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    Vedant Fashions

    MANYAVARGood
    Consumer Services·31 Oct 2025
    Management Summary

    Vedant Fashions delivered a resilient performance in Q2 FY26, navigating a significant operational transition caused by GST rate rationalization. While primary revenue dispatches were hampered for 15-20 days due to the need to re-barcode over 1 million pieces, secondary sales (sales to customers) grew by 4.6%. Management remains optimistic about H2 FY26, citing strong H1 SSG of 8.2% and a strategic pivot in marketing to drive footfalls ahead of the peak wedding season.

    Highlights

    8

    • Sales of customers reached ₹349.4 crores in Q2, reflecting a 4.6% YoY growth.

    • H1 FY26 reported revenue from operations stood at approx. ₹544 crores, up 7.2% YoY.

    • H1 FY26 Same-Store Sales Growth (SSG) was healthy at 8.2% compared to H1 FY25.

    • Gross Margin remained industry-leading at 66.1% for H1 FY26, despite quarterly fluctuations.

    • EBITDA margin for H1 FY26 was robust at approximately 43%, with a PAT margin of 23.2%.

    • Operational disruption from GST rate changes (effective Sept 22) impacted dispatches for 15-20 days.

    • Net addition of 3,500 sq ft retail area during the quarter, with a total footprint of 1.79 million sq ft.

    • International presence strengthened with 2 new stores in Australia and the UAE.

    Key financials

    Metrics

    6

    Periods

    2

    Q2

    3
    • Reported Revenue
      ₹263 Cr
    • Sales of Customers
      ₹349.4 Cr
      YoY+4.6%
    • PAT
      ₹56 Cr

    H1

    3
    • Gross Margin
      66.1%
    • EBITDA Margin
      43%
    • SSG
      8.2%

    Segment breakdown

    Manyavar
    Flagship brand Status0.05 positive Competitive Delta
    Mohey
    70% Brand Awareness30% Lehenga Contribution
    Twamev
    ₹3 Cr Target Audience
    List

    Guidance & targets

    3
    CategoryTargetPriority
    Revenue
    Mid-to-long-term SSG
    8% to 9%
    		Medium
    Margin
    SSG for Operating Leverage Break-even
    4% to 5%
    		High
    Capex
    Additional Capex for FY26
    0
    		High

    Risks & concerns

    4
    RiskSeverity

    GST Rate Rationalization

    Majority of products moved from 12% to 18% GST, requiring calibrated price hikes and causing short-term dispatch delays. — Management acknowledged

    medium

    Weak Men's Segment Footfall

    Weak footfall in the men's segment was identified as a primary lag on growth in the previous financial year. — Management acknowledged

    medium

    Gross Margin Contraction

    Analyst noted a 270bps contraction; management attributed this to quarterly mix and lack of wedding dates in Q2 FY26 vs Q2 FY25. — Analyst downplayed

    low

    Areas of Evasion(1)

    • Specific guidance for FY26 revenue or store additions beyond qualitative statements.

    Q&A highlights

    3

    “we had to actually physically change the barcodes of all our products in the warehouse... our dispatches were sort of hampered... reflected in the difference in primary revenue and secondary revenue growth by about 6%-odd.”

    Explains why reported revenue lagged behind customer sales growth during the quarter.

    asked by Sameer Gupta, India Infoline

    2 min read5 chapters

    Detailed Narrative

    01

    GST Transition Impacts Primary Revenue

    The quarter was significantly impacted by the government's GST rate rationalization effective September 22, 2025. Management had to physically re-barcode over 1 million pieces in the warehouse to reflect revised MRP tags, leading to a 15-20 day disruption in dispatches. This created a 6% delta between primary revenue and secondary customer sales, though operations have since normalized ahead of the peak season.

    02

    Strategic Portfolio Diversification

    Vedant Fashions is actively diversifying its brand portfolio beyond the flagship Manyavar brand. Mohey has pivoted from a bridal-heavy focus to include more non-bridal categories like stitched suits and saris, with bridal lehengas now contributing only 30% of its business compared to over 50% previously. Meanwhile, the 'Diwas' brand is being positioned for the festive segment, with plans to remove the 'By Manyavar' sub-branding in the next 3-4 years as it scales.

    03

    Store Network Optimization and COCO Experiments

    The company reported a net addition of only 3,500 square feet this quarter, reflecting a disciplined approach to expansion and the rationalization of underperforming locations. Notably, 9 of the 13 net EBO closures were SIS doors moving to MBO formats. The company also invested ₹11 crores in capex to experiment with Company-Owned Company-Operated (COCO) flagship stores in Bangalore to test retail innovations before pan-India franchisee rollout.

    04

    Resilient Margins Amidst Macro Headwinds

    Despite a lack of wedding dates in Q2 FY26 compared to the previous year, the company maintained an industry-leading H1 gross margin of 66.1%. Management highlighted that an SSG of 4-5% is required to offset typical rental escalations of 15% every three years. With H1 SSG at 8.2%, the company is well-positioned to benefit from operating leverage as revenue growth accelerates in the second half of the year.

    05

    Optimistic Outlook for H2 FY26

    Management expressed high confidence in H2 FY26, which typically represents the larger half of the financial year. A major pivot in marketing strategy, including the launch of the 'Manyavar Shadi Show,' is expected to drive footfalls. Management noted that while competition has increased, Manyavar stores located next to competitors have actually seen a 5% positive performance delta, reinforcing the brand's market leadership.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.