Cantabil Retail India Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Cantabil Retail delivered a strong Q3 and 9M FY26, marked by robust revenue and profit growth, along with significant margin expansion. The company reported a 19% YoY revenue growth and 31% YoY PAT growth for Q3 FY26, driven by a 6.3% SSG and efficient store expansion. Management remains confident in achieving its Vision 2027 targets, supported by positive consumer sentiment from GST rationalization and a focus on larger format stores.

Highlights

  • Q3 FY26 Revenue grew 19% YoY to INR 264.4 crores, reflecting strong operational performance.

  • Q3 FY26 PAT grew 31% YoY to INR 45.1 crores, demonstrating robust profitability.

  • Q3 FY26 EBITDA margin expanded significantly to 36% from 32.6% in Q3 FY25.

  • The company achieved a strong 6.3% Same Store Growth (SSG) in Q3 FY26.

  • GST rationalization has provided a meaningful boost to consumer sentiment and sales momentum.

Key financials

3 periods

Headline

  • Total Stores
    646 units
  • Total Retail Area
    8.82 lakh sq ft
  • Franchisee Stores
    131 units

Q3 FY26

  • Revenue
    ₹264.4 Cr
    YoY +19%
  • EBITDA
    ₹95.2 Cr
    YoY +31%
  • EBITDA Margin
    36%
  • PAT
    ₹45.1 Cr
    YoY +31%
  • PAT Margin
    17.1%
  • SSG
    6.3%
  • E-commerce Sales
    ₹17.7 Cr

9M FY26

  • Revenue
    ₹599.1 Cr
    YoY +20%
  • EBITDA
    ₹186.2 Cr
    YoY +27%
  • EBITDA Margin
    31.1%
  • PAT
    ₹66.5 Cr
    YoY +27%
  • PAT Margin
    11.1%
  • E-commerce Sales
    ₹37 Cr
  • Rental Cost
    ₹74 Cr

What they filed

Q1 FY27: revenue up 12.6%, net profit up 6.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue151 223 220 159 176 +17%264 +18%253 +15%179 +13%
EBITDA35 72 58 49 42 +20%95 +32%78 +34%59 +20%
Net profit7 34 23 15 7 +0%45 +32%29 +26%16 +7%
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.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 | FY27 · Medium confidence approximate 20 plus percent
    So we continuously have a target of approximate 20 plus percent in terms of revenue growth. So definitely this year and next year, our vision statement was clear.

    — Shivendra Nigam

  • Revenue Revenue · FY27 · High confidence INR 1,000 crore
    The target is to make the company INR 1,000 crore revenue company by next financial year with a margin of 58%-59% gross margin.

    — Shivendra Nigam

Margin

  • Gross Margin Margin · Medium confidence 58%-59%
    in terms of gross margin, 58%-59%, we are operating and this is probably couple of percentage or 5% may improve.

    — Shivendra Nigam

  • EBITDA Margin Improvement Margin · this year · Medium confidence couple of percentage of margin improvement
    So yes, a couple of percentage of margin improvement in terms of EBITDA is always there. We are targeting that.

    — Shivendra Nigam

Volume

  • Same Store Growth (SSG) Volume · long-term sustainable number · High confidence 6%, 5%-6%
    In any of the earlier commentary as well, we are targeting 6%, 5%-6%, which is a long-term sustainable number.

    — Shivendra Nigam

Capacity

  • New Stores Capacity · in a year · High confidence 75 new stores
    New stores opening, as we have already always said that we plan to open 75 new stores in a year.

    — Deepak Bansal

Profitability

  • PAT Margin Profitability · Medium confidence 12%. Maybe it is maybe 13%
    We are expecting a PAT margin because of GST rationalization and everything. That is 12%. Maybe it is maybe 13%. We will look at it. But whatever we are coming, it is definitely going to improve couple of percentage.

    — Shivendra Nigam

Other

  • Inventory Days Other · High confidence 120 days
    my ideal number is 120 days.

    — Shivendra Nigam

  • Working Capital Days Other · High confidence 100 to 105 days
    working capital is approximately 100 and 105 days.

    — Shivendra Nigam

What to watch in Q4 FY26

Revenue Growth (FY27 target)

FY27
Current 20% growth for 9M FY26
Target approximate 20 plus percent for FY27, aiming for INR 1,000 crore revenue

Why it matters

To track progress towards the ambitious INR 1,000 crore revenue target for FY27, a key long-term goal.

So we continuously have a target of approximate 20 plus percent in terms of revenue growth. So definitely this year and next year, our vision statement was clear. By 2027, we are crossing INR 1,000 crore of revenue mark and in terms of gross margin, 58%-59%, we are operating and this is probably couple of percentage or 5% may improve. The target is to make the company INR 1,000 crore revenue company by next financial year with a margin of 58%-59% gross margin.

Risks & concerns

  • Competition from new brands (especially with FDI)

    low

    Management believes their existing footprint (650 stores) makes it difficult for new brands to compete effectively.

    So in single brand retail, there is already 100% FDI allowed in India. So I don't, there will be much competition coming, but if it will be coming, yes, we are very much prepared to tackle it. And with the kind of marketing footing we have, like we have 650 stores, 350 stores. So it will not be easy for any new brand to compete us with at all the places and at all the locations.

    Analyst downplayed

Q&A highlights

8 direct
SSG calculation and revenue per square feet for matured stores Direct
Last year, the overall store running for the quarter, it is INR 1,018 as compared to INR 962 last year. And if I take 9 months, it is INR 790 per square feet as compared to INR 743 per square feet last year, which can be taken L2L as a matured store.

