The current market price (CMP) of V-MART is Rs. 7277. Motilal Oswal has estimated a target price for the stock at Rs. 9250. The stock is expected to offer a 35% upside in 1 year.
|Stock market outlook|
|Current market price (CMP)||Rs. 3306|
|1 year back||35.00%|
In FY22, V-MART sales are expected to be Rs. 17.3 billion, and for FY23, it is expected to be Rs. 26.2 billion. In FY22, V-MART’s EBITDA is expected to be Rs. 2 billion, and for FY23, it is expected to be Rs. 3.5 billion. The company’s ‘Unlimited’ stores are currently operating at ~Rs. 7.2k/square foot annually. That’s 15% below V-Mart’s pre-COVID levels. Store revenue is 15% below pre-COVID level on an LTL basis. The company has reduced its labor costs by 30%.
Comments from Motilal Oswal
Commenting on the stock’s profitability, Motilal Oswal said: “While improved throughput and profitability under the ‘unlimited’ retail channel as well as aggressive store additions are expected to drive steady growth for V-Mart, the sluggishness in rural markets seen in 3QFY22, as well as the negative impact on demand from rising prices, could remain the key overhangs to watch.We consider a CAGR of 36% /46% of revenue/EBITDA in FY22-24E, respectively. The company aims to achieve 5-6%/7-8% EBITDA margin in the short term/long term, respectively.”
About the company
Founded in 2002, V-Mart is a family-owned retail chain offering clothing, footwear and accessories for men, women and children. The company also offers a wide range of home furnishings, general merchandise, toys, dishes, utensils and other home utility items. 17 years’ rich expertise in providing affordable, high-quality fashion, combined with an extensive network of over 200 stores in 171 cities in 17 states.
The stock above was taken from Motilal Oswal’s brokerage report. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.