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Shares of V2 Retail were locked in the 5 per cent upper circuit at Rs 1,284.85 on the National Stock Exchange (NSE) in Tuesday’s intra-day trade after Motilal Oswal Mutual Fund (MF) on Monday bought a 2 per cent stake in the company via open market transactions.
Till 10:31 AM, a combined 150,000 equity shares had changed hands on the counter, and there are pending buy orders for nearly 30,000 more shares on the NSE and BSE.
In two months, the stock price of V2 Retail has rallied 70 per cent, while it has zoomed over 16 times, or 1,515 per cent, from the level of Rs 79.57 on the BSE, in the past 16 months.
On September 23, 2024, Motilal Oswal Mutual Fund - Motilal Oswal Large and Midcap Fund purchased 734,800 equity shares in V2 Retail, representing 2.12 per cent stake in the company, for Rs 85.24 crore.
The mutual fund bought the shares at a price of Rs 1,160 per share via block deals on the NSE, exchange data showed.
The mutual fund bought the shares at a price of Rs 1,160 per share via block deals on the NSE, exchange data showed.
Meanwhile, private equity firm Lighthouse Advisors, through its affiliate India 2020 Fund II Ltd, sold 734,800 shares at a price of Rs 1,160 per share, data showed.
The foreign portfolio investor (FPI) held 6.36 per cent or 2.2 million shares in V2 Retail at the end of June 2024 quarter, the company's shareholding pattern data showed.
The foreign portfolio investor (FPI) held 6.36 per cent or 2.2 million shares in V2 Retail at the end of June 2024 quarter, the company's shareholding pattern data showed.
Currently, V2 Retail is trading under ‘T’ group on the BSE and ‘BE’ segment on the NSE. The Trade-for-Trade (T) group is a surveillance measure that requires securities to be settled on a trade-to-trade basis.
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V2 Retail provides a comprehensive portfolio of product offerings addressing diverse pockets. The company offers smart, trendy and fashionable apparels across categories at affordable prices under one roof. It operates 117 stores all over India (primarily in Tier II and Tier III towns and cities) covering a total retail area of approximately 1.3 million sq. ft.
The company plans to improve its store profitability and would be looking at rationalising certain stores before accelerating growth through faster store addition. To increase its bill size, store productivity and store gross margins, V2 Retail plans to increase the share of its private labels across its stores.
V2 Retail caters to the rising aspirations of the middle class in Tier II and III cities, providing affordable and high-quality fashion in a modern and comfortable setting. By embracing the concept of ‘value retailing’, V2 Retail meets the growing demand for affordable yet stylish fashion among the expanding middle class.
In its apparel section, the company focuses on ethnic, fusion, and western wear for women; formal, sports and casual wear for men, and a variety of kids’ wear in different colours and designs.
In its apparel section, the company focuses on ethnic, fusion, and western wear for women; formal, sports and casual wear for men, and a variety of kids’ wear in different colours and designs.
India’s retail sector is poised for remarkable growth, projected to grow at a compound annual growth rate (CAGR) exceeding 13 per cent by the year 2027. For the year 2024, the sector is poised for growth ranging between 10-13 per cent. The Indian retail industry is a dynamic and rapidly evolving sector with immense potential for growth, V2 Retail said in its FY24 annual report.
Some of the key drivers for the company's growth include growing urbanisation, participation of women in the workforce, rising disposable incomes, discretionary spending, increasing aspirations, fashion consciousness and brand awareness, e-commerce and the growing influence of social media due to the wide availability of smartphones and high-speed internet.
Apart from that, entry of international players across various retail segments, supply side innovations, improved manufacturing capabilities, efficient warehousing and distribution, leveraging technology and easy and on demand availability of credit are also contributing factors.
Apart from that, entry of international players across various retail segments, supply side innovations, improved manufacturing capabilities, efficient warehousing and distribution, leveraging technology and easy and on demand availability of credit are also contributing factors.
Meanwhile, V2 Retail is targeting a 30–40 per cent sales CAGR over the next three-to-four years, which can result in margin expansion and improved store metrics. It plans to maintain RoE at 20 per cent. Drivers such as new store expansion and higher revenue per sq. ft. can lead to a healthy growth in revenue and earnings before interest, tax, depreciation and amortisation (Ebitda).
Given the upgrade to its store addition targets and higher-than-expected SSSG (same store sales growth), analysts at Nuvama Wealth and Investment, raised FY26 revenue/EBITDA/PAT estimate by 15 per cent/20 per cent/28 per cent.
As peers such as V-Mart Retail and Zudio have over 500 stores each, the brokerage firm believes V2 Retail can achieve healthy growth rates over a longer period.
As peers such as V-Mart Retail and Zudio have over 500 stores each, the brokerage firm believes V2 Retail can achieve healthy growth rates over a longer period.
With aggressive and profitable growth, Nuvama upgraded its target multiple to 15x FY26 EV/EBITDA (from 12x earlier) and reaffirmed its ‘Buy’ rating with a revised target price of Rs 1,352 (from Rs 841 earlier), which implies a FY26 P/E ratio of 40x, the brokerage firm said in Q1FY25 result update.
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