Vedant Fashions Ltd Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gaurav Jogani - JM Financial Ltd - Analyst : Thank you for the opportunity. So sir, my first question is with regards to if you can throw some light on what is leading to this tepid demand overall? Would you allude this to the overall slowdown in the macro environment? Was it also due to the lower store openings during the year? What exactly would you like to pinpoint this to?

Question: Gaurav Jogani - JM Financial Ltd - Analyst : Thanks, Vedant for this detailed answer. My second question again is with regards to the overall category as a whole. If you can highlight something on how the category has grown over the past two to three years because in FY23 is when we really saw a good spurt of demand there and which I think attracted a lot many players in the system. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 10:30AM, VEDN.NS - Q4 2025 Vedant Fashions Ltd Earnings Call But how has been the condition of those players who have been entering into these markets? Has any of them been able to gain significant market share? Anything that you can throw some light?

Question: Gaurav Jogani - JM Financial Ltd - Analyst : Thank you for this. I'll come back and make you some questions.

Question: Tejash Shah - Advisor(india) Private Limited - Analyst : Vedant, just you broadly touched upon this in your opening remarks and the previous questions also. But what specific measurable actions are we taking to reverse our current growth deceleration? And more importantly, how are we tracking or validating the effectiveness of those initiatives?

Question: Tejash Shah - Advisor(india) Private Limited - Analyst : So the second part of that question was that, let's say, if you have rolled out these initiatives in 10% or 15% of our network, are we seeing materially different outcome in terms of numbers versus the rest of the network or is it like very early stage where we have not rolled out at all?

Question: Tejash Shah - Advisor(india) Private Limited - Analyst : And if I may squeeze in the last one. So Vedant, our model relies on our ability to recruit franchise partners. Now historically, our franchise partners also would not have seen such a difficult period. So any comment, any insights on the morale of the franchise partners and our ability to attract that capital, which is very crucial for our growth?

Question: Tejash Shah - Advisor(india) Private Limited - Analyst : Got it. Thanks and all the best for.

Question: Varun Singh - AAA PMS - Analyst : Sir, my first question is maybe if you can throw some light over last one year with regards to store closures which would have happened. So what are your key learnings from that? That's my first question That's my first question.

Question: Varun Singh - AAA PMS - Analyst : Understood. So none of the closure would be related with regards to underperformance of the store due to competition. That understanding would be fair, right?

Question: Varun Singh - AAA PMS - Analyst : Understood. And secondly, given the price points where we belong to, you think that this price point is maybe significantly scalable to make the overall retail area maybe 3x, 4x, 5x from the current level or you believe that maybe a similar to trend, the way they started a different format itself is at half the price point. That opportunity for us you think I mean given that we have created a specialist brand image for ourselves in this category itself so similar to Mohey, in Manyavar franchisee itself or with a similar brand name. I mean if you can throw some light with regards to this improving the addressable market for us. And in that context on [Mohey] also, if you can throw some light with regards to how much we have been able to scale and the scalability potential which the way we are looking at it over the next one to two years?

Question: Varun Singh - AAA PMS - Analyst : Sorry, Vedant, to cut you over here. But I think my earlier understanding was that our category is immune to subdued consumer sentiment given that wedding is an essential thing and the exposure that we had to wedding that had a larger role to play. So I mean how consumer sentiment in our case would explain the revenue growth underperformance. That is something -- I mean I'm sorry, I could not track you over the last two, three quarters if you would have already mentioned about this.

Question: Varun Singh - AAA PMS - Analyst : When you say from bridal wear to wedding wear, I mean you mean that to sell more of lower ASP product?

Question: Varun Singh - AAA PMS - Analyst : But you think that Mohey is taking more time than we expected to maybe fine-tune the business model and then rapidly scale it up? I mean what's your current understanding on Mohey?

Question: Varun Singh - AAA PMS - Analyst : Yes, sure. But honestly, only five, six EBOs is not I think inspiring much to us as an investor because I mean we see so many companies doing retail expansion, et cetera. 10 to 12 stores -- I mean I don't know that what is stopping us to grow at a relatively faster rate given our business economics, cash flow situation and everything. So maybe if you can offer some comments with regards to what is FY26 target and how are you looking to scale up this franchisee? That's my last question.

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : Thank you, for the opportunity. Just wanted to understand how is the demand now? I mean how has April been and are you seeing impact of higher number of wedding days in this quarter against last year? Some initial feelings would help.

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : Okay. And how are you looking at space expansion? Because last you had mentioned was that you would go slow on space expansion. So how should we look at that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 10:30AM, VEDN.NS - Q4 2025 Vedant Fashions Ltd Earnings Call

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : Okay. And could you also elaborate on your LFS or MBO strategy, if any, to gain geographical reach or customer reach across the country?

