Vishal Mega Mart Shares In Focus As Motilal Oswal Sees Double-Digit Growth Ahead — Check Rating, Target Price

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Motilal Oswal Report

Motilal Oswal reiterates 'Buy' rating on Vishal Mega Mart Ltd. with a revised target price of Rs 170, implying an upside of 25% from current market price of Rs 136.

The brokerage remains positive on Vishal Mega Mart for its consistent growth trajectory, along with potential for margin expansion.

Confident of sustaining double-digit SSSG over fairly long period 

Vishal Mega Mart management remains confident of sustaining double-digit same-store-sales growth on an annual basis over a fairly longer period, though on a quarterly basis, there could be deviations due to a change in the festive calendar, etc.

Vishal Mega Mart’s differentiated proposition (~75% of revenue from own brands), ownership of opening price points and loyal customer base (~95% of sales to repeat customers) remain key drivers for sustainable SSSG. 

Management noted that stores across various cohorts are delivering double-digit growth. For example, 7-10-year old stores with SPSF of ~1.7- 2x of system average remain among the best performing stores.

Further, Vishal Mega Mart’s focus on premiumisation is helping it garner a higher wallet share from customers, especially during the festive period.

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