Vedant Fashions Limited

Vedant Fashions reported Q3 FY26 revenue from operations of ₹492 crores and PAT of ₹135 crores. For the nine-month period, revenue stood at ₹1,036 crores, growing 1.7%, with a Same-Store Sales Growth (SSSG) of 1.8%. The quarter's performance was significantly impacted by fewer wedding dates in December and no wedding dates in January, coupled with a muted consumer sentiment, particularly in the middle-class segment.

Despite revenue challenges, the company maintained healthy margins, with a gross margin of 65.7% and an EBITDA margin of 44.6% in Q3 FY26. For the nine-month period, gross margin was 66% and EBITDA margin was 44%. Management noted that gross margins were impacted by an increase in GST rates from 12% to 18% on 90% of products, which was not fully passed on to consumers to maintain product value and aspiration.

The premium brand, Twamev, demonstrated exceptional performance, achieving an overall growth of 40% in both Q3 and year-to-date. Twamev's SSSG stood at 12% in Q3 and 16% year-to-date, significantly outperforming the company's overall SSSG. This strong traction in the premium segment, where ASP ranges from ₹15,000-₹16,000, encourages plans to further accelerate and scale the brand.

The company pursued a calibrated approach to store expansion, focusing on improving the quality of its retail footprint. This involved selective store additions, resulting in a net increase of approximately 5,500 square feet during Q3, while rationalizing smaller and underperforming locations. Management expects this store consolidation exercise to conclude in the next 2-3 quarters, with store expansion normalizing thereafter, shifting focus from store count to square feet area.

Vedant Fashions reaffirmed its commitment to a franchise-led expansion model, with future growth primarily driven by franchisee stores. An investment of ₹11 crores was made in COCO (Company-Owned, Company-Operated) stores during the last quarter for experimentation purposes, converting some franchisee stores. These experimental COCO stores have performed decently, in parity with other stores, but the overall expansion strategy will remain franchise-focused, not COCO.

The company executed an integrated marketing strategy across its brands, including the successful launch of 'The Manyavar Shaadi Show,' a 6-episode YouTube podcast hosted by Karan Johar, which garnered strong viewership. Campaigns for Mohey and Twamev, along with targeted digital initiatives for Mebaz and Diwas, aimed to enhance brand visibility, sharpen positioning, and deepen consumer engagement, contributing to a positive sentiment for Indian wear.