Aditya Birla Fashion and Retail Limited

Sangeeta Tanwani

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Tejash Shah

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Tejash Shah

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Ashish Dikshit

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Garima Mishra

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Jagdish Bajaj

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Jagdish Bajaj

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Garima Mishra

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Sangeeta Tanwani

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Garima Mishra

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This is despite the impact of continued ramp-up of OWND during the quarter.

— Jagdish Bajaj

We are experiencing something like 3% to 4% sort of inflationary pressure as far as raw materials is concerned.

— Ashish Dikshit

And therefore, effectively, it would sort of put pressure in the second half of the year to take -- to fully counter it, take price increases between 5% to 8% depending on the category.

— Ashish Dikshit

So, as of now, while we feared a significant sort of risk on demand, as of now, we have not seen it play out.

— Ashish Dikshit

And therefore, consequent sort of pressure on demand is something that we'll have to wait and watch for in the second half of the year.

— Ashish Dikshit

My only concern is really the demand compression towards, if any, coming towards the second half of the year when the cost inflation, not just in textile, but overall basket, if it brings any slowdown in the market.

— Ashish Dikshit

Just on cash flow statement, if I look at lease liability last year versus this year, a significant decline.

— Ankit Kedia

Why is the interest and lease liability decline in cash flow significantly?

— Ankit Kedia

But it's a significant decline versus last year.

— Ankit Kedia

In the shorter term, you may not be able to see the impact of it.

— Ashish Dikshit

So, still -- we are still in a slightly cautious mode here?

— Sameer Gupta

So, now across the 79 stores, what is your experience in terms of consumer acceptance of our merchandise, the profile of consumers -- and given that there might be some impact of inflation in the second half.

— Hemant Shah

Sometimes inflation causes downward pressure and therefore, value retailers gain out of it.

— Ashish Dikshit

We'll have to remain cautious in terms of our pricing in this and perhaps should be more conservative as far as price increases are concerned.

— Ashish Dikshit

I think the challenge is to create a distinctive brand where you can stand out and charge a reasonable premium to be -- to build a brand around it and which is why we are building the business the way we are building.

— Ashish Dikshit

Q

Thank you. Good evening, everyone. Thank you for joining us today for the Q4 FY '26 earnings call of Aditya Birla Fashion and Retail Limited. Starting with the demand environment in this quarter, demand trends during the quarter remained broadly in line with what we have seen over the past quarter. The wedding calendar was relatively weaker compared to the same period last year. At the same time, towards the end of the quarter, market began to see the emergence of certain disruptions in the context of the geopolitical uncertainties, and we shall see how these developments play out. Against thi

Management

Q

Congratulations on the strong performance. My first question was actually on Pantaloons. So, the 17% Pantaloons format revenue growth. Yes. So, my question was on the Pantaloons format. If you could just help us understand what drove the 17% revenue growth. I understand there could be some benefit of the EOSS, which moved into this quarter. But any additional details you could help us with on this?

Sangeeta Tanwani

Yes, sure. Thanks, Archana, for the question. This is Sangeeta. So, Archana, like we had told you in the last call, the reason why we had pushed our EOSS, based on our new strategy, we were pretty confident of our merchandising sell-throughs, and therefore, we've chosen to move the EOSS to January. This is really a quarter where we think our strategy that we've been working on for the last 18 months with a concerted set of actions, which are translating into results, which starts from, as Jagdish alluded in his speech, fundamentally defining our target audience in a very sharp manner, strength

Q

First question pertains to overall your read on demand sentiment because this quarter was a slightly muddy quarter in terms of the first 2 months were very normal and then the last month, we saw disruption at a macro level, not in India, but otherwise, the sentiment-wise and then supply chain-wise. So, whether the last month has disrupted the flow materially or at all? And then should we extrapolate the sentiment or revival that we have seen to FY '27 as well?

Ashish Dikshit

So, Tejash, I think FY '27 on a full year basis is perhaps too much of a stretch when things are changing on a daily basis, would be hard to assess on a full year basis. But to your question on a more near term, you're right. I think there was a marginal impact in March, which was -- which slowed down some of the momentum which had built up in the previous 3 to 4 months. But we have seen demand nearly normal for most part of April and going into this quarter. So, as of now, while we feared a significant sort of risk on demand, as of now, we have not seen it play out. Having said that, most of

Q

My first question is on the company's cash flow situation. So, it seems like cash consumed in FY '26 is of the order of INR1,400 crores. I'm just summing up the operating cash flow payments for lease liability and capex, right? So, how are you viewing your liquidity situation considering per your earlier guidance, the company becomes FCF positive only by FY 2029?

