Aditya Birla Fashion and Retail Ltd (NSE: ABFRL) Q3 2026 Earnings Call dated Feb. 06, 2026
Corporate Participants:
Jagdish Bajaj — Chief Financial Officer
Sangeeta Tanwani — Whole-Time Director
Analysts:
Archana Menon — Analyst
Gaurav Jogani — Analyst
Ankit Kedia — Analyst
Garima Mishra — Analyst
Devanshu Bansal — Analyst
Rajiv B — Analyst
Sameer Gupta — Analyst
Presentation:
operator
Sa. Sa. Foreign. Ladies and gentlemen, good day and welcome to the third 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 Q3 FY26 performance followed by a question and answer session. We have with us today Mr. Ashish Dix Chit, Managing Director, ABFRL Mr. Jagdish Bajaj CFO ABFRL Mrs. Sangeetha Tanwani, Director and CEO, Pantaloon Segment 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 risks 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. Thank you for joining us today. I would like to welcome you all to the Q3 FY26 earning call of our company Ajit Birla Fashion and Retail Ltd. Looking back at the quarter, the overall demand environment remained mixed with consumption largely centered around festive and wedding related shopping. Additionally, a part of the festive season shifted to the previous quarter this year compared to Q3 last year which impacted the reported sales growth particularly for our Mastich and premium brands. Also for our pantaloon format, we have consciously postponed our Euss by 12 days into Q4 which further impacted the sales growth.
Against this backdrop, our business continued to perform well with all new businesses delivering over 20% growth. The value and musty segment saw a marginal impact due to the shift in Peugeot and eoss. However, performance remains strong even adjusted for these shifts including the traction seen in January. We also continue to invest in network expansion through growth Capex adding a net 5.5 lakh square feet of area over last 12 months. This position us well for future growth and operating leverage. As these stores mature, all our businesses remain firmly on their respective long term growth trajectories in line with the strategic direction we have been consistently outlining over the past few quarters.
Now moving to the financial performance of the quarter, Adit Birla Fashion and retail posted 8% YoY growth to reach Rs 2,374 crore versus Rs 2,201 crore last year. Overall EBITDA grew by 13% with margins at 15.6% for the quarter compared to 14.9% in the same period last year. Within segments, our ethnic business continued its consistent margin expansion for the eighth consecutive quarter with Q3 margin reaching 22.7% up 350 basis points versus last year. Profitability across Tomorrow and the luxury segment excluding Gallery Lafayette delivered YOY improvement. If we see ABFRL excluding Tomorrow, overall margin stood at 20% in this quarter up 70 basis point versus last year.
Depreciation increased during the period driven by new store additions. Reported loss was 141 crore. This include a one time exceptional item pertaining to new labor court this quarter. Otherwise normalized loss stood at 115 crore versus 103 crore last year. As of December 2025, ABFRL held gross case of around 2,100 crore at the same level as end of Q2FY26. Moving to the YTD performance, ABFRL revenues took at rupees 6,187 crore up 10%. YoY EBITDA grew 17% in absolute terms to 655 crore versus 559 crore in YTD last year with margins improving by 70 basis points to 10.6 despite 100 basis point higher advertisement spend versus last year.
If I look at FBA FRL excluding tomorrow, YTD margins are expanded by 150 basis points to 15.2%. Our focus continues to be on driving profitability and at YTD level, ABFRL excluding Tomorrow delivered positive EBITDA on a pre in days basis. Despite our deep investment in establishing multiple new businesses, our endeavor will be to improve on this trajectory as these businesses mature. Our overall retail Network stood at 2012.12 26 stores spanning over 7.7 million square feet as of Q3 and with 50 new additions during the quarter with area up by 2.5 lakh square feet sequentially. Now let me brief you on the performance of individual segments.
