V-Mart Retail’s revenue increased 13% in the first quarter, led by 14% store additions as same store sales growth (SSSG) was muted at 1% due to Eid shifting to the fourth quarter of FY25.
Its EBITDA increased 28% beating estimates of a 15% rise, driven by lower inventory provisioning and reduced advertising and promotion (A&P) spends, and also its EBITDA margin expanded by 165 basis points to 14.3%.The company’s management continues to target 12-15% net store additions and mid-to-high single-digit SSSG, with consistent improvement in profitability driven by disciplined cost controls across segments, the brokerage said.
Motilal Oswal said the improved productivity of VMART / unlimited stores, closure of non-performing stores and lower losses in the online segment have led to an improvement in VMART’s overall profitability.
V-Mart remains a key beneficiary of the unorganised-to-organised retail shift and the massive growth opportunity in value fashion, the brokerage said.However, with aggressive store expansion by many value retailers, the rising competition in value retail remains a key watch, it said.
The brokerage has raised its FY26 and 27 EBITDA estimates by 2% each, driven by stronger margin performance in the core VMART profit. It said it models a compounded annual growth rate (CAGR) of 16% and 25% in revenue and EBITDA, respectively, over FY25-28, driven by 12% CAGR in store additions, mid-single-digit SSSG.
The brokerage said the stock’s recent correction — declining 9% in the past month and 20% this year, so far — along with improved profitability, makes its valuations attractive.
Of the 15 analysts that have coverage on the stock, 13 have a “buy” rating and one each have “hold” and “sell” ratings.
Shares of V-Mart Retail were trading 1% lower at ₹795.9 apiece.
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