V2 Retail (NSE:V2RETAIL) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to V2 Retail Limited Q2 and H1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Before we begin, a brief disclaimer. The presentation which V2 Retail Limited has uploaded on the stock exchange and their website, including the discussions during today's call, contains or may contain certain forward looking statements concerning V2 Retail Limited business prospects and profitability, which are subject to several risks and uncertainties, and the actual results could materially differ from those in such forward looking statements.

0:58 Please note this conference is being recorded. I now hand the conference over to Mr. Akash Agarwal, Director and CEO, V2RETAIL. Thank you, and over to you, sir. Good afternoon, ladies and gentlemen. I, Akash, welcome you all to our q two and h one FY twenty seven earnings conference call. Thank you for your continued trust in V2RETAIL, India's leading value fashion retailer for Bharat. V2 was founded with a simple mission to democratize fashion by offering high quality, trendy, apparel at affordable prices to value conscious customers. Today, we proudly serve India's growing neo middle class and middle class populations across tier two and tier three cities.

1:44 As of 09/30/2026, we operate four twenty seven stores across 27 states in more than three forty cities, covering about 4,600,000 square feet of retail space. We have a complete value chain from an in house design team of 60 designers to dedicated job workers to three warehouses, 22 hubs to our own fleet that refills inventory at stores every alternate day. Our motto value and variety comes to life through this. This was a quarter of aggressive expansion with short term pain for long term gain. In Q2 FY 'twenty seven, we opened 49 new stores and closed three, taking a total to four twenty seven stores.

2:32 In the first half of FY 'twenty seven, we opened 106 stores and closed four. This is our highest ever H1 addition. 60% of these new stores are in core states, UP, Bihar, MP, Odisha and Assam, where our brand recall is very strong. Second, volume led growth. Despite muted consumer sentiment, we delivered strong volume growth. In the second quarter, volume growth was 31% year on year. In the first half of FY twenty seven, volume growth was 43% up year on year. This shows our value proposition is working. Customers are buying more from us. Three, same store sales growth. The FY twenty seven SSSG showed minus 14.9%, but normal SSSG was plus point 5% because q two last year had an early Durga Puja and an extended wedding season, while this year, the festive season shifted to quarter three. If we adjust for this, we are point 5% positive.

3:36 The first half SSSG was minus 3.7% calendar basis. Our sales per square feet per month was 700 rupees in the second quarter versus 933 in the second quarter of FY twenty six and seven eighty five in the first half of FY twenty seven versus $9.48 in the first half of FY twenty six. This drop is expected because we have opened 106 stores in six months. New stores take up to two to three years to mature and also because of the shift of the festive season. Our mature stores, which are older than two years, are still doing 1,000 rupees plus PSF. Four, customer metrics remain strong. Average bill value was 917 in the first half of FY twenty seven compared to 900 last year. Our average selling price was around 307 in the first half of the year versus 309 in the first half of the last year.

4:37 Full price sales was 91% in quarter two and h one versus 92% last year. We are not a discount retailer. We sell at MRP. Revenue mix remained primarily the same. Menswear about 40%. Ladies 29%, kids 22%, and lifestyle 9%. Now I will take you through our consolidated financial performance. Revenue from operations was 905.6 crores in the second quarter versus INR 708.6 crores in the second quarter last year, registering a growth of 28%. This growth is entirely volume led. Gross profit was INR 281.3 crores versus INR 198.2 crores, a growth of 42%.

5:25 Gross margin improved to 31.1% versus 28.0% last year, an expansion of three ten basis points. EBITDA with Ind was 120.3 crores versus 85.4 crores, a growth of 41%. EBITDA margin stood at 13.3% versus 12.1%. EBITDA pre Ind AS, our real cash EBITDA, was INR 53.4 crores versus INR 44.4 crores last year, growth of 20%, with a margin of 5.9. PAT was 18.2 crores versus 17.2 crores, a growth of 6%. The PAT margin was 2%. PAT growth is lower than EBITDA because of higher depreciation, 68 crores of depreciation versus INR 37 crores of depreciation last year from right of use assets for the 106 new stores.

6:21 Now consolidated financials for the first half of the year, revenues stood at INR 1,902.8 crores versus INR 1,340.9 crores, a growth of 42%. Gross profit grew from INR 384.4 crores to INR 566.4 crores with a 29.8% margin. EBITDA grew from 172.7 crores to 259.7 crores, a growth of 50%. Pre India's EBITDA grew from 96.9 crores to 132.8 crores with a growth of 37%. And the PAT grew from INR41.9 crores to INR60.1 crores with a growth of 43%. As of 09/30/2026, inventory stands at INR1447.8 crores versus INR $11.41 crores at the end of March twenty twenty six. The increase of about INR $30.06 crores of inventory is for the 106 new stores, advanced festive stocking for quarter three and the new store pipeline for quarter three. Our festive inventory is already at stores.

