The one group which is now leading the mid-cap gains is Future Group. Earlier, it was difficult to invest in Future group stocks because of uncategorized businesses. For this group decided to demerge and reorganize their different businesses and make them categorized. This however, proved to be a value-unlocking step for the group which simplified the management, balance sheet and interest segment of different brands. During reorganisation process, group focused on making free cash flow in different companies to grow at a faster rate. For this, group placed most of debts of different brands into single company i.e Future Enterprises. Now, the conclusion result is that Future Retail of Future Group has largest market capitalisation among different Future Group stocks. Let’s discuss and find how you can approach different stocks of future group.
Future Retail is the core business of Future Group. It has a multi-format network of stores, including Big Bazaar, FBB, Easyday, Foodhall, HomeTown and Ezone. Company has emerged as a top quality retail business operator after restructuring. It was listed about one year ago around Rs.150. And after consolidating around Rs.120, stock has gave a sharp move with over 300 percent return in less than a year.
Reasons for this great rally that we have seen in stock in past few months includes re-rating of retail sector after D-mart listing and restructuring in group. Earlier, Morgan Stanley has also recommended to buy it through its initial coverage. Although, i think Future retail has some remaining energy to run more in market and give higher return to its investors. Therefore from both fundamental and technical view, i would advice to continue holding future retail for target of around Rs.680 in short-term. However, one who bought this stock at very low levels can hold for long-term also.
Future Consumer is engaged in branding, marketing, sourcing, manufacturing and distribution of fast moving consumer goods (FMCG), and processed food products. Its portfolio includes product categories, such as basic foods, ready to eat meals, snacks, frozen and processed food products, beverages, personal care and home care under its own portfolio of brands.
Future consumer has also rallied over 300 percent in last one year after huge buying in Future retail. It has comparatively less value than future retail. However, it carries only few portion of debt which marginally effect the profit/loss of the company. With a little market share and stable growth rate of FMCG sector, company has a good potential to grow in market. Therefore, i would advice to keep this stock in your long-term portfolio. However for short-term, my target for future consumer will be Rs.90.
Future Lifestyle Fashions Limited owns and markets over two dozen fashion brands through exclusive brand outlets, department stores and multi brand outlets, as well as company operated chains such as Central, Brand Factory and Planet Sport. It collectively operates around 400 stores spread over 5 million square feet of retail space.
Future Lifestyle has a good market presence which will help them to go further. Fashion industry is one of those industries where i think one can definitely invest in small proportion for better returns in long-term. Therefore, one can go for long-term in stock. However for short-term, i would advice to book profit at present levels or book around Rs.410.
Future Enterprises develops, owns and leases the retail infrastructure for the Group. The company also holds the Group’s investments in subsidiaries and joint ventures including insurance, textile manufacturing, supply chain and logistics.
Future enterprises is the only stock in Future group which is trading at a discount in comparison of its book value. Despite of this fact, Future enterprises has equally rallied in last one year as other future group stocks. From valuation point of view, i think stock price is much less than other group companies. However, there are chances that stock could outperform the group in long-term. For short-term, i think one can book profit around Rs.82.
Although, i think stocks of future group have already rallied 300-400 percent in market after which group stocks doesn’t look so attractive as they were 6 months earlier. I think for short-term, investors should keep eye on Future retail, Future consumer and future enterprises where we can see some big gains.
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