Ladies and gentlemen, good day and welcome to Metro Brands Limited Q4 FY 2026 earnings conference call hosted by Emkay Global Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Devanshu Bansal from Emkay Global Financial Services. Thank you, and over to you, sir. Yes. Hi. Thank you and good afternoon, everyone. I would like to welcome the management team of Metro Brands and thank them for this opportunity. We have with us today Mr. Rafique Malik, Chairman, Ms. Farah Malik Bhanji, Managing Director, Mr. Nissan Joseph, Chief Executive Officer, Mr. Kaushal Parekh, Chief Financial Officer, Mr. Mohit Dhanjal, Chief Operating Officer, and Ms. Alisha Rafique Malik, President, Sports Division, E-commerce and CRM. I shall now hand over the call to the management for the opening remarks. Over to you, sir. Thank you, Devanshu. Good afternoon, everyone, and thank you for joining our earnings call. In Q4 FY 2026, we posted a 20% growth in our standalone business along with a 21% growth in EBITDA, leading to a PAT of 15%. We continue to see consistent growth from our multiple e-com channels in our digital commerce business as it grew 53% and holds a 12% share of our total revenues for that quarter. A few noteworthy points on store openings. We crossed the 1,000-store mark last quarter by opening a net of 42 stores and ended the quarter with a total of 1,034 stores. In those openings, we also had our first two Thea stores that we opened since the acquisition. As we look to the future, we are closely monitoring the Gulf crisis to see the impact that it could potentially have on our raw materials and other input costs, though we believe we can mitigate most of it for the near term. We remain aware that there could be disruptions caused by geopolitical issues, and we will stay agile to make sure that we continue to maximize our sales and profitability in those situations. In March of 2026, we also opened a new DC that increases our storage capacity by 200,000 sq ft, ensuring that we have the capacity to cater for our growth. We continue to invest in growing our multiple banners, invest in our talents, our technologies, and last but not least, in our marketing initiatives to ensure that we continue to hold a strong position in the market. In closing, despite a slow start to the fiscal year, I'm very pleased to see and proud of the team that at the end delivered metrics in our guidance range, which has been PAT in the mid-teen% range, EBITDA in the high 20%-low 30%, and of course, a sales growth of 15%. With that, I will now turn it back to the operator for questions. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Sameer Gupta from IIFL Capital. Please go ahead. Hi. Good afternoon, everyone, and thanks for taking my question. First of all, congratulations on a good set of numbers. First question, sir, most of the input cost basket has gone up. Specific to crude, we're seeing a very sharper inflation. Now, if you can just quantify the kind of input cost inflation that you're facing at this point, and what is the strategy? I know you mentioned you can mitigate it, most of it in the near term. Still, are you looking at price hikes going forward? I still understand that you have more than six months of inventory. Still, the procurement for the next season would have started, and you would be locking it at higher prices. Just wanted to understand this aspect. Great. Thank you, Sameer. There's two ways that we plan on mitigating this. First of all, we are looking at forward buying a lot of the raw materials that we can buy in bulk to make sure that we don't see significant price hikes there. Overall, if it does impact us in those items that it impacts us, I think we've seen overall input costs of 10%, maybe. It's not a significant spike, though there are certain categories that spike a little bit more than the others. Like you rightly said, we do have six months worth of inventory, and we also have orders placed for past that period of point that would be protected in price. When you look at the overall picture of things, it's going to be a lot more gradual, though input costs may spike in between, we're not going to have the step spike. Because we are so far planned out, we're able to then figure out how best to mitigate it. Got it. Basically not looking at any immediate reaction in terms of pricing at all in the near term. Correct. That would be a correct summary. Well, nothing more than normal inflation, Sameer. 