V2 Retail Q3 FY26 Earnings Analysis

- Targeting revenue growth of over 50% driven by 8-10% same-store sales growth (SSSG) and expansion of store footprint by 60-70%. - Plan to add 130 new stores in the current year and 150 stores next year to fuel growth. - New stores initially achieve about 70% of sales per square feet of old stores, maturing over time. - Volume growth in Q2 FY '26 recorded at 58%, with full-price sales contributing 92%. - Focus on expanding in existing core markets (60-70% of stores) and newer geographies (30-40% of stores). - Aim to maintain gross margin around 28-29%, passing cost benefits to consumers to gain market share. - Long-term potential for 2,000 to 2,500 stores nationwide, driving sustained growth. - Expect EBITDA margin to stabilize around current levels during rapid expansion, improving as store maturity increases.

- Revenue growth target is over 50% annually, driven by 8-10% same-store sales growth (SSSG) and 40% revenue from new stores. - Store expansion planned to continue aggressively: 130 new stores in the current year, increased from 100; 150 new stores targeted next year. - EBITDA margin guidance maintained at around 8% pre-Ind AS, considering new stores initially have lower sales per square feet (~70% of old stores), leading to margin offset. - Long-term EBITDA margin expansion expected as newer stores mature and contribute higher sales. - Target Return on Equity (ROE) above 20% beyond FY '28 driven by scalable and replicable business model. - Gross margin targeted at 28-29%, with strategic focus on passing benefits to consumers to maximize market share. - Earnings growth reflected in strong PAT growth: 3,561% YoY increase in Q2 FY26 and sustained improvement in operating leverage.

- To open 150 stores, V2 Retail Limited plans a capex plus inventory investment of around INR 350 crores. - Additional warehousing cost is estimated at around INR 25 to 30 crores to support the hub-and-spoke regional warehouse model. - The company raised QIP funds used primarily to: - Repay INR 135 crores debt - Allocate INR 165 crores for working capital - INR 100 crores for general corporate purposes - The capital raise also supports: - Payment to vendors earlier, improving vendor relations and obtaining bill discounts. - Increasing store opening targets. - Future capital requirements depend on execution and performance; currently, cash flows cover growth till end of FY '28. - Strategic focus on building an ecosystem where product and data are central to driving product design and quality.

- Currently, there are no plans for new fundraising through debt or equity. - The company has recently completed a QIP (Qualified Institutional Placement) which has funded growth plans till the end of FY '28. - Future fundraising will depend on execution and performance; if the business metrics are healthy and store expansion targets increase, the company may consider raising more capital. - The primary objective remains to maintain a healthy Return on Equity (ROE) and raise funds only if necessary to support expansion and growth. - The company is focused on achieving an ROE of more than 20% and will evaluate fundraising needs accordingly.

The transcript does not explicitly mention the current or expected orderbook or pending orders for V2 Retail Limited. However, relevant insights related to inventory and supply are: - All planned stores for the season had their orders fulfilled by May-June, indicating proactive inventory planning. - Any stock shortages currently experienced are due to better-than-expected sales, not supply constraints. - Winter season inventory was planned 4-5 months in advance, showing well-ahead order placement. - The company sources from about 250 vendors currently, with visibility on manufacturing capacity for the next few years. - Increased vendor payments and early payments aim to strengthen vendor relations and ensure priority supply. - No direct reference to orderbook or pending orders but high confidence in inventory management and supplier ecosystem to meet demand. Hence, V2 Retail demonstrates strong order planning with robust vendor engagement to support store expansion and demand growth.