Good afternoon, everyone, and a very warm welcome to the V2 Retail Limited quarter four and FY26 earnings conference call. Thank you for joining us today.

We trust you've had a chance to review our results. The earnings presentation and the press release are available on the stock exchanges and also on our website.

Our quarter four results reflect the continued momentum across our business and the ability of of our teams to execute with discipline and agility. Even on a high base, we have demonstrated that our model can scale effectively while maintaining resilience in dynamic market conditions.

The 60% year-on-year revenue growth for the fourth quarter significantly outpaces the broader market. Importantly, we have consistently delivered growth in excess of 60% for two consecutive years, underscoring the strength and sustainability of our operating model.

In addition to our strong top-line performance, I want to highlight the strategic investments that are reinforcing our ability to scale efficiently in India's value fashion segment. Our ongoing focus on analytics-driven merchandising, supply chain responsiveness, and operational discipline has strengthened our operating leverage and positioned us to capture growth at scale.

Customer traction across categories remains healthy, reflecting the continued relevance of our price-value positioning and product refresh cycle. A steady flow of trend-appropriate assortments combined with strong quality standards and competitive pricing has supported growth across our store network.

This validates our approach of balancing affordability with fashion relevance, ensuring that we remain the preferred destination for value-conscious consumers. As we look ahead, we'll continue to deepen our investments in technology, expand our store footprint, and enhance our customer engagement.

These initiatives, together with our disciplined execution, gives us confidence in sustaining momentum into the FY27 and beyond. On the expansion front, our focus this year has been on improving geographic coverage through a balanced mix of rural market entry and deeper penetration in Tier 2 and Tier 3 cities.

This approach has helped us broaden our customer reach and improve regional alignment through localized assortments and strong store-level execution. During FY26, we added 136 stores and our pipeline of planned openings remains robust.

Backed by a strong merchandising and inventory management team, we remain focused on disciplined expansion, efficient inventory deployment, and sustainable operating performance. Importantly, our current store footprint has crossed 350 stores nationwide, marking a major milestone in our journey.

Moving on to some key updates for the quarter and for the whole financial year: First, we completed the physical verification of property, plant, and equipment and reconciled this with our fixed assets register. As a result, we've written off assets with a carrying value of ₹5.77 crores, and this has resolved the earlier audit qualification.

Second, we have been consistently sharing pre-Ind-AS numbers to provide better transparency on our operational performance, and we will continue to do so going forward. Our annual business plans, budgets, cash flows, store-level metrics, and incentive structures are all aligned to pre-Ind-AS numbers.

Our revenue and profitability guidance is also communicated on this basis. Third, we are now focusing on retail business only and have moved away from in-house manufacturing operations.

Fourth, the impact of new labor code is not material and has already been recognized in our financial results. Lastly, due to geopolitical tension, we have increased our safety stock in the month of March for seamless availability of stock, which has resulted into higher inventory levels in the month of March.

Once the situation normalizes, we will reduce our safety stock. We are looking to maintain inventory at 90 to 100 days and creditors at 45 days.

Now moving on to some performance highlights: Revenue for the fourth quarter grew at 60% year-on-year to ₹797 crores. The EBITDA for the quarter stood at ₹109 crores as compared to ₹57.5 crores in the corresponding quarter last year, registering a stellar growth of 89%, and EBITDA margins stood at 13.7% as compared to 11.6% in the corresponding quarter last year.

PAT for the quarter stood at a record ₹17.5 crores compared to ₹6.4 crores in the corresponding quarter last year. We opened 33 new stores and closed two during the quarter, and achieved a net addition of 136 stores in the whole financial year, taking our store total store count to 325 stores with approximately 3.5 million square feet of retail space.

The SSG for quarter four stood at 7.74%. There was a robust volume growth of 53% in the quarter.

The full-price sales contributed 89% in the fourth quarter. Now consolidated performance highlights for the whole financial year: Revenue for the year grew 63% to ₹3,067 crores.

EBITDA for the year stood at ₹455 crores compared to ₹258 crores in the corresponding period last year, registering a stellar growth of 77% year-on-year. EBITDA margin improved to 14.9% compared to 13.7% in the same period last year.

