Aditya Birla Fashion and Retail Ltd (NSE: ABFRL) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
Jagdish Bajaj — Chief Financial Officer
Vishak Kumar — Director and Chief Executive Officer, Lifestyle Business
Ashish Dikshit — Managing Director
Analysts:
Unidentified Participant
Aditya Soman — Analyst
Archana Menon — Analyst
Kunal Shah — Analyst
Gopal Nawandhar — Analyst
Harsh Shah — Analyst
Gaurav Jogani — Analyst
Sameer Gupta — Analyst
Jignanshu — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the first quarter earnings conference call of Aditya Birla Fashion and Retail Limited. The call will begin with a brief discussion by the company’s management on the Q1 FY26 performance followed by by a question and answer session. We have with us today Mr. Ashish Dixit, Managing Director, ABF RL and Mr. Jagdish Bajaj, CFO, ABF RL. I want to thank the management team on behalf of all the participants for taking valuable time to be with us. I must remind you that today’s discussion may include certain forward looking statements and must be viewed therefore, in conjunction with the risk that the company faces.
Please restrict your questions to the quarter performance and to strategic questions Only housekeeping questions can be dealt separately with the IR team. With this, I hand the conference over to Mr. Jagdish Bajaj. Thank you. And over to you, sir.
Jagdish Bajaj — Chief Financial Officer
Thank you. Good evening everyone. Welcome to the Q1 FY26 earnings call. Thank you for joining us today. As we reflect on the first quarter, the apparel market witnessed selective growth pockets largely fueled by higher wedding dates. That said, the broader market sentiment remains cautious and the pace of recovery continues to be gradual. Against this backdrop, our focus has remained steadfast on driving profitability through disciplined execution and operational efficiency. All our businesses have either maintained or improved margins demonstrating the resilience of our portfolio growth during the quarter was laid by our newer businesses which continue to capture the emerging consumer segments.
These segments are fast becoming key growth engines supported by differentiated product offerings, sharper brand positioning and stronger consumer connect as reflected in their growing contribution to overall revenue from 37% last year to 44% this year before financial performance and update on corporate actions tomorrow. Gates first investment of rupees 437 crore from ServiceNow Ventures in its current round of external Fundraise leveraging the ServiceNow AI platform tomorrow will further enhance its speed to market dynamic and focused assortment and seamless consumer experiences across the rapidly expanding omnichannel footprint. Relevant regulatory filings pertaining to the transactions have been completed on demerger.
As previously communicated, all requisite processes have been successfully completed culminating in the creation of Aditya Birla Lifestyle Brands Limited the company was listed on the stock exchange on 23 June 2025. Coming to the financial performance for this quarter, ABFRL sustained strong profitable growth momentum in Q1 FY26 underpinned by a well defined strategy of scaling its diverse high potential businesses with a disciplined focus on profitability the company’s consistent execution once again delivered healthy top line growth alongside margin resilience. Despite a challenging market backdrop. Revenue for the quarter increased 9% YoY to Rs 1831 crore fueled by strong performance across key segments.
Performance of Ethnic and Tomorrow business stood out delivering 25% and 38% growth respectively, reflecting the strength of their brand portfolios, expanding consumer reach and sustained demand momentum. EBITDA rose to 169 crore up 38% YoY supported by strong expansion in the Ethnic business where margins improved by 600 bpas. Stable margins in Tomorrow and Pentalons despite a softer market environment further impacted by the shift of E Excluding Tomorrow, the rest of MEFRL portfolio delivered an EBITDA of rupees 245 crore which is 49% growth over last year. This balanced growth, driven by both scale and operational efficiency underscores ABFRL’s ability to navigate market shifts while building a stronger foundation for sustained profitability.
As of June 2025, ABFRL held gross case of 2070 crore. Let me first cover Pantaloons. The Pantaloon segment reported revenue of Rupees 1094 crore primarily due to the shift of EID and the impact of store closure over last 12 months, adjusted for which growth would have been 4% L2L this quarter remained flat. However, when adjusted for the shift of EID from April last year to March this year, the normalized L2L stood at 3% for Q1 FY26. The segmental margin stood at 17.1%, marginally lower than last year, largely owing to lower sales. Despite this, Pantaloon’s format once again delivered an EBITDA margin of 18% plus underscoring the consistent strength of its retail operations, controlled markdown strategies and disciplined cost management across its network.
Style up the value Retail format under Pantyloans continued its strong growth trajectory. The brand expanded its footprint to 49 stores during the quarter and posted a robust 36% revenue growth signaling expanding shopper base. This momentum positions style of well for accelerated scale up in the coming quarter and sustained growth in the years ahead. Ethnic Businesses Our ethnic wear business continues to be a powerful growth engine for us, anchored by the most comprehensive ethnic brand portfolio in India spanning designer blade brands to premium ethnic wear brands. In Q1FY26, the segment delivered still a performance reporting revenue of 436 crore up 25% YoY, one of the highest growth rates across our portfolio.
Profitability showed a sharp uplift with EBITDA margin expanding by 600bps resulting in positive EBITDA this quarter versus a loss in the same period last year. The quarter’s strong performance was driven by robust L2L growth across most brands with occasional 8 brands posting double digit L2L growth on the back of a strong wedding season and sustained demand for occasion via fashion. Strategic actions including curated seasonal collections, shopper merchandising and enhanced retail experiences further stand on consumer connect and translated into higher productivity for store. Our designer led ethnic portfolio comprising Sabyasachi Tarun Taliani, House of Massawa and Santano Nikhil delivered an exceptional 79% YoY growth in Q1.
