V2 Retail Limited is one of India’s fastest-growing value retail chains, offering affordable fashion and lifestyle products primarily in Tier II and Tier III cities. With a strong focus on private labels and customer-centric assortment, the company operates over 200 stores nationwide. V2 Retail is known for delivering quality, variety, and value to aspirational consumers across the country.
In this article we are going to discuss the summary of the management commentary that was delivered on Q4FY25 performance.
Performance Overview (FY25)
- Transformation Year: FY25 was a defining year, with focus on strategy, execution, and agility.
- Revenue crossed an all-time high of 1884.5 crores growing 62% from last year.
- Profit after tax surged to INR 72 crores marking a 159% growth from last year and it is company’s highest ever.
- EBITDA stood at INR 257.8 crores growing 74% with margins of 13.7%.
- Same store sales growth for FY25 was 29% even on a high base.
- Volume growth came in at 43% reinforcing customer traction.
- Full price sales stood strong at 89% up from 87% in FY24.
- ROE improved to 23.2%, a clear reflection of company’s capital efficiency.
| Particulars | FY25 | FY24 | YoY Growth |
|---|---|---|---|
| Revenue | ₹1,884.5 crore | ₹1,164 crore* | +62% |
| EBITDA | ₹257.8 crore | ₹148 crore* | +74% |
| EBITDA Margin | 13.7% | ~12.7%* | +100 bps approx. |
| Profit After Tax (PAT) | ₹72 crore | ₹27.8 crore* | +159% |
| PAT Margin | ~3.8% | ~2.4%* | +140 bps approx. |
| Same Store Sales Growth (SSSG) | 29% | 31% | Slightly Lower |
| Sales per Sq. Ft (Monthly) | ₹1,017 | ₹854 | +19% |
| Return on Equity (ROE) | 23.2% | ~16%* | Significant increase |
| No. of Stores (as of Mar 2025) | 189 | 117 | +72 Stores |
| No. of Stores (Current) | 207 | — | — |
Operational Highlights
Store Expansion
- added 74 stores and closed two during the year reaching 189 stores by 31st of March 2025.
- As of today, company have already crossed the 200 stores mark with 207 stores live
- Company’s stores are profitable from the very first month with breakeven sales at just Rs. 500 per square feet per month.
- Sales per square feet for the year rose to Rs. 1,017 per square feet per month up from Rs. 854 last year.
Product and brand lend differentiation:
- 85% of company’s business is private label and they are doubling down on it.
- Company’s own design products contributed about 35% to 40% this year and they target it to reach around 60% by the summer of 2026 and 80% by 2027. This means better margins, unique fashion, less discounting and customer loyalty.
- Company reduced old inventory that is more than 1 year old inventory from 18% to just 5% ensuring freshness and relevance.
CAPEX and Future Outlook
- V2 Retail’s CAPEX per store stands at ₹2.2 crores (including inventory).
- With inventory at 90 days and creditor days at 45, the company maintains a lean working capital cycle.
- For FY26 & FY27, it projects 45–50% revenue growth, driven by new stores and 8–10% same store sales growth, targeting EBITDA margins of 8–9% (pre-IndAS).
- Expansion is focused on UP, Bihar, Odisha, Jharkhand, and newer regions like Punjab, Bengal, Rajasthan, and South India, emphasizing profitable and scalable growth over sheer store count.
Question and Answer Session Highlights
can we be PAT positive this year in all quarters?
Yes, that is the target. And I think even this year we were EBITDA positive in all the four quarters. But for this coming years now, even with the seasonality, we expect to be PAT positive in all the four quarters.
Do we have a PAT margin number in mind that we want to achieve?
We target a pre-IndAS EBITDA margin of 8% to 9%. So, I think which translates to about 4% to 5% of PAT.
in a TV interview you had divulged that you will open 100 stores this year. So, is that still in force?
Yes. So, we have already opened 17 stores this quarter. So, we are on track to open 100 stores this year.
This year the same store sales growth (SSSG) was impressive at 29%. But is it correct that the guidance for next year is only 8–9%?
Yes, that’s correct. In the last two years, we delivered very high SSSG — 31% in FY24 and 29% in FY25. Now that our base sales have crossed ₹1,000 per square foot per month, we are targeting a more normalized SSSG of 8–10%, which we consider strong and sustainable on this high base.
If I assume the same revenue per square foot next year and factor in the addition of 100 new stores, the growth still calculates to over 50%. Is that a correct assumption, or am I missing something?
The assumption depends on the timing of store openings. You may have averaged it out across the year, but in our internal model, a significant number of stores are planned to open during the September–October festive season, which contributes more to sales. So, when timed correctly, 50% growth is achievable, but the actual outcome depends on the month-wise rollout of new stores.
What is the current warehouse capacity, and are there any plans to expand it given the aggressive store additions planned?
The current warehouse capacity is sufficient to support another 70–80 stores. We have already finalized a new zonal warehouse in Calcutta, and as store expansion accelerates, more warehouses will be added accordingly.
What is the CAPEX per square foot for a warehouse?
For a 1 lakh square feet warehouse, the CAPEX is around ₹20 crores.
Congratulations on the great results. You mentioned earlier a 40%–50% growth target for the next 4–5 years, along with margin expansion in FY26 and FY27. So, considering both, what kind of EBITDA growth are you targeting? A margin estimate would help in understanding this better.
Since new stores typically perform lower in terms of sales per square foot and take around 2–3 years to mature, we don’t expect a significant jump in EBITDA margin immediately. However, there will be some operating leverage. If we achieve strong same store sales growth (SSSG) like the past two years, we may see some margin expansion. Otherwise, with the plan to open 100 stores, we are targeting a pre-IndAS EBITDA margin of around 8% to 9%.
You’re targeting 40%–50% growth. Is this target based on your current size and low base, or is it driven by overall market expansion and growth potential?
The total addressable market is very large, so it’s not just about our base size. We’ve built a model assuming the opening of at least 100 stores annually and achieving 8%–10% same store sales growth (SSSG), which we believe is realistic. We’ve already demonstrated this capability by opening 74 stores last year. There’s even potential to grow faster—up to 50%–60%, if performance continues to improve and new stores perform well.