Anagram Research has given a neutral rating to Vishal Retail in its August 2, 2008 research report. "Vishal Retail enjoys the preferred advantage over other retailers as discount retailing gains in times of higher inflation and slowing demand with growing presence in Tier II and Tier III cities with.Management has strong footing on stores rollout and targets to reach 190 stores with area of 3.7 million square feet by FY09 and 500 stores with retail space of 10 million sq. ft by FY11. Company is increasing its focus of specialty formats while also adding up to its restaurant business. Company also targets to increase the share of private labels from current 15% to 25% by FY10 where margins are high, however increasing share from FMCG will drive the volumes but with lower margins."
"Though raising funds will remain critical in present scenario of rising interest rates on borrowed funds and fragile equity market condition. We believe Vishal retail's strong execution capabilities as well diversification plans particularly will result in better valuations going forward. At CMP of 391, stock trades at 15.6x its Q1FY09 annualised EPS of Rs 25. We have 'Neutral' rating on stock," says Anagram's reserach report.
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