V-Mart Retail (VMART) Q4 16/17 earnings summary

Executive summary

• FY17 revenue rose 24% to ₹10,048.15 million and profit after tax increased 43% to ₹395.27 million despite demonetization-related retail disruption.

• Growth reflected 13.3% apparel same-store sales growth, 20 store openings and investment in merchandising, people and supply-chain technology.

• The non-metro value-retail model expanded to 141 stores across 121 cities in 14 states and union territories.

Financial highlights

• Revenue from operations was ₹10,017.26 million versus ₹8,092.54 million in FY16; total revenue was ₹10,048.15 million versus ₹8,104.25 million.

• EBITDA rose to ₹856.72 million from ₹630.05 million; reported PAT was ₹395.27 million versus ₹276.33 million.

• Net sales increased 23.82% to ₹10,006.2 million; operating profit (EBITDA) was ₹856.7 million.

• Gross profit margin increased to 29.84% from 29.42%; total expenses were ₹9,191.44 million versus ₹7,474.20 million.

• Net cash flow from operating activities was ₹687.18 million; net cash and cash equivalents ended the year at ₹28.63 million.

Outlook and guidance

• FY17-18 priorities include new non-metro stores, stronger fashion forecasting and design, data analytics, technology, customer experience and supply-chain improvements; no numerical financial guidance was stated.

• Plans include festival collections, private labels across divisions, core never-out-of-stock merchandise, expansion of the loyalty program and development of an omni-channel strategy.

• Growth is to be paced within balance-sheet capacity while protecting margins, inventory turns and profitability.

• Management expected GST, lower apparel tax on items priced below ₹1,000, rural income growth and increasing consumer spending to support value retail demand.