Monte Carlo Fashions Limited

Monte Carlo Fashions Limited reported a robust Q3 FY26 with revenue reaching INR 608 crores, an 11% year-on-year growth, and net profit increasing by 11% to INR 107 crores. For the first nine months of FY26, revenue from operations stood at INR 996 crores, also up 11%, with profit after tax growing 17% to INR 107 crores. EBITDA for Q3 was INR 166 crores (7% growth) with a margin of 27.24%, while 9M EBITDA was INR 201 crores (11% growth) at a 20.23% margin.

The company experienced a strong rebound in sales across most categories, with footwear sales more than doubling compared to 9M FY25. The cotton segment demonstrated significant growth of 22.13% in 9 months, outpacing the winter segment's 13.9% growth. Online sales continued strong momentum, and the company expanded its retail presence by adding 5 new EBOs for Cloak & Decker, aiming for 25-30 by year-end.

Monte Carlo is enhancing customer convenience through partnerships with quick commerce platforms like BlinkIt, Swiggy, and Zepto for express deliveries within 30 minutes. A strategic collaboration with Salesforce is underway to streamline operations and build long-term brand loyalty through digital transformation. The company has also expanded into overseas e-commerce platforms via zoom.com and styleshop.com to broaden its global presence.

The company is investing in a 35-megawatt PM KUSUM Solar project, which is a purely financial investment with an anticipated Internal Rate of Return (IRR) of 18%. The project cost is estimated at INR 3-3.2 crores per megawatt, with a funding mix of 70% debt and 30% equity. This investment is expected to add approximately INR 100 crores to the company's debt next year, with a competitive cost of debt around 7%.

Monte Carlo is confident in achieving the higher end of its 10-15% revenue growth guidance for FY26 and projects a 15-20% growth for FY27, driven by strong sell-through and low retail inventory levels. While inventory has increased due to higher sales, management expects debtor days to reduce by 5-10% in the next financial year. The company also anticipates a better Q4 FY26 margin compared to the previous year due to lower returns.

The company noted that sales returns for 9M FY26 were 17%, higher than the 13% recorded in the previous year, though provisions are made based on a three-year trend, and lower actual returns are expected in Q4. Employee benefit expenses saw an increase of over INR 7 crores, with only INR 30 lakhs attributed to a labor law change (gratuity), while the remaining increase was due to annual increments and other benefits.