V-Mart Retail Ltd. share price target

With an 11% upside potential from the CMP, we maintain our BUY rating on the stock.

We have maintained our FY24/25 EBITDA estimates as the demand environment and business are likely to stabilize in coming quarters and hence we maintain our BUY recommendation on the stock as most of the factors have already been reflected in the CMP.

Result has been underwhelming. Revenue growth was primarily led by retail expansion, while SSSG registered modest decline (-3%). Sharp correction (value repositioning) in ASP (-6%) impacted the revenue performance of Unlimited (+4% YoY) vs VMART (+15% YoY).

Recommendation With a 22% upside potential from the CMP, we maintain our BUY rating on the stock.

V-Mart’s Q4FY23 result continues to be tepid. Its revenue performance has been decent (at 8% vs 12% retail expansion 4Y CAGR, 80% revenue share). In Unlimited, we like the relative outperformance in new stores (vs the acquired ones) led by strategic interventions such as: (1) Smaller size stores at ~8,000 sqft (vs 10,000 sqft acquired stores), (2) lower ASP (-7% YoY FY23), (3) high focus on tier-3 cities (75% stores added in tier-3 cities in FY23).

We recommend a BUY with a near-term TP of Rs 2,360/share, implying an upside of 10% from the CMP.