VMART - V-Mart Retail

📊 NSE: VMART 🏢 Trading 📅 Last Updated: 12/14/2025 14:50

💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 17% YoY to INR 3,253.86 Cr in FY25. In Q2 FY26, V-Mart segment revenue grew 23% YoY to INR 662.4 Cr, Unlimited segment grew 22% YoY to INR 138.0 Cr, while LimeRoad NMV declined 32% YoY to INR 19.2 Cr.

Geographic Revenue Split

The company focuses on 'Bharat' (Tier 2, 3, and 4 cities). While specific regional % splits are not disclosed, management highlighted increased penetration in specific states and noted that disruptions in the Northeast and excess rainfall impacted recent performance.

Profitability Margins

Gross Margin remained stable at 34.5% for YTD FY26. Operating Profit Margin improved significantly from 0.4% in FY24 to 5.5% in FY25. Net Profit Margin turned positive at 1.41% in FY25 compared to -3.47% in FY24.

EBITDA Margin

EBITDA margin (Post-Ind AS 116) stood at 11.7% for YTD FY26. In Q2 FY26, EBITDA grew 85% YoY to INR 71.5 Cr (8.9% margin) driven by a 53% reduction in LimeRoad losses to INR 3.4 Cr and improved operational efficiency.

Capital Expenditure

Not explicitly disclosed as a total planned figure, but the company opened 25 new stores (18 V-Mart, 7 Unlimited) in Q2 FY26 and closed 2, indicating continued investment in network expansion.

Credit Rating & Borrowing

ICRA reaffirmed [ICRA]AA- (Stable) for INR 295 Cr fund-based facilities and [ICRA]A1+ for INR 5 Cr non-fund based facilities. Interest coverage ratio improved to 2.8 times in FY25 from previous lows.

⚙️ Operational Drivers

Raw Materials

Traded goods (Apparel, Non-Apparel, and FMCG) constitute the primary cost, with COGS representing 65.5% of revenue (INR 1,108.4 Cr for YTD FY26).

Import Sources

Sourcing is primarily domestic, focusing on curated designs and private labels. Specific states or countries are not disclosed, but the supply chain is managed through a central warehouse and logistics network.

Key Suppliers

Not disclosed in available documents; however, the company evaluates supplier continuity through an ESG lens and conducts workshops on quality standards.

Capacity Expansion

Current store network stands at 533 stores (438 V-Mart, 95 Unlimited) as of Q2 FY26. Expansion is calibrated, with 25 stores added in the most recent quarter.

Raw Material Costs

COGS as a percentage of revenue was 65.5% in YTD FY26. Procurement strategies focus on 'product sharpness' and 'better pricing' to maintain value for customers without compromising margins.

Manufacturing Efficiency

As a retailer, efficiency is measured by Inventory Turnover Ratio, which was 2.36 times in FY25, and Same Store Sales Growth (SSSG), which was 11% in Q2 FY26.

Logistics & Distribution

Distribution costs are managed through a centralized model; the company reported a 38.1% improvement in the Cash Conversion Cycle to 13 days in FY25 due to better inventory management.

📈 Strategic Growth

Expected Growth Rate

17-22%

Growth Strategy

Growth is driven by a 11% SSSG, expansion of the store network (25 new stores in Q2 FY26), and reducing losses in the LimeRoad digital segment (53% reduction). The company is also focusing on 'product sharpness' and technological supply chain advancements.

Products & Services

Apparel (77% of Q2 FY26 revenue), Non-Apparel (11%), and FMCG (12%) sold through offline stores and the LimeRoad online marketplace.

Brand Portfolio

V-Mart, Unlimited, LimeRoad.

New Products/Services

Focus on private labels with curated designs and high-quality freshness. Private labels do not target differentiated margins but focus on quality and design to drive volume.

Market Expansion

Targeting increased penetration in specific states within 'Bharat' (Tier 2/3/4 cities) through calibrated store openings.

Market Share & Ranking

Positioned as a leading value retailer in 'Bharat'; specific market share percentage not disclosed.

🌍 External Factors

Industry Trends

The value retail industry is seeing a gradual improvement in demand. Trends include a shift toward omnichannel (offline + online) and increased competition from both organized and unorganized players.

Competitive Landscape

Operates in a highly competitive landscape involving both offline value retailers and online marketplaces.

Competitive Moat

Moat is built on a deep presence in Tier 2/3 cities, a conservative capital structure, and a strong private label portfolio. Sustainability is supported by a 11% SSSG and a turnaround to profitability in FY25.

Macro Economic Sensitivity

Highly sensitive to inflation and income fluctuations in rural and semi-urban India, which directly impact discretionary spending on fashion.

Consumer Behavior

Shift toward early festival shopping and demand for 'freshness' in fashion portfolios. Consumers are increasingly value-conscious, requiring sharper pricing and quality.

Geopolitical Risks

Minimal direct exposure as a domestic retailer, though global supply chain issues could indirectly affect input costs for apparel.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with Section 197 of the Companies Act, 2013 regarding director commissions (limited to 1% of net profits) and SEBI Listing Obligations.

Environmental Compliance

The company reused 83% of cartons and digitised store registers to reduce paper use. ESG compliance is monitored by the Board.

Taxation Policy Impact

Effective tax impact included a deferred tax credit of INR 18.8 Cr in FY25. Current tax was minimal at INR 0.7 Cr.

⚠️ Risk Analysis

Key Uncertainties

Inventory obsolescence risk and seasonal sales volatility could impact margins by 1-2%. Climate change (floods/cyclones) poses risks to infrastructure and supply chain continuity.