Neutral V-Mart Retail; target of Rs 4750: Motilal Oswal

Motilal Oswal's research report on V-Mart Retail

V-Mart Retail’s (VMART) revenue grew 20% YoY in 2QFY25, led by strong SSSG and store additions. EBITDA beat our estimate by 30%, aided by better productivity, improvement in gross margin for offline format, and lower losses in LimeRoad (LR). We broadly maintain our revenue/EBITDA estimates for FY25/FY26. We expect revenue/EBITDA CAGR of 17%/39% over FY24-27 as we build in improved SSSG and lower losses in the online segment. Consistent demand recovery in the value fashion category could be the key growth driver for VMART. Reiterate Neutral with a TP of INR4,750.

Outlook

We value VMART at 20.5x Dec’26E EBITDA to arrive at our TP of INR4,750. We maintain our Neutral rating on VMART.