These brands continued to set benchmarks in the luxury and pretty ethnic space driven by category extension, accelerated store rollout and continuous product innovation that elevated consumer experience and brand desirability within premium ethnic wear. Taswa posted another standout quarter capitalizing on the wedding season to deliver 72% YoY sales growth and 39% L2L growth. The brand further deepened its presence in key wedding hubs and strengthened its connect with Indian consumers, expanding its network now to 70 stores. TCNs posted growth in revenue over last year despite store closures demonstrating the resilience and strength of its brands. Growth was multi channel led by 4% retail L2L alongside strong momentum in other sales channels.
After a slow April, business has moved into a consistent double digit L2L growth trajectory. Profits of the quarter saw a significant improvement versus last year driven by higher gross margins and improved retail performance. On luxury retail comprising the multi brand format. The Collective and other mono brands continue to deliver double digit profitability posting single digit YoY growth in Q1 versus last year. The format added three new stores to the network and now encompasses 54 stores now tomorrow portfolio grew by 38% versus last year this quarter. This strong organic growth was fueled by an expanded product portfolio, enhanced focus on D2C channels and impactful brand building initiatives.
Portfolio brands accelerated their offline expansion and exited the quarter with 25 stores across key market nationwide. The current fundraise will position the brands well to continue to keep this high growth momentum and realize our ambition of building multiple large digital first brands. In conclusion, this quarter’s results underscore ABFRL’s ability to achieve profitable growth marking the fourth consecuting quarter of year on year margin expansion. This reinforces our confidence as our emphasis on innovation, retail productivity and disciplined cost management has a stunned margins and maintain resilience even amid a cautious demand environment. Going forward we’ll continue to scale our core market leading brands while accelerating momentum in our newer high potential segments.
With the festive season arriving early, we are well positioned to capture demand through compelling product stories, enhanced retail experiences and a wider omnichannel presence. Our strategy remains clear. Build on the strength of our brands, sustain profitable growth and create long term value by staying ahead on evolving consumer preferences in the Indian fashion and lifestyle space. We are open to questions now. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and then one on their touchstone telephone. If you wish to remove yourself from the question queue you may press Star and then 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 again. To register for a question, please press Star and then one. Our first question comes from the line of Aditya Soman from clsa. Please go ahead.
Aditya Soman
Hi, good evening and thanks for the opportunity. So two questions from me. Firstly on the sort of very strong EBITDA trajectory for the ethnic business. So we’ve seen strong growth and now sort of EBITDA also improve. So can you give us some sense of how you see this trajectory evolve over the short term and then more importantly over the medium term and where you feel steady state EBITDA for this business should be. And then secondly for the pantaloon store closures. So there was a sort of a 2.7% store reduction but I see that the area is actually flattish.
So one anything to read across in that and secondly would this represent sort of the sort of would we still see further store reduction or do we think for now we are good in terms of store count and we could potentially see an increase down the line.
Ashish Dikshit
Thanks Aditya. For those questions on the ethnic portfolio I would first say that there is consistent improvement across the portfolio of the brands. But we have a mix of brands which are well established, highly profitable brands which are in the turnaround phase like TCNS and the brands which are in build up phase like Taswa. So the first part is most of these businesses benefit from wedding seasons which is largely in the second half of the year. The cost base remains pretty static but their revenue is significantly higher in the second half versus first half. So you will see a much sharper increase in profitability as you go forward move towards the second half of the year.
Having said that, the three constituents which is designer brands, the turnaround business of TCNS and Taswa will all have different trajectory. I think designer brand portfolio is quite stable. I would argue in high 20s in post India terms to some of them in high 30s is really where the steady state margin will fit. The premium brand portfolio which is Thuswa is still scaling up. You can see the quarter performance 3070 odd percent growth, 39% like to like. I think we’ll continue to push it. Profitability is somewhat away as far as this business is concerned. We think FY27 end is where we’ll get to the break even.
In Taswa. TCNS has been showing strong improvement. But still while at the post India level it’s turned positive at Pre India’s terms it’s still somewhat below the breakeven level. I’m very enthused by the turnaround trajectory in TCNS and the acceleration in Taswa while the designer brands by themselves are already in good space as a portfolio. Therefore Aditya, if you look at it ethnicwear business which we had zero presence in FY20, we now have a business which was last year close to 2000 crores, growing this quarter at 25. But I would say even going forward one could imagine a 20% kind of growth rate and as TCNS kicks in perhaps that could be even stronger.
And a portfolio level of Post India’s EBITDA margins north of 20% is what we could look at as far as this business is concerned. We’re not there yet. There is also seasonality between first half and second half but that’s really where we think the ethnic business. So it’s a very beautiful business shaping up extremely well both in terms of size and profitability. On your second question on Pant loans we did a fairly deep network correction. If you have followed the business over the last 15 to 18 months from a network of stores which is north of 460 now we are talking closer to 400 and much of it has happened in last year 12 to 18 months.
