Stocks To Buy: Motilal Oswal 'bull case' projects 100% upside for shares of this retail chain

Shares of V2 Retail Ltd. gained on Monday, August 7, after brokerage firm Motilal Oswal initiated coverage on the stock.

The brokerage has initiated coverage on V2 Retail with a "buy" rating with a target price of ₹275 per share, indicating an upside of 27% from its previous closing price.

It said V2 Retail is a pure-play, offline-first value fashion retailer focused on India's tier-2/3 markets, catering to aspirational yet price-sensitive households.

Motilal Oswal said V2's differentiation stems from:

• Focused value-fashion retailer catering to the entire family, with selective lifestyle offerings across 400 stores in over 300 cities.


• A product-ownership model anchored by 90% private-label mix, with in-house design contributing 35-40%.


• Industry-leading store productivity at ₹923 sales per square foot (SPSF) as of FY26.


• A throughput-led cost structure delivering superior margins despite structurally lower gross margins than peers, the brokerage said.

Motilal Oswal said it believes V2's merchandise discipline, robust store economics and deep cluster-led penetration across underpenetrated markets provide a durable competitive moat.

The brokerage expects V2 Retail's revenue to grow at a Compounded Annual Growth Rate (CAGR) of 40% over financial year 2026-2029, its pre-Indian accounting standards (pre-IND AS) EBITDA, to grow at a 38% CAGR and its Profit After Tax (PAT) to grow at a 35% CAGR over the same timeframe, driven by 450 store additions, mid-single-digit same store sales growth (SSSG) and fixed-cost dilution on a scaling network.

It said its initiation and target price is premised on a discounted cash flow (DCF)-implied 15x estimated September 2028 pre-Ind AS EBITDA multiple, implying a 25x estimated September 2028 pre-Ind AS earnings per share (EPS).

Bull case

In a bull case scenario, Motilal Oswal has a target price of ₹440 per share, implying a 100% upside potential.

For the bull case scenario, Motilal Oswal assumes 49% revenue CAGR over FY26-29 compared to 40% in the base case. It expects stronger revenue growth to be driven by higher SSSG of 8% and faster store additions (area CAGR of 38% compared to 33% in the base case).

Driven by a better gross margin print and higher SSSG, Motilal Oswal expects pre-IND AS EBITDA margin to improve to 9.9% by FY28, 90 basis points higher than its base case.

The bull case target price is based on a price-to-earnings multiple of 30x estimated for September 2028 compared to 25x in its base case.

Bear case

On the flip side, in its bear case scenario, Motilal Oswal has a target price of ₹150 per share, implying a 34% downside potential.

It said in this scenario, it assumes a 24% revenue CAGR over FY26-29 and has moderated its SSSG expectation to 2% and subsequently built-in slower area ramp up of 19%.

It said a lower SSSG leads to negative operating leverage and it expects a lower EBITDA margin of 8.3% by FY28, which is 70 basis points lower than its base case assumption. The bear case price target values the stock at 20 times its September 2028 estimated earnings.

Key risks

Motilal Oswal said key risks for the stock are execution and site-selection risk from rapid geographic expansion, intensifying competition from national value-fashion players, and higher assortment as in-house design scales beyond 35-40%, potentially impacting sell-through, markets and store returns.

Stock reaction

Apart from Motilal Oswal, Nuvama is the only other brokerage that has coverage on the V2 Retail stock, which is a "buy" recommendation as well.

Shares of V2 Retail are trading 1.8% higher on Monday at ₹220.47. The stock has been flat over the last one month, but has declined 10.2% so far in 2026.

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