Buy V-Mart Retail; target of Rs 3500: Motilal Oswal
Motilal Oswal is bullish on V-Mart Retail recommended buy rating on the stock with a target price of Rs 3500 in its research report dated May 31, 2021.
June 10, 2021 / 11:58 AM IST
Motilal Oswal's research report on V-Mart Retail
V-Mart Retail (VMART)’s revenue was up 6% YoY (8% beat), driven by pent-up demand for shopping. The EBITDA beat was much stronger (99% beat), led by improving gross margins and cost measures. - We revise down our FY22 revenue/EBITDA estimates by 31%/33% due to the impact of the second wave, but maintain FY23 revenue/EBITDA estimates given the expectation of swift recovery. The company’s strong cost leadership, lean balance sheet, and secular growth opportunity should keep it in good stead. Maintain Buy.
We assign a 22x FY23E EV/EBITDA multiple to arrive at TP of INR3,500. Given the huge growth opportunity in the Value Fashion segment and V-Mart’s strong execution capability, it has the potential to garner 25–30% EBITDA/PAT growth sustainably for a prolonged period – backed by 20%+ revenue growth (SSSG + new store adds). We retain our Buy recommendation.
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