Vedant Fashion’s (VFL) 2Q performance was impacted by GST-linked dispatch disruptions, creating a ~6% delta between primary and secondary sales. owever, the company has been struggling to revive growth sustainably, with its 1HFY26 revenue tracking 5% below 1HFY23 levels. Margins contracted ~270bp/340bp YoY at the gross/EBITDA level, reflecting a lower wedding mix and continued operating deleverage. VFL continued to consolidate its retail footprint in order to improve overall quality. The company closed eight net domestic EBOs and seven SIS for a net closure of 13 stores during 2Q. Management indicated that further store consolidation is likely in 2HFY26.
OutlookWe await evidence of sustainable growth rebounding for VFL before we turn constructive. Reiterate Neutral with a revised TP of INR725 (earlier INR785), premised on 40x Dec’27E P/E.
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