Look at V-Mart Retail, says Arun Baid

Arun Baid - Vice President- Research at Religare Capital Markets told CNBC-TV18, "V-Mart Retail is a structural story from my perspective because they cater to cities where you don’t have many organised players. They are catering to the aspirational India. They cut their guidance for this particular year to 4 to 6 percent because things were much tougher than what was anticipated. Then you have this abnormal monsoon situation where rains were pretty deficient.""This company has about 80 odd stores in Uttar Pradesh (UP), Bihar and Uttarakhand. There has been some issues in those markets in a near-term. Having said that, we believe the aspirational story is still on. You might have some time being issues in that particular area but going ahead that should get sorted out," he added. "What we like about this company is that except this year and last year this company has grown at over 10 percent same-store sales growth (SSG) for a major part in the recent history. So we believe that SSG will again pickup. In our numbers we have factored for FY17, 6 to 7 percent SSG only. So, our numbers is capturing that low SSG but the store expansion is on track.""This year it should open up about 20 odd stores which would take them to about 128 stores for this whole year for FY16 which is a good number to go by. We believe that despite SSG being 4 to 6 percent the company will grow at 20-25 percent compound annual growth rate (CAGR) for next few years. The return ratios are going to improve. It doesn’t have much debt on his books. The opportunity is very large and that is one reason why we like this company," he said.