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Indian Express
5 days ago
- Business
- Indian Express
V2 Retail's 1-year rally: With the stock up 330%, what's the long-term play?
Twelve months ago, V2 Retail was just another under-the-radar value fashion chain, trading at around Rs 450 per share. Today, the stock is hovering near Rs 1,900, a 330% gain in one year. For most investors, this kind of return typically comes from a hot tech IPO or a turnaround story driven by one-off news. But V2's rise has been different. This is a company that sells affordable clothes in Tier-2 and Tier-3 cities. It operates in a sector known for thin margins and heavy discounting. Yet in FY25, it posted record revenue of Rs 1,884 crore, grew profit after tax by 159%, expanded to over 200 stores, and improved its operational metrics across the board from sales per square foot to inventory efficiency. More importantly, this growth has not come at the cost of financial discipline. Margins have held steady, working capital has stayed lean, and store-level profitability has remained intact. The company has leaned into private labels, kept capital expenditure in check, and used internal accruals to fund expansion. With such a steep run-up, the obvious question now is, what comes next? Has the stock already captured the full benefit of this operating performance, or is there still room for upside if execution stays strong? Let us break down the FY25 numbers and see where V2 might be headed from here. At its core, V2 Retail is a value-focused fashion retailer that caters to India's lower- and middle-income households, primarily in Tier-2 and Tier-3 cities. It operates through a network of physical stores. There were 189 at the end of FY25, and the number has already crossed 200 as of June 2025. Unlike high-end or trend-driven brands, V2 focuses on value and variety. It keeps the average selling price low (around Rs 297 in FY25 and Rs 308 in Q4FY25) while giving consumers many choices within that budget. This pricing strategy, combined with store locations in underserved markets, forms the base of its customer appeal. But what truly drives the business is control over the supply chain. Around 85% of its sales in FY25 came from private-label products, that is, apparel and accessories designed in-house and manufactured through vendors or earlier in its units. These are not national brands sold at a discount. Instead, they are V2's designs, priced competitively and refreshed regularly. This gives V2 three important advantages: On the operational side, V2 has kept its model asset-light. While the company incurs capital expenditure for setting up stores (roughly Rs 2.2 crore per store, including inventory), it does not own most of its retail real estate. Rentals are negotiated selectively, often slightly away from prime market locations, to keep costs low. In FY25, the average rent was Rs 52 per square foot per month, lower than Rs 56 the year before. Once a store is live, it reaches breakeven at just Rs 500 per square foot per month in sales. By FY25, the company's system-wide average was already Rs 1,017 per square foot per month, which is double the breakeven point. This gives it a strong buffer and ensures that most stores turn profitable from the first month itself. Warehousing and logistics also play a key role. V2 runs a central warehouse in Gurgaon and is now expanding into zonal warehouses, starting with one in Kolkata. Inventory is refilled weekly through its fleet of vehicles, helping maintain stock availability across stores without overloading them. What makes all this work together is a deep understanding of the value-conscious Indian consumer. The company has built a model that works well at scale, especially in smaller cities where aspirational demand is growing but branded retail options are still limited. V2's moat does not come from brand power or capital intensity. Instead, it lies in the tight integration between product, pricing, and execution. A customer walking into a V2 store sees a wide range of fashion items that feel fresh, are well-fitted, and cost far less than what most national chains offer. That experience is made possible through a backend that handles design, vendor negotiation, warehousing, and merchandising with precision. Switching to a rival is not easy for the customer, because few alternatives match V2 on both price and choice. And for a competitor trying to copy the model, building this level of execution discipline, especially in lower-income geographies, takes years of iteration and trust-building with suppliers. Moreover, the company has already built store-level processes that ensure profitability at scale, not just growth. Every store is measured on earnings before interest, tax, depreciation, and amortization (EBITDA), and new store performance is tracked closely. As of now, the management claims that not a single store over one year old is loss-making at the EBITDA level. V2 Retail's headline numbers in FY25 show the company's improving execution at every level. Revenue grew 62% year-on-year to reach Rs 1,884 crore, up from Rs 1,164 crore in FY24. That is the highest topline in the company's history. But more importantly, profitability improved along with growth. EBITDA rose to Rs 258 crore, a 74% increase, and EBITDA margins expanded to 13.7%, up from 12.7% last year. Profit after tax came in at Rs 72 crore, which is nearly three times higher than the Rs 28 crore earned in FY24. This improvement came from both higher volumes and better operating metrics. One of the strongest indicators of V2's momentum is its same-store sales growth (SSSG). After posting a 31% growth in FY24, the company delivered a further 29% SSSG in FY25. That is an impressive figure, especially on a high base. This means that the company is not just growing by opening new stores. Even older stores are seeing strong demand. Many new stores reached operating profitability within the first few months, according