- 11 Feb 2022
- ICICIdirect Research
V-Mart reports steady performance with healthy revenue recoveryVMART - 2035 Change: -3.80 (-0.19 %)
News: On a favourable base, revenue for the quarter grew 47% YoY to Rs.692.0 crore (I-direct estimate: Rs.625.3 crore). The company, during the quarter, added six new stores taking total store count to 374 stores. During the quarter, it successfully integrated Unlimited business in south and west India, which, we believe, has contributed ~10% of revenues. Excluding the Unlimited format, revenue recovery was at 111% of pre-Covid levels (vs. 100% in Q2FY22). EBITDA margins declined 250 bps YoY to 19.6% (I-direct estimate: 19.6%). Absolute EBITDA grew 30% YoY to Rs.135.3 crore (I-direct estimate: Rs.122.8 crore)
Views: V-Mart reported a steady operational performance on the back of strong festive demand and onset of winters. While revenue were above our estimates, profitability was broadly in line. Employee and other expenses increased by 65% and 86% YoY, respectively mainly on account of higher marketing spends and integration of Unlimited business format. We like V-Mart as a structural long term story to play the unorganised to modern retail shift. Recent acquisition of ‘Unlimited’ store brand (74 stores) will enable V-Mart to cater to the fashion needs in western and southern markets of India (where V-Mart has minimal presence).