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?
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