7:30 Borrowings stood at INR $5.28 crores, of which INR 45.6 crores is noncurrent and INR $4.83 crores is current versus INR $2.53 crores in March 2026. The increase is to fund growth. The net working capital increased to eighty eight days versus eighty one days in FY '26 due to higher inventory. This will normalize in quarter three after the festive sale. Long term track record. So from FY 'twenty two to FY 'twenty six, our revenue grew from INR $6.29 crores to INR 3,067 crores, almost 5x. EBITDA grew from INR 65 crores to INR $4.55 crores and back from a loss to INR 162 crores at the end of FY '25.

8:19 We have demonstrated a profitable scale up. So, friends, we are at inflection point. Why did we open 106 stores in the first half of the year? We have reached a stage where our back end, which is the design, sourcing, warehousing and talent can support 150 plus stores per year. The demand for value fashion in Bharat is huge. The market is shifting from unorganized to organized. We want to capture this first. It has put short term pressure on SSSG and PSF, but history shows that our new stores breakeven in the first month and achieve company average sales within two to three years. Quarter three will be our biggest quarter ever. Durga Puja, Dushera, Diwali, the wedding season all fall in quarter three this year. Our inventory is ready. We expect a strong recovery in SSHG and PSF.

9:11 We plan to open only 60 to 70 stores in the second half of the year, focused on consolidating operations and sweating our existing four twenty seven stores. With gross margin now at 30%, we aim to sustain around 29% to 30% gross margin and 13.5% to 14.5 EBITDA margin for the full year. As festive inventory sells, net working capital should come back to around seventy five to eighty days by March 2027. We remain committed to our mission to provide affordable, high quality fashion to every Indian. With this, I open the floor to question and answers. Thank you very much. We will now begin the question and answer session.

10:07 Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vibha from Haitong India Securities. Please go ahead. Thanks for the opportunity. Akash, sir, my question was on our growth for Q2. We have posted a negative growth because of the shift of this season. I wanted to get more color on this number in terms of breakup in our four festivals related states and other states where there is a lesser dependency on this. Can you break up this number right now other states have performed where there is a lesser difference?

11:07 That's my So I wouldn't have that number on hand, but I can tell you that almost two sixty of our stores are Puja Impact stores, where there's an impact of Durga Puja, and it ranges from about thirty days before the festival to about fifteen days before the festival. And that is why we always give a normalized SSSG whenever there's a festival shift. Understood. And related to this, how would we are performing since Q3? Can you give some more color? How was the October trade so far? And how are the initial traction has been in November as well? And what kind of issue do you expect to post in q three? And you also had cut your guidance to five to 7% same store sales growth after the q two business update.

11:58 Do you foresee now with the q three demand to surpass this in FY twenty seven? So you need to understand that already six months of the year had passed, and in the first six months, our SSHG calendar basis was minus 3.7%. So even if we achieve the target that we had set initially of eight to 10% for the rest of the year, then the whole year SSSG would be five to seven percent. So there was no change in guidance per se. It was just because the first six months of the year was a bit muted. That is why the whole year guidance changed. But looking at October, so if you look at calendar to calendar, then, of course, it's a double digit SSSG growth. But if you look at period to period, it is again a flat SSSG growth.

12:47 But quarter three, winter is a big, big part of quarter three. So... And Diwali is also still pending. So I think we'll be able to comment more and give more color by the end of November or around December 15. It all depends on how the winter goes. But how has been the Pooja sales in October? So if you look at calendar to calendar, it's more than a double digit growth. But if you look at period to period, it's been flat. Understood. Perfect. Lastly, on the store addition, you mentioned that you will be adding 60 to 70 stores in next group and focus on improving the performance of existing portfolio. I remember you were saying more than 100 these MOUs were signed for h two. So is there a shift of some of the stores which are planned to be opened in h two to next year? That's how we So we've already opened about, I think, 18 stores out of those.

13:45 Okay. And 60 to 70, are gonna open. And I think the rest will be shifted to April because there are some project delays in some of the sites. Perfect. Thank you so much, sir. Thank you. Thank you. Next question is from the line of Kushal Goenka from Mangal Kesham. Please go ahead. Yeah. Hi. Thank you so much for taking my question. My first question was that, Akash, you have been mentioning that you want to be the best paymaster in the industry. So I'm like, my question is if I need to compare two scenarios between keeping the money longer in the business versus paying the creditors early and getting better prices, can you please quantify the gross margin benefit will outpace the working capital requirement?