Profit after tax for the financial year stood at a record ₹162 crores compared to ₹72 crores in FY25, registering a strong growth of 125% year-on-year. Same-store sales growth for the financial year stood at approximately 8.6%.

Robust volume growth of 47% in the whole financial year. The full-price sales contribution was 90% in FY26.

Our ROE continues to improve and now stands at 26% compared to 23.2% in FY25 and around 10.7% in FY24, reflecting disciplined capital allocation and strong operating leverage. Now moving on to pre-Ind-AS reporting: For quarter four FY26, revenue remains the same at ₹797 crores, 60% up year-on-year.

Gross margin was 30.3% compared to 27.6% in the corresponding quarter last year. EBITDA was ₹54 crores, up 98% year-on-year, with an EBITDA margin of 6.8% in the fourth quarter.

PAT came in at ₹25 crores, up 118% year-on-year. Now the full financial year highlights on the pre-Ind-AS basis: Gross margin improved to 30.2% from 29.2% last year.

EBITDA was ₹277 crores, up 83% year-on-year with an EBITDA margin of 9%. PAT stood at ₹162 crores, up 87% year-on-year.

Further, it is important to note that company has achieved a PAT of ₹173 crores on standalone basis. Looking forward, our priorities remain clear: profitable growth, capital efficiency, and disciplined execution.

With sustained revenue momentum and improved inventory operating leverage, every initiative is directed towards one ultimate goal: enhancing long-term shareholder value. With that, I will now open the floor for questions.

Hi, Akash. Am I audible?

Yeah.

Hi, Akash. Congratulations on good set of results.

Last two years has been really great for us and it's just you and the whole team has contributed a lot in this. Kudos to that.

I have few questions. First will be on the store side.

Last year we opened around 136 stores. How much we are planning for this year?

Around 170 to 180, we guess?

I think for this year the target would be anywhere between 170 to 200 stores completely dependent on how we are performing and how the momentum continues.

We are able to manage store openings through our internal accruals only and the cash on the balance sheet, right?

Yes, for at least this financial year we are covered with internal accruals and the cash in the balance sheet.

For next upcoming two to three years, we have to do another QIP for that? No, but

our debt-to-equity ratio is very, very healthy, we have the option of getting more debt on the books. I think that will be our first preference even if we need some cash for future expansion.

Okay. I have another question on the SSG side: can you tell us, because we are maintaining around 8% to 10%, going forward this doesn't go below 8%.

What kind of strategies we are using on our existing stores so that we can able to achieve 8% to 10% SSG going forward?

I think the strategies remain the same and we're focusing on the strengths and all the strategies that have previously worked over the last three years. It is strengthening the product, it is making the back end more robust, that includes the supply chain, that includes the visual merchandising, that includes the customer experience at the store.

I think if you're giving a good product at the best value and it is supported by a good supply chain and good retail operations, good visual merchandising, that itself should lead to at least 8% to 10% SSG. We're just doubling down on all the strategies that have previously worked on us and now investing more in technology that can future support this better.

Are we running any kind of a loyalty programs or something like that?

We don't have a loyalty program per se, but we have a database of about 8 crore customers and we do reach them through WhatsApp, RCS, and SMS, and we give them gift vouchers and other kinds of gifts, not loyalty points.

Okay. I just have two more questions.

First will be: as we are seeing recent geopolitical tensions have increased the commodity prices. We are capable enough around 3% to 4% will pass on the prices to the customers so that they won't impact our margins going forward?

Yes, we have seen some movement in yarn prices and that would have to be transferred to the customer. We will maintain our gross margins and prices might go up in the future by 3% to 4%.

Okay. Just last on the capex side: so as of today I think last quarter we have around ₹2 crores ₹2.2 crores per store we require.

It's maintained right now as well?

It's about ₹2.6 crores, and it will increase because of the price increase, it'll become around ₹2.7, ₹2.8 crores now. That includes capex and inventory.

The capex would be about ₹1.2 to ₹1.3 crores and the rest would be paid inventory.

Okay. Thank you, and all the best for the future.

Thank you.

Hi, sir. Good afternoon.

