Summary
Baazar Style Retail Limited - Q3 FY26 Earnings Call Summary Friday, February 13, 2026, 4:00 PM IST
Event Participants
Executives 2 Nitin Singhania (CFO), Shreyans Surana (MD)
Analysts 6 Anand Mundra, Chirag, Gaurav Jogani, Himanshu Dugar, Pranav Shrimal, Rehan Syed
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹1,376 crores | +38% YoY for 9M FY26; driven by cluster expansion and focus market growth. |
| Private Label Revenue | ₹740 crores | +68% YoY; contribution increased to 54% of total revenue from 44% YoY. |
| Gross Profit | ₹475 crores | +40% YoY; margins improved to 34.5% (+65 bps) due to higher private label mix. |
| EBITDA (Ind AS) | ₹217 crores | +45% YoY; margin at 15.8% (+76 bps) reflecting better operational efficiency. |
| PAT Margin (Ind AS) | 2% - 3% | Guided range for FY26; reflects improved cost absorption despite expansion. |
| Store Count | 252 stores | +27% YoY; 53 net additions over the last 12 months. |
| Inventory Days | 102 days | Reduced from 111 days YoY; improved working capital cycle through tech investments. |
| Average Transaction Value | ₹969 | Reported for 9M FY26; slight pressure on ASP due to lack of festival (Eid) timing. |
| Sales per Square Foot | ₹743 | 9M FY26 figure; Calendar Year 2025 metric stood at ₹731, up 4% YoY. |
Geographic & Segment Commentary
- Core Markets (West Bengal, Assam, Tripura): Revenue grew 34% YoY in 9M FY26 despite external headwinds including heavy rainfall in Bengal and regional unrest in Assam/Tripura. SSG in these clusters was impacted by 8% cannibalization due to the deliberate strategy of opening 25 new stores within existing high-potential footprints.
- Focus Markets (Bihar, UP, Odisha, etc.): Revenue grew 61% YoY to ₹238 crores, now contributing 17% of total sales. These markets demonstrated resilience with an 8% SSG, leading the company’s geographic diversification strategy beyond its Eastern core.
- Apparel vs. General Merchandise (GM): Apparels remain the primary driver at 87% of revenue, while GM contributes 13%. Management intends to maintain this mix while using GM and the new personal care category as high-frequency footfall drivers.
Company-Specific & Strategic Commentary
- Strategic Investment: Secured ₹331.53 crores from Cupid Limited via equity warrants at ₹328.25/warrant to accelerate store expansion and deleverage the balance sheet. Approximately ₹182 crores is earmarked for debt reduction, while the remainder will support network growth and supply chain infra.
- Product Synergy: Partnering with Cupid Limited to introduce personal care and wellness products into 252 stores by Q1 FY27. This move aims to increase customer visit frequency and diversify revenue streams beyond pure fashion.
- Store Format Innovation: Transitioning 80% of existing stores to “double-height gondolas” within 12-14 months. This format allows for higher product density, with early data showing sales of ₹11,000 per sq. ft. vs ₹9,000 for standard formats.
- Supply Chain & Tech: Investing ₹7-10 crores in SAP ERP and Infor WMS, alongside a “hub and spoke” warehouse model. New regional centers and collection points have already reduced Assam delivery times from 10 days to 6 days.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 35% YoY (FY26) | Revised upward following strong 9M momentum and store ramp-up. |
| Store Expansion | 60-80 stores/year | Accelerated from 40-50 range due to fresh capital; targeting 500+ stores by FY29. |
| Private Label Share | ~65% (2-year target) | Plans to move from “attractive pricing” to “fair pricing” as brand recall stabilizes. |
| SSG (Full Year) | 4% - 5% | Revised downward from previous targets due to cannibalization and weather/unrest impacts. |
| Debt Reduction | ₹182 crores | Targeted repayment using proceeds from the Cupid Limited investment. |
Risks & Constraints
| Risk | Context |
|---|---|
| Cannibalization | Rapid cluster-based expansion led to an 8% SSG decline in mature stores within those clusters. Management argues the trade-off is acceptable for higher absolute EBITDA and market share. |
| Competition | Increasing entry of large national players in Tier 2/3 towns of East/Central India. The company is countering this via tech investments and aggressive private label scaling. |
| Macro/External | 9M performance was volatile due to heavy rains in Bengal and socio-political unrest in Tripura/Assam. Such events frequently coincide with peak festival seasons, impacting high-margin sales. |
Q&A Highlights
Store Expansion & Cannibalization
- Question: Why continue opening stores in existing clusters if it cannibalizes SSG by 8%? (Gaurav Jogani)
- Answer: While SSG is impacted, the new stores in known catchments are achieving 13-14% pre-Ind AS EBITDA in Year 1, matching mature stores. This strategy captures 92% “new” market revenue that competitors would otherwise take (Shreyans Surana).
Strategic Investment Rationale
- Question: Why raise capital at ₹330 (below IPO price) when internal accruals could fund 40-50 stores? (Himanshu Dugar)
- Answer: The fundraise allows acceleration to 80 stores/year while simultaneously cleaning the balance sheet. Lowering interest costs and having a cash buffer provides agility and protects against wrong site selections (Shreyans Surana).
Cupid Partnership & GM Strategy
- Question: Will the Cupid deal change the apparel-heavy revenue mix? (Subhanu)
- Answer: No, the focus remains 87% apparel. Cupid’s personal care products will replace other low-margin GM items within the 13% segment to drive higher frequency and better footfalls (Shreyans Surana).
Financial Metrics
- Question: What is the expected trend for rental costs? (Pranav Shrimal)
- Answer: Rentals are expected to remain stable between ₹58 to ₹60 per square foot for the next fiscal year (Nitin Singhania).
Key Takeaway
Baazar Style Retail delivered a record 9M performance with revenue growing 38% YoY to ₹1,376 crores and EBITDA margins expanding to 15.8% (Ind AS). The quarter was marked by a transformative ₹331.53 crore investment from Cupid Limited, which shifts the company’s trajectory from organic growth (40-50 stores/year) to an accelerated expansion of 60-80 stores annually. Strategically, the company is doubling down on private labels (54% of revenue) and the “double-height gondola” store format to drive throughput. While rapid expansion has caused temporary 8% SSG cannibalization in core clusters and weather-related disruptions impacted the East, management has offset this with 61% growth in focus markets like UP and Bihar. The company enters FY27 with a significantly deleveraged balance sheet and a clear roadmap to reach 500 stores by FY29, supported by a new personal care vertical and upgraded SAP-led digital infrastructure.
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