@prosperotree 1/ Let me attempt this with some rough calcs. METHOD 1: Below snapshot from company data except for avg store size which is calculated. Note that the revenue CAGR is driven by sqft growth. Why this is imp later in METHOD 2 
@prosperotree 2/ With the avg store data I attempted to value a single store. Revenue is avg store sqft x Avg rev/sqft from tweet (1) – gives a FCF stream. Obviously many assumptions made
@prosperotree 3/ Discounting this FCF stream at diff exp return rates gives an avg value per store. At 18% discounting each store is worth 68 cr and existing stores are worth 10k cr or 11% of market cap and so on
@prosperotree 4/ Factoring in future stores (I typically like to pay <60% value for existing business) one can arrive at a certain market cap. Even at exp return of 12-15% this is a rich multiple to pay! Given my filters I wouldn’t pay more than 25x trailing PE.
@prosperotree 5/ METHOD 2: To invert. If I want 18% in 5 years market cap needs to grow to 2L cr. This implies a 50-60% PAT CAGR. Since SSSG will be limited to around 5-10% this implies that balance has to come from 3 levers (a) sqft growth ie stores (b) EBITDA expansion (c) operating leverage
@prosperotree 6/ Is it possible? I don’t know. Figure out what you can underwrite on (a), (b), (c) and you have your answer! ... recent interview by the MD on store expansion should solve for (a). How much headroom is there on b&c? My guess as good as yours. Let me know your comments
@prosperotree *typically I like to pay not less than 60% value for existing biz. Most times between 60-70% of current market cap for good promoters