10% inflation is normal. Sameer, this is Kaushal. Sorry, Sameer, this is Kaushal. Sure. Go ahead. In fact, a slightly higher inventory that you see is also one of the reason behind this is some front loading of inventory that we did in anticipation of this price rise, which may see gradually coming through from now on. Got it. Got it, Kaushal. That's very helpful. A sub-question to this is also, there is an impact on the input cost basket, but there is also an impact on the end consumer demand. Usually, inflation tends to have higher impact on discretionary products. Just wanted to understand any experience that you can share, how has it been in the past? Now, FY 2023 is a very muddled year, or even though it was an inflationary, but there were a lot of other things that were happening, so that may not be the right benchmark. In previous years where there was high inflation, how did demand pan out at that point in time? But footwear is still a discretionary purchase which can be deferred, so that is the source of this question. Yeah. I think, there's a couple of ways to look at that. First of all, footwear is not a constant purchase, right? That you feel, an inflation would hit your wallet to a significant nature. Neither is it a big-ticket item. Those are the two things that things like [ASAP] going for it. The other thing is, unfortunately, inflation really affects the low- to middle-class much harder than it seems to affect a slightly higher class of person. Therefore, we don't see as much fluctuations come when there's inflation of a higher nature. The demand tends to not be as spiky or lumpy, when we see inflation as you might see with people that have seen a significant increase in their basic basket of good purchases. Because of the premium nature or the premium and, target consumer, you are saying that the elasticity to inflation is that much lower? Correct. Got it. I'll come back in the future then for any follow-up. Again, thanks for taking these questions. Thank you, Sameer. Thank you. Next question is from the line of Rahul Agarwal from Ikigai Asset Manager. Please go ahead. Hi. Thank you so much, and a very good afternoon to the team on the call. I have two questions, both on more medium-term trends. One is when I look at the in-store sales, I see single-digit growth over the last three years. If you could just comment on how do you see walk-in with footfalls in stores, and the growth forward. And for fiscal 26, and obviously including fiscal 25, the sense I'm getting is that most of the top-line growth is driven by new store additions, and lesser from SSG. Any comments specifically on same-store sales growth across in maybe Metro Mochi, the core network? Will you just talk about that? Thank you so much. Thank you for your question, Rahul. We are seeing footfall growth in our Metro Mochi stores. Another way to look at that also is the basket of goods that they do buy. We've opened up stores that have different mix of sales to square foot, and you can see that we've maintained our square footage compared to the last quarter, at 4,500. That shows that it is not just coming from new stores, because if it was only new stores, you would start seeing that square footage, sales per square foot go down because new stores typically aren't as productive as your existing stores, right? They get up to that mark, but not right away. We always think that there's room for improvement in SSG. We're quite pleased with the SSG we're seeing, especially since we're able to decipher how we look compared to the market in previous quarters, once we see the numbers. That has also been indicative to us that we're gaining market share. You're right, a portion of our increases do come from new stores. A portion of our increases do come from the annualization of stores that we opened in the previous years. That is not what drives all of it. It is definitely SSG that drives it. Got that. The question on the in-store footfalls, how should I look at that part of the segment? Yeah, no, we're seeing in-store footfalls growing. One way to measure that is also the number of bills that we have. We've seen that, but more importantly, what we're seeing from our CRM database is in the back half of the year, also the same part that we saw business start to improve, we started seeing new customers come into our into our stores. Customers that we didn't have. Maybe they were not new, but we never had information on them, so one could lead to the conclusion that they were new customers. We started seeing that increase too, which is where if you've tracked us from Q1 through Q4, you've seen steady improvements in our business and it's largely driven by ability to acquire new customers and also go back and win back and/or get customers to repurchase in our stores. Got it. Got that. Thank you so much. I'll get back in the queue with more questions. All the best. Thank you. Next question is from the line of Gaurav Jogani from JM Financial. Please go ahead. Thank you for taking my question. Congratulations on this concept of numbers. My first question is with regards to the nature of the growth, if you're seeing the growth, you know, one, we are seeing the portion of men's has increased significantly in the overall contribution whereas the unisex has kind of declined. Anything to read there, given that Walkway and clogs are also adding this kind of a model? No, Gaurav, I think best way is to look men's and unisex together because at times, due to some reclassification that happens from few of the third-party brands, you see slight