V2 Retail reports sharp jump in revenue and profit, powered by store expansion

Mint

30-07-2025

Bengaluru: Value apparel retailer V2 Retail Ltd's net profit jumped in the April-June quarter, driven by sales growth and continued store expansion, even as consumption in India's small towns remained uneven amid weak demand.
The company's net profit surged 51% from a year earlier to ₹ 24.7 crore in the three months through June, as expenses rose at a slower pace of 21%, it said in an exchange filing on Wednesday. The higher profit was attributed to revenue growth significantly outpacing costs, helping the company expand margins.
The company reported a consolidated revenue of ₹ 632 crore for the April-June period, up 52% year-on-year, marking its highest quarterly revenue since being set up as Vishal Megamart Ltd in 2001. The company sold the 'Vishal' brand in 2011 and rebranded as V2 Retail Ltd. The performance slightly exceeded a Bloomberg analysts' estimate of ₹ 628 crore, as per projections tracked on the terminal.
Shares of V2 Retail settled 1.2% higher at ₹ 1,959.55 apiece on the BSE on Wednesday.
In a separate filing, V2 Retail said its board has approved a plan to raise up to ₹ 400 crore through the issuance of equity shares or other eligible securities. The funds may be raised via qualified institutional placement (QIP), preferential allotment, or other permissible modes, subject to shareholder and regulatory approvals. Chief executive Akash Agarwal had indicated in a July interview with Mint that the company was exploring fundraising options to support its ongoing store expansion and strengthen its supply chain and backend infrastructure.
The company did not disclose growth from existing stores for the quarter. However, it added 26 new outlets during the period across 215 cities in the country, indicating that overall revenue growth was driven largely by network expansion rather than same-store performance.
V2 Retail's expansion comes amid intensifying competition in the value fashion segment, particularly across tier-2 and 3 towns. The company is evaluating an upward revision to its FY26 expansion target of 100 stores. It has a strong presence in eastern India, especially in Bihar, Uttar Pradesh and Odisha where rivals like V-Mart are also expanding aggressively. This simultaneous push by major players underscores the rising battle for wallet share among price-sensitive consumers in India's smaller cities.
'Store expansion has clearly driven a large part of V2's topline growth, this quarter around 35% of it is from new stores alone,' said Pratik Prajapati, equity research analyst at Ambit Capital. 'Compared to peers like V-Mart, which added 15 stores and DMart, which added 12, V2 has significantly outpaced them. You'll likely see the full impact of this expansion reflected in the coming quarters, with V2 potentially outperforming its competitors.'
Founded by Ram Chandra Agarwal, V2 Retail is one of India's oldest value fashion retailers, catering primarily to middle- and lower-income households in India's small towns. With a strong footprint in North and East India, the company operates a chain of affordable fashion and lifestyle stores offering apparel, footwear, and accessories for the entire family. Over the years, V2 has built a loyal customer base in small towns by focusing on deep discounting, festival-driven promotions, and a wide range of private-label offerings tailored to regional preferences.
In an earlier interview with Mint in early July, Akash Agarwal, chief executive officer (CEO) of V2 Retail, had said the company may revise its FY26 expansion guidance upwards from the initial target of 100 stores. 'We are well on track and we've already opened 26 stores this first quarter,' he said, adding that the company is evaluating whether to increase that number based on ongoing performance.
Despite the rapid rollout, Agarwal emphasized in the interview that profitability remains central to the company's growth strategy. He said all V2 stores are Ebitda positive. The company has also tightened inventory controls over the past two years, reducing the share of unsold stock older than 12 months from 25% to below 5%.
Same-store sales have grown nearly 30% annually over the last two years, said Agarwal, and the company is now targeting annual revenue growth of 40-50%, supported by better throughput and backend improvements. V2 has also been scaling its in-house manufacturing arm, V2 Smart Manufacturing Pvt. Ltd, which contributed ₹ 13.6 crore in revenue during the June quarter. However, the unit posted a net loss of ₹ 1.9 crore due to initial set-up costs.