Vishal Mega Mart has announced strong financial results for the first quarter, demonstrating significant growth across key metrics.

Revenue and Profitability Surge

The company reported a substantial 21% year-on-year increase in revenue from operations, reaching ₹3,140.30 crore, up from ₹2,596.20 crore in the same quarter last year. This growth was primarily driven by healthy double-digit same-store sales growth (SSSG) of 10.5%.

Profitability saw an even more impressive uptick, with EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) rising by 25.6% to ₹459.00 crore. The EBITDA margin expanded by 60 basis points to 14.6%, despite facing higher costs during the quarter.

Net profit surged by 37.3% to ₹206.00 crore, compared to ₹150.00 crore in the same quarter of the previous year. This substantial increase in bottom-line performance was supported by higher other income.

Operational Highlights

Vishal Mega Mart continues to expand its retail footprint across India. As of the end of the quarter, the company operates 717 stores spanning 472 cities, with a total retail area of approximately 12.4 million square feet. This extensive network allows the company to cater to a vast customer base of 151 million.

The company's Quick Commerce initiative has also shown significant traction, now covering 670 stores across 445 cities. This service has attracted 9.8 million registered users, indicating strong adoption of the company's omnichannel strategy.

Category-wise Performance

For the quarter, Vishal Mega Mart's revenue contribution by category was as follows:

Management Commentary

Mr. Gunender Kapur, Managing Director and Chief Executive Officer of Vishal Mega Mart, commented on the results: "We continued to deliver a strong performance in both revenue and profitability and demonstrated the strength of our purpose-led strategy of making aspirations affordable for consumers across geographies in India."

He further added, "Growth was mainly driven by continued strength of our own brands portfolio, strong footfall and store additions. During the quarter, we added 23 gross new stores, in-line with our store opening momentum. We expanded our presence in South India (Karnataka, Kerala, among others) and opened a new store in Gujarat and Maharashtra each and are encouraged by the early response."

Future Outlook

The inclusion of Vishal Mega Mart in the MSCI Standard Index is expected to potentially attract inflows of $258.00 million, which could further boost investor interest in the company.

With its robust financial performance, expanding store network, and growing omnichannel presence, Vishal Mega Mart appears well-positioned to capitalize on the evolving retail landscape in India.

The company's shares ended 3.5% higher at ₹144.85 on the day of the results announcement, reflecting positive investor sentiment towards the company's growth trajectory.

Nuvama Alternative & Quantitative Research has released projections for the upcoming MSCI Standard index review, anticipating significant changes that could impact investor portfolios and market dynamics.

Expected Additions to MSCI Standard Index

According to Nuvama's analysis, four companies are poised for inclusion in the MSCI Standard index during the August review announcement:

1. Vishal Mega Mart
2. Swiggy
3. Hitachi Energy India
4. Waaree Energies

These potential additions are expected to attract substantial foreign inflows, with Nuvama estimating a combined influx of $1.03 billion.

Projected Exclusions

While some companies are set to join the index, others may face removal. Nuvama's research suggests that two companies could be excluded from the MSCI Standard index:

1. Sonacoms
2. Thermax

The potential exclusion of these companies could lead to significant outflows, with Sonacoms and Thermax possibly seeing outflows of $186.00 million and $154.00 million, respectively.

MSCI Smallcap Index Changes

The MSCI Smallcap Index is also expected to undergo changes. Nuvama anticipates:

• 12 new additions
• 4 exclusions

Among the potential new entrants to the Smallcap Index are:

1. Inventurus Knowledge Solutions
2. Brainbees Solutions
3. Ather Energy
4. Zinka Logistics Solutions

Market Implications

These projected changes in the MSCI indices could have substantial implications for the Indian equity market. The addition of companies like Vishal Mega Mart and Swiggy to the Standard index may boost their visibility among global investors and potentially increase their liquidity.

Investors and market participants are advised to closely monitor the official MSCI announcement in August for confirmation of these changes and to assess their potential impact on portfolio allocations and market movements.

It's important to note that these projections are based on Nuvama Alternative & Quantitative Research's analysis and are subject to change. The final decision on index constituents rests with MSCI.