### **Overview** V2 Retail Limited (NSE: V2RETAIL), established in 2001 by Mr. Ram Chandra Agarwal and rebranded from "Vishal Mega Mart" in 2011, is a fast-growing Indian value fashion retailer focused on affordability, quality, and variety. Headquartered in Gurugram, Haryana, the company operates a widespread network of retail stores across India, primarily targeting **neo-middle-class and middle-class consumers in Tier II, III, and rural markets**. It is listed on the National Stock Exchange (NSE) and has established strong brand equity through its **"Value and Variety"** philosophy. --- ### **Business Model & Value Proposition** - **Target Customer:** Value-conscious consumers across urban, semi-urban, and rural India, particularly those with monthly incomes between ₹10,000 and ₹70,000–80,000 (~80% of the population). - **Core Philosophy:** *“Value and Variety”* — delivering trendy, high-quality apparel and lifestyle products at accessible price points. - **Differentiation:** - Low cost-to-MRP markup (~55% on internal designs; final average markup ~155% vs. typical 500–600% industry average). - Strong focus on **private label brands** (80–85% of sales), enhancing margin control and reducing dependency on discounts. - Air-conditioned stores with trial rooms, offering a modern retail experience in underserved areas. - **Product Range:** Comprehensive portfolio covering: - **Apparel:** Men’s (40%), Women’s (40%), Kids (25%) - **Lifestyle:** Accessories (deodorants, wallets, sunglasses, purses, footwear) – ~8% of sales - Private labels: *Godspeed, Herrlich, Glamora, Ebellia, Honey Brats, JEYPORE*, and *ORISSA* - **Positioning:** One-stop, family-focused destination for affordable fashion in organized retail. --- ### **Store Network & Expansion Strategy** As of **November 2025**, V2 Retail operates **259 stores** across **23 states** and **195+ cities**, with a total retail footprint of approximately **27.94 lakh square feet**. #### **Key Geographic Insights:** - **Top States by Store Count:** - Uttar Pradesh (48) - Bihar (44) - Odisha (30) - **Southern India Expansion:** Rapidly emerging as a key growth region with 18 stores in Karnataka, 2 in Goa, and recent entry into **Andhra Pradesh** with promising results. - **Core Markets:** Northern and Eastern India remain dominant; South India is now a strategic priority. #### **Expansion Momentum:** - **Aggressive Growth:** Added **71 new stores** in H1FY26 alone, including **43 in Q2 FY26**. - **Net Change (H1FY26):** +70 stores (71 opened, 1 closed). - **Future Targets:** Plan to open **100–120 stores per year** over the next 4–5 years, with: - 60–70% expansion in existing, high-performing clusters. - 20–30% in new markets (Punjab, West Bengal, Rajasthan, Maharashtra, Tamil Nadu). - **National Vision:** Achieve presence in **all Indian states within 2–3 years**, positioning as a truly **national-level retailer**. #### **Store Economics:** - **Capital Expenditure per Store:** ₹7.5–8 lakh per sq. ft. (~₹2.3–2.4 crore per store including inventory). - **Breakeven:** ₹500 per sq. ft. — stores typically **breakeven from first month**; mature in **2–3 years**. - **Market Entry Approach:** Enters new regions with **1–2 test stores** to gather consumer data and refine assortment before scaling (e.g., successfully replicated in Karnataka, Goa, AP, and Rajasthan). --- ### **Financial Performance & Operational Discipline** - **Sales Productivity:** Strong improvement from ₹650/sq. ft. (3 years ago) to **₹1,000–₹1,100/sq. ft. (Nov 2025)**. - FY25: ₹1,017/sq. ft. - Q1 FY26: ₹957–₹960/sq. ft. (despite high new store mix) - **Revenue Growth (FY25):** ₹1,884 crore | **Gross Profit:** ₹551 crore → **29.3% GM** - **Profitability:** Targeting **8–9% EBITDA margin (pre-IndAS)** in FY26–27. - **Same-Store Sales Growth (SSSG):** ~29% YoY in FY25; ~31% (9M FY25); 59% post-pandemic recovery (Q2 FY22). - **Working Capital Management:** - Inventory: ~90–108 days - Payables: ~45 days - High inventory turnover with **15-day slow-moving product identification policy**. - **Cost Efficiency:** - Rental cost reduced to ₹52/sq. ft./month (from ₹56 YoY). - Economies of scale expected with higher store density (lower per sq. ft. operating costs). --- ### **Supply Chain & Vertical Integration** - **Integrated Model:** Owns **V2 Smart Manufacturing Private Limited (VSML)**, though as of Jun 2025, **0% of apparel is sourced in-house**, indicating full reliance on external manufacturing. - **Manufacturing Partnerships:** Dedicated **job-work partners** for scalable, quality-controlled production. - **Centralized Infrastructure:** - Procurement: Bulk buying for cost efficiency. - Distribution: Centralized DC in Gurgaon, supported by **owned logistics fleet**, enabling **weekly refills** to all stores. - Capacity: DC can support up to **1.5 million sq. ft.** of retail space. --- ### **Technology & Digitization** - **IT Systems:** SAP HANA ERP + Proprietary POS system integrated across procurement, planning, analytics, and sales. - **Data-Driven Operations:** - Real-time footfall tracking, sales analytics, and digitized productivity metrics. - Advanced analytics used for **regional preference mapping**, **trend forecasting**, and **personalization**. - **Omnichannel Strategy:** - Plans to launch **omnichannel platform in FY26** leveraging existing store inventory (no additional warehouse cost). - Online currently minimal (<5% of sales); **V2kart.com** launched to serve as brand amplifier and convenience channel. - **Product Development:** AI, automation, and trend research integrated into design and merchandising. --- ### **Product & Design Excellence** - **In-House Design Team:** 25–30 member team producing **300–350 new designs weekly**. - **Design Process:** Focus on **four key attributes** — **design, fabric, color, and fit**, supported by competitive benchmarking and global trend research. - **Private Label Focus:** - Internal designs contributed **~35–40% of revenue in FY25**, targeted to reach **60% by 2026 and 80% by 2027**. - Goal: **100% private label revenue by FY27**. - **Innovation & Speed-to-Market:** Designed products yield **15–20% higher gross profit per sq. ft.**. --- ### **Strategic Priorities (2025–2027)** 1. **Geographic Diversification:** Expand across South and Western India; target **Tamil Nadu and Maharashtra**. 2. **Store Scalability:** Achieve 100+ net store additions annually with disciplined capital allocation. 3. **Enhance SSSG:** Target **minimum 8–10% same-store sales growth**, up from current momentum (~29–31%). 4. **Boost Margins:** Increase private label share and reduce over-a-year-old inventory (improved from 18% to 5%). 5. **Technology Integration:** Digitize end-to-end operations; prepare for seamless omnichannel fulfillment. 6. **Talent Development:** Recruiting senior leadership to support scale and operational rigour. --- **Advisors & Key Personnel** - **Investor Relations Advisor:** Marathon Capital Advisory - **Company Secretary & Compliance Officer:** Mr. Shivam Aggarwal - **Promoters:** - **Mr. Ram Chandra Agarwal** – Founder, Chairman & Managing Director, pioneer of value retailing in India. - **Mr. Akash Agarwal** – Whole Time Director/CFO (Finance, Procurement, E-Commerce).