It is Report on V-Mart Regarding its Brokerage Report.
During the Last Year after the affect of COVID in Apparel Retail Sector which was badly effected by it and till now it is operating below the Precovid Levels but now it is expected that it will boost its sales and it will soon match to its PRE-COVID Levels As per the VMART Retail Footfalls are increasing day by day.
Buy Rating is maintained stock at FY23E EV-to-EBITDA ratio of 23x (in line with its pre-COVID three-year average EV-to-EBITDA multiple of 23x), increasing our target price to INR3,500.
Here what VMART Retail Business is expected
With a focus on smaller towns and largely on high streets, VMART has seen a
better recovery than other Apparel retailers. Footfalls are expected to normalize
in the coming 1-2 quarters.
1.Value retail has a long runway for growth, with a large lower tier market and a
compelling value proposition.
2.VMART’s disciplined and strong execution capability is reflected in its healthy
store economics, efficient working capital, and largely internally funded growth.
3.Its low-cost structure allows it to remain competitive in the market. The liquidity
constraints caused by COVID-19 are expected to lower competition.
4.VMART is currently valued ~18x FY23E EV-to-EBITDA against its long term
sustainable EBITDA growth potential of 20-25%, implying an EV-to-EBITDA to
EBITDA growth ratio of 0.7-0.9x. This makes it an attractive bet given the long
runway of growth.
At the Moment Price is Rs 2674. TARGET PRICE of Rs 3500 which is expected to 25% hike.