to the management. These early breakeven points are a direct result of tight cost control and improving brand recall in smaller cities. A deeper look at store-level metrics reveals a clear step-up in efficiency: ● Volume growth was 43% in FY25, showing broader demand across categories. ● Average selling price (ASP) increased to Rs 297 in FY25, from Rs 263 in FY24. ● Average bill value (ABV) rose to Rs 859, compared to Rs 797 last year. ● Sales per square foot (per month) jumped to Rs 1,017, up from Rs 854. These numbers suggest that V2's customers are buying more items and spending more per visit, all while prices remain firmly in the value segment. That means growth is coming from genuine traction, not inflation-led pricing or deep discounting. During FY25, the company opened 74 new stores and closed only 2, taking its total to 189 stores at year-end. By May 2025, the live store count had already crossed 200. Retail space expanded to over 20 lakh square feet, covering nearly 150 cities across 20 states. Store openings were not random. V2 focused on clusters where it already had a presence and operating leverage, such as Bihar, Uttar Pradesh, Odisha, and Jharkhand. It also began expanding into new territories like Punjab, West Bengal, and Rajasthan. Management shared that newer stores in these regions are already delivering revenue per square foot close to the company average, which is a strong signal of product-market fit. Despite this fast rollout, the company kept its working capital cycle stable. Inventory stood at 90 days of sales, and creditors remained around 45 days. The portion of old inventory (more than 12 months) fell sharply from 18% to just 5%. This was possible because of better vendor coordination and more accurate demand forecasting. On a pre-IndAS basis, which excludes accounting adjustments related to leases, the EBITDA margin stood at 8% in FY25. This is the number that most closely reflects operating profitability, especially for companies with large rental commitments. The management has guided for 8-9% EBITDA margins on a pre-IndAS basis over the next two years. This margin level may seem modest, but it reflects a conscious choice to maintain affordability while scaling operations. As more stores mature and fixed costs spread out, margins are expected to inch higher without compromising on growth. After delivering a 330% return in just one year, V2 Retail has moved from being a turnaround story to a momentum stock. For long-time investors, the ride has already been rewarding. But for new investors evaluating it today, the key question is how much of the upside is already priced in? As of now, the stock trades close to its all-time high, with a trailing price-to-earnings (P/E) multiple of around 80-90 times. This is significantly higher than the broader retail sector average. On a price-to-sales basis, too, the company commands a premium due to its asset-light model and strong growth trajectory. These valuations may appear stretched, but they reflect investor belief that V2 can continue expanding store count, hold its margins, and eventually scale profits much faster than revenue. If the company can grow earnings by even 30% annually over the next few years, the current P/E ratio will start to look more reasonable. There are a few reasons this expectation is not entirely unfounded: However, it is important to note that V2 now has less room for error. At these valuations, any signs of margin pressure, weak festive season performance, or slower new store breakeven can affect investor confidence. Execution, not just expansion, will be closely watched. For retail investors, V2 Retail today represents a mature, fast-scaling business that is still early in its long-term journey. But the steep rally means one must now weigh the upside against potential volatility. The fundamentals are strong, but the expectations are high. In other words, this may no longer be the undiscovered gem it once was, but it might still be a business worth tracking, especially if it can sustain growth without compromising on discipline. Note: This article relies on data from annual and industry reports. We have used our assumptions for forecasting. Parth Parikh has over a decade of experience in finance and research and currently heads the growth and content vertical at Finsire. He holds an FRM Charter and an MBA in Finance from Narsee Monjee Institute of Management Studies. Disclosure: The writer and his dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
Fashion Network
02-06-2025
- Business
- Fashion Network
V2 Retail Q4 net profit rises 79 percent to Rs 6 crore
Value fashion retailer V2 Retail Ltd reported a 79 percent increase in net profit to Rs 6 crore for the fourth quarter ended March 31, as against Rs 6 crore in the year-ago quarter. The company's revenue for the quarter rose by 69 percent to Rs 499 crore, as against Rs 296 crore in the corresponding quarter of the previous fiscal year. For the full financial year, the company's net profit stood at Rs 72 crore on a sales revenue of Rs 1,884 crore. Commenting on the results, Ram Chandra Agarwal, chairman managing director in a statement said, 'FY 2025 has set a new performance benchmark with highest ever revenue and profit after tax (PAT). Despite a challenging environment marked by a high base and muted consumer sentiment, the Company has achieved industry-leading performance.' 'This exceptional outcome underscores the effectiveness of our strategic initiatives, which have driven innovation in product development, enriched the in-store experience, and significantly enhanced customer satisfaction. At V2 Retail, we believe the initiatives executed so far, along with those currently in progress have strong potential to further elevate our performance in the future,' he added. During the financial year, the company opened 74 new stores and closed 2 stores to end the year with a store count of 189 with a total retail area of 20.27 lac sq ft.
