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Mehta Equities
Monte Carlo (Accumulate)
CMP: ₹542
Target: ₹717
Monte Carlo Fashions Ltd (MCFL) is the leading apparel brand in India from the Oswals of Ludhiana, known for OWM; it is especially famous for exclusive woollen brand ‘Monte Carlo’. Company cater to the premium and mid-premium branded apparel segment for men, women and kids, offering a comprehensive line of woollen, cotton and cotton-blended knitted and woven apparel and home furnishings through ‘Monte Carlo Exclusive Brand Outlets’ and multi-brand outlets, including a network of national chain stores under the ‘Monte Carlo’ brand.
We believe MCFL is well placed and well connected with customers belonging to both the mass and premium categories. Considering the superior brand recall coupled with strong distribution network and focus on non-sweater segment to new geographies, we expect 15-20 per cent top-line growth going forward. Monte Carlo has also drawn up an aggressive store roll out plan for the same which will see the company’s store count grow to 275 from 192 at present. Based on our discussions with the management, we believe the company will soon come out with a dividend distribution policy for optimum utilisation of its cash flows.
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