V-Mart LimeRoad loss cut slows to 39% from 70% claim in May

What's new

• V-Mart Q1 revenue up 23% YoY; pre-Ind AS EBITDA margin up 70 bps to 7.6%.
• Unlimited format revenue surged 33%, SSG 13%, and sales per sq ft reached Rs 710.
• LimeRoad losses fell 39% YoY, but management earlier claimed a 70% cut — gap unexplained.
• Capex of Rs 38 cr for 15 new stores; network at 591 stores across 335 cities.

Themes from the call

Key quotes

• "We have almost -- cut down almost 70% of the losses in that business from the last year perspective."

  — Anand Agarwal, CFO and CEO (May 2026 call)

• "The LimeRoad marketplace continued to improve, with losses reducing by 39% year-over-year and 7% quarter-over-quarter..."

  — Anand Agarwal, CFO and CEO (July 2026 call)

The brief

V-Mart's LimeRoad turnaround suddenly looks less impressive. Three months ago, Anand Agarwal told investors losses had been cut 'almost 70%' from a year earlier. This quarter the same metric stands at 39% year-on-year reduction. The gap of roughly 30 percentage points has no explanation. That matters because the LimeRoad narrative (a marketplace that lost money for eight quarters and has now flipped to improving economics) has been a selling point for V-Mart's omnichannel strategy. If the loss-reduction pace has halved, the story changes.

Strip out the LimeRoad confusion and V-Mart's core business is strong. Revenue rose 23% to an undisclosed absolute figure, pre-Ind AS EBITDA margin expanded 70 bps to 7.6%, and same-store sales grew 9%. Unlimited was the standout: 33% revenue growth, 13% SSG, and Rs 710 per square foot. Footfalls jumped 39%, though conversion slipped from the mid-40s to 38-39%, suggesting shoppers are browsing more before buying. Gross margin fell 80 bps to 34.5%, partly from aged inventory provisioning and partly from product mix. Management says it prefers absolute rupee gross profit over percentage maximisation, a reasonable choice if it keeps inventory clean.

The broader guidance is cautious optimism. Agarwal targets mid-to-high single-digit SSG for the full year, expects store additions of 90-plus gross, and warns that Q2 will be soft because Durga Puja shifts 19 days into Q3. Price increases are capped at 3-5%, with raw-material inflation of 10% partly absorbed by vendor efficiencies. Expansion remains disciplined: 15 new stores this quarter, zero long-term debt, and a debt-free balance sheet.

But the inconsistency on LimeRoad's loss reduction cannot be waved away. It could be a measurement difference (quarterly versus annual, or gross versus net) but management did not clarify. That silence erodes trust in what is otherwise a positive earnings call. Investors need a bridge between 'almost 70%' and 39%. Without it, the 39% figure should be taken at face value: that is a slower turnaround than advertised.