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    V-Mart Retail Q1 FY27 earnings call

    VMART
    Consumer Services·27 Jul 2026
    Management Summary

    V-Mart Retail Limited reported a strong Q1 FY27 with 23% revenue growth and 9% SSG, marking its 11th consecutive quarter of positive like-for-like growth. Profitability metrics showed significant improvement, with reported EBITDA up 27% and PAT up 41%. However, gross margins saw an 80 bps decline due to mix changes and inventory provisioning, and the company noted increased competition impacting conversion rates. Management remains focused on disciplined expansion, operational efficiency, and managing inflationary pressures while maintaining customer value.

    Highlights

    6

    • Overall revenues grew 23% year-on-year, marking the 11th consecutive quarter of positive like-for-like growth.

    • V-Mart core business delivered 8% SSG, and the Unlimited format significantly outperformed with 13% SSG.

    • Footfalls were up 39% and memo count up 18% year-on-year, indicating healthy customer engagement.

    • Post-IndAS EBITDA grew 27% year-on-year to INR 161 crore, with margins expanding 50 bps to 14.8%, reflecting better cost absorption.

    • PAT grew 41% year-on-year to INR 47 crore, demonstrating strong bottom-line performance.

    • LimeRoad marketplace losses reduced by 39% year-on-year and 7% quarter-on-quarter, alongside an 18% increase in NMVs.

    Concerns

    5

    • Gross margin declined 80 bps to 34.5%, primarily due to a mix change and regular provision on aged inventory.

    • Conversion rate declined due to increased competition and customers checking multiple stores before purchase, increasing footfalls but decreasing memo count per visit.

    • Risk of non-uniform monsoon impact potentially leading to demand deficiency in some states.

    • Volatility in raw material and supply chain costs, influenced by crude oil prices and geopolitical situations, creating inflationary pressures.

    • Minimum wage hikes and raw material inflation could lead to a 0.5%-0.75% margin compromise despite efficiency efforts.

    Key financials

    Metrics

    21

    Periods

    2

    Headline

    19
    • Revenue Growth
      23%
    • Overall SSG
      9%
    • Reported EBITDA
      ₹161 Cr
      YoY+27%
    • Reported EBITDA Margin
      14.8%
    • PAT
      ₹47 Cr
      YoY+41%

    Q1

    2
    • Stores Added
      15 units
    • Stores Closed
      1 units

    Segment breakdown

    Unlimited Format
    33% Revenue Growth40% EBITDA Growth710 Rs Sales per Square Feet18% Sales per Square Feet Growth13% SSG
    V-Mart Core Business
    8% SSG
    LimeRoad Marketplace
    39% Losses Reduction (YoY)7.0% Losses Reduction (QoQ)18% NMV Increase
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹38 crores

    Debt

    Debt disclosed

    Liquidity

    Liquidity disclosed

    Guidance & targets

    7
    CategoryTargetPriority
    Store Expansion
    Gross New Stores
    90+
    		High
    Store Expansion
    Stores to be closed
    8 to 10
    		High
    Store Expansion
    Unlimited Store Openings (Southern Market)
    Higher number compared to last year
    		Medium
    SSG
    SSG for the year
    Mid-to-high single digit
    		Medium
    SSG
    SSG to offset inflationary pressures
    3%-4%
    		High
    Pricing
    ASP Increase
    3%-5%
    		High
    Pricing
    Price Increase from Inflation
    2%-2.5%
    		High

    What to watch in Q2 FY27

    5

    Overall SSG Performance

    FY27
    Current9% (Q1 FY27)
    TargetMid-to-high single digit

    Why it matters

    To verify if the company can sustain its strong SSG performance and achieve its full-year guidance, especially given the expected Q2 impact from Durga Puja shift.

    overall, our growth of 23% with 9% like-for-like growth has been there, which is what we would call is the 11th quarter in the consecutiveness where we are delivering positive like-for-like growth... Mid-to-high single digit, yes.

