Brandman Retail Ltd — Q4 FY26 earnings call

Call held 20 May 2026

Management summary

Brandman Retail reported strong financial performance for FY26, with significant growth in PAT and EBITDA margins, driven by a top line of ₹162 Cr. The company is aggressively expanding its retail footprint, planning 22 new stores this year and aiming for 50 Sneaker stores in five years, funded by its recent IPO. While Q4 margins were impacted by seasonal discounts and a strategic shift towards lower-margin retail, management expressed confidence in long-term growth and margin sustainability.

Highlights

  • PAT grew from ₹8 Cr to ₹25 Cr in FY26, a CAGR of 77%.

  • EBITDA margin inflected from 8.7% to 22% in FY26, with a CAGR of 84.46%.

  • Top line reached ₹162 Cr with a PAT margin of 15.55% in FY26.

  • Company plans aggressive retail expansion, targeting 50 Sneaker stores in 5 years and 22 new stores this year, funded by IPO money.

  • Successfully listed on NSE Emerge on February 11, 2026, with IPO oversubscribed by 114X and a listing premium of approximately 4%.

Concerns

  • Q4 FY26 gross margin was lower at 26% due to end-of-season sales and discounts, compared to higher margins in previous quarters.

  • Shift from higher EBITDA B2B segment (26%) to lower EBITDA retail/e-commerce segment (18-20%) could pressure overall margins in the short term.

  • Rupee depreciation could impact margins on imported brands (Anta, Saucony, Wilson) which constitute 20-30% of business.

Key financials

3 periods

Headline

  • Revenue
    ₹162 Cr
  • PAT
    ₹25 Cr
  • EBITDA Margin
    22%
  • PAT Margin
    15.6%

Q3 FY26

  • Sales
    ₹48.59 Cr
  • Operating Profit
    ₹20.68 Cr

Q4 FY26

  • Sales
    ₹67 Cr
  • Operating Profit
    ₹7.63 Cr
  • Gross Margin
    26%

What they filed

Q1 FY27: revenue up 60.1%, net profit up 16.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY25Q1 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue28 12 49 67 45 +60%
EBITDA2 -1 15 7 4 +90%
Net profit4 0 15 6 5 +16%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • FY24 Revenue Breakdown
    22% Retail7.6% E-commerce70.4% B2B Business

Capital allocation

high confidence
  • Liquidity Liquidity disclosed IPO money will be used for opening 22 new stores.
    Yes, it is with the IPO money, ma'am.

Guidance & targets

Retail Expansion

  • Number of Sneaker stores Retail Expansion · next 5 years · High confidence 50 stores
    Yeah, we aspire to have 50 stores of Sneaker in the next 5 years.

    — Mr. Arun Malhotra

  • Number of new stores Retail Expansion · this year · High confidence 22 stores
    Out of those 22 stores, there are going to be: 5 stores of Anta, 2 stores of Wilson, 5 stores of Saucony, 7 stores of Sneaker And the rest will be New Balance stores.

    — Mr. Arun Malhotra

Revenue

  • Top-line company value Revenue · High confidence ₹1,000 crores
    We aspire to be a thousand-crore top-line company, and that is the inspiration that I am working towards.

    — Mr. Arun Malhotra

Channel Mix

  • Online and Retail contribution to top line and bottom line Channel Mix · moving forward · Medium confidence 75 to 85%
    So the online play with the retail play would be constituting at least 75 to 85% of our top line and bottom line as we move forward.

    — Mr. Arun Malhotra

PAT Margin

  • Sustainability of PAT margin PAT Margin · next 2 to 3 years · High confidence 15.5%
    I would say that, yes, with 1 or 2% here and there. I believe the PAT margin was 15.5%.

    — Mr. Arun Malhotra

Company Size

  • Business company value Company Size · High confidence ₹500 Cr
    Now we are all focusing on how to make it a ₹500 Cr business company.

    — Mr. Devendra Negi

What to watch in Q1 FY27

Progress on 22 new store openings

next quarter
Current 22 new stores planned
Target Number of stores opened and their initial performance

Why it matters

The aggressive retail expansion is a key growth driver, and its execution and initial performance will indicate future revenue and margin trajectory.

We are opening up stores of Anta, Wilson, and Saucony, which will drive our D2C, direct-to-consumer, retail business.

Risks & concerns

  • Rupee depreciation impact on imported goods

    medium

    Rupee depreciation could put pressure on margins for imported brands (Anta, Saucony, Wilson) which constitute 20-30% of the business, though management states they have enough buffer.

    Analyst acknowledged

  • Margin pressure from aggressive retail expansion

    medium

    New stores take time to mature and contribute to margins, potentially pressuring overall profitability in the short term, though management expects stores to break even within 2 years.

    Analyst acknowledged

  • Shift to lower EBITDA retail segment

    medium

    The strategic shift from a B2B segment with 26% EBITDA to retail/e-commerce with 18-20% EBITDA could dilute overall company margins.

    Analyst acknowledged

Q&A highlights

7 direct
Impact of Rupee depreciation on margins and price pass-through Direct
As regards the Indian rupee is concerned, for now, we have enough buffer in our margins to be able to absorb this and not pass it on to our consumer. We plan to talk to the brands as we move forward, so that they can also support us in case this becomes a burden for us.

