V-Mart Retail (VMART) Q4 15/16 earnings summary

Executive summary

• FY16 revenue rose 12% to ₹808.16 crore, while PAT fell to ₹27.63 crore from ₹37.37 crore amid weak retail demand and higher employee costs.

• Growth came with expansion into West Bengal and Odisha; the year-end network reached 123 stores in 106 cities across 14 states and Union Territories.

Financial highlights

• Revenue from operations was ₹809.38 crore versus ₹720.20 crore; total revenue was ₹810.43 crore versus ₹722.40 crore.

• EBITDA was ₹61.96 crore versus ₹63.68 crore; profit before tax was ₹40.88 crore versus ₹57.15 crore.

• PAT was ₹27.63 crore versus ₹37.37 crore; revenue growth was 12%, while PBT declined 28% on the rounded comparison shown.

• Gross margin improved 84 bps to 29.42% from 28.59%; depreciation and amortization rose to ₹19.01 crore from ₹4.57 crore.

• Operating cash flow increased to ₹51.30 crore from ₹39.94 crore.

Outlook and guidance

• Above-average monsoon expectations for FY17 were seen as supportive of farm output, rural incomes and consumer spending recovery.

• FY17 priorities included widening store coverage, improving back-end efficiency and converting local customer preferences into merchandise and profitability.

• Long-term opportunity rests on organized retail’s estimated ~10% share of Indian retail and continued growth in Tier-II and Tier-III markets.