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    V-Mart retail attractive business at decent valuations: Prakash Diwan

    Synopsis

    "They have optimised cost to such a large extent that I do not think in this business it is possible to exceed these kind of efficiencies."

    ET Now
    In a chat with ET Now, Prakash Diwan, Director, Altamount Capital Management, shares his views on V-Mart.

    ET Now: Have you looked at V-Mart retail at all?

    Prakash Diwan: Very closely, I think one of those remarkable things about this company has been the conviction with which they stood ahead, and stood aside from the rest of the pack in creating this business model.

    By the way they have a negative working capital cycle, the only thing which makes the stock attractive is the fact that it is not a capital intensive business, so that makes it not so large in terms of an balance sheet size. Interestingly, they have opened stores in very low cost properties which are not necessarily on the ground floor.

    They have optimised cost to such a large extent that I do not think in this business it is possible to exceed these kind of efficiencies. The fact that they focus only on some very basic fast moving items means that they are not stuck with inventory, or any sort of debt cost. The kind of traffic that they have been able to generate has been very positive.

    The customer base is very genuine. They are the people who want to buy things at a value and the expansion is in cities which you would not probably associate with the mall culture, or with the retail stores expansion culture. And, that is exactly where the success has been in the tier two, tier three towns and a lot of people would love to replicate that.




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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