In the age of online shopping, Vishal Mega Mart is one of the top offline-first diversified retailers in the country. From apparel to general merchandise to FMCG products, you get it all under one roof at Vishal Mega Mart Stores.
Recently, Samayat Services LLP, one of the promoters of the retail chain, sold a 13.97% stake in a bulk deal on 27 February 2026.
The offloaded stake was lapped up both by foreign institutional investors and domestic mutual fund houses.
The Government of Singapore bought 2.7% stake, while the Monetary Authority of Singapore bought another 1.56% stake in the retail giant.
HDFC Mutual Fund also bought a significant stake in two transactions of 1.19% and 0.81% in the company.
Let’s try to understand the impact and reasons behind the promoter exiting the stock, and why institutions are loading it up.
Vishal Mega Mart’s Pan-India Expansion: Focus on Tier III Cities
Vishal Mega Mart is expanding its reach to the remote corners of India. With 80 new stores added during the 9 months ended 31 December, 2025, the total store count reached 771.
Out of which 383 stores are in tier III cities, 188 in tier II and 200 in Tier I, mainly targeting the middle and lower-middle income groups.
The management expects the total number of new stores to be added in FY26 to be a little more than 100 (including the 80 stores already opened).
Having said that, management also indicated that there are challenges in opening more stores, especially related to the availability of properties that can be developed into profitable stores.
Another interesting factor is that the retailer is now scaling in the southern part of the country. During the Q3FY26, they opened 12 stores across South India, while 7 in North, 7 in the West, and only 3 in the East.
Amongst South Indian states, Kerala is scaling fastest with 19 operational stores, and 20 more in the pipeline. While management indicated that these recently opened stores are performing well, they do not want to conclude anything yet about the performance.
Another aspect of the retail giant is that they are now focusing on small-format stores. Six such stores were already there, and during Q3FY26, they added four more. All ten are performing well as per relevance and financial outcomes expected by the company.
The company is planning to add 30-40 of such small-format stores in the near-term.
Double-digit SSSG Amidst Slowdown
Vishal Megamart recorded Same-Store Sales Growth (SSSG) of 10.3% for the 9MFY26. This was lower than the 11.9% recorded in the corresponding period last fiscal. The management has attributed this slowdown due to delayed winter and other minor factors.
They also commented that for Q4FY26 and near-term, they are expecting SSSG to be around 10% only.
Management also commented that given the slowdown in the retail space and muted consumer demand, a double digit SSSG is rare amongst its peers and highlighted three factors which are driving this double-digit growth.
First, Vishal Mega Mart is gaining market share continuously from the local Kirana stores as well as other retail stores.
Second, the company has a loyal customer base and the same is now buying more products which is leading to more revenue generation. During Q3FY26, 95% of the revenue was generated from customers enrolled for their Loyalty program.
Finally, there has been price-point upgradation which has increased the average selling price. Customer preferences are evolving and they are moving towards higher price point products.
As of 9MFY26, highest or premium priced products offered around 14% SSSG, while mid price points contributed to 9% SSSG and opening price points contributed to only 6% SSSG.
Scaling Quick Commerce Business
Quick commerce businesses are suffering in India, but Vishal Mega Mart is expanding in this space. They have expanded their quick commerce stores to 723 stores across 485 cities and currently have more than 12 million users, with a 55% YoY growth during Q3FY26.
Perhaps it is the highly systematic approach that is working for the quick commerce stores.
Private Labels: The Secret Behind Rising Profitability
Vishal Mega Mart, being a retailer, sells products from multiple brands like all other retailers. However, the majority of its revenue is generated from its own brands.
During the 9MFY26, 74.5% of the sales came from its own brand, while the third-party brands contributed to just 25.3%. Own brand contribution also rose by 100 basis points during the period.
9MFY26 Performance: PAT Jumps 28% as Margins Expand
Sales grew from ₹8,168.5 crore in 9MFY25 to ₹9,792.2 crore in 9MFY26, logging a 20% YoY growth. Gross profit grew by 20% from ₹2,332.6 crore to ₹2,801 crore during the period; however, the gross profit margin remained the same at 28.6%.
Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) grew from ₹825.2 crore to ₹1,045.7 crore, registering a 26.7% YoY rise.
Finally, we have adjusted Profit after tax (PAT), which increased by 28% YoY from ₹547.9 crore to ₹700.7 crore, and the PAT margin increased from 6.7% to 7.2% during the period.
Coming to the returns, return on capital employed (ROCE) is currently at 13.1%, which is slightly lower than the industry median of 13.9%.
Given the solid numbers, robust expansions, and plans to scale its own brands, it may be safe to conclude that the only reason the promoters are selling is to encash part of their holdings for other reasons..
Having said that, the stock has come in for some selling from the highs it hit post listing. While there could be multiple factors at play, one important factor could be the super premium valuation at which the company traded in the markets.
Valuation
The stock is currently trading at a price/earnings (PE) of 62.4x, which is way higher than the industry median of 36.7x. However, the price/earnings to growth (PEG) ratio is at par with the industry median at 1.38x, suggesting the stock is fairly valued if adjusted for growth.
1-Year Share Price Chart of Vishal Mega Mart
Final Thoughts
Vishal Mega Mart is scaling operations and increasing revenue and profits. In such a scenario, the promoter’s exit and entry of the foreign and domestic institutional players perhaps indicate long-term conviction of the institutional investors and promoters booking profits.
However, as the business is evolving , it would be wise to add the stock to your watchlist and keep an eye on the future performance and further potential changes in the ownership structure of the company.
Disclaimer:
We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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