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Vishal Mega Mart FY26: Strong SSSG, faster store expansion, and a private label-led value play

Vishal Mega Mart Limited closed Q4 FY26 with consolidated revenue from operations of 3,114.1 crore, up 22.2% year on year. Profitability also improved, with profit after tax of 167.9 crore versus 115.1 crore in Q4 FY25, taking the PAT margin to 5.4% from 4.5%.

For FY26, the company reported consolidated revenue from operations of 12,906.3 crore, a 20.4% increase over FY25. Full-year PAT stood at 839.2 crore, up 32.8%, with a PAT margin of 6.5%.

The operating story remained anchored in two levers that management repeatedly emphasized on the earnings call: double-digit same store sales growth and the ability of private labels to protect affordability in an inflationary environment.

Growth quality: Same store momentum stayed strong

Vishal Mega Mart reported adjusted same store sales growth of 13.2% in Q4 FY26 and 11.0% for FY26. Management attributed the Q4 acceleration to a combination of a consumption uptick and higher investments in growth during the quarter.

On the call, the company also provided a rare decomposition of FY26 SSSG. Management said that of the 11% same store growth, about 7% came from new customers and new transactions, about 2% came from existing customers buying more items, and the remaining about 2% came from customers buying a higher price point. Management interpreted the new customer contribution as an indicator of market share gains.

The company also linked its marketing push to momentum in the apparel category. Management said its recent campaign with Bollywood actor Vaani Kapoor delivered 1.6 billion views on Instagram and 300 million plus unique viewers, and stated that while it is difficult to attribute growth to any one factor, advertising played an important role.

FY26 financial summary

Notes: All numbers above are consolidated and sourced from the company’s FY26 earnings presentation. Adjusted EBITDA is defined as EBITDA pre Ind AS 116 and pre ESOP charges.

Private labels at the center of the value proposition

A key operational disclosure in the presentation was the mix between own brands and third-party brands. The company reported that 74.1% of FY26 product sales came from own brands, up from 73.1% in FY25. The presentation also stated that the company had 26 own brands as of March 31, 2026.

Management framed this mix not only as a margin lever, but as a demand protection tool during inflation. On the earnings call, the CEO said the company will endeavour to ensure that its discount versus market leader brands on private labels remains at least the same. He gave an example that if the private label discount is 40% versus a leader brand, the company would try to ensure it stays at least 40% even if it has to adjust pricing.

This stance was repeated in the context of both apparel and non-apparel categories, with management highlighting that in food and grocery, private brands can be 30% to 50% cheaper than market leaders. Management also suggested that inflationary periods tend to increase footfalls at value retailers due to down-trading.

Store expansion stayed aggressive and geographically diversified

The network expansion story remained a major highlight. The company added 25 stores in Q4 FY26 and 105 stores in FY26, ending March 2026 with 795 stores across 535 cities and 30 states and union territories. Total retail area stood at 13.45 million square feet.

In terms of store footprint mix, the presentation showed a Tier-wise split at March 2026 end: 205 stores in Tier I cities, 189 in Tier II, and 401 in Tier III. Region-wise store counts at March 2026 were North 305, South 213, East 197, and West 80.

Management also highlighted deeper penetration into new cities, stating that FY26 included entry into 77 new cities. On geography, management said Kerala had performed better than average among newer states, while Gujarat and Maharashtra were consistent with national performance.

Small format stores as a penetration tool

The company also discussed small format stores targeted at deeper towns. Management stated that small format stores are delivering similar store EBITDA, similar revenue per square foot, and similar return on capital employed compared with stores in larger towns. The CEO said the company had 13 small format stores by the end of FY26, with three opened in Q4.

When asked whether macro uncertainty could slow expansion, management’s answer was explicit: the company will not slow down store expansion and will continue with its plans.

Loyalty scale and quick commerce KPIs

The presentation reported about 169 million registered loyalty customers as of March 31, 2026, with 17% year-on-year growth. It also stated that about 95% of FY26 gross revenue came from registered loyalty customers.

On digital, Vishal Mega Mart continued to expand its hyperlocal delivery model through its website and mobile application. The presentation disclosed that in FY26, 745 stores enabled hyperlocal delivery, the service covered 505 cities, and the platform had about 13 million registered users. Year-on-year growth rates were disclosed as 14% for stores, 18% for cities covered, and 48% for registered users.

Margin drivers: operating leverage and inventory clean-up

On margins, the consolidated financials showed gross profit margin of 27.8% in Q4 FY26 and 28.4% for FY26. Adjusted EBITDA margin was 8.8% in Q4 and 10.2% for the full year.

Management provided two practical operating insights on the call. First, it explained the Q4 promotional intensity as part of seasonal inventory management, saying the company tries to liquidate older stock before the spring and summer season to ensure fresher inventory sells at full value.

Second, on rent, the CFO said lease contracts typically carry about a 15% step-up every three years, translating to about 5% per year, and that sustained double-digit SSSG should create operating leverage. He also clarified that the Q4 rent comparison year on year is affected by lease renewals in the previous year quarter.

What to watch in FY27

The company did not provide numeric guidance for FY27 in the documents provided, but management’s forward commentary was clear on direction. It reiterated the intent to continue expanding stores and said the company would try to open even more stores if practically possible.

At the same time, management acknowledged macro uncertainty, particularly around higher fuel prices and geopolitical developments. It also noted inflation pressure building in petroleum derivative inputs and said fabric prices were rising by about 10% to 11% as of the call date.

The central operating question for FY27 is whether the company can maintain its value positioning while input inflation rises. Management’s stated approach is to protect opening price points and maintain private label discounts versus leader brands, while seeking internal cost initiatives and productivity gains.

Takeaways

Vishal Mega Mart’s FY26 narrative was consistent: strong same store sales growth, accelerating store additions, and a private label-heavy mix that management positions as both a value and resilience advantage. With 795 stores, a large loyalty base, and disclosed hyperlocal delivery KPIs, the company appears focused on scaling reach while keeping affordability at the core. The near-term risk remains the inflation and demand environment, but management’s stated strategy is to lean into the value proposition and continue expanding rather than pull back.