14:36 So see, here here, it's not a very simple answer because when we are becoming the best paymaster or paying our vendors early, it's not just the benefit in gross margin or the discount that we get from our vendors. It's also the increase in on time delivery, increase in the priority given to us by our vendors in terms of supplies, in terms of quality, which, you know, which gives you some factors which are, I I would say, not quantifiable. That is why we always like to have some extra cash on the books even if we have to borrow so that whenever our vendor are in need, they can get any bill discounted so that it helps them with their working capital so that we always have a very high fill rate in our stores and our DCs.

15:23 Because the opportunity loss of an empty shelf is a complete sale loss, basically. That is much, much higher than any interest cost that you'll be paying on the borrowings. Okay. So can you give any guidance on the credit days going ahead? So I think... See, our average credit days is around sixty five to seventy days. And whatever prepayment we do is completely dependent on the situation in that particular season or month. So whatever extra cash flow we generate, we give the prepayment. So it should be between, I would say, about forty five to sixty five days, the credit days, depending on the availability of funds. So it might also reduce going ahead also?

16:09 Correct. If we have extra cash on the books, we will always pay our vendors earlier than their bill... When when their bills are due. Okay. And my second question is, Akash, that you have been promising to include your core team members of six to seven people since the last two quarters, and I have not been able to get that information. I tried to search the annual report also, and I'm not sure if it's mentioned there. So it would be great if you could mention it here, the names and roles. And also second part to that question is, are we actively looking for more CXOs Because we do have an ambitious target to reach 2,500 stores. So how are we planning to strengthen the coating? So what we do now is we keep a probation of at least six months whenever a senior key managerial person joins the organization before we, you know, set it out send it out to the investors in our deck because we wanna see the culture fit. We wanna see if if they're the right fit for the organization.

17:12 But definitely, a lot of them have passed those six month benchmark, and we'll we'll share it on the presentation. And, yes, we are on the look for look for more CXOs. We're looking at the parts that we are on. We're always on the lookout for good professionals, experienced professionals who can help us in our journey. But if you could just let me know, like, some people who are there with you, say, like, since last five years, if you can mention their names or their roles who are closely working with you because Sure. We will add that to the presentation. You will get it. Sure. Please, if you can do that, I've been asking you since the last two quarters. Sure. Yeah. Thank you. Thank you so much and best of luck. Thank you.

18:01 Thank you. Next question is from the line of C. A. Vikas from C. R. Please go ahead. Hello. Yes, sir, you're audible. Yes. Thanks for taking my question, sir. My question on guidance side, like FY 'twenty seven guidance regarding around 50% growth. So in actuality, we already achieved around 42% and about 28% in quarter two. To reach that 50% growth guidance, so we need to do H2 around 56% growth. So do you still maintain this 2% growth guidance? Or is there any changes?

18:47 Or how much of H2 growth do you expect from new store? And how much of distribution? That was my question. Yes. I think we are not changing our guidance in terms of revenue growth. I think we should still surpass the 50% guidance that we had for the whole year. And talking about old store versus new store, in the second half of the year, I think old stores should grow at 7% to 9% SSSG and new stores will be the rest. So if the second half of the year, we are expecting almost 60% sales growth, seven to nine will come from old stores, the rest will come from new stores. Okay, sir. So the company opened one zero six store in h one. So are you on track to open one seventy two to 100 store for full year?

19:43 Correct. So I think we already opened 115,116 stores, and we're gonna open 60 to 70 more. And for FY '28, do you still expect revenue growth around 50% for any other guidance, sir? So for FY '28, our current guidance would be anywhere between one twenty to one fifty stores. It will completely depend on the rest of the year's performance, how we change that target. Okay. Okay. Thanks for taking my questions. Thank you. Thank you. Next question is from the line of Ankush Agarwal from Search Capital. Please go ahead. Yeah. Hi, Apax. Thank you for taking my question. So Ankush, firstly, this FLG, right, even if we adjust for the festive shift, like, the is point 5%, and then we have also made this comment that calendar calendar period to period, it is still flat when you need to comment on.

20:42 So I wanted to understand what is more happening. Like, it's not just the festive shift that is in fact, that is the underlying something else is also happening. So have you sort of done any analysis as to what is happening? Maybe some of the old... Newer store forward that you would have added in last one and a half years, they are not giving the same level of throughput. So wanted to know more of this. Yeah. So we we checked the data, and nothing stands out in particular. You know, if you look at ABB is maintained, ASP hasn't changed a lot. If we looked at statewide SSHG, we looked at cohort wise SSHG. So the the the slowdown or the delta is throughout. And when we did competitor benchmarking also, we we found out the same results. So it's it's hard to put a a particular factor to that because nothing stands out from the data.

