V-MART

V-Mart Retail Limited was incorporated as Varin Commercial Private Limited in 2002. The Company started its operations in the value-for-money retail segment by opening its first retail store in Gujarat in 2003. In 2006, the name was changed to V Mart Retail Pvt. Limited. V-MART’s business can be classified 

into three verticals viz. apparels, general merchandise (non-apparels and home mart) and kirana bazaar

The company operates primarily in tier II & tier III cities with the chain of “Value Retail” departmental stores. The stores cater the needs of the entire family altogether by offering apparels, general merchandise and Kirana goods.The company has 86 stores across 73 cities in 12 states and union territories, with a total area of nearly 7 Lac sq.ft. The stores are located in  New Delhi, Gujarat, Uttar Pradesh, Bihar, Punjab, Chandigarh, Haryana, Uttarakhand, Jammu and Kashmir, Rajasthan and Madhya Pradesh. They are pioneers in setting up modern ambiance stores across various small towns and cities like Sultanpur, Ujjain, Motihari etc. As per the annual report they are focussing on a single customer type (evolving from aspiring to consuming) with an annual income range between H1 lakh to H10 lakh and largely residing in Tier-I, Tier-II and Tier-III locations in India

The company came out with IPO last year at a price of 210 Rs. The proceedings of IPO were used for setting up new stores and for working capital requirement. The promoters hold 59% stake in the company. The company is founded by the Ex-CEO of Vishal Retail. In the first year after IPO, V-Mart reported a 36% growth in its revenues and a 72.2% increase in its profit after tax in 2012-13.The company policy clearly says that it always aims to keep debt equity ratio below 0.75. 

The company intend to establish an online portal (www.vmart.co.in) to address the growing online shopping potential in Tier-II and Tier-III Indian cities without a substantial investment. In the 2012-13 annual report the company said that it was aiming to set up 25 stores this year and they have already setup 17.The most recent store was at Jhansi which was opened on 4th week of October. Though they had to close down some stores like that in Karnal due to poor footfall,they are making for it by adding mores stores in areas that attract more people

The company came up with superb results in the recent quarter.Its sales increased to 128 cr from 79 cr(comparing sept quarters) and profit more than doubled to 2.8 cr from 1.3 cr. The market gave a thumbs up for the company and the share price moved up smartly to hit a life time high of 242 rs before closing at 238 rs. Organised retail is expected to grow at 25 per cent and reach a size of US$ 200 billion by 2020.The company was aiming for a 30% growth as per the recent management conference call. I think we can expect significant upside even from current levels if the management is able to deliver their promise. Any correction in stock price may be used as an opportunity to add V-MART into your portfolio.CMP-238 Rs/-

Note:-I have vested interests in V-MART and its safe to assume that i am holding it from lower levels