Stanley Lifestyle stock made everyone happy on its debut, gave 38% return, should you book profit?

Stanley Lifestyles Listing Day Strategy : Stanley Lifestyles Limited’s (Stanley Lifestyles IPO) stock has made investors happy on its debut day today. The stock was listed today at Rs 499 with a 35 per cent premium over the issue price of Rs 369. At the same time, the stock strengthened to Rs 510 intraday. That is, investors have got 38 per cent return on it on the very first day. Should investors book profit and exit in a market with high valuation? Or should they stay in the stock for a long period?

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It was subscribed 97 times

Stanley Lifestyles’ IPO was subscribed more than 97 times overall. 50 per cent of it was reserved for qualified institutional buyers (QIB) and it was subscribed 215.62 times. 35 per cent of the IPO was reserved for retail investors and it was subscribed 19 times. While 15 per cent was reserved for non-institutional investors (NII) and it was subscribed 121.42 times overall.

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What are the positive facts about Stanley Lifestyles

1. Stanley is a super-premium and luxury furniture brand in India and one of the few domestic super premium and luxury consumer brands operating on a large scale in India.

2. The company is the fourth largest player in the home furniture segment in India in terms of revenue in FY 2023. Stanley Lifestyles has the distinction of being one of the first few Indian companies to do business in the super-premium and luxury furniture segment.

3. On the valuation front, the company is priced at a P/E of 60x post the issuance of equity shares based on FY23 earnings at the upper price band.

4. There are no listed peers in the sector in which the company is located.

5. The company has scope for business improvement based on industry tailwinds, brand recall and business scalability.

6. Stanley Lifestyles has an estimated market size of around $5.3 billion (Rs 423 billion) in FY23, which is projected to grow to around $10.5 billion (Rs 840 billion) by FY27.

7. The company currently has 62 COCO and FOFO stores with an average revenue per store of Rs 50.67 million as of 9MFY24. With the expansion of 24 new stores and 3 new anchor stores by FY27, the company’s total store count will increase to 89 stores.

8. The company’s average revenue per store will increase due to growth in India’s per capita GDP, increasing number of affluent families and increase in organized retail share in the luxury retail market.

9. Stanley is the largest among its peers in terms of number of stores and total range of luxury products offered and is the fastest growing in terms of revenue growth.

10. Rapid expansion of stores from 19 stores in FY11 to 34 stores in FY13 has led to a 46.29% CAGR growth in revenue and EBITDA growth of 173.44%. EBITDA margin has improved to 20% in FY23 from 15% in FY21.

(Source – Quoted from brokerage house Anand Rathi and brokerage house SMIFS)

(Disclaimer: Stock views are given by experts and brokerage houses. These are not the personal views of Financial Express. There are risks in the market, so take expert advice before investing.)