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    Monte Carlo Fas.

    MONTECARLO
    Textiles·29 Jan 2026
    Management Summary

    Monte Carlo Fashions reported a robust Q3 FY26 with an 11% YoY revenue growth to INR 608 crores and an 11% increase in net profit to INR 107 crores. The company's 9M FY26 performance also showed an 11% revenue growth and a 17% PAT increase. Management expressed confidence in achieving the higher end of their 10-15% full-year guidance and projected 15-20% multi-year growth, driven by strong performance in new brands, footwear, and home textiles, alongside retail expansion and digital initiatives.

    Highlights

    5

    • Q3 FY26 Revenue grew 11% YoY to INR 608 crores.

    • Q3 FY26 Net Profit increased 11% to INR 107 crores.

    • 9M FY26 Profit After Tax increased 17% YoY to INR 107 crores.

    • Footwear sales more than doubled compared to 9M FY25.

    • Company anticipates 15-20% revenue growth for next financial year (FY27).

    Concerns

    2

    • Sales returns for 9M FY26 increased to 17% from 13% in 9M FY25.

    • Contradictory growth outlook: Management stated 7.5% growth for current year and 7% for next year in one instance, while consistently guiding 15-20% elsewhere.

    Key financials

    Metrics

    8

    Periods

    2

    Q3 FY26

    4
    • Revenue
      ₹608 Cr
      YoY+11%
    • EBITDA
      ₹166 Cr
      YoY+7.0%
    • EBITDA Margin
      27.2%
    • Net Profit
      ₹107 Cr
      YoY+11%

    9M FY26

    4
    • Revenue
      ₹996 Cr
      YoY+11%
    • EBITDA
      ₹201 Cr
      YoY+11%
    • EBITDA Margin
      20.2%
    • Profit After Tax
      ₹107 Cr
      YoY+17%

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    70% debt and 30% equity

    Debt

    Debt disclosed

    Cost 7.5%

    Liquidity

    Cash ₹300 crores

    Guidance & targets

    7
    CategoryTargetPriority
    Revenue
    Revenue Growth
    higher end of 10% to 15%
    		High
    Revenue
    Revenue Growth
    15% to 20%
    		High
    Margin
    EBITDA Margin
    100 to 200 basis points plus
    		High
    Capacity
    New EBOs
    40 to 45
    		High
    Capacity
    Cloak & Decker EBOs
    25 to 30
    		High
    Working Capital
    Debtor Days Reduction
    5% to 10%
    		Medium
    Volume
    Home Textile Growth
    25%
    		Medium

    FY26 Revenue Growth

    next quarter (Q4 FY26 results)
    Current11% (9M FY26)
    Target~15% (higher end of guidance)

    Why it matters

    To verify if the company achieves its stated full-year revenue growth guidance of 10-15%, particularly the higher end.

    So in 10% to 15% till date, we have achieved only 11%. And again, I'm reiterating that we'll be ending around 15%. So you can assume that the fourth quarter is going to be better than the -- this 9 months, then only I can achieve my 15% target.

    How to verify

    key_financials.metrics[label='Revenue (Q3 FY26)'].yoy_growth

    Risks & concerns

    2
    RiskSeverity

    Inventory Buildup / Sales Returns

    Sales returns for 9M FY26 increased to 17% from 13% in 9M FY25, which historically led to margin depression. Management expects lower returns in Q4 due to better sell-through. — Analyst acknowledged

    medium

    Economic Recession

    Management stated that the only risk to ROE improvement is if the economy moves into a recession, impacting consumption. — Management acknowledged

    medium

    Q&A highlights

    7

    “This year, we'll be growing around 7.5%, and next year forecast is also around 7%.”

    This statement directly contradicts multiple other instances where management guided for 15-20% growth for the current and next financial year, creating confusion regarding the company's actual growth outlook.

    asked by Jigar Nathwani

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 & 9M FY26 Financial Performance

    Monte Carlo Fashions reported a strong Q3 FY26 with revenue reaching INR 608 crores, marking an 11% year-on-year growth. EBITDA stood at INR 166 crores with a margin of 27.24%, and net profit increased by 11% to INR 107 crores. For the first nine months of FY26, revenue from operations was INR 996 crores, an 11% increase, with EBITDA at INR 201 crores (20.23% margin) and profit after tax growing 17% year-on-year to INR 107 crores.

    02

    Strategic Retail and Digital Expansion

    The company is actively expanding its retail footprint, aiming to open 40-45 EBOs across India, with a focus on Western and Southern regions. During Q3, 5 new Cloak & Decker EBOs were added, bringing the total to 22, with plans to reach 25-30 by year-end. Monte Carlo has also enhanced its digital presence through its own website, external portals, and partnerships with quick commerce platforms like BlinkIt, Swiggy, and Zepto for express deliveries.

    03

    Diversification into Solar Power Project

    Monte Carlo is investing in a 49-megawatt PM KUSUM solar project, a purely financial decision with an anticipated Internal Rate of Return (IRR) of 18%. The project cost is estimated between INR 120-150 crores, funded with a 70% debt and 30% equity mix. This move is expected to increase the company's overall return on investment, with approximately INR 100 crores of debt to be incurred next year for this subsidiary project.

    04

    Growth Drivers and Segment Performance

    The company observed a strong rebound in sales across most categories, with brands like Rock.it and Cloak & Decker delivering consistent performance. Footwear sales more than doubled in 9M FY26 compared to the previous year. The Home Textile segment also maintained robust growth, with a projection of 25% growth for the next financial year. Cotton sales grew faster (22.13% in 9M) than winter sales (13.9% in 9M), reflecting a changing dynamic in product mix.

    05

    Margin Outlook and Inventory Management

    Management anticipates Q4 FY26 margins to be better than the previous year, driven by improved sell-through and fewer returns. While sales returns for 9M FY26 were 17% (up from 13% in 9M FY25), the company expects lower returns in Q4. Overall EBITDA margin for FY26 is expected to be 100-200 basis points higher than the 19% recorded last year. The effective tax rate is projected to be 25% for the full year, assuming no capital gains.

    06

    Long-term Growth and Capital Allocation Strategy

    Monte Carlo is confident in achieving a multi-year revenue growth of 15-20%, citing strong performance from newer brands and categories, and a low inventory position. The company aims to reduce debtor days by 5-10% in the next financial year. Despite having approximately INR 300 crores in cash, management deferred discussions on potential buybacks, indicating that such decisions would be taken up with the Board.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.