I think the High PE ratio might be another reason.
New stores coming up in the untapped NE markets
Given the considerable decline in the market price, the current price looks good to me given the management’s continued aggression in store expansion (projected to be 40 per year for the next three years) along with a new warehouse with a capital of 100Cr. 2cr is the investment per store as per the management which can be easily funded by the internal accrual (80cr per year).
If all of this indeed materialises, then the current price looks like a good entry point. Any other opinions or Am I too optimistic about this?
Disruption .
With new high speed broadband & delivery access . Amazon /Flipkart / AJIO are threats to the business model . With the way sears JC penny collapsing in US .
Not going to happen that soon.
Online retailers need a huge amount of logistics support to penetrate Tier 3 and 4 towns. Would be interesting to see the penetration of etailers in 3/4 towns and also for which category. In case there is a return of goods then it just adds on to the costs at their end
Consumer behaviour will be the biggest so called barrier…touch/feel, trialing before purchasing is still relevant and important in these towns as they don’t want to blow up their hard earned money in purchasing something which doesn’t fit.
If you see the performance of V Mart from the start of the year till date, it has managed to perform quite well…and held its own amongst the best of the mid-caps and large-caps…despite being in the ASM list…
But market sentiments may play a spoilsport…and drag the price down. With 3 major state elections around the corner…Rajasthan, MP and Chattisgarh…any loss for BJP would impact the market.
Personally I’m willing to wait till the general elections before starting to invest…just to get these emotional / sentimental issues out of the way.
VMart is one of the key players to leverage on emerging Bharat theme…thats my personal fav.
V-mart posted loss for Q2. Could anyone find out the reason or attend their concall to find out the same?
Company has made provision for investment in I L & F S which it feel is doubtful to recover now due to which loss is reported
Though it is small amount 12 crore but yes co has suffer selling rout has name associated with ILFS
Another interview highlighting the challenges and the Holi sales off-take
Really, transferring shares doesn’t incur ltcg tax?
V-Mart to hire 2,000 people, invest Rs 115 crore for 60 new stores in FY20
IBEF: September 02, 2019
Value fashion and lifestyle products retailer V-Mart Retail would hire 2,000 people and invest Rs 115 crore (US$ 1.64 million) this fiscal to expand its footprint, a top company official said.
The retailer, which mainly operates in tier-II and III cities, plans to add around 60 stores this fiscal, taking its total count to 275.
The company also expects the contribution of its private labels to increase to around 75 per cent of total sales, from 70 per cent currently. “We have plans to add 60 stores this year (fiscal) in our network, taking the total count to 275,” V-Mart Retail Chairman and Managing Director Lalit Agarwal told PTI.
“We would hire around 2,000 people this fiscal to enhance our back-end support and manpower,” he said, adding that the company presently has 7,000 employees. In 2018-19, V-Mart Retail Ltd had posted a revenue of Rs 1,433.75 crore (US$ 20.5 million).
V-Mart has already opened 20 new stores this fiscal and now operates 233 outlets.
company plans to open new stores in Bihar, Jharkhand, West Bengal, Odisha and north eastern states, besides markets like Madhya Pradesh and Rajasthan.
“We would be investing around Rs 1.5 crore (US$ 0.02 million) per store (on average) and additionally invest around Rs 25 crore in warehouses and training of staff etc,” he said. “The investment would primarily come from internal accruals and some from debts from financial institutions.” Agarwal said 75 per cent of V-Mart’s stores are located in just four states – Uttar Pradesh, Uttarakhand, Jharkhand and Bihar.
“Consumption levels are much higher in the markets we operate in. These markets are under-served. We will continue to go deeper and focus on tier II, III and IV towns as we expand and we will also keep on adding new states,” he added.
The company is also working on an omni-channel retail strategy by integrating offline stores with its online e-commerce portal.
“We have piloted it in some of the stores and would soon implement it pan India by the end of this fiscal,” he added.
V-Mart, which opened its first store in 2004 in Ahmedabad, Gujarat, now has presence in 18 states.
Last month, V-Mart Retail had opened three new stores in Nagaland, Jharkhand and Rajasthan.