I-Sec maintains Buy call on Vishal Mega Mart, target price Rs 140

ETMarkets.com
Financials
Vishal Mega Mart delivered a strong Q4FY25 performance despite a challenging demand environment, with revenue/ EBITDA/ PAT growth of 23%/ 43%/ 88% exceeding our expectations. The performance was driven by double-digit SSSG (13.4% YoY) and an addition of 28 stores QoQ (85 stores in FY25). For FY25, revenue/ EBITDA/ PAT grew 20%/ 23%/ 37% with SSSG of 11.8%. Adj. EBITDA margin (pre-INDAS and ESOP) expanded 240bps YoY to 8.2% and reported EBITDA margin was at 14% (up 190 bps YoY; ~70bps impact due to ESOPs). ICICI Securities expects Vishal mega Mart to maintain its strong momentum, supported by aggressive store expansion and a focus on value-driven pricing.
Investment Rationale
The key drivers are Vishal Mega Mart's high share of private label products (~73% of sales), lean cost structure, efficient supply chain, and a highly loyal customer base (contributing ~95% of revenue). ICICI Securities retains its positive outlook and maintains a BUY rating, as the company remains well positioned for sustained and profitable growth.
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Promoter/FII Holdings
Promoters held 74.55 per cent stake in the company as of 31-Mar-2025, while FIIs owned 7.03 per cent, DIIs 12.18 per cent.
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(You can now subscribe to our ETMarkets WhatsApp channel ICICI Securities has a Buy call on Vishal Mega Mart with a target price of Rs 140. The current market price of Vishal Mega Mart is Rs 118.85.Vishal Mega Mart delivered a strong Q4FY25 performance despite a challenging demand environment, with revenue/ EBITDA/ PAT growth of 23%/ 43%/ 88% exceeding our expectations. The performance was driven by double-digit SSSG (13.4% YoY) and an addition of 28 stores QoQ (85 stores in FY25). For FY25, revenue/ EBITDA/ PAT grew 20%/ 23%/ 37% with SSSG of 11.8%. Adj. EBITDA margin (pre-INDAS and ESOP) expanded 240bps YoY to 8.2% and reported EBITDA margin was at 14% (up 190 bps YoY; ~70bps impact due to ESOPs). ICICI Securities expects Vishal mega Mart to maintain its strong momentum, supported by aggressive store expansion and a focus on value-driven pricing.The key drivers are Vishal Mega Mart's high share of private label products (~73% of sales), lean cost structure, efficient supply chain, and a highly loyal customer base (contributing ~95% of revenue). ICICI Securities retains its positive outlook and maintains a BUY rating, as the company remains well positioned for sustained and profitable growth.The brokerage maintains its earnings estimates for FY26E/FY27E, modelling revenue/ EBITDA/PAT CAGR of 18%/19%/26% over FY25-27E. They maintain a BUY with a DCF-based unchanged target price of Rs 140. The key risks are slower-than-expected store addition and SSSG, exit of key managerial personnel and customer shifting towards convenience (quick commerce).Promoters held 74.55 per cent stake in the company as of 31-Mar-2025, while FIIs owned 7.03 per cent, DIIs 12.18 per cent.
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