Edelweiss Securities
V-Mart Retail posted inline Q1FY19 revenue growth of 14.6 percent YoY, while EBITDA and PAT growth of 16.5 percent/11.2 percent YoY surpassed our estimates.
The net store addition remained strong – eight stores were added in Q1FY19 and management is confident of adding 35 stores in FY19. The proportion of private labels remained at over 50 percent and the target is to augment this share to ~75-80% over the next few years.
This, coupled with multiple micro-initiatives (in-house design team, focus on full-price sales, penetration to tier IV towns, etc) and an attractive opportunity landscape instills confidence. We thus raise our FY20E EV/EBITDA target multiple to 25x (22.5x earlier), giving us a revised target price of Rs 2,883 from 2,636 earlier.
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