Turning to the pantaloon segment, the business performance reflected a shift in festive and EEOSS sales into Q2 and Q4 respectively. Adjusting for Peugeot and EOSS shift, pantaloon format, L2L stand at 3%. Revenue for the segment stood at 1276 crore for the quarter with margin at 18.2% lower on account of owned losses and marginal dip in pantaloon due to sales shift for pantaloons. Our refreshed strategy centered on moving away from value, late fashion and building premium brand proposition is showing some green shoots. Our current month on month trajectory validates that this approach is working as some of the key initiatives, KPIs are showing encouraging trends.
We are enthused by these early results and will continue to build upon it with sharp execution to progressively set the business up for sustainable growth. On in its new format posted revenue growth of 54% YoYo the brand expanded its footprint by adding nine new stores in Q3 and now has 67 stores coming to the ethnic business. Our ethnic portfolio Is now at 2,200 crore annual sales with 650 stores across the country. Our Q3 revenue is stood at rupees 703 crore up 20% YoY despite festival shift with L2L at 10%. The portfolio also saw a 350 basis point YoY EBITDA margin expansion driven by strong revenue growth led operating leverage as you are aware, our ethnic portfolio comprise of two business segments, Designer Led and Premium Ethnic.
The Designer led segment, a strong and profitable business, continued to scale rapidly. The Portfolio delivered over 30% YoY growth driven by healthy L2L growth of around 15% category expansion, elevated retail experiences while also reporting strong double digit profitability during the quarter. Now within the premium ethnic VA brand, Taswa continued its strong trajectory posting 26% YoY revenue growth led by 8% L2L growth on YTD basis, L2L stood at 20%. The brand added eight new stores in Q3 expanding its network to 85 stores. The brand’s recent traction reflect the impact of improved assortments and curated wedding led collections supported by continued brand visibility efforts.
TCNS reported flat overall revenue growth during the period largely driven by store rationalization of 50 stores. In last one year since acquisition, the network has been streamlined from around 650 stores to 480 stores. On this more focused and profitable base, we delivered strong L2L growth of 8% for the quarter with YTD L2L growth at 10% reflecting improving underlying performance margin was up by approximately 500 basis points driven by improved product performance and retail execution on a pre in days basis, losses have declined by over 50% on a YTD basis indicating meaningful progress in the turnaround.
New launches are witnessing strong sell throughs translating into improved store productivity. This reflects our focused product strategy and the pivot towards a higher mix of occasion wear as outlined at Analyst Day. With these strategic foundations in place, we are entering the next phase of expansion with a Healthy Store Edition plant targeting double digit growth and double digit pre index margin over the medium term. On luxury retail, the collective and monobrands business delivered another strong quarter with 16% YoY growth with improving profitability. The business added three new stores to the network and now spread across 49 stores.
India’s first flexible luxury departmental store, Gallery Lafaye commenced operations in November 2025 and had seen strong early traction. The platform will continue to deepen consumer engagement through curated experiences, add new and relevant brands and strengthen its positioning as a premier luxury destination in the Indian market. Our digital brand portfolio tomorrow grew by 29% versus last year in Q3 underpinned by strong back end technology and data science led capabilities enabling rapid scale up. The business is now operating at an annual revenue run rate of 1100 crore including wrong with improving profitability trends, the portfolio continue to build its omnichannel presence closing the quarter with 90 plus stores across key market nationwide.
In conclusion, our larger businesses including pantaloons and TCNs continue to progress along a clear strategic path and are now well positioned to contribute meaningfully to overall growth. At the same time, our other businesses which have reached a significant scale will now pursue steady improvement both in terms of profitability and growth. Collectively these outcomes along with adequate case availability provide comfort on the strategic direction of the portfolio and its ability to deliver consistent value over time for our stakeholders. Thank you and happy to take questions now.
Questions and Answers:
operator
Thank you Mr. Bajaj. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Archana Menon from Morgan Stanley. Please go ahead.
