Financial Performance Q4 FY26

  • Revenue grew 6% year-on-year to INR162 crores
  • Gross profit increased 15% YoY to INR96 crores
  • Gross profit margin stood at 58.8% for the quarter
  • EBITDA remained flat year-on-year at INR42 crores
  • EBITDA margin was 25.6% (flat YoY)
  • Profit after tax grew 11% to INR15.3 crores
  • PAT margin was 9.4%, an increase of 40 basis points

Financial Performance Full Year FY26

  • Revenue remained flat year-on-year at INR592 crores
  • Gross profit margin stood at 58.4%, an increase of 110 basis points

Strategic Updates and Operational Highlights

  • The company is executing its Mufti 2.0 transformation journey focused on premium store formats, elevated merchandise, and digital storytelling
  • During Q4 FY26: opened 7 new stores and closed 24 underperforming stores
  • Website business grew approximately 75% year-on-year in FY26
  • Advertising spend in Q4 was approximately INR13 crores, representing 8% of revenue
  • Muftisphere loyalty program has 2.5 million members, contributing 35-40% of EBO revenue with average spend of INR5,200 per ticket
  • As of the call date, the company had 31 new identity stores (14 renovated, 16 new, 1 relocated)

Forward Guidance and Outlook

  • FY27 store count expected to remain flat: planning to open ~20 new stores and close ~20 underperforming stores
  • Targeting mid-single-digit growth for FY27 given macroeconomic uncertainty
  • Advertising and branding investments expected to increase to 9-10% of revenues in FY27
  • EBITDA margin expected to be around 23-24% in FY27 due to increased marketing spend
  • Gross margins expected to remain in the range of 56-58%
  • Capex per new store: INR40-45 lakhs depending on location (high street vs mall)

Business Model and Working Capital

  • The company operates on a risk absorption model supporting partners with fresher merchandise and inventory flexibility
  • This results in structurally higher receivable and inventory days compared to peers
  • Debtor days currently at 140-146 days, expected to remain in this range with minor fluctuations
  • No material write-offs historically on account of bad debts or inventory

Market Conditions and Challenges

  • Consumer sentiment remained cautious throughout FY26 with uneven discretionary spending
  • Near-term demand visibility uncertain due to geopolitical tensions and inflationary pressures globally
  • Input costs are at "astronomical high" levels according to suppliers
  • The company is being cautious about expansion in Tier 3 markets due to changing post-COVID consumer behavior

Capital Allocation

  • Dividend of INR2 announced for the year

Management Participants

  • Mr. Kamal Khushlani - Chairman and Managing Director
  • Mr. Rasik Mittal - Chief Financial Officer
  • Strategic Growth Advisors - Investor Relations Advisors