V-Mart Retail\u2019s (VMart) Q4FY19 revenue growth of 15.9% y-o-y came in line with estimate. However, Ebitda and adjusted PAT decline of 23% and 60% y-o-y, respectively, belied it. SSSG grew mere 3.5% y-o-y owing to softer growth in February and March. FY19 was characterised by multiple strategic initiatives \u2013 strengthening warehousing & supply chain capabilities, expanding managerial bandwidth, investments in technology, etc. This led to Q4FY19 and FY19 Ebitda margin falling 260bps and 150bps y-o-y, respectively. We expect these costs to remain elevated in FY20 as well. Pace of store expansion remained healthy \u2013 added 14\/44 stores in Q4FY19 VMart provided `73.5 mn towards IL&FS exposure (100% provided now). While attractive opportunity landscape and company-specific moats remain intact, factoring the heightened competition and cost, we revise down FY20\/21E Ebitda 11% Retain \u2018hold\u2019 with revised TP of `2,503 (earlier `2,700). While FY19 SSSG came at 3.7% y-o-y on a base of 9% y-o-y, volume grew 8% y-o-y, sustaining the deflationary trend. Ebitda margin, however, contracted 260 bps y-o-y due to a sharp jump in staff cost and other expenses \u2013 higher promotions, longer EOSS period, higher manpower cost and ESOPs cost of `30.7 mn. With VMart now present in 17 states (14 in FY18), the potential for deepening reach has expanded \u2013 we estimate retail space addition of 25% plus in FY20. Seeing increasing competition from regional as well as national players (Reliance Trends, Zudio, Pantaloons, etc), private labels\u2019 share will be 65-68%. FY20 SSSG guidance of 7-8%. The company will focus on fortifying position in existing geographies. Management expects slight improvement in FY20 working capital level. VMart\u2019s strategy of increasing clusters coupled with healthy store additions is likely to drive growth and sustain MS gains.