HDFC Securities' research report on V-MART Retail
V-MART reported 29.5% growth YoY (INR 5.94 bn vs HSIE: INR 5.3bn). Organic business (ex-Unlimited/Limeroad acquisition) grew at 9% CAGR (4- year) in Q4FY23 (INR4.94bn; 3-year CAGR: 8%; HSIE: INR 4bn). Note: Unit economics remains weak but is improving at the margin (footfall density stood at 91% of pre-pandemic times). Profitability was weaker than expected (3.9% vs HSIE: 5.7%) due to a 5% price cut across the portfolio and an inferior product mix. Note: FY23 has a one-time expense towards Limeroad (INR120mn).
We’ve marginally cut our FY24/25 EBITDA estimates to account for higher Limeroad expenses. Consequently, our TP is revised downwards to INR2,450/sh (earlier: INR2,500/sh; implying 23x Jun-25 EV/EBITDA). Maintain BUY.
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