V-Mart Retail Limited — Q3 FY26 earnings call

Call held 23 Jan 2026

Management summary

V-Mart Retail delivered a strong Q3 FY26 performance, with post Ind AS EBITDA growing 22% to INR 210 crores and PAT up 23% to INR 88 crores, driven by robust operating leverage and 190 bps margin expansion. Despite weather-related demand disruptions and cautious consumer sentiment, the company maintained healthy inventory, expanded offline gross margins by 70 bps, and added 23 new stores, bringing the total to 554. The Unlimited business showed visible improvement, and the company remains focused on profitable, disciplined expansion and capital efficiency.

Highlights

  • Post Ind AS EBITDA grew 22% YoY to INR 210 crores, with margins expanding 190 bps to 18.6%.

  • PAT grew 23% YoY to INR 88 crores, and YTD PAT grew almost 3x to INR 113 crores.

  • Offline business gross margins expanded 70 bps YoY, driven by better inventory health and reduced discounting.

  • Added 23 new stores during the quarter, taking the total store count to 554, with new stores ramping up faster than historical averages.

  • The Unlimited business showed visible improvement, with newer stores delivering better sales per square feet and profitability.

Concerns

  • Weather-related disruptions, including delayed/milder winter and excess rainfall/cyclones, affected demand in various regions.

  • Consumer sentiment remains cautiously positive, influenced by global developments, with spending largely occasion-driven.

  • A one-time exceptional cost of INR 2.1 crores was recognized due to proposed labor code changes.

Key financials

3 periods

Headline

  • EBITDA (post Ind AS)
    ₹210 Cr
    YoY +22%
  • EBITDA Margin (post Ind AS)
    18.6%
  • Offline Gross Margin Expansion
    70 bps
  • Total Expenses Growth
    1%
  • Days of Inventory Increase
    1%
  • Total Store Count
    554 stores
  • SSSG (normalized)
    5.5%
  • SSSG (overall full year basis)
    3%
  • Unlimited Volume Growth (9 months)
    10%
  • V-Mart Volume Growth (9 months)
    1%
  • Exceptional Cost (Labour Code)
    ₹2.1 Cr

Q3

  • PAT
    ₹88 Cr
    YoY +23%
  • New Stores Added
    23 stores
  • Capex
    ₹57 Cr

YTD

  • PAT
    ₹113 Cr
    YoY +200%
  • Free Cash Flow
    ₹63 Cr
    YoY +9.4%

What they filed

Q1 FY27: revenue up 23.1%, net profit up 38.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue661 1,027 780 885 807 +22%1,126 +10%971 +24%1,089 +23%
EBITDA39 171 68 126 72 +85%210 +23%106 +56%161 +28%
Net profit-57 72 19 34 -9 +84%88 +22%11 −42%47 +38%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹57 Cr completely funded by our internal accruals
    • New store additions and selective refurbishments ₹57 Cr
    Capex for the quarter stood at INR57 crores, primarily towards new store additions and selective refurbishments. On a YTD basis, the business generated positive free cash flow of INR63 crores, which was also 9.4% up year-on-year. Our expansions have been completely funded by our internal accruals, keeping the balance sheet strong and virtually debt-free.
  • Debt Debt disclosed
    Our expansions have been completely funded by our internal accruals, keeping the balance sheet strong and virtually debt-free.
  • Liquidity Liquidity disclosed YTD free cash flow of INR 63 crores, up 9.4% YoY.
    On a YTD basis, the business generated positive free cash flow of INR63 crores, which was also 9.4% up year-on-year.

Guidance & targets

Store Count

  • New store additions Store Count · this year (FY26) · High confidence 75+ stores
    As communicated in last quarter's call, we are looking to end the year with 75-plus new stores additions this year.

    — Anand Agarwal

Margin

  • Offline gross margins Margin · full year · High confidence broadly stable versus last year
    And for the full year also, we expect the offline gross margins to remain broadly stable versus last year as our value proposition continues to focus on volume-led growth.