Clarifies the basis for SSG calculation and provides key operational efficiency metrics for matured stores.

Asked by Pavan

Employee cost control despite store expansion Direct
So our store is approximately 9%-10%, right? So this is the third quarter. So obviously, when the third quarter revenue is higher, but overall, 10% is my salary cost at the front-end level and going forward, the trajectory will be approximately same.

Addresses concerns about cost management amidst aggressive expansion, indicating operational efficiency in employee costs.

Asked by Ankit Shah

Inventory ownership and commission structure for franchise stores Direct
In all the stores, including franchisee stores in company's book, it is a stock transfer and all the merchandise which is sold to the end-user is in company's GSTN. So including franchisee stores, all 646 store inventory is coming in company's book.

Clarifies the company's asset-light model for inventory in franchise stores and the commission structure, highlighting centralized inventory management.

Asked by Ankit Shah

Seasonality of margins and impact of higher ticket size in Q3 Direct
So always Q3 is better in terms of sales, because ticket value due to winter is high. Now, the margin is same, 60% margin, quarter-on-quarter, we have been maintaining, but the store expenses are mostly fixed in nature. So that is why I always see third quarter EBITDA, or in fact, PAT margin is always very high, because sales are higher and better margin we are getting, because mostly fresh sale is also there.

Explains the reason for higher Q3 margins, attributing it to higher sales volume and ticket size against fixed store expenses.

Asked by Naitik

Impact of GST rationalization on consumer momentum Direct
So the day 22nd of September, the GST came, we have seen a great momentum... GST rationalization has definitely made the changes in terms of overall business, specifically for retail. So momentum is there and it looks like long term.

Highlights a positive external factor contributing to sales momentum and its expected long-term benefit for the retail sector.

Asked by Harshit

Profitability difference between family stores and traditional men's stores Direct
Anandji, EBITDA is 2% higher in the family stores than the men's store. So we have a better profitability in the family stores than the only men's stores because the rental per square feet comes down in the family stores and the sales vis-a-vis doesn't come down that much.

Provides insight into the strategic advantage and higher profitability of family stores, supporting the company's focus on larger formats.

Asked by Anand Mundra

Branding and marketing strategy for the medium term Direct
So our branding goes both in the traditional way and the digital marketing way... But yes, when it comes to the future, we're planning to go for some aggressive advertisement campaign like brand ambassador kind of thing. But that is not a plan in the short run. Maybe after a year or two, we go with that kind of brand.

Outlines the company's current and future branding efforts, indicating a potential shift towards more aggressive marketing in the medium term.

Asked by Ankit Shah

New store ramp-up and maturity timeline Direct
Earlier also, whenever we are opening the maturity period for that store, we are considering it 2 to 2-1/2 years. And that is also our payback period, 2 to 2-1/2 years... So you can say new store is delivering is approximately INR 675, you can say. And over a period of time, when it has been matured, it is coming to the maturity level in 2 to 2-1/2 years.

Provides clarity on the expected ramp-up period and sales performance for new stores, crucial for assessing future growth drivers.

Asked by Hitaindra Pradhan

2 min read 7 chapters

Detailed narrative

Q3 & 9M FY26 Performance Overview

Cantabil Retail reported a strong Q3 FY26 with revenue growing 19% YoY to INR 264.4 crores and PAT increasing 31% YoY to INR 45.1 crores. The EBITDA margin expanded to 36% from 32.6% in Q3 FY25. For the nine months of FY26, revenue grew 20% to INR 599.1 crores, and PAT increased 27% to INR 66.5 crores, with an EBITDA margin of 31.1%.

Store Expansion and Footprint

The company continued its efficient scaling, reaching a total of 646 stores across 8.82 lakh square feet. Management plans to open 75 new stores annually, with a focus on increasing the average store size to 1600-1700 square feet. Currently, 20% of stores are family stores, 10% are exclusive ladies and kids stores, and the remaining are men's stores, with 131 stores operating under the franchise model.

Margin Dynamics and Seasonality

Q3 typically sees higher margins due to increased sales volume and higher ticket values during the winter season, which helps absorb fixed store expenses. The gross margin has been consistently maintained at 60% quarter-on-quarter. The company aims for a gross margin of 58-59% with potential for a few percentage points of improvement, and expects PAT margins to improve to 12-13%.

GST Impact and Consumer Momentum

The GST rationalization implemented on September 22, 2025, has positively impacted consumer sentiment and sales momentum. Management noted a strong pickup in demand in October and November, which continued into January, indicating a long-term positive effect on the retail business. This rationalization has made changes in terms of overall business, specifically for retail.

Branding and Marketing Strategy

Cantabil employs both traditional and digital marketing, with current efforts focusing on store location and SMS campaigns for existing stores. The company plans to pursue more aggressive advertisement campaigns, including brand ambassadors, in the medium term (1-2 years). The main strength lies in store location, reducing the need for extensive marketing support.

Inventory Management and Working Capital

The company aims to reduce its inventory days from 121 days (last year) to an ideal range of 110-120 days, and working capital days to 100-105 days. Inventory for all stores, including franchisee stores, is maintained on the company's books. Products older than one year are moved to factory outlets or online channels to manage inventory efficiently.

Future Growth Outlook and Targets

Cantabil targets an approximate 20% revenue growth for FY26 and FY27, with a vision to achieve INR 1,000 crore in revenue by FY27. The company expects PAT margins to improve to 12-13% and aims for a long-term sustainable Same Store Growth (SSG) of 5-6%. New stores are expected to mature and reach full sales potential within 2 to 2.5 years, contributing to overall growth.

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