movement. Even during this quarter, the increase that you see in men's, there is equivalent decrease that is happening in unisex. Nothing, nothing more to read into that. Okay. Okay. Just one data point that we also able to get from the data was that the eastern part of India has kind of declined, whereas the south part of Yeah, it's continuing to grow faster for you. Anything specific to eastern part which has led to this decline of 10% on a year-over-year basis? On a first quarter basis, that is. We're just trying to see the number you're saying, right? It's pretty much in line with our number of stores. It depends on what happens from a festival standpoint in the other markets as much. If you look at it over the years, the eastern part of our business has been between the 13%-15% mark, right? That quarter, we were 14%. For the year, we were 14%. It's nothing unusual that happened there that I could point to. Gaurav, it's also rounding off that comes here because we are not showing in decimal points. Even 14.51 ideally will get rounded up to 15. Whereas 14.49 would still be rounded down to 14. We have not seen any decline as such in the eastern part of India. Just last part from my end. Given the medium-term guidance towards that 15%-18% growth, now you have multi-fold brands in your [LTT], how are you looking to segregate this growth between your core brands versus the new age brands? What kind of growths are you looking from these two cores? That would be the second question. Yes. I think from a quantum of growth in each one, there's a significant opportunity for each of those banners to grow, right? There's varying degrees of what growth looks like. The Foot Locker can grow to a certain number, definitely not as big as the number of Metro Mochi stores out there, right? Same with Clarks. Each of them, for the next few years, from a quantum standpoint, has the same quantum potential for growth. As you know, we're well-capitalized. If we find the right opportunities for whatever brand that might be, we're happy to open those stores. The opportunity exists, Gaurav. The willingness on our part exists. The tools exist, and of course, the capital exists. That's not a restraint in any way. It's just got to be the right locations and the right markets for that right banner. Yeah, sure. Actually, your question was different. I do understand there's core opportunity there. Just given that the base for the core brand is now higher and that the newer brands are starting at a lower base. Can there be the quantum of growth percentage could be different in each of these? If yes, what kind of growths can we expect from newer set of the cores versus the older cores? No, correct. Gaurav, I think I understood your question. When I said quantum, maybe I didn't clarify. Quantum in terms of numbers, not in terms of percentage, right? In terms of numbers, for the next foreseeable couple of years, all of them have a significant opportunity to grow almost to the same level. It might vary a little bit left and right. From a percentage standpoint, as you rightly pointed out, it'd be significantly different. We have no Clarks stores today, so their growth will be infinite, so to speak, on a math basis. Whereas Metro Mochi has a lot of stores, so their growth may seem small on a percentage basis. When you look at a numerical quantum, I think the opportunity for each of those banners to grow at equal pace almost is quite good. Sure. Thank you. Thank you for answering my questions. Thank you. Next question is from the line of Umang Mehta from Kotak Securities. Please go ahead. Hi. Thanks for the opportunity, congrats on a good year. My first question was again on demand. Currently, what kind of momentum are you seeing? We are seeing three quarters of stable FSS, so revenue per square foot. Are you confident that with the current pace of expansion, that number will remain stable or grow from where we are? A related question was, you mentioned about festive wedding demand to be good and GST tailwinds. Was there anything like lower or higher festive or wedding days in this current quarter versus base quarter, which was kind of driving this improvement on a sequential basis? Okay. Just to take it down, decouple your questions. I'll take the last part first. There was nothing significant driving it, like I said, I think some of the marketing initiatives that we're putting in place is driving new footfall to our stores, that's where you're seeing that growth come from. When we look to the future, Umang, we are pretty confident that on a long-term basis, we can continue to grow our business in that 15+% range year-on-year as we've done and shown over periods of time. Will there be hiccups in between? Absolutely. Will there be things that come in? Absolutely. Will there be normal things that come in that create differences such as lower wedding dates one season or one quarter versus another quarter? Those things will always happen. For me to commit and say every single quarter will be