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In the process, the stock also made a new post-listing high of ₹127, surpassing the previous high of ₹117. The stock is now up 56% from its IPO price of ₹79 per share. The stock had listed in December last year.
Vishal Mega Mart is also touted as a potential beneficiary of the potential consumption boom post the income tax relief announced during the Union Budget by Finance Minister Nirmala Sitharaman on February 1.
Brokerage firm Elara Securities reiterated its “buy” rating on the stock with a price target of ₹140.It 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.
Elara expects Vishal Mega Mart’s net profit to grow at a Compounded Annual Growth Rate (CAGR) of 27.5% over financial year 2024-2027 led by store expansion and a higher same-store sales growth.Slower-than-expected pace of store expansion and slower same-store sales are key risks to Elara’s assumptions.
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.
Morgan Stanley’s target on Vishal Mega Mart is the highest on the street for the stock.
Five analysts now have coverage on Vishal Mega Mart, out of which four of them have a “buy” rating, while the other one has a “hold” rating.
Shares of Vishal Mega Mart shares ended 6.8% higher on Tuesday at ₹123.18.