21:35 Okay. So in light of this, assuming that that is just... Remains muted going ahead, how are we looking to sort of adjust our growth ambition? Because, again, then if we continue to aggressively add more stores and down the ramp will again impact the overall profit target of the business because at 70%, that is really what I had in 56% store growth that was working on, but I think at lower SSD, that might not be sustainable. So are we looking to sort of adjust that growth ambition in light of this lower SSD? Yeah. Correct. So if this trend continues to the third quarter, then next year, we'll only open 100 stores, which initially the target was one fifty to 200. Next question is from the line of Onkar from Shree Investments.

22:32 My question was regarding the depreciation in this quarter. Is this back continue in the Q3 and Q4 as well? Will... Sir, your voice is not clear. I lost you. Sorry. Am I audible now? Yes. Much better. Yes. My question was regarding the depreciation in this quarter. So will this continue in the Q3 and Q4? Or there will be slight reduction going forward? No. It's gonna continue now because the base of the stores have increased. So the depreciation is gonna continue in the third and fourth quarter. Okay. So overall speaking, like, have you seen any demand slowdown overall or just that something else? Because you yourself mentioned that there are no particular reasons you can see for the reduced SSHG.

23:27 Yeah. But I've also always mentioned that, you know, the macroeconomic, the demand scenario only has, like, a delta of plus or minus five percent. So I think definitely we have performed less than our expectations. But again, we are hopeful for the winter season. But in the last three months, definitely we saw some sort of a demand slowdown. Okay. And this store expansion, which you have said of hundreds where things doesn't work out, like, then what will be the sales figure for appointment? It will... Will be... Will it be a 50% kind of growth, or you have to lower it down again? No. So if we open only 100 stores, then the sales growth will also reduce from 50.

24:18 So that should be how much then? If you... If at one fifty to 200, if if it would be about 50, then at 100, how much I think it would be around 35%, 35 to 40%. Okay. And that... When approximately at what time you will decide that, like, you have to reduce the store expansion? I think it'll be at the end of the third quarter. How we do in the third quarter? Because this is the biggest quarter for us. It has a lot of festivals plus the winter season. So we'll get a much better idea at the end of the third quarter. Correct. And can can you mention the match first stores SSHG for the first half? We don't give that breakout, but may... Maybe from next time, we'll start giving that out also.

25:06 For the next half, you are mentioning that you will be growing that around seven to 9%. Right? That's our target. Yes. Yeah. But I mean, since you are mentioning for the next second half, at least you can give for the first half. Right? You're talking about actual SSHG for old versus new. Right? Correct. Correct. For the mature stores, you said you will be doing around seven to 9%. So I was asking you, can you share the data for the SSHG of mature stores for the first half? That's what I'm saying. I don't have it off on hand. Maybe we'll share it from the next time. Okay. Okay. Alright. Thank you. Thank you. Thank you. Next question is from the line of Amish Kannani from Noise Investment Managers.

25:57 Please go ahead. Hello. Hello? Yes, sir. Sir, maybe the question is but just I was wondering if there are any nuances to pick up. One, in terms of festive season versus winter sales, are we kind of seeing any different trends? And whatever sales number growth that we have had for the month of November, If you can give us some sense of what is kind of affecting the sentiment and what are we doing to see that might may not affect us for the rest of the month, especially the November, December and January, sir.

26:48 So I already mentioned about Durga Puja. Durga Puja period to period was flat. But what we are seeing the early trends of winter, we are seeing a very positive uptick in demand and sales, but it's too early to call. But in terms of preparation, like I already mentioned, you know, our winter fill rate is almost 20% better than last year because a lot of goods were received late. So we are much better prepared for the winter season this year. So hopefully, this trend continues through November and December, and we can get back on track. And sir, about the pricing trend, the inflation and pass through of inflation. Is it something which is one, what is the actual trend? And have you passed on the inflation? And that's the reason why we are seeing this kind of a softer trend? Or anything to read there and update us what's the average inflation and how much is passed?

27:45 Yes. So there was a rise in raw material prices, and we have increased the MRP for those products. But if you see the ASP, the ASP has actually come down 3% in the first half of the year. So how we manage that is by a better product mix. So if the premium and super premium contribution was 30% for a particular category, because the prices are increasing, we increase the options in value and economy. So overall, for the customer, in terms of price points, it doesn't change much. And their average basket size, it doesn't change much. So I don't think that has an impact on the sales currently. Sure. And the last one on the sales, average sales per square feet, which has come down to a low of 700.

