IGI Logo

Operationally better than expectations, led by strong recovery in Ethnic and improved profitability in Luxury Retail

* Revenue grew 9% YoY to INR18.3b (~5% beat), driven by strong performance in Ethnic (up 25% YoY) and TMRW (up 38% YoY).

* Gross profit grew 18% YoY to INR10.5b as gross margin expanded ~410bp YoY to 57.3%.

* EBITDA at ~INR1.1b (22% beat) grew 25% YoY as EBITDA margin improved ~75bp YoY to 6.1%.

* Pantaloons EBITDA margin declined ~50bp YoY, while Ethnics and Luxury Retail saw significant 16-24pp improvement in margins.

* Reported losses remained flat YoY at ~INR2.3b (vs. ~INR2.4b loss YoY) as higher EBITDA was offset by an increase in depreciation (up 15% YoY).

Segmental performance

Pantaloons and Style Up

* Revenue declined ~1% YoY owing to the impact of last years’ store rationalization and a shift in the festive period.

* Store count remained unchanged at 405 (vs. 417 YoY), with area of 5.73m sqft (-0.3% YoY).

* LTL growth was flat owing to a shift in Eid. Normalized for the same, LTL growth stood at 3%.

* Style Up revenue grew 36% YoY, led by store additions.

* Store count stood at 49 (added 3 stores in 1Q, up 63% YoY).

* EBITDA at INR1.9b declined 4% YoY and margins contracted ~55bp to 17.1%.

Ethnic

* Revenue grew by 25% YoY, led by a higher number of wedding days (vs. 1QFY25) and strong growth in designer-led portfolio (revenue up 79% YoY).

* Sabyasachi posted its best ever 1Q, as revenue jumped 56% YoY to surpass the INR1b mark in 1Q. Profitability remained strong in double digits.

* Masaba sales grew 26% YoY, with the beauty brand Love Child up 70% YoY.

* Shantanu & Nikhil revenue grew 13% YoY, while Tarun Tahiliani revenue rose ~28% YoY.

* Tasva revenue grew 72% YoY, led by 39% LTL and ~11% YoY store additions to reach 70 stores (added 3 net stores in 1Q).

* TCNS portfolio surpassed 1QFY25 revenue despite sharp network rationalization (80+ closures in last 12 months) and was EBITDA positive in 1QFY26.

* Ethnic segment reported a sharp turnaround with EBITDA of INR20m (vs. loss of 540m in 1Q25).

TMRW

* Revenue grew 38% YoY to ~INR2b.

* Losses too expanded by ~37% YoY to INR630m.

* TMRW secured INR4.4b fund raise from ServiceNow Ventures.

Others (Luxury Retail)

* Despite the weak market, Luxury Retail reported 6% revenue growth.

* EBITDA more than doubled YoY to INR550m.

* EBITDA margin expanded sharply to 45.5% (vs. 22% in 1Q).

For More Research Reports : Click Here 

For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412