Q1 2027 Cantabil Retail India Ltd Earnings Call Transcript
Key Points
- Revenue grew 13% YoY to INR178.8 crores in Q1 FY27, with EBITDA up 21% and EBITDA margin expanding to 33.2%.
- Same-store sales growth remained positive at 4.04%, indicating strong consumer traction and improving store productivity.
- The company maintains a strong five-year track record with revenue CAGR of 22% and PAT CAGR of 26%.
- Management is confident in achieving the INR1,000 crore revenue target for FY27, supported by aggressive store expansion (28-30 stores planned in Q2) and a target of 5% SSSG.
- Gross margin expansion is expected to sustain, with management guiding to maintain an average annual gross margin of 50%.
- The company has successfully recovered INR10 crores of the INR25 crore loan given to a real estate developer, with the remaining INR15 crores expected by February.
- Inventory management is improving, with inventory days reduced to 114 days in FY26 from 121 days in FY25, and a target of 110 days.
- The company is focusing on larger store formats (average 1,810 sq ft in Q1) to drive higher sales per store and improve productivity.
- Online sales are planned to increase to 8% of total revenue in FY27, up from 6% in FY26, despite a temporary dip in Q1 due to software integration.
- Management is open to revisiting its loyalty program strategy and increasing marketing spend, particularly in digital, to drive growth.
- PAT margin slightly declined to 9.1% in Q1 FY27 from 9.2% in Q1 FY26, despite revenue growth.
- Raw material prices have increased by around 10-15%, and the company has had to pass on price increases to customers, which could impact demand.
- Volume growth has been sluggish at around 7-8%, with management expecting no significant improvement in Q2 due to a late Diwali and Raksha Bandhan.
- The company's online sales contribution dipped to 5% in Q1 due to software integration issues, below the annual target of 8%.
- The company has a high dependence on new store openings to meet its revenue target, as Q1 growth of 13% was below the implied run-rate needed for INR1,000 crore.
- Franchise store count has declined from 178 in FY23 to 130 currently, indicating challenges in expanding the franchise model, especially for larger stores.
- The company's return on capital employed (ROCE) has been impacted by high inventory levels, though management is working to optimize inventory days.
- The loan to a real estate developer, though partially recovered, raised concerns about capital allocation, and management has not fully ruled out similar transactions in the future.
- The company faces competitive pressure from new-age fast fashion brands, which may impact its market share, especially among younger customers.
- Management has not committed to a loyalty program, which could limit customer retention and repeat sales growth.
Ladies and Gentlemen, Good day and welcome to Cantabil Retail India Limited Q1 FY27 Conference Call.
(Operator Instructions)
I now hand the conference to Mr. Vijay Bansal, CMT Cantabil Retail India Limited. Thank you and over to you, sir.
firstName,lastName,personPermId,companyName,companyPermId,position,positionId,eventId
"Chindanandan","","","","","Analyst","","138030643362"Good afternoon, everyone. On behalf of Cantabil Retail India Limited, I extend a warm welcome to all participants joining us for the Q1 FY â27 earnings conference call. Joining me today are Mr. Deepak Bansal, Whole-Time Director, Mr. Basant Goyal, Whole-Time Director, Mr. Shivendra Nigam, Chief Financial Officer, Ms. Poonam Chahal, Company Secretary, and our investor relations advisors from Marathen Capital. We trust you had the opportunity to review our Q1 FY â27 results. Our earnings presentation and financial statements are available on the stock exchanges and the
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