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On Tuesday, Vishal Mega Mart Ltd (VMM:IN) shares received a positive outlook from Jefferies, as the firm initiated coverage with a Buy rating and set a price target of INR125.00. The retail company, known for its value offerings, especially in smaller cities, was highlighted for its strong performance and potential for continued growth.
Jefferies' analysis pointed out Vishal Mega Mart's significant presence in Tier-2 cities and beyond, positioning it as a comprehensive shopping destination with a focus on apparel and a substantial share of private labels. The firm's analysts were impressed by the store economics, noting that a typical new store could expect a payback in less than two years.
The investment firm forecasts a compound annual growth rate (CAGR) of approximately 27% in earnings from the fiscal year 2024 to 2027. This optimistic projection is supported by the company's solid balance sheet, which boasts a net cash position and best-in-class return ratios, according to Jefferies.
The endorsement from Jefferies comes as Vishal Mega Mart continues to expand its footprint, capitalizing on the growing demand for value retail in India's burgeoning market. With a business model that emphasizes cost-effectiveness and a diverse product mix, the company is well-positioned to leverage the opportunities in the retail sector.
Investors and market watchers will be keeping a close eye on Vishal Mega Mart's performance, as the company aims to meet these growth expectations and solidify its position in the competitive retail landscape. The positive initiation by Jefferies is likely to bring increased attention to the company's stock in the coming days.
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