I think we’ve hit the bottom end in terms of store closures. You are going to start to see net store additions as we go forward. The new store in line with the strategy that Sangeetha had sort of laid down is about opening larger stores. So while the number of stores may be fewer, the size of the stores will be more like 20, 25,000. If you see any of our new Pantaloons store, it’s cleaner, bigger, more impactful and very modern and contemporary. Some visuals you can see in the presentation itself and that’s the direction for Pantaloons which have been consistently following as a part of our RE pivot which we started two, two and a half years back when we made the correction in distribution as well as imagery of Pantul.
Aditya Soman
No, understand. Very clear and thanks for that detailed answer. Just maybe one follow up on Taswa. Obviously growth here is very strong, but when we sort of look at, when we say it’s available across 70 stores, this includes sort of. These are just standalone TASWA stores or these are also other absolute.
Ashish Dikshit
No, no, this is absolutely. That is just standalone TASWA stores.
Aditya Soman
Understand? So the LTL is just this 39% is on the standalone Taswa store versus standalone.
Jagdish Bajaj
Yeah. About 50, 52 of these 70 stores would be part of the L2LT LTL.
Aditya Soman
Perfect. That’s very helpful. Thank you.
operator
Thank you. Our next question comes from the line of Arjuna Menon from Morgan Stanley. Please go ahead.
Archana Menon
Hi sir. Thank you for the opportunity. My questions are on pantaloons, firstly on the marketing and brand building side, I mean, what is the spend currently as a percentage of revenue for pantaloons and how has that been in the past? Are we thinking of taking that up, you know, in this year and in the years to come? And the second question was in the retail identity. There’s a mention of the new retail identity and some pictures, but just wanted to get a sense from you that of your total 400 odd stores, what percentage of stores would be, say under the old, you know, retail identity, which maybe you’re not so happy with, say maybe five years, you know, earlier.
So what, what is that percentage and how are you thinking of refurbishments and renovations going ahead?
Ashish Dikshit
Okay, so Archana, as far as pantaloons marketing spends are concerned, they have been in the range of 1 1/2 to 2%. Historically at its peak, maybe 2, 2.5%. At the low point, maybe 1, 1.5% but typically 1 1/2. On an annualized basis, of course, quarter and quarter, these numbers look very different. But on an annual basis I think you could assume a 1.5% kind of base. As the number that we have. We. Expect in a shorter term, which is next year or so, this percentage to marginally go up, primarily because we feel we now have a new proposition. The pantaloon stores, the product portfolio, the aesthetics, the design cycle, everything that now is represented in the new pantlooms is a big shift from what we used to be. So every element of innovation, aesthetics, retail, display, the consumer experience has significantly moved. So towards the festive part, we may spend a little bit more for a short period of Time I don’t think it will change the long term sort of investment of one and a half, 2% kind of range.
It won’t be any different. But short period of time you might see in some quarters some of the more target expense typically closer to the festive period. Retail ID on the retail ID it’s been a evolving story. The latest retail identity that we are talking about is obviously very very new. But if I were to count the last one or the ones that we are very happy with and it’s modern and contemporary and in line with the current position about 50% of our network is of the new identity that we are happy with. There is a task in the remaining 45, 50%.
We will take it slowly over a period of time. Not all these stores are based in big cities where it’s required as those cities are experiencing better retail environments far more rapidly. So we’ll pace the rollout of new retail identity and take it over three four year period.
Archana Menon
Just two follow ups. First if you could help me with a city presence for pantaloons now after all the store closures and secondly for tomorrow after the fund days what would your state be right now?
Ashish Dikshit
City. About 185 cities is where our presence is. 185 to 190. And is that what you’re looking for or you’re looking for any more granularity than that?
Archana Menon
No sir, this is good. 185, 190. And on tomorrow on your stake currently.
Ashish Dikshit
Tomorrow it’s early double digit stake that Servicenow Ventures has invested in for their 423crores. It’s 11 odd percent kind of stake. The exact details are probably in the filing but that’s a rough stake that they have. The remaining stake lies between EBFRL and a small part within that in the ESOP in employees anitrum.
Archana Menon
Just last question. So what would your current investment be in tomorrow?
Jagdish Bajaj
So far tomorrow we have invested 770 crores through equity investments in different forms over the last three years, three or four years.
Archana Menon
Thank you so much.
operator
Thank you. Our next question comes from the line of Kunal Shah from Jefferies. Please go ahead.
Kunal Shah
Hi, thank you for the opportunity. So my question is also on tomorrow. So with this capital raise your cash burn in this business is not that high. What are the areas where this will be invested? Are there more acquisitions planned or offline expansion or how would this capital be allocated under tomorrow?
Ashish Dikshit
So Kunal, two parts, one capital raise process is still on. We expect to raise more capital in this round. The first announcement you’ve seen. But as I’ve always maintained in our previous calls, we are looking to raise close to or north of $100 million half of that capital. Where would this be used? You’re right. There is a part which will go towards the funding of the businesses since it’s still not cash flow positive or EBITDA positive at this stage. So first part of it, our focus currently is on growing what we have. We have a portfolio of very powerful brands.
Some of them when we acquired were as low as 10 crores a year and have grown from 100 to 200 crores a year. Some brands were 200 crores, have grown to 300 crores. Some require acceleration, some require more branding effort. But by and large it’s for acceleration of growth of this business is where the capital will grow. As you would have seen in our presentations, the EBO expansion because we want to truly build an omnichannel digital first experience. But omnichannel for our brands, brands such as the India garage company Nobero, etc. Have started expanding offline.
Wrong. Had already had some presence so there would be a part of capital that would go towards that.
