#COMPANY #POTENTIAL

• Indian appliances and consumer electronics industry stood at US $9.84 billion in 2021 and is expected to more than double to reach ₹1.48 lakh cr (US $21.18 billion) by FY25. (Source : IBEF) • The Room Air Conditioner Market (RAC) grew 45% over FY22 in value terms. As a result, the overall market size grew to ₹22,750 cr in FY23, of which the market for central air conditioning, including central plants, packaged and ducted systems, and VRF systems was around ₹4,250 cr, while the market for room air conditioners comprised the balance ₹18,500 cr. • The overall AC industry (both residential and commercial), currently valued at around ₹27,500 cr in FY24, is likely to double in the next four years. In FY24, of which the market for central air conditioning, including central plants, packaged and ducted systems, and VRF systems was around ₹4,500 cr, while the market for room air conditioners comprised the balance ₹23,000 cr. • In FY23, the Indian RAC has grown to 8.4 million units and 10 million units in FY24. • The demand growth in the segment is expected on the back of rising urbanization, increasing disposable income of the middleclass population, easy consumer credit, wide usability of online sales and decreasing replacement cycle. • As a part of the Atmanirbhar Bharat Program, the Government has announced Production Linked Incentive (PLI) Schemes for many product categories, the ecosystem for air conditioning components is developing fast in the country. In pursuit to secure their supply chain, European and American players are looking at reliable and capable manufacturers outside China. • E-commerce, as a distribution channel, has been witnessing phenomenal growth owing to the impetus provided by the Pandemic, thereby advancing its penetration in the country by 12-18 months. The Indian E-commerce market is expected to grow 21% to ₹58,580 cr (US $75 Billion) in 2022 and is likely to reach ₹1,01,547 cr (US $130 Billion) by 2025 growing at a CAGR of over 20%. The number of internet connections in 2021 increased significantly to 830 million, driven by the ‘Digital India’ programme.

#COMPANY #OUTLOOK

• The company aims to grow faster than the market in its core businesses of air conditioning and commercial refrigeration. The company is also planning to grow revenue from adjacencies such as Air Coolers, MEP services for Water Supply projects, and Railway Electrification. It will consolidate its position in the Middle East, Africa and South Asia regions with deeper market penetration and the introduction of innovative products and solutions. • It aims to expand the global footprint by entering North America and Europe as Original design and manufacturing (ODM) solutions provider. • It aims to strengthen its R&D and innovation capabilities and deploy total cost management programme across various businesses and functions. • The company targets to achieve 15% market share in FY25 in the RAC segment. • There is enhanced focus on increasing penetration in Tier 3/4/5 cities and developing more executive dealers there. • They have guided for a margin of ~7%-7.5% for electro-mechanical projects & commercial air conditioning systems segment and ~8%-8.5% for unitary products and commercial refrigeration products segment. • Capex for the upcoming 3 years will be in the range of ~₹750-₹800 crore per year. • The Sri City Plant produced more than 300,000 air conditioners in FY24 and is on course to double that production in the current fiscal year. • It plans to invest over ₹50 cr in advertising during the upcoming summer season.

Blue Star Limited 1550-1715
Expected level 2000
Support 1362

213🚀long term level hit

Good morning

Good morning

Vishal Mega Mart Company Details Report

Vishal Mega Mart (VMM) is one of India’s largest offline-first value retailers, catering to a population of ~1b across the middle- and lowincome segmentsVishal Mega Mart .  VMM is a unique Indian retailer with: 1) a strong presence in tier 2+ cities (696 stores in 458 cities); 2) well-diversified exposure to key consumption baskets—Apparel (44%), General Merchandise (GM) & Fast-Moving Consumer Goods (FMCG; both ~28%); 3) a strong and affordable private brands portfolio (73% revenue share); and 4) one of the lowest cost structures in the industry.  We believe VMM’s uniqueness provides it with a strong moat against intense competition from both offline and online value retailers.  Expect VMM to clock a revenue/EBITDA CAGR of 19%/20%, driven by: 1) ~13% CAGR in store additions, 2) consistent double-digit SSSG, and 3) modest operating leverage benefits.  Given VMM’s debt-free balance sheet and robust cost controls, we expect ~24% PAT CAGR and cumulative pre-IND-AS OCF/FCF generation of ~INR32b/INR23b over FY25-28.  Initiate coverage on VMM with a BUY rating and a TP of INR165, premised on DCF-implied ~45x Sep’27E pre-INDAS 116 EV/EBITDA (implying ~31x Sep’27E reported EBITDA and ~69x Sep’27E P/E). 09 Page # 42 Initiate coverage with a BUY rating and a TP of INR165 10 Page # 44 Shift from unorganized to organized retail a multi-decadal growth story 11 Page # 51 Company overview 12 Page # 53 Key risks and concerns 13 Page # 55 Management background 14 Page # 56 ESG initiatives 15 Page # 57 B

