V-Mart Retail (VMART) Q4 19/20 earnings summary

Executive summary

• FY20 total revenue rose 16% YoY to Rs 166,650 lakh; EBITDA increased 61% to Rs 21,376 lakh, while PAT fell to Rs 4,935 lakh from Rs 6,163 lakh.

• Results reflected robust trading through mid-March, followed by COVID-19 store closures and lockdown disruption; full-year SSSG was -2.3% versus +3.7% in FY19.

• Expanded to 266 stores across 19 states, launched an omnichannel platform and maintained a cash-positive position at FY-end.

Financial highlights

• Revenue from contracts with customers was Rs 166,202 lakh and total revenue Rs 166,650 lakh; net sales were Rs 166,159 lakh, up 16% YoY.

• EBITDA was Rs 21,376 lakh versus Rs 13,293 lakh in FY19; reported growth was 61%, with FY20 results reflecting Ind AS 116 adoption.

• PAT was Rs 4,935 lakh versus Rs 6,163 lakh; basic EPS declined to Rs 27.18 from Rs 34.01.

• Revenue growth of 21% through March 15 was reduced to 16% for FY20; March revenue declined 40% after lockdown-related closures.

• FY20 included a one-time Rs 400 lakh additional inventory provision for COVID-19; FY19 included Rs 980 lakh impairment on IL&FS commercial paper.

Outlook and guidance

• Priorities were Respond, Renew and Reimagine: protect health and liquidity, improve process efficiency, strengthen omnichannel and adapt products and operations to changing demand.

• Planned to accelerate e-commerce and marketplace reach, expand FMCG availability online and use technology to improve customer engagement and operating efficiency.

• Management expected prolonged disruption from recurring COVID-19 outbreaks, weaker consumer spending and a slow retail recovery; no quantified company-specific FY21 earnings guidance was stated.

• Cost actions included rental renegotiations, variable-cost and overhead reduction, a freeze on discretionary spending and holding capital expenditure.