Buy V Mart Retail; target of Rs 1085: Motilal Oswal

Motilal Oswal's research report on V Mart Retail

V-Mart Retail’s (VMART) delivered 22% YoY revenue growth, on the back of 11% blended SSSG, partly boosted by the early festive season. Margin continued to improve with ~335bp pre-IND AS EBITDA margin expansion, driven by operating leverage, curtailed ad spends, and lower inventory provisioning, given rising freshness in inventory. Given strong growth tailwinds in value fashion, management raised its store additions guidance to ~75 (from ~65 earlier). The company continues to target mid-to-high single-digit SSSG, with consistent improvement in profitability driven by disciplined cost controls.

Outlook

We reiterate our BUY rating on VMART with a revised TP of INR1,085, premised on 23x Dec’27 EV/pre-INDAS EBITDA (implies ~12x reported Dec’27 EBITDA). VMART remains one of our top ideas in the retail space.