Baazar Style Retail Limited — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

Baazar Style reported strong 9-month FY26 results, with revenue up 38% and EBITDA up 45%, driven by robust store expansion and private label growth. A strategic investment of ₹331.53 crores will fuel accelerated expansion to 500+ stores and debt reduction. Despite SSG challenges in some regions, management remains optimistic about market opportunity and operational efficiencies, revising FY26 SSG guidance to 4-5%.

Highlights

  • Secured a strategic investment of ₹331.53 crores from Cupid Limited, enabling accelerated store expansion to 60-80 stores annually and a target of 500+ stores in three years.

  • 9-month FY26 revenue from operations grew 38% YoY to ₹1,376 crores, driven by strong growth in both core (34% YoY) and focus markets (61% YoY).

  • EBITDA for 9-month FY26 rose 45% YoY to ₹217 crores, with EBITDA margin expanding 76 bps to 15.8%, reflecting improved operational efficiency.

  • Private label share significantly increased to 54% of overall revenue (up from 44% in 9-month FY25), contributing ₹740 crores with 68% YoY growth.

  • Inventory days reduced from 111 days to 102 days, indicating better working capital management.

Concerns

  • SSG in mature stores within existing clusters declined by 8% due to rapid ramp-up of new stores, though overall store EBITDA improved by 30 bps.

  • Heavy rainfall in Bengal and unrest in Assam and Tripura during peak festivals impacted SSG, leading to a revision of FY26 SSG guidance to 4-5% from previous 8%.

  • Average Selling Price (ASP) declined by ~3% for 9-month FY26, attributed to Eid shifting to Q4 and a strategic focus on entry-price point products in focus states.

Key financials

  1. Revenue from Operations ₹1,376 Cr +38%YoY
  2. Gross Profit ₹475 Cr +40%YoY
  3. EBITDA ₹217 Cr +45%YoY
  4. EBITDA Margin 15.8%
  5. Store Count 252 stores +27%YoY
  6. Private Label Share 54%

What they filed

Q1 FY27: revenue up 28.9%, net profit up 7.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue311 412 345 377 532 +71%466 +13%466 +35%486 +29%
EBITDA24 83 40 58 69 +183%89 +7%48 +21%72 +24%
Net profit-9 30 -6 2 51 +679%19 −38%-26 −301%2 +8%
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

  • Apparels
    87% Revenue Share
  • General Merchandise
    13% Revenue Share
  • Focus States
    ₹238 Cr Revenue61% Revenue Growth17% Contribution to Revenue

Capital allocation

high confidence
  • Capex Capex disclosed
    • Digital transformation and technology backbone ₹7 Cr
    • Warehouse infrastructure ₹20 Cr
    We are investing INR7 to INR10 crores in FY '26 to build an integrated and intelligent technology backbone... around INR20-INR25 crores on the warehouse side, warehouse infra.
  • Debt Gross ₹267 Cr
    • Repayment Repayment of borrowings from strategic investment proceeds ₹182 Cr
    we are having a debt of around INR267 crores, out of which INR152 crores is for bank and INR115 crores is for the bill discounting
  • Liquidity Liquidity disclosed Strategic investment of ₹331.53 crores from Cupid Limited through preferential issue of warrants will strengthen the balance sheet and provide flexibility for growth.
    We have secured a strategic investment of INR331.53 crores from Cupid Limited through a preferential issue of up to 1.01 crores equity warrants at an issue price of INR328.25 per warrant, convertible into equity shares within 18 months.

Guidance & targets

Store Expansion

  • Store additions per year Store Expansion · Annually · High confidence 60-80 stores

    Previously 40-50 stores → 60-80 stores

    we have the opportunity to accelerate this growth to 60 to 80 stores per year, giving us a greater headroom and flexibility for growth.

    — Shreyans Surana

  • Store additions Store Expansion · Q4 FY26 · High confidence ~11 stores
    So it is around 11 stores.

    — Nitin Singhania

Store Count

  • Total stores Store Count · Over next three years · High confidence 500+ stores
    We operate 252 stores as of December '25 and we have a clear roadmap to scale to 500 plus stores over the next three years through a disciplined cluster-based approach.

    — Shreyans Surana

Revenue

  • Full-year Revenue Growth Revenue · Full-year FY26 · High confidence 35% YoY
    we revised our full-year revenue guidance to 35% year-on-year.

    — Shreyans Surana

Profitability

  • Pre-Ind AS EBITDA Margin Profitability · Full-year FY26 · High confidence 7-8%
    Our pre-Ind AS EBITDA margin is guided at 7 to 8%

    — Shreyans Surana

  • Pre-Ind AS PAT Margin Profitability · Full-year FY26 · High confidence 3-4%
    and pre-Ind AS PAT margin is guided at 3% to 4%.

