Vishal Mega Mart's management sees Kerala as a major opportunity with a potential of ~100 stores, comparable to Uttar Pradesh's current ~125-store network. Early traction has been encouraging, supported by compact formats and strong value positioning. Tamil Nadu entry will be phased to safeguard store economics.
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ICICI Securities Report
ICICI Securities has maintained its 'Buy' rating on Vishal Mega Mart Ltd., assigning a target price of Rs 175, indicating a 34% upside from the current market price of Rs 131.
The brokerage highlights robust expansion plans, premiumisation trends, and strong execution as key drivers of growth.
Expansion momentum strengthens medium-term visibility
Vishal Mega Mart continues to build a dense, repeatable expansion model across tier II/III markets. Kerala has emerged as a strong next-leg opportunity, with management identifying a ~100-store potential, a meaningful opportunity given UP currently has ~125 stores.
Early traction has been encouraging, supported by compact formats and strong value perception.
Tamil Nadu will be approached in a calibrated manner to protect early unit economics and ensure consistency across the model as the footprint expands.
Strong value-led positioning vs peers
In Kerala, customers were historically accustomed to cooperative formats offering ~2- 5% savings; Vishal Mega Mart's sharply priced FMCG and general merchandise products provide a materially stronger value proposition.
In markets with DMart overlap, Vishal Mega Mart plays a distinct role in consumer basket, led by fast fashion sharply priced private labels, while DMart remains dominant in full-basket FMCG. This differentiated positioning limits direct head-to-head competition and supports Vishal Mega Mart's margin resilience.
Key risks:
Slower-than-expected store addition and same-store sales growth, exit of key managerial personnel and customer shifting towards convenience (quick commerce).
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