Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
V-mart Retail Ltd (NSE: VMART) Q4 2026 Earnings Call dated May. 08, 2026
Corporate Participants:
Lalit Agarwal — Managing Director
Anand Agarwal — Chief Financial Officer
Analysts:
Vaishnavi Mandanya — Analyst
Sameer Gupta — Analyst
Tejas Shah — Analyst
Rehan Sayed — Analyst
Rahul Agarwal — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Vmart Retail Limited Q4FY26 earnings conference call home hosted by Anand Rakhi Shares and Stockbrokers Limited. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance, please signal an operator by pressing star and zero on your touchstone telephones. I now hand the conference over to Ms. Vaishnavi Mandanya from Anand Ratty Share and Stock Brokers Limited.
Thank you. And over to you, ma’. Am.
Vaishnavi Mandanya — Analyst
Hi. Thank you. Good morning everyone. On behalf of Anandatu Shares and Stockbrokers, it’s our pleasure to host the 4Q FY26 earnings conference call of Emaat Retail Limited. From the management side today we have Mr. Lalit Agarwal, Managing Director and Mr. Anand Agarwal, CFO. I’ll now hand over the call to the management for the opening remarks followed by the Q and A session. Thank you.
Lalit Agarwal — Managing Director
Thank you, Vaishnavi. Good morning everyone. Thank you so much for being on the call. So the story continues. The consumption in India for us looks quite healthy. We have seen a better quarter in the last quarter definitely, which is supported by the overall macro picture. So the macro picture that I can see here is positive. We definitely have controlled inflation. We definitely have a better per capita income that we are visualizing for the customers. So I think there are definitely positive vibes coming.
Except the last quarter we also had this war scenario which was erupting which definitely gave a little bit of. I mean it was just. There was no real life problem. But perceptionally there was a pressure that the consumer had perception they were into a fear factor. People wanted to hold their expenses largely in urban India. We saw not especially in tier two, tier three towns. So those still look good. Our footfalls have been growing. There was definitely a little bit of mixed weather times because the last quarter, early part of the quarter we saw winter being very low and then suddenly winter came up and then it sinked very fast.
So winter was weak, but summer came up very early. But our organization prepared very well. We prepared very well for launching the summer. Then in advance in time where we took the benefits versus the market and those benefits actually accrued some results to us as well. And then post that we saw some geopolitical challenges. We definitely saw some cities and some towns where we saw some crisis of oil. There was one or two or three days of some crisis which we saw coming in and then maybe that created a concern.
There is definitely big piece in terms of the whole crude oil price rise which is happening. And there are directly, we don’t see fuel costs getting risen, but indirectly all the raw materials, all the, all the products, all the services which are all getting affected because of the crude oil prices going up. And so largely our apparel business or non apparel business, we see almost 70%, 60 to 70% consumption of polyester, yarn or poly based product lines which have or will get impacted because the earlier orders that we had given was already being secured for April, May deliveries.
But for all those deliveries which are going to come in June, July, August. So we will see some impact there. Also we have tried to block our orders well in advance, keeping in mind and then taking the use of the existing inventories of yarn and fabric and, and apparels that the vendors have. So there is a lot of good work that we are trying to do with the vendors in terms of trying to nullify the impact of the rise in the yam prices or rise in the Polysa prices. So definitely there is a rise of almost 15, 10 to 15% in the yarn prices, which effectively converts to almost 5 to 7% in the panel prices.
With some negotiation in certain products we have to pass on 1 or 2% in the cost for the future deliveries. But in certain cases we have also passed it on to the consumers, but very, very controlled. So overall there is some deception. We are able to in terms of both availability of raw material as well as the prices of raw material. So that is one thing which is little difficult to consume. That certainly will impact the consumer sentiment or could impact the consumer sentiment as well because the inflation expected has to come up.
Because in the last quarter we did not see those things happening suddenly in the end of the month. In the quarter which is the March month, we saw some prices going up of oil or some certain, certain product lines where the consumers got impacted little bit, but not too many things. I think there’s not too many change which has happened. We still see better footfall. We still see consumers coming out to buy and open because last month or this month also we saw some footfall coming in from the marriage season.
The marriage was there. We also saw summer coming because summer was late, because initially summer got launched in January, February and once again in the March month we saw a little bit of winter chill happening, a little bit of rains coming in. That rains also disturbed the market a little bit in terms of the seasonal need. So those seasonal need picked up In April only and that is continuing in May. We have maddo seasons coming in. But yes, there will be one month of stale also which will happen because of agriculture which comes in.
But overall I see good news coming in from agricultural side also. There could be some futuristic challenges which could come in. But as of now we see good agricultural output coming in. Consumers or the consumers are actually coming out to spend that money. There were few instances of rains which actually created some havoc in certain farm area, which is largely in the northern belt. We saw some impact, but otherwise most of the areas we saw good things coming up. Festivals and seasons. Eid and Holi were two big festivals in the last quarter.
We saw good traction. Both EID was very good. Even Oli was okay. Not great, but okay. But apart from that, post Oli or post Eid, we saw a good jump as well because of the early launch of our product lines. So overall I think we have strengthened our business verticals. We have strengthened our unlimited business. Our unlimited south stores in the public performance in the south store looks good. We have now got a good grip over it. So we are firing, we are trying to open up more new stores in the market.
