Vishal Mega Mart vs V-Mart: Motilal Oswal sees up to 50% upside in one value fashion stock

Two stocks stand out in its latest report — V-Mart Retail and Vishal Mega Mart (VMM) both of which the brokerage believes still have room to climb further.

Motilal Oswal has set a target price of Rs 975 for V-Mart Retail. With the current market price, this works out to an upside of roughly 13%. For Vishal Mega Mart, the target is Rs 165. Against the current price, this implies upside of nearly 50%.

But what is driving the brokerage’s positive view? Let’s take a look – 

Value fashion demand holds up despite pressure

The quarter in question, April to June 2026, fell right in the middle of Adhikmaas – an extra lunar month considered inauspicious for big purchases in many Indian households and came alongside general inflationary pressure on family budgets.

However, value fashion retailers managed to maintain their growth momentum.

According to Motilal Oswal, the four listed value fashion retailers recorded around 25% year-on-year revenue growth in the first quarter of FY27. This was supported by nearly 20% growth in retail area and around 4.5% improvement in productivity.

The brokerage said, “Demand momentum remains healthy, profitability continues to improve.”

V-Mart and Vishal Mega Mart stand out

Sales and profitability also showed signs of strengthening.

Promotional activity resulted in an aggregate gross margin decline of around 25 basis points. However, better cost control and operating leverage helped offset this pressure.

Aggregate pre-Indian Accounting Standards (Ind AS) EBITDA increased around 26% year-on-year, while the margin improved by 10 basis points to 9%.

V-Mart and Vishal Mega Mart performed better on this front. Their EBITDA margins expanded by around 75 basis points and 25 basis points, respectively.

Motilal Oswal said, “Operating leverage and tighter cost-control measures offset the impact of minimum wage hikes and GM contraction.”

Why are retailers adding stores so quickly?

The four retailers together opened 107 net new stores in the quarter, taking their combined network past 2,000 stores and 25.5 million square feet of retail space. South India stood out as the newest growth frontier, while the North and East remain the biggest existing markets.

Vishal Mega Mart added 24 stores, while V-Mart added 14.

Motilal Oswal noted, “Store economics remain healthy despite accelerated rollouts, with new stores ramping up faster and newer geographies delivering productivity comparable to that of mature markets.”

Why is the brokerage positive despite near-term risks?

Motilal Oswal sees a structural shift in India’s retail market. Consumers in Tier 2, Tier 3 and Tier 4 cities are increasingly looking for organised stores offering multiple products under one roof.

The brokerage expects this shift, along with greater private-label penetration and rising aspirations in smaller cities, to support long-term growth.

It said, “We remain structurally positive on value fashion retailers.” Motilal Oswal expects both companies to deliver high-teens revenue compound annual growth rate (CAGR) over FY26-29, alongside improving profitability.

However, raw material and wage inflation remain risks. 

For now, the brokerage believes these concerns can be managed through sourcing efficiencies, product-mix changes and calibrated price increases.

Disclaimer: This article is based on research reports from one or more brokerage firms and is for informational purposes only. The views, target prices, and recommendations expressed are those of the respective brokerage firms and do not reflect the official policy or position of Financial Express. This should not be construed as an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor before making any investment decisions.