    Risks & concerns

    5
    RiskSeverity

    Inflationary Pressures on Consumers

    War scenario, crude oil prices, and FMCG price revisions are causing inflation, leading to consumer sensitivity and feeling the pinch. — Management acknowledged

    high

    Non-uniform Monsoon Impact on Demand

    Hazy monsoon outlook and El Niño effect could lead to floods in some states and deficiency in others, creating non-uniform demand patterns. — Management acknowledged

    medium

    Raw Material and Supply Chain Volatility

    Geopolitical situation, crude scarcity, and unstable pricing cause volatility in raw material and supply chain costs, potentially impacting sentiment and pricing. — Management acknowledged

    medium

    Increased Competition and Conversion Rate Decline

    Greater competition leads to customers checking multiple stores, increasing footfalls but decreasing memo count and conversion rates. — Analyst acknowledged

    medium

    Minimum Wage Hike Impact on Costs

    Minimum wage growth impacts salary and wage bills, though management aims to offset this through efficiency and sales growth; Karnataka's implementation is currently on stay. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “not equal proportion. It will vary from time to time. But the mix change is more from a customer perspective. We have not changed the stock mix deliberately to inflict a gross margin change. It's just customer preference, which is happening from time to time... provisioning is a very thought out and a very longstanding, more than 10, 15-year-old consistent policy, which happens every quarter. While the proportion may not exactly be the same, not very significant difference between the two.”

    Clarifies the specific factors contributing to the 80 bps gross margin decline, indicating both customer-driven mix changes and consistent inventory provisioning played a role.

    asked by Videesha Sheth

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Q1 FY27 Performance and Growth Drivers

    V-Mart Retail Limited reported a robust Q1 FY27, with overall revenues growing 23% year-on-year and a 9% overall same-store growth (SSG). This marks the 11th consecutive quarter of positive like-for-like growth, driven by sustained productivity from existing stores, better merchandise, and sharper price architecture. Footfalls increased by 39% and memo count by 18% year-on-year, indicating healthy customer engagement despite a late summer season and shorter wedding season.

    02

    Profitability and Operational Efficiency

    The company demonstrated strong profitability, with post-IndAS EBITDA growing 36% year-on-year to INR 83 crore, expanding margins to 7.6% from 6.9%. Reported EBITDA also saw a 27% year-on-year growth to INR 161 crore, with margins expanding 50 bps to 14.8%. PAT increased 41% year-on-year to INR 47 crore. Operational efficiencies were evident as total expenses increased by 15%, well below the 23% revenue growth, providing 150 bps of operating leverage.

    03

    Inventory Management and Product Strategy

    V-Mart continued to improve its inventory productivity, reducing overall days of inventory by 8% year-on-year to 86 days. Inventory per store also decreased by 5% to approximately INR 1.5 crore at quarter-end. The company is focusing on improving full-price sales and reducing dependence on discounts, aiming for healthier inventory cycles and better rupee gross margins. The product strategy emphasizes fresher fashion, better newness, and deeper assortment analysis to enhance customer experience.

    04

    Expansion and Format Performance

    The Unlimited format in South India continued its strong momentum, delivering 33% revenue growth and 40% EBITDA growth for the quarter, with sales per square feet reaching INR 710, up 18% year-on-year. V-Mart added 15 new stores and closed one, bringing the total network strength to 591 stores across 335 cities, encompassing 51 lakh square feet. The company's expansion guidance for the year remains unchanged at 90+ gross new stores, with a focus on disciplined growth and profitability over mere store count.

    05

    Inflationary Pressures and Pricing Strategy

    The company acknowledged significant inflationary pressures due to geopolitical situations, crude oil prices, and FMCG price revisions, noting a 10% rise in overall raw material prices. Management aims to pass on some of these costs, targeting a 3-5% ASP increase, with 2-2.5% attributed to inflation. They are also focusing on efficiency measures to mitigate the impact and avoid significant consumer burden, aiming for a 0.5%-0.75% margin compromise.

    06

    Technology, Omnichannel, and Leadership Transition

    V-Mart is leveraging technology and AI across various areas, including demand forecasting, design, and replenishment, to enhance retail decisions and customer communication. The LimeRoad marketplace continued to improve, with losses reducing by 39% year-on-year and 7% quarter-on-quarter, alongside an 18% increase in NMVs. The company also announced a leadership transition, with Mr. Anand Agarwal taking over as COO in addition to his CFO role, aiming for a faster, more analytical, and responsive organization.

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