Target: ₹890
CMP: ₹734.70
Vedant Fashions Ltd (VFL) is a leading player in India’s celebration wear market, anchored by flagship brand Manyavar. Through its five brands — Manyavar, Mohey, Twamev, Manthan and Mebaz — the company offers ethnic wear for men, women and children. VFL operates 662 exclusive brand outlets (EBOs) across India and 16 EBOs in 12 global cities, spanning about 17.9 lakh sq ft, with a presence across 26 States and in the US, UAE, UK and Canada.
Revenue grew about 17 per cent year-on-year (y-o-y) to ₹281 crore in Q1FY26, driven by a revival in wedding and festival wear demand, ongoing store expansions, strong customer traction (up 23 per cent) and same-store sales growth (up 17.6 per cent).
VFL sustained its industry-leading performance, reporting a 66.9 per cent gross margin. EBITDA grew about 7 per cent to ₹121 crore, while EBITDA margins contracted about 410 bps to 43 per cent in Q1FY26 due to a rise in marketing spend (5.6 per cent in Q1FY26 vs 2.3 per cent in Q1FY25) and other expenses. Marketing spend is expected to normalise over the year, which should help maintain healthy margins. Net profitability remained strong, with a PAT margin of around 25 per cent and PAT of ₹70 crore, a 12.4 per cent y-o-y growth.
VFL is prioritising portfolio quality over aggressive expansion, consolidating weaker stores, managing rental costs selectively and aiming for 8-10 per cent store additions in FY26E, with muted net additions due to strategic closures.
As per market consensus, the stock currently trades at 40x one-year forward P/E, which is attractive compared to its three-year average P/E of 51.3x. VFL’s strong brand equity, consistent margin leadership, expanding global footprint and tech-driven omni-channel strategy collectively reinforce its position in the premium ethnic wear segment.
Published on September 16, 2025