Kunal Shah
Understood? Understood. And the second question is on tcns. If I heard it correctly, you said after April this business is moved to a double digit like for like growth. Is that understanding correct?
Ashish Dikshit
Yeah, yeah. So the business as you know had been struggling to get organic growth for some time in past. But in last four months, four, five months, we’ve changed the trajectory. Only April was affected to some extent and that was also partly due to shift of eid. But if you leave that aside, every month is delivering good strong, high double digit like to like growth. And that’s very assuring for us because a lot of changes have been done in merchandising. Retail execution has been significantly revamped. Old inventory is out of the system, poor stores are out of the system.
So we are finding a very strong trajectory. And therefore our thesis on investment in TCNS is looking much more surer and stronger now at this point versus any time in last 12 to 18 months.
Kunal Shah
Understood. And if I may get this data on what is the percentage of revenue that this or what is the percentage of revenue coming from retail which this LTL growth captures? If I can have some understanding of that. And in the other parts, the other channels, are you looking to consolidate or has that already happened and is that is behind?
Ashish Dikshit
It’s not the 50%. I’ll just figure out if there is significant deviation the retail share yeah, it is about 50 odd percent. Department storage and E commerce constitute the large part of the remaining business. Because the MBO business is very small. I think the business is now well positioned with everything that needed to be sorted out to even grow in department store channel which which had stagnated over a period of time in last one or two years. While we’re fixing the product, I will see growth coming there also in next couple of quarters as well as online business.
Although online business as an overall business is only about 15 18%. But I expect the share to rise as far as online is also concerned.
Kunal Shah
Understood. And any plans to expand store network now again in the retail channel or that is still some time away.
Ashish Dikshit
So Kunal, as we had mentioned, a part of our strategy was first to remove bad inventory, bad costs and bad stores which we did in first eight to 12 months. Then was to revitalize the merchandise as well as revitalize stores which is what is executing. And we are very happy to see the kind of outcome that delivering in terms of sales store performance as we move towards second half and perhaps towards the later part of this year is when the expansion would start. The real impact of that you will start to see only next year.
Kunal Shah
Understood? Understood. And in that case pre index profitability also should come next year. Probably on a full year basis.
Ashish Dikshit
Yeah. Yes. Yes.
Kunal Shah
Understood. Thank you. That’s all for my say.
Jagdish Bajaj
Thanks.
operator
Thank you. Our next question comes from the line of Gopal Nawandar from SBI Life Insurance. Please go ahead.
Gopal Nawandhar
Hi sir. Thanks a lot for the opportunity and congratulations on this external fundraise for tomorrow. So my question was on, you know, we have seen improvement in the profitability of TCNs. So when we should start seeing the addition of network and tcns.
Jagdish Bajaj
Kupal, thanks. As I was explaining to Kunal, we want to be sure that the business is in good place, product is working, stores are working, the viability is strong. So in last four, five, six months we have started to see the outcome of it. When the like to like first move from negative to positive and now move from positive to double digit positive. This gives us a lot of confidence. Of course store pipeline takes some time to build. So you’ll start to see perhaps second half of this year you might see 30 to 40 stores store addition.
But next year onwards if this trajectory continues, very confident that this improvement is quite structural and strong. We’ll start expanding more rapidly next year. Or the outcome we may start to do towards the second half of this year. But most of the benefit of that will probably Come next year.
Gopal Nawandhar
Okay. And pantaloon side also we have seen consolidation of network. What is our plan there in terms of will there be a net network addition this year or will still continue to reject the sizes of the stores.
Jagdish Bajaj
So I think in absolute number of stores they may not be significant addition, but the network is improving both in quality and size. Number of stores that we are opening between 20 to 30,000 is where the focus of new pantaloons is. While lot of our network of small stores is what we are looking to rationalize this year there may be only marginal increase in network, although the space increase will be material. But going forward, I think Pantoons has bottomed out its stores that we wanted to close. And we expect next year onwards to start adding to the store network as well.
Gopal Nawandhar
And sir, on the tomorrow side, losses in this quarter was little higher versus what has been the run rate in last few quarters. With this fundraise and our focus shifting more on the offline stores, how should one see the profitability trajectory for this business?
Jagdish Bajaj
So you’re right, Gopal, I think the quarterly performance while on the revenue side was very strong with 38% organic growth. The losses had marginally gone up. In percentage terms they were similar to last year, but in absolute terms that had gone up. I think in second half of the year we will see that trajectory also beginning to change. Fundraiser of course be put for also expanding offline business to get the balance between offline and online offline businesses. The benefit Gopalot brings is brands which are seen only online. The credibility comes and stature comes from offline presence.
Offline business also allows us to typically increase the gross margins by higher price points, superior products which sometimes get lost in online business. So we are finding almost 10 percentage difference, you know, thousand percentage point difference between the gross margin that we deliver in offline business versus online business. But still the share of offline today is small. As it improves, the shape of profitability will start to shift there.
Gopal Nawandhar
And sir, can I ask questions on ABLBL and this.
Jagdish Bajaj
We would probably Gopal not be able to address that in this call, but we will reach out to you separately for any question. Amit will connect with you.
Gopal Nawandhar
Sure. Thanks a lot and all the best.
Jagdish Bajaj
Thank you. Thank you, Gopal.
operator
Thank you. Our next question comes from the line of Harsh Shah from Bandhan amc. Please go ahead.
