Q1 2027 Renaissance Global Ltd Earnings Call Transcript
Key Points
- Revenue grew 30% year-over-year to ₹690 crore, with broad-based growth across brands and customer segments.
- Profit after tax surged 288% year-over-year to ₹25.6 crore, reflecting strong operational performance and improved profitability.
- Own brand EBITDA margin improved to 11.5% from 10% in Q1 FY26, driven by scaling of high-margin direct-to-consumer brands.
- Working capital days reduced by 33 days year-over-year to 220 days, with a target of ₹250 crore in working capital improvements for FY27.
- Jean Dusset store expansion is on track with three stores operational and four more planned in FY27, with payback period of less than one year per store.
- With Clarity brand is growing at ~20% with a revenue run rate of ₹220 crore, benefiting from a digital-first model and high gross margins.
- Management expects bottom-line growth of over 30% for FY27, driven by exiting low-margin businesses and improving capital efficiency.
- Company is targeting ₹1,000 crore in direct-to-consumer revenue by FY29 with at least 15% operating margin from this segment.
- Potential tariff refunds are being pursued, which could provide additional upside to earnings.
- Strong cash flow generation expected, with over ₹300 crore from operations in FY27, enabling potential brand acquisitions.
- Revenue growth may be muted in coming quarters due to planned exit of certain customer brand lines, reducing annual revenue by ₹300-400 crore.
- EBITDA margin dipped to 7.2% from 7.7% year-over-year, partly due to exit costs and strategic rationalization.
- Foreign exchange loss of ~₹13 crore in the quarter due to currency depreciation, impacting profitability.
- Licensed brand segment has seen declining revenue and margins over recent years, with profitability down to 13% from 15.5% in FY24.
- Management is not yet ready to disclose tariff refund amounts, creating uncertainty for investors.
- Finance costs remain flat despite working capital improvements, with benefits expected only by end of FY27.
- The company is rationalizing its licensed brand portfolio, exiting licenses like NFL, Netflix, and Harry Potter, which may limit growth in that segment.
- Gross margin pressure is expected in the near term due to exit costs and inventory sell-downs.
- Jean Dusset store profitability is based on limited data, with only a few months of history, posing execution risk.
- No new brand acquisitions are imminent, and the company's ability to grow D2C revenue to ₹1,000 crore by FY29 depends on successful execution of store expansion and brand scaling.
Ladies and gentlemen, good day and welcome to the Renaissance Global Limited discussion on Q1 FY27 earnings conference call.
(Operator Instructions)
I now hand the conference over to Nishweta from Central Broking.
Thank you and over to you.
Thank you Ananya. Good day everyone and thank you for joining us on the Renaissance Global Q1 FY27 Earnings Conference Call. We have with us Mr. Sumit Shah, Chairman and Global CEO, Mr. Darshil Shah, Managing Director, and Mr. Tabish Bhandeli, Manager of Corporate Strategy.
We would like to begin the call with a brief opening remarks from the management, followed by a question-and-answer session. Now, I would like to invite Mr. Sumit Shah to make his opening remarks. Over to you, sir.
Thank you very much.
Good afternoon, everyone, and thank you for joining us for Renaissance Global's Q1 FY27 earnings call.
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