28:32 We have been targeting and old stores are getting 2,000. Anything that you can give us, would say, one, two months, new store is largely probably affecting this. So are we kind of is there any trend that we are quickly reaching there, at least $80,000,000,850,000,000 plus and whether that is affecting our EBITDA margins? So any sense on the second half EBITDA margin because of slightly lower average sales per square feet? And it may the new store may take some time to scale up because of which we need to buy on the margins operating margins, sir? So new stores, historically, we've always seen they take about two to three years to mature.

29:21 But because the first half was a bit muted, maybe that maturity period for our new stores that we opened in FY 'twenty six has increased to... Sorry, in FY '25 has increased to... From two to three years to two and a half to three and a half years. But, again, it's too early to call, and we'll only find out how those new stores keep performing and keep ramping up because the new stores started about 35 to 40% lower than our mature stores PSF. And that is what brings the company level PSF down. But if you look at EBITDA margins, even with the Durga Puja shift, our EBITDA margins, even pre Indias, has gone down by only point 2%. Because we are getting operating leverage, we've been able to increase our gross margins by lesser discounting, better product mix. So those things are offsetting the lower per square feet from new stores.

30:19 Sure, sir. That's the hard thing to note. Thanks and all the best. Thank you. Thank you. Next question is from the line of Avinash from MOSL. Please go ahead. Hey, good afternoon sir. I just want to double click on this gross margin only. So if I look at for this quarter, the full price sales were actually down, if I look Y o Y, to 91%. And still, there's a 300 bps of margin improvement in an inflationary scenario. So how should we see this? Is this entirely because of the faster payments to the vendors? Or how should we read this for the full year? So there are three things here. One, we give a marketing offer as a bill discounting... Sorry, a bill buster offer to our customers.

31:05 That happens during the share up. So that happened in September last year, but that campaign will happen in October this year. Second, the major part is the better... Lesser discounting because if you see the quarter one numbers, our gross margin was 1% less. Because of of, we had to start discounting earlier than expected. And when you talk about full price sales, it only gives you the quantity of goods sold at discount or sold at full price. It doesn't give you the discount... Depth of discount that you have given. So you can have the same full price sales in terms of quantity, but maybe the average discount that we gave last year was 50%, whereas the average discount that we gave this year is only 30%.

31:53 So that increases gross margin. Okay. Got it. And, generally, when I'm looking at the apparel companies are facing five to 6% kind of RM inflation, so how are you tackling this, and what should be the margins for the full year? So like I already mentioned, what we are doing is we're focusing more on blended fabrics rather than 100% cotton fabrics. So we are changing the product mix in a way that my ASP doesn't change and the value proposition to the consumers don't change. But, of course, all the core products, everything that we sell in quantity, the prices of that in terms of our cost has increased from anywhere between three to 7%. So we have increased the MRP because, you know, we are already the lowest margin retailer.

32:42 We can't absorb that kind of price increases in our margin. Okay. So on a full year basis, margins, how should it be, like, gross margins? It should be between 29% to 30%. Okay. Okay. Got it. And the second question is coming to the inventory. See, I understand there's a 50 shift component as well. But if you look at FY twenty six end, we have a higher inventory because you are ramping up the stores and you added 100 stores in the first half. Now the inventory should either be stable or improve from that level side. So I can see a further increase in the absolute inventory despite the outlook for the storage is coming down. So what But if you look at the closing retail space area, that has increased by almost 1,000,000 square feet.

33:32 So how can absolute inventory go down from March to here? So three things happen at the end of September quarter. So you are ramping up for winter season. So all your winter goods are coming into the warehouse. You're ramping up for the festival season. All your festive goods are in the warehouse, and you're planning for the 60, 70 stores that you're gonna open in the second half of the year. So that is why if you look historically, always the inventory in terms of days and levels is always highest at the end of September quarter. Okay. So this is only because of the factory shopping that you are seeing in inventory buildup right now? No. And the 1,000,000 square feet that we've already opened. So you need to understand at the end of March, we had this inventory for the 1,000,000 square feet that we were gonna open. Now those stores are already open, So you already have that inventory in house, plus you will have the festive inventory, winter inventory, and the 70 stores that you're gonna open in the second half of the year.

34:31 Okay. Got it. I'll... And the last question is regarding the debt and the cash flows. So debt has again started to pile up to INR 500 crores right now. So what's your sense on the cash flows? So because we preformed our growth and we know we opened 106 stores in the first half of the year, that is why we needed that cash flow earlier, and it also includes the prepayment that we do to our vendors. But now going forward, as and when, you know, we are gonna open lesser stores in the future, so this level should come down. What is the comfortable portion of the debt that you are ready to take? Like, this 500 close to it should be, say, suppose... I'm not I'm not asking immediately, but, say, suppose two years down the line.

