Vishal Mega Mart shares get 25% upside target despite 2025 gains; here's why
MOFSL said it viewed the company’s diversified category mix, ownership of opening price points, strong contribution from in-house brands and lean cost structure.
- Dec 17, 2025,
- Updated Dec 17, 2025 11:45 AM IST
Vishal Mega Mart Ltd received a ‘Buy’ rating from Motilal Oswal Financial Services, with the brokerage pencilling in a 25 per cent upside potential, despite the stock having rallied 26 per cent in 2025. Motilal Oswal has revised its target price to Rs 170, valuing the stock at around 40 times estimated December 2027 EV/Ebitda, which implied roughly 29 times December 2027 reported Ebitda and about 61 times price-to-earnings.
The brokerage likes the stock for Vishal Mega Mart's consistent growth trajectory, along with potential for margin expansion. MOFSL said it viewed the company’s diversified category mix, ownership of opening price points, strong contribution from in-house brands and lean cost structure as providing a durable moat amid intense competition from both offline and online value retailers.
The brokerage said its FY26–28 earnings estimates remained broadly unchanged. It modelled a compound annual growth rate of 20 per cent in revenue, 22 per cent in Ebitda, 27 per cent in pre-Ind AS 116 Ebitda and 30 per cent in profit after tax over FY25–28E, driven by about 12 per cent CAGR in store additions, consistent double-digit same-store sales growth and nearly 160 basis points expansion in pre-Ind AS 116 Ebitda margins.
MOFSL said the company management remained optimistic about sustaining double-digit SSSG on an annual basis for a fairly long period, driven by differentiated own brands portfolio (75 per cent of the revenue mix).
Vishal Mega Mart has focused on premiumisation over the last few years to match the rising aspirations of its customer base while remaining competitive in the opening price points by investing the gains from better buying efficiencies to improve the product quality, it said.
"The company’s focus on volume-led growth, technology (warehouse automation, RFID implementation), best-in-class supply chain management (3 per cent of revenue) and frugal operational philosophy should result in operating leverage and drive Ebitda margin expansion. Management noted that lower throughput in South India is a function of relatively new stores. However, driven by higher apparel salience, the profitability in South is similar if not better than the pan-India level, which has buoyed management to accelerate store expansion in South India," MOFSL said.
Vishal Mega Mart Ltd received a ‘Buy’ rating from Motilal Oswal Financial Services, with the brokerage pencilling in a 25 per cent upside potential, despite the stock having rallied 26 per cent in 2025. Motilal Oswal has revised its target price to Rs 170, valuing the stock at around 40 times estimated December 2027 EV/Ebitda, which implied roughly 29 times December 2027 reported Ebitda and about 61 times price-to-earnings.
The brokerage likes the stock for Vishal Mega Mart's consistent growth trajectory, along with potential for margin expansion. MOFSL said it viewed the company’s diversified category mix, ownership of opening price points, strong contribution from in-house brands and lean cost structure as providing a durable moat amid intense competition from both offline and online value retailers.
The brokerage said its FY26–28 earnings estimates remained broadly unchanged. It modelled a compound annual growth rate of 20 per cent in revenue, 22 per cent in Ebitda, 27 per cent in pre-Ind AS 116 Ebitda and 30 per cent in profit after tax over FY25–28E, driven by about 12 per cent CAGR in store additions, consistent double-digit same-store sales growth and nearly 160 basis points expansion in pre-Ind AS 116 Ebitda margins.
MOFSL said the company management remained optimistic about sustaining double-digit SSSG on an annual basis for a fairly long period, driven by differentiated own brands portfolio (75 per cent of the revenue mix).
Vishal Mega Mart has focused on premiumisation over the last few years to match the rising aspirations of its customer base while remaining competitive in the opening price points by investing the gains from better buying efficiencies to improve the product quality, it said.
"The company’s focus on volume-led growth, technology (warehouse automation, RFID implementation), best-in-class supply chain management (3 per cent of revenue) and frugal operational philosophy should result in operating leverage and drive Ebitda margin expansion. Management noted that lower throughput in South India is a function of relatively new stores. However, driven by higher apparel salience, the profitability in South is similar if not better than the pan-India level, which has buoyed management to accelerate store expansion in South India," MOFSL said.