Vmm is One-of-a-kind retailer catering to the ~INR70t opportunity  VMM is one of India’s largest offline-first value retailers, catering to a population of ~1b across the middle- and low-income segments. It serves a substantial market valued at ~INR70t, which is likely to reach ~INR100t+ by CY28.  It has a strong footprint of 696 stores across 458 cities spanning 30 states and UT, with ~72% of its stores located in tier 2 cities and beyond.  VMM is a unique retailer with well-diversified exposure across key consumption baskets—Apparel (44%) and GM & FMCG (both ~28%), that provides an opportunity to increase its share of customers’ wallets.  VMM has a strong and affordable portfolio of its private brands, which contributes ~73% of its revenue. Its private-labels in FMCG are sourced from reputed vendors such as Indo Nissin, Bikanerwala, and CCL Products and are priced at a significant discount to branded competitors.  The company has one of the leanest cost structures among Indian retailers, with a cost of retailing (CoR; including rentals) of ~INR1,800/sq ft (at least 20% lower than its nearest competitor). This enables VMM to offer the most competitive opening price points across several categories.

A play on rising aspirations in Tier 2 cities and beyond Unique retailer with a diversified category mix, affordable own brands play

VMM is among the largest offline-first value retailers in India, catering to a population of ~1b in the middle- and low-income segments. It services an INR70t Indian aspirational retail market, which is expected to reach INR100t+ by CY28.  Strong store footprint with long runway for growth – VMM has a strong footprint of 696 stores across 458 cities spanning 30 states and Union Territories, with ~72% stores in tier 2 cities and beyond. The company operates in a big-box retail format with an average store size of ~17.5k sqft.  Well-diversified category mix – VMM boasts a well-diversified category mix with over 25% revenue contribution from three major categories—Apparel, FMCG, and GM, which provides a large TAM and an opportunity to increase its share of customers’ wallets. Comparatively, other value-focused retailers primarily target either apparel (Zudio, V2 Retail, Style Baazar, and V-Mart) or grocery (DMart).  Strong and affordable own brands portfolio: VMM has a strong and affordable portfolio of own brands, which contributes ~73% of its revenue. Its private-label in FMCG are sourced from reputed vendors such as Indo Nissin, Bikanerwala, CCL Products etc. and are priced at a significant discount to branded plays.  Store payback in less than two years: VMM’s efficient working capital management, superior cost controls, and disciplined asset-light approach have enabled strong store economics, with ~15% pre-INDAS EBITDA margin at the store level, over 50% RoCE, and a payback period of less than two years.  Lean cost structure: VMM has one of the leanest cost structures among Indian retailers, with a CoR (including rentals) of ~INR1,800/sq ft (at least 20% lower than its nearest competitor). This enables the company to offer the most competitive opening price points across several categories.

Long runway for growth in the INR70t aspirational retail industry

 The tier 2+ towns account for ~74% of India’s retail spends (~INR56t), which remains largely dominated by unorganized retail (~90% share).  However, rising brand awareness, store expansion by organized retailers, and greater focus on better-quality products have led to a marked shift toward organized, one-stop shopping destinations, even in semi-urban and rural India.  VMM is a play on rising consumption and aspirations in Tier 2 and beyond India. Its well-diversified category mix and the lowest opening price points enable it to serve ~1b middle- and low-income consumers, representing ~INR70t aspirational retail market (as of CY23).

Healthy store economics create room for accelerated store expansions

VMM’s retail footprint spans 696 stores over 12m sq ft across 458 cities. It operates a big-box retail format, with an average store size of ~17.5k sqft.  During FY22-24, VMM added ~55 net stores annually. However, the pace of store additions has accelerated, with ~85 net stores added in FY25.  The company’s efficient working capital management, superior cost controls, and disciplined asset-light approach have enabled strong store economics with ~15% pre-IND-AS EBITDA margin at the store level, over 50% RoCE, and a payback period of less than two years.  Management has indicated that VMM could potentially add 100 stores annually over the next ~15 years across 50 tier 1 cities and 1,250 tier 2 cities with populations exceeding 50k.  Given the long runway for growth, strong store economics, and entry into newer territories, we believe the pace of store additions will likely remain elevated over FY26-28, as VMM expands its presence in states such as Tamil Nadu, Gujarat, and Maharashtra.  Overall, we build in ~13% CAGR in store additions for VMM over FY25-28, taking the total store count to 1,000 by FY28.

Well-diversified portfolio enhances VMM’s TAM and share of wallet

 VMM boasts a well-diversified category mix with over 25% revenue contribution from three major categories—Apparel, FMCG, and GM.  Comparatively, other value-focused retailers mainly target either apparel (Zudio, V2Retail, Style Baazar, and V-Mart) or grocery (DMart).  VMM’s diversified category mix makes it a one-stop destination for the entire family, expanding its total addressable market (TAM) and driving higher wallet share among consumers.  The GM and FMCG sections are typically located on the upper floors of VMM stores. Although these categories have lower gross margins compared to Apparel, they serve as a footfall driver for VMM.

