Company Update : Baazar Style Retail Ltd by JM Financial Services Ltd
Strong all round performance
Q2FY26 Performance
* Revenue - Baazar Style reported strong revenue growth of 71% YoY to INR 5.3 bn. Growth was led by the early on set of festivities leading to a SSSG growth of 22% YoY (19% adjusted for early festive) and ~39% area expansion. Sales density remained robust and grew 22% YoY to INR 10,380 (annualised).
* Margin – Reported EBITDA grew 1.8x YoY to INR 691 mn (9% below estimates) as EBITDA margin expanded ~520 bps YoY to 13% (JMFe: 14.3%) primarily led by leverage benefits leading to 170bps/260 bps lower staff cost and opex coupled with 90 bps YoY gross margin expansion to 30.5%. The increase in gross margin is attributed to increase in private label share by 1,270 bps to 57.7% despite 100bps YoY lower general merchandise sales which are margin accretive. Pre-Ind AS EBITDA grew 10x YoY to INR 333 mn as margins expanded by ~520 bps YoY to 6.3%.
* Adjusted profit was at INR 101 mn led by 73% YoY higher other income despite sharp 88% increase in depreciation expense (higher on account of change in lease accounting) and 7% YoY higher interest cost. The Company during the quarter changed its lease accounting policy leading to an exceptional gain of INR 552.6 mn (INR 413.5 mn net of tax impact) leading to reported PAT of INR 515 mn. Pre Ind AS PAT stood at INR 155 mn.
* Store: The company added 18 new stores in Q2FY26, taking the total store count to 250 (Retail area – 2.3 mn sq. ft). Average store size of new stores increased by ~8% to 10.2k sq ft in Q2.
Other highlights
* Bill cuts per store increased by ~25% YoY to ~22.5k bills per store while the transaction value per bill increased by ~1% to INR 1,005.
* ASP increased 5% YoY to INR 273.
* Items per basket declined 4% YoY to 3.69 items.
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SEBI Registration Number is INM000010361
