V2 Retail is continuing its aggressive expansion strategy for FY27, while maintaining its revenue growth target of more than 50%. However, the company has reduced its expectations for same-store sales growth (SSSG) to 5-7% due to softer consumer demand and a challenging comparison with the previous year.
V2 Retail Maintains More Than 50% Revenue Growth Target.
Akash Agarwal, Whole-Time Director and CEO of V2 Retail, said the company achieved approximately 42% growth during the first half of the financial year, despite the shift in the festive calendar.
According to management, the timing of Durga Puja has moved from September to October this year. As a result, the company expects stronger sales during the third quarter and continues to target revenue growth of more than 50% for the full financial year.
The company believes the festive season could provide a boost to customer spending and help support its overall growth target.
SSSG Outlook Reduced to 5-7%
While revenue growth guidance remains strong, V2 Retail has lowered its full-year same-store sales growth expectation to between 5% and 7%.
Management said the final picture regarding SSSG should become clearer after the third quarter. The company also pointed out that it did not rely heavily on deep discounting during the second quarter compared with the previous year.
This strategy could help protect gross margins. V2 Retail continues to closely monitor gross profit per square foot, which remains an important performance indicator for the business.
High Base and Inflation Affect Consumer Demand
One of the major reasons behind the lower SSSG outlook is the strong base from older and mature stores. These stores have recorded substantial improvements in sales per square foot over the past few years, making further growth more challenging.
Higher product and raw material costs are also affecting the retail environment. Rising inflation and increased prices could influence customers’ purchasing decisions.
However, the company expects demand to improve during the festive period. Management believes customer spending trends will become clearer as the Navratri and festive shopping season progresses.
V2 Retail Plans Around 200 New Stores in FY27
Store expansion remains a major part of V2 Retail’s growth strategy.
The company has already opened 106 stores and has signed lease agreements for another 104 locations. Based on the current expansion pipeline, management expects to add approximately 200 new stores during FY27.
Since April 2025, V2 Retail has opened nearly 240 stores, significantly increasing its retail presence across India.
The company has a much larger long-term target and aims to build a network of around 2,000 V2 Retail stores across the country.
Expansion Strategy Could Depend on Q3 Performance
Although V2 Retail is currently pursuing rapid expansion, the pace of store additions in the next financial year could depend on third-quarter performance.
If demand and sales remain strong, the company may continue with its aggressive store-opening strategy. On the other hand, weaker-than-expected performance could result in a more cautious approach to expansion.
This makes the third quarter particularly important for investors and the company’s future expansion plans.
Expansion to Be Funded Mainly Through Internal Cash Flow
V2 Retail expects its current store expansion programme to be funded largely through internal accruals.
Management believes the company can support the addition of approximately 150-200 stores annually through internally generated cash. However, a significantly faster expansion programme could require additional funding.
If the company chooses to accelerate store openings beyond its current capacity, it may consider raising funds through debt or equity.
Higher Prices Could Impact Customer Demand
V2 Retail generally passes price increases of around 5-6% on to customers. Higher average selling prices have historically helped the company offset some of the impact of lower sales volumes.
However, the latest price increases have been higher, at approximately 7-8%.
The company expects the third quarter to provide a clearer indication of how customers respond to these higher prices, particularly during the festive shopping period.
What Investors Should Watch
For investors tracking V2 Retail, several factors will be important in the coming quarters:
- Full-year revenue growth of more than 50%
- SSSG performance in the 5-7% range
- Third-quarter festive demand
- Progress toward approximately 200 new stores
- Gross profit per square foot
- Impact of higher product prices on customer demand
- Funding requirements for future expansion
- Progress toward the long-term 2,000-store target
Overall, V2 Retail continues to target strong revenue growth despite softer same-store sales expectations. The company’s aggressive store expansion, festive-season demand and ability to manage higher prices will be key factors in determining whether it can sustain its growth momentum through FY27.
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