Shares of Vishal Mega Mart traded higher at ₹138.80, up 1.24% today, after Motilal Oswal initiated coverage on the stock with a bullish view, estimating significant upside potential. The brokerage set a target price of ₹215 per share, implying an upside of around 55% from current levels.
Motilal Oswal highlighted Vishal Mega Mart as a key play on rising aspirations in India’s Tier-2 and smaller cities. The company operates 696 stores across 458 locations, catering to nearly a billion middle- and low-income consumers.
Why Motilal Oswal is bullish:
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Strong presence in Tier-2+ cities with a diversified product mix: Apparel (44%), FMCG and General Merchandise (~28% each).
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Private brands contribute ~73% of revenues, supporting affordability and better margins.
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One of the lowest cost structures in the industry, offering a competitive edge against both offline and online peers.
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Healthy financial outlook: projected FY25–28 revenue/EBITDA/PAT CAGR of ~19%/~20%/~24%.
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Debt-free balance sheet and robust cash flows, with expected Pre-IND AS operating cash flow of ~₹32,000 crore and free cash flow of ~₹23,000 crore over FY25–28.
Valuation:
Motilal Oswal values Vishal Mega Mart at ~45x Sep’27E pre-IND AS EV/EBITDA, translating to ~69x Sep’27E P/E, and assigns a target price of ₹215 per share.
The stock was last seen trading at ₹138.80, with a market cap of ₹64,728 crore and a P/E ratio of 102.13.
