Overview

• Motilal Oswal initiated coverage on July 16 with a Buy rating on Vishal Mega Mart and set a Rs 165 per share target based on a DCF valuation implying roughly a 45x EV/EBITDA multiple for September 2027.
• The brokerage forecasts a 19% compound annual growth rate in revenue and a 20% CAGR in EBITDA through FY28 driven by a targeted 13% annual increase in store openings and double-digit same-store sales growth.
• With a debt-free balance sheet and tight working capital management, Vishal Mega Mart is projected to deliver a 24% PAT CAGR and generate about Rs 32 billion in operating cash flow and Rs 23 billion in free cash flow over FY25–28.
• The retailer’s competitive moat is underpinned by a private-label portfolio that accounts for 73% of revenue, low retail costs around Rs 1,800 per square foot, and a diversified mix across apparel, general merchandise and FMCG categories.
• Vishal Mega Mart operates 696 stores in 458 cities across 30 states and Union Territories, with roughly 72% of its network concentrated in tier-2 and smaller markets.