Vishal Retail will probably deliver better on listing gains than DLF atleast that could be a reasonable expectation. Retail might be quite excited by this opportunity, said CNBC-TV18’s stocks editor, Udayan Mukherjee.
Vishal Retail is a much more exciting play for the pop offer. It is not as sexy as DLF but we have seen in the past that the biggest issues might take up a lot of headline space but they don’t often generate the biggest returns on listing and it was a fair bet to say that Vishal will probably deliver better on listing gains than DLF atleast that could be a reasonable expectation.
You don’t see too much of Vishal where we stay. They don’t have big glass buildings in downtown city but they are very strong in some of the up country places. They are value retailers, they are not one of your big brand retailers. They have their own brands which they sell pretty successfully and in doing that they have better margin profile than many of the other listed players. So I think 11% operating margin retail player cannot be overlooked specially as it comes at a 13 kind of PE multiple for this year. If our expectations for their FY08 EPS are met then the stock is being offered at 13 times at the higher end of the band.
I don’t think you found anything in this country in the retail space ever in that kind of valuations spectrum. So you can justify much more upside on Vishal. It will almost certainly get done at the higher end of the band and then I think it is much easier to justify a 40-50% upside on listing or shortly after listing on Vishal than it is on DLF. So retail might be quite excited by this opportunity.
Source: moneycontrol.com
