This article first appeared on GuruFocus .
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Revenue from Operations:INR 3,727 crores, 18.7% growth over last year.
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Same-Store Sales Growth:10% increase.
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Operating EBITDA:INR 387 crores, 19.3% growth over last year.
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Operating Margin:Improved from 10.3% to 10.4%.
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Profit After Tax (PAT):INR 259 crores, 25.6% growth over last year.
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PAT Margin:Improved from 6.6% to 6.9%.
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New Store Openings:27 new stores, total store count at 819.
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Total Trading Area:13.8 million square feet.
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Private Brands Contribution:75.2% to revenue.
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Quick Commerce Expansion:767 stores across 520 cities.
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Registered Consumers on Quick Commerce:Over 1.4 crore people.
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Release Date: July 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Vishal Mega Mart Ltd ( NSE:VMM ) reported a strong revenue growth of 18.7% year-over-year, reaching INR 3,727 crores.
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The company achieved a same-store sales growth of 10%, demonstrating the resilience of its business model.
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Operating EBITDA increased by 19.3% to INR 387 crores, with an improvement in operating margin from 10.3% to 10.4%.
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Profit after tax grew by 25.6% to INR 259 crores, with the PAT margin improving from 6.6% to 6.9%.
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The company expanded its store network by adding 27 new stores, bringing the total to 819 stores across 559 cities.
Negative Points
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Elevated inflation has impacted the demand environment, although the company expects this to taper down in subsequent quarters.
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The small store format expansion is progressing slowly, with only a few new openings despite the potential for significant growth.
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Employee costs have increased by 13% year-over-year on a per square foot basis due to higher minimum wages in multiple states.
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The rollout of RFID technology is expected to take over a year to complete, which may delay potential operational efficiencies.
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The company faces ongoing competitive pressure in the apparel sector, with other value retail players expanding aggressively.
Q & A Highlights
Q: What is the strategy for expanding the small store format beyond the current guidance of 80 to 100 stores? A: Gunender Kapur, CEO, explained that the small format stores are half the size and revenue of regular stores. Expansion into small formats will occur in states where larger format opportunities are nearly exhausted, such as UP and Haryana. The focus remains on larger formats due to their higher revenue and margin potential.
Q: Why is the expansion of small format stores progressing slowly despite their potential? A: Gunender Kapur, CEO, stated that initial experiments were conducted to ensure financial outcomes align with expectations. Now confident, the company will accelerate small format expansion, particularly in UP and Haryana, while continuing to open large format stores.
Q: What is the status of the RFID implementation in stores, and what benefits have been observed? A: Gunender Kapur, CEO, reported that RFID is being rolled out in all Delhi NCR stores. Benefits include improved inventory management, reduced shrinkage, and enhanced analytics. The rollout will take over a year to complete across the network.
Q: How has the company managed to improve gross margins despite cost pressures? A: Gunender Kapur, CEO, attributed the margin improvement from 28.4% to 28.7% to reduced promotional expenditure and maintaining prices, which positively impacted same-store sales growth.
Q: What is the impact of foreign ownership capping at 49% on the company? A: Amit Gupta, CFO, clarified that the cap ensures the company remains Indian owned and controlled, aligning with regulatory requirements for multi-brand retailing through its subsidiary, Air Plaza.
Q: How does the company plan to handle price hikes in its own labels amid inflation? A: Gunender Kapur, CEO, emphasized minimizing price hikes, especially in opening and mid-price points. Any increases are limited to higher price points and only in critical categories, ensuring competitiveness against market leaders.
Q: What is the contribution and performance of the quick commerce channel? A: Gunender Kapur, CEO, noted that quick commerce contributes 5% to 9% of store revenue, with higher private brand penetration and 20% of customers being new to Vishal Mega Mart.
Q: How has the loyalty ecosystem impacted customer lifetime value and merchandising? A: Amit Gupta, CFO, highlighted that the loyalty program, covering 17.5 crore customers, contributes 95% of revenue and supports a 10% same-store sales growth, indicating strong customer retention and value.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
