Vishal Mega Mart Reports Strong Q1 FY26 Growth with 21% Business Increase and Double-Digit SSG

Vishal Mega Mart Limited (VMM) announced its Q1 FY26 (quarter ended June 30, 2025) results, highlighting robust performance across key metrics: * The business grew by 21% year-on-year, supported by an 11.4% adjusted Same Store Sales Growth (SSG) and the opening of 23 new stores. * Gross margin improved from 28.2% to 28.4%, while EBITDA margin saw an increase from 14.1% to 14.6%. On an adjusted basis (pre-ESOP and Ind AS 116), EBITDA margin rose from 9.3% to 10.3%. * Profit After Tax (PAT) improved from 5.8% to 6.6%, and adjusted PAT for ESOP charges increased from 6% to 6.9%. * As of June 30, 2025, the company operates 717 stores across 472 cities, adding 14 new cities in the quarter. The total trading area stands at 1.24 crore square feet (12.4 million square feet). * Contribution of private brands reached 75.8%, marking a 170 basis points improvement year-on-year, primarily driven by growth in FMCG and general merchandise. * The QuickCommerce business expanded to 670 stores in 445 cities, with approximately 1 crore (~10 million) registered customers. Management noted that 20% of QuickCommerce consumers are new to Vishal stores, indicating incremental business. * Management expects consumer demand to improve following income tax changes and noted an uptick in rural demand. They aim to maintain consistent SSG momentum, largely driven by increased footfall. * The company has successfully piloted new stores in Maharashtra (Pune Talegaon) and Gujarat (Naroda Ahmedabad, with another in Anand opened in July 2025), with early results being encouraging, prompting plans for further expansion in these states. * In response to the Karol Bagh store incident, VMM has engaged leading global fire management companies to review and upgrade its systems and has initiated a major training campaign and daily SOP compliance review across all stores. * Six smaller format stores are now operational in Uttar Pradesh and Haryana, performing as per target, with accelerated rollout planned for future quarters. * The company's SSG recorded double-digit growth across Tier 1, Tier 2, and Tier 3 cities, as well as across all states. * On margins, management stated that gross margins would remain constant, with any improvements reinvested into growth. EBITDA margins are expected to improve incrementally (0.1-0.3%) due to operating leverage. Rental inflation is typically 5% annually, and wage inflation is projected at 5-7%.