Congrats on good set of numbers. My question is again regarding the gross margins.

This year because of the higher full-price sales through and all, we have seen a good improvement in the gross margins. How should we see this number going forward, one in the near term and two mainly because of the yarn and the cotton basis that you have indicated?

We started focusing a lot on inventory management and freshness of inventory, and we started doing inter-store transfers of inventory also and better product mix at stores. That all led to a better gross margin this year.

Going forward, you can look for us to maintain this gross margin anywhere between 28% to 30%. Like I mentioned earlier, all the price increases in raw materials will be passed on to the customer, and there will be an increase in MRP while maintaining the margins.

Okay. Because I'm asking this, the other competitors, they have said that they don't want to pass on the full increase to the customers.

They want to retain some part and take a hit on the margins. How do you see that?

I don't want to comment on any competitors, but our strategy is we won't absorb it in our gross margins because 3% to 4% increase is not significant. Our average selling price is ₹300.

That translates to about ₹10 to ₹12 additional MRP. I don't think it's a significant impact, we would look to maintain our gross margin at 28%

to 30%. Sir.

That clarifies. Thank you.

I'll get back in the queue.

Hi, sir. Thank you for the opportunity.

Sir, what gives you confidence that despite of all this uncertainties on a global front, demand will be good and you will be adding 170 to 200 stores, which is higher than what you had guided earlier?

What we're building today is not for the near term. We're building for our 20-year vision, which is to be one of the top value fashion retailers in the country.

Hopefully what is happening around the world is temporary. India is poised to grow at 5% to 6% GDP in the next 20 years.

If you look at organized retail, it is poised to grow at 9% to 10%. We want to capture most of that market.

That's why these kind of short-term hindrances don't sway us from our long-term plan.

Sir, won't this put any pressure on your near-term margins?

We have seen a little bit of sale impact in May because of the war. I think overall what we have seen in March, April, I think we can continue the positive momentum and it will not have a huge impact, specially in Tier 2, Tier 3 towns.

Okay. Sir, two more questions.

One is what is the quantum of more than six months and one year old inventory? Will you be able to grow at 50% despite of everything?

More than one year old inventory is less than 5%, and more than six months old inventory is less than 24%. About 76% of our inventory is less than six months old, and out of that also about 50% of the inventory is less than three months old.

Okay. Sir, on growth, any commentary?

No, we are guiding for at least 50% revenue growth over the next two years.

Okay. That's it from my side, sir.

Thank you.

Thank you.

Hi. Thank you for the opportunity.

This year, I was just noticing we have opened quite a few stores in quite a few new states. We have also entered Gujarat, Maharashtra, and increased [unclear] 18 stores.

Total on the strategy [unclear]

Can you hear me now?

Much better.

Yeah. I was asking, we have opened stores in quite a few [unclear]

Sir, can't hear you. There's a lot of disturbance from your phone.

Hello? Can you hear me now?

Yeah. I was saying that we have entered quite a few new states in this financial year, particularly in the western region.

Going forward, what is our strategy? Are we going to go deep in these states, particularly Gujarat, Maharashtra, Rajasthan, and in terms of new store expansion?

Which geographical area will they be largely concentrated into?

Our strategy remains the same. Whenever we enter a new state, we open about four to five stores there just to get a lot of data points in terms of what assortment, what sizes, what colors sell there.

Then we make an optimum model. For future expansion, it all depends on the performance of each state.

We're tracking that every month. For example, we had entered Karnataka and now we have almost 15 to 16 stores there.

The future expansion would completely depend on how each state stores are performing. Looking at the data now, Gujarat is performing very well for us.

All the south states, Andhra, Karnataka, Goa, they have been performing well. Maharashtra also, we've opened three stores and two of them are performing phenomenal.

We are looking to open 30% to 40% new stores in the newer regions that we've entered, and of course 50% to 60% will come from our core, strong regions.

Understood. Secondly, on our SSG growth, SSG growth has been close to 7%, 8%, but the sales per square feet has declined by close to 7%, 8%.

What explains this? Is it because we are opening larger stores?

That is one of the reason?

We opened 130 new stores, and the new stores start at about 70% of old stores' per-square-feet sale. If you look at only old-store PSF, those have increased 8.5% equal to the SSG.

