India’s fast-moving consumer goods (FMCG) sector has been on a robust growth trajectory, driven by multiple factors such as higher product prices, consumer-driven demand, and the essential nature of many goods.
The FMCG market, as of December 2022, reached a valuation of a whopping $56.8 billion, underlining its significance in the Indian economy.
Listed below is one multibagger stock associated with the FMCG sector that one could add to their watchlist for a potential upside of more than 50 percent:
V2 Retail Limited
With a market capitalization of Rs 1,788.61 crores, the stocks of V2 Retail Limited, offering apparel and general merchandise, etc, started their trading session on Monday at Rs 529.90 and currently trades at Rs 530, gaining approximately 1.30 percent compared to the previous close of Rs 523 apiece.
Nuvama, one of the well-known Domestic Brokerages in India, gave a ‘Buy’ recommendation on the stocks of V2 Retail Limited and gave a target price of Rs 831, exhibiting a potential upside of 57 percent.
The rationale behind providing such a recommendation pertains to the proactive management steps yielding the required results, completion of store rationalization, consistent growth in revenue per sq. ft. (throughput), and many more.
Having a glance at the financials, the company’s prime business indicators, viz, its operating revenues as well as after-tax profits, reported some positive movements with the former rising from Rs 231 crores during Q2FY24 to Rs 374 crores during Q3FY24, and the latter, keeping the timeframe the same, transitioning from losses of Rs 6 crores to profits of Rs 24 crores.
Keeping a purview of the last six months, the company’s stock has proven to deliver multibagger returns of around 167 percent to its stakeholders, i.e., if someone had invested Rs 1 lakh into the company’s stock six months ago, it would have converted to Rs 2.67 lakhs.
According to the latest presentations, the retail company’s store count stands at 107 and the total retail area was reported to be approximately 11.40 lakh sq. ft. The same-store sales growth (SSSG) stood at around 47 percent for Q3FY24 compared to (3.6 percent) for Q3FY23.
V2 Retail Limited is a retail company engaged in retail sales of garments, textiles, and other accessories in India. The company carries out business as a dealer, wholesaler, agent, distributor, etc. Geographically, the company derives a majority of its revenue from the sale of apparel within the domestic market.
Written by Amit Madnani
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