Our line road strategy also has been very fruitful. We have been able to create a lot of efficiency, lot of execution discipline, lot of technological changes and utilization of AI, which really has given us a lot of benefit in terms of the loss prevention because we have almost cut down almost 70% of the losses in that business from the last year perspective. So that we are very confident on that particular side of the business. Because almost half of the business coming from that area is mostly Omni.
And Omni is a good piece that we are trying to focus on where the consumers who are buying both online and offline, we are seeing very promising results from there. A lot of work happening in the entire product line. Product development teams, vendor development teams, the design departments trying to bring in lot of analysis, bring in lot of design elements, integrate with or have partnerships with vendors, trying to work with needs, explore also the international markets. So there’s a lot of work which has happened in the, in the product areas, in rationalizing the product and in creating a better freshness in the product, in liquidating the entire old merchandise and all of those things.
So that has also given a lot of benefits in the last quarter. So overall our strategy remains very clear. We keep focusing on the similar area of market. We keep focusing on giving better fashion, attracting newer generation consumers, definitely making the family look more younger, more sweeter and more cuter. So that is our focus area. We will do it all of these through definitely lot of intervention of AI. We are focusing as an organization a lot on all these language models, AI and flows and stuff.
So there is a lot of work, there is a lot of discussion and lot of debates happening and lot of new introduction of certain smaller things are happening. So certainly some of these will yield more results, make us more scalable, make us more efficient, and also make us more intelligent in terms of serving the consumers. So those are the areas we are trying to work on, both impacting the front end as well as the back end. So some of these things will certainly help us over the market. We look, we see, we can, we’ve got a good grip over the business.
We’ve got good team now. We recently moved into a new office in Gurgaon. So the team has all come together and this makes us once again more scalable and more better in terms of collaboration. So a huge round of applause for our team, our stakeholders who’ve been there, been working with us. Certainly we have seen some upswing also in the competitive space. The competition has got good targets where they’re trying to open up a lot of stores in the coming quarters and coming year. So we will see good things coming in.
But yes, we suddenly have seen the impact of all these competitive activities are getting nullified. Now we are not seeing too much of impact coming in even if the stores are opening because already the market is occupied with many stores. One additional store or two additional stores now opening up doesn’t give any more big impact on our existing store sales. So I think that side is becoming more controllable. We are definitely able to counter a lot of these competition. We are also able to yield the benefit from the little bit of, I would say improper execution or improper presentation of their product in the market from the earlier successful retail organization.
So some of those benefits also we are trying to achieve because some of those competitions, when they opened up those stores in the first one or two years, they actually picked up their sales. They actually attracted certain consumers. Now the customer base has become wider, the organized customer base has become wider. So we are trying to attract more footfall of those customers who were earlier going on those competition stores. That is our strategy to try and bring in those consumers even if the market looks a little too weaker in terms of the demand.
So our strategy will be largely to increase our own market share from the earlier times. But anyway, we’ll take out the questions ahead. I hand it over to Anand. He will take you detailed into the numbers. Thank you so much.
Anand Agarwal — Chief Financial Officer
Thank you Lalit and good morning everybody. I’ll quickly take you through the numbers and some commentary around them and then we can open the house for questions. So Quarter four has been a great growth quarter for us with actually our highest ever quarterly new store editions as well as good like to like same store sales growth leading to a total sales growth of 24%. We opened 29 new stores and also delivered a LTL of 12% with Vmart at 12 and unlimited at 9%. Overall, this marks the 10th consecutive quarter of sustained like to like growth reflecting the continued progress on planned merchandising and product upliftment.
Disciplined expansion and automation led systematic process improvements across the organization. The new stores that we opened are delivering actually better than network throughput which reinforces the confidence in both site selection discipline and brand relevance across Tier 2 and Tier 3 markets. The south market under unlimited format continued its strong momentum delivering a 28% revenue growth and a 63% increase in EBITDA supported by strong throughput of new stores added and continuous operational efficiencies.
We remain confident in scaling in south markets where results remain encouraging. The sales per store and the sales per square feet matrices continue to improve in line with FSC. We also saw apparel ASPs grow 5% this quarter primarily due to the better festive mix, lower discounting and improved full price sell throughs on the margin front. Gross margins actually for the quarter decreased year on year by 1%. This was on account of provision taken on inventory as per our consistent long standing policy and also a 12% decline in the lime route commission income which actually flows 100% into the gross margin line but now forms a smaller share of the overall revenue.
The important highlight actually was the improved inventory health that should result in better gross margins going forward which will or should be driven by higher proportion of fresher merchandise on shelves, lower discounting intensity or requirement of lower discounting and improved product mix. Overall. Our days of inventory also improved by 3 days which is on a 5 water rolling average basis along with per store inventory reduction of 13% year on year. The inventory betterment should continue as we will further rationalize assortments, display densities and gain benefits from improvements emanating from supply chain efficiencies on replenishment cycles and warehouse dispatch optimizations.
Coming to operating expenses, the total expenses increased by 8% largely led by a planned significant drop in expenses in the line road, vertical drop in ESOP expense year on year and lower offline marketing spends as we continue to drive loyalty based traffic to stores through more digital interventions. As a result of these sustained operational efficiencies, EBITDA grew by 56% year on year 206 crores with margins expanding by 220 basis points to 10.9% reflecting better cost absorption and productivity gains.
