FDC, V-Mart Retail hit record highs in weak market

FDC and V-Mart Retail have hit their respective record highs by surging up to 11% on the BSE in intra-day trade in otherwise weak market. FDC has rallied 11% to Rs 319 in early morning trade on back of heavy volumes. The trading volumes on the counter jumped more than 10-fold with a combined 1.05 million shares changed hands on the BSE and NSE till 01:23 pm. The stock surpassed its previous high of Rs 297 touched on February 12, 2018 in intra-day trade. Last month, on February 7, the board of directors of pharmaceutical company had approved the buyback proposal at a price of Rs 350 per equity share through tender offer. Since February 3, FDC intimated the stock exchanges regarding board meeting of share buyback, it zoomed 41% from Rs 232, against 5.6% decline in the S&P BSE Sensex. The stock turned ex-date for share buyback on February 28, 2018. The pharmaceuticals company reported a strong 94% jump in net profit at Rs 427 million in December 2017 quarter (Q3FY18) against Rs 220 million in the corresponding quarter of previous year.

Operational revenue grew 13% to Rs 2,488 million from Rs 2,201 million in previous year quarter. V-Mart Retail too hit a new high of Rs 1,960, up 7%, extending its 16% gain in past four trading sessions on the BSE. In past one month, the stock surged 37% as compared to 2.8% decline in the benchmark index. V-Mart is a medium-sized hypermarket format retail chain based at New Delhi. It is a multi-brand family retail store offering apparels, general merchandise and kirana. Primarily focusing on Tier- H & Tier- 111 cities which are located as standalone stores in high-street areas and shopping hubs. During Q3FY18, V-Mart reported an increase in revenue from operations by 13% to Rs 3,680 million, EBITDA by 30% to Rs 640 million, and net profit by 27% to Rs 367 million over the corresponding period last year. Same store sales growth (SSSG) for the quarter remained flat over a high base of 17% in Q3 of FY17. “Despite a sharp run-up in stock price over the past year, V-Mart remains a robust three to four-year growth story, with a combination of strong growth and sustainability of strong return ratios,” Systematix Institutional Equities said in result update. “We maintain a Buy rating, considering the strong balance sheet and growth trajectory, which will help sustain its premium multiples. However, the smaller scale of operations and execution risks associated with aggressive growth would keep V-Mart’s multiples at a discount to leading comparables like Future Retail and DMart,” the brokerage firm said with target price of Rs 2,085.