The brokerage has initiated protection on V2 Retail with a “purchase” ranking with a goal worth of ₹275 per share, indicating an upside of 27% from its earlier closing worth.
It stated V2 Retail is a pure-play, offline-first worth style retailer targeted on India’s tier-2/3 markets, catering to aspirational but price-sensitive households.
Motilal Oswal stated V2’s differentiation stems from:
- Targeted value-fashion retailer catering to the complete household, with selective way of life choices throughout 400 shops in over 300 cities.
- A product-ownership mannequin anchored by 90% private-label combine, with in-house design contributing 35-40%.
- Business-leading retailer productiveness at ₹923 gross sales per sq. foot (SPSF) as of FY26.
- A throughput-led price construction delivering superior margins regardless of structurally decrease gross margins than friends, the brokerage stated.
Motilal Oswal stated it believes V2’s merchandise self-discipline, sturdy retailer economics and deep cluster-led penetration throughout underpenetrated markets present a sturdy aggressive moat.
The brokerage expects V2 Retail’s income to develop at a Compounded Annual Development Charge (CAGR) of 40% over monetary 12 months 2026-2029, its pre-Indian accounting requirements (pre-IND AS) EBITDA, to develop at a 38% CAGR and its Revenue After Tax (PAT) to develop at a 35% CAGR over the identical timeframe, pushed by 450 retailer additions, mid-single-digit similar retailer gross sales progress (SSSG) and fixed-cost dilution on a scaling community.
It stated its initiation and goal worth is premised on a reduced money circulation (DCF)-implied 15x estimated September 2028 pre-Ind AS EBITDA a number of, implying a 25x estimated September 2028 pre-Ind AS earnings per share (EPS).
Bull case
In a bull case situation, Motilal Oswal has a goal worth of ₹440 per share, implying a 100% upside potential.
For the bull case situation, Motilal Oswal assumes 49% income CAGR over FY26-29 in comparison with 40% within the base case. It expects stronger income progress to be pushed by greater SSSG of 8% and sooner retailer additions (space CAGR of 38% in comparison with 33% within the base case).
Pushed by a greater gross margin print and better SSSG, Motilal Oswal expects pre-IND AS EBITDA margin to enhance to 9.9% by FY28, 90 foundation factors greater than its base case.
The bull case goal worth relies on a price-to-earnings a number of of 30x estimated for September 2028 in comparison with 25x in its base case.
Bear case
On the flip aspect, in its bear case situation, Motilal Oswal has a goal worth of ₹150 per share, implying a 34% draw back potential.
It stated on this situation, it assumes a 24% income CAGR over FY26-29 and has moderated its SSSG expectation to 2% and subsequently built-in slower space ramp up of 19%.
It stated a decrease SSSG results in destructive working leverage and it expects a decrease EBITDA margin of 8.3% by FY28, which is 70 foundation factors decrease than its base case assumption. The bear case worth goal values the inventory at 20 occasions its September 2028 estimated earnings.
Key dangers
Motilal Oswal stated key dangers for the inventory are execution and site-selection danger from fast geographic growth, intensifying competitors from nationwide value-fashion gamers, and better assortment as in-house design scales past 35-40%, probably impacting sell-through, markets and retailer returns.
Inventory response
Other than Motilal Oswal, Nuvama is the one different brokerage that has protection on the V2 Retail inventory, which is a “purchase” advice as nicely.
Shares of V2 Retail are buying and selling 1.8% greater on Monday at ₹220.47. The inventory has been flat over the past one month, however has declined 10.2% up to now in 2026.
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