Elara Capital initiates coverage on Vishal Mega Mart with buy rating at Rs 140 target price
Elara Capital on Monday said it has initiated coverage on the hypermarket chain Vishal Mega Mart with a ‘buy’ rating at a target price of Rs 140 per share, which implies a potential upside of over 35% from the stock’s current levels. The brokerage has cited the company's strong balance sheet, efficient operations, and significant growth potential in India's expanding retail market.
On Monday, Vishal Mega Mart shares were trading 5% lower at Rs 103.05 on the BSE. The company, which operates supermarket chains across 30 states and Union Territories in India, has shown strong momentum since its listing on December 18. The company debuted at Rs 110 on BSE, delivering an immediate 41% premium to IPO investors, while on NSE, the shares opened at Rs 104, representing a 33.3% premium.
Elara Capital highlighted Vishal Mega Mart (VMM) as a cash-rich retailer with a strong balance sheet, demonstrating efficient management across operations and finances. The brokerage said it believes the company is positioned to outperform peers like Shoppers Stop, V-Mart, and V2 Retail, noting that its performance is comparable with market leaders such as DMart and Trent.
Vishal Mega Mart operates an extensive network of 645 stores across 414 cities as of H1FY25, with plans to expand rapidly. «We expect its retail network to expand at a compounded annual growth rate (CAGR) of 11.5% from FY24 to FY27, reaching 846 stores by FY27,» Elara said in its note. The expansion is projected to be driven by a blend of new store openings and strong
