V-Mart Retail (VMART) Q4 17/18 earnings summary

Executive summary

• FY2017-18 total revenue rose 22% to ₹12,265.13 million and profit after tax increased 77% to ₹777.04 million, despite demonetisation and GST-related disruption to cash flows and consumer sentiment.

• Growth was supported by 9% same-store sales growth, 31 store openings and expansion into Tier-IV towns; the year-end footprint reached 171 stores.

Financial highlights

• Revenue from operations was ₹12,223.72 million, up from ₹10,017.26 million; total revenue including other income was ₹12,265.13 million.

• EBITDA increased to ₹1,369.27 million from ₹889.00 million; PAT rose to ₹777.04 million from ₹439.04 million.

• Gross profit margin improved to 32.08% from 29.84%; inventory days held at 86.

• Net cash from operating activities was ₹643.38 million; cash and cash equivalents closed at ₹137.37 million, versus ₹28.63 million a year earlier.

Outlook and guidance

• Planned growth prioritises Tier-II, III and IV locations; stores are to be opened only where break-even is expected by the end of the first quarter and positive contribution in year one.

• Expansion is intended to be funded through internal accruals, with continued focus on revenue growth, margin preservation, technology and people investment.

• Plans include deeper North-East presence, wider social and digital media activity, greater warehouse capacity and shorter delivery turnaround times.