Summary
Stanley Lifestyles Limited - Q3 FY 2026 Earnings Call Summary Friday, February 13, 2026 4:00 PM
Event Participants
Executives 4 Abhijeet Sonar (CEO, Retail Business), J. K. Sharath (Group CFO), Sunil Suresh (Chairman and Founder), Venkataramana Gorti (Joint Managing Director)
Analysts 5 Arvind Arora, Devanshu, Kaushik Poddar, Madhur Rathi, Resha Mehta
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹317.9 crores (9M) | +1.4% YoY; muted growth attributed to demand softness and a shift toward value-oriented products. |
| Revenue from Operations | ₹103.8 crores (Q3) | -5.4% YoY; impacted by residential project handover delays and subdued discretionary demand. |
| Gross Profit | ₹187.6 crores (9M) | +6.2% YoY; supported by strategic sourcing and improved product mix despite lower revenue growth. |
| EBITDA Margin | 18.8% (9M) | -10 bps YoY; remained stable at the operational level despite expansion costs. |
| EBITDA Margin | 11.9% (Q3) | -690 bps YoY; moderated due to operational deleverage, new store costs, and labor law impacts. |
| Profit After Tax (PAT) | ₹13.6 crores (9M) | -26.1% YoY; decline driven by higher depreciation and finance costs from store expansion. |
| Profit After Tax (PAT) | (₹0.2 crores) (Q3) | Reported marginal loss vs ₹8.9 crore profit YoY; impacted by amortization of new leases and expansion overheads. |
| Store Count | 62 Stores | Includes 9 new stores opened in first 3 quarters; 6 additional stores in immediate pipeline. |
| Cash Reserves | ~₹190 crores | Remained stable YoY despite ₹62 crores invested in expansion during 9M FY26. |
Geographic & Segment Commentary
- Metro Expansion: The company has expanded its COCO (Company-Owned, Company-Operated) presence across India’s top six metros. While Bangalore remains a legacy stronghold, growth is diversifying with Pune growing at 250%, Chennai at 35%, and Hyderabad at 35% following franchisee acquisitions.
- B2C vs. B2B: B2C remains the core focus, contributing 70% of revenue through a mix of COCO and FOFO (Franchisee-Owned, Franchisee-Operated) stores. The B2B segment accounts for 30% of revenue, targeting high-profile projects like airport lounges (Delhi T2) and high-net-worth institutional clients.
- Full Home Solutions (KCD): Strategic pivot toward Kitchen, Cabinetry, and Wardrobes (KCD) is gaining traction. The cabinetry/full-home order book mix increased from 12% in Dec 2024 to 37% in Dec 2025, significantly increasing potential average ticket sizes per customer.
Company-Specific & Strategic Commentary
- Leadership Transition: Transitioned from founder-led to institutional leadership with the induction of a Joint MD and Retail CEO, resulting in a temporary 3-month cost overlap.
- BIS & QCO Compliance: Obtained BIS certification for key products ahead of Quality Control Order (QCO) implementation; management expects this to restrict non-certified imports and favor organized players.
- Best Cost Country (BCC) Sourcing: Shifting sourcing from expensive European imports to local and BCC models to improve price competitiveness and mitigate ForEx volatility.
- Network Rationalization: Conducting a “three-decade reset” involving relocation of legacy stores that outlived catchment potential and upgrading tech platforms for better scalability.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Milestone | ₹1,000 crores | Target remains intact for the milestone within 1,000 working days; growth expected to accelerate as 2022-24 home sales reach handover phase. |
| Store Openings | 15 New Stores by April 2026 | Plans to reach 12 COCO and 3 FOFO stores for the full expansion cycle by early Q1 FY27. |
| Market Opportunity | 109,000+ Luxury Units | Management expects premium home handovers (>₹1.5cr) to double in 2026-2028, creating a massive pipeline for interior fit-outs. |
| Profitability | Improving Margins | Expected as mature stores (>36 months) begin to outweigh “young” stores currently diluting the bottom line. |
Risks & Constraints
| Risk | Context |
|---|---|
| Project Handover Delays | Execution is highly dependent on residential real estate timelines; delays in premium project handovers directly impact furniture delivery schedules. |
| Operational Deleverage | Heavy front-loading of expansion costs (rentals, staff, depreciation) is compressing margins until new stores reach 24-36 month maturity. |
| Regulatory/Labor Costs | New labor code implementation resulted in a ₹0.9 crore one-time hit and recurring increases in employee benefit liabilities. |
| Catchment Migration | In fast-growing cities like Bangalore, rapid shifts in micro-markets can make legacy store locations redundant within 7-10 years. |
Q&A Highlights
Full Home Solution Pivot
- Question: How does the shift to full home solutions affect the business? (Manjeet Buaria)
- Answer: The cabinetry/KCD order book jumped from 12% to 37% of the total in one year. Entering a home via kitchen/cabinetry allows for 6-7x higher ticket sizes as loose furniture orders typically follow (Sunil Suresh).
Profitability and Expansion
- Question: Why is revenue growth lagging store count growth? (Manjeet Buaria)
- Answer: Over 50% of stores are under 24 months old. Mature stores (>36 months) have significantly higher margins, while new stores currently carry high depreciation/finance costs under lease accounting (Sunil Suresh/J.K. Sharath).
Quality Control Order (QCO) Impact
- Question: Will QCO help against unorganized players or imports? (Madhur Rathi/Devanshu)
- Answer: It specifically impacts premium European and Chinese imports. Customs have already begun blocking non-certified goods. Being an early mover in BIS certification gives Stanley a 1-2 year lead (Sunil Suresh).
Leadership and Succession
- Question: Is the founder taking a back seat with the new CEO? (Manjeet Buaria)
- Answer: No, the founder is taking a “further front seat” during this strategic reset. The professional team was added to manage institutional scale and tech implementation (Sunil Suresh).
Key Takeaway
Stanley Lifestyles reported a transition-heavy Q3 FY 2026, with revenue remaining flattish at ₹103.8 crores and a marginal PAT loss due to front-loaded expansion costs. Management characterized the period as a “strategic pause” to institutionalize leadership, implement a full-home solution pivot, and rationalize the store network after 30 years of operations. Despite current margin compression from nine new store openings, the company maintained a strong cash position of ₹190 crores. The strategic outlook is anchored by the doubling of premium home deliveries (>₹1.5cr units) projected for 2026-2028 and the competitive advantage gained from early BIS certification, which is expected to curb imported competition. Management remains committed to its ₹1,000 crore revenue milestone, expecting an inflection point as new stores mature and the kitchen/cabinetry order book—which now constitutes 37% of orders—converts to high-value sales.
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