V2 Retail (V2RETAIL) Q3 24/25 earnings summary

Executive summary

• Achieved record revenue and PAT for the nine months ended December 2024, surpassing previous full-year highs, with Q3 FY25 revenue at ₹590.9 crore, up 58% year-over-year, and PAT up 117% to ₹51.2 crore.

• Opened 45 stores and closed 2 in nine months, reaching 160 stores and 17.22 lakh sq.ft.; 3 more added in January, totaling 163.

• Focused on affordable, high-quality fashion for the neo middle and middle class, primarily in Tier II and III cities, with strategic emphasis on product development, supply chain, and customer experience.

• Unaudited standalone and consolidated financial results for the quarter and nine months ended 31 December 2024 were approved by the Board on 23 January 2025.

• Statutory auditors issued a modified review report, highlighting a qualification regarding reconciliation of physical verification of property, plant, and equipment.

Financial highlights

• Q3 FY25 revenue: ₹590.9 crore, up 58% year-over-year; Q3 gross margin: 32.1%; EBITDA: ₹111.5 crore, up 83% YOY; EBITDA margin: 18.9%.

• Q3 FY25 PAT: ₹51.2 crore, up 117% YOY; PAT margin improved to 8.6% from 6.3% in Q3 FY24.

• Nine months revenue: ₹1,386 crore, up 60% YOY; gross margin: 29.8%; EBITDA: ₹200 crore, up 72% YOY; PAT: ₹65.6 crore, up 172% YOY.

• Standalone net profit for Q3 FY25 was ₹5,087.88 lakhs; consolidated net profit at ₹5,119.20 lakhs.

• Inventory days increased to 131 in 9M FY25 from 108 in 9M FY24; net working capital days at 71.

Outlook and guidance

• Expecting positive PAT in Q4, aided by Eid in March; targeting 50% annual revenue growth for the next decade, with 10% SSG and the rest from new stores.

• Planning to open 100 stores next year, funded via internal accruals; SSG guidance for next year set at 10%.

• EBITDA margin target of 10% pre-Ind AS in the next two years; ROE target of 25% in 18-24 months.

• Continued expansion with new store openings in multiple states, focusing on Tier II and III cities and affordable fashion.

• Management confident of utilizing advances for advertisement services within the extended contract period with BCCL.