V-Mart Retail (VMART) Q2 26/27 earnings summary

Executive summary

• Q2 revenue rose 18% YoY to ₹95,299 lakh; reported SSSG was 3% versus 11% after adjusting for the 19-day festive shift.

• Q2 EBITDA increased 20% to ₹8,606 lakh, with margin at 9.0% versus 8.9%; net loss was ₹1,634 lakh.

• H1 revenue rose 21% to ₹2,04,180 lakh and net profit to ₹3,087 lakh; EBITDA margin expanded to 12.1% from 11.7%.

• The store network reached 613 across 351 cities after 23 openings and one closure in Q2.

• Limited review found no matter causing auditors to believe interim results contained a material misstatement.

Financial highlights

• Q2 gross profit rose 18% to ₹3,189 Mn; gross margin was 33.5% versus 33.6%.

• Q2 post-Ind AS 116 PAT was a loss of ₹163 Mn versus ₹89 Mn; pre-Ind AS 116 PAT was a loss of ₹205 Mn versus ₹180 Mn.

• Pre-Ind AS PBT was a loss of ₹26 crore versus ₹28 crore; post-Ind AS EBITDA margin was 9.0% versus 8.9%.

• H1 gross profit rose 19% to ₹6,941 Mn, with margin at 34.0% versus 34.5%; post-Ind AS 116 PAT increased 25% to ₹309 Mn.

• Employee costs rose 15% and other expenses 18%; employee-cost savings modestly improved the expense ratio.

Outlook and guidance

• FY sales growth expectation remains 17%-20%; the FY store-opening target is at least 90-100, with 38 stores opened in H1.

• Planned price increases of 5%-6% address input-cost inflation; another Q4 increase may be needed if crude remains at $110-$115.

• Festive-season sales were positive but below target; Q3 is expected to reflect the shifted festive period, including Pujo. Further operating efficiencies are expected in H2.