The results are satisfactory, and it is evident that they are able to successfully replicate their model throughout new stores and new locations.
The Gap between the December quarter and the March quarter has reduced; earlier sales dipped by 20%, which has now improved to 15% and margins which were at 7.3% 2 years ago are now at 11.6% + improved YoY growth rate, cash flow, working capital days and inventory days which should further improve as their base gets bigger.
V2 retail concall crisp update,
Analysts asked questions about past way back 2007-2010, how company is different now? Good concall
Very good Q1FY26 Business update.
Standalone revenue stood at ₹628 crores in Q1 FY26, up 51% YoY from ₹415 crores in Q1 FY25 a remarkable performance despite the high base. This growth underscores the effectiveness of our product-first strategy, improved sell-throughs, and deeper market penetration.
V2 retail 1Q FY26
revenue at ₹632 cr up 52 % yoy and 27 % qoq
ebitda grew 57 % yoy / 51 % qoq to ₹87 cr
margins at 13.8 % up 40 bps
PAT ₹24.7 cr up 51 % yoy and 286 % qoq
SSSG 5 % (normalised 10 %); PSF ₹960 / month
Net +27 stores ⇒ 216 total; retail area ~23.5 lac sq ft
Volume +50 % yoy; ASP ₹303; ABV ₹901
Full‑price sales mix 92 %; NWC days down to 34
Target 50% revenue growth going forward with 8% to 10% SSSG from old stores and 40% growth from new stores
Store opening target increased to 100-120 stores in FY26, up from initial target of 100
New stores breaking even from first month with 6-7% EBITDA vs 10% for old stores
Planning QIP of INR 400 crores to accelerate momentum and future-proof growth
Will be PAT positive in all quarters of FY26
Targeting to become debt-free after QIP fundraise
Expanding to 25 states with stores coming up in next 6 months - aiming to be nationwide retailer in 3 years
70-75% expansion in existing states, 20-25% in new geographies
Hub-and-spoke model operational with 8 hubs, enabling daily/alternate day replenishment vs weekly earlier
New eastern zonal warehouse finalized for INR 25-30 crores investment
Target EBITDA margin expansion to 10% in next 2 years (currently 8.3%)
Store warehouse area reduction from 7-8% to 2-3% of floor space due to higher frequency drops
Inventory at store level to reduce from 10-12 days sales cover to 3-4 days
Investment in Centric PLM and Planning technology for process automation
Target PSF of INR 1,200 nationally (old and new stores combined) in next 3 years
At INR 1,200 PSF, expects 11% EBITDA margin and ~40% ROE
V2 retail appears to be the most comfortably placed in terms of valuations and growth.
V2 had laid down pretty aggressive expansion plans & the company seems to be executing that. A QIP could even lead to more aggressive expansion.
Right now everything seems to be going right for company & they are even scouting for more SMP & are strengthening their team.
They could reach 500 stores mark really quickly if things remain status quo. They’ve already opened 61 net stores this year & could have operating leverage also act as a catalyst for them.
Disc: Own as part of family PF & have added recently too
I see corporate governance issue mentioned in past in thread. Also they are growing too fast in too many states. Isn’t this a problem? Also using debt/equity to scale rather than internal accruals ?
The governance issues have been there. It has to be taken with a pinch of salt or rather a bag of salt. What’s good to see is that they are searching for SMPs including a CEO.
As far as entering new states is there it’ll be a challenge in future provided that expansion gets saturated in states where they are predominantly present.
However they’ve explained that 75% expansion will be in existing states & rest from newer geographies. There target geographies have immense scope but one would need to take into account how their new store network performs. Hence new store throughout becomes even more important. As of now they are performing well with their throughout almost 75-80% of matured stores.
On expansion, feel for faster scale up capital is needed aside internal accruals as there are many areas where funds are needed. More stores would need more capex plus inventory plus setting up more warehouses & hubs & beefing up Backend as well.
