30,000% rally in 10 years! Can multibagger stock V2 Retail mint more money for investors?

Multibagger Stock: Mid- and small-cap stocks have experienced a wave of selling in recent sessions as investors reassess their valuations, following the modest performance of most companies in the December quarter, causing them to touch multi-month lows.

In contrast, some stocks have managed to perform well despite the market trend. One such stock in this regard is V2 Retail, which has surged 10% so far in January, while the Nifty Smallcap 100 index has fallen by 12% during the same period.

The stock has been maintaining the same momentum over the past few years, continuing to surge even while the broader market struggled. From a price of ₹85 per share in February 2023, the stock has risen by 2,135% and is now trading at ₹1,900 apiece.

Impressively, during this period, the stock remained in positive territory for 21 out of 24 months, highlighting its consistent performance. Over the past decade, it has delivered a remarkable gain of 30,000%. This week, the stock reached a new record high of ₹1,933 per share.

V2 Retail is one of the fastest-growing retail companies in India, offering a portfolio of products, including apparel and lifestyle products.

Stellar performance in Q3

The company reported a stellar overall performance in Q3FY25 despite a higher base and subdued consumer sentiment. Profit after tax grew by 117% year-on-year (YoY) to ₹51.2 crore, while revenue from operations surged by 58% YoY to ₹590.9 crore.

Revenue per square foot grew 12% YoY to ₹14,628 (annualized) on healthy SSSG. Gross margin expanded by 50 basis points YoY to 32.1% due to a higher contribution from MRP sales (91% versus 86% YoY).

On the operating front, EBITDA reached ₹111.5 crore, compared to ₹60.9 crore in Q3FY24, registering an 83% YoY growth. The EBITDA margin stood at 18.9% for Q3FY25, up from 16.3% for Q3FY24.

The company added 21 stores in Q3FY25, bringing its store count to 160. On a YoY basis, volume grew by 34%, ASP rose 18% to ₹343, and total area grew 51% to 17.2 lakh sq. ft.

Is stock poised for further gains?

Following the company's strong performance, domestic brokerage firm Nuvama Professional Clients Group retained its 'buy' rating on the stock and raised its target price to ₹2230 per share, citing V2 Retail's steady store expansion and higher revenue per square foot.

The brokerage highlighted that the company has the potential to grow at a sales CAGR of 50% over the next three to four years, which could result in margin expansion and improved store metrics.

It stated that the company is aspiring to be a pan-India retail player and sees ample growth opportunities over the next 10 years. Given the upgrade to its store addition targets and higher-than-expected SSSG, the brokerage raised its FY26 revenue, EBITDA and PAT estimates by 5%,10% and 22%.

As peers such as V-Mart Retail and Zudio have over 500 stores each, the brokerage said the company too can achieve healthy growth rates over the longer term. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.