The EBITDA growth translated into significant growth in adjusted pad to 10 crores. We have actually normalized the PAD numbers for exceptional gains to reflect the real operating profits. For better comparison and reflection of year on year sustainable business improvements for the quarter we have reassessed and reduced the one time exceptional charge of 2.1 crores provided for in the last quarter by almost a crore in this quarter. So thereby the full year impact for the labor code led impact is limited now only to 1.2 crores which is related to the estimated provision on account of these labor code implementations.
Lime Road Loss Marketplace loss reduced significantly year on year continuing the sustained improvement in the operating matrix for the online marketplace business. The marketplace business remains profitable at CM3 levels in high single digits and has now begun to contribute meaningfully by increasing the customer loyalty. Higher bill sizes and much higher repeat rates for the growing Omni customer base reflecting validation of the original investment thesis in Lineboard As a culmination of all the improvements and efforts on a full year basis, pat has grown by 6x to 124 crores reflecting consistency rather than quarter specific effects.
This is our highest ever PAT and the pat percentage at 3.3% is also now almost reaching the similar levels of PAT of around 4.4.5% that we used to enjoy eventually on the you know, moving on to CapEx and cash flows. CapEx for the quarter stood at 37 crores, 159 crores for the full year primarily towards new store editions, old store refurbishments and technology led investments for the next year. The capex is estimated at roughly around 170180 crores on a YTD basis. The business generated positive cash flows of 33 crores versus a negative cash free cash flow of 33 crores in the last year.
There is no long term debt on the books and we remain comfortable on the cash front with ample working capital limits available to leverage future growth which will be financed through internal accruals coming to store expansions. We opened 29 stores this quarter and 92 in the full year with 12 closures. The guidance for the next year remains the same at 13 to 15% area addition every year net of 1 or 2% mistakes that many closers year on year. With a healthy store pipeline, improving throughput across both mature and new stores, and disciplined inventory and cost management, we believe the business is well positioned now to maintain momentum into the coming quarters while sustaining profitability and cash generation.
So that is all from my side and I now request Farah to open the house for questions.
Questions and Answers:
Operator
Thank you very much sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter STAR and one on the Touchstone telephones. If you wish to remove yourself from the question queue, you may enter Star and 2. Participants are requested to please use only handsets while asking a question. Participants are also requested to please limit your questions to two questions per participant. We will wait for a moment while the question queue assembles.
The first question is from the line of Sameer Gupta from India Infoline. Please go ahead.
Sameer Gupta
Hi sir, good morning and congrats on a good set of numbers and thanks for taking my question. So firstly you did mention in the commentary but little bit more clarity on this aspect. So there is a inflationary pressure across the board and does not particularly in the petrochem based raw materials but yarn and cotton also have gone up. So just trying to understand the impact on vmart. So if you could give any idea as to how much RM inflation currently we are facing or any kind of sensitivity where you know linked to crude.
If crude goes up let’s say 10% our RM basket goes up by how much? Any any sense on that would be great. Really helpful.
Lalit Agarwal
Yeah so I’ve already narrated mostly see definitely there is a direct correlation with the crude prices. The proportion of fabric or the proportion of yarn or the cost of yarn that gets into the apparel making varies from 33% to 50%. Lower price product would have a higher amount, higher percentage of yarn or higher price product could have a lower percentage of yarn and then it is just not when you say yarn you mean
Sameer Gupta
Polyester.
Lalit Agarwal
When I say yarn I am saying polyester or cotton or whatever it is whether it is a viscose or it is a polyester or it is a polygottom. So ultimately there are yarns which are mixed in nature. There are single single yarn in nature. So not that every In a higher priced product you would have cotton more and lesser polyester. In a lower price product you would have more polyester and lesser cotton. So when we look at the lesser price product the impact becomes a little more higher the yarn. If the yarn or the crude increases by around 10% it gets translated to around 5% of increase in the yarn cost.
And in that variable cost it goes down to maybe one and a half to 2%. So that’s how the metrics flows. What is the level of. If the overall crude prices that we see is grown by almost 30, 35% it has translated to almost a cost of 10, 8 or 9% in yarn cost which is resulted into 3 to 4% of apparel or garment cost. And that is a 100% yarn based or polystery yarn based product. But if it is a mixed product product it comes down. So what we are trying to do is how do we accommodate this 3 to 4% either with certain innovation in fabric, trying to use certain different kind of fabric which could actually nullify maybe a little more lightweight fabric which could nullify a little more negotiation in terms of the overall cut make finishes of the garment.
How we are trying to manage those costs. But still we are seeing one or one and a half percent of increase in the overall price, the overall price of the cost of the product that we are sourcing, which certain part of it we are trying to pass it on to the consumer. But certain part of it we are also trying to retain which could increase the inward margin a little bit. But I think effectively we will want to bring in more efficiency so that the delivered margins and the outward margins do not get affected through this.
Sameer Gupta
Got it? Yeah. Very very clear sir. Thank you so much. And if could also allude to roughly our fabric mix in terms of polyester and cotton that would complete this puzzle.
