Vishal Mega Mart (VMM) Q2 26/27 earnings summary

Executive summary

• Consolidated Q2 revenue rose 14.0% YoY to ₹3,398.53 crore; H1 revenue increased 16.4% to ₹7,125.54 crore.

• Festive-calendar timing shifted purchases into Q3, weighing on Q2 margins; reported SSSG was 5.4% in Q2 and 7.7% in H1, versus calendar-adjusted ~9% and ~9.5%.

Financial highlights

• Consolidated Q2 net profit was ₹157.88 crore versus ₹152.31 crore YoY; H1 net profit was ₹416.65 crore versus ₹358.38 crore.

• Adjusted PAT grew 6.4% to ₹172.0 crore in Q2 and 15.8% to ₹436.7 crore in H1.

• Q2 gross profit rose 12.7% to ₹950.1 crore; H1 gross profit increased 16.4% to ₹2,018.9 crore.

• Standalone Q2 revenue was ₹1,990.09 crore and net profit ₹165.18 crore; H1 revenue was ₹3,877.40 crore and net profit ₹338.37 crore.

Outlook and guidance

• Full-year SSS growth target is double digit; Q3 SSSG would need to exceed 10% for the first nine months to reach double-digit growth.

• Guidance remains for 100+ store openings this year, with annual openings intended to exceed the prior year's count; new stores are expected to be profitable and viable.

• Gross margins are expected to remain stable YoY in H2; management sees no need for further price increases at current inflation levels.

• Management expects EBITDA margin to improve by ~30 bps annually as double-digit growth outpaces 6%-7% store-level cost inflation.