Motilal Oswal's research report on V-MART
After acquiring 74 stores of “Unlimited” from Arvind Fashion, VMart aims to achieve profitability by: a) improving store productivity, b) optimizing cost and c) shutting loss making stores. The company is targeting to achieve an EBITDA margin of 5-6%/7-8% in the near term/long term, respectively. In that context, we visited a few ‘Unlimited’ Stores in Hyderabad along with some peer sets to get a perspective on: a) the changes made since the acquisition as well as store value propositions v/s peers in the region, and b) the store operating metrics and profitability.
Outlook
Consequently, we maintain our TP of INR4,450 on the stock, assigning 20x EV/EBITDA on Mar’24. Given the huge growth opportunity in the value fashion segment and VMart’s strong execution ability, it has the potential to achieve 25-30% EBITDA/PAT growth sustainably in the long run backed by 20%+ revenue growth (SSSG + new store adds). Reiterate BUY.
More Info
At 12:59 hrs V-Mart Retail was quoting at Rs 3,445.00, up Rs 138.85, or 4.20 percent.
It has touched an intraday high of Rs 3,479.05 and an intraday low of Rs 3,410.00.
It was trading with volumes of 104 shares, compared to its thirty day average of 625 shares, a decrease of -83.35 percent.
In the previous trading session, the share closed down 2.78 percent or Rs 94.70 at Rs 3,306.15.
The share touched its 52-week high Rs 4,620.00 and 52-week low Rs 2,495.80 on 19 October, 2021 and 22 April, 2021, respectively.
Currently, it is trading 25.43 percent below its 52-week high and 38.03 percent above its 52-week low.
Market capitalisation stands at Rs 6,803.69 crore. For all recommendations report, click here
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