    — Anand Agarwal

Square Footage

  • Annual square footage addition Square Footage · medium to long term · High confidence 13-14%
    So the square footage addition on an annual basis should be at around 13%, 14%. That is what we have targeted. And that is a long-term target that we have taken. It's not just for 1 year or this year or the next year. I think in the medium to long term, we are building up 13% to 14% area addition every year.

    — Anand Agarwal

SSSG

  • SSSG SSSG · mid- to long-term average · High confidence 5-8%
    The SSG aspirations always need to be mid- to high single digit, 5% to 8%. So that's the aspiration. Obviously, there will be quarterly disturbances. There will be anomalies and opportunities that we will keep encountering as we move along. But as our mid- to long-term average, I think 5% to 7%, 5% to 8% is something that we are definitely trying to deliver.

    — Anand Agarwal

Unlimited Business

  • Unlimited sales per square feet Unlimited Business · next 2 to 3 years · Medium confidence in line with V-Mart numbers
    we continue to put our faith in expanding the Unlimited business and increasing the sales per square feet to bring it in line with V-Mart numbers in the next 2 to 3 years.

    — Anand Agarwal

  • Unlimited EBITDA margins Unlimited Business · soonest possible · Medium confidence in line with V-Mart
    So our objective is to get the profitability in line with V-Mart at the soonest possible.

    — Anand Agarwal

What to watch in Q4 FY26

SSSG trajectory

Next quarter
Current Flattish in Q3 due to festive shift; ~3% for overall full year basis.
Target Stable 5% to 6% (normalized)

Why it matters

To confirm if the SSSG returns to the normalized range after the festive calendar shift and reflects underlying demand.

But if I normalize, we would see a stable 5% to 6% same-store sales growth

Risks & concerns

  • Weather-related disruptions

    medium

    Delayed/milder winter in North, excess rainfall/cyclones in East/South affected demand, making demand 'little erratic'.

    Management acknowledged

  • Consumer sentiment influenced by global developments

    medium

    Consumer sentiment is 'cautiously positive' but not 'exuberant', with savings rates declining and spending being occasion-driven.

    Management acknowledged

  • Competitive intensity

    medium

    Competition has increased, with more organized players entering markets, offering more choices to consumers.

    Management acknowledged

  • AI/Tech disruption

    low

    AI and new technologies could disrupt traditional retail models and employment, potentially creating 'short-term noise'.

    Management acknowledged

  • Labour code changes

    low

    Recognized a one-time exceptional cost of INR 2.1 crores due to proposed labor code changes, though rules are yet to be announced.

    Management acknowledged

Q&A highlights

6 direct
Discretionary demand evolution & growth levers Direct
We definitely believe that we are doing as a company, we are performing better. Last year also, we gave a great performance. This year also, our performance on the same-store sales growth has been good.

Analyst questioned about sustaining double-digit growth beyond FY26 in Tier 2/3 cities and specific initiatives. Management emphasized festive-led demand, own designs, and growth momentum.

Asked by Sucrit Patil

Margin expansion and capital efficiency Direct
We definitely believe that every expansion or increase in revenue will bring in some benefit into our cost, our expenses as a percentage of sales. So we will definitely deliver better margin even going forward.

Analyst questioned levers for margin expansion and translation to ROCE/debt reduction. Management highlighted digital initiatives, efficiency generation, and upskilling people to drive sales and efficiency.

Asked by Sucrit Patil

Gross margin improvement & winter/festive mix Direct
I think gross margin uptick is largely because of higher full price sell-through because we generally don't discount during this quarter, and we have not done any discounting in this quarter.

Analyst asked about the mix of winter vs. festive assortment and factors contributing to gross margin uptick. Management attributed it to higher full-price sell-through and better inventory health/shrinkage management.

Asked by Hitaindra Pradhan

SSSG for matured stores and Tier 3/4 markets Partial
Definitely, this quarter because the Pujo month -- Pujo festival was in the last quarter. So you are not seeing a high or a flat or you are seeing a flattish same-store sales growth. But if I normalize, we would see a stable 5% to 6% same-store sales growth.

Analyst questioned the declining SSSG trend in matured stores and whether Tier 3/4 markets can achieve nominal GDP level growth. Management explained the festive shift impacting Q3 SSSG and reiterated belief in opportunity and growth beyond GDP.

