V-Mart Retail Limited

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.

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.

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.

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.

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 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.