Vishal Mega Mart: First Take: Q1 FY27 - in-line operational print

Research evidence excerpt

Vishal Mega Mart: First Take: Q1 FY27 - in-line operational print

Latika Chopra, CFA AC Asia Pacific Equity Research

(91-22) 6157-3584 23 July 2026 J P M O R G A N

latika.chopra@jpmorgan.com

Investment Thesis, Valuation and Risks

Vishal Mega Mart (Overweight; Price Target: Rs145.00)

Investment Thesis

VMM is well placed to tap into the secular shift to the organized retail market with a pan-

India reach skewed towards smaller cities, balanced category mix (Apparel/General

Merchandise/FMCG salience: 44% / 29% / 27%) and a strong portfolio of own brands

(~74% revenue contribution). With significant room for expansion into virgin areas in its

large markets and underpenetrated states, we forecast ~100 annual net store adds for VMM

over FY26-28E, taking the overall store footprint to ~995 stores by FY28. We expect VMM

to clock ~HSD SSSG led by formalization tailwinds in the smaller cities and own initiatives

(portfolio expansion, using data for enhancing consumer engagement, scaling up of

hyperlocal business). Cost leadership is at the heart of the business and is well reflected in

its operating margin profile, which we believe is among the best in the industry, and we build

in modest margin expansion, largely led by sourcing efficiencies and operating leverage

benefits. VMM’s asset-light expansion strategy, tight focus and working capital

investments provide high return ratios for the company (adj. ROE/ROCE of 32%/45% in

FY26).

Valuation

Our Sep-27 price target of Rs145 is based on a one-year forward P/E target multiple of 48x,

which is at a ~10%/25% discount to TRENT/DMART’s, factoring in the higher revenue

growth outlook for TRENT (based on Bloomberg consensus) and the DMART’s execution

track record.

Risks to Rating and Price Target