Because we have opened so much new area this year, it gets the overall company per-square-feet sale down. As they mature, you'll see the growth in company PSF also.

Understood. If your sales per square feet improves from year on because the expansion in terms of percentage of new stores opened will slightly come down, do we see your EBITDA margins on a pre-Ind-AS basis to improve further from year on?

On standalone basis, we closed at around 9.4%. Can we cross close to around 11% in the next two years?

Because

we are again guiding for opening more than 50% new area, it becomes a challenge to increase the company-level PSF and expand EBITDA margins along with a 50% growth. You're right.

The year when we add only 20% new area, then you can expect that. Next two years, we want to add 50% new area, have 50% revenue growth, we are guiding for the similar margins and the similar PSF.

Understood. Okay.

Thank you.

Thanks.

Hi, sir. Congratulations on good set of numbers.

My first question is, sir, how does the management look into tinkering into related verticals or opening newer format stores? Just trying to extrapolate from the likes of Trent, which created different brands under one umbrella.

I know immediately we would not need that because we got a lot of scope to expand, but want your views that if there is any discussions in the board meeting, and have you thought about the same, and at what scale do we start thinking about it?

I think we don't want to dilute our focus till we have at least 2,500 V2 stores. I think we've built a very strong model, and we want to get to every part of the country because still good fashion at affordable price is not available to most middle-class consumers in India.

We want to capture that blue ocean first, and then maybe we would think about the other strategies.

That's helpful. My second question is, Akash, looking from the naked eye and from the likes of investors, you seem to be a one-man show.

However, it's the whole unseen team that is delivering such stellar results. My question is, if tomorrow hypothetically you are not able to attend a concall, who are in the organization would do so to answer?

Would really love to know the people who knows the in and out of the company and has a fair understanding and works closely with you. That's my second question.

There would be at least six people who would be able to take the call if I am not available. Most of them have been with us for a journey of more than I think 10 years now.

It's just that I have been the face of the investors and the community. Of course, all the business leaders and the senior management people we have, they have all the gist of the data because most of our reviews, most of our performance appraisals, everything is done on data, and most of the decisions that we take is also done on data.

That is how we've built the culture around the company.

Okay. Just a suggestion, if you could just include the management team and the people closely working in the presentations also so that we can have a view on that.

Sure, that is noted.

Yeah. Yeah.

Just a last small clarification. There was a minuscule pledge creation of some 33.5 lakh shares, I guess.

Any reason behind that?

No, that was only for working capital needs, because we give a lot of prepayments. Even the QIP proceeds we use for a prepayment.

You'll see that our creditor days have come down. We want to be the best paymasters in the industry, and we want to be the priority vendor for all our suppliers.

We want to help them with their working capital. Okay.

Thank you so much and best of luck.

Thank you.

Hello. Am I audible?

Okay. Sir, congratulations on an amazing set of results.

I just had two questions. The first one would be, I think in the last concall, you had mentioned that you do not want to increase the prices of our goods, basically.

We want to remain at the same price. This year, we saw a volume growth of 47% while our revenue for the entire year grew by 63%.

What was the main driver for that? How do we look at prices going forward?

That's not a right insight, it's all because of product mix. What we've seen is products like kurtis, product like men's woven pajamas, product like men's casual shirts, these were the highest-growing categories for us.

We gave them more space in our stores. What that does is that reduces the quantity of maybe lower price point items like a kids' Bermuda.

It's all because of product mix. The ASP increase within the category is only inflationary.

I think that would be around 4% to 5%, but everything else is attributed to a different product mix.

Okay. Just to understand, between men's, ladies', and kids', what would be the ideal ratio?

Our

men's would be about 41%, 42%, women's wear is around 27%, and kids' is about 25%.

We are basically at what you want to be in this segment.

Yes.

Sure. Finally, you mentioned that every new store starts at about 70% of the PSF of mature stores.

How long does it take to become EBITDA positive, the new stores?

It is EBITDA positive from the first month itself because the breakeven point is around ₹500 per square feet of sale, and they start at about ₹700 to ₹750. To mature and reach old stores' level, it takes about three to four years.

