Vedant Fashions EBITDA margin falls to 44.3% in FY26

Vedant Fashions Limited reported FY26 revenue of ₹1,435.5 crore, but its EBITDA margin fell to 44.3% from 50.1% in FY23. Vedant Fashions’ EBITDA declined to ₹635.7 crore from ₹678.3 crore over the same period, while sales of customers rose to ₹2,008.1 crore in FY26.

How did Vedant Fashions’ EBITDA margin change?

Vedant Fashions’ EBITDA margin fell by 5.8 percentage points from 50.1% in FY23 to 44.3% in FY26. EBITDA was ₹678.3 crore in FY23, then declined to ₹664.3 crore in FY24, ₹646.4 crore in FY25 and ₹635.7 crore in FY26, making FY26 the third consecutive year of lower EBITDA after FY23.

Revenue increased by ₹80.6 crore between FY23 and FY26, from ₹1,354.9 crore to ₹1,435.5 crore, but EBITDA decreased by ₹42.6 crore. The presentation calculates EBITDA from profit before tax plus finance cost and depreciation, after deducting interest income, dividend income, specified investment-sale profits and fair-value gains on investments carried at fair value through profit or loss.

Did Vedant Fashions grow revenue and customer sales in FY26?

Yes, Vedant Fashions increased FY26 revenue to ₹1,435.5 crore from ₹1,386.5 crore in FY25, while sales of customers rose to ₹2,008.1 crore from ₹1,892.9 crore. Revenue was ₹49.0 crore higher year on year, whereas sales of customers increased by ₹115.2 crore and exceeded the FY23 level of ₹1,861.4 crore by ₹154.2 crore.

The rise in FY26 followed a smaller movement in the prior years: revenue increased by ₹12.6 crore in FY24 and ₹19.0 crore in FY25. Sales of customers declined from ₹1,861.4 crore in FY23 to ₹1,852.7 crore in FY24 before rising to ₹1,892.9 crore in FY25 and ₹2,008.1 crore in FY26.

Vedant Fashions defines sales of customers as retail selling price sales by exclusive brand outlets, large format stores and online-channel customers, together with its sales to multi-brand outlets, including shop-in-shops, and certain lateral e-commerce-platform customers. This is distinct from reported revenue: FY26 customer sales of ₹2,008.1 crore were ₹572.6 crore above revenue of ₹1,435.5 crore.

What happened to Vedant Fashions’ gross, pre-tax and net profitability?

Vedant Fashions’ gross margin, profit before tax margin and profit after tax margin were all lower in FY26 than in FY23. Gross margin declined to 65.7% from 67.4%, profit before tax margin declined to 34.5% from 42.5%, and profit after tax margin declined to 26.2% from 31.7%.

Gross profit increased to ₹942.5 crore in FY26 from ₹912.6 crore in FY23, but profit before tax (PBT) declined to ₹495.9 crore from ₹575.8 crore and profit after tax (PAT) fell to ₹375.5 crore from ₹429.1 crore. FY26 PAT was also below ₹388.5 crore in FY25 despite revenue increasing by ₹49.0 crore during the year.

The presentation defines gross profit as revenue from operations less cost of goods sold, which includes material consumed, inventory changes, purchases of stock-in-trade and job charges. The 1.7-percentage-point decline in gross margin from FY23 to FY26 occurred alongside a 5.8-percentage-point EBITDA-margin decline and a 5.5-percentage-point reduction in PAT margin.

How did Vedant Fashions’ return on capital change?

Vedant Fashions’ pre-tax return on capital employed (RoCE) fell to 63.09% in FY26 from 95.32% in FY23. RoCE declined through the intervening years, reaching 85.27% in FY24 and 68.69% in FY25, leaving FY26 32.23 percentage points below FY23 and 12.29 percentage points below FY25.

The company’s RoCE calculation starts with PBT and finance cost, then deducts specified interest income, investment-sale profits, fair-value gains and mutual-fund dividend income. Its denominator is net worth less current investments, non-current investments and other bank balances, meaning the disclosed 63.09% is a pre-tax management metric rather than a PAT-to-equity calculation.

FY26 revenue of ₹1,435.5 crore was the highest in the five-year FY22-to-FY26 record, while EBITDA of ₹635.7 crore, PBT of ₹495.9 crore and PAT of ₹375.5 crore remained below FY23 levels. The financial-summary page provides no cost, product, channel or operational explanation for the changes in margins or RoCE.

Conclusion

Vedant Fashions combined higher FY26 revenue and customer sales with lower profitability measures than in FY23. Revenue reached ₹1,435.5 crore and customer sales reached ₹2,008.1 crore, while EBITDA margin was 44.3%, PAT margin was 26.2% and pre-tax RoCE was 63.09%.

What remains unresolved in the FY26 financial summary is the cause of the decline from FY23 levels, including the 5.8-percentage-point EBITDA-margin reduction and the 32.23-percentage-point RoCE reduction. The presentation discloses no FY27 margin target, revenue target or expansion plan, so any subsequent disclosure addressing these measures would clarify whether the FY26 trend changes.