Buy V2 Retail; target of Rs 1445: Sharekhan

Sharekhan's research report on V2 Retail

V2 Retail’s (V2R’s) Q2FY2025 numbers were a mixed bag, with revenues growing strongly by 64% y-o-y while EBIDTA margins lagged expectation at 8.7% (flat y-o-y) due to lower gross margins and higher employee cost.Same-store-sales-growth (SSSG) stood at 34% in Q2FY2025 (~36% in H1FY25). Strong festive and winter season will drive double-digit SSSG in H2 (Q3 is expected to be stronger).The company targets to open 60 stores in FY2025 (has guided for opening 40 stores in H2FY2025). Net addition of 22 stores was done in H1FY2025.

Outlook

Stock trades at 20x, 13x and 9x its FY25E, FY26E and FY27E EV/EBIDTA, respectively. We stay Positive on the stock maintaining price target at Rs. 1,445.