Are V2 Retail Ltd latest results good or bad?

V2 Retail Ltd's latest financial results for the quarter ended December 2025 reflect a significant operational turnaround, showcasing strong growth and improved profitability metrics. The company reported a net profit of ₹102.07 crores, which marks a notable year-on-year growth of 99.39%. This is a substantial recovery from a loss-making position just a year prior, indicating effective management strategies and a favorable market environment. Revenue for the same period reached ₹929.18 crores, representing a year-on-year increase of 57.24%. This growth is attributed to enhanced store productivity and strategic inventory management, particularly during the festive season, which typically boosts sales in the retail sector. The operating profit margin also exhibited a robust performance, reaching 18.69%, a significant improvement from previous quarters, driven by better operational efficiencies and a favorable product mix. The company's ability to generate strong cash flow from operations, amounting to ₹222 crores, further underscores its operational strength, as this figure exceeds its profit before tax of ₹98 crores. Additionally, the interest coverage ratio improved to 7.91 times, indicating a solid capacity to service its debt obligations, despite a high debt-to-equity ratio of 3.35 times. However, while V2 Retail's operational metrics show positive trends, its return ratios remain a concern. The average return on equity (ROE) is reported at 8.20%, which is below the typical expectations for retail businesses, suggesting that while the company is growing, it has historically struggled with capital efficiency. The company also experienced an adjustment in its evaluation, reflecting the market's response to its financial performance and growth prospects. Overall, V2 Retail's latest results illustrate a strong recovery and operational improvement, but challenges related to valuation and capital efficiency warrant close monitoring as the company navigates its growth trajectory in a competitive retail landscape.