Harsh Shah
Yeah, hi. Thanks for taking my question. And so basically even Skylab would be right in the investment field, I would believe. Right. And while you kind of laid down your, you know, ambition for Skylab, Over a five year period, would this fall flow? Probably. What would I mean, guidance for next couple of years, let’s say what would that be? And currently at what revenue per square feet? Let’s say the initial cohort of stores, right. It might be 10, 15, 20 stores. What revenue per square feet basically are they operating at currently?
Jagdish Bajaj
So I think our projections for style up, we have mentioned our long term plan. We currently have about 59 odd stores. 50, 55, 60 stores. 49 stores at this point of time. We look to add about 40 stores this year which will increase the size of the business. And the productivity has been varying between, you know, if you look at sales per square feet per day between 20 to 25 in some of the lower performing store to 35 to 40 in some of the higher performing store, depending on the location, the kind of market that it is, it needs to go up from there.
But at current level of performance, the store network as a whole is profitable. Which means the contribution at the store level is positive as a four for the entire store network of 4,950 people, 50 stores as we scale, get some leverage of scale both on the gross margin as well as visibility of the brand. I think that’s where the positive flywheel will start to set in.
Harsh Shah
Basically at EBITDA level there is no cash burn in this format as well.
Jagdish Bajaj
There is a cash burn at EBITDA level to cover the overhead cost of the operations.
Harsh Shah
Okay, the format level basically it’s a bit positive. But let’s say corporate level, it’s retail.
Jagdish Bajaj
Store level, it’s positive, but the corporate overheads are not covered.
Harsh Shah
Okay, where would the peak losses be in basically in this business at EBITDA level. And when do you foresee, at what level of scale? 150 stores or see, I, I think.
Jagdish Bajaj
We’Ll discover it perhaps in next 18 to 24 months. Because if this rate continues, which means as we add more stores, the store losses are not there. Therefore we have a higher leverage available on fixed cost. But we also recognize that on the other side, as you scale the business, you’ll have to also increase your team size operations. So fixed overheads will also grow at this point of time. So maybe for next two, three years we will have some level of losses at this point of time because overheads we may have to increase a little bit more ahead of actual expansion.
And that’s the period we’ll go through. But I think both the size of the opportunity as well as the current performance gives us confidence that it’s a Fairly scalable business and therefore leveraging of overheads is something that we’ll be able to achieve in maybe three, four years.
Harsh Shah
But is there a case basically where you see to kind of accelerate this store expansion? Because at current scale I’m looking at what, you know, the other players are expanding probably 40 stores looks probably, you know, slightly on the lower side. Is there a possibility that given the confidence which you have in the store format and the store level profitability, this can go up to 60, 70 stores or something?
Jagdish Bajaj
That’s all very easily and certainly I think we just want to. I think the only point I would make is that it’s a very large opportunity and a market which provides a very long term growth piece. We don’t want to rush into it because this will be an opportunity not just today, but in FY30 and FY35 also. And therefore we are equally focused on making sure that we get it right. Continue to refine the proposition, improve the product while simultaneously growing this year at 4550 stores, but after that between 75 to 100 stores is pretty much on card.
Harsh Shah
Got it. And one on Sabyasachi. I mean, at least for this quarter has been fantastic. But if we look at the last couple of quarters tapered off. So what really changed in this quarter which led to such high growth rate? I mean, if you could give some qualitative color on it, could be helpful.
Jagdish Bajaj
No, I do think his growth rate, even the quarter before, which is quarter four, was fairly stable. Good growth rate, of course, not like 40%. See, remember, all weddings are businesses. That’s why it’s 72% growth. Saby Whatever, close to 40% growth. Tarun Teliani all the businesses have also benefited from a low wedding base of last year. To that extent, this is not the organic growth number. This is a reflection of a lower base and which is to some extent is what is showing up in anybody who has a share of exposure to wedding related purchases.
I don’t think, however, there is any absence of growth momentum in the brand. It’s a very, very powerful brand. Obviously it’s a brand which you don’t want to rush in and grow. Like we may want to grow with Taswa or Style up to that extent, but the brand trajectory will continue to grow extremely well.
Harsh Shah
And has the contribution of let’s say jewelry in this actually increased meaningfully, let’s say on a Y basis or I mean let’s say between jewelry, apparel and accessories and say press label what they have. So has the contribution being stable on a YY basis or if it’s more like driven by Apple.
Jagdish Bajaj
Jewellery is the category in which Sabyasachi’s brand’s share has been growing consistently over a period of time. It’s a very large category. And Sabyasachi brand as well as Sabyasachi himself is spending a lot of time in refining the proposition, taking it very high end because no Indian jeweler has reached the level of pricing and sophisticated that he has. Not just in India but outside. But obviously compared to the size of the market in jewelry, it’s a small business. But as a part of his mix, it’s a meaningful mix now and growing as a share of the overall portfolio.
Harsh Shah
Okay, and just one more basically on Kasuga, what would be the core addition plan this year? And also gross cash is coming to it. But what is the net cash currently with us on the 30th of June?
Jagdish Bajaj
So that’s why store edition plan is about 40 stores this year plus minus a few. But that’s really the total store edition plan for this year on the gross to net cash debt lying in tomorrow. And there’s debt lying in standalone entity and there’s debt parts of the ethnic subsidiary. So Jagdish can see Hersh with us at standalone 11. I have cash of around 1900 crore and a borrowing which is 750 crore for a long. This is long term falling due in 29:30.