Archana Menon
Hi, thank you for the opportunity. My first question was on Pantaloons so in your comments you mentioned that there was positive trends in month on month performances and KPIs improving. So if you could share some more details on how the performance has been through the quarter and in January and which are the key KPIs we are seeing an improvement. Any additional details?
Sangeeta Tanwani
Yeah, hi Archana, this is Sangeeta. So as Jagdish mentioned that our performance for this quarter actually corrected for the shift of festive actually is at about 3%. The other big shift that happened in this quarter I’m just giving you first explanation for the growth because we had a good autumn winter and the season was going well and One of the KPIs that we saw improve significantly is our sell through rates on our merchandise. Given all the shifts we’ve made in our merchandising strategy. We actually decided to shift our EOSS versus last year to quarter four and of course this will have an impact on quarter four and we will see the base has shifted from quarter three and this will come back looking stronger in quarter four.
To your specific question on the indicators, some of the shifts that we had called out in our strategy was shift in our merchandise aesthetics. And we had taken a big bet for example on certain categories. The women’s western wear category, non apparel category. Very happy to share with you that on both of those categories our growth have been above expectation. And given that the strategy was to be a more fashion forward brand, it was very important for western wear to turn around and which we’ve been able to do successfully. Our new stores, if you see the new retail identity that we have rolled out over the last few months, those stores are outperforming versus the rest of the network.
Our online business, which today is a small business, but we had made certain choices to get that business to a path to profitability and then start scaling the business. We’ve moved significantly forward on that business too. More importantly, we made investments in marketing in this quarter. We signed a celebrity and invested significantly in marketing in line with the repositioning strategy of the brand. As you know, we’ve been talking about moving from a little bit more premium in the mid market segment itself. But in terms of imagery, making ourselves more premium. Our merchandising store strategy, everything has been in line with that and the new advertising too.
What’s heartening to note is that the profile of the customer, while it’s too early to assess the overall impact of marketing and it will take some time for the results to come through specifically on marketing. But the early signs in terms of the profile of the new customers that we have acquired, there is clearly a shift in terms of the profile being more younger, which again is in line with the stated strategy. So therefore I think with the shifts that we made in our merchandising, in our store strategy, in online, in the marketing investments all seem to be paying off and we are seeing and steady improvement in all our metrics and that gives us the confidence that we will see stronger growth coming back, even stronger growth coming back in the future in pantomimes.
Archana Menon
Thanks Anita for this. Just following up on this, in line with the premium premiumization strategy that we followed, are you seeing a growth in the average basket size or ticket, average bill order so far?
Sangeeta Tanwani
Yeah. So in terms of our build value, it has increased a little bit. While we made sure that we’re not taking up our prices significantly, what we’ve done is to make sure we packed more value in our products and that is something that we will continue to drive. Also, with non apparel being integrated into our apparel strategy, we hope to see an ongoing improvement in our basket sizes as well. So not a very significant impact in terms of the basket size, but in terms of our average selling price, we’ve seen about a 2 to 3% increase because of the shift and because of our premiumization.
Archana Menon
Thank you for this. And on TCNs, what are your store expansion plans for Nectar?
Jagdish Bajaj
So Archana, as you know, in TCNs, as Ashish in TCNs, we’re focused on consolidating the cost side of the business, the inventory and putting out fresh merchandise. And the store expansion was really not on the agenda for much of last couple of years. I think from Q4 of this year is when our expansion agenda is changing. I expect that we’ll add between 50 to 60 stores next year in TCNs, something that we had back so far. But now that the merchandising performance has significantly shifted strategy on both dimensions, which is making the brand a little bit younger and contemporary as well as increasing participation in celebration wear and festive wear through wishful, both are playing out well.
We feel more confident to store expansion now.
Archana Menon
Thank you so much. I’ll come back in the queue.
operator
Thank you. We take the next question from the line of Gaurav Jogani from JM Financial Ltd. Please go ahead.