Asked by Hitaindra Pradhan

Revenue growth slowdown and festive shift Direct
So I think as I already explained that compared to last year same quarter, last year, the Pujo festival, which is celebrated largely in eastern and southern part of India, that was largely in October. And the sales was also a lot of sales came into the month of October, which is the Q3. This year, the festival -- Indian festival calendar moves by the lunar process, the lunar calendar. So that got moved into September.

Analyst noted a slight slowdown in revenue growth and asked about factors. Management clarified the impact of the festive calendar shift from Q3 to Q2, which affected the reported Q3 growth.

Asked by Kaivalya Baing

Unlimited business growth and profitability Direct
So all the new stores that we have been opening in Unlimited, most of them have been delivering much better sales per square feet and much better profitability, in line with the established V-Mart model.

Analyst questioned the lower sales per square feet for Unlimited and asked about the path to better SSSG and profitability. Management explained that newer Unlimited stores are performing well and the focus is on bringing the overall chain's performance in line with V-Mart.

Asked by Devanshu Bansal

Cost of retailing and LimeRoad impact Direct
So you need to break down the P&L, while we present LimeRoad numbers as segment numbers also. So if you were to isolate that and look at the offline P&L separately, you should be able to see there is no further aberration.

Analyst inquired about the reduction in the overall cost of retailing (INR 181/sq ft) and whether it's a sustainable new cost structure, specifically asking about the LimeRoad impact. Management clarified that LimeRoad costs inflated overall costs previously, and the current reduction reflects strategic cost control.

Asked by Rajeev Anchal

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Overview

V-Mart Retail reported a strong Q3 FY26 with post Ind AS EBITDA growing 22% year-on-year to INR 210 crores, and margins expanding by 190 basis points to 18.6%. Net profit for the quarter increased 23% year-on-year to INR 88 crores, while year-to-date PAT grew almost threefold to INR 113 crores. This performance was attributed to solid execution, healthy margins, and strong operating leverage, despite a 1% increase in total expenses.

Macroeconomic and Consumer Environment

Management noted that while industrialization deepens and government policies are supportive, consumer sentiment remains cautiously positive, influenced by global developments. Inflation is largely under control, and per capita income continues to rise, albeit slowly. Spending is primarily occasion-driven (festivals, weddings), and savings rates have declined, with younger consumers increasingly influencing purchase decisions, especially in fashion.

Operational Efficiencies and Inventory Management

The company emphasized its focus on operational efficiencies, leading to a 70 basis point expansion in offline business gross margins year-on-year, despite a 40% decline in LimeRoad commission income. This improvement was driven by better inventory health, reduced discounting, and improved product mix. Days of inventory marginally increased by 1% to 95 days, but overall inventory freshness improved due to aggressive liquidation of old stocks in prior quarters.

Expansion Strategy and New Store Performance

V-Mart added 23 new stores during Q3 FY26, bringing the total store count to 554. These new stores are reportedly ramping up faster and delivering better throughput than historical averages, reinforcing confidence in site selection and brand relevance across Tier 2 and Tier 3 markets. The company aims to add over 75 new stores by the end of FY26, with expansions fully funded by internal accruals, maintaining a virtually debt-free balance sheet.

Unlimited Business Integration and Outlook

The Unlimited business showed visible improvement, with new stores opened post-acquisition performing significantly better in sales per square feet and profitability, aligning with the V-Mart model. While the overall Unlimited chain's sales per square feet are currently 16-17% lower than V-Mart, the company is focused on bringing this metric and EBITDA margins to parity within the next 2-3 years. Unlimited recorded 10% volume growth over 9 months, compared to 1% for V-Mart.

Capital Discipline and Technology Adoption

Capital discipline remains central to V-Mart's model, with a focus on efficient stores and lower per square foot capex compared to industry averages. The company is continuously upgrading its systems, ERP, and analytics, deploying early AI use cases to refine assortments, remove slow-moving SKUs, and sharpen focus on high-demand categories. This technological integration supports supply chain operations and overall efficiency.

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