V2 Retail Q2 gross margin rises 310 bps to 31.1% on mix

V2 Retail Limited lifted Q2 FY27 gross margin by 310 basis points to 31.1%, while full-price sales made up 91% of sales despite festive demand shifting into Q3. Revenue rose 28% year on year to ₹905.6 crore and EBIDTA increased 41% to ₹120.3 crore.

How did V2 Retail’s Q2 FY27 margins change?

V2 Retail’s gross margin rose to 31.1% in Q2 FY27 from 28.0% in Q2 FY26, a 310-basis-point increase. Gross profit increased 42% to ₹281.3 crore, exceeding the 28% increase in revenue to ₹905.6 crore, while cost of goods sold rose to ₹624.3 crore from ₹510.5 crore.

The Q2 FY27 gross margin was also 250 basis points above the 28.6% reported in Q1 FY27. For H1 FY27, gross margin was 29.8%, up 110 basis points from 28.7% in H1 FY26, although it remained below the 30.2% reported for FY26.

What drove V2 Retail’s gross-margin expansion?

V2 Retail attributed the Q2 FY27 margin expansion to reduced off-season discounting and a healthier sales mix. Full-price sales accounted for 91% of total sales in both Q2 FY27 and H1 FY27, which the company said supported continued gross-margin expansion.

Volume rose 31% in Q2 FY27 despite lower discounting, according to V2 Retail. Chairman and Managing Director Ram Chandra Agarwal said disciplined merchandising, pricing and inventory management supported the result, while the release also cited analytics-driven merchandising and agile supply-chain capabilities.

The sales mix occurred alongside a change in the festive calendar, with demand deferred from Q2 to Q3 versus the previous year. V2 Retail reported 28% revenue growth in Q2 FY27 despite that timing effect, while Q2 gross profit grew faster at 42%.

How did V2 Retail’s operating profit and net profit perform?

V2 Retail’s Q2 FY27 EBIDTA, or earnings before interest, depreciation, tax and amortisation, increased 41% year on year to ₹120.3 crore from ₹85.4 crore. EBIDTA margin rose 120 basis points to 13.3% from 12.1%, although it was 70 basis points below the 14.0% margin reported in Q1 FY27.

Profit after tax increased 6% to ₹18.2 crore in Q2 FY27 from ₹17.2 crore a year earlier. V2 Retail said elevated depreciation and amortisation charges associated with store expansion affected profit after tax growth, even as quarterly EBIDTA increased by ₹34.9 crore.

For H1 FY27, EBIDTA rose 50% to ₹259.7 crore from ₹172.7 crore and its margin reached 13.6%, compared with 12.9% in H1 FY26. The financial table reports H1 FY27 profit after tax of ₹60.1 crore versus ₹41.9 crore, while a later narrative paragraph gives ₹60.9 crore; both disclosures describe 43% year-on-year growth.

How did the festive-calendar shift affect V2 Retail sales?

V2 Retail reported same-store sales growth, or SSSG, of about negative 14.9% in Q2 FY27, largely because festive demand shifted from Q2 to Q3 relative to Q2 FY26. On the company’s normalised basis, Q2 FY27 SSSG was positive 0.5%, and management expects deferred festive demand to support Q3 FY27.

The timing effect also affected first-half comparable-store sales, with H1 FY27 SSSG at negative 3.7%. Yet H1 FY27 revenue rose 42% to ₹1,902.8 crore from ₹1,340.9 crore, while volume growth was 43%, showing that reported sales and volumes increased despite the decline in same-store sales.

Management said the reported SSSG impact was timing-related and expects it to normalise in the following quarter. That expectation concerns the movement of festive demand into Q3 FY27, rather than a disclosed numerical target for Q3 revenue, margin or profit.

What is V2 Retail’s store-expansion position?

V2 Retail operated 427 stores across 26 states and one Union Territory as of September 30, 2026, with about 46.3 lakh square feet of retail area. The company said its value-fashion network has a focused strategy for Northern and Eastern India, particularly Tier II and Tier III cities.

The release contains two different H1 FY27 store-movement disclosures. The H1 update says V2 Retail opened 106 stores and closed four stores, whereas the Q2 update says it opened 49 stores and closed three stores “in H1 FY27”; the release does not reconcile those figures.

V2 Retail linked higher depreciation and amortisation to store expansion undertaken in recent years. Management said new-store additions are guided by location selection, store economics, capital allocation and return metrics, but it disclosed no numerical store-opening target beyond the stated H1 FY27 movements.

Conclusion

V2 Retail combined 28% Q2 FY27 revenue growth with a 310-basis-point increase in gross margin to 31.1%, as gross profit rose 42% to ₹281.3 crore. The company identified lower off-season discounting, 91% full-price sales and 31% volume growth as the mechanisms behind the margin improvement, while expansion-related depreciation and amortisation limited profit after tax growth to 6%.

The next period to watch is Q3 FY27, when management expects deferred festive demand to normalise the timing-related pressure on same-store sales. Investors can also monitor whether later disclosures reconcile the differing H1 FY27 profit-after-tax figures of ₹60.1 crore and ₹60.9 crore, as well as the two differing H1 store-movement disclosures.