Okay. That's amazing.

Thank you so much.

Thank you.

Hi, Akash. Akash, can you just share the sales per square feet for the older stores and new stores for FY26?

Sorry, can you repeat that question? The

sales per square feet for old stores and new stores separately for FY26.

Our old stores were at ₹1,124 per square feet for the whole year, and new stores were at ₹750 per square feet. New stores is any stores that opened after FY24.

Understood.

We are continuing to see that new stores are starting at more than 70% of the old stores throughput, and which is why I think we continue to sort of scale up aggressively on new stores, right?

Yes. Of course, it changes month to month, but it is at a very respectable level.

Like I said, it's already at a ₹750 per square feet of sale level, which already starts contributing to the company EBITDA from day one. I think we have a good amount of margin of error for the new stores, that's why we continue expanding.

Okay. Secondly, you mentioned that the increase in inventory is partially because of you stocking up because of geopolitical uncertainty.

Is there a number of what quantum of inventory will be because of that early sourcing?

According to our closing area in March, we look to maintain about ₹2,500 to ₹2,600 per square feet of inventory, so that's around ₹900 crores of inventory that we need. We have additional inventory of about ₹125 to ₹150 for the 60 stores that we have planned to open this quarter.

About ₹100 to ₹150 is the pre-GRC that we did because we saw a lot of supply chain disruptions and because we were opening so many newer stores and we had a good festival coming up in April and wedding season. We did early GRC and we wanted to have extra safety stock rather than empty shelves at our store.

I think if you include new stores and this together, it'll be about ₹300 crores of inventory.

Okay. Got it.

That was helpful. Thanks.

Thank you.

Thank you for the opportunity. My first question will be, while throughout the year, first three quarters, we have been outperforming the peers in terms of SSG growth, in this fourth quarter specifically, the SSG growth was a bit under par as compared to the peers.

Any color on that and how we suppose to go back to normalcy where outperforming our peers?

I think again you have to look at it from a different lens. The SSG that we're calculating is on a base of ₹1,000 per square feet of sale.

Growing at 8.5% on ₹1,040 per square feet of sale, our old stores are now at ₹1,125, which is I think at least 40% to 50% more than our peers. As the base increases, of course the percentage growth, you cannot keep being number one.

I think if you look at the full-year SSG growth, we are still right at the top even with a higher base. Look at the profitability numbers.

Look at the EBITDA numbers. For us the ultimate aim is highest per-square-feet GP and highest per-square-feet EBITDA and highest return on equity.

I think we beat our peers on all those metrics that matters the most.

We continue to guide to 8% to 10% SSG for the future?

Yes.

Secondly, one bookkeeping question, that depreciation has increased materially sequentially while our stores increased sequentially by 11%, 12%. Depreciation has taken a drastic increase.

Is it a one-time somewhere or something like that?

It is a one-time accounting change. A lot of small items like nuts, hard tags, hangers, what we used to capitalize earlier, now we depreciated them because we want to expense it off.

Okay. What was the quantum of that one-time hit that we have taken this quarter?

I think it would be about ₹6 to ₹7 crores.

Okay. That was helpful.

I'll join back the queue.

Thank you.

Hi, Akash. Great set of numbers.

Just wanted to understand what was our marketing spend in financial year '26?

It was about 0.3%.

Okay, 0.3%. What does the marketing budget for the coming year, financial year '27?

It's similar numbers. Most of that marketing happens for newer stores.

For older stores, I think our product is the biggest marketing ambassador for us, and a lot of word-of-mouth marketing has been working for us. In fact, we've been more targeted in terms of marketing and more efficient.

Going forward, it will be less than 0.5%.

Okay. Just one last question: what do you do with the off-season inventory?

Let's say, if you are left with some winter season inventory, how do you dispose it off? What do you do with it?

About 15% of every season's inventory is left with us. We sell it the next season.

We don't dispose off any inventory. Because winter season is so short, it's only three months.

We get it back to our warehouse. We reprocess it.

We repack it, and we send it in the next season.

Okay. I think those were the questions.

Thanks, Akash. All the best.

Thank you.