Lalit Agarwal
See I mean what we are looking forward is the festive period and the winter period. In that festive and the winter period what we see that the poly mix comes goes up to almost 80%, 75 to 80%. But during summer the cotton mix comes up to be almost around 50%. But you know, when you’re moving towards the forward season and the winterish season, the polyester mix grows up. That is why your polyester mix would be around 70 75% of the total sourcing that you are doing in the forward period.
Sameer Gupta
Got it sir. This is very clear second question and let’s just exclude the war and crude impact when we are answering this. Now this year excluding lime road, the company has clogged the 6% pre index EBITDA margin which is up 120 basis points. Yoy. And again in the base I’m excluding line growth. This is at a 5% LFL and this is despite a relatively higher area growth this year. Now if a mid single Digit lfl were to repeat all else equal. And when I say all else equal let’s just assume there is no crude or inflation impact.
And logically a 120 basis points margin expansion at least should happen in FY27. What are the constraining factors here? Is there any competitive threat that you are looking at? Again we don’t know what is going to happen on the war and stuff on inflation. So if you could just you know highlight the thought process here if it is correct or you know there are any issues in there.
Lalit Agarwal
I mean please talk to Anand and come and help my CNA team so that they can actually project such kind of good numbers. I’m pretty happy about your thing. But yes, certainly efficiencies bring in benefits. It is just not the same. But you know, how efficiently are you able to sell through your buy or sell through your inventory. So that is also one of the biggest factor which gives you margins. So I think it is more about efficiency generation. It is definitely also about mid digit or little higher than mid digit same store sales growth.
So I don’t see a lot of constraints. I see there are constraints in terms of the overall inflation, overall labor cost also going up. Because what happened recently in Haryana or Noida and all of this certainly has led to a little bit of could lead to a little bit rise in the labor cost that again could be determined. But otherwise I don’t see any challenge whatever that you are thinking, whatever that you are predicting. We also believe that similar things could be derived if we are able to achieve 6 to 7% of like for life growth.
Sameer Gupta
Superb sir. That’s all from me. I’ll come back in the queue. Any follow ups? Unless Anand wants to add to this.
Anand Agarwal
Sameer, I think I’m good with what Lalit is suggesting. I think we all things remaining equal, we remain optimistic and buoyant for you know, a similar kind of growth. But as Lalit suggested, I think all things currently do not look equal. So let’s wait and see how well we can leverage and optimize this.
Sameer Gupta
Sure. Anand and Lalit sir, all the best.
Operator
Thank you. Our next question is from the line of Tejas Shah from Avendus Park. Please go ahead.
Tejas Shah
Hi Lalitji. Anand, thanks for the opportunity and congrats on good set of numbers. Lalitji, you spoke in detail but just wanted to double click on it on demand scenario. So a lot of and not only your results but if I see consumption results in general I would say that after a long time there is some broad Based recovery which is visible. So just wanted to know. So there’s one disruption which has come from external environment which is the whole crude related inflation. Looking at your own data and in your field on the ground, do you believe that we can pass on the inflation to customer without hurting this momentum which we have seen for last, let’s say four, five months or for us it was actually much more longer which can actually continue.
And even if we have to pass on the inflation, whatever proportion you just spoke about, it won’t disrupt the demand momentum.
Lalit Agarwal
So prijesh, this is just not our inflation. It is just not our price increase or whatever inflation we are passing on. It is the basket inflation that the consumer spends their earning to. So almost what we see, almost 60% of consumers basket is need based. 60, 65% is need based. And out of that almost 70, 75% of their basket could get affected. Because if I look at the entire piece, even the agriculture prices, the whole fertilizer, the whole pesticides, or even the logistic cost or their day to day power cost or inventory cost.
So what we see the impact could go to all these extent and could actually get affected. So the consumer may find it difficult to manage their inflation and that could be a reality. And that is what we are caring about all of our consumers who are largely need based consumers. But one respite we are able to see is the increase in minimum wages or the overall earning capabilities that is going to increase by the government. So I think some of these things can actually give some benefit. But otherwise if this continues, I mean it may throw a little bit of challenge in terms of the consumer sentiment.
But overall from our side we are being very, very sure we do not want to pass it on blindly. We do not want to pass it on like we did it in 2023. So we don’t want to do that same mistakes again. We may absorb some margins, we may change certain product lines, but some of these where we feel the consumer can actually pay and where the design factor is much more larger and the consumer will be will be easier for them to easier to pace. That is where we will try to take it up. I don’t think we will see a lot of challenge in terms of the demand.
But yes, overall the demand could get impacted a little bit. But as I said earlier also the organized market is also become bigger. So for us it is more a challenge where we could pull in. How could we pull in more sales from our peers, from our competitors so that we are actually able to grab and get that opportunity in spite of a weaker market if at all happens very clear
Tejas Shah
And second on market competitive landscape. So usually and you called out that there is not only pricing issue of raw material but availability issue also. So does it mean that the smaller players kind of get shafted or cornered in securing raw material at right prices versus let’s say an established player like us. And hence it can be a very good opportunity for us to get market share in this environment. So I just don’t want to raise my hopes because
Lalit Agarwal
As
Tejas Shah
Of now we are also struggling.
