V2RETAIL

Strengthens Balance Sheet with QIB Funding

, a fast-scaling value fashion retailer, reported a robust Q3FY26 performance, with revenues rising to ₹929 crore, supported by festive demand, strong footfalls in Tier-2 and Tier-3 markets, and disciplined execution. EBITDA margins expanded to 18.7%, aided by operating leverage and better inventory deployment. The successful ₹400 crore QIB has strengthened the balance sheet, reducing execution risk as the company accelerates its national expansion. Financial Performance - Revenue: ₹929 crore, driven by festive-led demand and volume growth. - EBITDA: ₹174 crore, margin at 18.7%, supported by operating leverage. - PAT growth outpaced revenue, aided by cost absorption and stable finance costs. - Gross margins improved sequentially on favourable category mix and high full-price sales. SSSG & Demand Indicators - Reported SSSG: 2%, diluted by festive timing and new-store additions. - Normalised SSSG: 12.8%, reflecting strong underlying demand. - Volume growth: +48% YoY; average bill value: ₹964; full-price sales: 92%. - Winter wear contribution boosted margins due to higher sell-through. Store Expansion & Productivity - Added 35 stores in Q3, total 294 stores across 225 cities and 25 states. - Unit economics: ₹2.4–2.5 crore investment per store, breakeven at ₹500/sq ft, opening productivity at ₹750–800/sq ft. - Sales per sq ft: ₹1,032/month, impacted by new-store mix; mature stores at ₹1,100–1,200 PSF. Working Capital & Balance Sheet - Net working capital days rose to 69 vs 37 in FY25, due to inventory build and tighter creditor cycles. - Inventory quality remains strong, with high full-price sell-through. Valuation & Outlook - Near-term metrics diluted by new-store ramp-up, but margins expected to remain stable. - Medium-term growth supported by sustained SSSG, inventory efficiency, and store productivity. - Valuation: ~20x FY28E earnings, offering reasonable visibility on earnings growth.