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Strong performance continues; revenue/EBITDA up ~21%/26% YoY

* 1QFY26 consolidated revenue of INR31.4b grew 21% YoY (vs. consensus estimate of 20% YoY growth), driven by adjusted SSSG of 11.4% (slightly lower than 13.7% in 4Q due to a shift in festive dates).

* VMM added 21 net new stores in 1Q (23 gross additions), taking the total store count to 717 across 472 cities (14 cities added in 1Q) with total retail areas of ~12.4m sq.ft. (up ~11% YoY).

* Sales of own brands grew 24% YoY, while third-party brands grew by a modest ~13% YoY.

* Gross profit at INR8.9b grew ~22% YoY as gross margin expanded ~15bp YoY to 28.4%, likely driven by a higher share of private labels (75.8%, up 170bp YoY).

* Employee/other expenses increased 14%/19% YoY.

* Reported EBITDA rose ~26% YoY to INR4.6b (4% above BBG consensus) as reported EBITDA margin expanded ~55bp YoY to 14.6%.

* Pre-INDAS 116 EBITDA (pre-ESOP charges) grew ~34% YoY to INR3.2b, with EBITDA margin of 10.3%, up ~100bp YoY.

* Adjusted PAT (pre-ESOP charges) came in at INR2.2b (up 38% YoY), with margin expanding 90bp YoY to 6.9%.

* Reported PAT of INR2.1b surged ~37% YoY, driven by higher EBITDA and other income (+2.2x YoY).

Category- and geography-wise performance

* Among categories, general merchandize outperformed with 23% YoY growth, followed by 20% each for apparel and FMCG.

* VMM expanded its presence in South India (Karnataka, Kerala, etc.), by adding 12 stores and opened a new store in Gujarat and Maharashtra. Early responses to these stores have been encouraging, as per management.

* Geographically, South India was the fastest-growing region for VMM with 23% YoY growth, though the region’s per-store productivity remains ~15% below company-level average.

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