Centrum Broking
Mirza Intl (Buy)
CMP: ₹117
Target: ₹205
Mirza International is engaged in the business of manufacturing leather and leather footwear, and dealing in apparels.
We maintain our ‘buy’ rating on Mirza International with a target price of ₹205 (20x FY20E EPS). While management has achieved its FY18E guidance of ₹400 crore domestic sales, they have further guided for ₹600 crore sales for FY19E on the back of new product launches and entry into women footwear. They believe the 100 online-offline large format stores have the potential to generate ₹3 crore sales each which would offer them significant upside.
Further sports shoes and Bond Street have contributed 30 per cent to the domestic footwear sales which would further grow in FY19 as they launch new variants. Management remains confident of double digit growth in the exports business post three consecutive years of decline while leather business would increase utilisation levels and add to margins.