capital days can lead to further re-rating of the stock, the brokerage added.