Cantabil Retail India Limited

Cantabil Retail delivered strong financial performance in FY26, with revenue from operations growing by 18% to INR 852.6 crores compared to INR 721.1 crores in FY25. EBITDA saw a 29% increase to INR 264.3 crores, with margins improving to 31% from 28.4% in FY25. Profit After Tax (PAT) grew by 28% to INR 95.8 crores, and PAT margins expanded to 11.2% from 10.4% in FY25. The company also reported robust Q4 FY26 results, with revenue up 15% to INR 253.5 crores and EBITDA up 34% to INR 78.1 crores.

The company expanded its retail footprint by opening 91 stores in FY26, bringing the total to 652 stores across 9.15 lakh square feet. For FY27, Cantabil targets a total of 725 stores and plans for net additions of 90-100 stores. The strategy emphasizes opening larger family stores (average opening size of 1,700 sq ft) in prime locations, as these formats yield better EBITDA margins compared to smaller stores. Retail area is targeted to grow by 15-20% per annum.

Cantabil successfully maintained its gross margin at approximately 60%, a key long-term target, despite some raw material price increases. The company attributes this to a better efficiency mix, pricing corrections, and GST benefits. Operating expenses were also tightly controlled, with retail cost reducing from 34% to 33% year-on-year. The internal guidance is to maintain an EBITDA margin of 30%.

Same-store sales growth (SSG) remained robust at around 5% in FY26 and April, with management confident of maintaining 5-6% despite monetary policy tightening. Footwear sales grew by 40% to INR 14 crores in FY26 and are targeted to reach 3-4% of total sales by the end of the current fiscal year. Kids wear sales, currently 2-3% of total sales, are projected to grow to 4-4.5% next year. E-commerce sales also grew by 10% in value to INR 11 crores in FY26.

Cantabil maintains a debt-free balance sheet, which provides flexibility for growth investments. The company capitalized a new corporate office cum warehouse with a budget of INR 50-55 crores in FY26. Capex per square foot is expected to decrease in FY27 due to the adoption of a new, more cost-effective furniture fixture category. The company has a cash surplus, part of which (INR 25 crores) was given as an intercorporate loan for better returns.

The company demonstrated improved efficiency in inventory and working capital management. Inventory days reduced from 123 days to 109 days in FY26, and the working capital cycle improved from 115 days to 105 days. Cantabil maintains an inventory provisioning policy of 10% for goods aged 1-3 years and 50% for goods older than 3 years, with 70-75% of total inventory being within 1.5 years.

Cantabil maintains a manufacturing strategy where 60% of its production is in-house (through its Bahadurgarh factory and job workers) and 40% for accessories. The factory has a capacity to produce 18-20 lakh garments, fulfilling 25% of requirements, with job workers contributing 35%. The company plans to expand its specialized suit facility, which offers better margins, as requirements increase.