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SENSEX: 22876.54 118.17

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Multi Baggers

Hem Securities

12.00 AM Aug 24th 2013

Vaibhav Global

BSE ID : 532156     NSE ID : VAIBHAVGBL

RECOMMENDED PRICE 176.30

PEAK FROM RECO 809.35 359.08%

CURRENT PRICE 768.90 336.13%

Vaibhav Global has posted robust growth of more than 40 percent in its bottomline which stood at Rs 40.03 cr in Q1FY14 as compare to Rs 28.06 cr in Q1FY13. We recommend 'BUY' on the stock with a target price of Rs 240 in the medium to long term investment horizon.

Vaibhav Global

Vaibhav Global- A Global Retailer in Fashion & Lifestyle Accessories has posted robust growth of more than 40 percent in its bottomline which stood at Rs 40.03 Cr in Q1FY14 as compare to Rs 28.06 Cr in Q1FY13. Also, topline of company has witnessed rise of approx 25.4 percent at Rs 250.61 Cr in Q1FY14 as compare to Rs 199.84 Cr in Q1FY13. Sequentially, PBIDT margin of company has shown significant rise from 1.98  percent in Q4FY13 to 13.78 percent Q1FY14.

During Q1FY14 company's Home TV Network reaches over 100 Million households. In US, company's Home TV Network reaches 63 million households of total 116 million households while in UK, company's Home TV Network reaches 20 million household of total 25 million households. In Canada it reaches 18 million households, thus depicting wider presence of company in these markets.

Company has shown fall in its debt level consecutively from last four years. Company's debt has fallen from Rs 200 Cr in FY'10 to Rs 143.18 Cr in FY'13. Also, Operating cash Flow of company has seen consecutive rise from last 3- 4 years .It has risen from Rs 53.76 Cr in FY'11 to Rs 76.73 Cr in FY'13.

Valuation

Vaibhav Global which has come out with strong financial performance in Q1FY14 has shown decent growth with its direct-toconsumer business model on home shopping and e-commerce platforms in US and UK business operations. Company's business model which is largely recession proof due to low pricing and wide product offerings seems attractive with great future potential.

At a CMP of Rs 176.30, VGL trades at 5.94x of FY14E EPS of Rs 29.64 & 5.11x of FY15E EPS of Rs 34.47. We recommend 'BUY' on the stock with a target price of Rs.240 (appreciation of about 36 percent) in the medium to long term investment horizon.

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Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advice. Reader is requested to rely on his own decision and may take independent professional advice before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned herein and the same have acted upon or used the information prior to, or immediately following the publication. Analyst Certification The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

VaibhavGlobal_HemSec_Multibagger.pdf

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