Now once they reach scale & with recent store openings maturing & delivering higher throughout & their inventory getting even more rationalised with quicker delivery & lesser at store, leading to lower investment in new stores, this problem should get sorted.
In a nutshell, there are problems but they seemed to have cracked the code in terms of agility in opening new stores & their performance as well. What needs to be seen is if the momentum sustains.
Disc: Could be completely wrong in weighing pros more than cons but have expectations set on various deliverables that need to be tracked for the company. Plus this space would only get more heated so one needs to track execution and performance of competitors as well.
A very good business update for Q2 from V2 Retail. Very solid revenue growth backed by Pujo with store opening execution too good to be true
Disc: Biased & no reco
54d438ca-4f7b-4dce-ad41-3bf9bd9b1e99.pdf (245.0 KB)
2Q26 Business Update - V2 retail vs V-mart retail vs Baazar style
V2 Retail:
Baazar Style:
V-Mart Retail:
disclaimer: no recent transactions
A reminder on the last time they followed such an aggressive strategy is needed, esp as its debt funded this time thus far. The amount of WC needed to double your store base in a year is massive, that’s where they got in trouble last time around too.
The sale of Vishal Retail was preceded by a severe financial crisis that began in 2008 and culminated in the company’s distress sale by 2011. This crisis represents one of the most significant retail collapses in India’s organized retail history.
Vishal Retail, founded by Ram Chandra Agarwal in 2001, experienced rapid growth and went public in 2007, raising ₹110 crores through its IPO. The company embarked on an aggressive expansion strategy following its successful public listing, operating over 170 stores across India under brands like Vishal Megamart, Vishal Retail, and Vishal Fashion Mart.news18+1
However, this rapid expansion was funded through heavy borrowing. The company took on substantial debt to finance new store openings, anticipating continued growth in consumer spending.economictimes
The global financial crisis of 2008 devastated Vishal Retail’s business model:
By 2009, Vishal Retail faced catastrophic financial distress:
As the crisis deepened, Vishal Retail entered the Corporate Debt Restructuring (CDR) process:
Unable to recover from the crisis, Ram Chandra Agarwal was forced to sell the business:
Following the sale:
V2 Retail | Competitive Benchmarking (Value Fashion Retail)
Rapid store expansion + better asset productivity = the twin engines driving share gains and margin lift. But execution and deleveraging (₹400cr QIP) are key swing factors - missing either one of them, and margins + balance sheet recovery take a hit.
Scale & Share: FY25 revenue ₹1,884cr → ~1.5% of organized apparel, ~3–4% of value-fashion. ~225 stores now; 100–120 adds planned in FY26 = footprint-led growth story.
Geography: Strong Tier-2/Tier-3 presence; 70–75% expansion in existing states. 8 logistics hubs + new East warehouse → better replenishment. Omnichannel small (~5%), physical network remains core.
Efficiency: ROCE 17% (vs 11% last year), CCC down to 66 days, inventory days 159 (↓ from 199). Fixed assets +80% YoY → near-term pressure on depreciation & interest until stores stabilize.
Differentiation: 92% full-price sell-through + 2-day restocking cycle = pricing power + faster turns. Vendor consolidation + data-driven assortment added ~1pp to gross margin.
Financials: 3-yr revenue CAGR ~50%, FY25 OPM ~14%, FCF ₹92cr — top-quartile among value-fashion peers.
Leverage: Debt ₹850cr, D/E 2.45×; QIP crucial for deleveraging + expansion.
Risks: Execution (100+ stores FY26), 4–5% closure rate, SSSG must hit 13–15% to sustain 10% EBITDA (pre-Ind AS). Missing that will lead to margin compression + slower payback.
