V2 Retail (V2RETAIL) Q2 24/25 earnings summary

Executive summary

• Achieved record H1 FY25 sales with revenue up 61% year-on-year to INR 795 crore and PAT surging to INR 14.4 crore from INR 0.5 crore last year.

• Q2 FY25 revenue rose 64% year-on-year to INR 380 crore, with EBITDA up 60% to INR 33.1 crore; Q2 PAT loss narrowed to INR 1.9 crore from INR 5.7 crore loss in Q2 FY24.

• Opened 24 new stores and closed 2 in H1 FY25, reaching 139 stores and 14.82 lakh sq.ft. retail area, with plans to add 40 more in H2.

• SSSG was 36% in H1, with volume growth of 49% and 91% of sales at full price, up from 85% last year.

• Unaudited standalone and consolidated Q2 and H1 FY25 results were approved on 24 October 2024, with a modified auditor's report due to ongoing asset reconciliation.

Financial highlights

• H1 FY25 revenue from operations: INR 795 crore, up 61% year-on-year; Q2 FY25 revenue: INR 380 crore, up 64% year-on-year.

• H1 gross margin: 28.2%; Q2 gross margin: 27.3%; H1 EBITDA: INR 88.5 crore, up 60%; Q2 EBITDA: INR 33.1 crore, up 60%.

• H1 PAT: INR 14.4 crore (vs. INR 0.5 crore last year); Q2 PAT margin improved to -0.5% from -2.4% year-over-year.

• Standalone Q2 FY25 revenue was ₹38,000.68 lakh, with a net loss of ₹251.08 lakh; consolidated Q2 net loss was ₹193.49 lakh.

• Standalone and consolidated EPS for Q2 FY25 were negative, reflecting sequential decline in profitability.

Outlook and guidance

• Targeting 40 new stores in H2, aiming for 50-60 stores annually if ROE remains around 20%.

• H2 SSSG guidance: 15%-20%; full-year EBITDA guidance: INR 120 crore pre-Ind AS.

• PAT expected to be INR 60-65 crore for FY25 (about 55% of EBITDA).

• Management expects to utilize advances for advertisement services within the extended contract period.

• Long-term SSSG target: 10% annually; aiming for 10% pre-Ind AS EBITDA margin in 2-3 years.