Credo Brand Marketing Ltd Management's Take

• 📉 Revenue decreased by 6% YoY in Q3 FY26 to Rs.146.1 crore; 9M revenue also declined 7.6% to Rs.429.7 crore.
• 📊 EBITDA margin contracted from 30.6% to 22.9%, PAT down to Rs.7 crore from Rs.18.3 crore in Q3 FY25, indicating profitability challenges.
• 🏬 Operating 446 EBOs as of Dec 2025, with ongoing network optimization involving store closures and new premium store openings.
• 💻 Digital business grew 87% YoY, aided by social media marketing investments.
• 🎯 Marketing budget planned to increase to 8-10% of revenue to support brand re-positioning and growth.
• ⚠️ Short-term concerns include subdued apparel industry demand, margin pressure from GST changes, and increased marketing expenses.
• 🔄 Working capital improved to 179 days, reflecting better credit and collection management.

📊 Financial Performance

• Revenue for Q3 FY26 declined 6% YoY to Rs.146.1 crore and 9M revenue down 7.6% to Rs.429.7 crore, reflecting softness in the apparel sector.


• Gross profit margin compressed to 56.5% from 61.9% due to GST reforms; EBITDA margin dropped to 22.9% from 30.6%; PAT fell sharply to Rs.7 crore from Rs.18.3 crore, indicating margin pressure and higher costs.

🏬 Operational Highlights

• MUFTI operated 446 Exclusive Brand Outlets (EBOs) as of Dec 2025, expanding by 27 new stores but closing 22 underperforming locations for network optimization.


• Sales mix shows dominance of EBOs (57%), with Multi-brand outlets, online, and large format stores contributing 24%, 11%, and 5% respectively.


• Bottomwear (40%) and shirts (35%) remain primary revenue drivers.

💻 Digital and Brand Initiatives

• Online business surged 87% YoY, driven by social media engagement on YouTube and Instagram.


• Launched 12 new premium format stores under 'Mufti 2.0' aiming to enhance shopping experience and product quality.

📈 Future Outlook

• Marketing budget to increase from ~5% to 8-10% of revenues to elevate brand presence and premium positioning.


• Anticipates a net store reduction of 10 in FY26, with a more balanced open-close strategy planned for FY27 focusing on quality locations.


• Targets EBITDA margin recovery to approximately 25% by Q4 FY26, despite expecting full FY26 revenue to be 5-6% lower than FY25.


• Emphasizes omnichannel growth leveraging digital platforms for better customer reach and conversion.

⚠️ Risks and Challenges

• Apparel industry softness with cautious consumer behavior and weaker footfall impacted festive sales.


• Margin pressures stemming from GST reforms and strategic pricing decisions to retain market share.


• Elevated marketing expenditure expected to temper profitability over the near term.


• Significant store churn may lead to temporary revenue fluctuations but aligned to long-term network quality.

🏭 Business Model and Inventory

• Adopted asset-light approach outsourcing manufacturing but controlling design and quality in-house.


• Maintains inventory risk to prevent brand dilution from over-discounting, resulting in higher working capital but fresher merchandise.