Lalit Agarwal
Our team is also trying to grab onto all of these, secure the production, it is just not securing the order but also securing the actual inventory for the vendor because the vendor should also have that raw material well in his house before he is able to deliver. So I think it’s just, it’s not over. The things are going to be for us also a tough period. All the vendors and the entire supply chain there is so much of difficulty which is getting interrupted because even the whole gas issue also has impacted the production lines of certain vendors in certain processes.
So there are challenges. The whole election thesis which happened in Bengal and Tamil Nadu, there also the labor workforce has got reduced. There has been a challenge in terms of the availability of the labor. So some challenges have been erupted. But I hope those challenges will be met. And certainly obviously people who are little inefficient, people who have a little lesser brand image or even the payment terms or even the capability to secure the product line will face challenges. We know it is an immediate situation we are dealing with as an emergency situation and we are not leaving anything unturned.
So we are trying to get deeper into it. Wherever we feel there is a challenge here. We are also exploring of bringing things from China or some other places. So some of these things we are trying to do so that we can integrate our supply chain
Tejas Shah
And last one. So Anand, you kindled our hope by saying that we are kind of moving towards that pre Covid packed margin direction. So with whatever ceteris paribus, where are we today? Do you think that with the hope, with the goal that we have of 5, 7% SSSG, can we achieve that number at pat margin level this year?
Anand Agarwal
So Tejas, I think the direction is right. Our efforts are very genuine and sustained and we are seeing results emanating out of these sustained efforts now to set a timeline whether this will happen in the next year or the year after that. I can’t, you know, see that or I cannot predict that. But definitely our Intentions are obviously towards securing that kind of margins in the medium term. It may happen next year. I don’t know. There are so many different factors which will influence that. But definitely our intention is obviously to get to that level very fast
Tejas Shah
And all the best for that. Thank you.
Operator
Thank you participants. As a request please limit your questions to only two questions. The next question is from the line of Rehan Sayed from Trinetra Asset Managers. Please go ahead.
Rehan Sayed
Good morning to the team and thanks for taking my question. Sir, I have just only two questions. First on just want to get understanding regarding your apparel. ASP remains broadly flat while footwear English sharply. So just are customers currently preferring lower kit products or is this more because of high ends contribution from entry pairs categories? This is my first question.
Lalit Agarwal
Rayan, can you just repeat the last piece? You said that are customers preferring what
Rehan Sayed
Like I just want to understand this customer currently preferring lower ticket products or this is more because of higher mix contribution from entry price categories?
Lalit Agarwal
What is happening is gradually the, the. I mean our, not only our but the availability in the market to all the organized player value organized player is becoming larger and larger. So. So certainly the average spend per piece by the consumers which they used to pay earlier, they definitely want more efficiency, more value here. But it is not the fact that they are trying to go for a lower ASP or lower price product. We are expecting a little bit of mix change as well as focusing on little bit more on the better product because the consumers are certainly asking for a better quality product, asking for better product in general.
But yes, as if we see inflation coming in, there could be some impact that the consumer would face here both the things would happen but the higher consumer which is the brand buyer and then the consumers which buy premium products would move down and could buy a little better product from our customers our offering and there could be certain lower line customer base where they will struggle could either not buy or want to buy a little more enterprise kind of product. So I think largely we see these products, the ASP coming out in the balancing mode.
We are not seeing very high growth in the entry price product as well. We are seeing that similar and even good products coming out good products are also coming out as good.
Rehan Sayed
Okay. Okay, thanks for clarification. And my second and last question is around your geographic mix that we have seen about the southern markets. So that you have seen Uttar Pradesh and Bihar together now contribute a very large portion of the store network. So how does the management view the long term growth opportunity in south South India especially after Seeing traction in Tamil Nadu,
Lalit Agarwal
I think we have been focusing very highly on, on that particular market. Our philosophy is also to build a sustainable return on capital or the ROCE from the business. We just don’t want to go and open out the stores. The property prices in those markets are also little higher. So we have to be a little more conscious in terms of our expansion. We just want to open stores which remain profitable for a longer term. So that is how we are trying to do. We have created our team there in south India has been strengthened.
They are trying to acquire. But for us, every market there is a large opportunity. Markets like Uttar Pradesh or Bihar where we are almost there in all the districts we still see a 50 to 70% growth rate which would come in from these market. In terms of our number of stores getting expanded in the next five years. I think there is a long opportunity which is available in all of these markets. The population rate in the upper India or our core market is very, very high. I think there is an opportunity in entire India and that is how we have divided our organization structure so that every, every zone or every state is being given a sufficient time and sufficient energy so that we are able to expand.
Rehan Sayed
Okay, thanks for detailed answer. And so just last one more question if you just could be, allow me like what is the medium term sustainable ROC target once the current function phase matures?
Lalit Agarwal
I think see we’ve been always working towards acquiring around 15 to 18% of RC living. So this year right now we are around 14 and a half percent.
Rehan Sayed
We
Lalit Agarwal
Would want to go to 18 and then maybe 20, about 20%. So I think our investment that we had done in the last few years was largely in the warehouses or the in the acquiring line board and unlimited or even feeding to the losses of line road actually took away our ROC. And ultimately we would want to over anything above 20, 22%.
Rehan Sayed
Okay. Okay, thank you and good luck for your coming quarter.
