Cantabil FY26 shows profitable expansion as store network reaches 652

Cantabil Retail India Limited ended FY26 with a clear message: growth is back, and it is coming with improving profitability. For Q4 FY26, revenue from operations rose to 253.5 crore, up 15 percent year on year. The quarter also saw a sharper rise in operating profit, with EBITDA at 78.1 crore, up 34 percent, and PAT at 29.2 crore, up 30 percent. For the full year, revenue reached 852.6 crore, up 18 percent, EBITDA grew 29 percent to 264.3 crore, and PAT increased 28 percent to 95.8 crore.

Behind these headline numbers is an operating story that mixes store-led expansion, better productivity, and disciplined cost control. Cantabil added 53 stores in FY26, taking the total network to 652 stores across 308 cities and 21 states. Retail area expanded to 9.15 lakh sq. ft from 8.04 lakh sq. ft a year ago. At the same time, same store sales growth held in the mid-single digits at 5.24 percent for the year and 4.97 percent for the quarter. This combination suggests growth is being driven by both new capacity and healthy demand in the existing base.

Operating momentum: growth with improving unit economics

Cantabil’s key operating indicators point to steady improvement in customer-led metrics. In Q4 FY26, average basket value increased to 4,484 from 4,009 in Q4 FY25, while average selling price rose to 1,181 from 1,111. Volume growth for the quarter stood at 9.69 percent year on year, and for the full year it was 13.33 percent. These data points matter because they indicate that growth is not just a price effect. Volumes expanded meaningfully while the customer’s ticket size also improved.

Productivity metrics stayed stable, even with a larger store base. Sales per sq. ft per month was 768 in FY26 versus 763 in FY25, and price per sq. ft was 875 in Q4 FY26 versus 874 in Q4 FY25. Inventory discipline also improved. Inventory days reduced to 126 in FY26 from 141 in FY25, and working capital days eased to 104 from 113. For an apparel retailer, this is a key signal because faster inventory movement reduces markdown risk and frees cash to fund growth.

Store mix is also changing in a way that reflects management’s evolving view of the opportunity. By FY26, the company operated 238 family stores, 311 mens stores, and 39 ladies and kids stores. The number of mens stores declined versus FY25, while family stores increased. This shift appears aligned with the company’s stated strategy to deepen reach across categories and improve the customer’s ability to shop multiple needs in one location.

Financial summary (as reported)

Note: Gross margin figures are presented in the investor presentation as gross margin value and gross margin percentage labels. EBITDA and PAT are as per the profitability highlights table.

Margin story: operating leverage shows up in FY26

Cantabil’s FY26 margin expansion stands out because it happened alongside rapid store expansion. For Q4 FY26, EBITDA margin increased to 30.8 percent from 26.6 percent in Q4 FY25. For the year, EBITDA margin rose to 31.0 percent from 28.4 percent. This points to operating leverage and improved gross margin capture. FY26 gross margin increased to 514.8 crore, up 22 percent year on year, with gross margin percentage labels moving to 60 percent in FY26 compared to 59 percent in FY25 and 56 percent in FY24.

The operational matrix gives another lens into cost structure. For FY26, net sales were 853 crore, COGS was 338 crore, employee expense was 123 crore, administration and other expense was 113 crore, and marketing expense was 14 crore, resulting in EBITDA of 264 crore. Compared with FY25, the company delivered higher revenue with a modest improvement in cost ratios. Inventory days and working capital days also improved, supporting the view that growth did not come at the cost of balance sheet stress.

At the same time, below EBITDA costs increased. Depreciation rose to 99.7 crore in FY26 from 80.2 crore in FY25, and finance cost increased to 48.0 crore from 34.8 crore. The balance sheet shows right-of-use assets at 485.3 crore and lease liabilities that together exceed 540 crore (non-current and current combined), reflecting the lease-heavy nature of the store network. This matters because store expansion can lift revenue, but it also brings higher fixed charges that need consistent store productivity.

The company also presented a pre Ind AS 116 view, where EBITDA for FY26 is 162.1 crore with an EBITDA margin of 19.0 percent, versus FY25 EBITDA of 120.2 crore and margin of 16.7 percent. The direction remains the same: profitability improved year on year, even after adjusting for accounting treatment of leases.

