HDFC Securities upgrades V-Mart Retail to Buy, target price Rs 3,500

HDFC Securities has upgraded V-Mart Retail to Buy from Reduce earlier with a target price of Rs 3,500. The current market price of V-Mart is Rs 2895.95. V-Mart Retail, incorporated in 2002, is a Mid Cap company with a market cap of Rs 5737.08 crore, operating in the Retail sector.

V-Mart Retail's key products/revenue segments include Income from Retailing, Sale of services and Other Operating Revenue for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Standalone Total Income of Rs 1030.11 crore, up 55.43% from last quarter Total Income of Rs 662.74 crore and up 14.19% from last year same quarter Total Income of Rs 902.08 crore. The company has reported net profit after tax of Rs 71.63 crore in the latest quarter.

The company's top management includes Mr.Aakash Moondhra, Mr.Lalit Agarwal, Mr.Madan Agarwal, Mr.Murli Ramachandran, Mr.Govind Shridhar Shrikhande, Ms.Sonal Mattoo, Mr.Raghuvesh Sarup, Ms.Shweta Kumar. Company has S R Batliboi & Co. LLP as its auditors. As on 31-12-2024, the company has a total of 2 Crore shares outstanding.

Investment Rationale
Against the backdrop of improving rural cycle, a modest ask from growth/margins, and a 35% stock price correction, HDFC Securities suspects the risk-reward dynamic has swung in favour of V-Mart. The brokerage has baked in 15% revenue CAGR over FY25-27E and 6.4% EBITDAM respectively. They upgraded the stock toBUY (earlier REDUCE) with a DCF-based target price of Rs 3,500/share (implying 25x FY27 EV/EBITDA).

Promoter/FII Holdings
Promoters held 44.29 per cent stake in the company as of 31-Dec-2024, while FIIs owned 17.32 per cent, DIIs 32.44 per cent.