Harsh Shah
Okay.
Jagdish Bajaj
We have adequate cash for the future expansion plans. Remaining is on tomorrow which also will get offset by the current fundraiser. So that number will move significantly post this fundraise. And there is debt lying in some of the ethnic subsidiaries like Subway and others.
Harsh Shah
But not meaningful. Right? I mean if you could quantify that the debt in the subsidiaries, ethnic subsidiaries.
Jagdish Bajaj
That’S you know, maybe another 600 crore. I don’t know. Yeah, without tomorrow. Without tomorrow is not more than 200 crore. Yeah. So about 200 odd crores lying in subsidiary ethnic subsidiaries. And tomorrow of course will again turn net positive because the debt currently will be offset by the equity raise that we’re doing.
Harsh Shah
Okay. Okay, got it. Thank you so much.
operator
Thank you. Our next follow up question comes from the line of Kunal Shah from Jefferies. Please go ahead.
Kunal Shah
Hi. My follow up is on this tomorrow capital raise. So just want to understand this 11% dilution would imply I think valuation of around 4,000 crores. Right. So is there any, you know, performance benchmarks or is this valuation independent of all of those things? Given it’s in a CCPS form
Jagdish Bajaj
this Is like a regular equity invested in investment in form of CCPs. No, there is, there’s no sort of. If you’re seeing. Is there any strings attached to it? No.
Kunal Shah
Understood, understood. And if you include the brand which is not consolidated, I think one of those. The total revenue would be around thousand crores. Right. For this business.
Jagdish Bajaj
The last year as we keep. I think last year annualized revenue would have been close to about thousands. If you were to add wrong business to which is where we currently have minority stake and it’s growing at about 30, 40%. So we expect the run rate to be closer to 14 to 1500 crores by the end of this year. But at this point of time without consolidation. Last year or without consolidation our revenue was 670 crores which is. 650 crores. 650 crores which did not include wrong revenue which would have been another 200 odd crores.
So we would probably be about 850, 900 crores last year revenue. And if you were to consolidate to wrong.
Kunal Shah
Understood, understood. Understood. That’s clear. That’s clear. Thank you for that. That’s all from my side.
operator
Thank you. Our next question comes from the line of Gaurav Jogani from JM Financial. Please go ahead.
Gaurav Jogani
Thank you for taking my question. So my first question is with regards to the capex. What kind of capex are you looking for from this year in the next couple of years?
Vishak Kumar
So I think at this point of time we have regular CapEx for most of the businesses and a one time CapEx. The one time CapEx I would say is what we are completing this year for Gallery Store. The store which is likely to open towards the end of this year. So that’s one time capex if you exclude that. I think the overall CapEx plan for other businesses put together will be in the range of about 300 odd quotes.
Gaurav Jogani
And if we add it would be 500 crores for this year.
Vishak Kumar
Yeah, yeah, that’s for this year. Yeah. Okay.
Gaurav Jogani
So my second question is with regards to the losses that we are seeing in the tomorrow business though you know that number has increased. But I think there, I think the. EBITDA also constitutes of the. The losses of wrong in that. Am I correct in my understanding?
Jagdish Bajaj
Yes, we. We share our share of our losses. We consolidate in losses although we don’t take it in revenue. So it is inclusive of that. Yeah.
Gaurav Jogani
Okay. So. So in that that is also one of the reason why the losses seems to be higher in that context.
Vishak Kumar
Yeah. Yeah.
Gaurav Jogani
Okay. Okay. Enter with regards to, you know, again tomorrow, what would be the final game plan here? I mean though I understand that, you know, it would be in a high aggressive expansion mode and with this one case you want to explain it further but you know, when can we see at least a post India break even here in this?
Vishak Kumar
So tomorrow there’s not too much of a difference between post and pre India numbers. There’s some. And as we increase the share of offline, perhaps that may grow over a period of time as we have indicated in our investor presentation also which we made beginning of this year. Tomorrow we are looking at FY29 as the year in which we try to look at EBITDA break even. So that’s the journey that we should be on.
Gaurav Jogani
Okay. Okay. But given, you know, the performance in terms of the top line growth, etc. Is encouraging, do you think that it could be sooner versus what you would have expected earlier than that?
Vishak Kumar
No, honestly I, I don’t, I don’t see that. I don’t. I mean we will be happy to get there but at this point I wouldn’t want to indicate that.
Gaurav Jogani
Okay. You know the Pantaloons bit we are seeing, you know that there is some losses because of the sign up business there as well. And I mean X of the X of that and X of the marketing spends. Ideally you indicated, you know that the profitability would have been higher. So once Style up also starts to contribute profitably, what kind of margins then you expect in Pantaloons to deliver on steady state basis.
Vishak Kumar
So if you were to stay with post Indias and then we’ll come to pre Indias, I think Pantaloons itself is currently and consistently operated about 18% plus EBITDA margin tile up is obviously taking away while it’s marginally positive, but it’s taking away. Therefore the segmental results are close to 16, 17% depending on which quarter you’re talking about. This quarter it was 17%, previous quarter it was 15%. So I think that’s the range in which the current profitability is operating. We don’t think we have achieved right level of profitability in panthenones itself and we think another 300 to 500 basis points improvement.
