HDFC Securities continues to recommend V-Mart Retail as a preferred buy in the value retail space, reaffirming its 'Buy' rating and setting a price target of ₹850. According to reports from ET Now, the brokerage believes that the growth visibility is improving and the stock is available at attractive valuations following a correction. The stock is currently trading at below 13x FY28 EV/EBITDA, which the brokerage views as reasonable given the company's growth prospects and improving profitability profile.
The brokerage highlights that V-Mart is experiencing rising demand, with guidance for same-store sales growth (SSSG) for FY26 in the mid-to-high single digits. As reported by ET Now, this reflects a pick-up in consumption trends, especially for the company's presence in tier II and tier III markets. The company is expected to achieve a healthy revenue growth CAGR of 16 per cent between FY26 and FY28, driven by both organic growth and strategic expansion.
According to HDFC Securities, the company can expect an increase in margins by 40 points in FY26-FY28 due to better cost control, improvement in the product mix, and benefits of operating leverage as store productivity increases. The brokerage notes that the company's inventory efficiency is improving, as inventory per square foot is declining even as revenue grows. New store additions are gaining momentum, with new stores operating at an EBITDA margin of 4-5 per cent, while old stores are stabilising at 1-2 per cent.
At the time of the report, shares of V-Mart Retail Ltd. were up 2.49 per cent, trading at ₹508.65, compared to the previous closing price of ₹496.30. According to ET Now, the brokerage believes the recent 30 per cent correction in the stock price over the last six months has made valuations more attractive. The company's strength in the value retail segment and focus on operational efficiencies should provide a fillip to growth despite near-term headwinds for discretionary spending.
