- Revenue (Q3 FY24): INR156.2 crores, up 4.9% year on year.
- Revenue (Nine months FY24): INR471.3 crores, down 5.9% year on year.
- Gross Margin (Q3 FY24): 45.7%, up 410 basis points year on year.
- Gross Margin (Nine months FY24): 45.1%, up 390 basis points year on year.
- EBITDA (Q3 FY24): INR18.2 crores, up 8.7% year on year.
- EBITDA (Nine months FY24): INR54.1 crores, down 3.5% year on year.
- EBITDA Margin (Q3 FY24): 11.7%, up 50 basis points year on year.
- EBITDA Margin (Nine months FY24): 11.5%, up 30 basis points year on year.
- Net Profit (Q3 FY24): INR1.8 crores, down 62% year on year.
- Net Profit (Nine months FY24): INR5.3 crores, down 60.1% year on year.
- PAT Margin (Q3 FY24): 1.2%, down 200 basis points year on year.
- PAT Margin (Nine months FY24): 1.1%, down 150 basis points year on year.
- Retail Sales Contribution (Q3 FY24): 68%.
- Retail Sales Contribution (Nine months FY24): 67%.
- Retail Store Count: 864 stores as of nine months FY24, with 15 new stores opened in Q3.
- COO Store Count: 221 as of nine months FY24.
- Franchisee Store Count: 643 as of nine months FY24.
- Distribution Business Contribution (Q3 FY24): 28% of revenues.
- Distribution Business Contribution (Nine months FY24): 30% of revenues.
- Distributor Count: 747 distributors as of nine months FY24, with 6 new distributors added in Q3.
- States and Union Territories Presence: 25 states and 5 union territories as of December 2023.
Release Date: February 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue growth of 5% year on year, reflecting brand strength.
- EBITDA growth of 9% year on year, showcasing operational efficiency.
- Retail store count increased to 864 with 15 new stores opened in Q3 FY24.
- Gross margin improved by 410 basis points year on year to 45.7%.
- Positive results from new sports shoe launches, especially in the ladies' segment.
Negative Points
- Net profit for Q3 down by 62% year on year.
- PAT margins for nine months FY24 decreased by 150 basis points year on year.
- Distribution business remains loss-making for the last three quarters.
- EBITDA margin for retail business slightly down due to festive promotions.
- Pending receivables from Punjab and UP affecting cash flow.
Q & A Highlights
Highlights of Khadim India Ltd (BOM:540775, Financial) Q3 and Nine-Months FY24 Earnings Call
Q: Can you highlight the timeline for the demerger process and the separate listing of the distribution business?
A: The demerger process is pending with the stock exchange. Once approved, it will be sent to the NCLT, and we expect it to take around six more months, likely completing by August 2024. The separate listing of the distribution business will happen the month following the NCLT order. (Indrajit Chaudhuri, CFO)
Q: Why were EBITDA margins for the retail business slightly lower this quarter despite the festive season?
A: During the festive season, we incurred additional costs for promotions and incentives to our retail and franchisees, which impacted the EBITDA margin. (Indrajit Chaudhuri, CFO)
Q: Are you still targeting 19%-20% EBITDA margins for the retail business in the next few years?
A: Yes, if the retail business grows by 10%-12%, we can achieve 18%-20% EBITDA margins in the next three years. (Indrajit Chaudhuri, CFO)
Q: What steps are being taken to make the distribution business EBITDA-positive?
A: We are reducing debtors and controlling costs. Post-demerger, further cost reduction steps will be taken. If demand improves, we aim to achieve positive EBITDA. (Indrajit Chaudhuri, CFO)
Q: How has the sports shoe segment performed, and what is its current contribution?
A: The sports shoe segment contributes 17%-20%. New launches, especially in ladies' sports shoes, have performed well. (Rittick Burman, Whole Time Director)
Q: What impact has the implementation of BIS had on costs and margins?
A: There is a slight increase in costs from vendors, but it is nominal. We do not expect a significant impact on margins. (Indrajit Chaudhuri, CFO)
Q: What are the plans for retail store additions next year?
A: We plan to add 25 COCO stores, primarily in the East and some in the South, and 65-70 franchisee stores. (Indrajit Chaudhuri, CFO)
Q: What has been the volume growth in the retail business this quarter?
A: The retail business saw a 17% volume growth in COCO stores and 10%-11% in franchisee stores during the festive season. (Indrajit Chaudhuri, CFO)
Q: What is the current debt on the balance sheet, and how will it be allocated post-demerger?
A: The current debt is around INR122 crores. Post-demerger, approximately INR100 crores will be attributed to the retail business, with the balance in distribution. (Indrajit Chaudhuri, CFO)
Q: What is the status of receivables from Punjab and UP, and how will they be utilized?
A: We have received INR28 crores from UP, with INR10 crores pending. Punjab has INR32 crores pending. Once received, funds will be used for debt reduction and working capital. (Indrajit Chaudhuri, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