Yeah. I just had a question, what is the kind of expectation on the SSG growth for next year considering the number of stores we're opening?

SSG has no relation to the number of stores that we are opening, because SSG that we declare is for the older stores, and we guide for a 8% to 10% SSG going forward. Acha.

You said that the new stores open at ₹750 revenue per square feet. How many months or years does it take to reach a matured revenue per square feet of 11 ₹1,100?

Takes about three to four years.

Three to four years. Okay.

Thank you.

Thank you.

Hello. Good afternoon, team.

I have just one question on operating leverage. I think as you mentioned our margin will be not increase, and second, our old-store PSF around stabilize around 8% 8% to 10%.

Then how can we'll get the operating leverage going forward?

Sorry, I did not understand your question.

I have the one question on operating leverage. Can you hear me?

I can hear you now.

As you mentioned, our margin will be stable at as your guided level, and our PSF growth around 8% to 10%. Then how can we will get the operating leverage going forward?

Because

we are opening so many newer stores, we are adding almost 50% to 60% new area, and they start at about 70% of old-store PSF. That's why we cannot get an operating leverage at the company level, because old stores' EBITDA is around 11% to 12% and new stores' EBITDA is around 5% to 6%, the blended EBITDA remains the same.

If you look at only old stores in isolation, then of course there's an operating leverage because the per-square-feet costs come down, and with an SSG of 8.5%, the store-level EBITDA also increases. It's only because we are adding so much new area, at the company level, it will take a few years to see.

That means FY27 yielding leverage in consol level?

Yes, FY27 you will see similar EBITDA margins and similar company PSF numbers.

Just it. Thank you.

Best of luck.

Hello. Am I audible?

Yes.

Hi, Akash. Congratulation.

Akash, is it in the current quarter, our sales was good from new stores if I compare previous year quarter four sales number from new stores? Because if I see my SSG growth in the current year is 7.7% in the current quarter, and if I compare previous year quarter, then it was 24%.

Then still we are able to accelerate our GP margin by 270 bps. Is my understanding correct?

No, but GP margin is not related to new or old stores. The gross margin expansion was because we did less discounting during the winter season and better product mix, and we did a lot of inter-store transfers.

Quarter four and quarter four is comparable, correct? Previous year quarter four and current year quarter four.

Then if my SSG growth was not so great if I compare with the previous year quarter four, which was 24%, still my margin is expanded.

Because of, again, a better product mix and more full-price sale, the gross margin across old and new stores was higher. Because the gross margin was higher, the EBITDA margin was higher.

Okay. Understood then.

Akash, is there any plan where we are venturing into another segment other than this retail fashion? Because I have seen some advertisement where we are asking for vendor to publish our product or something like that in the media, social media, or something like that.

No,

we don't have any other model or no plans for any other model. We completely focused on this model and trying to make this better and better and reach our next target of ₹1,200 per square feet at company level.

Understood. Okay.

Thank you. All the best, Akash.

Thank you.

Hi. Thanks for taking my question.

Akash, just wanted to understand our expansion for next two years in terms of store additions. How many stores are we planning to add, and what is the strategy around store additions?

Will these stores be within our existing locations or are we also entering into new locations? Just wanted to understand how do we evaluate when we kind of set up a store in a new place, what are some of the let's say top three, top five points which are most important for us to set up a store in a locality?

Yeah. We want to open 50% to 60% new area every year.

This year, we want to open at least 170, 180 new stores, and again next year the same. If we end the year at around 500 stores, we would want to open 250 stores next year.

Again, this is all conditional that we're not compromising on any of our profitability or operating numbers and metrics. If the momentum continues and if we keep performing well, and both old and new stores keep performing well, then we will go ahead with this expansion.

To answer your second question, we have, I would say, a scorecard for every location which has at least 70 to 80 different metrics. That includes how far is it from the metro station, how far is it from the train station, bus station, floor plate, parking, frontage, the access road width, how many cars are passing every 10 minutes during different times of the day.

There are different metrics that we put for a location that gives us a confidence score as to how that store would perform. Of course, it includes population density, per capita income, and we do sales benchmarking from the unorganized and organized players in that particular city.

That's how we take a decision to enter a city.