35:19 So I think any level below point five in terms of debt to equity ratio is good for our business. It's healthy. As long as you know you have enough EBITDA and profit to cover your interest payments. Got it. That's it from my side as well. Thank you. Thank you. You. Next question is from the line of Meet Mehta from Integrity Ventures. Please go ahead. Hi, Akash. Very congratulations on a good set of numbers. Just a confusion on the PSF side. So if I'm not wrong, our starting PSF for new stores was around $707,130 levels.

36:06 But we reported the PSF of 700 for this q two. So, you know, what kind of starting PSF we have and why, you know, the number have fallen from $9.38 rupees in the last quarter to, you know, 700 kind of levels. Is it just because of the new store addition or, you know, anything to read on that? So whenever we talk about PSF, it's always the last twelve month average. When we talk about that new stores are doing about $7.20, $7.30, Old stores are doing about 1,100 rupees per square feet. So if you look at historically also, whenever there is no festival in quarter two, quarter two PSF is almost 40 to 45% lower than year average. Got it. So... But, you know, our starting PSF for new stores is around $7.20, $7.30, and we are lower than that. So, you know, are those stores doing much lower than the 700 kind of level? Because mature stores would be doing around a thousand, 11 100 kind of range.

37:12 So, you know, they are doing much lesser on the new store side. So that's what I'm explaining. If you look at just new stores, if the year average is seven twenty, if you reduce 40% from that, it... You you come with what, I think, $4.50 rupees per square feet for quarter two. And for old stores also, if the year average is 1,100 and you reduce 40% from that, you get at 700 rupees per square feet of PSF. So you're only looking at quarter two in isolation, which is the wrong way to look at it. Our last twelve months average for newer stores is still above $7.30, $7.40 rupees per square feet. Got it. And with, you know, festivities and bidding demand and, you know, the winter collection going live for this quarter, this should jump for the quarter three.

38:04 Correct. Got it. Got it. Yes. Thanks for the on this particular thing, and all the best for the coming quarters. Thank you. Thank you. Next question is from the line of Nikhil from Bliss Homes. Please go ahead. Hi, Akash. Looking at the October and starting November sales data you have so far in Q3, can we expect Q3 to be V2 Retail's best quarter ever? Yes. Q three will be V2 Retail's best quarter ever in terms of revenue, in terms of profitability. Correct. Okay. That's it from my side. All the best. Thank you. Thank you.

38:53 Next question is from the line of Deepak from V2RETAIL. Please go ahead. Hey. Hi, Akash. Just wanted to get your view on if you have done some deep dive on... In terms of new customer acquisition, was there a call or the existing customers and... But I'm I'm sure you will be maintaining that when when you, you know, register a consumer or, let's say, invoice a customer. So how does it look like in terms of... You know, can you give some color on that? Yeah. So we always look at CRM data. And what we have seen in the last two to three years, I would say, so the average frequency of our customers, repeat customers used to be almost five, five and a half months, which has reduced to just four point four to four and a half months now.

39:48 And for our mature stores, the repeat customer sales has increased from 55% to almost 70, 70%. And customers who come back within one year has also significantly improved. There's a improvement in almost... In that percentage by almost 500 basis points. So all these metrics are improving. But in the second quarter, like, again, like I said, there's no number that stands out to say, oh, suddenly the repeat customers went down or the new customer acquisition fell down. There there is no number that stands out and tells us, okay. This is the problem or this was the issue. So I think it is a mix of everything because, like, ABB was 1% down and footfall was 3% down.

40:35 And so it's a it's a... I think mix of a lot of factors together, but nothing stands out significantly saying that, okay. This is the reason why we're seeing a little dip in sales. Okay. So you mentioned about recency. You mentioned about frequency. And what about the monetary value? As in the the existing customers, how has been their basket size? That's also in line. So we don't we don't track lifetime value, but what we see is average loyal customer for us spends around 2,200 to 2,500 rupees annually with us. Understand. Understand. Understand. Understand. So, basically, some acquisition is next to nothing because our marketing cost is less than, I I would say, point 5%.

41:22 Yeah. Yeah. Yeah. Yeah. So, basically, what what we are looking at... So let's say if I have to identify the problems, spell out the problem correctly with respect to last quarter because, you know, a lot of investors are, you know, kind of taken aback by the numbers because they were never in the habit of, you know, using the numbers going down from V2. So if I have to identify the problem correctly, the problem would be in terms of few percentage points here or there. Right? So in terms of music, football has gone down by, let's say, 3%. Right? And 1%, what was what was that remark? PV, average bill value. Average bill value. So that would be the kind of total impact. Right? Correct. Plus plus the festival impact.

