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    V2 Retail Q1 FY27 earnings call

    V2RETAIL
    Consumer Services·14 Aug 2026
    Management Summary

    V2 Retail delivered a strong Q1 FY27, with revenue up 58% and PAT up 70% year-on-year, driven by robust store expansion and healthy demand in the value fashion segment. While gross margins saw a slight contraction and inventory levels increased due to safety stock, management remains confident in maintaining profitability and growth through strategic investments in technology, supply chain, and customer experience, targeting 170-200 new stores for the year.

    Highlights

    5

    • Revenue grew 58% year-on-year to INR997 crores, demonstrating strong top-line performance.

    • EBITDA increased 60% year-on-year to INR139.5 crores, with EBITDA margin improving to 14% from 13.8% in the prior year.

    • Profit after tax (PAT) grew 70% year-on-year to INR41.9 crores, reflecting continued improvement in profitability.

    • Expanded store network by adding 56 net stores, reaching 381 stores and crossing 400 nationwide subsequently.

    • Full price sales contributed approximately 90% of sales, indicating healthy demand and disciplined inventory management.

    Concerns

    5

    • Gross margin slightly contracted to 28.6% from 29.5% in the prior year, attributed to Adhik Maas and fewer wedding dates.

    • Full price sales percentage decreased from a normal 92-93% to 90% in Q1 due to market slowness during Adhik Maas.

    • Increased safety stock due to geopolitical tension resulted in higher inventory levels, though expected to normalize.

    • New stores' sales per square foot are about 34% less than mature stores, with 10-12 stores performing below INR600 per square foot.

    • Customer experience feedback indicates an average Google rating of 3.6, lower than peers, with issues like rude staff and long billing queues.

    Key financials

    Single quarter

    07 metrics
    1. 01Revenue₹997 Cr+58.0%YoY
    2. 02Gross Margin28.6%
    3. 03EBITDA₹139.5 Cr+60%YoY
    4. 04EBITDA Margin14%
    5. 05PAT₹41.9 Cr+70%YoY

    Capital allocation

    4
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Debt

    Debt disclosed

    M&A

    RK Retail

    acquisition · closed

    Liquidity

    Liquidity disclosed

    Internal accruals are expected to be sufficient for expansion plans, with potential to release INR150-200 crores by normalizing creditor days.

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue
    Revenue Growth
    at least 50%
    		High
    Margin
    Gross Margins
    29% to 30%
    		High
    Margin
    EBITDA Margins
    maintain current levels
    		Medium
    Store Count
    New Store Openings
    170 to 200 stores
    		High
    Volume
    SSSG
    8% to 10%
    		High
    Inventory
    Inventory Days
    around 100 days
    		High
    Working Capital
    Creditor Days
    45 to 50 days
    		High
    Pricing
    Product Price Increase
    4% to 5%
    		High

    What to watch in Q2 FY27

    5

    Impact of 4-5% price increase on demand

    Q3 FY27 onwards
    CurrentPlanned for Q3 FY27
    TargetNo significant impact on volumes or value growth

    Why it matters

    To assess if the planned price hikes affect customer demand or sales volumes as management expects.

    So I think we'll start seeing that impact from the third quarter onwards, and it will be an increase of about, I would say, 4% to 5% increase in the overall garment cost, which we'll have to pass on to the consumer.

    Risks & concerns

    4
    RiskSeverity

    Geopolitical tension leading to higher inventory

    Increased safety stock in warehouses due to geopolitical tension, resulting in higher inventory levels, though expected to normalize. — Management acknowledged

    medium

    Gross margin contraction

    Gross margin contracted slightly in Q1 due to Adhik Maas and fewer wedding dates, but management expects to maintain 29-30% going forward. — Management downplayed

    low

    Customer experience issues

    Analyst noted lower Google ratings (3.6 vs 4.1-4.2 for peers) due to rude staff and long billing queues; management is implementing AI-enabled CCTV and NPS-linked incentives. — Analyst acknowledged

    medium

    Impact of price increases on demand

    Management plans 4-5% price increase from Q3 FY27 but believes it will be offset by ASP increase, with no huge impact on value growth. — Analyst downplayed

    low

    Q&A highlights

    7

    “Historically, what we have seen is there have been multiple instances. But historically, what we have seen is it might impact the volumes a little bit, but it is completely offset by the increase in the ASP. So in terms of value growth, it doesn't have a huge impact.”

    Addresses concerns about demand elasticity in response to planned 4-5% price increases from Q3 FY27.

    asked by Priyanshu Jain

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance Overview

    V2 Retail reported a strong Q1 FY27, with revenue growing 58% year-on-year to INR997 crores. EBITDA saw a 60% increase to INR139.5 crores, and the EBITDA margin improved to 14% from 13.8% in the previous year. Profit after tax (PAT) also demonstrated robust growth, rising 70% year-on-year to INR41.9 crores, reflecting healthy operational leverage and improved profitability.

    02

    Store Expansion and Network Growth

    The company continued its disciplined store expansion, adding 56 net new stores during Q1 FY27, bringing the total store count to 381 as of June 30, 2026. Subsequently, V2 Retail crossed the milestone of 400 stores nationwide. Management aims to open 170 to 200 new stores in FY27, with each new store carefully evaluated for catchment potential and sustainable returns.

    03

    Operational Efficiency and Inventory Management

    Full price sales constituted approximately 90% of total sales in Q1, indicating strong demand, though slightly down from the usual 92-93% due to factors like Adhik Maas. Due to geopolitical tensions, safety stock was increased, leading to higher inventory levels. The company targets maintaining inventory at around 100 days and creditor days at 45-50 days, with plans to normalize safety stock once the situation allows.

    04

    Strategic Investments and Future Growth Drivers

    V2 Retail is making strategic investments to strengthen its market position. Key focus areas include analytics-led merchandising, supply chain responsiveness, and technology adoption, including AI workflows and an AI-enabled data platform. The company also plans to invest in team building, with two president-level hirings, to support its target of 50% CAGR for the next 2-3 years.

    05

    Customer Experience Initiatives

    Addressing analyst concerns about customer experience, management acknowledged lower Google ratings (average 3.6) compared to peers, citing issues like rude staff and long billing queues. In response, V2 Retail has initiated a pilot program sending NPS links to 40% of customers and linking store team incentives to NPS scores. Additionally, AI-enabled CCTV cameras are being deployed to monitor billing queues and trigger notifications for corrective measures.

    06

    Pricing Strategy and Raw Material Impact

    The company anticipates a 4-5% increase in overall garment costs from Q3 FY27 due to rising raw material prices, which will be passed on to consumers. Historically, such price increases have impacted volumes slightly but were fully offset by the increase in average selling price (ASP), resulting in no significant impact on value growth. Gross margins for Q1 were 28.6%, slightly down from 29.5% last year, attributed to the Adhik Maas period and fewer wedding dates.

    This is an AI-generated summary of a publicly available earnings call transcript.