Synopsis: HDFC Securities remains bullish on this stock, seeing nearly 72.5 percent upside driven by strong revenue growth, improving margins, and efficient store expansion, supported by rising traction in the Unlimited format and better operational execution.
The article outlines this small-cap stock’s strong growth and profitability trends, highlighting nearly 72.5percent upside as per brokerages. It covers revenue and margin expansion, operational efficiency, store network growth, especially the Unlimited format, and recent Q2 to Q3 financial performance, along with valuation and investment rationale.
With a market capitalization of Rs 3,916 crore, V-Mart Retail Ltd’s shares are trading at Rs 492.85 per share, up by 2.27 percent from its previous close. The company trades at an undervalued P/E of 33x compared to its Industry average, and has given a negative return of 27 percent in the last 5 years.
HDFC Securities on V Mart
HDFC Securities maintains a Buy rating with a target price of Rs 850, implying nearly 72.5 percent upside from today’s close. The positive outlook is driven by strong revenue visibility, margin expansion potential, and improving operational efficiency across its expanding store network.
Rationale:
Growth Momentum Supported by Store and Sales Expansion: The company is positioned for strong growth, with revenue CAGR projected at 16 percent over FY26–FY28. This outlook is underpinned by mid-to-high single-digit same-store sales growth and accelerating store additions, particularly in the Unlimited format, which continues to gain traction across key markets.
Margin Upside Driven by Efficiency Gains: Profitability is expected to improve steadily, with EBITDAM expanding by around 40 basis points over FY26–FY28. This is supported by better operating leverage in both new and mature stores, along with disciplined cost control and improving contribution from recently added outlets.
Operational Discipline and Attractive Valuation: Operational efficiency remains a key strength, reflected in declining inventory per square foot despite rising revenues. Additionally, after a ~30 percent correction over the past six months, the stock now trades below 13x FY28 EV/EBITDA, offering a more attractive entry point relative to its growth prospects.
Strong Store Performance
Revenue Growth: Revenue momentum remained healthy, with combined Q2 to Q3 revenue rising 15 percent, supported by same-store sales growth of 5 percent. The ‘Unlimited’ format stood out, delivering 15 percent revenue growth, alongside 2 percent SSSG and 7 percent SSVG, while EBITDA surged 40 percent, indicating strong format scalability.
Profitability & Operational Gains: with EBITDA rising 22 percent to Rs 2,095 million and margins expanding to 18.6 percent. PAT grew 23 percent to Rs 880 million, supported by operational efficiencies. Losses at LimeRoad narrowed 60 percent, while the store network expanded to 554 locations and customer traction increased 15 percent
About the Company
V-Mart Retail is a leading Indian value-fashion retail chain founded in 2002 by Lalit Agarwal, focusing on Tier II, III, and IV cities. It offers affordable family fashion—apparel, footwear, and home furnishings—along with general merchandise. The company operates hundreds of stores, mainly in North and East India, following a cluster-based expansion model.
Financial highlights: The revenue from operations grew by 10 percent to Rs 1,126 crore in Q3 FY26 from Rs 1,027 crore in Q3 FY25, and EBIDT grew by 22 percent to Rs 210 crore in Q3 FY26 from Rs 171 crore in Q3 FY25. Accompanied by a net profit growth of 23 percent to Rs 88.0 crore in Q3 FY26 from Rs 71.6 crore in Q3 FY25, resulting in an EPS growth of 23 percent to Rs 11.08 per share in Q3 FY26.
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