Buy V-Mart Retail For Target Rs.5,300 By Motilal Oswal Financial Services Ltd
Slight moderation in revenue growth (+16% YoY vs. 20% YoY in 2Q)
*VMART’s 3Q revenue grew 16% YoY to INR10.3b (5% lower than our last published estimate), driven by 10% blended SSSG (vs. 15% YoY in 2Q) and 7.5% YoY store addition.
*SSSG for VMart (core) stood at 10%, while SSSG for Unlimited came in at 11%.
*Management indicated a shift in the festive period (Pujo sales shifting to 2Q) was the reason for slight growth moderation.
*We believe a slightly delayed winter in North India could also be a reason for moderation in SSSG for VMart (core).
*The company opened 21 new stores (our estimate: 19 VMart stores and 2 Unlimited stores) during the quarter, taking the total store count to 488 (44 net store additions in 9MFY25).
*Breakup of stores - VMart likely closed the quarter with 403 stores and Unlimited with 85 stores. ? Segment wise revenue-
*Limeroad (LR) revenue declined 35% YoY to INR110m. Adjusted for LR, VMART revenue (including Unlimited stores) was up ~17% YoY.
*VMart (core) revenue likely grew ~18% YoY to ~INR8.6b, with annualized throughput of ~INR10,000/sq.ft. SSSG moderated slightly to 10% (vs. 16% in 2Q).
*Unlimited revenue likely stood at ~INR1.6b, up ~8% YoY, with annualized throughput of ~INR7,250/sqft. SSSG stood at 11%, flat QoQ.
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