As per the AR, they had 40 stores in FY 20, which increased to 78 in FY 22, so doubled, but revenue remained almost same ie around 800 crore levels. If one calculates, pre covid in FY 20 they were doing almost 20 cr per store sales, so with 90 stores already, they may hit 1800 cr sales run rate, even if they hit pre covid per store sales, AR says ssg is 15 %, that will be additional. This will be the first full year without any lockdowns for all new stores.
In H1 FY 23 they have already opened 10 stores, so assuming same rate may end FY 23 with 100 + stores, having a revenue rate of 2000 cr min, without considering ssg, which will be more than 2x of FY 22 sales of 890 cr.
If they continue to open 20/25 stores every year in MP, UP, Jharkhand in FY24 and 25, then having 150 stores in FY 25 is a reasonable expectation, so it is min 3000 cr sales rate, considering no ssg.
A lot depends on execution and consumer electronics demand also.
This is also a story of unorganized to organized retail and increasing penetration in under penetrated markets as per capita income increases.
ROCE is 78 %, ROE 51 %, ( asset light) so if the growth sustains market may give good valuation of 40-50 PE
Numbers estimate: Assuming no margin improvement, conservative estimate of 1500 cr sales in FY 23, they may do 70 to 80 cr PAT, FY 24 2300 cr sales, may do 135 cr PAT
So if they execute well on forward PE, this is less than 15 PE.
There is v little information available about this co apart from AR and screener, I hope management comes out with some investor ppt and do con calls to communicate better.
I think @ayushmit bhai also tracks this company closely and may wish to share his view
Disc : Invested and views are biased
Subscribe To Our Free Newsletter |