Ashish Dhawan, Akash Bhanshali cut stake in this multibagger fashion retailer; here's what investors can do

Ace Dalal Street investors including Ashish Dhawan and Akash Bhanshali have trimmed their stakes in a multibagger fashion retailer, which has been drawing attention from the brokerage firms. The stock is Arvind Fashion Ltd, which has more than doubled investors' money in less than a year.

Seasoned investors Akash Bhanshali, who owned 51,18,045 equity shares, or 3.84 per cent stake in the company as of June 30, 2024 quarter, signaled a potential exit from the company in the September 2024 quarter. His name was missing in the key shareholder's list as of September 30, 2024.

Similarly, another Dalal Street marquee investor Ashish Dhawan held only 24,00,000 equity shares, or 1.80 per cent stake in Arvind Fashions as of September 2024 quarter. His holding stood at 65,64,065 equity shares, or 4.93 per cent stake for the June 2024 quarter. Dhawan sold 41,64,065 equity shares during July-September period for the current quarter.

Akash Bhanshali was gradually trimming his stake in the Arvind Fashions, while Ashish Dhawan has kept his stake mostly unchanged for nearly eight quarters or say two years. According to the data from Trendlyne, Bhanshali's Rs 7,300 crore portfolio has 19 stocks, while Dhawan currently owns 12 stocks worth Rs 4,150 crore as per the latest corporate filings so far.

Shares of Arvind Fashion rose 3.8 per cent to Rs 610.95 on Monday, hitting its new 52-week high. The company commanded a total market capitalization close to Rs 8,500 crore. The scrip had settled at Rs 610.95 on Friday. The stock has zoomed more than 110 per cent from its 52-week low at Rs 299.15 hit on October 26, 2023.

Arvind Fashion is engaged in the business of designing, sourcing, marketing, and selling a wide portfolio of men’s, women’s, and kids' branded readymade apparel, footwear, innerwear, and other accessories across multiple owned and licensed brands through a network of stores and distribution channel operated directly or through subsidiaries and joint ventures.

Its portfolio of branded products straddles various pricing tiers and has a presence across categories including but not limited to casual wear, formal wear, athleisure. It has a strong brand pipeline including names like Arrow, Tommy Highfiger, Flying Machine, Calvin Klein and US Polo Assn in India.

Arvind Fashion's established footprint in India’s high-street fashion world has been one of the hallmarks of its successful journey thus far, said Sunidhi Research. "Sustained brand innovations and publicity by global brand owners We believe the company would find similar success in the branded portfolio with 15 per cent CAGR expansion in the retail space in the next 2-3 years," it said.

The company maintains leadership in the casual segment and benefits from the intensification of the trend of casualization. We foresee a revenue, ebitda and PAT CAGR of 13 per cent, 21 per cent and 50 per cent, respectively for FY24-27E. "As the profitable growth journey has started picking momentum since FY23 we recommend investment for a two-year horizon for a target price of Rs 945," it said.

Anand Rathi expects a mixed quarter for the sector, with growth for some retailers driven by network expansion, customs duty reduction and volume growth, and subdued performances by others owing to heavy rains, 15 days of 'Shradh' in September and weak consumer sentiment.

It expects revenue to grow 32 per cent QoQ to Rs 1,261.6 crore, with an ebitda margin improving to 12.8 per cent during the quarter. It may report a net profit of Rs 19.4 crore for the period, zooming 1,370 per cent on a sequential basis. Arvind Fashions remains among top picks of Anand Rathi with a 'buy' tag.

Arvind Fashions has strategized to focus on its core brands namely US Polo Assn., Arrow, Tommy Hilfiger, Calvin Klein, and Flying Machine. As part of its strategy, each of the brands has its core management team. This provides the brand with a sharpened focus and ensures that the stated deliverables are met, said Ventura Securities.

"All the news initiatives should establish it as a fast growing branded apparel company with high return ratios. We expect a significant re-rating story to play out over the next 24 months. We initiate coverage with a 'buy' for a price target of Rs 729," it added in its report in the last week of September 2024.