SWOT ANALYSIS

Financial performance

Key risks and concerns

 Dependence on third-party vendors for manufacturing of own brands (73% revenue share)  Rising competition from other offline and online value retailers  Inflationary risks and inability to pass on price hikes  Sales concentration in select states  Follow-on stake sales from promoters (private equity-backed) and a lack of clarity on long-term ownership

Multi-category, own-brand portfolio acts as a strong moat for VMM

 VMM has successfully established a diverse and expanding portfolio of 26 own brands across key consumption baskets, with revenue contribution from these brands steadily rising to 73% by FY25.  In FY25, 19 of VMM’s own brands surpassed INR1b in sales, with six brands exceeding INR5b, demonstrating strong brand acceptance. VMM’s own brands typically offer the lowest opening price points, which makes them attractive for value-conscious consumers.  VMM operates a 100% private label portfolio across men’s, women’s, and kids’ fashion, covering a wide range of categories such as denim, ethnic wear, innerwear, and sportswear.  The company has significantly expanded its own brand offerings in GM under the ‘Tandem’ brand for home appliances, introducing products such as air fryers, garment steamers, sound bars, and kitchen tools.  VMM’s private labels account for ~35% of its FMCG revenue and hold ~45% share in categories where they are present. Moreover, the volume share is significantly higher, given the 20-50% price discount vs. leading brands.

Valuation and view

 We expect VMM to post a revenue/EBITDA CAGR of 19%/20%, driven by: 1) ~13% CAGR in store additions, 2) consistent double-digit SSSG, and 3) modest operating leverage benefits.  Given VMM’s debt-free balance sheet, robust cost controls, and tight working capital management (~15 days net-working capital), we expect ~24% PAT CAGR.  Over FY25-28, we expect VMM to generate a cumulative OCF/FCF of ~INR32b/ INR23b, which should enable accelerated store expansions.  We believe the company’s diversified category mix, ownership of opening price points, significant contribution from its own brands, and lean cost structure provide it with a strong moat against intense competition from both offline and online value retailers.  We initiate coverage on VMM with a BUY rating and a TP of INR165, premised on DCF-implied ~45x Sep’27E pre-IND AS 116 EV/EBITDA (implying ~31x Sep’27E reported EBITDA and ~69x Sep’27E P/E). Our DCF-implied multiples are at ~4-7% premium to VMM’s average trading multiples since the listing.  Based on our reverse DCF analysis (10.5% risk-free rate, 6.5% terminal growth rate), our TP of INR165/share implies ~11%/13% revenue/pre-INDAS 116 EBITDA CAGR over FY25-50E, driven by ~115 store additions annually and ~4% CAGR improvement in store productivity.  Despite strong performance since the listing (up 75% from IPO price), we believe the risk reward remains attractive (bull: INR210/share; bear: INR120/share)

Vishal Mega Mart 90-110
Expected level 135
Support 88

Good morning

The Ramco Cements Limited Company Details Report

The Ramco Cements Limited is a flagship company of the Ramco Group and is headquartered in Chennai. It is an Indian cement manufacturer with an installed annual production capacity of 24.3 MTPA (million tonne per annum) and 15.9 MTPA of clinker capacity as on 31st March 2025 and ready-mix concrete has installed capacity of 56 m3 per hour. The satellite grinding units are promoted very near to the market so that the distributors can meet demand of the consumers locally. It catered to more than 9,400 dealers and more than 23,500 sub dealers as on 31st March 2024. Its regional distribution of cement capacity as on 31st March 2025 was as follows- 50% Tamil Nadu, 33% Andhra Pradesh, 9% West Bengal, 8% Odisha and 1% Karnataka It manufactures and markets OPC (Ordinary Portland Cement) grade to multiple types of blended cement, ready mix concrete and dry mix products. The company has integrated cement plants and grinding units situated in Tamil Nadu, Andhra Pradesh, West Bengal, Karnataka and Odisha. The integrated cement and grinding units' capacity state wise as on 31st March 2024 was Tamil Nadu 51%, Andhra Pradesh 31%, West Bengal 9%, Odisha 8% and Karnataka 1%. Major cement brands of the company are Ramco Supercrete, Ramco Supergrade, Ramco Sulphate Resisting Cement and Ramco SuperFast. Its captive power capacity stood at 166 MW of wind power, 175 MW of thermal power plants capacity and 43MW waste heat recovery system (WHRS) 43 MW as on 31st March 2024. Green power capacity increased to 211 MW as on 31st March 2025.

Cost analysis