CMP: ₹1,959.00 | Market Cap: ~₹680 Cr | Sector: Retail Fashion
🧵 At a Glance
V2 Retail delivered a strong topline performance for FY25 with revenues jumping 62% YoY to ₹1,88,987 lakh (₹1,889 Cr), and net profit soaring to ₹7,089 lakh (₹70.9 Cr) from ₹2,728 lakh last year. But wait—before you hit the buy button, hold that thought. The company’s auditors have again flagged concerns (same as last year) about asset reconciliations, and there’s an eye-popping ₹1,494 lakh advance outstanding since 2019 to Times Group.
So… numbers look shiny, but the skeletons in the closet are still rattling.
🧭 About the Company
- Founded: 2001
- Headquarters: Delhi NCR
- Business: Budget fashion retail chain targeting Tier 2–3 cities
- Store count: 100+
- Focus: Apparel, footwear, accessories — Think: D-Mart meets Pantaloons, on a budget
- Subsidiary: V2 Smart Manufacturing Pvt Ltd (contributes to garment supply)
🧑💼 Key Managerial Personnel
| Name | Role |
|---|---|
| Ram Chandra Agarwal | Chairman & Managing Director |
| Pratik Adukia | CFO |
| Shivam Aggarwal | Company Secretary & Compliance |
📊 Financials (Standalone, ₹ in Lakhs)
| Metric | FY25 | FY24 | YoY Growth |
|---|---|---|---|
| Revenue from Ops | 1,88,450 | 1,16,473 | +62% |
| EBITDA (approx.) | ~19,000 | ~11,000 | +73% |
| PAT | 7,090 | 2,729 | +160% |
| EPS (₹) | 20.5 | 7.9 | ✨ |
| Total Assets | 1,57,713 | 96,610 | +63% |
| Net Worth | 34,500 | 27,453 | +26% |
🧾 Auditor Qualifications (Yes, Again)
Both standalone and consolidated reports have qualified opinions:
“The company has not reconciled its asset register with physical verification done in 2023. We cannot confirm if fixed assets shown are accurate.”
Also:
₹14.94 Cr advance paid to BCCL (Times Group) is still outstanding since April 2019. V2 claims they will utilize it for ads by July 2025. Seems like a very expensive Times Now subscription.
🧮 Fair Value Estimate
- EPS: ₹20.5
- Assumed P/E: 15x (for a smallcap retail company with some credibility flags)
- Fair Value: ₹307
At CMP ₹1,959 — this is already 6x above our estimated FV. Valuation is pricing in either hypergrowth… or hallucination.
📦 Business Highlights
- Q4 Revenue: ₹49,851 lakh — sequential dip vs Q3 (₹59,094 lakh)
- Q4 PAT: ₹667 lakh — down from ₹5,088 lakh in Q3
- EBITDA Margin: 10%+ range
- Strong YoY jump in inventory: ₹52,618 lakh vs ₹35,997 lakh in FY24 — preparing for aggressive store rollout?
💼 Balance Sheet Red Flags
| Metric | FY25 | FY24 |
|---|---|---|
| Right-of-use assets (leases) | ₹64,914 | ₹35,225 |
| Lease liabilities (non-current) | ₹69,314 | ₹38,008 |
| Short-term borrowings | ₹9,564 | ₹7,355 |
| Trade Payables | ₹33,170 | ₹15,914 |
⚠️ Lease liabilities nearly doubled, and assets grew over 60% — major expansion. But borrowing also rising.
🧠 EduInvesting Take
V2 Retail is the student who failed for 3 years and suddenly shows up with 90% marks — you’re proud… but you double-check the paper first.
- Business performance is improving, yes.
- But the lack of asset register reconciliation, and long-standing ad advances, are like leaving exam questions blank and still getting full marks.
- Debt rising, lease costs ballooning, and inventory piling up — the growth is aggressive, but we hope it’s not built on a shaky rack.
This could be a turnaround story, or a sugar-rush story.
🧨 Risks
- Auditor red flags continue for 3rd straight year
- ₹14.94 Cr stuck in ad advances since 2019
- Expansion could eat up cash if footfalls disappoint
- Asset mismatch may result in future accounting shocks
💡 Bright Spots
- Revenue and PAT growth is real and consistent
- Inventory expansion = bullish bet on demand
- Strong visibility in Tier-2 India where competition is thin
🗓️ Published: May 27, 2025
✍️ By: Prashant Marathe
Tags: V2 Retail FY25 Results, BCCL Advance, Retail Turnaround, Auditor Qualification, Tier-2 India, Apparel Retail, EduInvesting, Smallcap Watch
