Lalit Agarwal of V-Mart Retail says since the tier II, III cities haven't shown tendency to shop/buy online, they do not see threat from online sales for now at least.
V-Mart Retail which currently operates in tier II and tier III cities have plans to open 7 additional stores by end of March, says CMD, Lalit Agarwal in an interview to CNBC-TV18. The company has opened 20 stores in the last 2-3 years, and currently have 62 stores.
Agarwal is very bullish on the company's growth going forward, which basically comes from tier II and tier III cities.The company is into affordable fashion that is easy on the pocket for the youth in these cities who want to replicate their role models, he adds.
Religare which covers the stocks has a buy rating on it.
The company has plans to add another 60 stores in the coming two and half years for which the IPO proceeds will be used, says Agarwal. Post the IPO there would be no need for more funds, he adds.
Agarwal says since these cities haven't shown tendency to shop/buy online, they do not see threat from online sales as of now at least.
Below is the transcript of Lalit Agarwal's interview with Anuj Singhal and Ekta Batra on CNBC-TV18.
Ekta: One of the things that I was looking at was your same store sales growth which in fact has been historically at around 10 percent levels but as of 9 months it has slowed down to around 7.5-8 percent, can you tell us what you are clocking at this point in time and if you are estimating a pick up, where is it coming from?
A: The kind of business model that we perceive, the kind of rate of growth in the same store we have received, we still feel there is enough more space to be covered and we are right now continuing with almost similar rate of growth which we had shown in the last 9 months.
I see a lot of aspirations with the common man - the middle income group and the lower middle income group who lives in this smaller town of tier II and tier III cities and there is also a lot of youth population coming up there. So this youth population with their aspirations is bringing pushing up consumption, basically of affordable fashion retail. So that is where the growth is coming from and we are targeting a better growth rate maybe in the next year to come.
We feel because the kind of stores that we open up in these district levels, there are not many opportunities available for the consumer to shop from and they do not have those big stores or malls to shop from, so these guys will look forward to certain products which are fashionable, which can help them copy their role models in the media. Although they want to replicate their role models, their pocket size is limited. So they want go for certain fashion, which is affordable to them. That is where we are targeting to hit the consumer and provide such kind of products, which can bring in revenue for us.
more to come
V-Mart Retail stock price
On March 27, 2015, at 14:05 hrs V-Mart Retail was quoting at Rs 522.00, down Rs 3, or 0.57 percent. The 52-week high of the share was Rs 652.00 and the 52-week low was Rs 265.00.
The company's trailing 12-month (TTM) EPS was at Rs 20.46 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 25.51. The latest book value of the company is Rs 94.48 per share. At current value, the price-to-book value of the company is 5.52.
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