V2RETAIL - V2 Retail

📊 NSE: V2RETAIL 🏢 Textiles - Products 📅 Last Updated: 12/14/2025 14:52

💰 Financial Performance

Revenue Growth by Segment

Revenue grew 62% YoY in FY25 to INR 1,884.5 Cr. Product mix contribution: Mens Wear (40%), Ladies Wear (27%), Kids Wear (25%), and Lifestyle (8%). Q2 FY26 revenue grew 86% YoY to INR 708.6 Cr.

Geographic Revenue Split

Regional space mix: East (44.39%), North (29.13%), South (7.12%), and West (not explicitly detailed but part of the remaining mix).

Profitability Margins

Gross margin target is 28-29%. Q2 FY26 gross margin improved to 28% from 27.2% YoY. Net profit ratio improved to 3.76% in FY25 from 2.34% in FY24.

EBITDA Margin

Pre-Ind AS EBITDA margin for Q2 FY26 was 6.3% (up from 2.1% YoY). Standalone EBITDA for FY25 was INR 252.3 Cr compared to INR 142.4 Cr in FY24.

Capital Expenditure

Store setup capex is approximately INR 1,100 per square foot. Management plans to add 60-70% new area annually to support a 40% revenue contribution from new stores.

Credit Rating & Borrowing

Liquidity profile is characterized as 'Stretched' by ICRA, with fund-based working capital limit utilization averaging 84% and peaking at 99%. Debt-Equity ratio increased to 2.43 in FY25 from 1.83 in FY24.

⚙️ Operational Drivers

Raw Materials

Apparel and Lifestyle stock-in-trade (Mens, Ladies, Kids wear). Purchases of stock-in-trade for H1 FY26 totaled INR 1,234.03 Cr.

Import Sources

Localized sourcing is prioritized to maintain operational efficiency and lower costs.

Key Suppliers

Sourced from various vendors, including a focus on MSMED (Micro, Small and Medium Enterprises) vendors to manage finances and supply chain properly.

Capacity Expansion

Current regional space mix is dominated by the East (44.39%). Planned expansion involves adding 60-70% new square footage annually to achieve a 50% total revenue growth target.

Raw Material Costs

Purchases of stock-in-trade represented approximately 92% of revenue in H1 FY26 (INR 1,234 Cr against INR 1,334 Cr revenue), though this includes inventory build-up.

Manufacturing Efficiency

Subsidiary 'V2 Smart Manufacturing Private Limited' handles manufacturing. All stores older than one year are EBITDA positive.

Logistics & Distribution

Prioritizes efficient SCM and localized sourcing to bolster emerging market penetration.

📈 Strategic Growth

Expected Growth Rate

50%

Growth Strategy

Growth is targeted through 8-10% Same Store Sales Growth (SSSG) and 40% revenue from new stores. Achieving this requires adding 60-70% new area annually because new stores initially generate ~70% of the sales per square foot of older stores.

Products & Services

Mens Wear, Ladies Wear, Kids Wear, and Lifestyle products (consumer goods).

Brand Portfolio

V2 Retail, V2 Smart Manufacturing.

New Products/Services

Focus on augmenting revenue through private label brands and maintaining inventory freshness to drive higher sales per square foot.

Market Expansion

Aggressive offline store expansion targeting emerging markets and increasing penetration in existing regions like the East and North.

Strategic Alliances

Marathon Capital serves as the Investor Relations advisor.

🌍 External Factors

Industry Trends

The organized value retail segment is growing but attracting aggressive expansion from both established players and new entrants, leading to margin compression risks.

Competitive Landscape

Intense competition from new entrants in the value retail segment and established organized players.

Competitive Moat

Moat is built on cost leadership and operating leverage. By maintaining high sales per square foot, the company reduces per-unit operating costs, though this is vulnerable to intense competition.

Macro Economic Sensitivity

High sensitivity to discretionary consumer spending and economic slowdowns, which directly impact footfalls and average sales per square foot.

Consumer Behavior

Consumer skepticism to step out during economic slowdowns or health crises significantly affects footfalls and discretionary spending.

Geopolitical Risks

General macroeconomic and geopolitical developments are cited as factors that could materially impact operations.

⚖️ Regulatory & Governance

Industry Regulations

Subject to standard Companies Act and SEBI (LODR) regulations. Internal audit systems are under constant review to ensure adherence to relevant regulations.

Taxation Policy Impact

Standalone tax expense for H1 FY26 was INR 12.3 Cr.

Legal Contingencies

The company has disclosed the impact of pending litigations in Note 35 of the standalone financial statements; specific INR values for these cases were not provided in the snippets.

⚠️ Risk Analysis

Key Uncertainties

Rapid expansion risks (60-70% area growth/year), inventory aging/obsolescence in apparel, and the ability to maintain liquidity with a 'Stretched' profile.