Vishal Mega Mart Limited — Q3 FY26 earnings call

Call held 28 Jan 2026

Management summary

Vishal Mega Mart delivered strong Q3 FY26 results with 17% YoY revenue growth and 9.6% adjusted same-store sales growth, driven by market share gains and customer upgradation. The company continued its aggressive store expansion, opening 29 new stores in Q3, and saw positive results from its small format store pilots. Despite festive timing shifts and delayed winter impacting the quarter, the 9-month performance remained robust with 19.9% revenue growth and 10.3% adjusted SSSG.

Highlights

  • Q3 FY26 Revenue from operations of ₹3,670 crores, up 17% YoY, demonstrating strong growth.

  • Q3 FY26 Adjusted SSSG of 9.6%, indicating robust organic performance.

  • Q3 FY26 EBITDA of ₹605 crores, up 19.8% YoY, with EBITDA margin expanding to 16.5% from 16.1% last year.

  • 9M FY26 Revenue from operations grew 19.9% YoY to ₹9,792 crores, with adjusted SSSG at 10.3%.

  • Successful small format store pilot, with 10 stores showing similar relevance and financial outcomes to normal format stores.

Concerns

  • Delayed winter in December had a small impact on Q3 sales, though overall winter merchandise SSSG remained double-digit.

  • Impact of new Labor Codes resulted in an ₹8.4 crores impact for the 9-month period, though deemed not material to overall results.

  • Infrastructure constraints (e.g., road construction) can lead to temporary store closures, affecting operations.

Key financials

2 periods

Q3 FY26

  • Revenue from Operations
    ₹3,670 Cr
    YoY +17%
  • Adjusted SSSG
    9.6%
  • EBITDA
    ₹605 Cr
    YoY +19.8%
  • EBITDA Margin
    16.5%
  • PAT
    ₹313 Cr
    YoY +19.1%
  • PAT Margin
    8.5%

9M FY26

  • Revenue from Operations
    ₹9,792 Cr
    YoY +19.9%
  • Adjusted SSSG
    10.3%
  • EBITDA
    ₹1,459 Cr
    YoY +24.4%
  • EBITDA Margin
    14.9%
  • PAT
    ₹671 Cr
    YoY +30%
  • PAT Margin
    6.9%

What they filed

Q1 FY27: revenue up 18.7%, net profit up 25.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,436 3,136 2,548 3,140 2,981 +22%3,670 +17%3,114 +22%3,727 +19%
EBITDA302 505 357 459 395 +31%605 +20%425 +19%545 +19%
Net profit104 263 115 206 152 +46%313 +19%168 +46%259 +26%
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.

Guidance & targets

Store Expansion

  • New Store Openings Store Expansion · every year · High confidence 80 to 100 stores
    For the 9-month period, total new-store openings stand at 80. You would recall that at the time of our IPO, we had guided to 80 to 100 new stores every year. So, for the current financial year, we will end at the upper end or slightly over 100 stores vis-à-vis that guidance.

    — Gunender Kapur

Sales Growth

  • Same-Store Sales Growth (SSSG) Sales Growth · near future · Medium confidence around 10%
    So averaging 2Q and 3Q, SSSG around 10%. So, is that what we can expect in the near future as well, around a 10% kind of SSSG? That is what we expect, Percy, and that would be our endeavor.

    — Gunender Kapur

  • Total Sales Growth Sales Growth · near to medium term · Medium confidence about 19% to 20%
    And secondly, on the total sales growth, again, it would be about 19% to 20% on average. So again, is this something that we can sort of take going forward in the near to medium term? That is what we expect, Percy, and that would be our endeavor.

    — Gunender Kapur

What to watch in Q4 FY26

Small format store scaling decision

Spring/Summer (next 1-2 quarters)
Current 10 stores in pilot, performing well
Target Decision on scaling up beyond 10 stores

Why it matters

Indicates the future growth trajectory from a new store format and its potential contribution to overall expansion.

We will watch it for some more time, but keep opening 1-2 stores in spring, summer also, and then come to a conclusion on that.

Risks & concerns

  • Seasonal demand volatility / Delayed winter

    medium

    Delay in winter, specifically for December, had a small impact on business, leading to aggressive discounting by some players to clear seasonal merchandise.

    Management acknowledged

  • Localized disruptions (e.g., Durga Puja impact in Assam)

    medium

    A specific event in Assam during Durga Puja (leader's death, state shutdown) significantly impacted sales in that region for 6-7 days.

    Management acknowledged

  • Competitive intensity leading to discounting

    medium

    There is evidence of increased discounting across the market, particularly by players trying to clear inventory due to various factors.

