Motilal Oswal believe Vishal Mega Mart’s diversified category mix, ownership of opening price points, significant contribution from its own brands, and lean cost structure provide it with a strong moat against intense competition from both offline and online value retailers.
NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Shares of Vishal Mega Mart Ltd. are likely to remain in focus as domestic brokerage firm Motilal Oswal remains positive on the stock citing its consistent growth trajectory and potential for operating leverage led margin expansion.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
The brokerage reiterates its Buy rating with a revised target price of Rs 135, premised on ~27 times DCF implied Sep’28E pre-INDAS 116 EV/EBITDA (implies ~42x Sep’28 EPS).
The stake sale by promoter (PE with ~40% stake) remains a key overhang to the stock’s performance, despite the stellar operating performance.
Vishal Mega Mart’s management remains confident of sustaining double-digit same-stores sales growth on an annual basis, though on a quarterly basis, there could be deviations due to the change in the festive calendar, among other factors. Management believes there is a potential to add 1,200 stores in the large format (~17k sqft) in the next 10-12 years.
ALSO READ: Dodla Dairy’s Strong Demand Outlook Keeps Systematix Bullish — Check Target Price, Upside
The brokerage also highlighted that the company remains among the most consistent retailers within its coverage.
Motilal Oswal believes its diversified category mix, ownership of opening price points, significant contribution from its own brands, and lean cost structure provide it with a strong moat against intense competition from both offline and online value retailers.
Additionally the recent extension of its long-term CEO’s tenure for another five years, alongside redesignation as Founder, provides comfort on the continuity of the business strategy, believes the brokerage. However, concerns about potential promoter stake sales and long-term ownership still remain key overhangs for the stock.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence,
Sharp Market Insights,
Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
