Sharekhan bullish on Lovable Lingerie's business

MUMBAI: Sharekhan is bullish on Lovable Lingerie’s strong brands, focused strategy and robust financials as well as the vast canvas of opportunity in this space.

“As per CARE’s estimates, the premium and super premium sub-segments of the women’s innerwear segment is pegged at Rs 1200 crore and is growing at over 24%. The company’s strong brands, focused strategy and robust financials as well as the vast canvas of opportunity in this space make us bullish on its business.

Further, at the upper end of the stated price band of Rs 195-205, the stock is available at 20.3x its annualised M9FY2011 earnings and 18.5x FY2012 rough profit estimate of Rs 18.4 crore.

That is almost a 40% discount to the only other listed innerwear player, Page Industries (exclusive Jockey licensee), which is trading at 26x its FY2012 earnings per share (EPS) estimate of Rs 59,” the report said.

The company has entered the capital market to raise between Rs 88.7-93.3 crores by issuing shares in the price band of Rs 195-205 per share. It plans to use the proceeds for setting up of manufacturing facility, brand building expenses, brand development expenses for “College Style” brand, investment in joint venture, setting up of exclusive brand outlets, setting up of retail store modules for “shop-in-shop” and for up-gradation of design studios.