Target: ₹850
CMP: ₹475.35
For V-Mart Retail, the summer offtake remains healthy and winter merchandise spillover was limited to Q4. While core V-Mart is expected to remain steady, Unlimited’s new stores performance (higher sales/sq ft) coupled with the renewed expansion vigor keeps V-MART’s odds of maintaining a baseline rate of 15-16 per cent revenue CAGR over FY26-28 high.
A step-up in Unlimited’s network expansion (added 18 stores in the past six quarters vs a muted FY23-24) along with steady improvement in unit economics (format is now estimated to be at 4-5 per cent pre-INDAS EBITDAM vs 1-2 per cent for legacy stores) is noted.
However, what gives us more comfort on V-Mart is not just the healthy KPIs but its risk management and relative insulation from potential macro shocks vs peers. Most value retailers benefited from a buoyant macro environment over FY23-25, with sales productivity gains coming alongside rising inventory needs (higher inventory/sq ft). However, V-Mart continued to gain sales/EBITDA productivity, while keeping inventory needs in check. This makes it more resilient to inventory cycle shocks in an unfavorable macro environment.
Against this backdrop, 30 per cent stock price correction seems overdone (stock now available at <13x FY28 EV/EBITDA/<18x FY28 P/E). The demand from growth and profitability remains modest. We bake in about 16 per cent revenue CAGR and about 40-bp margin expansion over FY26-28E. We maintain BUY with a DCF-based TP of ₹850 (implying 21x FY28 EV/EBITDA).
Published on March 30, 2026