    — Shreyans Surana

  • Ind AS EBITDA Margin Profitability · Full-year FY26 · High confidence 14-15%
    On Ind AS basis, EBITDA is guided at 14% to 15%

    — Shreyans Surana

  • Ind AS PAT Margin Profitability · Full-year FY26 · High confidence 2-3%
    and PAT margin is expected between 2% to 3%

    — Shreyans Surana

Same-Store Growth (SSG)

  • SSG growth Same-Store Growth (SSG) · FY26 · High confidence 4-5%

    Previously 8% → 4-5%

    Hence, the SSG guidance for FY '26 is being revised to 4% to 5%.

    — Shreyans Surana

Capex

  • Investment in technology Capex · FY26 · High confidence ₹7-10 crores
    We are investing INR7 to INR10 crores in FY '26 to build an integrated and intelligent technology backbone

    — Shreyans Surana

Private Label

  • Private label share of revenue Private Label · Over next two years · High confidence 65%
    we aim to scale this to around 65% over the next two years.

    — Shreyans Surana

Growth Outlook

  • Overall growth outlook Growth Outlook · Annually · High confidence 30%

    Previously 25% → 30%

    Now we will go for 30% as a growth outlook

    — Shreyans Surana

Store Operations

  • Existing stores with double height gondola Store Operations · Next 1 year · High confidence 80%
    almost 80% of the stores in next 1 year will have double height gondola.

    — Shreyans Surana

Debt

  • Interest payment as % of total revenue Debt · Next year · High confidence ~0.7%

    Previously ~1% → ~0.7%

    next year it might be 0.7% and gradually it goes decreasing.

    — Nitin Singhania

What to watch in Q4 FY26

Insurance Claim Resolution

Within a few months
Current Claim filed for ₹43 crores, under review and in discussion stage.
Target Claim settled and funds received.

Why it matters

Resolution of this significant claim will enhance the company's liquidity and financial position.

approximately INR43 crores claim has been filed with the insurance company and the matter is currently under the review and we are still in the discussion stage... I cannot give you a timeline right now but I am expecting it, the conclusion of the entire claim thing to get settled in a few months.

Risks & concerns

  • Cannibalization of SSG in existing clusters

    medium

    Opening new stores in existing clusters led to an 8% decline in SSG for mature stores, though overall store EBITDA improved by 30 bps.

    Analyst acknowledged

  • Impact of heavy rainfall and unrest on SSG

    medium

    Heavy rainfall in Bengal and unrest in Assam/Tripura during peak festivals negatively impacted SSG, leading to a revised FY26 SSG guidance of 4-5%.

    Management acknowledged

  • Increasing competitive intensity in value retail

    medium

    Growing competition in the value retail space, though management believes there is still significant headroom for growth in under-penetrated Tier 2/3 markets.

    Analyst acknowledged

Q&A highlights

7 direct
Store Expansion Strategy & Cannibalization Direct
in that scenario, as you rightly said that the existing cluster, there was a cannibalization of sales by 8% in the existing cluster. But while that -- I think the strategy on the EBITDA has been good for us. If you see the first nine months performance, even without Eid, the store EBITDA, overall store EBITDA for the company has increased by 30 bps.

Management clarified that despite an 8% SSG decline in mature stores due to new additions, the overall store EBITDA increased by 30 bps, justifying their cluster-based expansion strategy.

Asked by Gaurav Jogani

Competitive Intensity in Value Retail Direct
I think competition intensity is growing and I think it's good for the market only... there is a huge opportunity in this market because of the under-penetration in Tier 2, Tier 3 and the unorganized penetration is very, very high compared to the organized penetration. Still on an average every smaller city has got only 2 to 3 organized players. So I think there is a huge headroom to grow in these cities.

Management acknowledged increasing competition but emphasized the vast untapped market in Tier 2/3 cities and their strategy to build robust backend infrastructure to compete effectively.

Asked by Gaurav Jogani

Insurance Claim Status Partial
approximately INR43 crores claim has been filed with the insurance company and the matter is currently under the review and we are still in the discussion stage... I cannot give you a timeline right now but I am expecting it, the conclusion of the entire claim thing to get settled in a few months.

Provided an update on a significant pending insurance claim for inventory loss, indicating it's still in discussion but expected to be settled within a few months.

Asked by Chirag

Change in Store Addition Target Post Fundraise Direct
that time when we said 40 to 50 stores, with the capital that we are having and with the internal accrual that we were having... With now having a fund in our bank, I think we can go for the faster expansion of 60 to 80 stores at the same time making meaningful investments in technology and infrastructure to support the scale and operational efficiency.

Explained that the strategic fundraise removed capital constraints, allowing the company to accelerate store expansion from 40-50 to 60-80 stores annually without negatively impacting the balance sheet.

Asked by Chirag

Private Label Pricing Strategy Direct
See in terms of private label has started doing very well for us... though we have not increased a lot on the MRP side, but we have kept the MRP same. But yeah, we are getting good traction around the private labels.

Management clarified that despite strong growth and acceptance of private labels, they are currently maintaining MRPs, focusing on gaining traction rather than immediate price increases.

