V-Mart Retail Upgraded To 'Buy' By Motilal Oswal On Strong Q1 Profit Beat — Check Target Price

Motilal Oswal Financial Services has upgraded V-Mart Retail Ltd. to a ‘Buy’ rating, citing a strong beat on profitability. The brokerage has raised its target price to Rs 1,035, noting that the stock’s recent correction, combined with improved margins, has made valuations more attractive.

V-Mart Retail’s revenue rose 13% year-on-year in Q1 FY26, driven primarily by a 14% increase in store count, while same-store sales growth remained muted at 1% due to the shift of Eid to Q4 FY25. "Ebitda rose approximately 28% year-on-year (15% beat), driven by lower inventory provisioning and reduced A&P spends. Ebitda margins jumped to 14.3%," the report added.

"Management continues to target 12-15% net store additions and mid-to-high single-digit SSSG, with consistent improvement in profitability driven by disciplined cost controls across segments," it added.

The brokerage raise its FY26/27E Ebitda by approximately 2% each, driven by stronger margin performance in the core VMART format. "We model a CAGR of 16%/25% in revenue/Ebitda over FY25-28E, driven by ~12% CAGR in store additions, mid-single-digit SSSG, and further reduction in LR losses," it added.

Motilal Oswal said V-Mart's overall productivity has got a boost, supported by better productivity of V-Mart and Unlimited stores, the closure of non-performing stores, and lower losses in the online segment.

The brokerage highlighted that V-Mart remains a key beneficiary of the unorganised-to-organised retail shift and the massive growth opportunity in value fashion. "However, with aggressive store expansion by many value retailers, rising competition in value retail remains a key watch," it added.

The brokerage upgraded V-Mart to 'Buy' with unchanged approximately 13X Sep ’27E EV/Ebitda to arrive at the revised target price.