V-Mart Retail Ltd - Q4 FY21 Result Update - YES Securities

(Rating: ADD, TP: Rs3,000 Upside: 8.6%)

- View - We build in a 49% revenue and 54% EBITDA over FY21-23E from a low base which leads to a lower upside despite a higher multiple of 60x vs 55x earlier which balances the near-term weakness with structural long-term positives. Therefore, we downgrade the stock to ADD from Buy with a revised PT of Rs 3,000 (from Rs 3,089 earlier) based on 60x FY23E earnings and 19x EV/EBITDA.

- Result summary - In-line performance with 6% yoy revenue growth, gross margin expansion of 130bps and EBITDA margin expansion of 110bps to 9.5% and lower yoy net loss of Rs 15mn.

- Key metrics - Footfalls down 11%, conversion rate up from 55% to 61.1%, transaction size up 7.7% yoy, Apparel ASP down 8.4% to Rs 327, shrinkage down by 30bps to 1.3%.

- Store addition - Net addition of 5 stores in 4Q taking total store count to 279, opened 20 and closed 7 stores in FY21.

Shares of V-MART RETAIL LTD. was last trading in BSE at Rs.2780 as compared to the previous close of Rs. 2766.9. The total number of shares traded during the day was 1947 in over 460 trades.

The stock hit an intraday high of Rs. 2800 and intraday low of 2725. The net turnover during the day was Rs. 5376539.

Source : Equity Bulls

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