V-Mart Retail (VMART) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue grew 20% year-over-year, with like-to-like sales growth of 15% (V-Mart 16%, Unlimited 11%) and 21 new stores opened, bringing the total to 467.

• EBITDA increased 57x year-over-year in Q2FY25, reaching 5.8% of revenue, while Limeroad's EBITDA loss reduced by 63% YoY.

• Repeat customer sales reached 70%, and NPS exceeded 60%, reflecting strong customer loyalty and satisfaction.

• Value retail segment outperformed, especially among youth and rural consumers, while premium brands faced challenges.

• Unaudited financial results for Q2 and H1 FY2024-25 were approved on October 29, 2024, covering performance up to September 30, 2024.

Financial highlights

• Q2FY25 revenue was ₹6,610 million, up 20% YoY; YTD FY25 revenue was ₹14,471 million, up 18% YoY.

• Q2FY25 EBITDA was ₹386 million (5.8% margin), up from ₹6 million (0.1%) in Q2FY24; YTD FY25 EBITDA was ₹1,376 million (9.5% margin).

• Q2FY25 PAT loss was ₹-565 million (-8.5% margin), improved from ₹-641 million (-11.7%) YoY; YTD FY25 PAT loss was ₹-444 million (-3.1%).

• Gross margin for YTD FY25 was 34.5%, slightly down from 35.3% YoY.

• Manpower costs rose 21% due to higher incentives and ESOP liabilities, in line with sales growth.

Outlook and guidance

• Store expansion guidance maintained at 55-60 new stores for FY25, with a focus on 12-13% area growth annually.

• Management expects gross margins for offline business to remain similar to last year, with continued focus on volume-driven growth.

• LimeRoad losses expected to keep reducing, with a long-term goal of minimal loss funding or marginal profitability.

• Inventory days improved by 16% YoY to 111 days, indicating better inventory management.

• Management aspires to reach pre-COVID profitability levels (8% EBITDA margin, 5% PAT margin pre-Ind AS) within three years.