Hold Kewal Kiran Clothing; target of Rs 1300: ICICI Direct

ICICI Direct's research report on Kewal Kiran Clothing

We met the management of Kewal Kiran Clothing to gain an insight into the company's business outlook. Kewal Kiran is one of India's leading branded apparel companies with popular home-grown brands like "Killer", 'Integriti', 'Lawman' and 'Easies'. Though KKCL has a strong brand portfolio, revenue growth has remained sluggish over FY17-9MFY19 owing to the onslaught of discounting by e-commerce players. KKCL has shied away from discounting its brands, leading to slower revenue growth. However, the management is looking to revive revenue growth by introducing lower priced products as brand extensions rather than diluting the original brand.

Outlook

KKCL has a strong balance sheet, with debt/equity ratio comfortably placed at 0.2x and having a strong cash position. We roll our estimates to FY21 and model revenue and PAT CAGR of 10% and 11%, respectively, in FY18-21E. We have a HOLD rating on the stock with a revised target price of Rs 1300 (16.0x FY21E EPS).

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Read More First Published on Mar 26, 2019 04:35 pm

Jamie Dimon says we've split the US economy, leaving the poor behind

J.P. Morgan Chase CEO Jamie Dimon said that the U.S. economy has essentially been split into those benefiting from thriving corporations and those who are left behind.

"I don't want to be a tone deaf CEO; while the company is doing fine, it is absolutely obvious that a big chunk of [people] have been left behind," Dimon said. "Forty percent of Americans make less than $15 an hour. Forty percent of Americans can't afford a $400 bill, whether it's medical or fixing their car. Fifteen percent of Americans make minimum wages, 70,000 die from opioids" annually.

"If you travel around to most neighborhoods where companies live, they're doing fine," Dimon said. "So we've kind of bifurcated the economy."

Dimon was speaking at an event at the bank's New York headquarters to unveil a new $350 million program to boost job prospects for people in under-served communities. The J.P. Morgan chairman and CEO has frequently voiced concern about the declining labor force participation rate and the shortfalls of the educational system in preparing people for emerging roles.

Making progress against these issues involves companies working with local organizations to provide skills outside of the university context, he said.

Dimon called the education system "broken" and said his bank stopped giving philanthropic dollars to colleges years ago.

"Harvard and Princeton are not a philanthropy," Dimon said. "Helping these kids is."