Axis says V-Mart Retail to benefit from rural recovery; predicts 31% upside

V-Mart share price target: Brokerage firm Axis Direct has recommended 'Buy' rating on V-Mart Retail, calling it as its top conviction idea from the retail space. It said that India’s retail landscape remains predominantly unorganised and offers substantial headroom for growth in smaller towns and emerging markets.

Axis Direct has set a target price of ₹760 on V-Mart shares, implying an upside of ₹182 or 31 per cent from Thursday's close of ₹578.

Meanwhile, V-Mart shares traded 2 per cent lower at ₹573 today on the National Stock Exchange (NSE) around 9:45AM.

V-Mart Q3 results

Axis Direct noted that V-Mart reported resilient numbers in the third quarter (Q3FY26), with revenue growing 9.7 per cent Y-o-Y and 39.6 per cent Q-o-Q to ₹1,126 crore. The quarter saw a shift in sales due to a larger share of Durga Puja moving to Q2 in FY26 compared with the previous year.

 

The company reported a 22.8 per cent increase in net profit for the quarter at ₹87.99 crore compared with a net profit of ₹71.63 crore in the October-December quarter of the previous fiscal.Its same-store sales growth (SSSG) was flat, while Unlimited stores reported 2 per cent growth, resulting in an overall flat SSSG. On a cumulative basis, Q2 and Q3 results, adjusted for festive timing distortions, showed a combined SSSG of 5 per cent and revenue growth of 15 per cent.

Ebitda grew 22.3 per cent Y-o-Y to ₹210 crore, with margin expansion of 190 bps to 18.6 per cent, driven by improved gross margin (+40 bps Y-o-Y to 36.2 per cent), lower employee costs (-25 bps Y-o-Y), and reduced other operating expenses (-126 bps Y-o-Y). 

Expansion strategy

During the quarter, V-Mart opened 23 new stores (21 V-Mart and 2 Unlimited) and closed 2 stores (1 V-Mart and 1 Unlimited), taking the total store count to 554 (V-Mart - 458, Unlimited - 96).

Over the medium to long term, the company has set a target of 13–14 per cent annual increase in square footage, with 60–65 per cent of new stores coming from the same states but different towns.

Rural recovery

Axis Direct said that V-Mart is well-placed to benefit from rural recovery and market share gains from unorganised players. Strong footfalls, disciplined cost control, and steady store expansion should aid performance, while the recent announcement on GST rate cut is likely to spur consumption and boost discretionary spending.

V-Mart shares have underperformed the markets significantly over the last few years. As per exchange data, V-Mart shares have corrected 22 per cent in the last one year while the front NSE Nifty has climbed 11 per cent during the same period. The counter has yielded no returns in the past five years.  

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