Baazar Style Retail Up 5% as JM Financial Initiates 'Buy

Baazar Style Retail's shares increased by 5 percent during a session on BSE, reaching a peak of 242.1 Rs per share. By 10:33 AM, Baazar Style Retail was trading 1.58 percent higher at Rs 234.15 on the BSE.

The BSE Sensex rose by 1.18 percent yo 75045.56. The company has a market capitalisation of Rs 1,747.17 crore. The shar's 52-week high is 430.95 Rs and the 52-week low is 181.3 Rs.

The domestic broking house, JM Financial, has just placed a 'buy' tag on Baazar Style Retail and set a price target of Rs 400 per share. The brokerage firm is quite optimistic about the company's financial self-sufficiency considering its robust growth potential in an oversized, mostly unorganized Total Addressable Marketspace (TAM). 

The value apparel market stood at a whopping Rs 3.7 trillion in FY24. Out of this, the released portion was Rs 1.3 trillion, which is expected to grow at a CAGR of 17 % during the period of FY24 to 27 (19% during FY19-24) and reach Rs 2.1 trillion by FY27. There will be a considerable increase due to the shift from unbranded to branded clothing along with better quality products being offered at low prices. Also, the brokerage firm is optimistic that the company will be able to meet demand for store expansion due to favorable unit economics. In the calculations, at least 265 stores could potentially be added, taking into account the current economic and GDP per capita situation which can only get better with increased per capita income alongside urbanization. 

“The firm is expected to open 145 stores within FY25-27E”, as found in the report. 

On the other hand, the firm is welcoming high revenue concentration (80-90 sourseid) from core markets, overdependance in sales of figurative apparel, strong competition in value fashion retailing, and failed introduction of inhouse labels along with lack of reliable suppliers and no set procurement agreements with other suppliers as risks the company may face.

In Eastern India, Baazar Style Retail is one of the pace-setters in value fashion retailing and has captured the market. Apart from providing affordable clothes, BSRL also deals in other goods and home furnishing items.