Buy V-Mart Retail; target of Rs 3048: Dolat Capital Market
Dolat Capital Market is bullish on V-Mart Retail has recommended buy rating on the stock with a target price of Rs 3048 in its research report dated January 25, 2021.
January 27, 2021 / 03:05 PM IST
Dolat Capital Market's research report on V-Mart Retail
Vmart's performance was marginally below our estimates. But, it registered a strong business uptick QoQ led by early on-set of winter in its core UP/Bihar market (66% of rev), festive season, pent-up demand and wedding buying partly off-set by partial lockdowns, night curfews and weak sales in December. SSS declined by 19% YoY vs. -84/-50% in Q1/Q2. Store additions were healthy at 10. Vmart is well-poised to capture the significant growth potential in value fashion retailing with aggressive store openings. Vmart's ethos of prudence and agility, proactive costs, cash flows and vendor management, cluster-based approach of store expansions and debt free BS provides the necessary ammunition to tap the large addressable market opportunities. Vmart's potential fund raise (Rs 5bn enabling resolution but fund raise may be limited to Rs 2.5-3bn) may accelerate its store expansion trajectory and will be positive.
We maintain our revenue but increase our EBITDA/PAT estimates by 2/10% and 5/17% for FY22E and FY23 respectively to factor robust costs management. Reiterate BUY with revised TP of Rs 3,048 @ 50x Dec-22E EPS (earlier Rs 2,496 @ 50x Sep-22E EPS).
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