Strong quarter masked by inflation headwinds and margin compression ahead

Delivered 23.0% YoY, 11th consecutive quarter LFL positive (9% stated)

Gross margin 34.5%, declined 80 bps YoY; inventory days 86 (down 8%)

Confirmed in call; strong format, new stores outperforming legacy stores

10% blended RM inflation confirmed, passing 2-2.5%, taking 0.5-0.75% margin hit

Mid-40s → 38-39%, but admitted increased competition; memo count +18% masks lower conversion

Q1 delivered 9% LFL; forward guidance now 'mid-to-high single digit' vs implied prior 10%+. Reflects caution on macro and RM headwinds.

10% blended RM inflation (cotton, polyester, dyes, chemicals). 2-2.5% pass-through, 0.5-0.75% margin absorption. Prior calls implied gradual mitigation; now explicit pressure.

34.5% this quarter vs 35.3% prior. Claim inventory provision temporary, but RM + wage inflation will keep margin under pressure. Pre-COVID target 4-4.5% PAT margin now at 4.3%, not a clear path up.

90+ stores for FY27 consistent with prior guidance. Q1 added 15 (net 14), on track for ~13-15% area growth.

Unlimited 40% EBITDA growth, SPSF ₹710 (+18%), management committed to 'higher number of store openings' vs core V-Mart in Southern markets.

Mix unequal split; customer-led (festive/seasonal), not deliberate. Provision is consistent 10-15-year policy. Both contributed, not equally quantified.

Past counting errors; increased competition (customers checking multiple stores). Memo count still healthy +18%, footfalls +39%.

No price hikes yet; forward purchases hit by crude. Will pass some through, but cautious on consumption impact. 2-2.5% inflation pass-through likely.

New store memos all new (100% growth). Old stores 9% LFL; ASP +2-3%, rest from memo growth via footfall, not conversion.

Yes, via better product mix, higher-priced items (sets, combos). Working on UPT too.

Gross. Expect 8-10 closures also this year.

Deferred with 'Dil hai ki manta nahi' — implies yes, but not narrating.

2 of 3 months in Q1 already. Karnataka on stay, <5% vendor exposure. Will offset via efficiency/sales growth, keeping employee cost % flat.

Not compromising margins yet except ~0.5-0.75%. Creating efficiency measures, small product price rise. 3-4% SSG historically enough to absorb inflation.

Very difficult to answer. Want to better last year's SSG. Mid-to-high single digit implied.

Historically 3-4% SSG offsets wage/rental hikes. 95-98% of expenses fixed. Manageable with 3-4% SSG.

Yes, Unlimited attractive but challenging to expand profitably. Will accelerate Southern expansion.

Gross margin already better at Unlimited. EBITDA gap closing as legacy stores age out. Expecting similar margins soon.

Confident. 0.9% lower this quarter from provision. Focusing on rupee gross margin, not %. Supply chain risk higher than margin risk.

Should not exceed 3-5% ASP increase. 2% achieved this quarter (mix + inflation). 2-2.5% price increase on overall.

Prior capex guidance 170-180 Cr annually; Q1 ₹38 Cr suggests on track. Assumes mid-to-high single digit SSG; implies FY27 revenue ~1300-1400 Cr if Q2-Q4 average 6-8% SSG (vs Q1's 23%).

Currently 4.3% (at range floor). RM inflation 10%, passing 2-2.5%, absorbing 0.5-0.75% margin. Wage hikes continuing. Path to 4.5% unclear if SSG mid-high single digit.

Q1 ₹38 Cr for 14 net store additions + refurbishments. Implied ~140-160 Cr for 90+ additions.

10% blended RM inflation (crude-linked yarn, cotton, chemicals, dyes). Only 2-2.5% pass-through planned; absorbing 0.5-0.75% margin. If crude remains elevated or inflation accelerates, margin at risk.

Monsoon deficit 30%, El Niño effect noted. Non-uniform impact (states with higher rain = floods, others with deficiency). Agricultural demand risk. Household budget sensitivity acknowledged.

UP minimum wage increases in Q1 (2 of 3 months in P&L). Karnataka hike pending on stay (~5% vendor exposure, <5% if garmenting). More hikes expected in FY27. Cannot be fully offset by sales growth.

Conversion dropped mid-40s to 38-39%. Attributed to past counting errors + increased retail competition (customers multi-store shopping). If competition continues, LFL growth could soften.

Durga Puja shifted 19 days into Q3. Q2 is historically small quarter. Negative impact on both sales and margins expected; management says timing issue, recovers in Q3.