Vedant Q2 EBITDA Falls 4.8% Despite 2.4% Revenue Growth

Vedant Fashions Limited reported Q2 FY27 EBITDA of Rs 107.5 crore, down 4.8% year on year, although revenue from operations rose 2.4% to Rs 269.4 crore; domestic same-store sales declined 5.8%, with management citing Navratri’s move from Q2 in FY26 to Q3 in FY27 as an impact on the quarter.

Why did Vedant's Q2 EBITDA decline despite revenue growth?

Vedant’s operating earnings declined because gross profit grew more slowly than revenue and the EBITDA margin contracted. Revenue from operations increased from Rs 263.2 crore in Q2 FY26 to Rs 269.4 crore in Q2 FY27, while gross profit rose 1.8% from Rs 171.6 crore to Rs 174.7 crore. Gross margin consequently moved to 64.9% from 65.2%.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, fell from Rs 112.9 crore to Rs 107.5 crore. The margin decreased by 3 percentage points to 39.9% from 42.9%. Profit after tax, or PAT, was nearly unchanged at Rs 56.2 crore, compared with Rs 56.1 crore a year earlier, while PAT margin declined to 20.9% from 21.3%.

The profit and loss statement shows total expenses rose to Rs 218.5 crore in Q2 FY27 from Rs 209 crore in Q2 FY26, while total income rose to Rs 292.7 crore from Rs 283.1 crore. Purchases of stock-in-trade increased to Rs 49.6 crore from Rs 44 crore, other expenses rose to Rs 69 crore from Rs 61.3 crore, and employee benefits expense increased to Rs 17.4 crore from Rs 16.5 crore. The presentation does not assign the EBITDA movement to any individual expense line.

How did domestic same-store sales affect Vedant's retail performance?

Vedant recorded domestic same-store sales growth, or SSSG, of negative 5.8% in Q2 FY27, even as total customer sales across channels increased 0.6% to Rs 351.5 crore. Comparable-store measurement includes stores opened on or before March 31, 2025 and operating on September 30, 2026. Domestic SSSG excludes Indian shop-in-shop, or SIS, stores and international stores.

Customer sales were Rs 349.4 crore in Q2 FY26, so the Rs 2.1 crore increase in Q2 FY27 was modest relative to reported revenue growth of 2.4%. Vedant defines customer sales as sales of its branded products by exclusive brand outlets, large-format-store and online-channel customers, along with sales made by the company to multi-brand outlets, including shop-in-shops, and certain lateral e-commerce platform customers at recommended selling price.

Management said the Q2 FY27 result was affected by a festive-calendar shift: Navratri fell in Q2 in FY26 but moved to Q3 in FY27. That disclosed timing difference provides the company’s stated context for the quarter’s retail comparison; the presentation does not quantify how much of the 5.8% domestic SSSG decline was attributable to the calendar movement.

Vedant had 497 domestic exclusive brand outlets, or EBOs, spanning 1.67 million square feet across 202 Indian cities and towns as of September 2026. Net rollout in Q2 FY27 was 4,900 square feet. These figures exclude SIS and international stores, matching the scope used for the company’s domestic outlet disclosure but not necessarily the full customer-sales base.

What did Vedant report for the first half of FY27?

Vedant reported H1 FY27 revenue growth of 4.8%, EBITDA growth of 3.3%, and PAT growth of 8.3% from H1 FY26. Revenue from operations reached Rs 570.7 crore, compared with Rs 544.3 crore, while EBITDA rose to Rs 242 crore from Rs 234.2 crore. The half-year performance contrasts with the Q2 EBITDA decline because first-half operating profit remained above the previous year’s level.

Gross profit in H1 FY27 increased 3.6% to Rs 372.6 crore from Rs 359.7 crore, but gross margin declined to 65.3% from 66.1%. EBITDA margin was 42.4%, compared with 43% in H1 FY26. PAT increased to Rs 136.8 crore from Rs 126.3 crore, and PAT margin rose to 24% from 23.2%.

Customer sales across channels rose 2.1% in H1 FY27 to Rs 771 crore from Rs 755.1 crore in H1 FY26. Domestic SSSG was negative 0.3% for the half year, less negative than the Q2 reading of negative 5.8%. The difference shows that the comparable-store trend for the six months was closer to flat than the single-quarter result, though it remained below the previous-year level.

What changed in Vedant's balance sheet and cash flow?

Vedant’s total assets were Rs 2,952.3 crore at September 30, 2026, up from Rs 2,852.7 crore at March 31, 2026, while total equity increased to Rs 2,099.2 crore from Rs 1,964.3 crore. Investments, including cash and bank balance within current assets, were Rs 390.4 crore at September 30, compared with Rs 537 crore at March 31.

Trade receivables increased to Rs 722.6 crore from Rs 651.2 crore, while inventories were broadly unchanged at Rs 144.5 crore versus Rs 144.6 crore. Right-of-use assets declined to Rs 374.1 crore from Rs 422.2 crore. Non-current lease liabilities decreased to Rs 261.3 crore from Rs 305.8 crore, and current lease liabilities edged down to Rs 149.6 crore from Rs 151.8 crore.

For the half year ended September 30, 2026, net cash generated from operating activities was Rs 108.1 crore after a Rs 70.1 crore movement in working capital and Rs 60.6 crore of net income tax paid. Investing activities used Rs 19.1 crore, including Rs 45.8 crore of net investment purchases, while financing activities used Rs 97 crore, principally Rs 97.2 crore of lease-liability principal and interest payments. Cash and cash equivalents ended the period at Rs 3.1 crore, compared with Rs 11.1 crore at the beginning of the period.

Conclusion

Vedant’s Q2 FY27 illustrates a gap between sales growth and operating-profit growth: revenue rose 2.4% to Rs 269.4 crore, but EBITDA fell 4.8% to Rs 107.5 crore as EBITDA margin declined to 39.9%. The 5.8% fall in domestic SSSG accompanied customer-sales growth of only 0.6%, whereas H1 revenue, EBITDA and PAT rose 4.8%, 3.3% and 8.3%, respectively.

The next disclosed point to watch is Q3 FY27, when Navratri falls after shifting out of Q2, because management identified that calendar movement as affecting the quarter’s performance. Vedant’s stated growth plan also includes retail expansion in and outside India, up-selling and cross-selling, targeted marketing, development of emerging brands and a disciplined approach to acquisitions; its domestic EBO network stood at 497 outlets in September 2026.