Retail Sector Q4 Results Preview: Rural Recovery Momentum Likely To Lead To A Strong Quarter — Nirmal Bang

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Nirmal Bang Report

Q4 is usually a seasonally weak quarter for the retail industry. We believe that the mass rural categories have been recovering well for the past couple of quarters and the continued momentum will be visible in numbers especially for V-Mart whose main customer base is in the income range of Rs 15,000-50,000.

V-Mart has pre-announced that the total revenue for Q4 FY25 would be up 17% YoY, which was above our and consensus expectation and driven by same-store sales growth of 8% YoY (V-Mart at +7% and Unlimited at +10%).

For Bata India, we expect average selling price expansion coupled with an already strong premium portfolio to be the key driver of the ~7% YoY revenue growth in what is seasonally the weakest quarter of the year.

We still believe that a full-fledged recovery in volume for the mass category to pre-pandemic levels for the two companies will take time mainly due to competitive intensity from organized, unorganized and e-commerce players as well as BIS in the case of Bata.

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