Vedant Fashions Ltd | Fundamental Analysis | CA Rachana Ranade

"what are we going to focus on is what is the expected CAGR in each and every category not only the market size but also the branded penetration why? Because this company is into the Branded Category and that is why we need to understand how much is the expected CAGR in this category, so if you have a look at this market size is expected to grow for the apparel category from 7.5 to 8 percent CAGR whereas branded penetration can grow at 12 to 13 percent CAGR, if you have a look at the ethnic wear this expected to grow at 5.5 to 6 percent CAGR whereas the Branded category can grow at 12 to 14 CAGR, for Indian wedding and celebration wear category the market size is expected to grow again at a five and a half to six percent CAGR whereas the Branded Category is expected to grow at 18 to 20 percent CAGR."

"Now let's try and analyze the financial parameters for Vedant fashion limited if I were to tell you some key points something like debt to equity ratio they have a very nice debt to equity ratio at just 0.24 current ratio is also good at 1.85, now if you have a look at the return related ratios ROCE and ROE both are very good at 32.8 percent and 27.8 percent"

"if we were to move ahead with gross profit margins and net profit margins you can see that they have a very good gross profit margin percentage somewhere in the range of 69-70 and above whereas the net profit margin percentage is also around 35 percent"

"you can see that currently their sales is at highest at one thousand to two hundred and six crores where I'm talking about the TTM figures you can also see that operating profit is highest at 590 crores even their operating profit margin is highest at 49 percent their PBT and PAT, profit after tax both are at highest all-time high and PAT is at Three hundred and seventy one crores"

"if I want to move on to the cash flows of the company again cash flows you can see there has been a steady growth in the operating cash flows and the latest figures 31st March 2022 operating cash flow is at the highest at Three hundred and fifty one crore rupees."

"Now let's compare the performance of this company with its peers but which peers Unlisted Peers, now where have I taken this data from I have taken it from the RHP of the company and that is the reason why this data is of financial year 2020 right so first let's check out the OPBDIT margin that is nothing but Operating Profit Before Depreciation Interest and Tax the margin for Vedant fashion limited stands at 43 which is way too higher as compared to the other unlisted players in the space. If I have a look at the net profit margin you can see that their net profit margin stands at 26% again way too higher as compared to its other unlisted peers and even if you check out the ROCE data that is at 41% again higher as compared to other unlisted peers"

"you can see that it is taking a nice support I have already drawn a Trend Line you can very clearly see this it took a support not once, not twice but third time it has taken a support here and is ready for a bounce again, you can see all in all this is in an up move right now because it is forming higher highs as well as higher lows."

"how does the PIVOT look like you can see here that the PIVOT right now is placed at one three seven five, the stock is very well trading above that there is a resistance which we can see at R1 around 1500 Rupees, MACD is also about to cross over, RSI has also just gone above 60, of course all these are the technical indicators as I shoot the video how about the 50 days moving average you can also see that the stock is trading way above its 50 days moving average all in all technically as well this stock looks to be strong right now."