Gaurav Jogani
Thank you for taking my question, sir. So first on pantaloons, I do understand, you know, the shift to Q2 of the festive season has kind of impacted the revenue growth in Q3. But if you look at the nine months revenue growth also the revenue growth, you know, in total has been only 1%. Also if you look at the margins, margins have also kind of dipped 100bps on a nine month basis. So you know, where are we on the path of, you know, margins improvement going ahead? So should we consider, you know, a large part of the rationalization of stores, etc.
Is now over the cost elements. Initiatives are over and probably going ahead. Can we see improvement in margins and also in the revenue growth?
Jagdish Bajaj
So Gaurav first, as Sangeetha explained, even if you look at it’s more pronounced in Q3, but if you look at nine month also, the shift in USS from December to January has also brought down revenue growth for this quarter as well as for nine months. But your point still remains. I think last couple of years. Rationalization has sort of curtail the revenue growth opportunities as far as the business is concerned. And that’s going to reverse now as most of the network rationalization part is over and we are looking to improve the network addition is going to start from this year onwards and more specifically next year.
On the margin front, Pantanoo’s margin remains steady. The reduction that you’re seeing is combination of two things. One is the shift in revenue because it’s a very high operating leverage business. When you shift revenue from one quarter to another for temporary, that quarter looks little lower. There is absolutely no concern around it. The other reason is of course as owned expanded this year with the rebranding and relaunch, etc. The owned losses have brought down the margin by that 100 basis point that you’re seeing there. As far as pantaloon’s own profitability is concerned, it remains pretty much on the trajectory that we had indicated earlier.
Gaurav Jogani
Sure. So just a follow up on this. Pantaloons, what kind of store expansion can we expect, you know, from the next year, say for FY27, 28? What steady store expansion can be built in?
Jagdish Bajaj
I think about 20 stores is what we would say we need to build in. Because Gaurav, as Sangeetha explained, a lot of our premiumization strategy was building around aspirational and experience premiumization, not necessarily significant shift in pricing. So the Pantaloons addressable market hasn’t come down. It’s just that I think as consumers have moved they’re looking for better and more superior experience, which is what we have been testing and implementing. And the confidence is now fairly strong that we should get back to the expansion path and this is what we’ll do.
Gaurav Jogani
And would the stores be. The sizes would be larger or smaller versus you know, the earlier network that we used to expand. Because I think now we are looking to expand more in the tier one on Metro cities.
Jagdish Bajaj
Yeah, larger, larger stores,
Gaurav Jogani
any size that. You can help us. I mean 15,000.
Sangeeta Tanwani
We are largely looking at stores in the range of 18,000 plus going up to 25, 30,000 depending on the potential of the market.
Gaurav Jogani
Sure, thanks. And my next question is with regards to, you know, the, the ethnic part of the business, you know, very commendable job in terms of both the growth that you have driven and also the margins that are coming in. But if you can dissect, you know, the, the profile of margins between, you know, their designer led brands which were already profitable versus the journey of profitability in the, the other ethnics part of the business and how it is shaping up. When do you expect though that business also to turn profitable?
Jagdish Bajaj
Okay, so Gaurav, as you know the designer led brands are very profitable. They continue to remain so and continue to grow also strongly on that level of profitability. So the shift is really what we need to make is in the premium ethnic where it consists of primarily two large businesses. One is taswa and you know this is a business we are investing in. It’s growing very rapidly. On an analyzed basis we are growing at about 45, 50% YTD. 9 month growth rate is 32% on like to like. So very strong traction this business has. But losses continue to be on a small base that we have.
Losses continue to be there. As far as Taswa is concerned, TCNs we have made a big shift. I think as Jagdish in his opening remarks mentioned that profitability has halved in this nine month period versus last year. We are very close to breakeven this quarter, almost breakeven. I wish we had made little bit more to be able to declare a profit in this quarter. But on annualized basis our breakeven will probably be next year. So as TASWA scales a little bit because TASWA intrinsic margins are very good, the gross margins are very good. Store productivity, as you know, which is the largest driver in the retail business profitability, 32% like to like growth on an 8090 store network over a long period of nine months indicates very strong confidence that this will also get back to profitability which we haven’t achieved yet.
