ICICI Securities research report on V-MART Retail
V-MART (value fashion retailer) is well positioned to capture growth opportunities in tier 2-4 cities with aggressive store openings and first-mover advantage. It has already built a successful and highly profitable business model. However, near term focus would be on preserving cash through cost reduction, rationalising capex and optimising working capital. Rising competition, increasing share of new stores vs matured stores, and investment in supply chain will keep margin range-bound and return ratios steady.
Outlook
We like the company’s revenue growth potential, timely execution and best-in-class return ratios. Initiate with BUY and DCF-based target price of Rs2,500/share on Sep’22E.
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