Operator
Thank you. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Rahul Agarwal
Good morning Narutji and Anandji. Three questions. Firstly, on the macro side, you know, when I look at this value fashion segment, right when we look at growth, we analyze, you know, detailed numbers for each company, you know, the listed space at least. Clearly fourth quarter Vmart has been an outlier in terms of how SSGs have come through. Your new store editions have also been in sync, so very good performance. But incrementally when you look at full year, fiscal 26 or even last three years, cumulative we’re looking at very high discipline on Emart in terms of how balance sheet cost is getting managed, which is again very good.
But purely from a market share perspective and given what is happening on value fashion because there is too much growth in hinterland of India, a lot of expansion happening by competitors, does market share actually mean anything in this industry? And for you internally, do you guys discuss how are we doing in terms of our own revenue market share, 3 year, 5 years, 1 year analysis, 10 year views. So that’s the first question, sir.
Lalit Agarwal
Rahul, we are absolutely bang on and definitely market share is something that we keep watching on, but it doesn’t because the largeness of the Indian consumption is massive and we actually could bring in more consumption and the consumption is bound to increase. So in spite of all of these new additions in value, retail which has been already out there, so much of consumption left out, still more than 60% of the business is going to the moment pop or the unorganized traditional retail. So there is still a lot of opportunity left.
We don’t really believe there is certainly a shift which will happen and there will be always some part of the retailers which will have some inefficiencies in the business. And how do you grab onto those opportunities? And that is what we all try to do. We try to talk about it that how do we actually create a strength within the organization which could bring in or give more value to the customer, create more better perception towards the customer, give the customer the best experience and that is what will bring in the market share or some share from our peers if at all they are acquiring or they are able to acquire in the last few one or two years with some store openings.
So that is how we try to play about it. But you are absolutely right. With so many number of players coming in and so many number of players available, the market share piece is not valid and should not be a big point in our area that this is not a product led business where one or two companies could acquire a very high market share. So this is not those kind of businesses where such things can happen. Got it. And there’s two more things, one
Rahul Agarwal
For you and one for Anand. We’ll cover on when we talk to your vendor side. On the fabric manufacturing side there is, you know, and we’ve also worked on product freshness in our stores which actually has resulted into shorter cycle sourcing for you is what we understand. And please correct me if I’m wrong, we’re sourcing much more fresh products and hence the sourcing Cycles are quicker, the inventory turns are faster. Unfortunately in current environment because of that, maybe when we enter the festive season and then the winter, maybe 2Q 3Q of the next year which is fiscal 27.
How are you looking at the advanced booking? Because as you already explained that there is some inflation, something will get absorbed, something will get passed through. But what we hear is the advanced booking from WeMart versus some other value fashion retailers, two to three of them, they’ve been better off. So will there be a margin hiccup when we get into our seasonally strong season? That’s one. And secondly, just on the capex side, if Anand can clarify, my sense is refurbishment in new stores 130, 140 crore should be enough.
When you look at this 175, 180 crore number, what is that additional spend? If could just break that down. Thank you so much.
Lalit Agarwal
No, I think, see as I told earlier also we are, we definitely have two verticals. One is the vertical which closes the final design and the other is the vertical which tries to close the fabric pieces. So we work in a longer term mindset to close our fabric needs and fabric requirement and give the perspective so that the time taken for the fabric development also is taken into account. So there is certainly good work that the team has done. They have almost blocked 50 to 60% of our lead or our total demand till December.
So there is already a blocking which has happened for the forthcoming 67 months. Part of which is going on, part of which is being closed. So there is a lot of work. I don’t see a jump in margin there but I would see not a negation in the margin. I would see maybe availability of the product. I would see a better value being provided to the consumers if they compare it with other part of the market. So I still feel that the consumer and our consumers are very much down to our consumers who can buy only two or three times in a year.
Their earning capabilities are very low. Their average earning is around 30,000 rupees a month. So I think for them creating an impact at this point of time from our side shouldn’t happen. And that is what we are trying to prevent because they should not. They already are in pain because of inflation. And bmart also offers or doesn’t help them to sustain that pain, doesn’t help them to give the product at the similar prices actually makes the consumer move away from the brand. I think that is where we want to bring in that loyalty.
And our loyalty is very, very important for us because for us almost 72% of our sales comes from our repeat customers and the customers who are already shopping with us. So that is the core priority. We definitely want to offer them a longer term view and being with them is more important in these difficult times. Yeah Anand, if you want to answer on the capex piece
Anand Agarwal
On the capex side, Rahul, we spent 159 crores this year. And my estimate is, you know, because we also do apart from the, you know, the new store expansion as well as the old store refurbishments, we are slightly going heavy on the tech side with a lot of, you know, AI led interventions. So the budget that I have put together for next year is probably around 170 plus crores. And the differential for whatever you mentioned in the numbers is more to go towards the tech side.
Rahul Agarwal
Got it? Got it. Anand, thank you so much and wish you all the best for the next year.
Operator
Thank you. The next question is from the line of alias Kar Shake from Motilal Oswald mutual fund. Please go ahead.
Rahul Agarwal
Yeah, thanks a lot for the opportunity and hi Lalitji and Anand, congratulation on very good set of numbers. Just two questions. You already have spoken on them. One on the raw material already you have, you know, elaborated a lot. I just wanted to, you know, quickly understand if you can quantify, I mean if the crude prices remain where they are then what kind of price increase do would you need to mitigate? And in the past, you know, probably during COVID or post Covid when these pricing were taken, we saw some impact in terms of demand.
