V-Mart Retail

V-Mart Retail reported a strong Q3 FY26, with reported EBITDA growing 22% year-on-year to INR 210 crores, and margins expanding by 190 basis points to 18.6%. The company's PAT for the quarter increased by 23% to INR 88 crores. Year-to-date PAT has grown almost 3x to INR 113 crores, reflecting consistent performance. This robust financial delivery was achieved despite a quarter of mixed signals and weather-related disruptions.

Management noted that industrialization continues to deepen with supportive government policies and inflation largely in control. Per capita income and consumption are rising, albeit not significantly. Consumer sentiment is described as stable and cautiously positive, not exuberant. Footfall growth across markets has been consistent, with increased spending driven by occasions, festivals, weddings, and family events rather than impulse purchases. Rural and semi-urban consumer sentiment has improved, supported by agricultural produce and higher MSPs.

The company's focus on operational efficiencies and tight cost control significantly contributed to margin expansion. Total expenses for the quarter increased by only 1%, leading to strong operating leverage. Offline gross margins expanded by 70 basis points year-on-year, primarily due to better inventory health and reduced discounting. Management emphasized disciplined execution, leveraging digital initiatives, and upskilling personnel to drive efficiency and sales without necessarily reducing costs.

V-Mart added 23 new stores during Q3 FY26, bringing the total store count to 554. These new stores are ramping up faster and performing better than historical averages, reinforcing confidence in site selection and brand relevance. The Unlimited business is also showing strong performance in its newer stores, with a strategic goal to bring its sales per square foot and profitability in line with the established V-Mart model within the next 2-3 years. The company aims for a long-term annual square footage addition of 13-14%.

Despite weather-related disruptions and a delayed winter, inventory remained healthy and under control, with aggressive liquidation of old stocks in earlier quarters leading to lower provisioning. Days of inventory marginally increased by 1% to 95 days, attributed to a strategic increase in FMCG inventory for apparel offtake during winter. The festive demand was reasonable but erratic, with the Pujo festival shifting to Q2 this year, impacting Q3 revenue growth compared to the previous year.