Subscribe for Vishal Mega Mart Ltd IPO; Geojit Financial Services

Geojit Financial Services, has come out with its report on Vishal Mega Mart Ltd. The research firm has recommended to “ Subscribe” the ipo in its research report as on December 10 2024.

Broker Research

December 11, 2024 / 10:25 IST

IPO

Geojit Financial Services, Vishal Mega Mart Ltd

Vishal Mega Mart Ltd. (VMML) is a one-stop destination for middle- and lower-middle-income India. The company offers products across three major categories, i.e., apparel (sales mix of 45%), general merchandise (sales mix of 28%), and fast-moving consumer goods (sales mix of 27%), through a pan-India network of 645 stores. The total addressable market for aspirational retail in India is ₹68-72 trillion (US$ 820-870 billion) for CY2023, and is expected to be ₹104-112 trillion (US$ 1,250-1,350 billion) by CY2028, growing at a CAGR of 9%. (Source: Redseer Report). Vishal’s revenue grew from ₹5,588cr in FY22 to ₹8,911cr in FY24 with a CAGR of 26.3%, primarily due to an increase in revenue from existing and new stores. The number of stores has increased to 611 at a CAGR of 10% during the same period.

Valuation and Outlook

At the upper price band of Rs.78, VMML is trading at a P/E of 69x on FY25 earnings (annualized), which appears fairly priced compared to its peers and factoring its high growth. Considering positive industry growth opportunities, expected rise in demand, healthy store additions, and presence in the online channel, we assign a “Subscribe” rating on a medium- to long-term basis.

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