Ashish Dikshit

I'll get Jagdish to respond to. Thanks, Garima. So, at the standalone level, we started the year with a gross cash of INR2,100 crores. As stated, we are planning to utilize it INR1,000 crores in FY '26, INR600 crores in FY '27 and INR500 crores in '28, post which we aim to be FCF positive in FY '29. In FY '26, we were cash EBITDA positive, at a standalone level. As we aggressively ramped up our new businesses during this quarter -- during this year, we consumed totalling to around INR1,000 crores, INR300 crores towards working capital, INR450 crores towards capex and infused INR250 crores in o

Q

My question again is in relation to Pantaloons. Now if we add up the Q3 and the Q4 numbers and then we compare it with the last year H2 base, the growth is 6%. Now the growth that we see in Q4, would you say just it's merely a shift of the one quarter to other? Or I mean, as you've been highlighting that the strategy is working out. So, are you seeing the benefits again seeping in, in the Q1 numbers as well?

Sangeeta Tanwani

So, as I mentioned before, this is obviously not -- even if you normalize for the shift of the EOSS, as I mentioned before, even if I look at November to March, which normalizes for both the shift in festive from last year versus FY '25 -- and if you account for the shift of the EOSSs as well, our growth -- and therefore, quarter 3 plus quarter 4 may not be the best way to look at it because there's a shift of festive sitting there. And therefore, November, March is the cleanest period to kind of look at the true growth. Our growth are pretty high, like-to-like, in fact, is in the range of abo

Q

Sir, just within Pantaloons division, if I have to take OWND out there, what could be the Pantaloons margins, if I exclude OWND and what are the losses in OWND products?

Ashish Dikshit

Pantaloons margin for the quarter, and I think for the year are also between 18% to 18.5%, which is the margin that Pantaloons has consistently delivered slightly higher than last year. OWND losses are, therefore, causing the rest of the difference between the segmental profitability. Business is still very small. We are investing. We've got a whole new team, separated the business, relaunched the brand this year. So, we'll have to wait and see, wait for some more time to get a reasonable sense of profitability of this business. So, in this environment where you said demand challenges could co

Q

Firstly, and I know a lot of people have asked on this, but Pantaloons. So, if I look at the full year numbers and this normalizes for festive shift, EOSS shifts, etcetera, it's a 2% LTL. And this has generally been a good year for apparel. So, we have a Shoppers Stop and a V-Mart both reporting 5% LTL growth this year. So, is it a case in case of Pantaloons of the first half being poor and second half with all our strategies and actions? Is that the case?

Ashish Dikshit

Yes, that's right. Absolutely. Okay. And if that is the case, then why are we still not accelerating the pace of store addition? I heard in the other question, you said 20 to 22 store additions in FY '27, and this happens to be a multiyear opportunity. Why then the confidence is not showing in our store addition guidance? So see, it will be very knee-jerk reactions if we keep reacting to every quarter's responses, which is why we look for long-term trends and opportunities, which is why, as Sangeeta mentioned, we have looked at last 5, 6 months of last year as well as we are getting into this

Q

First thing, I wanted to understand on the OWND. So, now across the 79 stores, what is your experience in terms of consumer acceptance of our merchandise, the profile of consumers -- and given that there might be some impact of inflation in the second half. So, how do you see the impact on this brand?

Ashish Dikshit

So, OWND, as you know, is in a very early phase in a market where there are multiple players between 300 to 1,000 stores. We have just started the journey. So, early stage for us to make conclusive sort of points about it. There are largely 2 set of customers. One is young people who are looking for what one could call a disposable fashion, fast fashion, different names used for it, which is high fashion but low price. The other is simply customers who are looking for reasonable quality at low price, which is mid- to low-income family customers. Both these profiles currently exist. We are obvi

Q

Sir, we have spoken a lot regards omni as far as Pantaloons is concerned and also the online businesses in general, getting more traction. But could you give some sense on how the competition is panning out? So, are we seeing more competition even from the other players, especially on the overall online business is concerned? And also your specific comments on the same with TMRW because it's more of an online kind of a brand. So, how are you facing the competition there vis-a-vis how soon you expect the profitability in case of TMRW to come in, in this context?

Ashish Dikshit

So, I think it's very similar to the question that was asked in context of the ethnic wear. There are -- it's not that new online players are coming. I mean online players have got established. All the new players who had to come have come in the last 6, 7 years. There are new players coming in. Equally, there are older players which fall out. As far as TMRW business is concerned, you've seen consistently, we report every quarter the growth numbers -- we're still growing on a full year and a quarterly basis at 30% plus. This is the third consecutive year and about 10, 12 quarters with the exce