Shares of Vishal Mega Mart Ltd. the hypermarket store chain fell as much as 7% on Wednesday, October 21, in response to its September quarter results, which saw margin pressure from last year, and an impact to its Same Store Sales Growth as well.
For the September quarter, revenue for Vishal Mega Mart saw growth of 14% on a year-on-year basis ₹3,399 crore from ₹2,981 crore.
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter stood at ₹412 crore from ₹395 crore last year, implying a growth of 4.3%.
EBITDA margin for the quarter narrowed by over 100 basis points to 12.1% from 13.2% in the year-ago period. The company attributed the drop in margins to the operating deleverage arising from the shift in festivals.
The company’s net profit also increased by 3.9% from last year to ₹158 crore from ₹152 crore.
Same store sales growth at the end of the quarter stood at 5.4%. On an adjusted basis, that figure stood at 9%. The company, in a post-earnings release, stated that festivals this year have moved to the December quarter, compared to the base quarter, and that impacted the same store sales growth by 3% to 4%.
For the first half of the current financial year, the same store sales growth for Vishal Mega Mart stood at 7.7% and with the festive season shifting to the second half of the year this time, the impact of the same has been between 1.5% to 2%. Adjusted for that, the same store sales growth would have been 9.5%.
For the first half of the year, the company added 49 stores on a net basis, taking the total store count to 844. 44.1% of the topline during this period came from the apparel business, 28.4% came from general merchandise and 27.3% came from FMCG.
As of September 30, the company had a customer base of 18.1 crore.
“We had a strong start to the festivals and this has reinforced our confidence in the demand momentum as we approach Diwali and the wedding season. Looking ahead, we remain focused on capturing growth opportunities while staying agile in an evolving geopolitical and inflationary environment,” Gunender Kapur, the founder and CEO of Vishal Mega Mart in a post-earnings statement.
Shares of Vishal Mega Mart are now trading 5.9% lower on Wednesday after the earnings announcement at ₹88.87. The stock is down nearly 50% from its post-listing high of over ₹150 and is now nearing its IPO price of ₹78 apiece. The stock has declined 35% so far on a year-to-date basis.