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

Executive summary

• Q1 FY25 saw strong sales growth, improved footfalls, and positive consumer sentiment, with revenue up 16% year-over-year and EBITDA increasing 89%, despite disruptions from national elections and ongoing inflationary pressures.

• PAT turned positive at ₹121 million, reversing a loss last year, and the Board approved unaudited financial results for the quarter.

• Efficiency initiatives and internal process improvements, especially in product assortment, technology, and customer experience, are yielding visible results.

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

• Statutory auditors conducted a limited review and found no material misstatements.

Financial highlights

• Revenue from operations for Q1 FY25 was ₹78,608 lakh, up from ₹67,852 lakh in Q1 FY24, with overall sales growing 20% year-over-year for the core business and 5% for Unlimited; normalized Unlimited growth would be 18% excluding store closures.

• EBITDA margin for the quarter was 13.4% for the core business, 18% for Unlimited, and 12.6% at the entity level, including LimeRoad losses.

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

• Free cash flow for the quarter was ₹431 million, a significant improvement from negative ₹17 million last year; CapEx was ₹260 million, mainly for new stores and refurbishments.

• Inventory reduced by INR 144 crores quarter-over-quarter, improving working capital and inventory freshness; inventory days improved to 107 from 123 year-over-year.

Outlook and guidance

• Targeting gross addition of 50 stores in FY25, with most openings planned around the festive season and continued focus on omni-channel expansion and LimeRoad integration.

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

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

• Inventory days reduced and working capital efficiency improved, supporting future growth.

• Financials prepared in accordance with Ind AS and reviewed by the Audit Committee and Board.