Credo Brands Marketing Limited has informed the Exchange about Transcript
MUFTI · price
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Credo Brands (Mufti) reported Q1 FY26 revenue of INR 119.9 crores, essentially flat year-on-year, with EBITDA of INR 31 crores (25.9% margin) and PAT of INR 6.3 crores. Gross margin expanded 290 bps YoY to 61.6%, though management warned this will normalize to ~56-57% by year-end. The company is embarking on a major premiumization drive: opening 20-odd premium/flagship stores and renovating 15-20 existing outlets in FY26, with store capex rising from INR 25 lakhs to INR 32-35 lakhs each. Marketing spend will jump to 6-7% of sales in FY26 and 8-10% in FY27, up from INR 5.4 crores in Q1 (vs INR 2.4 crores YoY), primarily directed to digital channels. Management guided to flat-to-low-single-digit revenue growth for FY26, with Q2 also expected to be flat, and acknowledged near-term margin pressure from higher rentals and advertising.
Short-term negative for the stock: management has openly guided to a margin hit over the next two years as the company invests heavily in brand premiumization, with payback expected only from FY28. Revenue growth has also been revised down to flat/single-digits, and store count will remain flat. Investors may need to look through 2-3 quarters of subdued earnings for a recovery narrative.