Cantabil Retail India Limited held its Q1 FY27 earnings conference call on August 6, 2026, at 02:30 PM IST. The call was led by Chairman and Managing Director Mr. Vijay Bansal, with other key management participants including Whole-Time Directors Mr. Deepak Bansal and Mr. Basant Goyal, Chief Financial Officer Mr. Shivendra Nigam, and Company Secretary Ms. Poonam Chahal.

Financial Performance (Standalone)

  • Revenue from Operations: Grew by 13% year-on-year (YoY) to ₹178.8 crores in Q1 FY27 from ₹158.7 crores in Q1 FY26.
  • EBITDA: Increased by 21% YoY to ₹59.4 crores from ₹49.0 crores. EBITDA margin improved to 33.2% from 30.8%.
  • Profit After Tax (PAT): Grew by 11% YoY to ₹16.3 crores from ₹14.7 crores. PAT margin was 9.1%, slightly down from 9.2%.

Operational Highlights

  • Store Network: The company operated 667 stores across India with a total retail area of 9.42 lakh square feet.
  • Same-Store Sales Growth (SSG): Was positive at 4.04% for Q1 FY27.
  • Long-Term Financial Performance: Over the past five years, the company achieved a revenue CAGR of 22% and a PAT CAGR of 26%.

Management Commentary and Guidance

  • FY27 Revenue Target: Management reiterated its full-year revenue target of ₹1,000 crores.
  • SSG Target: The annual SSG target is approximately 5%.
  • Store Expansion: Planned store openings for Q2 FY27 are 28-30 stores. The average store size is increasing, with Q1 openings averaging 1,810 sq. ft. The company aims for an overall average store size of ~1,500 sq. ft by FY27-end.
  • Gross Margin: Was ~60% for the quarter. Management targets maintaining an annual average gross margin of 60% and expects it to be sustainable.
  • Online Sales Contribution: Was 5% in Q1 FY27, a dip from the previous year due to a software integration process. The full-year target for online sales contribution is 8%.
  • Volume Growth & Seasonality: Management expects stronger volume growth and performance in the second half (H2) of FY27, particularly in Q3, aided by a later Diwali (around November 10, 2026) and the winter season.

Key Q&A Highlights

  • Gross Margin Expansion: Attributed to a combination of product mix changes and inflation correction. Management is confident in sustaining the ~60% annual target.
  • Raw Material (RM) Inflation: Prices have increased by ~10% YoY. This cost has been passed on to customers with no impact on sales. Management expects further correction in RM prices.
  • Minimum Wage Hike Impact: A ~30-35% minimum wage hike in Haryana and UP impacted employee costs in Q1. This impact is now factored in and will continue monthly, with no further significant hikes expected.
  • Loan to Real Estate Developer: A ₹25 crore loan given in March 2026 was partially recalled. ₹10 crores was received back in Q1 FY27. The remaining ₹15 crores is due to be returned by February 2027. Management stated such transactions would not be repeated.
  • Inventory Management: Finished goods inventory days improved from 121 days in FY25 to 114 days in FY26. The company is targeting a further reduction to ~110 days but considers 110-120 days ideal for its operations.
  • Working Capital Cycle: Is approximately 100-105 days.
  • Franchisee (FOCO) Model: The number of franchisee stores has decreased from 178 in FY23 to 130 currently. This is attributed to the strategic shift towards opening larger-format stores, which require higher investment that franchisees in Tier 3 towns are less comfortable with.
  • Marketing Spend & Growth Levers: Marketing spend has historically been ~2% of revenue. Management plans to increase spending on digital marketing and advertisements. Growth is expected to be driven by new store openings, SSG, and online category growth.
  • Return on Capital Employed (ROCE): Was stated to be approximately 40%.

Other Business Metrics

  • Average Selling Price (ASP): Is approximately ₹1,100, with no immediate plans for premiumization.
  • Customer Loyalty: Repeat customer rate is ~50%. The company does not currently have a point-based loyalty program but has the capability to implement one.
  • Store Closures: The company closes 20-25 underperforming stores annually, which is considered a normal churn rate.