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : Okay. And how is Andhra and Telangana markets doing now? I mean do they continue to drag?

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : Q4 as well as Q1 because we don't know about Q4 as well, right?

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : AP, Telangana is your Mebaz network or do we have Manyavar stores as well there? I mean just trying to understand is it Mebaz, which is impacting or is it Manyavar as well? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 10:30AM, VEDN.NS - Q4 2025 Vedant Fashions Ltd Earnings Call

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : Any particular reason why AP, Telangana particularly are hit?

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : So people must be shifting to unorganized players for price points. That could be fair assumption?

Question: Prerna Jhunjhunwala - Elara Capital - Analyst : Okay, well, thank you so much for the detailed answer. I'll come back to the question for me. Thank you.

Question: Ankita Jain - Phillipcapital India - Analyst : Vedant, two questions from my side. You mentioned that Mohey would have around 2.5 lakh square feet. Is it fair to assume 14% of AVR revenue also, they would be 12% to 14% levels or in throughput they are still significantly lower than Manyavar today?

Question: Ankita Jain - Phillipcapital India - Analyst : Sure. My second question is for Rahul ji. Why is the inventory and receivables both gone up in the quarter? I can understand we would be expecting a better quarter and hence inventory buildup, but even receivables have gone up from franchisees.

Question: Ankita Jain - Phillipcapital India - Analyst : Yes. But we also closed stores, right? So net AVR addition is not significant. So if I look on net basis, then why is like receivables?

Question: Ankita Jain - Phillipcapital India - Analyst : Right. Which means we have pushed more inventory to the franchisees, right, and we are not getting the same sales?

Question: Ankita Jain - Phillipcapital India - Analyst : So ex of the new stores so that would be new stores. But from Vedant's point of Mohey and Twamev, that means the inventory is not moving for the remaining 50% of the receivables. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 10:30AM, VEDN.NS - Q4 2025 Vedant Fashions Ltd Earnings Call

Question: Ankita Jain - Phillipcapital India - Analyst : So if next year we add another 1.5 lakh square feet, receivables will further increase.

Question: Ankita Jain - Phillipcapital India - Analyst : Understood. My last question is on the rental cost. How do you see now with more bigger stores opening, you are taking more rentals on your books? And in such a scenario where SSG is negative and low single digit, that pressure is coming on to the margins. How do you balance that in medium term?

Question: Ankita Jain - Phillipcapital India - Analyst : And just a follow-up on that rental part. Till last quarter we mentioned we have closed the smaller stores, right, some 1,000 square feet, 1,200 square feet stores. And now you are saying that we also close stores, which the market has moved. So can you quantify both those stores which we have closed, how much is because of business and how much is the small store strategy which we are closing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 10:30AM, VEDN.NS - Q4 2025 Vedant Fashions Ltd Earnings Call

Question: Ankita Jain - Phillipcapital India - Analyst : Understood. Fair point. Thank you so much for that.

Question: Sameer Gupta - IIFL Capital - Analyst : Just wanted to understand this competitive aspect in little more detail. In your experience over the last decade of running Manyavar, have you witnessed this kind of competitive frenzy when even in any particular micro market, it may not be at a pan-India level, that so many people have opened so many stores.

Question: Sameer Gupta - IIFL Capital - Analyst : And so just trying to understand then what is the trigger now? I mean it's not like the overall consumption is booming or suddenly these players have got funding from somewhere. So why now and what's so special?

Question: Sameer Gupta - IIFL Capital - Analyst : Okay. So let me ask another question on the similar line. By when do you expect consolidation? Because what I understand is that you only said that none of them are doing well. So I mean by when do you see this consolidation here in this market?

Question: Sameer Gupta - IIFL Capital - Analyst : But in your experience, let's say, in any particular micro market, you might have faced the situation. Anything then you had witnessed that it takes these many years for people to consolidate or nothing like that?

Question: Sameer Gupta - IIFL Capital - Analyst : Got it. That's very clear. Second and last question, on retail area. Now this year has been on both sides so there has been a consolidation and there has also been lower than what your usual increase in retail area is even at a gross level. So FY26 onwards, at least the consolidation part, are we done or do you expect more store closures to happen? And of course the retail area addition will depend on a number of things, but used to be a 14%, 15% retail area growth. Any guidance or any tidbits on what is the expected strategy as it looks like today? That would be great.

Question: Sameer Gupta - IIFL Capital - Analyst : Got it. That's all from me, and thanks and all the best.