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

Executive summary

• Q1 FY25 saw revenue grow 16% year-over-year, with EBITDA up 89% and PAT turning positive at ₹121 million from a loss of ₹220 million in Q1 FY24.

• V-Mart sales rose 20% and Unlimited 5% year-over-year, with strong footfall growth in tier three and four towns and improved customer engagement through digital initiatives.

• LimeRoad losses narrowed by 60% year-over-year, with continued integration and synergy with V-Mart stores.

• Inventory days improved by 18% year-over-year, and inventory value reduced by 7%.

• Unaudited financial results for the quarter ended June 30, 2024, were approved by the Board on August 5, 2024.

Financial highlights

• Q1 FY25 revenue 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%.

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

• Gross profit margin at 35.2% (vs. 35.8% YoY); 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.

• Inventory reduced by ₹1,440 million quarter-over-quarter, improving working capital and inventory freshness.

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 emphasis on reducing losses in digital marketplace and optimizing inventory.