So what are your thoughts on that?
Lalit Agarwal
So I think we have already merited, we would not want to increase the same product price too much on the average. If you look at the similar like for life product lines, the price of increase may go up to up by one one and a half, one and a half percent. But there could be certain price increase in the ASP that we could see from the mix change. Because like you know earlier times we used to sell large amount of kurta in the month but now we want to sell more kurta set in women. Now when you sell kurta set as a mix the asp goes up and that is what we are trying to do.
So that how do we bring in combination which is more in fashion and how do you bring up the consumer lifetime value or how do you bring up their spend value at our place? That is how we are trying to position ourselves. But you will not see too much of price rise coming in from this perspective.
Rahul Agarwal
Got it. This is very Useful. A second question on growth, you did elaborate a lot. But I just had two questions on the growth part. One is SSG. While now we have seen, you know, very strong SSG, you know, performance for almost back to back, maybe 10 quarters. Right. So typically we have seen, you know, the sector go through a cycle and after maybe 2, 3 years of good SSLG you see some softening happening. Now also you know, after such strong numbers and store addition from the competition is also happening.
So maybe there would be some probably, you know, competitive factors also. Plus you are adding a lot of store, 1890 stores. So is there also a risk of overlap? So just if you can share some thoughts on you on the SSG trends. While you have said that you would want to do and continue to do 5, 7% but do you see the risk of a on SSG because of cyclicality, competition plus overlapping of your own stores?
Lalit Agarwal
I think Alif the worst is over behind us. We have seen enough of that as of now. All of the work that VMAD has done in the past three, four years in trying to, you know, strengthen the organization, strengthen the technology parameters, strengthen the analytical strength, bring in the whole, integrate the whole partnership with the vendors, have that designing capability and all of that, I think for us we are very confident that we would, we should be continuing and we should be growing more and this is the time where we need to come back and we need to keep continuing on that, on that growth rate.
See the risks are always there. The risk will always continue. There will be market disruption, there will be certain internal disruptions which could happen. There could be some competitive led challenges which could get thrown away in particular markets or in particular geography or in particular terms. So but overall we believe and we are very confident that we should be able to track and continue the FSG growth rate which is going on. We’ll be very, very cautious and we are also very very optimistic on this.
Rahul Agarwal
Got it sir, thank you so much and very happy to see that confidence in your growth capability. Thanks. Thanks a lot. Wish you all the best.
Operator
Thank you. The next question is from the line of Lokesh Manik from Vallum Capital. Please go ahead.
Rehan Sayed
Yes. Hi, good morning. Lalitji and Anand and team. Am I audible?
Operator
Yes. Great,
Rehan Sayed
Great. Sir, two questions from my side. One is on the capex per store which pre Covid used to which was only vmart pre Covid which used to be about 1 point to 1.3 crores then introduction of limeload and it shot up to 2.3 crores is this year is at 2 crores. So in the medium term, where do you see this settling down? Maybe Anand would have a better idea on that if he can just guide us.
Anand Agarwal
So, Lokesh, our capex per store still remains around 1.3 1.4 crores for certain areas. Wherever very isolated cases where we have to be slightly more a market, there can be exceptions, but otherwise, at an overall basis, our capex per store still remains at 1.3 1.4 crores. So I think the number that you’re getting is an average of total capex divided by the new store editions. But there is also a lot of store refurbishments that we do and that takes up a significant, a good amount of capex that happens after every four to six years, depending on the condition of the store and the, you know, the market intensity or the competitive intensity.
But that is a very large project that we have undertaken in the last two years. So a good part of our capex spend goes towards store refurbishments.
Rehan Sayed
So. Yeah, when, when do you expect that to taper off?
Anand Agarwal
I don’t see that tapering off because. No, I don’t see that tapering off because this is a continuous, you know, evolution. We will continue to keep bettering our stores. So typically every store will go through a refurb cycle between four to six years. Now, some may go a bit early at four years, some may go by six years. But that is the typical range in which we like to operate. And that is the way we have, you know, constructed our business model so that the internal accruals and the store ebitda itself and the cash flow generation is itself able to very well take care of that refurbish.
Rehan Sayed
Right, great.
Lalit Agarwal
There will be some pressure on the capex line as well because of the increase in the raw material prices or the crude prices or the market capabilities. There could be certain pressure which could come here as well. But as of now, we haven’t taken too much of pressure. We have actually reduced our capex from last year. We’ve negotiated more. Actually, that sourcing team has done a great job here as well. And so we are trying to work on that as well. But largely, if you look at the entire issue, there are the gross addition has been 90 store.
It is not the 75, 10, 8. So. So the gross addition has been larger. There has been little larger stores also which gets created. So overall, if you look at the number is per square feet as well as the other, because you need to invest more in the back end as well as you grow in the front End the back end investment also has to be in line with that.
Rehan Sayed
Great, great. Lalitji. My second question was on rent expense. So as a percentage of sales, you know we were at 4.5% again earlier and be peaked out at 10%. We’re at 8% today. Medium term. What is your target and where do you see this settling down?