Addresses a key macro risk for companies relying on imports, clarifying the company's strategy to absorb costs and engage with brands.

Asked by Mr. Ganesh Radhakrishnan

Sustainability of margins with aggressive retail expansion Direct
Our record says that within 2 years, we break even. There is a track record of that. So it is very important for us to be able to be in the right store, the right location, and right adjacencies.

Provides confidence in the financial viability of new stores despite initial cost pressures, citing a proven track record.

Asked by Mr. Ganesh Radhakrishnan

Abnormal operating profit in Q3 FY26 due to exports Direct
Actually, the quarter which you are talking about is where we have sold maximum of our sales portion to export, and not to our retail sales. That is why you are seeing a margin jump in this particular quarter.

Clarifies the reason for a seemingly high operating profit in Q3, attributing it to higher-margin export sales, which was not immediately clear from the P&L report.

Asked by Mr. Ganesh Radhakrishnan

Shift from higher EBITDA B2B segment to lower EBITDA retail segment Direct
Because, Mr. Gandhi, that is a business that is based on Season-1 and Season-2, and which we are not so keen on doing. We are keener on having our retail presence Pan-India. We believe in the India story.

Explains the strategic rationale behind prioritizing retail expansion despite B2B's higher EBITDA margins, emphasizing the long-term vision for direct consumer engagement and brand building.

Asked by Mr. Hardik Gandhi

Margin profile for different brands (Skechers vs Anta/On Cloud) Direct
The margins on Asics, Adidas, and Puma, which are locally sourced from the subsidiaries, are lower, and so is Skechers, compared to New Balance, or compared to Saucony, or compared to Anta, or compared to Wilson.

Provides crucial insight into the varying margin structures across the brand portfolio, indicating that locally sourced brands generally have lower margins than imported/licensed ones.

Asked by Mr. Hardik Gandhi

Funding for 22 new stores Direct
Yes, it is with the IPO money, ma'am.

Confirms that the planned aggressive retail expansion is fully funded by the recent IPO proceeds, alleviating concerns about capital availability.

Unit economics and confidence in margins for airport stores Direct
The conversion may not happen immediately at the airport, but it will happen at the Sneaker store in that city, or the target city that they are departing to.

Explains the strategic value of airport stores beyond immediate sales, highlighting their role in brand building and driving conversions in other retail channels.

2 min read 6 chapters

Detailed narrative

Strong Financial Performance in FY26

Brandman Retail demonstrated robust financial growth in FY26, with its PAT increasing significantly from ₹8 Cr to ₹25 Cr, representing a CAGR of 77%. The company's EBITDA margin also saw a substantial inflection, rising from 8.7% to 22%, achieving an impressive CAGR of 84.46%. The top line for the fiscal year reached ₹162 Cr, accompanied by a healthy PAT margin of 15.55%, indicating strong operational efficiency and profitability.

Aggressive Retail Expansion Strategy

The company is embarking on an aggressive retail expansion, planning to open 22 new stores this year, comprising 5 Anta, 2 Wilson, 5 Saucony, 7 Sneaker, and the remaining New Balance outlets. The long-term vision includes establishing 50 Sneaker multi-brand stores within the next five years. This expansion is primarily funded by the proceeds from the recent IPO, which successfully listed on NSE Emerge on February 11, 2026, with a 114X oversubscription.

Strategic Shift Towards Retail and D2C

Brandman Retail is strategically shifting its focus from a B2B-heavy model (70.4% of FY24 revenue) towards retail and Direct-to-Consumer (D2C) channels. While B2B currently offers higher EBITDA margins (26%) compared to retail/e-commerce (18-20%), management views retail as the core growth path, aiming for online and retail to constitute 75-85% of the top and bottom line moving forward. This shift is driven by the desire to capture the Indian retail landscape and build a strong brand presence.

Omnichannel and Market Reach

The company operates an omnichannel strategy, leveraging its physical stores as fulfillment centers for online orders, ensuring efficient delivery from the closest PIN code. This integration aims to enhance customer experience and optimize inventory. Through marketplace channels, Brandman Retail currently delivers to over 20,000 unique PIN codes across India, significantly expanding its reach beyond its current presence in 12 cities.

Margin Dynamics and Brand Portfolio

Gross margins vary across the brand portfolio; locally sourced brands like Skechers, Asics, Adidas, and Puma generally have lower margins compared to imported/licensed brands such as New Balance, Saucony, Anta, and Wilson. Q4 FY26 saw a lower gross margin of 26% due to end-of-season sales and discounts. Management believes the overall PAT margin of 15.5% is sustainable for the next 2-3 years, with potential variations of 1-2%.

Future Growth Aspirations

Brandman Retail aims to become a ₹1,000 crore top-line company and is currently focusing on achieving a ₹500 Cr business company status. The company is confident in its ability to grow, driven by the expansion of its multi-brand Sneaker stores, the introduction of new brands like Anta and Wilson, and the increasing contribution from its online business, including the newly launched Skechers online platform.

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