#PAT #MARGIN

In FY25, PAT margin contracted by ~25 bps YoY to 15.3%. As a percentage of revenue, finance costs witnessed a contraction YoY. Effective tax rate for the period was ~22%.

#ROCE

In FY25, ROCE for the company increased to 50.62%. Over the years, ROCE for the company has been on an upward trend. The company drove profitable operations and enjoyed a comfortable net cash surplus during the year which stood at ₹1,830 cr. The company is actively exploring opportunities to optimize borrowing costs and maximize yield on investments while maintaining conservative guardrails on safety, liquidity and returns

#ROE

In FY25, ROE for the company witnessed an increase to 43.36%, owing to a rise in net profit. With sustained investments guided towards expanding and developing newer categories, the company is foraying into multiple offerings across its existing business portfolio, that will help in improving the profitability and maintaining strong return ratios of the company going ahead

#Company #POTENTIAL

FMCG sector - FMCG sector, in FY25, continued witnessing steady demand trends, supported by a gradual recovery in rural sentiment and stable urban consumptions. The uptrend in rural growth was supported by a healthy monsoon season and continued government spendings. • Urban/Rural- While urban consumption trends observed a mixed bag, with sentiments hovering around upper-middle and affluent segments. Retail and food inflation were at an elevated level. • Rising Wellness - There is a growing awareness amongst people regarding their wellbeing. As people realize that good health needs proactive attention, they are rapidly growing closer to healthy eating habits. Organic, superfood-based, nutritious, natural products are gaining favour amongst the masses, no matter what the category. • Digitization • • Inflation- Increasing smartphone and internet penetration is helping people in rural areas easily access online shopping. It is increasingly becoming a priority for FMCG brands as customers interact with brands across multiple online and offline channels. Companies also get access to valuable data from these sources, including various social media platforms, web and mobile applications. Besides, it also allows FMCG brands to engage better with their customers and convert one-time buyers into repeat customers. E-commerce - Going forward, channel mix will shift dramatically in favour of E-commerce. The growth in the same have aided the sector to drive strong growth in the urban sector. FMCG companies are focusing on digitization for enabling smooth functioning of its supply and distribution channel.- FY25 witnessed a slowdown in consumption, led by impacted rural demand due to high food inflation and seasonality

#COMPANY #OUTLOOK

• In the medium term, they aim to deliver double-digit revenue growth through consistent outperformance across categories and market share gains in the domestic core portfolios, accelerated growth in the Foods & Premium Personal Care and double-digit constant currency growth in the international business. • Copra prices has inched up in line with expectations and continued to exhibit an upward bias. RBO has been stable and is expected to be range bound in the near term. LLP and HDPE (High Density Polyethylene) hardened sequentially and may trend upwards, considering recent bullishness in crude oil prices. Gross margin is anticipated to grow owing to moderation in raw material prices and a favorable portfolio mix. • The operating margin is envisaged to inch up over the medium term, supported by leverage benefits and premiumization of the portfolios across both domestic and international markets. • The company expects gradual improvements in the core categories, on the back of moderating trends in retail and food inflation, followed by a healthy monsoon season. • Amongst channels, modern trade (MT) and e-commerce (including quick commerce), continued to gain traction, while general trade (GT) remained under pressure due to evolving and inter-channel conflicts and customer shifts. • The company expects gradual improving trends in VAHO on the back of ATL (above the line) investments, brand activations and gradually improving trends in rural consumption sentiment. • The company continued to maintain its aspiration of achieving double-digit EBITDA margin in the Digital-first portfolio by FY27.

Marico 760-860
Expected level 1000
Support 585

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Vedant Fashions Limited Company Details Report

Vedant Fashions Limited was incorporated in 2002 and got listed in February 2022 with an issue size of ₹3,149 cr (only offer for sale). It is one of India’s largest company in Indian wedding and celebration wear segment, headquartered in Kolkata. VFL operates under the brand name- Manyavar which is the category leader in the branded market with pan-India presence. The other brands under which it operates are: Mohey, Mebaz, Manthan, Twamev. Mebaz was acquired by the company in 2017 to target the South Indian market. The online channel allows the customers to place orders through the company’s website with the option to visit the store for trials and fittings. The portfolio of products includes a wide range of attires and accessories. It operates through franchisee-owned exclusive brand outlets (EBOs), multi-brand outlets (MBOs), large format stores (LFS) and online platforms. As on 31st March 2025, the company’s EBO area stands at 1.79 million square feet (including Shop-in-Shops), spanning 678 stores (out of which 16 stores are located internationally in USA, UK, Canada and UAE) in 256 cities and towns globally. The company uses franchisee-owned franchisee-operated model, wherein the franchisee handles the store operations, and the company takes care of branding, designing, etc. VFL has two franchisee models – one, in which the company bears the rental cost and in the other, the franchisee bears the rental cost. The margin given to the franchisee for the first model is 18% and for the other model is 29.5%. This makes the company asset-light. Around 60% of the revenue comes from the stores where the company bears the lease cost. At the beginning of the operations, the franchisee invests in the capex of the store (about ₹2,000-₹2,500 per square feet) and pays an upfront deposit to the company.