Lalit Agarwal
I think in today’s scenario and as you understand the earlier times were virgin period where we used to walk into the virgin territories, people were not so much aware, people wanted good retailers to come in. So as of now there is definitely a lot of competition and lot of requirement of those kind of. And the construction cost has gone up, land costs have significantly gone up, the real estate prices have gone up, the cost has really gone up. So I think we should be hovering and we should be comfortable around 7 to 7.5%.
And 7% is the ballpark figure which we want to come up to. So 7% is something that we are trying to chase and we will be there. There’s all our, most of our new store are being planned at the that particular price maybe less than 7%.
Rehan Sayed
Great. My last question Lalaji was that over a period of time our ASP of apparel has been more or less constant at BMART level and at overall level as well. So now do you see that with the inflation coming in and if you’re able to crack your product mix strategy incrementally, you’ll see a lot of people coming to your store versus outside who’ve not been able to, who will not be able to manage inflation and who will have to take a price increase. So do you see that benefit going forward?
Lalit Agarwal
I’ve narrated we can only work towards it. We will definitely want to attract them more, convert them more, make them more happier, make them more aspirational. We would definitely want to do it. But see ultimately at the end of the day the amount of work that we are doing, I don’t feel that my competitors are not doing. So the entire market is very more intelligent. The entire market is trying to work on it and I give credit to the entire market, most of the value retailers are really working very hard to provide similar kind of experience to the consumer, similar kind of value delivery to the consumer.
So I don’t think there is a large piece. Yes, certainly we have done some extraordinary work. We will want to do more because I feel there is a lot of room more left. We could actually deliver more benefit to the consumer. You will actually be able to yield more better efficiency from our Operations as well.
Rehan Sayed
Great. Great. That’s it. From my side. Sir. Thank you so much.
Operator
Thank you. The next question is from the line of Jayat Jayant from 3 Pim. Please go ahead.
Unidentified Participant
Hi Lalaji. Hi Anandji. Thank you for taking my questions. A couple of questions. One is on unlimited. I know since acquisition we’ve divested a lot of stores. We’ve rationalized a lot of stores just from a sales throughput per square feet over the. Let’s say a medium term. Do you think as new stores get added and as you’ve mentioned that new stores are operating at vmart level efficiency. We see that number going up closer to the VMA levels over the next two or three years. Would that be an aspiration for us?
Lalit Agarwal
I don’t think there is a Delta and the delta will remain. We may. We are not. I mean there is an incremental sales store sales growth which are. We are getting better from there. But still the Delta will be there and Delta is right now there. So. So it is. It is going to be because there is a delta as of now of approximately 140rupees. 135rupees. And we could come little closer on the Delta. But still that Delta will not go away because vmart has also lines of FMCG which we do. The Kirana business also contributes to around 10 to 12, 13,000.
Vmart’s business where the sales per square feet is also a little higher. Vmart also does a little more of value products and then those products but unlimited does a little more of. A little more brands and premiums as also so Torah that difference is there. We are covering that the like for like growth should be higher in the unlimited. That is what we are trying to perceive and that is what we are trying to work towards.
Unidentified Participant
Sure. Thank you sir. Just one more question on this and you’ve alluded to this before is for FY27 specifically given the exact challenges on the gross margin side are we trying to manage that more via mix and premiumize the customer or loyal customers who are like 72% of our customers to a. Let’s say a higher price product is that or a higher margin product. Is that how we want to protect our margins for FY27 given the whole impact on. No, no, no.
Lalit Agarwal
I think we never work towards that. Certainly it is more about what does. What product are we able to create. Yes, there is a finding. We do want to bring in more aspirational customer. Also in our floor there is new set of customer entries that we are trying to also do because we also want to acquire better customers. Customers who were shopping in brands because now the brands are no longer relevant for them. They don’t want to show off their brand, they want to really show off the product. So if they want to really use a good product, a fashionable product, we are not leaving any stone unturned for providing them those kind of products.
Even if the price has to go up so the whole mix of the range could get impacted. We would want to attract more higher product or better product mix. But that doesn’t mean that we will manage our margins through that. We will certainly want to manage our margins largely from our internal efficiency generation through our vendors or in our innovation pieces or in our cost savings that we can do over increasing the quantum of production because our production rate is also going up. Our average order per color which used to be around 3,000 pieces then move to 5,000 pieces.
Now it is going up to 7 to 8,000 pieces and could go up to 10,000 pieces. Now how do we actually bring efficiency in their production lines and in the production fabric production lines or garment production lines? That is what we are all trying to work where that could be transferred to our consumers.
Unidentified Participant
Thank you. Thank you Lalaji. Thank you so much and all the best.
Operator
Thank you ladies and gentlemen. That was the last question. I now hand the floor back to the management for closing comments.
Lalit Agarwal
Thank you so much for being there. We really had a good session. We are very confident at vmart. Our team is super excited. We give a lot of credits to all our stakeholders or our teams who really done a great job in the last quarter. We will continue doing all of that. We will also keep innovating and creating newer ideas and newer thought process and adopting the newer set of digitalization which is coming into the market. So that is what we all are here for. Thank you so much and happy, happy.
Have a good day.
Operator
Thank you very much on behalf of Anurathy Shares and Stock Brokers Ltd. That concludes this conference. Thank you for joining and you may now disconnect your lines. Thank you.