Monte has given great set of numbers for Dec-17 quarter. Top line 355 cr vs 290 cr. PBT at 73 cr from 53 cr but if we exclude other income of last year then the same are 72 cr vs 44 cr. Great show. So far in this year for 3 quarters it has given a Topline of 560 cr vs 490 cr and PBT (Excluding other income) at 91 cr Vs 60 cr which ,for me, shows that its losses from summer-wear business are falling and it is growing fast. Not to forget that for past one year it has weathered the shock of Demonetization and GST otherwise the growth could have been even higher.
This is one stock where market is failed to recognize the underlying strong business strength and relatively very cheap valuations. Market is apprehensive of its success in summer clothing business and wants to play the waiting game but in my view due to its inherent distribution and marketing strength of very strong (Best in India) winter wear business it will find success in summer business. It doesn’t need to build its distribution and marketing from scratch for summer business. Second, it has very strong balance sheet with nil debt, good inventory and debtor management, good and consistent dividend policy (yield 2%) which will grow in the future. So I think market has managed to somehow ignore these factors and it is trading at cheaper valuation of 20 PE. Good buy at present levels of 560.
(Views are personal and should not be taken as a recommendation for buying or selling a stock. Stock markets are inherently risky so kindly do your Due Diligence before investing. I am not a certified Sebi Analyst and holding the stock discussed in this Post).