V2 Retail’s Rs 6,500 Crore Turnaround: How Founder Ram Chandra Agarwal Rebuilt From Bankruptcy
Agarwal’s first venture, Vishal Mega Mart, expanded to 170 stores and went public in 2007, but over-leveraged expansion led to a distress sale in 2011 to TPG and Shriram Group for Rs 70 crore.
When 60-year-old Ram Chandra Agarwal rings the opening bell at a new V2 Retail store, the moment marks a turnaround.
The same entrepreneur who once earned Rs 300 a month making photocopies and later lost a Rs 750 crore retail business now leads a chain that has delivered over 3,200% returns to shareholders in the last five years.
The Rise, The Fall – And The Rebuild
Agarwal’s first venture, Vishal Mega Mart, expanded from a single outlet in Delhi in 2001 to 170 stores and a Rs 110 crore IPO by 2007. Over-leveraged expansion coincided with the 2008 credit crunch. Lenders forced a distress sale of the company to TPG and the Shriram Group in 2011 for around Rs 70 crore.
Agarwal launched V2 Retail the same year. The strategy changed: tighter working capital cycles, an 85% private-label share, and a cluster approach that locates 60–70% of new stores in areas with high brand recall. V2 now operates 189 stores across 20 states, covering a retail area of 20 lakh square feet.
Of these, 74 stores were added in the financial year ending March 2025. Akash Agarwal, the second generation in the business, told NDTV Profit that strong store performance led the company to raise its initial guidance of 50 stores by nearly 50%.
The previous financial year saw revenue rise 62% year-on-year, while profit increased 2.6 times. Over a three-year period, revenue compounded at 44% and Ebitda at 61%. Cash flow from operations stood at 89% of Ebitda, while core debt remained modest at Rs 116 crore compared with a net worth of Rs 347 crore. Return on equity reached 23.2% in the previous financial year.
Inside The FY26–30 Playbook
Akash Agarwal told NDTV Profit this week that V2 Retail plans to open 100 stores in the ongoing financial year. “The entire capex will be funded entirely through internal accruals; we don’t foresee significant borrowings,” he said. The company has previously stated that it does not expect to raise large amounts of external debt.
Guidance shared during the June analyst call remains unchanged. The company expects 45–50% top-line growth in FY26–27 with same-store sales growth of 8–10% as new store cohorts mature. It projects some Ebitda margin expansion and a PAT margin of 4–5%. The company targets a store addition run rate of 100 outlets annually, with an aim of reaching 600–700 stores by FY30.
New outlets break even at Rs 500 per square foot and currently generate Rs 750–800 per square foot in revenue. The target payback period for new stores is four years.
Valuation Check
At a market capitalisation near Rs 6,500 crore, V2 Retail trades at about 20× projected FY27 earnings based on company guidance. This is above V-Mart’s valuation but below that of some lifestyle retail peers.
Two brokerages tracked by Bloomberg rate the stock as “Buy” with a 55% implied upside. They expect scale benefits and higher gross margins from private labels, which currently stand at 35–40% and are targeted to reach 60% by summer 2026, to support earnings even in the event of weaker discretionary spending.
Why This Comeback Matters
Agarwal’s trajectory from bootstrapping to failure to expansion reflects a broader shift in organised retail.
The company’s focus on value fashion in smaller cities has delivered high returns while maintaining capital discipline. Analysts are tracking whether V2 Retail can continue with more than 45% growth without additional leverage. For now, the financial performance and expansion strategy remain key to its outlook.
