At a Glance
Vedant Fashions (aka the king of sherwanis and father of Manyavar) just dropped its Q1 FY26 results, and it’s as blingy as its wedding collections. Revenue came in at ₹281 crore, up 17% YoY, while net profit stood at ₹70 crore, up 12% YoY. Margins are still the envy of the retail sector, with OPM around 43%. But here’s the catch – working capital days have exploded to 313, and debtor days at 163 could give lenders a heart attack. Stock trades at a P/E of 49 – clearly, the market is pricing it like a designer outfit, not a budget kurta.
Introduction
If weddings are recession-proof in India, Vedant Fashions is the groom collecting envelopes at the end. The company owns iconic brands Manyavar, Mohey, and a bouquet of others dominating the ethnic wear market. From grooms in Rajasthan to NRIs in New Jersey, Manyavar’s sherwanis have become the unofficial uniform of the Indian baraat.
Q1 FY26 numbers reaffirm its dominance, but growth is slowing, and valuation is sky-high. Investors love the brand strength, but they’re also watching debtors and inventory pile-up like an auntie watching the buffet line.
Business Model (WTF Do They Even Do?)
Vedant Fashions sells celebration wear – mostly men’s ethnic clothing, but also women’s and kidswear. Its moat lies in:
- Strong Brand Recall: Manyavar is to sherwanis what Maggi is to noodles.
- Asset-Light Model: Franchise-led stores reduce capex needs.
- Wide Distribution: 600+ exclusive stores, 300+ cities, plus international presence.
The company thrives on Indian weddings, festivals, and NRIs who refuse to give up their cultural bling.
Financials Overview
- Revenue (Q1 FY26): ₹281 crore (+17% YoY)
- EBITDA: ₹121 crore (EBITDA margin 43%)
- PAT: ₹70 crore (+12% YoY)
- EPS: ₹2.89
- ROE: 23%
- ROCE: 26.7%
Commentary: Profitability remains top-tier, but revenue growth is in single digits over five years (8.6% CAGR). Margins are stable because they sell premium products at fat markups.
Valuation
Let’s see if this sherwani is worth its price tag:
- P/E Method:
- EPS (TTM) ₹16.3
- Industry P/E ~40
- Fair Value = ₹16.3 × 40 = ₹652
- EV/EBITDA Method:
- EBITDA (TTM) ₹651 crore
- EV/EBITDA sector avg 20x
- Fair Value = ₹13,000 crore EV ≈ ₹530 per share
- DCF Method:
- Assume 8% growth, WACC 10%, terminal growth 3%
- Fair Value ≈ ₹600-₹650
Fair Value Range: ₹530 – ₹650
CMP ₹786 is priced like a premium lehenga – good-looking but expensive.
What’s Cooking – News, Triggers, Drama
- Q1 results show stable profit but slowing revenue growth.
- Integration of merged brands driving synergies.
- Paid ₹50,000 fine under Legal Metrology Act (oops, wrong label dates).
- Expansion in Tier-2 & Tier-3 cities continues.
- Any slowdown in weddings/festivals could hurt growth.
Balance Sheet
| Assets | ₹ Cr |
|---|---|
| Total Assets | 2,747 |
| Liabilities | 960 |
| Net Worth | 1,787 |
| Borrowings | 483 |
Auditor’s Note: Borrowings are creeping up; inventory and receivables are ballooning – someone call a CFO dietician.
Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 459 | 478 | 389 |
| Investing | -228 | -104 | -16 |
| Financing | -226 | -361 | -377 |
Comment: Cash flow from ops dipped last year despite profits – working capital ate the cash like guests at a wedding buffet.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 23% |
| ROCE | 26.7% |
| P/E | 49.1 |
| PAT Margin | 25% |
| D/E | 0.27 |
Takeaway: Returns are hot, but P/E is hotter. Valuation risk is real.
P&L Breakdown – Show Me the Money
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,326 | 1,365 | 1,428 |
| EBITDA | 658 | 643 | 651 |
| PAT | 423 | 388 | 396 |
Stand-up Line: Growth is crawling, but margins are strutting on the runway.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Trent | 17,134 | 1,436 | 125 |
| Arvind Fashions | 4,772 | -3 | NA |
| V2 Retail | 1,884 | 72 | 94 |
| Vedant Fashions | 1,428 | 396 | 49 |
Observation: Vedant wins on margins but lags peers like Trent on growth.
Miscellaneous – Shareholding, Promoters
- Promoters: 74.95% (tight control)
- FIIs: 9.9% (steady interest)
- DIIs: 11.1% (supportive)
- Public: 4% (retail crumbs)
Promoters hold the reins firmly; public float is tiny, limiting liquidity.
EduInvesting Verdict™
Vedant Fashions remains the undisputed king of Indian ethnic menswear. Its margins are industry-leading, brand equity is strong, and ROE is impressive. But growth is modest, valuations are steep, and working capital metrics are deteriorating.
SWOT Analysis
- Strengths: Iconic brand, high margins, strong franchise network.
- Weaknesses: High receivables, slow growth, premium valuation.
- Opportunities: Expansion in Tier-2/3, women’s wear, international weddings.
- Threats: Fashion trends, wedding slowdown, aggressive competitors like Trent.
Final Take: Vedant is a great business but an expensive stock. Unless earnings growth re-accelerates, investors might find better bargains elsewhere. For now, it’s like buying a Manyavar sherwani – premium, elegant, but only worth it if you really need it.
Written by EduInvesting Team | 30 July 2025SEO Tags: Vedant Fashions, Manyavar, Wedding Wear, Stock Analysis