Interesting insights from management - moving from 7 day drop to twice weekly drop -
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selling price per sq ft
reduction in store operation
V2 Retail -
Q1 FY 26 results and concall highlights -
Q1 outcomes -
Revenues - 632 vs 415 cr, up 52 pc. Volume growth @ 50 pc
Gross profit - 186 vs 120 cr, up 55 pc ( GMs @ 29.5 pc )
EBITDA - 87 vs 55 cr, up 57 pc ( margins @ 13.8 vs 13.4 pc )
PAT - 25 cr, up 51 pc ( PAT margins @ 3.9 pc, due 50 pc increase in depreciations and interest costs )
Total no of stores @ 216. Opened 28 and closed 1 store in Q1. Total retail area @ 23.49 lakh sq ft ( avg store size @ 10.87 k Sq Ft )
Sales / Sq Ft / month @ 960. That amounts to Rs 11.5 k / Sq Ft / yr
Avg bill value in Q1 stood @ 901 vs 824 in Q1 LY. Avg selling price per article stood vs 303 vs 260 in Q1 LY
SSSG @ 5 pc
Revenue Mix -
Men’s wear - 41 pc
Ladies wear - 29 pc
Kids wear - 24 pc
Lifestyle - 6 pc ( like Deos, Wallets, Sunglasses, ladies purse etc )
FY 25 outcomes -
Revenues - 1884 vs 1164 cr, up 62 pc
GMs @ 29.3 vs 29.7 pc
EBITDA - 257 vs 148 cr, up 74 pc ( margins @ 13.7 vs 12.7 pc )
PAT - 72 vs 28 cr, up 160 pc
PAT in Q1 on a pre Ind AS basis stood @ 30 vs 19 cr, up 62 cr. PAT on a pre Ind AS basis for FY 25 vs FY 24 stood @ 87 vs 39 cr, up 130 pc
Q2 FY 26 update - Revenues @ 705 vs 380 cr, up 85 pc. SSSG @ 10.3 pc. Company added 43 new stores reaching a total of 259 stores as on 30 Sep. Monthly sales / Sq Ft stood @ Rs 938. H1 revenues @ 1335 cr, up 68 pc. Total retail area @ 27.94 Sq Ft
Company aims to keep opening 100 stores / yr for next 3-4 yrs. Aim to reach 600-700 stores by FY 30
In Q1, sales @ MRP represented 92 pc of company’s sales. This is a direct reflection of company’s accurate assortment planing
Company does not sell online
If one were to look at mature stores, per sq ft sales per month stood @ Rs 1095
Guiding for a 50 pc revenue growth for FY 26. Expecting SSSG @ 8 - 10 pc + 40 - 42 pc sales growth from new store additions
Have passed an enabling resolution to raise funds via QIP, upto 400 cr - to accelerate growth + to reduce debt + to improve backend capabilities + to get better procurement terms from vendors
Company expects to be PAT positive in all 4 Qtrs in FY 26
Per store opening cost for the company typically varies between 2-2.5 cr ( including inventory + Capex ). Therefore the capex required to open 100 stores / yr should be around 250 cr
The shift in budget clothing retail from unorganised to organised sector is a huge tailwind and is even defying the broader macro - economic slowdown in the country. This is likely to continue for next 3-4 yrs
If the high growth trajectory as seen in Q1, Q2 sustains - company may even even open 120 stores in FY 26 and around 140 stores in FY 27
On an avg, the new stores are clocking Rs 800 / sq ft / month sales right from the first month - a very very encouraging sign ( IMHO ). An avg store breaks even @ sales value of Rs 500 / sq ft / month
Pre Ind AS EBITDA and PAT margins for FY 25 were @ 8 pc and 4.5 pc respectively. Company aspires to reach 10 pc EBITDA levels on a Pre Ind AS basis by FY 27 ( Assumption - if that transpires into a PAT margin of 6.5 pc and the topline grows compounds @ 50 pc CAGR till FY 27, absolute Sales and PAT in FY 27 can be 4230 cr and 275 cr !!!. At 5 pc PAT margins, absolute PAT would reach 210 cr )
Avg rentals that the company is paying today is Rs 53 / sq ft. For the new store openings, company is negotiating better terms and is able to reduce avg rentals to Rs 41 / sq ft for new store openings ( as they r able to attract customers at some distances away from main / central mkt places )
In case the per sq ft sales for new stores starts tapering off / SSSG at old stores shows a slowdown - company would slow down their rapid expansion spree and re-calibrate their growth stratergy
Disc: added recently, biased, not SEBI registered, not a buy/sell recommendation, posted only for educational purposes
QIP of 400 crores & entry of funds like Malabar
4c322e29-b05a-48f9-9f5a-effe981c0c8a.pdf (260.0 KB)
Disc: Biased & no reco
A very positive Q2, probably the first ever profitable Q2 with the first ever QoQ increase in Q2 sales, breaking the trend and in line with the management’s guidance of eventually turning profitable in Q2s.
