Bernstein has initiated coverage on Vishal Mega Mart with an ‘Underperform’ rating, setting a target price of ₹90 per share. The brokerage acknowledges the long-term promise of organized value retail in India but believes the stock’s current valuations are overstretched.
Bernstein sees potential risks from peaking operating margins, intensifying competition, and limited upside based on the company’s current 10% return on equity (ROE) profile. While it forecasts a 15% revenue CAGR and 10% EBITDA CAGR from FY25 to FY28, these projections fall short of supporting the stock’s present valuation.
The brokerage assigns a FY27 P/E multiple of 53x, implying a PEG (Price/Earnings-to-Growth) ratio of 2.7x on FY24–27 estimates, suggesting the stock is priced for perfection and leaves little room for execution missteps.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