42:10 Okay. Correct. Okay. Okay. Okay. Any other nuances which you want to share, which you would have identified using data analytics? Nothing significant, but, yeah, definitely, there were some categories where the on time delivery was really poor. So that is why the fill rates were not up to the mark at the stores. So those categories were degrowing, obviously, higher than the others, but nothing too significant to explain 5% to 6% downfall in sales. I understand. And and there's one last question, Akash. So let's say, so your merchandise sells at a very economical price. Right? In fact, all your trends and, you know, your website and other stores, their pricing is Mhmm. Way above yours. Right?

43:05 Who are your actual competition in terms of? So see, there are two direct competitors. One would be obviously the unorganized retail, the local mom and pop stores. They are selling very similar price point. And the second tier would be the organized players in this space. There are more than 20. So there is V Mart, Style Bazaar, City Cart, Bazaar Kolkata, M Bazaar. So there there are many players, and a lot of those players have more than 100 stores now. So this is the second tier of competition. So these are the two main direct competitor retailers to us. Oh, like to like business, for example, Akash, we have a lot of presence in Bihar, Odisha, Jharkhand, and all these places. Right? While, let's say, a V Mart would have presence spread across Pan India more in South or, let's say... I mean, you are... In terms of your geographic presence, you are more towards the economic sections. Right?

44:09 So benchmarking that V Mart with you would also not be appropriate because the future impact does not impact... I mean, does not impact them that significantly as it impacts you. Right? So any player which is, you know... So let's say you would have compared those players where the impact is high. Right? Any any any stock differentiation or any any any any any insight which came out of, let's say, benchmarking? Like, we look at all retailers the same now. We are also present in 25 states. So we also look at ourselves as a national level retailer. So out of four thirty stores, two fifty old stores are, you know, Pooja impacted.

44:55 But now when our our stores are also pretty spread out. So whenever we did the benchmarking, we saw, you know, still in most of the locations, our cost per week sale is at least 30% higher than our closest competitor. Still, the most footfall is in our stores. You'll find most customers in our stores. And I would say we still have the best offering in terms of variety, number of options, and pricing. So I think we still have that USP. We still have that edge. We still have that competitive advantage. No. No. No. Your business model is the best that I understand. Okay. Okay. I don't want to stretch it anymore. Thanks. Thanks, guys, for getting those insights and all the best. Thank you. Thank you. Next question is from the line of Vibha from Hytong India Securities.

45:46 Please go ahead. Hi. Thanks for the follow-up. My question was on gross margin, Akash. We mentioned that last year in Q2, we had run this BINBUSTER offer ahead of Vashira. So this year, it will be in q three. Would that impact our gross margins in q three because of this? So I think we'll still be able to maintain it in q three. Understood. And related to this, have we received any benefit of price hikes in q two or price hikes will start getting reflected from q three onwards? And what is the quantum of price that we have taken so far? And going forward, any more prices that you have? We've already taken the price hikes, but there is no benefit from the price hikes because we're maintaining the gross margins.

46:38 So whatever cost delta we got, we are maintaining those gross margins. What is the range of prices taken so far? So I think the hike in cost was around five... Three to 7%. So to maintain gross margin, we'll have to increase MRP by five to 10%. Understood. And you don't plan to take any more hike going forward? It all depends on the raw material prices. So we want to maintain our gross margins. So if there are further price hikes in raw material prices, then we'll have to take price hikes. Understood. And any guidance for the full year in terms of premium based EBITDA margins? Should we expect any sort of expansion for the full year?

47:27 After opening one seventy to one ninety stores in the whole year, I don't think we'll be able to expand the EBITDA margin. It'll be a great job even if we maintain it. So like we've always mentioned, I think we would be targeting a pre index EBITDA margin of seven to 8% for the whole year. Understood. Just on the SSD, you had mentioned that you have seen a double digit growth in this October. So this is... You are talking about October year on year basis. Right? And you said flattish for a period. What did you mean by that? So because moved from September to October, so when you look at calendar basis, October to October, it's showing a higher growth. But when you match it to period to period, that is the sharer to the sharer, it's flat.

48:16 Understood. So if you have return on a calendar year basis, double digit growth in October, and our base is also favorable, we have posted around 2% especially last year. Can we expect double digit growth to sustain in q three and then normalize back to our high single digit growth in q four? Again, we always like to focus on normalized SSH. That is period to period. And for that, our target is five to 7% for Q3 now. Understood. Perfect. Thank you, sir. Thank you. Thank you. Next question is from the line of Unkar from Sri Investments. Please go ahead. Yeah. Earlier, you mentioned that around 13.5% to 14.5% EBITDA margin you will be doing for the entire year.