Profitability, whether you look at pre Indias or post India is really what we need to deliver in pantaloons. Style up will start from a lower base. In Pre India’s terms it will go through a loss phase which is what it’s going through. But the encouraging part is that loss will not grow rapidly with the network because the network itself is not losing money. And I think as we bring scale and create greater sort of brand visibility through supply by more stores etc. We expect to improve that performance. But it will continue to remain loss making for at least next three to four years.
But not at a very high level of losses.
Gaurav Jogani
Sure, but then you said that the original pantaloons would see some 300 to 500 bps from that level. And then we have to blend the losses. So that means we have to do. Okay, thank you.
Vishak Kumar
Thank you.
operator
Thank you. Our next question comes from the line of Samir Gupta from IIFL Capital. Please go ahead.
Sameer Gupta
Hi and thanks for taking my question again. So firstly on pant loans, it’s been some time now that you know, we’ve been hearing about the new identity that has been rolled out. I heard through this call that around 51% of stores are now on the new identity. So let’s say the top end of these stores, maybe they have spent around two years under this new identity. Any performance metrics you can share here? Same store sales growth, the revenues per square feet kind of metric that they are tracking. Are they on the right track? Is this strategy showing results? Anything that you can highlight on that front?
Vishak Kumar
I think I would say the answer to your question is very simple. If you look at Pantloans as a business, it was FY23 when we started the journey. It was operating at a margin of 14 to 15%. As we speak today you can look at last six last last eight quarters, we are operating at 18%. So is this strategy working? Yes. I don’t want to get into specific store level slices. I don’t have it at this point of time. But I can also reconfirm to you that the new stores, the better stores are performing better than the old stores.
And that should be natural. But eventually the outcome of it is showing up in the absolute store absolute numbers that we are talking about. About.
Sameer Gupta
Got it. But internally, do you, do you slice it?
Jagdish Bajaj
We look at it. But we look at it every store level also because what happens Amir, sometimes the location, its potential, all that also matters in coming up with numbers. So sometimes averages miss out the bigger picture. And 400 store is not too many stores. And we are looking at 40, 50 stores that we are converting into new identity either through new store addition or through renovation. So it’s a number which we very closely track.
Aditya Soman
So Ashish, the point I’m trying to make here is that margin improvement is great. But pantaloons, if you look at it over A longer term history we have been able to improve margins and ROCE profile. The only problem area that I find is that there is no real history of same source sales growth on a consistent basis. And with this new identity rollout, if that problem is still persisting then it’s a problematic area. Right.
Ashish Dikshit
I think for us the more important thing is to figure out profitability. If we figure out profitability. Right. I won’t worry about other pieces. So the intermediate metrics don’t define the end outcome. Does every retailer need same store growth? Absolutely. Right. Sameer is pantaloon delivering it. I think for quite some time it’s not been managed. It’s not managed to do that. However, it’s a journey and therefore as you’re seeing it, we’ll hopefully start to get that. Sometimes there’s some are need factors and some are lag factors and we are beginning to see some of this starting to show up in a network.
And the total number same store growth will take longer to show up as the share of these stores increase over a period of time. As many of these stores are also remember new retail identity are new stores. They will also increase their share as the number of such stores go up from current let’s say 45% of network to 60% to 65% in a network. But indeed that’s the holy grail we are trying to chase which is getting to the same store growth. And completely agree with you. That’s something that pantaloons has not delivered consistently for some time.
Sameer Gupta
Great Ashi, that’s great to hear. Second is on Taswa. Now I understand you mentioned 40 store editions this year is what the target is. But if I look at more recent history, we’ve been very slow in terms of store expansion. We were at around 57 if I remember by end of March last year and right now we are at 70. So is this a conscious strategy that we just look at the first 50, 55 stores as a pilot and you know, be conservative in terms of store editions and then scale up? Still trying to figure out store economics.
Ashish Dikshit
I think we’ve gone past the stage of questioning the viability or figuring out the concept. If you see any of the Tusso stores now you get a sense of fairly established concept. We obviously want to be careful. It’s a category which has very high seasonality. We are not opening 2,000 sq ft stores. If you look at but for few malls, most of the Tatswa stores are fairly large stores in fairly well established markets which means large rentals in absolute terms, both the rentals in two size and therefore we want to remain cautious. This is a market which is available for us over a long period of time.
As we had mentioned, our goal was to get 200 odd stores over next three years. Currently 40 is perhaps not the right level. We are currently likely to go closer to about 90 stores by the end of this year. Hopefully we will be able to expand that little bit faster but don’t want to do it in a hurry. It’s not a value format which you can scale up very easily and by and large you will get enough customers at that price point in any locality. It’s bit of a destination shopping. It’s important to get the right store, right location, right facade and that’s taking somewhat more time than what we would ideally like.
But from the concept per se, the retail viability, there’s no question around it. I think it’s a format which is working very well.
Sameer Gupta
Got it. This is very, very helpful. Last question if I may squeeze in and it’s related. So now that’s why you mentioned it is a more major strategy in terms of store expansion. Pantaloons in any case, 15 stores around your targeting. So they’re also your measured. Designer brands are anyway self sufficient. TCN is on the path to profitability tomorrow. You expect losses to come down from second half and you are still sitting on a decent amount of net cash. So what was this need to raise capital in tomorrow at this point? I understand there is a trajectory of losses that you foresee in the coming years, but at this juncture why did you get to this capital raise?