And this I’m giving you commentary of nine months. Of course festive quarters tend to overstate intrinsic profitability and the summer quarters it shifts. So there is a bit of a swing. But on an analyzed basis that’s how the picture will look.
Gaurav Jogani
Sure. So would it be a right inference to say that the margin expansion in the ethnics part of the business still will be continuing over the coming years and the expansion would be meaningful given you know that from losses you will be actually turning to profitability or breakeven at least in the TCNS part of the business thus far. Maybe we can expect the the breakeven to happen somewhere in FY28.
Jagdish Bajaj
Yes, yes, I think, I think both the businesses the swing in profitability will be quite pronounced because from deep investment phase and the correction phase in TCNS and the growth phase in taswa the shift will be fairly pronounced as far as the premium ethnic wear is concerned. So profit trajectory will continue to improve Much faster than the revenue growth. Sure.
Gaurav Jogani
And if I can just slip in one last question, I mean, I do understand, you know, that the Galleries Lafayette opening during this quarter would have impacted the profitability in the other parts of the business, other segment of the business. If you can call out what kind of impact that had and also what kind of an impact that had on the depreciation and the lease liability interest.
Jagdish Bajaj
So I’ll wait. If Jagdish can give that answer very quickly, he’ll feel in the meantime, as far as the business launch is concerned, we would have invested maybe about 20, 25 crore in terms of the event, initial launch, the first stage of the business, which I think as the business scales up will reduce over a period of time. But that’s really the nature of investment. So far on the P and L side, on the balance sheet side, we have told you, I think indicated store cost of about 130 odd crores, 125 to 1 crores. And that that will go into the depreciation line.
And the depreciation, you know, is around 10 crore rupees. Because of this, the impact. Yeah, yeah. No, apart from this, the depreciation is higher because of owned. Tomorrow he’s asking only Gallup. So I, I say, I think we’ll, we’ll figure that number out for one specific. But that’s the nature of investment that we made in this concept. Sure.
Gaurav Jogani
So just the other speed, the profitability, would it be right to understand the profitability would have been higher by 2025 crores if not for Galleries Lafayette, Would that be right? Understanding
Jagdish Bajaj
not so much because there are also some gains. We have done business. There’s revenue, there’s gross margin. So the difference will be slightly lower than that. I was talking about the total investment that we’ve done in promoting and launching the business and so on.
Gaurav Jogani
Okay, thank you. Thank you for answering the question. That’s all.
operator
Thank you. We take the next question from the line of Ankit Kedia from Philip Capital. Please go ahead.
Ankit Kedia
Sangeet. I just wanted to understand, you know, over next two years, what is the target like for like growth in pantaloons, you know, which we are budgeting for.
Sangeeta Tanwani
So we are looking for mid to high single digit growth in pensions and you know, and double digit growth at an overall level.
Ankit Kedia
Yeah, sure. Two years back we had launched Insignia loyalty program, you know, which is a paid loyalty program like some of our competitors. What is the today overall revenue contribution of that program and how is the, you know, loyalty being here? Because of changing the Positioning to more younger audience, more premium. So are you seeing some impact of, you know, middle aged people going off the platform?
Sangeeta Tanwani
So it’s a very successful program for us. It’s a program that allows us to ensure that we have people continuing to shop with us and helps us in terms of retention. We’ve also figured that some of our older customers have continued to roll over from one year to the other as far as Insignia is concerned. So it’s a top tier program, as you know, and it is a program that allows us, as I said, on our large base of 16 million plus customers. This is in terms of number of customers is a small base, but in terms of the contribution of these customers, it’s a significant, significant number.
Our overall green card contributes to about 70% plus of our revenues and Insignia sits on top of that.
