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V2 Retail
Our verdict on V2 Retail isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The company reported a consolidated Gross Profit margin of 32.4% for Q3 FY26 and 30.2% for 9M FY26, significantly higher than the long-term target range. (3 exceeded across 3 tracked commitments)
“So our target gross margin is always 28%, 29%. We want to pass on everything to the consumer because we feel it is the time to get the maximum market share”
Revenue for the full year FY26 grew by 63%, exceeding the 50% target, while SSSG for the year was 8.6%, within the guided range. (1 exceeded across 1 tracked commitment)
“So we look at a 50% revenue growth going forward and in that we look at 8% to 10% SSSG so that's from the old stores and 40% revenue growth from the newer stores.”
See the full cited Management analysis of V2 Retail
How durable is the business?
Women's wear (Ladies Wear) share expanded from 27% to 29% of the total revenue mix, showing strong growth momentum. (5 expanding across 3 engines)
“Men's would be about 41%-42%. Women's wear is about 27%. And kids is about 25%.”
V2 Retail is aggressively expanding its footprint, opening 28 stores in Q1 FY26 and targeting 100-120 net additions for the full year. Expansion is diversifying into 25 states, with 20-25% of new stores in 'virgin' or newer geographies. (5 expanding)
“Importantly, our current store footprint has crossed 350 stores nationwide, marking a major milestone in our journey.”
See the full cited Business Model analysis of V2 Retail
Where does growth come from?
The company is accelerating its store expansion plans. After opening 72 stores in FY25, they are targeting 100-120 stores for FY26, with a potential increase to 150 stores if performance remains strong. They have already added 28 stores in Q1 FY26 and 9 more in July. (5 accelerating across 5 signals, 2 leading indicators)
“I think for this year, the target would be anywhere between 170-200 stores, completely dependent on how we are performing and how the momentum continues.”
Volume growth is accelerating, reaching 50% in Q1 FY26 compared to 43% for the full year FY25. (3 accelerating, 2 steady across 5 signals)
“Revenue for the 4th Quarter grew at 60% year-on-year to Rs. 797 crores.”
See the full cited Future Growth analysis of V2 Retail
What could break the thesis?
Trajectory is INTENSIFYING. Management has increased the expansion target from 100 stores to 120-130 stores for FY26, and potentially 150 stores for FY27, following the QIP. This increases the pressure on management bandwidth and supply chain. (5 intensifying)
“325 Stores at the end of FY26 (Opened 139 & Closed 3)”
The risk is intensifying. Same Store Sales Growth (SSG) has dropped to ~5% in Q1 FY26, down from 8.6% in FY26 and 29% in FY25. (4 intensifying, 1 easing)
“Same Stores Sales Growth (SSG) ... 8.6% FY26 [vs] 29.0% FY25”
See the full cited Risk analysis of V2 Retail
Read the full thesis on V2 Retail
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