As consumption in these markets picked up, the company scaled up in a measured manner. Store additions became the primary growth lever, supported by steady sales growth from existing locations. This combination of expansion and execution gradually translated into consistent financial improvement.
Revenue expanded nearly 17 times, rising from ₹109 crore in 2012-13 to about ₹1,884 crore in 2024-25. Over the same period, the business moved from a net loss of ₹7 crore to a profit of ₹98 crore. The operating turnaround is reflected clearly in shareholder returns, with the stock price rising from around ₹7.3 in 2013 to about ₹2,190 today—turning a ₹1 lakh investment into nearly ₹3 crore.
In this story, Mint assesses whether V2 Retail’s growth story remains intact and compares it with its closest peer, Baazar Style. Let’s take a look:
South India opens the next leg of expansion
V2 Retail caters to India’s expanding middle-class population, with a clear focus on tier-II and tier-III cities. As of Q2FY26, the company operated 259 stores across 23 states and more than 195 cities. Its presence is well diversified, with key concentrations in Uttar Pradesh (48 stores), Bihar (44), Odisha (30), Madhya Pradesh (20), Jharkhand (19), and Karnataka (18).
After establishing a strong presence in North and East India, V2 is tapping South India as its next growth driver. Karnataka has already become a key market, and the company has also entered Andhra Pradesh. Management intends to expand across the Southern region and be present in all major states, including Tamil Nadu, over the next 2-3 years.
It plans to add 130 stores in 2025-26, of which 70 net stores have already been opened. Subject to operating and profitability metrics remaining on track, the company plans to add around 150 stores in 2026-27, bringing the total store count to roughly 469. Its peer, Bazaar style, operates 250 stores totalling 2.3 million square feet, slightly lower than V2’s 2.8 million square feet.
Fast payback and steady same-store momentum
One of the standout features of V2 Retail is its fast payback cycle: new stores break even in the first month and become fully mature within 2-3 years. V2 funds about 50% of the total store investment, which is about ₹2.5 crore per store. V2 has also delivered strong same-store performance. Same store sales growth (SSSG) stood at 13% in the first half of 2025-26, higher than Baazar Style (10%) over a similar period.
Apparel-led mix drives ticket size and store productivity
Like Baazar Style, V2 business is centred on family apparel, with men’s wear forming the largest segment. In 2024-25, men’s wear contributed 40% of revenue, rising to 41% in the first half of 2025-26. This was followed by Women’s wear at 27% in 2024-25 (H1FY26: 29%), kids’ wear (25%), and lifestyle products (8%). The lifestyle category comprises non-apparel items such as deodorants, wallets, sunglasses, and ladies’ purses.
Only about 6% of V2 revenue comes from apparel priced above ₹1,000, reflecting its value-led positioning. Since apparel carries a higher average selling price (ASP) than general merchandise, a rising share of apparel in the overall revenue mix has consistently lifted ASP. ASP grew to ₹297 in 2024-25 (FY24: ₹263) and further to ₹309 in H1FY26, up from ₹264 in H1FY25.
This upward trajectory has also translated into higher customer spending per visit. Average bill value (ABV) rose to ₹900 in H1FY26, compared with ₹808 in H1FY25 and ₹859 in 2024-25. In comparison, Baazar Style reported a slightly higher average bill value of around ₹958, reflecting broadly similar positioning with marginal differences in pricing and basket size.
At the same time, V2 continues to outperform on store productivity. Monthly sales per square foot stood at ₹948 in H1 FY26, higher than Baazar Style’s ( ₹768). That said, V2’s sales per square foot have moderated from ₹980 in H1FY25 and ₹1,017 in 2024-25, largely due to the impact of newer store additions, which typically operate at lower productivity levels in the initial years.
V2 outpaces Baazar on the financial front
V2 has reported faster growth compared with its closest peer. Revenue rose 62% year-on-year to ₹1,885 crore, against 38% growth reported by Baazar Style. The momentum continued in the first half of 2025-26, with V2’s revenue increasing 69% year-on-year to ₹1,341 crore, while Baazar Style posted about 55% growth.
The margin profiles of both companies remain almost the same. Baazar Style reported a slightly higher Ebitda margin of around 14%, compared with V2 (12.9%). On the profitability front, V2’s net profit doubled year-on-year in H1 FY26 to ₹42 crore, aided by operating leverage and a low base. Baazar Style, in contrast, has only recently turned profitable. Both companies operate with a broadly similar inventory holding period.
Aggressive expansion plans, with steady margins
That said, V2 is targeting revenue growth of over 50% over the next few years, driven by a combination of 8-10% SSSG and roughly 40% incremental revenue from new store additions. To deliver this, it plans to increase its retail area by about 60-70% each year. Given the aggressive rollout, management expects margins to remain largely stable over the next two to three years. Return on Equity, which was 23% in 2024-25, is projected to stay above 20% through this phase.
Also, the company is working on incremental margin levers. It plans to improve gross margins by making early payments to vendors in exchange for bill discounts of 1.5-2% per month. This benefit is expected to start reflecting from Q3 of FY26. However, this is likely to increase net working capital days from 37 days (FY25) and 45 days in H1 of FY26.
On the cost side, average rentals for newly signed contracts have softened to around ₹48 per square foot, compared with the current average of ₹52 per square foot. These cost efficiencies are expected to support the bottom line as the store network scales.
V2 has also raised ₹400 crore through a qualified institutional placement, which management believes is sufficient to fund expansion plans through the end of 2027-28. The company aims to become a national-level retailer, with a presence across all Indian states within 2-3 years.
At ₹2,178 per share, V2 is trading at a premium valuation of 79.8 times its P/E ratio, which is higher than the Baazar Style (55.4) and 10-year median P/E (68). Partially, this premium can be justified by V2’s scale and consistently higher return ratios. That said, while the stock trades at a premium valuation, the market is clearly pricing in the long runway across under-penetrated markets and the company’s ability to compound earnings over the next few years.
For more such analysis, read Profit Pulse.
Madhvendra has over seven years of experience in equity markets and writes detailed research articles on listed Indian companies, sectoral trends, and macroeconomic developments.
The writer does not hold the stocks discussed in this article.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
