Cantabil Retail India Limited — Investor Meet, 19-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** For Q2FY25, Cantabil Retail India reported a revenue growth of 12%, reaching ₹151.2 cr, up from ₹135.1 cr in Q2FY24. EBITDA increased to ₹34.6 cr with a margin of 22.8% compared to 21.9% in the previous year. Profit After Tax (PAT) was ₹6.6 cr, slightly down from ₹7.5 cr in Q2FY24, resulting in a PAT margin of 4.3%. For H1FY25, revenue surged by 13%, totaling ₹279.1 cr against ₹246.9 cr in H1FY24, with EBITDA at ₹73.9 cr and a robust margin of 26.5%.

**Future Outlook and Growth Drivers:** Management is optimistic about achieving a volume growth of 15.5% for H1FY25 despite prevailing market challenges. The strategic focus is on enhancing customer experience and expanding into new markets. Targeted store openings are set at 80 to 85, with diversification across product categories.

**Order Book and Operational Updates:** The company successfully opened 23 net new stores during H1FY25, with a total of 556 retail locations—425 company-owned and 131 franchisee-operated.

**Analyst Q&A Insights:** Analysts questioned management about same-store sales growth, which registered at a modest 3.48%. Management attributed this to new store additions affecting the figures and remains confident in achieving a 4%-5% growth target by year-end. Discussions highlighted a mixed outlook on margins, with contractions noted in EBITDA and PAT due to operational costs and store expansions.

**Market or Regulatory Updates:** Market demand remains consistent across both urban and rural segments. Management is addressing challenges tied to rising operational expenses, particularly due to increased depreciation from recent store openings.

**Strategic Focus Areas:** The company's strategy leans toward aggressive store growth, regional diversification, and an introduction of fast fashion elements into its product lines. Current demographic trends suggest robust growth potential in Tier-II and Tier-III towns.

**Investor Insight:** With foundational growth metrics and a clear expansion path, Cantabil demonstrates solid growth potential. Current valuation metrics and future plans indicate a favorable environment for a 'buy' stance, particularly with upcoming festive seasons expected to contribute positively to sales figures.