at 15% is a little bit erratic on my part. However, what I'm confident about on my part is we can keep this sustained growth going for quite a bit of time. Thank you. The second question was on the network expansion. Specifically, if you can call out on current pipeline for Fila, Foot Locker, Clarks, and MetroActiv. How many stores could we possibly add in 2027? All of them combined? Separately. Yeah. Let me break it down this way. I think the opportunity to open, I am just going to say an aggregated number in those brands that you mentioned. Opportunity to open 50 stores exists. Will we get the right locations? Will we get the right rentals? Will we get the right timing of all of those? Will we make sure that BIS is mitigated, especially for the Foot Locker and the MetroActiv brands, which are heavily dependent on imported products? Those are questions that remain unanswered. Until we have clarity of all of those things, we try not to just open stores rapidly. The opportunity exists easily this year. Now, the question is, how much of those opportunities we realize due to other economic conditions that we may or may not control. Sure. BIS issue is there even in Clarks, is it? Well, BIS issues, to varying degrees, happen with most of our brands. With Clarks, it's not significant because they have more production in India. To varying degrees, it has it. Don't forget, let's assume it's 15% of an entire brand's portfolio, right? You know that 15% is what's super accretive to your profit line. That's what's doing a lot of flow through down to your profit line of that banner, right? If you miss that last 15% of your sales, the impact to your profit could almost be all of that amount. That's why we're very, very careful when we make these decisions. Sure. Makes sense. Just one last one for Kaushal. Possible to highlight the pre-Ind AS EBITDA impact for the full year? Pre-Ind AS EBITDA Umang would be around 21 odd percent, and I think we have already given a pre-Ind AS EBITDA. For the full year, it is 15.5%. Sure. Thank you so much. Thank you. All the best. Thank you. Thank you. Next question is from the line of Shraddha Kapadia. Sorry, Shraddha Kapadia from SMIFS Limited. Please go ahead. Hello. Am I audible? Yes, you are, Shraddha. Go ahead. Yes, ma'am. Go ahead. Congratulations on the good set of numbers. If we take a look, then e-commerce and omni-channel sales have increased significantly for the Q4. How should we look for it for the upcoming years? I think you should look at it as a percentage of business, right? The business is growing and so is e-com. It's not necessarily what is e-com going to grow as this. We look at it as what percentage of the business should it represent. It's going to represent somewhere between 12%-15% of our business, in the near term. That might grow, that might not grow, but from where we sit in the near term, that would be how we look at it. You can do the backward calculation to figure out if the rest of the company's growing at X, what would e-com grow. As you know, with e-com, we do have some lumpy quarters depending on what the festive season is, depending on when the brands do a lot of sales online and all of those things. There is some lumpiness in the e-commerce growth. Overall, we think it'll be somewhere between the 12%-15% range. Sure. That was quite helpful. Also to understand that if we take a look, the Foot Locker expansion remains cautious due to the BIS-related issues. When do we expect the supply chain challenges to normalize? Also the Fila repositioning is underway with the local manufacturing. When do you expect the brand to meaningfully contribute to the overall growth and profitability? Okay. The Foot Locker growth, it's not like we've stopped opening stores. I think the aspiration was to open a lot more stores by now if we had the comfort of BIS. We still don't have it, and unfortunately, this is not something that I can predict. It's out of our hands to predict. All I can tell you is as of today, we still don't have 100% comfort that BIS challenges, for whatever reason, have been mitigated. Different brands are at different spaces with it. That ebbs and flows, by the way. Sometimes brands don't get licenses renewed, sometimes they get it renewed. It's a little erratic from where we sit to predict how that is going to look. That's foundationally on that. Your second question, Shraddha, was on Fila. As you know, we've opened up our stores in Fila, we spent a lot of time and money cleaning up the old inventory. As we reposition it, because we're trying to build for the future and not trying to get a quick sale, we want to build it the right way, and that takes a little bit of time. I've got to believe that in the next 18 months, it becomes meaningful to our numbers. Got it. Sure. That was quite helpful. I will follow back with you. Thank you. Thank you. Thank you. Next question is from the line of Tejas Shah from Avendus Spark. Please go ahead. Hi. Thanks for the opportunity and congrats on the set of