Expansion engine: store growth, portfolio breadth, and digital push

Cantabil’s growth model remains anchored in its integrated approach. The company traces its organized retail legacy to 1989, launched its first Cantabil store in 2000, expanded into women’s wear in 2007, and introduced men’s accessories in 2013. It operates an integrated manufacturing facility of 2 lakh sq. ft in Bahadurgarh, Haryana, with capacity of 18 lakh pieces of garments per annum, supported by machinery from brands including JUKI, Ngai Shing, Kansai, Pfaff, Macpi, and Veit. This vertical integration, coupled with design capabilities and quality checks, is presented as a structural advantage in controlling product development and supply reliability.

The company’s footprint is now broad, with state-level presence that includes large bases in Uttar Pradesh (109 stores), Rajasthan (88), Maharashtra (71), Delhi (62), Haryana (58), Punjab (53), Gujarat (47), and Madhya Pradesh (45), among others. The operating indicator chart also shows a steady rise in COCO stores to 526 in FY26 from 463 in FY25, while FOFO stores declined to 126 from 136. Revenue store type mix moved further toward COCO, with FY26 at 81 percent COCO and 18 percent FOFO. This shift can raise control over brand experience and execution, but it also increases operating responsibility and lease exposure.

Digital is a smaller but stated lever. The company reported online sales contribution at around 6 percent in FY26, similar to FY25, while noting that during FY26 Myntra changed the billing system, impacting absolute revenue growth numbers. Management’s target is to scale online to 8 to 10 percent of sales over the next two years without compromising margins. The emphasis on profitability suggests online is being treated as an incremental channel rather than a discount-led growth engine.

Mix snapshot (as disclosed)

Note: Mix percentages are taken as presented in the investor deck.

Vision 2027: measurable goals with FY26 as the base

Cantabil’s Vision 2027 sets out a roadmap that is specific enough for investors to track. The company aims to increase its store network to 725 stores from 652, expand to 330 cities from 308, and reach revenue of 1,000 crores. On profitability, it intends to maintain EBITDA margin in the 28 to 30 percent range, while targeting higher single digit same store sales growth through better store ambience, improved display, and better inventory rotation.

FY26 performance suggests the company is entering this plan with momentum. Store expansion is already active, SSG is positive, and EBITDA margin is above the targeted range for FY26. Return ratios also support the narrative of efficient capital deployment. ROCE stood at 40.2 percent in FY26 and ROE at 22.0 percent, with debt equity ratio at 0. The high ROCE, in particular, becomes important in a store expansion cycle because it suggests the company is generating strong returns even after accounting for the capital intensity of leases and store rollout.

The balance sheet expanded alongside growth. Total assets increased to 1,149.8 crore in March 2026 from 941.2 crore in March 2025. Total equity rose to 478.0 crore from 393.1 crore, reflecting profitability and retained earnings. Inventories increased to 295.0 crore from 279.1 crore, but inventory days improved, suggesting faster rotation. Cash and cash equivalents were 25.4 crore versus 28.0 crore, and the company also reported loans of 25.0 crore under current assets in March 2026.

Takeaways for investors

Cantabil’s FY26 results look like a year where scale and profitability improved together. Revenue grew at 18 percent, EBITDA rose faster than revenue, and margins expanded materially. Store count increased to 652 and retail area reached 9.15 lakh sq. ft, while same store sales remained positive. Operational efficiency improved as inventory days and working capital days fell.

The next phase will likely be judged on how stable these improvements remain as the company moves toward Vision 2027. The plan requires continued store additions, stronger digital contribution, and higher same store growth, while keeping EBITDA margin in the 28 to 30 percent band. FY26 provides a strong starting point, but the rising depreciation, finance costs, and lease liabilities highlight the importance of maintaining store productivity.

Overall, the FY26 theme is disciplined execution. Cantabil expanded rapidly, protected unit economics, and improved return ratios. If it can sustain mid-single digit SSG and keep working capital under control while adding stores, the path to 1,000 crore revenue starts to look measurable rather than aspirational.