Motilal Oswal Monetary Companies Ltd (MOFSL) has initiated protection on Vishal Mega Mart (VMM) with a ‘Purchase’ ranking and a goal worth of Rs 165, citing robust fundamentals, constant development potential, and a compelling risk-reward ratio. The valuation is supported by a reduced money stream (DCF) mannequin, with implied multiples reflecting a 4–7 per cent premium over the inventory’s common buying and selling ranges since itemizing.
Vishal Mega Mart traded at Rs 137.50, up Rs 0.40 or 0.29 per cent as of 12:16 PM.
Development projection of Vishal Mega Mart robust
MOFSL forecasts a 19 per cent compound annual development fee (CAGR) in income and 20 per cent CAGR in EBITDA from FY25 to FY28. Development drivers embody a 13 per cent CAGR in retailer additions, sustained double-digit same-store gross sales development (SSSG), and average working leverage.
The brokerage additionally expects a 24 per cent CAGR in revenue after tax (PAT), supported by a debt-free steadiness sheet and stringent price management. Vishal Mega Mart is projected to generate Rs 3,200 crore in cumulative working money stream and Rs 2,300 crore in free money stream over the identical interval.
Vishal Mega Mart attain
VMM operates 696 shops throughout 458 cities, with a give attention to Tier-2 and smaller cities, giving it a novel edge in India’s worth retail phase. Its well-diversified portfolio—spanning attire, FMCG, and basic merchandise—has helped construct robust market presence and model loyalty.
MOFSL notes that non-public labels and low-price-point choices proceed to be VMM’s core strengths, serving to it stand agency in opposition to each on-line and offline rivals.
Bull and bear case goal by Motilal Oswal
Regardless of a 75 per cent rally within the inventory since its IPO, MOFSL sees additional upside potential. The brokerage has outlined a bull case goal worth of Rs 210, assuming quicker retailer growth and higher-than-expected SSSG, and a bear case goal of Rs 120, reflecting extra conservative development assumptions.
Below the bull case, income CAGR is anticipated at 22.5 per cent, with EBITDA margins bettering to fifteen.2 per cent until FY28 by 50 foundation factors above the bottom case.
