Future Retail share price falls to 52-week low after Morgan Stanley cuts target price

Future Retail share price fell to its fresh 52-week low today after brokerage Morgan Stanley slashed target price citing   a sharp rise in debt of the firm. Future Retail share price declined up to 2.43% to Rs 323.55, a fresh 52-week low, compared to the previous close of Rs 331.60 on BSE. The mid cap stock has declined 37.65% during last one year and fallen 34.89% since the beginning of this year.

The stock opened 1.6% lower at Rs 331.60 on BSE. Morgan Stanley which maintained a overweight call on the stock, cut its target price to Rs 540 from Rs 660 per share.

Company's Q2 earnings were in-line, but a sharp rise in debt is a key negative, said the brokerage. The brokerage lowered its FY20 earnings estimate for the firm by 8.5 percent. For the quarter ended September 2019, Kishore Biyani-led Future Retail Ltd reported a 6.92 percent fall in consolidated net profit at Rs 165.08 crore compared to the net profit of Rs 177.37 crore in corresponding period a year-ago.

Its revenue from operations rose 9.74 percent to Rs 5,449.06 crore in Q2 against Rs 4,965.40 crore in the corresponding quarter last year. The company's total expenses also rose 10.65 percent to Rs 5,304.80 crore during the period against Rs 4,794.11 crore in the year-ago quarter.

Future Retail had a network of 1,550 stores in 432 cities across its brands, including Big Bazaar, Easyday, WHSmith, fbb and ezone, in 16.40 million sq ft area, as on September 30, 2019 .

After the earnings were announced, the stock fell 5.98 per cent to Rs 323.55 on November 15. It closed 3.92 per cent down at Rs 330.65 on BSE.

By Aseem Thapliyal