Ashish Dikshit
Sameer, I think if you look at absolute cash in the books and the business, we need cash. Your question is absolutely valid. But I would also remind you that we have been fairly consistent about our philosophy of capital allocation and in various businesses when we launch tomorrow in 2021 we talked about that initially ABFR will fund it, give it some level of investment, allow the business to come to a certain size and we will get investors, external investors and over next 8, 10 years build a company which can find a very digital native path to this industry, which is fashion industry and have its own public market journey as we go forward from private to public.
And in line with that, we had stayed with stating even in the last fundraise we had called out that the capital will not be used for tomorrow because tomorrow has its own access to capital and potential attractiveness for investors because of its high growth trajectory. And that’s exactly what we’ve got Played out. So this is pretty much what we said four years back, two years back and six months back.
Sameer Gupta
Agreed. Ashish, this is very, very consistent to what you have been saying. But isn’t the message going then that you’re not very confident of the scale up future of tomorrow versus the other brands because there are other brands in the portfolio which are law smoking as well?
Ashish Dikshit
No, but for tomorrow. We created Sameer as a separate company five years back and we have consistently stayed with exactly what we said then. Now and as I said, this is our strategy. When we play out our strategy, we will stay with what we have said. There’s no reason to change it dramatically. So I don’t understand where your question is coming from when it was clearly stated in our capital allocation preparation principles which we laid out six months back, which we laid out four years back also. And this has been our strategy. So.
Sameer Gupta
That answers the question. Thanks again for taking these. I’ll come back in the Q and A follow ups.
Ashish Dikshit
Thank you.
operator
Thank you. Our next question comes from the line of Jignanshu from Bernstein. Please go ahead.
Jignanshu
Yeah. Hi. Thank you. Thank you for taking my question. Ashish, I know we discussed a lot about pantaloons. I just wanted to get clarity on one thing. This new rebranding exercise that we want to do and probably in general, our quote unquote turnaround approach for improving the same store sales growth at Pant loans to recover our rentals, etc. What are we changing with this new identity? Like what are we solving for? Is it, is it more premium experience and hence better margins? Is it a larger variety? Is it just the just the look and feel to differentiate it or modernize it? I think that would be helpful to understand. Thanks.
Ashish Dikshit
Okay. First I would say that while you’re calling it new retail identity, there’s no rebranding. It’s the same bank loans brand being prepared. As times change, the retail experience change, the landscape is changing. International brands are creating more aspirational retail environment. New retailers are coming. So this is in keeping with the times. This is something that retailers around the world do when the markets are evolving. Invest in mature markets where the maturity has already been reached. This happens once in seven, eight, 10 years. But in country like India which is still evolving consumers experiencing differential levels of retail experience, you have to constantly evolve.
So this is not something that we’re doing a one time exercise. We have been actually improving retail experience in line with what we felt was the current state at that point of time over the last five or seven years. The shift is more significant here. But coming to a more substantive part of your question, the whole idea is this. If you look at the bottom of the pyramid in value retail, there is a fairly large number of competitors who are actually crowding that space. More are coming selling clothes between 300 to 1000 rupees. Whether it’s large number of online players or multiple offline players.
Pantaloons over a period of time have delivered for Indian middle class a good quality, reliable and reasonable fashion for its customers. Over a period of time, as the definition of good quality changes because lot of product becomes available at lower prices, price points, Pantaloons need to upgrade and justify and attract that customer to upgrade from cheaper products, lesser quality products to better, more reliable products because the brands are still further up and they are far more expensive. So this is what we are trying to do in the journey. Therefore what happens, your customer profile which is wanting to get out of cheap products and looking for better quality either in fashion or durability or any other form, functional property, starts to look at better options and Pantaloons is well placed for that.
It’s a familiar brand and it offers that in financial and economic terms. It obviously creates average build size, it increases the gross margin because you’re able to offer better product at slightly better price. And also you know, the other benefits in terms of cleaner display, customer convenience and lower stock density and therefore better entry terms, lower markdowns, all of which actually both financially and for customers create value. So that’s the journey for us and that’s been the consistent path on which we’ve been following.
Jignanshu
Okay, thank you so much Ashish for. The very detailed answer. One quick follow up. What is the interplay between the ethnic. Wear of Pantaloons and and our TCNS products? So do we think of that as complementary, as competitor to each other? And do we sell TCNS products inside. Pantaloons or do we plan to?
Ashish Dikshit
The TCNS has been selling inside pantaloons for 20 plus years. It’s India’s. W for example is India’s most successful, the largest ethnic wear brand for a long period of time. And Pantaloons has had share of external brands all the time. TCNS continues to be a part of it. If you look at Pantaloons own business, close to 18, 20% comes from ethnic wear of this significant part comes from Pantaloon’s private labels. But there is a part which comes from external brands. And W is the number one external brand in Pantaloons but it’s not linked to our acquisition.
It was so even before we invested in TCNs.
Jignanshu
Okay, great. Thank you.
Ashish Dikshit
Nice. Complementary. About enhances our understanding of the premium ethnic where over a period of time, I think this will create interesting further possibilities for the company.
Jignanshu
Fair. Thank you so much.
operator
Thank you. Thank you very much. Ladies and gentlemen, on behalf of the management, we thank all participants for joining us. In case of any further queries, you may please get in touch with Mr. Amit Divedi. You may now disconnect your lines. Thank you.
Jagdish Bajaj
Thank you.