V2 Retail Limited announces Q2FY21 results

V2 Retail Limited, one of India's fastest growing Retail Company, has declared its Unaudited Financial Results for the Quarter & Half Year ended September 30, 2020 (Standalone and Consolidated).

For the quarter, revenue from operations stood at ₹ 850 mn, registering a decline of 44% basis Y-O-Y basis. However, the revenue started picking up compared to Q1 FY21 (₹370 mn) owing to easing of lock down related restrictions. Gross Margin stood at 31.8% for Q2 FY21 as compared to 27.7% for Q2FY20. EBIDTA for the quarter stood at ₹ 95mn as compared to ₹ 118 mn in Q2 FY20. EBIDTA margin stood at 11.2% for Q2 FY21 as compared to 7.8% for Q2FY20.

Various cost mitigation measures and prioritized cost reductions especially involving discretionary spends have helped us in bettering our margins. We believe many of these initiatives would continue to deliver efficiencies over the medium term. We have also been actively engaging with our key stakeholders including our vendors and property partners to collaboratively grapple with the unprecedented developments.

As a prudent measure, Company has made additional provision for inventories estimated at over ₹ 47.03 mn during H1FY21.

Key Developments:

- The Company opened 6 new stores and closed 4 stores during Q2 FY21.
- As on September 30, 2020, the Company operates 76 stores spread across 16 states and 69 cities with a total retail area of ~8.1 lac Sq. Ft.
- Company opened 5 new stores during Q3 FY21
- With easing of lockdown restriction and onset of festival season starting October 2020, we are witnessing uptick in demand, which we believe should further improve especially during winter.

Commenting on the results and performance, Mr. Ram Chandra Agarwal, Chairman & Managing Director said: "The world is dealing with a medical crisis of enormous proportion which has already resulted in severe economic disruption and demand contraction since the last quarter of FY20. The consumer sentiment has changed from positive to cautious and will take some time to return to normalcy. The entire economy is facing a slowdown, retail sector being one of the most impacted sectors as people shift their consumption to only essential.

A sustained recovery in macroeconomic indicators like GST collection, automobile sales (especially tractors), normal monsoons, and higher Kharif crop procurement coming on the back of a rich Rabi harvest, bode well for retail and discretionary spending in the coming months.

The Company is witnessing gradual pickup at store level operations. We anticipate the situation to stabilise and start turning positive with the onset of festival season from quarter 3 of this fiscal year. We believe that there would be serious uptick in consumer demand with the onset of festive season starting from Durga Puja and Diwali. Also, we have started witnessing demand for winter-wear apparel, contributing to a higher ASP and sales.

We are confident that following this pause, our growth and profitability will continue to accelerate on the back of sustained focus on customer experience, merchandise selection, strong brand recall and our omnichannel presence. Our online retailing platform (www.v2kart.com) has been receiving good response."

Health and safety of all our customers and employees are of paramount importance and all required precautions are being adhered to.

Shares of V2 RETAIL LTD. was last trading in BSE at Rs.51.15 as compared to the previous close of Rs. 48.8. The total number of shares traded during the day was 4861 in over 112 trades.

The stock hit an intraday high of Rs. 51.2 and intraday low of 48.7. The net turnover during the day was Rs. 244227.

Source : Equity Bulls

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