V-Mart Retail (VMART) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw revenue grow 16% year-over-year, with V-Mart up 20% and Unlimited up 5%, despite challenges from national elections and shifting consumer behavior.

• EBITDA increased 89% year-over-year to 12.6% of revenue, and PAT turned positive at ₹121 million from a loss last year.

• Footfalls increased 36%, with tier three and four towns showing 11% and 19% growth, and improved customer quality and trust.

• Store network expanded to 448 locations, with 7 new stores opened and 3 closed during the quarter.

• Strategic focus on product quality, Gen Z fashion, and digital initiatives, including 100% digital billing and personalized communication, drove customer engagement.

Financial highlights

• Revenue from operations for Q1 FY25 was ₹78,608 lakh, up from ₹67,852 lakh in Q1 FY24.

• EBITDA margin for V-Mart core business was 13.4%, Unlimited at 18%, and entity-level EBITDA at 12.6%, including a loss of INR 10 crore from LimeRoad.

• Gross margin for offline business remained healthy and flat; overall gross margin declined 60 bps due to LimeRoad's revenue drop.

• Free cash flow for the quarter was ₹431 million, with CapEx at ₹260 million, mainly for new stores and refurbishments.

• Net profit for Q1 FY25 was ₹1,214 lakh, compared to a net loss of ₹2,194 lakh in Q1 FY24.

Outlook and guidance

• Plan to open around 50 new stores in FY25, with most openings in Q2 and Q3 to leverage festive demand.

• Margin percentage expected to be retained, with focus on increasing rupee margin through higher volumes and top line.

• LimeRoad losses expected to reduce further quarter-over-quarter, aiming for minimal loss funding or marginal profitability.

• SSG growth and efficiency measures are expected to help return to pre-COVID EBITDA margin levels (8-8.5%) by FY26.

• Continued focus on omni-channel expansion and integration of digital marketplace LimeRoad.