V-Mart Retail Research Report By Nirmal Bang

VRL is one of the most efficient players in Indian retail Industry with a lean cost structure. Its lease rentals, at
4.3% of sales, are much lower compared to 8.3%/9.4%/15.1% of TL/SSL/PFRL, respectively, on a standalone basis. Similarly, employee costs at 6.7% are lower compared to 7.5%/8.3%/9.0% and other costs at 7.0% compared to 12.7%/25.2%/12.3% of SSL/TL/PFRL, respectively. Despite the focus on small cities, its revenue/sqft is higher at Rs8,878 compared to Rs 8,668/Rs 8,306 of SSL/PFRL, respectively. On account of its
low-cost structure, VRL enjoys highest operating margin of 9.4% compared to 5.7%/2.1%/2.3%/2.8% of SSL/TL/ PFRL/Arvind’s Megamart, respectively.

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