Financial Performance Summary

Q4 FY26 Results (Quarter Ended March 31, 2026)

  • Revenue from operations: ₹751 crores (vs. ₹695 crores in Q4 FY25), representing 8.1% YoY growth
  • EBITDA: ₹124 crores, with 10.6% YoY growth
  • EBITDA margin: 16.5% (vs. 16.1% in Q4 FY25)
  • Profit after tax (PAT): ₹68 crores (vs. ₹56 crores in Q4 FY25), representing 20.4% YoY growth
  • PAT margin: 9.0% (expanded by 92 basis points YoY)

Full Year FY26 Results (Year Ended March 31, 2026)

  • Revenue from operations: ₹2,702 crores (vs. ₹2,790 crores in FY25)
  • EBITDA: ₹374 crores
  • EBITDA margin: 13.8%
  • Profit after tax (PAT): ₹179 crores (vs. ₹170 crores in FY25), representing 5.3% YoY growth
  • PAT margin: 6.6% (vs. 6.1% in FY25)

Operational Highlights and Business Updates

Growth Drivers

  • Strong volume growth in Q4 driven by recovery in general trade channel
  • Continued growth in retail, e-commerce, and large-format retail channels
  • GST reduction from 12% to 5% improved competitiveness of branded players
  • Distributor count increased from 550 to 630 during the quarter

Input Cost Inflation and Price Actions

  • Company facing 15-20% overall cost inflation comprising:
  • Raw material price increases (some materials doubled from ₹120 to ₹240-250)
  • Labor cost increases: 25-30% in Haryana, 10-15% in other states
  • Implemented 15-18% price increases across product categories in calibrated manner
  • Price hikes intended to fully offset cost inflation and protect margins

Capacity and Expansion Plans

  • FY26 capex: ₹130 crores
  • FY27 capex guidance: ₹180-200 crores
  • Capex allocation: molds, administrative office, machine upgrades (no major capacity expansion)
  • Plan to open 100 new Exclusive Brand Outlets (EBOs) in FY27
  • Current EBO count: 400+ stores
  • New store investment: ₹30-35 lakhs per store

Channel Strategy

  • General trade recovery driving Q4 performance
  • Expanding retail footprint with new EBO format featuring exclusive articles
  • E-commerce presence includes platforms like Amazon and Flipkart
  • Recently entered quick commerce platforms (Blinkit and Zepto)
  • Export operations to 37 countries

Brand Performance and Product Mix

  • Brand contribution: Sparx (40%), Hawaii (25%), Flite (35%)
  • Gender segmentation: Men's (70%), Women's (25%), Kids (5%)
  • Focus on premiumization through sneakers and lifestyle products
  • Expanding price points: from ₹999-₹1,700 to ₹2,500-₹2,800 MRP
  • Targeting improved contribution from women's and kids' categories

Market Reach

  • Supplying to 70,000 retailers/MBO outlets
  • 420+ company-owned EBOs
  • Geographic expansion planned beyond North and East to West and eventually South

Management Guidance and Outlook

Near-term Caution

  • Uncertain external environment due to geopolitical situation
  • Inflationary pressures affecting consumer sentiment
  • Monitoring impact of price hikes on demand and consumption patterns

Financial Targets

  • Target to improve operating margin by 1%+ over FY26's 13.8%
  • Volume growth target: 4-5% annually
  • ASP improvement through premiumization journey

Growth Initiatives

  • 100 new EBO openings with redesigned format
  • Enhanced digital marketing strategy shifting from TV to digital platforms
  • Advertisement spend maintained at 4-5% of net sales
  • Focus on athleisure range and premium product offerings

Conference Call Participants

Management Team:

  • Mr. Gaurav Kumaar Dua - Co-CEO and Whole Time Director
  • Mr. Ritesh Dua - Co-CEO
  • Mr. Sushil Batra - Executive Director
  • Mr. Ankit Jain - Company Secretary & Compliance Officer
  • Mr. Ramesh Kumar Dua - Chairman and MD (mentioned but limited participation)

Moderator: Mr. Sameer Gupta from IIFL Securities Limited

Analysts Participating: Representatives from IIFL Securities, IDBI Capital, Motilal Oswal, SMIFS, and Sequent Investments.