49:09 Right? That is pre... Post India. We But like Yeah. Yeah. You can ask. Yeah. Yeah. First half, you have done around 13.6%, and quarter two, you have done around 13.3%, and we are guiding for around 13.5% to 14.5%. So in order to make it to the upper end of the band, I mean, do you see do you foresee that kind of margin expansion being there order to achieve that guidance. So we we don't... Yeah. We don't... We never guide for post India's numbers. That's why we always guide for pre India's. So definitely, the pre India's EBITDA margin for the second half will be better than the first half because the bulk of the profitability comes in the third quarter.

50:01 So I think the first half pre India's EBITDA margin is about 7%. So the next half should be at least 8%. So the full year pre India's EBITDA margin will be more than 7.5%. So for the quarter three and quarter four, do you expect this profit growth or the EBITDA growth to be higher than the sales growth? Again, I don't know exact number. But for the whole year, again, if you look at the whole year in picture, the revenue growth will be... Should be more than 50%, and the profit growth also should be more than 50%. See, either, like, equal... Equally not equal it or, like, better at slightly. That's how it should be. I lost you there. Sorry.

50:47 I was saying you mentioned that it should be at least equal or slightly better than that. Right? Correct. Correct. Okay. Alright. Thank you. Thank you. Thank you. Next question is from the line of Kushal from. Please go ahead. Hi. Thank you so much for giving me the follow-up. Akash, so you mentioned that there is some slowdown in demand, which is an external factor. My question is that an antifragile management usually don't wait for external factors to get better, but do internal changes like tinkering or making the internal systems better, changes that lead to generation of new demand. So anything that V2 is doing because I have seen Ram Ram's interviews, and I believe in his energy and story a lot. And just slowdown in demand should not let our vision fade away. So any thoughts on this?

51:44 Thank you. So that is the good thing about us. We never stop innovating or trying new things or experimenting even when we are doing amazing. So even when we were getting 31% or 29% SSHG, we were still working on 50 different projects to go to the next level. And even now, because, see, one or two quarters doesn't define anything. What we are working on is the vision for the future. That is 2,500 V2 stores. But definitely, we've always mentioned that our growth trajectory will completely depend on our performance. So if we see... Because, you know, at the end of the day, your performance leads to the cash flows and the internal accruals that allow you to grow. And if we see that all the parameters, all the pointers, all the benchmarks are positive, then we accelerate more. And if we feel that, okay, there is something that we need to work on more and consolidate, then, of course, we take the pedal... Foot away from the pedal.

52:42 But, again, like, even today, there are 25 different projects that are going on. So we completely went on live with hub and spoke. So all our stores are being replenished. Some are some are being replenished every day, and most are being replenished once in two days, which used to be once a week. So that has really simplified store operations. We have introduced a lot more fashion quotient in our assortment. So earlier, it it used to be less than 20%. Now we're trying to take it up to 30% where things that come, you know, in trend only for maybe six months. We're trying to offer those designs at our stores to attract Gen Zs. And the biggest project that we've undertaken is application of AI. So what we're doing is putting...

53:27 Making AI tools and AI agents that use OCR that do the analysis themselves in terms of what attributes are selling, what attributes we should increase at what store, and we've completely moved our complete ARS system onto that as well. So this will keep evolving, and I think it will start giving us rewards and returns from next year onwards. That's great to hear. Just last thing, any color on the V2 card e commerce that you have launched recently? So we did the pilot in two states. It's still going on. Again, it's a new, I would say, vertical. So there are some operational issues because at any given point of time, there are almost 35,000 pieces of inventory at any of our stores.

54:18 And looking for one order or two order, one or two pieces of an article is becoming a little bit of a challenge. So we don't want unfulfillable orders. So we're trying to look for solutions, how to solve that, or only go launch with, you know, high depth articles or core articles because we don't want to, I would say, compromise on customer experience. So we're just doing tinkering and doing the last minute checks, how we can make that better, and then we will, you know, add more states to that launch. But the... You plan to go full fledged with with this V2Cart? Yes. Correct. Because it has no additional fixed cost for us. We're using our existing inventory at the stores.

55:05 The technology cost is negligible. So it's all variable cost. So it always makes sense to add another channel to sell your current inventory on. Thank you so much, and best of luck. Thank you. Thank you. That was the last question for today. I now hand the conference over to Mr. Akash Agarwal sir for closing comments. Thank you, everyone, for joining us on today's call. We hope we've been able to address your questions and provide greater clarity on our performance and outlook. Should you require any other further information or have additional queries, please feel free to reach out to Marathon Capital, our investor relations advisers, who will be happy to assist you. We appreciate your continued interest, confidence, and support.

55:52 Thank you, and we look forward to speaking with you again. Thank you. On behalf of V2 Retail Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.