Is it possible to give a basis on whatever data we collect, what is the percentage of stores where we go wrong? There're obviously new store openings, and with new store openings, there's obviously growth, but there's obviously a risk if the store opens at a wrong location.

Do you have data around how many times do we go wrong in terms of our new store openings, and how quick are we to kind of reverse that decision or close that store?

See, I think that is a very subjective number, because four years back that number used to be around 10% because the company base PSF used to be ₹650 per square feet. About 10% to 12% of the locations used to go wrong because some new stores started from ₹300 per square feet.

Now because the company base level has increased to ₹950 per square feet and ₹1,000 per square feet, newer stores are starting at ₹750, so that percentage from 10% to 12% has come down to 2% to 3%. What we have understood is usually not about location being wrong, but it's more about your product and you as a brand.

Because I think it was just two years back that we had identified about 22 stores that we wanted to shut down, and all of those stores are profitable now. 21 of them are profitable now, and we just had to shut down one.

That tells you that more than location, it's about the product.

Got it. Thank you.

Thanks for answering my question.

Thank you.

Hello?

Yes, sir, we can hear you.

Sir, is there is any planning to open store in outside India? Your competitors are also entering that segment.

I think, sir, India is big enough for us to feed us for the next five years at least, because we want to have 2,500 stores. We're not looking at any other geographies.

Sir. Thank you.

Sir, you've given to the previous participant in terms of entering new area. One, if you can a bit more elaborate, you did also mention that you enter first with some four, five store in a state and then you expand depending on your understanding of that area and geography.

One, I did have observed that in few of the states we have four, five, seven stores, and few we have penetrated well in terms of 35 to 50 stores each state. One, the question is, sir, how have we expanded state by state in last two years, and how do we see that in next two years if you can give us some flavor of how we are approaching state by state or cluster-wise and how are we presenting ourselves with some say the warehouses and stuff like that?

That's question number one. Sir, second, I've observed that 90% of our sales you said is normal pricing, we are not resorting to discount sales and stuff like that, we being a value format.

The question there is, sir, how do we ensure that we keep our regular customers calling back? If you can give us some sense of what is working for us, even we have a very healthy same-store sales growth.

If you can give us some sense, we will be able to appreciate the model better. Thanks.

Sure. I'll answer your first question.

We are already present in 25 states now, and earlier we used to have one central warehouse. We already opened one zonal warehouse in Calcutta, and now we are finalizing one in the south.

We'll have three zonal warehouses, and we already have about 18 hubs, especially in all the states where we are densely located in. That's about supply chain.

Going forward, I think I already answered this question that now it all completely depends on the performance of the stores in each state. Giving you an example, we had entered West Bengal and Karnataka a few years back with a couple of stores, and now we have 20 stores in Karnataka and we have 15 stores in West Bengal.

Similarly, we have entered I think nine new states, we've entered Andhra Pradesh, Telangana, Maharashtra, Gujarat, Rajasthan, Punjab, Haryana. We will see the performance.

We'll judge the performance. We'll make the optimum model, and we'll expand wherever we see that we're getting the best traction.

Going forward, we want to be present in every state in the country, and we've seen a good response and a good performance of new stores in all the newer geography, so that gives us tremendous amount of confidence to actually expand further in these states. To answer your second question about why the customer keeps coming back, I think value fashion anywhere around the world, it's about creating an ecosystem where the designs that you're churning out or the assortment that you're churning out and what the customer sees at the store is something that he thinks is fashion forward, affordable, and good quality in terms of fabric, in terms of colors, in terms of fits.

It's about creating that brand identity in the minds of the consumers. Once you have that trust in the minds of the consumer that okay, if you go to V2, you'll find the latest fashion, you will find the most affordable price, and you will always find availability and a good customer experience.

I think a mix of all this gets them back to the store, and we do not want to be a discount store. That's why we're selling more than 90% at full price.

Thanks. That helps, sir, and all the best.

Hi, sir. Thank you for the opportunity again.

My question is regarding the right-of-use assets and lease liabilities on the balance sheet. If I look at them, the proportionate increase was not equivalent to what the area growth looked like.

Does this mean that we are signing lease for the shorter terms, or how should we look at it?

