Vedant Fashions

Vedant Fashions reported Q4 FY26 retail sales of INR 561 crores, marking a 7.8% growth over Q4 FY25, with a same-store sales growth (SSG) of 4.6%. Revenue from operations for the quarter stood at INR 399 crores, an 8.7% increase YoY. The company maintained a gross margin of 65% and achieved a healthy EBITDA margin of 45.6%, leading to a PAT of INR 114 crores, up 13% from Q4 FY25.

For the full financial year FY26, Vedant Fashions' retail sales crossed the INR 2,000 crores mark, reaching INR 2,008 crores, a 6.1% growth over FY25, with an SSG of 2.7%. Revenue from operations for FY26 was INR 1,436 crores, growing 3.5% YoY. The company reported a full-year gross margin of 65.7% and an EBITDA margin of 44.3%, with PAT at INR 376 crores. The cash conversion ratio for FY26 was approximately 98%.

The company's strategic focus in FY26 was on strengthening retail quality to drive sustained long-term growth, prioritizing same-store sales growth (SSG) through enhanced customer experience, data-driven merchandising, and omnichannel integration. While gross openings will remain stable, the net addition to retail area was about 4,200 square feet, with a focus on quality store openings. Management noted that new stores have significantly better revenue per square feet (85% better) compared to closed stores.

Vedant Fashions executed wide-ranging marketing initiatives, including the 'Made for Each Other' campaign featuring Rashmika Mandanna and Vijay Deverakonda, which garnered over 1 billion views and 11 million likes. They also launched the 'Manyavar Shaadi Show' YouTube podcast hosted by Karan Johar and amplified brand visibility through social media campaigns with cricketer Rinku Singh and new collection launches for Mohey and Twamev.

The company reported industry-leading gross margins of 65% in Q4 FY26 and 65.7% for FY26. Management clarified that the gap between retail sales and net sales (71-73%) and the gross margin contraction during FY26 were primarily due to the revised GST rules rolled out in September '25, which is expected to normalize from the upcoming financial year. Input cost inflation for fabric is anticipated to be a manageable 50 to 150 basis points increase on overall cost.

Management observed a natural cycle in the competitive landscape, with some players who entered in 2022 starting to close down, while newer players (last 1-2 years) continue to add stores. They noted that the current real estate market presents a challenge due to high rental levels, making it difficult to sign stores that meet their long-term sustainability criteria, with rentals in some markets being 1.3-1.4x expectations.

The company is focusing on improving customer retention by re-engaging its base of 90 lakh consumers, a new strategic initiative. They aim to improve Average Selling Price (ASP) by 3-3.5% annually through merchandising upgrades rather than price hikes. Significant investments are also being made in AI to enhance operational efficiencies across all departments, including analyzing 20,000 keywords for Google campaigns and deploying AI agents.