numbers. My first question pertains to your read on the consumer sentiment. Our performance has been very good, but would you attribute largely to our own efforts on expansion or branding or servicing? Or is it that we are actually picking up a real uptick in sentiments at consumer level as well? I think it's a combination, and it depends which banner you're talking about. Some banners had outstanding product launches. That helps. Some banners are now taking share away from unorganized markets. That has helped. Where we feel a little bit more insulated is twofold. One is our customer, for the most of our business, tends to be a premium customer, right? And as we know, inflation doesn't hit them hard right away. It has a delayed effect on them. And because we're not a frequent purchase or a high-ticket purchase, they're not going to do the calculation, "Oh my God, I can't afford this. I'm not going to buy it, and I'm going to go down and break." That's not who they are, right? That's how the premium customer acts. When it comes to the value customer for our Walkway business, we are so under-penetrated with Walkway relative to the market, which is dominated in specific. See, the overall footwear market has 70% in unorganized footwear, but in the premium space, in the value space, it's much higher, that is, in the unorganized market. Walkway has huge opportunities to continue its growth given its market share today in that space and the shift from unorganized to organized and the aspiration of customers to have better shopping environments and honestly pay more. We see us not being insulated, but I think we see us having a few moats around us that would tie it to any significant swings of inflation. Yeah. Nissan, just focusing on your customer set, based on whatever media headlines and other numbers that we are picking up, the white collar jobs seems to be under stress or that part of the market, which is essentially your customer. I was just trying to understand that, is it that our customer base is part of subset of this, which is insulated from the macro views that we are picking up? Or there were, as you said, that we had also product launches, and we had also made a lot of intervention for growth revival. I'm just trying to understand the momentum that you have said this quarter, is it sustainable for next year, at least in the near future? Tejas, I think there's a lot of things that go into having good retail quarters. At the foundation of it, if the consumer sentiment isn't right, you can't get it. It doesn't matter what you do. But on the other hand, we're comparing ourselves against the previous year, right? What were the inefficiencies we did last year? What were the misses we had last year? What are we better at this year versus last year? A lot of that comes into play. And in all honesty, there's so much more we can do to keep improving. My confidence, saying that we can mitigate it or at least we will be the ones that lead the way out of it, is not coming from the fact that one single thing alone, that my consumer won't be affected by it. There are many things we can do to also insulate ourselves from it. Some of these numbers you're seeing does come from consumer sentiment. It also comes from some of the product launches we've done, some of our marketing initiatives that we've invested in, some of the tech we've invested in our CRM. There's a lot of initiatives going on that we feel is driving it. Yeah. The last question. Some time back, we were kind of highlighting that the rentals or the competition for the rental space was not sustainable for us to make a very profitable construct of the business there. Looking at the store expansion this year, should one assume that we are out of that very hyper-competitive market cycle? From here on, based on this, how should we think about store expansion and rate going forward, looking at the space availability and competition both? Yeah, I don't think we're out of it. It's not like it's gone back to the good old times per se. I think what we're not seeing is its acceleration that we saw, right? We think that stabilized a little bit. Then, I think we're also got a great BD team that's working really hard to find us the right locations in the right spots that make sense for us. There's a lot of things there, too. Any guidance on store expansion? As many good ones as we can find, Tejas. Okay. That's all. All the best for coming quarters. Thank you. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes. Hi, Nissan. We have been investing in building up a strong leadership team, improving operations and technology for the last couple of years. Checking if you could talk about some of the large changes that have happened over the last year or so. This will help us better appreciate the improvement in growth profile and also sort of give us confidence for us in the road going ahead. I think, let's start off with the technology piece of it, right? We have now gone through an evaluation of our store POS system, and we are moving to a much more robust system that suits us. We appreciated the last one we had, and we loved the last one we had. When we looked the way we want to go, there is other POS systems out there. We have started that tech upgrade to the new POS system that will start in June, and by the end of the year, we hope to have that rolled out. We have also started developing AI agents in-house, to manage agentic workflows inside the organization using AI at its finest level of efficiency. We want to see that come to fruition. We are also continuously investing in all kinds of technology, including giving our people access to AI sites for different reasons. Not everybody wants the same AI site. They all have different functionalities. From a tech standpoint, we have definitely done our due diligence, and are working towards it. Now the lease of it, where we will be doing an SAP upgrade as well later on this year. All of that is in place, right? From a people standpoint, we continue to invest in people. We have had three significant hires in the last 12 months. Some of them are role replacements, and some of them are new. We added a new Chief Technology Officer, we have added a new Chief Marketing Officer, and most recently, we also added a Chief Product Officer to the team. All of these people come with deep domain experience, and they also come with scale experience. They also come with complexity experience, which is all of the things we need to run our business. We have been strengthening the management team, the senior leadership team. I feel very confident about the capabilities of the team, and it is now a question of how we can leverage that to take us to the next step. Sir, this leadership investment is largely done with, or we expect few more gaps to fill up in the due course? I think as we grow, right, there's always going to be gaps. There's always going to be gaps caused by our growth. There's going to be gaps caused by attrition, right? There's always going to be gaps that come up. I think for the most part, for where we are today, I think we've got a terrific team in place. Understood. All these leadership hires are new roles that have been created, right? Like chief product officer and chief technology officer, or these were also there in this new leadership that has joined? Some of them are new. The chief product officer role in its current avatar is a new role. The chief marketing officer role is new. We haven't had that position for a couple of years. The chief technology replacement product is a slightly differentiated avatar. We also, by the way, I think it was in the previous fiscal year, we hired a chief digital insights officer to join the team, which is why we've been able to take advantage of some of the AI initiatives that are coming through. We're investing not only in the product side of it or the marketing side of it, but also the technology side of it. Fair enough. Nissan, second, I wanted to understand Walkway and the format. The expansion has definitely accelerated in FY 2023. Any initial read-through on how the format is ramping up? Have we now crossed the pilot phase and now the expansion to be H2 2023? In one of the comments, you mentioned that the format has deep penetration potential. If you could throw some light here, it would be helpful. Yeah. I think from a market space standpoint, it has potential for two reasons. There are more tier 3 and tier 4 towns in this country than there are tier 1 towns, right? That's where Walkway would be playing. That's number 1. In those tier cities, unorganized sector leads the way. I would guess, and this is not a study, but if the average is 70% in those sectors, it's almost 85% of the business is done in an organized sector, right? The ability to serve that consumer is high, the market size is big, the number of stores are big. That's why we feel that the opportunity for growth exists. What we have to still keep cracking and getting it right is, how does Walkway play in a tier 2 town street? How does it play in a tier 4 street store? These all come with different mechanics. It's not a cookie-cutter approach. Until we figure out the entire formula, I would never feel that the pilot is done, which means I don't naturally ever feel my work is done on any store concept. I think there's a lot more pieces to the puzzle to make Walkway successful across from tier 2 to tier 4, through small shopping centers, through high streets, to high-density markets. Overall, though, we are pleased to see that the profitability and the model of Walkway starting to make a lot more sense, especially to our ROI. Fair enough, sir. Thanks for taking my question. Thank you. A reminder to participants, you may press star and one to ask the question. A reminder to all the participants, you may press star and one to ask the question. As there are no further questions, we take that as the last question, and we conclude today's conference call. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.