Vishal Mega Mart shares sink 8% as Q2 margin takes a hit despite profit growth

Vishal Mega Mart shares declined 8.23% from their previous close to hit an intraday low of Rs 86.66 apiece on the NSE following the earnings announcement. At the last check, the counter was trading at Rs 90.25, down 4.44% from its previous close of Rs 94.44.

Vishal Mega Mart Q2 results

Vishal Mega Mart reported a 3.7% year-on-year increase in profit after tax (PAT) to Rs 157.9 crore in Q2FY27, compared with Rs 152.3 crore in the corresponding quarter last year, according to an exchange filing.

Adjusted PAT, excluding employee stock ownership plan (ESOP) charges, rose 6.4% year-on-year to Rs 172 crore from Rs 161.7 crore in Q2FY26.

Revenue from operations increased 14% year-on-year to Rs 3,398.5 crore during the quarter, compared with Rs 2,981.5 crore a year earlier.

Reported EBITDA rose 4.4% year-on-year to Rs 412 crore from Rs 394.6 crore in the year-ago period.

However, EBITDA margin contracted to 12.1% in Q2FY27 from 13.2% in Q2FY26, a decline of 110 basis points. The company attributed the margin pressure to operating deleverage arising from the shift in the timing of festivals.

Store network and business update

As of September 30, 2026, Vishal Mega Mart operated 844 stores across 582 cities, covering a total retail area of approximately 1.41 crore square feet.

For the first half of FY27 (H1FY27), apparel accounted for 44.1% of revenue, followed by general merchandise at 28.4% and fast-moving consumer goods (FMCG) at 27.3%.

The company reported a consumer base of approximately 18.1 crore as of September 30, 2026. Its own brands contributed 73.9% of revenue in H1FY27.

Vishal Mega Mart's quick-commerce initiative had expanded to 781 stores across 532 cities, with a registered user base of 1.5 crore.

Management commentary

Commenting on the results, Gunender Kapur, founder, chief executive officer and managing director of Vishal Mega Mart, said the company delivered another strong quarter, supported by its own-brand offerings, customer-focused approach and disciplined execution.

He noted that demand conditions remained steady despite renewed inflationary pressures across key raw material categories and an uneven monsoon.

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The retailer added 26 gross new stores during Q2FY27 and 53 during the first half of the fiscal year. During the quarter, it also launched the first pilot store of Belong & Co., a new apparel format targeting young, affluent urban consumers.

Kapur said the company had witnessed a strong start to the festive season, reinforcing its confidence in demand momentum ahead of Diwali and the wedding season.

Looking ahead, the company said it would focus on expanding its merchandise offering, improving supply chain efficiency and maintaining cost discipline to capture growth opportunities while navigating geopolitical uncertainties and inflationary pressures.

Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here