"Despite inflationary trends, VMM has preserved its entry price points and meaningful price discount (vs branded players), which is driving market-share gains. While reported SSG at 5 per cent was impacted, adjusted SSG was strong at 9 per cent; VMM also maintained its double-digit SSG outlook for FY27. Initial traction in the under-penetrated South/West India and the small-format store pilot for lower-tier cities is encouraging and progressing in line with expectations," it said while suggesting a target of Rs 170 on the stock.
HDFC Institutional Equities said it has toned down its FY27 and FY28 earnings estimates by 3-4 per cent but maintain 'Buy' with a target of Rs 135. It said gross margin for the quarter contracted 32 basis points (bps) YoY to 28 per cent against its estimate of 28.3 per cent. Out of it, 20 bps contraction was attributable to the shift in higher-margin apparel sales to Q3. Double-digit SSSG guidance for FY27 stayed.
MOFSL said it has cut its FY27-29 Ebitda and PAT estimates by 2-4 per cent due to higher employee expenses and a slight moderation in same store sale growth (SSSG) estimate. Its revised lower its target on Vishal Mega Mart to Rs 170.
MOFSL said Vishal Mega Mart remained among the most consistent retailers within its coverage. "We believe its diversified category mix, ownership of opening-price-point products, significant contribution from its own brands, and lean cost structure provide it with a strong moat against intense competition from both offline and online value retailers," it said.
That said concerns over potential promoter stake sales and LT promoter ownership, post the private equity’s exit, remain key overhangs for the stock, MOFSL added.
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