Ankit Kedia
Sure. And from the store closures perspective, if you can give color on which type of stores we have closed, were they only loss making? Were they smaller stores, tier 2, tier 3 cities stores? And while we are opening more metro and Taiwan stores today, how is the inventory mix now moving from private label? Because we have piloted some stores which are more than 90% private label. So how is that mix changing from store closures, if you can say, and on the inventory mix to Metros and Taiwan cities?
Sangeeta Tanwani
Yeah. So the stores that we have closed is a combination of both. As you rightly said, there are some stores which were loss making stores and some stores where we believe the proposition that we’ve defined for ourselves because obviously we want to be consistent as a format across the country. These were stores either which were very small sizes or they were not in the right markets where the proposition could be represented. So we’ve shut about 11 odd stores and that’s behind us in terms of store closure so far. In terms of private label, we even today have a mix of stores.
There are certain stores which have a very high mix of private label and there are certain stor which are our largest stores which have a large representation of our external brands. As far as the mix is concerned, I think because of the nature of changes that we’ve made in the format opening larger stores, our mix has over the last two, three years has shifted by a percentage to a percentage and a half in favor of private label.
Ankit Kedia
Sure. And my last question is on owned, what is the two year target on store opening and profitability for owned? And also on inventory we see heavy discounting which had happened in owned. So is the old inventory which was being carried forward from style up now pretty Much over and we are starting with fresh inventory today.
Sangeeta Tanwani
So this model, you know, we’ve been at it for the last two, two and a half years and we’ve continued to refine this mod as we have learned every single quarter on this. As you’ve also seen that we rebranded it from style up to owned basis. All the consumer work that we have done, the discounting that we did, if you’re referring to the end of season sale, it was in line with what we have done before, perhaps a little bit more aggressive, but it has nothing to do with excessive liquidation of inventory. It is a normal USS period during which we carried out the liquidation.
And yeah, most of our new merchandise that we have is all tagged owned and we don’t have too much of the style of merchandise. However, I would like to mention that in terms of the aesthetics of the merchandise, we’ve only gotten better in terms of our fashion quotient and much younger with what we’ve created with ownership.
Ankit Kedia
And. Some a two year roadmap on store opening and profitability.
Sangeeta Tanwani
Sorry, I’m misanswering that. So from a store opening standpoint, we would be looking at opening about 40 to 50 stores in the coming year. As I mentioned right at the beginning, we have continuously refined this model and a lot of things are working for us in the right manner. And the moment we believe that we’ve all elements of the mix right, we’ll be ready to scale it up even beyond 50 stores.
Ankit Kedia
So is it fair to assume we will not be profitable at least till FY29?
Sangeeta Tanwani
Yes, probably.
Ankit Kedia
Sure. That’s it from my side. Thank you.
Sangeeta Tanwani
Thank you.
operator
Thank you. We take the next question from the line of Garima Mishra from Kotak Securities. Please go ahead.
Garima Mishra
Hi, thank you so much for the opportunity. Could you talk a little bit about the competitive environment that both Pantaloons and Owned are witnessing?
Jagdish Bajaj
As far as Pantaloon’s competitive environment has, I think we have moved away from a highly intense price based competitive set where Pantloons was operating five, six years back, primarily around price value equation, which is much lower to space where relatively lesser competition exists. As we are premiumizing, of course the journey takes time. I think we are moving into a space where the level of competition is relatively lesser. The owned business on the other hand, operates in an environment which is fairly intense from competitive point of view. There are a lot of players who are meaningfully large in that or many others who are entering in that space.
So that space I think over a period of time has only Intensified in competitive action. Does that answer the question? Garma.
operator
Garima, are you there? Since there is no response, we will move on to the next question which is from the line of Devan Shubhansal from MK Global. Please go ahead.
