V2 Retail Q3 Profit Soars 99% On 57% Revenue Surge, Eyes 150 New Stores

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AuthorIshaan Verma|Published at:
V2 Retail Q3 Profit Soars 99% On 57% Revenue Surge, Eyes 150 New Stores
Overview

V2 Retail reported a robust Q3 FY2026 with revenue soaring 57% YoY to ₹929 crore and Profit After Tax (PAT) jumping 99% YoY to ₹102 crore, exceeding FY2025 PAT. The company raised ₹400 crore via QIP, resolved an asset write-off, and aligned lease accounting, resulting in an exceptional gain. With 304 stores and 31.9 lakh sq ft, V2 Retail plans to aggressively expand by opening 150 new stores in FY2027, targeting 50% revenue growth.

📉 The Financial Deep Dive

The Numbers:
V2 Retail Limited has delivered a commanding financial performance for Q3 FY2026. Revenue surged by a remarkable 57% year-on-year to ₹929 crores. This top-line expansion was complemented by a 99% year-on-year jump in Profit After Tax (PAT), reaching ₹102 crores. Notably, this quarterly PAT surpassed the company's entire PAT for FY2025, underscoring significant acceleration. EBITDA grew by 56% YoY to ₹174 crores, maintaining a healthy margin of 18.7%.

The Quality:
The quality of earnings shows improvement. While IndAS reported EBITDA was ₹174 Cr (18.7% margin), the company also provided pre-IndAS numbers for transparency: EBITDA was ₹126 Cr (up 50% YoY) with a 13.5% margin. PAT on a pre-IndAS basis also saw a strong 47% YoY jump to ₹82 Cr. The nine-month figures reinforce this positive trend, with consolidated revenue up 64% YoY to ₹2,270 crores and PAT growing 119% YoY to ₹144 crores. Return on Equity (ROE) improved to 24.5% for the nine months ended FY2026, up from 23.2% in FY2025 and 10.7% in FY2024.

One-Offs and Financial Realignments:
Several significant adjustments were made: ₹5.06 crores in assets were written off, resolving a previous audit qualification. More impactfully, a reassessment of lease terms under IndAS 116 led to a reduction in Right-of-Use (ROU) assets and lease liabilities. This resulted in an exceptional gain of ₹27.69 crores (net of tax). The company also successfully raised ₹400 crores via a Qualified Institutional Placement (QIP) from marquee investors, strengthening its balance sheet.

The Grill:
While the results are strong, the aggressive expansion strategy and the reliance on pre-IndAS numbers for operational clarity are points for investors to monitor. Management guidance for a 50% revenue growth target in FY2027 and the planned opening of 150 new stores will require disciplined execution. The transition to reporting solely consolidated retail numbers post-subsidiary shutdown and future merger plans are also key strategic shifts.

🚩 Risks & Outlook

The primary risk lies in the execution of the aggressive store expansion plans. Opening 150 new stores in FY2027, on top of 105 added in the first nine months of FY2026 (bringing the total to 304 stores), demands robust operational oversight and supply chain management. Achieving a blended sales per square foot of ₹1,000 while expanding rapidly will be a challenge. The company targets 8-10% Same Store Sales Growth (SSSG) for the next year and aims for gross margins of 28-29%, expecting expansion from operating leverage. Investors should watch for the performance of new store cohorts and the efficiency of capital deployment.

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