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V-Mart's Resilience: Outperforming Peers in Value Retail
30 Mar
Summary
- V-Mart expects 15-16% revenue CAGR through FY28.
- Unlimited stores show strong sales and improved unit economics.
- V-Mart manages inventory effectively, offering macro shock resilience.
V-Mart Retail anticipates maintaining a strong revenue growth trajectory, with projections indicating a 15-16% CAGR between FY26 and FY28. This outlook is bolstered by the enhanced performance of its Unlimited stores, which are exhibiting higher sales per square foot and a notable increase in network expansion, adding 18 stores over the past six quarters.
The company's Unlimited format now shows improved unit economics, estimated at 4-5% pre-INDAS EBITDAM, a significant rise from the 1-2% seen in legacy stores. V-Mart's ability to grow sales and EBITDA productivity while controlling inventory levels positions it favorably for resilience against potential macro-economic downturns and inventory cycle shocks, differentiating it from industry peers.
Given these positive indicators and a modest growth expectation, the recent 30% stock price correction appears to be an overreaction. V-Mart is currently trading at attractive valuations. Analysts maintain a BUY recommendation with a target price of ₹850, implying a 21x FY28 EV/EBITDA multiple.
