Vishal Mega Mart Share Price Today Continues To Fall Despite Strong Q1 Result | Buy on Dip Or Sell?

Vishal Mega Mart Q1 Result Review

The retail company reported a strong first-quarter result driven by robust operating performance, store growth and stable EBITDA margin. Vishal Mega Mart's operating performance remained robust, led by its differentiated product mix, strong own-brand portfolio, and best-in-class cost controls, as per the Motilal Oswal report. The brokerage also highlighted concerns on promoter stake sales, LT ownership, and key-man risk.

"VMM remains among the most consistent retailers within our coverage. We believe its diversified category mix, ownership of opening price points, 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," stated the brokerage.

Vishal Mega Mart Share Price Recommendation

The brokerage saw 50% upside in the stock, representing a retailer headquartered in Gurugram. Motilal Oswal gave a 'Buy' rating to Vishal Mega Mart with a target price of Rs 165 per share. "We reiterate our BUY rating on the stock with a revised TP of INR165, premised on a DCF-implied ~34x Sep'28E pre-IND AS 116 EV/EBITDA (implying ~51x Sep'28E EPS)," noted the brokerage in its report.

Vishal Mega Mart Q1 Result Recap

Vishal Mega Mart reported a 26% annual jump in its consolidated net profit to Rs 259 crore from Rs 206 crore a year earlier. Revenue from operations increased 18.7% on an annual basis to Rs 3.727 crore from Rs 3,140 crore in the corresponding quarter. The retail chain reported a gross profit of Rs 1068.8 crore, which was 19.9% higher.

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