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V-Mart: Rural Slowdown, Poor Winter hurt - Views on News from Equitymaster
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V-Mart: Rural Slowdown, Poor Winter hurt
Feb 25, 2016

V-Mart announced results for third quarter of financial year 2015-2016 (3QFY16). The company's topline increased by 11% YoY, while bottomline fell by 38% YoY in 3QFY16. Here is our analysis of the results.

Performance summary

  • Sales grew by 11% in 3QFY16.
  • Operating margins for the quarter fall to 11.4% as compared to 14% in same quarter last year. Operating profits fall by 10% YoY.
  • Higher depreciation coupled with a poor operating performance lead to a 38% YoY decline in profits during the quarter.
  • During 9mFY16 period, revenues rise by 15% YoY, while profits decline by a fourth.

Financial snapshot

(Rs m) 3QFY15 3QFY16 Change 9mFY15 9mFY16 Change
Net sales 2,400 2,651 10.5% 5,496 6,314 14.9%
Expenditure 2,063 2,349 13.9% 4,927 5,744 16.6%
Operating profit (EBDITA) 337 302 -10.3% 569 570 0.1%
Operating profit margin (%) 14.0% 11.4%   10.4% 9.0%  
Depreciation (39) 49   (0) 141  
EBIT 376 253 -32.7% 570 429 -24.8%
EBIT margin (%) 15.7% 9.5%   10.4% 6.8%  
Interest 14 13 -6.7% 34 24 -29.8%
Other income 3 2 -26.4% 21 10 -52.8%
Prior period items 2 (12)   1 (2)  
Extraordinary items (net of tax) (1) -   (12) -  
Profit before tax 367 230 -37.5% 557 413 -25.9%
Tax 126 80 -36.9% 188 141 -24.7%
Effective tax rate 34.3% 34.6%   33.7% 34.2%  
Profit after tax/(loss) 240 150 -37.5% 358 271 -24.1%
Net profit margin (%) 10.0% 5.7%   6.5% 4.3%  
No. of shares (m)       18.0 18.1  
Fully diluted EPS (Rs)*         16.1  
P/E (x)*         28.6  

* trailing 12 months earnings

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