V-Mart Retail Ltd. share price target

We recommend a BUY with a near-term TP of Rs 2,770/share, implying an upside of 10% from the CMP.

Due to disruptions in UP and Bihar, which form 65-70% of the top-line, the sale is expected to be adversely impacted in Q1FY23

We maintain a BUY rating on the stock with a revised TP of Rs 3,880, implying an upside of 16% from the CMP.

Q4 revenue grew 30% YoY to Rs 4.6bn, with 84% coming from VMART and 16% from Unlimited stores

DIVI: Remarkable quarter; upgrade to BUY, VMART: Well placed to capture value fashion opportunity; raise to BUY, IIP: Industrial growth disappoints

kend closures in various states affected overall operations. The second quarter of the fiscal year is generally low on margins with no major festivals or any major consumption drivers and largely comprises of end of season liquidation. Moreover, there has been immense margin pressures on the product sourcing side due to spike in cotton yarn prices, with little signs of abetment. However, the company mitigated the same...

In view of the healthy Q2 performance we revise our store opening estimates for FY22/23/24 with improvement in profitability thus leading to an upward revision in our estimates and rating to BUY (HOLD earlier) and revised TP of Rs. 4,750 (Rs. 3,685 earlier).

VMART saw a resurgence in growth, with 12 store additions and 93% YoY jump in revenue, 8% above pre-COVID levels (2QFY20). Excluding onemonth revenue from the recently acquired Unlimited' stores, it reached pre-COVID levels. LTL stood at 90%. It reported an operating (pre Ind AS 116)/net loss of INR57m/INR141m. Recent acquisition of the Unlimited Value Retail chain and aggressive store additions in its core markets should drive steady growth (FY23E PAT revised upward to 25% on incorporating Unlimited stores in our estimates), which can be well supported by a lean Balance Sheet, backed by a recent QIP. We factor...

We remain positive on the stock from a long-term perspective in light of its immense growth potential. At CMP, the stock trades at 16x FY24E EV/EBITDA, and we assign a target multiple of 18x FY24E EBITDA to arrive at TP of Rs 3,685/share, implying an upside potential of 6% from CMP.

V-Mart follows a cluster based approach of adding stores within a radius of 50-100 km. This gives it better economies of scales, supply chain efficiencies and better understanding of fashion needs of the specific region...