V2 retail -
Q2 results and Concall highlights -
Pre Ind AS results for Q2 -
Revenues - 708 vs 380 cr, up 86 pc ( Q2 volume growth @ 58 pc ). SSSG @ 10.3 pc
Gross margins @ 28 vs 27.2 pc
EBITDA - 44 vs 8 cr ( margins @ 6.3 vs 2.1 pc )
PAT - 25 vs 1 cr
Pre Ind AS results for H1 -
Revenues - 1340 vs 795 cr, up 69 pc
Gross margins @ 28.7 vs 28.2 pc
EBITDA - 97 vs 40 cr, up 142 pc ( margins @ 7.2 vs 5 pc )
PAT - 56 vs 20 cr, up 185 pc
Sales per Sq Ft / month in Q2 @ Rs 938 vs Rs 905 in Q2 LY
Total store count now @ 259. Opened 43 stores in Q2. Total retail area @ 27.94 lakh Sq Ft. Total stores opened in H1 @ 70
MRP sales contributed to 92 pc of total sales
Avg bill value @ Rs 899 vs 791 in Q2 LY
Avg selling price @ Rs 315 vs 269 in Q2 LY
States with bulk of V2 retail stores -
Bihar - 44
Assam - 17
NCR - 10
UP - 48
Jharkhand - 19
Karnataka - 18
MP - 20
Odisha - 30
WB - 13
Have already added 16 new stores in Q3 ( till date ). Store count as on the date of concall now stands @ 275
SSSG for H1 stood @ 13 pc
Have recently entered AP mkt. Seeing good response. Should enter TN, Telangana in near future
Looking out for a good tech partner who can help them sell online ( and leverage their inventory via a new sales channel ) with minimal costs. Hopefully, this should happen by next FY
Breakeven level of sales requirement for a new store are > Rs 500 psf / month. Most of company’s stores achieve this after 1 -2 months of operations
Oct sales have very been strong
Should close FY 26 with a total new store addition of 130 stores. If the sales momentum continues as in H1, should add another 150 stores in next FY
Have raised 400 via QIP. Have repaid debt worth 135 cr, used 165 cr for working capital and will be using 100 cr for general corporate purposes. Company aims to be the best pay masters for their vendors by ensuring timely payments to them and always ensuring good liquidity in their hands. In return, company gets good discounts from them
Even the new stores that the company has opened in non-core mkts like - Maharashtra, Gujarat, Haryana etc - are doing well
Current avg cost @ Rs 52 psf. For the next 80 stores ( MOUs that the company has signed up ), the avg rentals are Rs 48 psf
Early onset of winter is a good sign for the company. ASP and Gross margins for winter clothing is higher vs summer clothing
Company’s store managers and floor managers do get incentives ( like 10-30 pc extra salaries ) for achieving their sales targets. Hence the attrition is low. However, the attrition @ lower levels remains high - which is an Industry wide phenomenon
Sales of winter wear are exceeding company’s expectations and the company is facing stock shortages @ some of their stores. They r working overtime to resolve the issue
At present, the company is not looking to expand their Gross Margins. This is a deliberate strategy - to pass on max benefits to the consumers so as to keep the throughputs and sales velocity @ stores at levels far higher than their competitors
Disc: holding, added more recently, not SEBI registered, not a buy/sell recommendation, posted only for educational purposes
