V2 Retail Q1 FY27 Results (NSE: V2RETAIL)
Signal: Steady quarter
The read
Q1FY27 sustains the high-growth trajectory with revenue up 57.7% YoY to ₹99,719.65 lakh and PAT up 69.7% to ₹4,185.16 lakh, while EBITDA margin rose 10bps YoY to 14.1%; however, gross margin contracted 257bps as raw-material-linked costs rose 280bps as a share of revenue, so the next proof point is whether merchandising and sourcing changes can restore gross-margin quality rather than relying on expense growth below sales.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹997.2 Cr | 57.7% | +25.1% |
| EBIT | ₹76.58 Cr | 36.6% | |
| Net profit | ₹41.85 Cr | 69.7% | |
| EPS | ₹1.15 | -83.9% | |
| EBIT margin | 14.1% |
P&L walk
Revenue increased 57.7% YoY to ₹99,719.65 lakh and EBITDA increased 59.3% to ₹140.45 Cr, but gross margin contracted 257bps as raw-material-linked costs rose to 71.4% of revenue; depreciation increased 98.4% and EBIT growth consequently moderated to 36.6%.
Segments
The group is effectively single-segment retail, and the subsidiary contributed a reported loss of ₹4.85 lakh with nil revenue, leaving consolidated PAT of ₹4,185.16 lakh almost identical to standalone PAT of ₹4,190.01 lakh.
Key positives
- Revenue reached ₹99,719.65 lakh, up 57.7% YoY and 25.1% QoQ, extending the company's multi-quarter high-growth trajectory.
- EBITDA increased 59.3% YoY to ₹140.45 Cr and EBITDA margin expanded 10bps YoY to 14.1%, despite gross-margin compression.
- Employee benefits and other expenses grew 39.7% YoY versus revenue growth of 57.7%, helping protect EBITDA margin.
- Finance costs rose only 9.7% YoY to ₹2,499.03 lakh, materially below revenue growth.
- The appointment of a President Buying & Merchandising with approximately 25 years of experience is intended to strengthen assortment, sourcing, pricing and inventory optimization.
Key concerns
- Gross margin fell 257bps YoY to 28.6% as raw-material-linked costs increased to 71.4% of revenue from 68.6%; the filing does not disclose the driver.
- Revenue grew 57.7% YoY while raw-material-linked costs grew approximately 64.2%, indicating that the company absorbed part of the cost increase rather than fully passing it through.
- Depreciation increased 98.4% YoY to ₹6,367.38 lakh, causing EBIT growth of 36.6% to lag EBITDA growth of 59.3%.
- EPS declined 83.9% YoY to ₹1.15 despite PAT growth of 69.7%, requiring reconciliation of the post-stock-split share-count and EPS presentation.
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