    Analyst acknowledged

  • Infrastructure constraints impacting store operations

    low

    Road construction, flyovers, or other infrastructure projects can lead to temporary closures or disruptions for some stores.

    Management acknowledged

Q&A highlights

8 direct
Deceleration in growth (Q2 vs Q3) due to festive timing Direct
Largely, it is a festive timing change, Percy. We have itemized the impact of the preponement of Puja this year and that impact was 2.1%. Now that has a further impact on the EBITDA numbers for the quarter and the PAT numbers for the quarter. I would say that it was almost entirely because of the change in the festive timings.

Clarifies that quarterly growth variations are due to festival calendar shifts, not underlying business weakness, and points to 9-month numbers for a normalized view.

Asked by Percy (IIFL)

Drivers of double-digit SSSG and differentiation strategy Direct
Our same-store sales growth has three components. Firstly, I would like to mention that of our same-store sales growth, the most dominant component is upgradation from mom-and-pop stores and market share gain... Secondly, increase in the average bill value of the existing Vishal customers... And last but not the least is an improvement in our average selling price.

Details the specific strategies (market share gain, increased bill value, premiumization) contributing to the company's strong SSSG and competitive advantage.

Asked by Percy (IIFL)

Higher price point growth (market phenomenon vs. company intervention) Direct
This is totally because of company interventions, Manish. So, for example, what we are doing deliberately as an input is that in every category of ours, in every large merchandise category, as we call it, every season we introduce one higher price point where the fashionability and functionality is significantly better at a higher price point.

Confirms that growth in higher price points is a result of deliberate company strategy to offer aspirational yet affordable products, rather than a general market trend.

Asked by Manish Poddar (Invesco AMC)

Market discounting trends and landlord preferences for organized players Direct
So, Manish, on both, on the more discounting, there is some evidence that that's happening... in the balance period and in the balance states, people do make efforts to promote more or discount more to ensure that they are not stuck with very large inventory... On the rental part where the landlords wanting to take you on board... rentals are relevant in the micro markets. It's not across the board, but we are not seeing any significant pressure on rentals.

Addresses competitive pressures (discounting due to inventory issues) and clarifies rental market dynamics, indicating stable rental costs for the company.

Asked by Manish Poddar (Invesco AMC)

Store addition guidance for next year and execution capability Direct
So, Garima, we are retaining a guidance of 80 to 100. And secondly, we have further increased our capacity to add new stores. But the most important input into our number of store additions is the availability of properties, which can become growing profitable stores for us that we can identify.

Reaffirms the store expansion target and emphasizes focus on profitable store locations over merely hitting a numerical target.

Asked by Garima Mishra (Kotak Securities)

Impact of new Labor Codes on financials Direct
So Garima, our comment was more that it's not that the impact has been negligible, but it is not material for our results. So, the impact has been around 8.4 crores so far... most of our employees are actually on our payroll... most of our store employees are already covered in that 50% bracket. So, there we do not have any significant impact.

Quantifies the impact of Labor Codes (₹8.4 crores for 9M) and explains why it is not material due to existing employee coverage.

Asked by Garima Mishra (Kotak Securities)

Small format store performance and strategy Direct
In the small format stores, our action standard or goal was twofold. One was that they should be as relevant as our current format stores. And secondly, the financial outcomes should be the same or similar... per square foot revenue for the small format stores is pretty much similar to what we achieve in our large format stores... financial outcomes are also similar to what we achieve in our normal format stores.

Confirms the success of the small format store pilot, indicating both relevance and financial parity with larger stores, supporting potential future scaling.

Asked by Jignesh Kamani (Nippon India Mutual Fund)

Consumer sentiment and macro factors (income tax, GST changes) Direct
What I have been experiencing is definite optimism because of the income tax and the GST change. But I think the impact of those is yet to be seen. We are quite certain that it will come... the impact of changes made has not been fully witnessed by anybody thus far. But logically, when you have more money with the customers, and you have somewhat lower prices, it can only impact the consumption demand positively.

Provides management's optimistic outlook on consumer demand driven by recent policy changes, while acknowledging that the full impact is yet to materialize due to other short-term issues.

Asked by Latika Chopra (JP Morgan)

2 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Overview

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%.

9M FY26 Performance Overview

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%.

Store Expansion Strategy & New Markets

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.

Same-Store Sales Growth Drivers

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.

Impact of Festive Seasonality and Other Disruptions

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.

Small Format Store Pilot Success

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.

Consumer Sentiment & Macro Factors

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.

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