Business Standard
28-05-2025
- Business
- Business Standard
V2 Retail consolidated net profit rises 78.89% in the March 2025 quarter
Sales rise 68.39% to Rs 498.51 crore Net profit of V2 Retail rose 78.89% to Rs 6.44 crore in the quarter ended March 2025 as against Rs 3.60 crore during the previous quarter ended March 2024. Sales rose 68.39% to Rs 498.51 crore in the quarter ended March 2025 as against Rs 296.04 crore during the previous quarter ended March 2024. For the full year,net profit rose 159.01% to Rs 72.03 crore in the year ended March 2025 as against Rs 27.81 crore during the previous year ended March 2024. Sales rose 61.80% to Rs 1884.50 crore in the year ended March 2025 as against Rs 1164.73 crore during the previous year ended March 2024. Particulars Quarter Ended Year Ended Mar. 2025 Mar. 2024 % Var. Mar. 2025 Mar. 2024 % Var. Sales 498.51296.04 68 1884.501164.73 62 OPM % 11.6010.61 - 13.6812.69 - PBDT 38.2819.52 96 196.87108.09 82 PBT 10.350.05 20600 98.2231.37 213 NP 6.443.60 79 72.0327.81 159
India.com
27-05-2025
- Business
- India.com
Meet Uma Agarwal, wife of Vishal Mega Mart founder, as beautiful as any Bollywood actress, she is known for...
New Delhi: Social media is currently abuzz with memes showing netizens' desire to work as the security guard at Vishal Mega Mart. People are jokingly calling it their dream job. Amid all this, the founder of Vishal Mega Mart, Ram Chandra Agarwal, has also come into the spotlight. Ram Chandra began his journey with a humble photocopy shop and went on to establish a successful supermarket chain. He eventually sold the business for ₹70 crore and launched V2 Retail, which propelled his wealth from ₹70 crore to an impressive Rs 6,500 crore. That's Ram Chandra's story, but now his wife Uma Agarwal is also making headlines. In this article, we will talk about Uma, her stylish appearance, liefestyle etc. Whether in western outfits or traditional Indian wear, she adds a glamorous touch and looks no less than a film actress. Ram Chandra Agarwal and Uma Agarwal: Uma Agarwal is the whole-time director of V2 Retail Limited. The couple has two children, Akash Agarwal and Shreya Agarwal. While Akash is also the full-time director of V2 Retail Limited, not much is known about Shreya's role in the company. Uma Agarwal's daughter, Shreya Agarwal, is reportedly studying at USC Marshall School of Business, US. She has 21.7K followers on her Instagram handle and never misses a chance to impress everyone with her stunning pictures. Talking about her brother, Akash Agarwal, he is working with his father to expand their family business and is reportedly dating a stunning speech and language therapist named Ines Knani. All You Need to Know About Uma Agarwal Uma Agarwal is an Arts graduate and has over 17 years of hands-on experience in the retail industry Uma has been a member of the Board of Directors since the company's inception on July 27, 2001. She holds 3,44,000 equity shares in V2 Retail Ltd and plays a significant role in overseeing the marketing strategies of the company. Her expertise in the retail sector has been instrumental in scaling the company to new heights, and she is eligible to retire by rotation with a remuneration of up to Rs. 5,00,000 per month.
Economic Times
11-05-2025
- Business
- Economic Times
IPL Portfolio: Mid-innings, momentum & market mavericks — smallcase manager Piyush Mehta picks his dream 11
Tired of too many ads? Remove Ads How should investors handle the unpredictable and fast paced bowling by Trump? As Orange Cap winner in IPL leads runs, which stocks are leading by momentum and consistency in returns? While aggressive batsmen rule T20s, grounded all-rounders bring balance. Which defensive stocks bring stability amid volatility? Tired of too many ads? Remove Ads Which industries—tech, FMCG, bank, or EV—are leaving a huge mark like the most runaway IPL teams? If you were to construct a Dream 11 portfolio today, which stocks or sectors would find a place in your team? TARIL (opening batsman) Ujjivan (opening batsman) JSFB (middle order) Transrail (middle order) Jash (middle order) Ceinsystech (all-rounder) Kamat Hotels (all-rounder) Samhi (spinner) KPEL (spinner) Style Bazaar (fast bowler) V2 Retail (fast bowler) Vishnu Chemicals (12th man) If markets were a T20 match, where are we in the innings currently – early overs, slog overs, or a mid-innings slowdown? As markets play through a mid-innings slowdown, Piyush Mehta of Caprize Investment builds his Dream 11 portfolio with a mix of aggressive openers and steady all-rounders. From power plays in manufacturing to defensive picks that weather global googlies, Mehta lays out a winning strategy for volatile excerpts from a chat:Firstly, investors should focus on earnings and ignore all the noise on tariffs, yields and currency. Trump's anti-China rhetoric will benefit India massively along with other small Asian countries. While it is difficult to assimilate its immediate impact, our sense is that companies with strong engineering and manufacturing capabilities will benefit the most. China's pain will be India's gain and we are already seeing domestic companies getting multiple queries from US based like Panacea Bio, Rajesh Power, Style Bazaar, Jash Engineering are closing in on their all-time highs due to strong earnings like Jash Engg, V2 Retail, private banks, Bharti continue to be unfazed by global volatility and geo-political flare and power transmission, consumption/premiumization and water are sectors where we see structural secular runways for growthWe are in a mid-innings slowdown where markets and valuations will consolidate. Expect a strong turnaround in earnings and in the market before the start of H2FY26.
