Kotak Institutional Equities said in its note that the low-cost, good quality apparel and private label merchandise ensure steady margin for the company. This, coupled with an asset-light model, ensures healthy return ratios.
Calling Vishal Mega Mart a leading diversified retailer, Kotak Institutional Equities is expecting the company’s revenue to grow at a Compounded Annual Growth Rate (CAGR) of 17% over financial year 2025 – 2028, which will be led by a Same Store Sales Growth (SSSG) between 9% to 13% and a retail area CAGR of 12.6%.Kotak Institutional Equities noted that Vishal Mega Mart has a best-in-class and efficient cost structure and hence models an Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) CAGR of 18% and a PAT CAGR of 24% over financial year 2025-2028.
Last month, brokerage firm Elara Securities reiterated its “buy” rating on the stock with a price target of ₹140.
The brokerage said that it prefers Vishal Mega Mart given its strong pan-India store expansion potential, robust category mix tilted towards apparel and general merchandise with a higher share of private labels and a cash rich balance sheet.On January 27, brokerage firm Morgan Stanley had initiated coverage on the stock with an “overweight” rating and a price target of ₹161, which back then, implied a potential upside of 58% from those levels.
On December 18, 2024, shares of Vishal Mega Mart Ltd, the supermarket chain operator listed at ₹104 per share, which is a 33.3% premium compared to its IPO price of ₹78. The stock gained 45% on its first trade session.
The entire issue of ₹8,000 crore was an Offer for Sale (OFS), which means that the company did not receive any proceeds from the IPO.
In an interaction with CNBC-TV18 earlierthe management of Vishal Mega Mart had mentioned that the company did not have any immediate need for funds and hence the IPO was a complete Offer For Sale.
A total of five analysts have coverage on the stock, including four ‘buy’ ratings and one ‘hold’ rating.
Vishal Mega Mart shares ended the previous trade session 0.66% higher at ₹100.5 apiece. It has fallen 12.87% in the past month.
Also Read: Hero MotoCorp shares in focus after February sales fall 20%, miss estimates
