Target: ₹890
CMP: ₹734.70
Vedant Fashions Ltd (VFL), a prominent player in India’s celebration wear sector, primarily operates under its flagship brand, Manyavar. The company’s portfolio includes five brands — Manyavar, Mohey, Twamev, Manthan, and Mebaz — catering to ethnic wear for men, women, and children. VFL manages 662 exclusive brand outlets (EBOs) across India and an additional 16 EBOs in 12 international cities, covering approximately 17.9 lakh square feet, with a presence in 26 states and countries including the US, UAE, UK, and Canada.
In the first quarter of FY26, VFL reported a revenue increase of about 17 percent year-on-year, reaching ₹281 crore, fueled by a resurgence in demand for wedding and festival attire, ongoing store expansions, a 23 percent rise in customer traction, and a 17.6 percent increase in same-store sales.
The company maintained its strong performance in the industry, achieving a gross margin of 66.9 percent. EBITDA rose approximately 7 percent to ₹121 crore, although EBITDA margins contracted by about 410 basis points to 43 percent for Q1FY26, attributed to increased marketing expenditures (5.6 percent in Q1FY26 compared to 2.3 percent in Q1FY25) and other costs. Marketing expenses are anticipated to stabilize over the year, which should help preserve healthy margins. Net profitability remained robust, with a profit after tax (PAT) margin of around 25 percent, resulting in a PAT of ₹70 crore, reflecting a 12.4 percent year-on-year growth.
VFL is focusing on enhancing portfolio quality over aggressive expansion, strategically consolidating underperforming stores, managing rental costs selectively, and targeting an 8-10 percent increase in store count in FY26E. However, net additions may be muted due to planned closures.
Market consensus indicates the stock trades at 40 times one-year forward P/E, which is considered attractive compared to its three-year average P/E of 51.3 times. VFL’s strong brand equity, consistent margin leadership, expanding global presence, and tech-driven omni-channel strategy collectively bolster its position within the premium ethnic wear segment.
Published on September 16, 2025
