EduInvesting 5-Year Recap Series – Vishal Mega Mart Ltd (NSE: VMM)
📌 At a Glance
From ₹45 Cr profit in FY20 to ₹632 Cr in FY25, Vishal Mega Mart has pulled off a profit transformation that would make even Ambani ask for their CA’s number. Yet the street doesn’t seem hyped. No dividend. 93x P/E. And zero headline buzz. Is this retail rocket silently building for liftoff — or just another overvalued FMCG fantasy?
🛒 1. About the Company
Vishal Mega Mart is the D-Mart of the mass market.
- 🧥 Apparel, 🧂 FMCG, 🪑 home goods – all under one slightly flickering fluorescent roof.
- Operates 645 stores across 414 cities, focused on Tier-2, Tier-3 markets
- Targets lower-middle-income and value-conscious buyers
- Runs a hub-and-spoke model with its own e-commerce platform (aboutvishal.com)
- IPO’d recently, but been hustling in India since 2001
If D-Mart is the Reliance of retail, Vishal is the Micromax — rugged, everywhere, and built for Bharat.
🧑💼 2. Key Managerial Personnel (KMP)
| Name | Designation |
|---|---|
| Mr. Subodh Kant Sahay | Chairman (Non-Exec) |
| Mr. Rakesh Ranjan | Managing Director |
| Mr. Saurabh Mishra | CFO |
| Mr. Krishnan Balasubramanian | Independent Director |
📢 June 2025: Court fined the company ₹2.75 lakh for food safety violations. VMM shrugged, restocked the aisles, and moved on.
📊 3. Financials (FY21–FY25)
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | OPM (%) | ROCE (%) | Debt (₹ Cr) | CFO (₹ Cr) |
|---|---|---|---|---|---|---|---|
| FY21 | 4,452 | 82 | 0.18 | 14% | 7% | 770 | 1,054 |
| FY22 | 5,589 | 203 | 0.45 | 15% | 8% | 1,790 | 657 |
| FY23 | 7,586 | 321 | 0.71 | 14% | 9% | 1,462 | 636 |
| FY24 | 8,912 | 462 | 1.02 | 14% | 11% | 1,483 | 830 |
| FY25 | 10,716 | 632 | 1.37 | 14% | 13% | 1,729 | 1,399 |
📈 5-Year CAGR
- Revenue: 20%
- Profit: 73%
- OPM: Steady at 14–15%
- ROCE: Creeping up (finally)
💰 4. Forward-Looking Fair Value Estimate
- FY25 EPS = ₹1.37
- Assume forward P/E of 50–60x for high-growth retail (below D-Mart’s 100x)
🔮 Fair Value Range = ₹69 – ₹82
Wait. But CMP is ₹127.
Yep. It’s already trading at 93x earnings — and almost 10x book value. The market has priced in 2035 profitability in 2025.
🧾 5. Business Model & Growth Strategy
- 🏬 Store Count: 645 outlets and growing, targeting towns where Domino’s hasn’t reached yet
- 📦 Hub-and-Spoke Model: Efficient backend, fast turnaround, keeps prices low
- 📱 Digital Play: App and website for Bharat 2.0 users — not yet Amazon-killers, but mobile-savvy moms in Ranchi use it
- 📦 Private Labels: Growing share in apparel and food FMCG — better margins
- 📉 No Debtors: Literally 0–2 debtor days. You pay, you go. No trust issues.
🤖 6. Recent Developments
- ⚖️ Fined for food safety violations — nothing alarming but keep an eye
- 📊 May 2025 quarter:
- Sales: ₹2,548 Cr
- Net Profit: ₹115 Cr
- OPM: 14%
- Profit up 88% YoY
🧮 This quarter gave us annualized EPS ~₹1.00+, showing the runway for FY26.
📉 7. Risks & Red Flags
- ❌ No Dividend: Despite profits, they don’t pay you — reinvestment or tight margins?
- ⚠️ High Valuation: 93x P/E. D-Mart level P/E, but not yet D-Mart level moat.
- ⚖️ Food Safety Penalties: 2 court penalties in 1 week of June 2025 = bad optics
- 🧱 Debt Creep: Borrowings back up to ₹1,729 Cr. Watch leverage levels.
- 🧼 Thin Margins: OPM stuck at 14% – not bad, not great.
- 🧾 Low ROE: 10.5% ROE in FY25 = mediocre returns on growing net worth.
🛍️ 8. Peer Comparison (as of June 2025)
| Company | CMP (₹) | P/E | ROCE (%) | Sales Qtr (₹ Cr) | Profit Qtr (₹ Cr) |
|---|---|---|---|---|---|
| Avenue Supermarts | 4,201 | 101 | 18.0 | 14,871 | 550.8 |
| Vishal Mega Mart | 127 | 93.1 | 13.1 | 2,547 | 115.1 |
| V-Mart Retail | 3,397 | 311 | 8.4 | 780 | 18.5 |
| Shoppers Stop | 503 | 509 | 8.0 | 1,064 | 1.99 |
| Electronics Mart | 123 | 29.7 | 10.3 | 1,718 | 31.5 |
💡 EduInvesting Insight:
Vishal has the best profit growth and scale after D-Mart — but valuations are starting to look full.
📦 9. Inventory + Working Capital
- Inventory Days: 88 (steady)
- Payables Days: 70 (industry norm)
- Working Capital Days: 28 – creeping up, needs monitoring
Good signs:
✅ Positive operating cash every year
✅ Capex manageable
✅ Negative debtor cycle = cash-first model
🧠 10. EduInvesting Take
“Vishal Mega Mart is like that small-town cousin who quietly built a ₹60,000 Cr empire while you were busy watching Nykaa ads. It’s grown sales, grown profits, scaled stores — and still no one gives it front page.”
But here’s the twist — the stock isn’t cheap. It’s priced for perfection in a retail market that’s deeply imperfect. If rural demand slows or competition heats up (hi, JioMart), this P/E can deflate faster than a ₹99 inflatable swimming pool.
🛍️ Still, for long-term believers in Bharat’s rising consumption story — especially below the ₹500 price point — VMM is becoming too big to ignore.
📦 Bonus Fun Fact
🧴 VMM sells more sachets of shampoo, ₹99 kurtis, and 6-pack briefs in 1 quarter than Nykaa sells luxury skincare in a year. But guess who gets better valuations?
🏷️ Tags:
Vishal Mega Mart, VMM FY25 Results, Retail Stocks India, FMCG Retail Growth, Vishal Mega Mart Share Price Target, EduInvesting Recap Series, Midcap Retail India
🖊️ Author: Prashant Marathe
📅 Date: June 8, 2025
