Vishal Mega Mart Q1 Results: Revenue growth remains strong; margin expands despite higher costs

Vishal Mega Mart Ltd., the operator of hypermarket chains reported results for the June quarter after market hours on Wednesday, August 13, which were higher on a year-on-year basis.

Revenue for the quarter increased by 21% from last year to ₹3,140.3 crore from ₹2,596.2 crore, while its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 25.6% year-on-year to ₹459 crore.

EBITDA margin for the quarter increased by 60 basis points from last year to 14.6%. Margins for the quarter expanded despite higher other expenses, employee benefit expenses and finance costs. Gross profit margin for the quarter expanded by 20 basis points to 28.4% from 28.2% last year.

Net profit for the period increased by 37.3% from last year to ₹206 crore from ₹150 crore. Profit for the period was aided by a higher other income, which grew to ₹17 crore from ₹7.7 crore last year.

Same store sales growth stood at 10.5% year-on-year, while on an adjusted basis, that figure stood at 11.4%.

During the quarter, apparel contributed 47.4% to the overall topline, while 27.3% came from merchandise and 25.1% from FMCG. Customer base at the end of the June quarter stood at nearly 151 million.

Vishal Mega Mart's Quick Commerce initiative has now extended to 670 stores across 445 cities with a registered user base of 9.8 million.

At the end of the June quarter, Vishal Mega Mart operated a total of 717 stores across 472 Indian cities, spanning a total retail area of 12.4 million square feet.

Vishal Mega Mart is also a recent inclusion in the MSCI Standard Index. The stock will become part of the index at the end of this month and is likely to see inflows worth $258 million when the rebalancing takes place, according to IIFL Alternative Research.

Shares of Vishal Mega Mart ended 3.5% higher on Wednesday ahead of the earnings announcement. The stock ended at ₹144.85, which is the day's high. Shares have nearly doubled from their IPO price of ₹78 per share.