We've changed the policy last quarter, what we decided was we'd look at at least two to three years of performance of a new store before deciding whether we want to continue operating it or not, because our lock-ins and all the leases are about one year and the vendor lock-in is 11 years. We changed that accounting policy last year in line with all the retailers in the country because that also helps us reduce the gap between pre-Ind-AS and Ind-AS.

Sir. Understood.

Thank you.

Thank you.

Good afternoon. My question is regarding the cash flow.

In the current year, you'll be opening around 175 to 200 stores as you just stated, can you give us is it possible to be cash flow positive even after opening around 175 to 200 stores? That's the first question.

If I talk to you about operating cash flow, of course that can be positive. When we reinvest it, the net cash from operating activities can be positive even after opening 175 stores, yes.

You saw that last year also when we had opened 74 stores. This year because we had prepaid a lot of vendors, if you look at the creditors, that has come down by almost 10 days.

That shows an increase in a little bit of working capital. As and when we need the money for opening the newer stores, we can stop the prepayment program.

You are saying that wouldn't be the case this year, you will be cash flow operating positive this year?

Yes.

Okay. Another question is like you mentioned that maybe in couple of years or maybe five, seven years you plan to open around total store count should be 2,500 and your aim is to have a ₹1,200 square feet, how does this both align in your long-term vision?

Both periods are different again. Like I had already mentioned, till we keep adding 50% new area, we won't be able to increase the company per-square-feet sale.

There will be a time when we reach 2,000 stores, then we would only happen to open 500 new stores. That year, we'll be able to expand operating leverage, EBITDA, per-square-feet sale of the company as well.

Again, we're talking about two different timelines here.

Correct. This 2,000 store count of 2,000, what is the timeline for that?

After that, this is a five-year time period or what you're talking about?

It is completely conditional to performance, and it's just about building a model. We are looking to grow at least 50% if we keep performing well.

You can just build the model and see what year we reach 2,500 if we keep growing at 50%.

Correct, because you are earlier said that you would want to grow at least 50% for the next 10 years, so that's why this question arises.

Again, the capacity of number of stores of V2 in India today we think is 2,500, we can only grow at 50% till we reach that number. For beyond that to grow at 50%, we would need a different model or to enter a different country.

Okay. Till 2,500, you still feel confident that even after the base keeps increasing, you can still deliver 50% growth?

That's the idea and that's what we want to target conditional to good performance and continued momentum.

Correct. Another question is on the EBITDA margin front, for FY27 you have said that will be maintaining the margins, but what can be the margin level?

Can it go to pre-Ind-AS early double-digit or low double-digit margins in next two, three years?

There are three levers to this: one is of course consolidate consolidating and purchasing fabrics because still we are only nominating about 20% of our purchases and vendors are buying those raw materials in silos. We have the potential to save at least 3% to 5% there by centralizing and nominating fabrics.

The second operating leverage is of course our per-square-feet expenses, we've already been able to reduce it from around ₹200 per square feet of sale to around ₹190, and going forward it should go down to I think ₹175. A percent a percent and a half comes from there.

The third one is of course SSG that increases your per-square-feet sale. Because we are adding, 50%, 60% new area, it offsets all these three levers.

That is why you're able to maintain such a high EBITDA percentage even after adding so much new area.

Okay. Basically for near term a similar growth on the top line as well as similar growth on the bottom line, correct, at least for the near term?

Yes.

Okay. Just a last thing: after all this long-term questions, just wanted to know almost two months of this current quarter is gone.

You have said that May has been a little bit slow as compared to what you are guiding for or what you have delivered. What can we expect because only a month is remaining for this current quarter,

it should be with the

Yeah.

Again, I think it's too early to say. Like I said, April was very good for us and May has been a little slow, and June is supposed to be one of the biggest months for us.

That will define the quarter going forward, but it all looks good. Whatever is happening around the world, like I said, it's I think hopefully short-term and we can end those animosities and have peace.

Yeah. Even if there is a little bit here and there for the quarter, for the year as well as for the next two, three years you are guiding for 50%, right?

Yes.

Okay. All right.

Thank you very much.

Thank you.

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