Product portfolio

Geographies mix revenue

#SALES #GROWTH

In FY25, the revenue from operations was flat on a YoY basis and stood at ₹1,386 cr. The sale of company’s customers were ~₹1,893 cr witnessing an increase of 2% compared to FY24. The same store sale growth was negative 4% as against FY24. The company's performance was weak due to intensified competition and large number of stores opening over the past two to three years. In FY24, the revenue from operations grew by 0.9%. It was impacted due to lower number of weddings, high base effect and muted consumer discretionary demand. In October 2023, the sales was impacted due to inauspicious shraddh period. The sale of company’s customers were ~₹1,853 cr witnessing a de-growth of 0.5% compared to FY23. The same store sale growth declined by 10% YoY. The company has announced its Vivaham collection, Panchakacham and veshti sets in South India.

#EBITDA #GROWTH

In FY25, EBITDA witnessed a de-growth of ~18% and stood at ₹643 cr. It was impacted due to increase in other expenses. In cases where same-store sales growth has been modest but rent escalation requests have been raised, the company is actively renegotiating contracts to avoid any increase in rental costs. In FY24, EBITDA stood at ₹658 cr and saw a decline of 2% due to lower sales on a YoY basis. It was mainly due to muted consumer demand, however, the average selling price (ASP) was strong.

#PAT #GROWTH

During FY25, PAT declined by ~6% to ₹388 cr as compared to FY24. The effective tax rate in FY25 stood at 25.2%. In FY24, PAT witnessed a decrease of ~3.5% as compared to FY23. The effective tax rate in FY24 stood at 24.5%.

#EBITDA #MARGIN

During FY25, the company witnessed a contraction in EBITDA margin on a YoY basis and stood at 46.4%. It was mainly on account of higher other expenses during the period. In FY24, the margins were impacted marginally on a YoY basis. The EBITDA margin stood at 48%.

#PAT #MARGIN

In FY25, the PAT margin witnessed a contraction from 30% in FY24 to 28%. In FY24, the company saw decline in margins which stood at 30%.

#ROCE

In FY25, ROCE witnessed a decline as compared to FY24. This decline was on the back of lower profitability. In FY24, ROCE witnessed a decrease to 40% as compared to FY23.

#SECTORIAL #POTENTIAL

• The size of the retail apparel industry in India as on FY24 stood at ~₹5,74,000 cr out of which the ethnic wear comprises of ~30%. The total of Indian wedding and celebration wear about ~57% of the total ethnic business. (Source : Crisil Report) • The ethnic wear industry is expected grow strongly in the future, on account of the increasing trend of multi-day weddings, wider acceptance of traditional outfits during festival celebrations and the emergence of brands in the Indian wedding and celebration wear market. This industry has been highly unorganized. • Women’s ethnic wear is the largest segment of the overall market as it has found acceptance in both daily wear and office-wear categories, apart from the Indian wedding and celebration wear category. It includes lehengas, kurtis, sarees and salwar kameez. Men’s ethnic wear is the second-largest category and has a share of ~10% of the overall ethnic market. • The celebration wear industry in India is competitive, with several regional brands and unorganized retailers present in local markets across the country. The Indian celebration wear industry has also been a highly unorganized market. • The penetration into the unorganized markets with increasing retail footprint will lead to better performance in this segment. • Transition to indo-western and fusion wear, shift from tailored ethnic wear to ready-to-wear apparels, increasing trends of wearing ethnic in festivals and migration towards branded ethnic wear would be the key drivers of this industry.

#COMPANY #OUTLOOK

• In Q2 FY25, the company launched its new brand Diwas (men’s wear) which witnessed good traction. It is designed for the young generation and is available across leading marketplaces. It is available on the company’s own D2C (direct to customer) website and MBOs. It is a new approach taken towards the brand Manthan. The company will be focusing on scaling up Diwas instead of Manthan for next 2-3 years. • In FY25, the company will be taking orders for both Manthan and Diwas. • Diwas brand is operating in ₹1,000-₹2,000 per kurta price point and the same for Manyavar is ₹2,000-₹6,000. • Looking ahead, growth shall be boosted by relevant inventory & designs, robust store network, multi-dimensional marketing initiatives and strong back-end infrastructure. • In Q4 FY25, the company rolled out 1 EBO of Twamev and Mohey, each. • They have also launched perfumes under Manyavar brand (Essence by Manyavar) in October 2024 and witnessed decent traction. These were available in the top 50-60 stores of the company.

Vedant Fashions (Manyavar) 350-400
Expected level 500
Support 290

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