V-Mart Retail Ltd shares were up more than 5% on Friday and hit a new 52-week high of 3,284.95. Earlier this week, the value fashion retailer said in its June-quarter update that total revenue increased by about 16% year-on-year to 786 crore.
Since then, V-Mart’s shares have gained almost 12%. Note that last quarter’s growth was on a high base as revenue had increased by 15.4% in the June 2023 quarter.
Even so, one factor that investors are tracking keenly is the turnaround in its digital marketplace Limeroad. Last quarter Limeroad’s revenue – which comprises the commission it charges sellers on its net merchandising value – stood at 12 crore, down 29% year-on-year. “This is a cause for concern and would raise questions around the path to profitable growth in the long term for Limeroad," said a report by Nirmal Bang Institutional Equities.
Cutting costs, and losses V-Mart acquired Limeroad in FY23 to push its omnichannel strategy and integrated the business into its operations on 11 November 2022. V-Mart has been trying to reduce losses from Limeroad by cutting expenses. Limeroad’s Ebitda loss narrowed for the third straight quarter in January-March.
Ebitda, or earnings before interest, tax, interest and depreciation, is a key measure of profitability. Limeroad’s Ebitda loss in FY24 stood at 71.6 crore and V-Mart expects the FY25 loss to be 40-50% of that.
This should have a positive impact on the overall margin in FY25. Also read: The company has also been cl.
