Cantabil Retail India hosted a conference call on February 11, 2025. In the conference call, the company was represented by Mr Vijay Bansal-Managing Director, Mr Deepak Bansal –Whole time director and Mr Shivendra Nigam-CFO.

Key takeaways of the call

The company plans to capitalize on the growth opportunities by focusing on increasing SSG (Same stores sales), increasing retail presence and improving efficiencies.

Q3FY2025:

Revenue stood at Rs 222.9 crore in QFY2025 as against Rs 174.5 crore in Q3FY2024. A growth of 28% YoY.

Gross margins increased to 61% in Q3FY2025 mainly due to increase in average selling price by 1.5%.

EBITDA stood at Rs 72.5 crore in Q3FY2025 as against Rs 53.9 crore in Q3FY2024.

EBITDA margin was at 32.5% as against 30.9% in Q3FY2024.

Net profit stood at Rs  6.6 crore in Q2FY2025 as against Rs 7.5 crore.

Depreciation cost stood at Rs 34.4 crore for the quarter.

9MFY2025

Revenue stood at Rs 502.0 crore in 9MFY2025 as against Rs 421.3 crore in 9MFY2024. A growth of 19% YoY.

EBITDA stood at Rs 146.4 crore in 9MFY2025 as against Rs 117.9 crore in 9MFY2024.

EBITDA margin was at 29.2% as against 28.0% in 9MFY2024.

Net profit stood at Rs  52.3 crore in 9MFY2025 as against Rs 43.9 crore in 9MFY2024.

Stores: The company opened 43 new stores in 9MFY2025 taking the total store count to 576 stores as on Dec 31,2024. Of the total stores 443 stores are company operated and the balance are franchisee operated. The total retail area stood at 7.39 lakh sq ft as at Dec 31, 2024. Most of the stores opened are large format stores.

In Q3FY2025, the company opened 26 new stores of which 7 were mens stores, 10 were mens and ladies, 2 were ladies and kids and 6 were large family stores.

Similarly for nine months FY2025 of the total 43 stores 17 were men stores, 20 were men’s and ladies, 9 were ladies and kids and the balance were large format stores.

The company plans to open 28-29 stores in Q4FY2025 and plans to open 70-80 stores every year for next 2 years.

CAPEX required to open new stores is around Rs 20 crore per year.

Average payback period for company owned company operated store is 2.5 years and 3.5 years for franchisee owned franchisee operated.

SSG: Same store sales growth stood at 17.7% in Q3FY2025. The company targets SSG in the range of 5-6% going forward.

Healthy SSG was on account of larger wedding dates along with new collection in Q3FY2025.

Inventory: The inventory levels increased as on December 31,2024 due to winter season where the average selling price per winter product is higher.

Inventory as on December 31,2025 stood at Rs 250 crore.Inventory days stood at 120 days and the company expects inventory days to reduce to 115 days by march 31,2025.

CAPEX: The company plans to incur CAPEX of Rs 35 crore. Of this around Rs 20 crore will be towards setting up of  stores and Rs 15 crore towards ware house and office premises. The same will be funded through internal accruals.

Operating Cash flow: Operating cash flow for 9MFY2025 was Rs 90 crore+ after netting of working capital.

Revenue contribution:

In Q3 Fy2025, 81% of the revenues were from men’s category, 12% was from ladies category and 4% each from kids and accessories.

Inventory provisioning: The company does not do any provisioning for inventory older upto 1.5 years. From 1.5 to 3 years it does provisioning of 10% and for more than 3 years it does provisioning of 50%.

Outlook:

Consumer sentiments are good and the winter and wedding season are also good.

The company has retained revenue growth guidance in the range of 18-20% in FY2025 of which 5-6% is from same sales stores growth and the balance from new stores.

The company has guided for revenue growth in the range of 18-20% YoY and EBITDA margin of 29-30% for the next 2 years.

Dividend: The board has declared interim dividend of Rs 0. 50 per equity share @ 25% on a face value of Rs. 2/- per share for the FY 2024-25.

Management Commentary:

Commenting on the results, Mr. Vijay Bansal Chairman & Managing Director of Cantabil Retail India said : “We are pleased to report a historical quarterly performance for Q3FY25 setting various benchmarks. The record SSG of 17.7% achieved during the quarter underscores the robustness of our brand. The achievement of a historical high in quarterly revenue and Profit After Tax (PAT), despite a challenging market environment, is a testament to our customer-centric approach, highlights the brand''s competitive advantage and its potential for sustained growth and market leadership.

We are focused on executing a multi-pronged strategy aimed at augmenting customer convenience, strengthening our brand proposition, and driving business growth through expanded market presence and diversified offerings.

The government''s strategy to boost consumer demand through sustainable measures, including direct tax cuts, is anticipated to produce desirable results. The overall revival in consumer sentiment is expected to disproportionately benefit companies that have invested in building strong brand equity, nurturing customer relationships, and establishing a solid market presence. We are committed to shifting gears, capitalizing on emerging opportunities, and solidifying our position as a leader in the fashion apparel sector.

On the expansion front, the Company accelerated its store expansion strategy by opening 43 stores (net) during 9M FY25.”