V-Mart Q1 Results Review - LimeRoad Integration Continues To Hurt Profitability: Motilal Oswal

Motilal Oswal Report

V-Mart Retail Ltd. posted a net loss of 219 million (our estimate: net loss of Rs 2 million), primarily due to weak same-store sales growth and losses from Limeroad losses.

These factors contributed to a significant 740 basis points reduction in Ebitda margin. Revenue growth for V-Mart (excluding LimeRoad and Unlimited) grew 15%, mainly driven by footprint additions.

We have cut FY24E Ebitda by 28%, led by Rs 800 million Ebitda loss in LimeRoad and a prolonged recovery period.

However, we maintain our FY25E Ebitda, as we anticipate a recovery in SSSG and the mitigation of losses of Rs 500 million in LimeRoad.

We model a revenue/Ebitda compound annual growth rate of 18%/30% over FY23-25. We reiterate our 'Buy' rating with a target price of Rs 2,740 (based on 12 times enterprise /Ebitda on March-25E).

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