Vishal Mega Mart Limited

Vishal Mega Mart reported a strong Q3 FY26 with revenue from operations reaching ₹3,670 crores, a 17% year-over-year growth. Adjusted same-store sales growth (SSSG) stood at 9.6%. EBITDA for the quarter was ₹605 crores, growing 19.8% YoY, with the EBITDA margin improving to 16.5% from 16.1% in the prior year. Profit After Tax (PAT) increased by 19.1% to ₹313 crores, achieving a PAT margin of 8.5%.

For the first nine months of FY26, the company's revenue from operations grew 19.9% YoY to ₹9,792 crores. The adjusted SSSG for this period was 10.3%, neutralizing seasonal shifts. EBITDA for 9M FY26 was ₹1,459 crores, a 24.4% growth YoY, with the EBITDA margin expanding to 14.9% from 14.4% last year. PAT for the nine months grew 30% YoY to ₹671 crores, resulting in a PAT margin of 6.9%.

The company maintained its accelerated new store opening momentum, adding 29 new stores in Q3 FY26, bringing the total store count to 771 across 517 cities. Of these, 12 new stores were in South India (Kerala, Andhra Pradesh, Karnataka), and 2 each in Gujarat and Maharashtra. The company reaffirmed its guidance of 80-100 new store openings annually, expecting to be at the upper end of this range for the current financial year.

The double-digit SSSG is primarily driven by three factors: market share gains from mom-and-pop stores and other retailers, an increase in the average bill value of existing customers (buying more items), and an improvement in average selling price due to customer upgradation. Higher price point fashion items grew at 14% SSSG, mid-price points at 9%, and opening price points at 6%, indicating successful premiumization efforts.

The company noted that the deceleration in Q3 growth compared to Q2 was largely due to festive timing shifts, with Durga Puja sales falling in Q2 this year versus Q3 last year. This shift accounted for a 2.1% impact on SSSG. Additionally, delayed winter in December and localized disruptions like the state shutdown in Assam during Durga Puja also had minor impacts, although overall winter merchandise SSSG remained double-digit.

Vishal Mega Mart's small format store pilot, now expanded to 10 stores, is performing well. Management reported that these stores are achieving similar relevance and financial outcomes, including per square foot revenue, comparable to their larger format stores. This success indicates potential for future scaling of this new format.

Management expressed optimism regarding consumer sentiment, anticipating a positive impact from recent income tax and GST rate rationalization. While the full effect is 'yet to be seen' due to short-term issues like delayed winter or air quality concerns, the company believes that increased disposable income and lower prices will logically boost consumption demand.