Captains Speak     

Published: January 31, 2025
Updated: January 31, 2025

Cantabil Retail India

Expanding footprint, adding products

Cantabil Retail India Ltd, a New Delhi-headquartered apparel manufacturer and retailer, has launched a new series of enhancements to its e-commerce platform, Cantabilshop.com, to improve the online shopping journey.

Maintaining that “the new features offer a more intuitive, user-friendly interface with streamlined navigation, advanced product filtering, and faster checkout options, making it easier for customers to find what they need,” Deepak Bansal, director, added that “the upgraded website includes realtime inventory updates and personalized product recommendations, helping customers discover items that match their preferences. Secure payment options, backed by 256-bit encryption, provide peace of mind, while flexible payment methods — such as credit/debit cards, internet banking, wallets, and cash on delivery (COD) —ensure convenience.”

According to him, additional benefits include free shipping on orders above Rs 999, a 15-day hassle-free return and exchange policy, and special discounts that add value to every purchase. For prompt assistance, customers can reach out via WhatsApp or email, ensuring quick resolution of any concerns.

WOOING CUSTOMERS

Maintaining that “at Cantabil, our goal has always been to make shopping for quality fashion as effortless and enjoyable as possible,” Mr Bansal added that “with the updates to Cantabilshop.com, we are not just adding new features, we are creating an experience that makes our customers feel valued and understood. Whether it’s making it easier to find their perfect outfit or simplifying the checkout process, every change is about connecting with our customers and making their lives a little easier. This is just one step in our journey to bring the best of Cantabil closer to them, wherever they are.”

Reviewing the working of the company during Q2FY25, Mr Bansal pointed out that Cantabil had a good beginning in FY25. It achieved volume growth of 15.5% in H1FY25 despite challenging market conditions. Growth is being driven by expanding to newer markets and adding new product categories. The company’s focus is to expand geographically, add manufacturing capacities, improve manufacturing efficiencies, and solidify its position in the fashion apparel sector. Revenue stood at Rs 151.2 crore in Q2FY25 as against Rs 135.1 crore in Q2FY24, a growth of 12% YoY. The EBITDA margin was at 22.8% as against 29.6% in Q2FY24. Net profit stood at Rs 6.6 crore in Q2FY25 as against Rs 7.5 crore. Referring to the performance during the first half (AprilSeptember 2024), Mr Bansal revealed that revenue stood at Rs 279.1 crore in H1FY25 as against Rs 246.9 crore in H2FY24, a growth of 13% YoY. The EBITDA margin was at 26.5% as against 25.9% in H1FY24. Net profit stood at Rs 18.0 crore in H1FY25 as against Rs 19.8 crore in H1FY24.

NEW STORES

According to him, the company opened 23 new stores in H1FY25, taking the total store count to 556 stores as on Sept 30, 2024. Of these, 425 stores are company-operated and the remaining are franchiseeoperated. The total retail area stood at 7.03 lakh sq ft as at Sept 30, 2024. Most of the stores opened are largeformat stores. Of the total stores, around 20% are big family stores, 30% are men and ladies stores, 45% men only stores and the balance 5% ladies and kids stores. Of the total stores, 20% are in tier 1 cities and 40% each in tier 2 and tier 3 cities. The company plans to open 80- 85 stores in FY25. It opened 23 stores in H1FY25, around 10 stores in October, and a similar number in November 2024.

According to Mr Bansal, “the company witnessed sluggish demand in Q1 and Q2 of FY25. However, demand has rebounded in Q3FY25. The festive demand is coming from both urban and rural areas.” The inventory levels increased as on September 30, 2024 due to new stores being opened and also due to piling up of inventory for the winter season. The company expects the same to normalize by March 2025, and expects inventory days to be around 120. As regarding capex plans, he revealed plans to incur capex of Rs 40-50 crore in FY25. This will be towards setting up of new stores and also a warehouse, and will be funded through internal accruals.

The current revenue contribution from accessories is 5% and the balance is from apparels. The company plans to increase accessories’ contribution to around 6-7%. The current revenue contribution from the men’s category is around 83%, 10% from ladies, 5% from accessories, and the balance 2% from kids. The company plans to increase the ladies category contribution to 13-15% going forward. It plans to add ‘fast fashion’ as a category, and has the design and logistic capability for the purpose.

Cantabil has retained revenue growth guidance in the range of 15-18% in FY2025, of which 4-5% is from same stores growth and the balance from new stores. The EBITDA margin is in the range of 26-27% and PAT margin is 10% in FY2025. The company targets revenues of Rs 1,000 crore by FY2027. It expects the EBITDA margin to increase to 28-30% for coming years. Commenting on the results, Mr Bansal said, “We are pleased to report a robust beginning to FY25, with our company achieving an impressive 29.4% volume growth in H1FY25.” He added, “Notably, this success was accomplished despite challenging market conditions and adverse weather conditions, particularly the heat wave in North India and the extended monsoon, which impacted consumption. Our strategic agenda is focused on enhancing customer convenience, reinforcing our brand promise, and driving growth through expanded reach, bringing us closer to customers, as well as by entry into newer markets, diversification across segments and categories, and elevating the shopping experience.”

He continued, “These initiatives position us to capitalize on the revival in consumer demand, solidifying our competitive advantage and fuelling sustainable growth. The combination of above-normal monsoons, festive season and wedding season is expected to drive improvement in discretionary spending. Additionally, the government’s focus on consumption stimulus will further bolster demand. This favourable environment is particularly beneficial for companies with strong brand loyalty, deep customer connect and an established market presence. We remain positive on the consumption story, with a promising outlook for companies that have built strong relationships with their customers.”