Asked by Rehan Syed

Logistics Cost in Focus States Direct
I think it will not increase, it will reduce only because as compared to obviously the states which are nearer to the core warehouse, right now our warehouse is Bengal, the logistic cost will be lower for them compared to the states like UP and Bihar. But as I have said that the strategy that we are applying for the future is that we will have two big regional distribution centers going forward...

Management outlined a strategy to establish regional distribution centers and collection centers to reduce logistics costs and improve supply chain efficiency as they expand into new focus states.

Asked by Rehan Syed

ASP Decline Explanation Direct
So sir there are two reasons for the decline in ASP. One, when you are seeing this 9-month as the last 9-month. So last year 9-month had Eid in that... Second thing, this year largely because on the focus states, we have also focused a lot on the entry price point product, resulting into a lower comparatively ASP.

Management attributed the ~3% ASP decline to the shift of Eid to Q4 FY26 (from Q3 FY25) and a strategic focus on offering entry-price point products in new focus markets.

Asked by Himanshu Dugar

Fundraise Pricing vs. IPO Price Direct
Now coming to the pricing of the fund, the option that we chose was warrants. And I think the idea was that when we planned to do that, that time the if I correctly remember the prices was in the range of INR250 to INR300. And I think with the calculation or whatever the this the formula that have for the warrant, with that we decided to go with INR331 crores, which ensures that if you want to have a future growth of 60 to 80 stores, we can do that.

Management explained the warrant pricing of ₹331.53 was based on market conditions and growth acceleration needs at the time of planning, rather than a direct comparison to the IPO price.

Asked by Himanshu Dugar

3 min read 7 chapters

Detailed narrative

Strategic Investment Fuels Growth and Debt Reduction

Baazar Style secured a strategic investment of ₹331.53 crores from Cupid Limited through a preferential issue of equity warrants. This funding will enable the company to accelerate its store expansion plan from 40-50 to 60-80 stores annually, targeting 500+ stores within the next three years. A significant portion of the proceeds, ₹182 crores, will be utilized for debt repayment, strengthening the balance sheet and reducing interest expenses. Additionally, ₹7-10 crores are earmarked for digital transformation and ₹20-25 crores for warehouse infrastructure.

Robust 9-Month FY26 Financial Performance

The company delivered strong financial results for the 9-month period ending December 31, 2025. Revenue from operations grew 38% year-on-year to ₹1,376 crores. Gross profit increased 40% YoY to ₹475 crores, with the gross margin expanding by 65 basis points to 34.5%. EBITDA saw a 45% YoY increase, reaching ₹217 crores, and the EBITDA margin improved by 76 basis points to 15.8%, reflecting enhanced operational efficiency and cost management.

Accelerated Store Expansion and Retail Footprint Growth

Baazar Style expanded its store network to 252 stores in 9-month FY26, representing a 27% year-on-year growth from 199 stores. This expansion contributed to a 31% YoY increase in total retail footprint, reaching 2.35 million square feet. The company plans to add approximately 11 new stores in Q4 FY26, maintaining its aggressive growth trajectory. The strategy focuses on cluster-based expansion, which, despite some cannibalization in mature stores, has led to an overall increase in store EBITDA by 30 bps.

Private Label Dominance and Product Mix Diversification

Private label products significantly contributed to the company's growth, increasing their share in overall revenue from 44% in 9-month FY25 to 54% in 9-month FY26. This segment generated ₹740 crores in revenue, marking an impressive 68% YoY growth. The company aims to further scale private label penetration to 65% over the next two years. The strategic partnership with Cupid Limited will also enable diversification into personal care and wellness categories, enhancing product mix and customer frequency, while maintaining 87% focus on apparels.

SSG Challenges and Revised Outlook

Same-Store Growth (SSG) was impacted by several factors during 9-month FY26. Rapid new store ramp-up within existing clusters led to an 8% decline in SSG for mature stores. Additionally, heavy rainfall in Bengal and socio-political unrest in Assam and Tripura during peak festivals affected performance. Consequently, the SSG guidance for FY26 has been revised downwards from an initial 8% to 4-5%. However, SSG in other states remained resilient at 8%.

Digital Transformation and Supply Chain Optimization

Baazar Style is investing ₹7-10 crores in FY26 to build an integrated and intelligent technology backbone, including SAP ERP, Infor WMS, and Domo Analytics, to enhance supply chain visibility and optimize inventory. The company is also developing a hub-and-spoke model with regional distribution centers and collection centers (e.g., in Assam and Bihar) to improve supply chain efficiency. This initiative aims to reduce delivery times and support faster store ramp-up, contributing to better revenue per square foot.

Double Height Gondola Implementation for Enhanced Sales

The company is actively implementing a double height gondola strategy in new and existing stores to enhance customer experience and sales. Approximately 50 stores have already been converted, with a target to convert 80% of existing stores within the next 12-14 months. This approach allows for displaying more articles, boosting impulsive buying, and has shown promising results, with double height gondola stores achieving a sales per square foot of ₹11,000 compared to ₹9,000 for non-gondola stores.

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