Devanshu Bansal
Hi team, thanks for the opportunity. Ashish and Sangeetha, sorry for stressing on this but from pantaloons perspective we have done lot of store closures, right? So but this is still not reflecting into like to like growth for us. I’m taking cues from the performance of the other entity that we have, right? So in lifestyle brands also we have done store closures but at least from a like to like growth perspective we’ve delivered about 10% growth in nine months. So even from a margins perspective we are investing in terms of marketing etc and we’ve done store refurbishments but still the growth has been backlusted from fancy homes.
So how do you see this business returning to double digit growth? Also if you could provide some more color on this month on month growth improvement trajectory that you’ve talked about for better understanding.
Jagdish Bajaj
Okay, let me try and answer your first question. I think you’re right. The overall environment across the different price segments and consumer segments is somewhat different. You also see a portfolio for business where we are growing at 25 30%. There is a premium brand business which is growing at about 10 to 12%. I think the competitive intensity and the overall consumption at the lower to mid segment of consumption has been more challenging. For much of last 12 to 24 months. Much of our store rationalization was not so much about it doesn’t necessarily give you like to like shift.
It provides store closure and many times we close stores although they’re barely marginally profitable. Because one of the things that we also look at, I mean three things that we look at in terms of thinking about store closure. One, is it in line with long term strategy and we look at it second, financially does it make sense from profitability or loss point of view, will there be further cash losses and can we turn it around? And third, which is not visible in the numbers is what’s the capital productivity particularly from inventory point of view. There are stores which make money but have lower throughput and in some ways then creeps back into higher inventory and higher markdown which is not visible on the surface.
And we look at all this and therefore necessarily to your point, store closure, store rationalization doesn’t necessarily lead to like to like improvement in significant manner. Having said that, I agree with you. I think the performance in this segment has been lower than our premium segment or which is lower than the super premium segment in some ways tells you the story of the market as well. Apart from the challenges that, you know, business would have faced. On the more recent improvements, I think Sangeetha had given a color of it. Sangeeta, do you want to add something more to it?
Sangeeta Tanwani
Yeah, Devansha. So like I mentioned before, I think all the improvements that we have been working on as they’ve kind of gotten rolled out, we’ve seen significant improvement in metrics and more so in our performance in the last three to four months, as Jabdish alluded to it. So the metrics on the efficiency of our merchandise, our inventory, or be it the performance of our newer stores with newer design, new retail identity, these are larger stores that we have opened. And some of the stores that we’ve opened even in tier one towns have started off exceedingly well.
There is also this bit in terms of the marketing investments that we’ve made with the repositioning. We’ve seen the shift in the customer base which actually was very heartening. Our focus has also been in terms of execution in stores and in store experience. So again on both of those, the inputs that have gotten and some of the metrics that we are seeing, so the efficiency with effectiveness with which the store staff launches the new merchandise, a significant shift in the execution parameters and a lot of other improvements that we are making in terms of creating a harmonized in store experience with our customers.
I think these are several actions across every single element and every single touch point which has given us the confidence. It’s of course there in the results, but gives us the confidence for the future as well.
Devanshu Bansal
Got it. Thanks for answering. And secondly, sir, there is some level of leadership exit now at ccms. Right. So how have you sort of taken care of this knowledge retention for this particular segment from the outgoing leadership? As historically our presence has been limited in this category. Right. So maybe if you could throw some light on that fair point.
Jagdish Bajaj
I think as you know, we had invested in TCNS business almost two and a half years back, September of 2023. So while Anant has been leading the business for nearly 15 years and has done incredible job in building the business literally from scratch over this period, there’s also been a very strong leadership team with him which has played this role. And as Anant transitions out of it, first of all, he’s spending next three, four months with our next leader who’s Suraj, who’s been in this ethnic business for last two, three years was responsible for growing and building Taswa business looking after Jaipur.
So reasonable familiarity. Perhaps not as much as Anant has had over the last 15 years. But Anant has also taken upon himself to help Suraj transition over next three, four months. Could be slow and deliberate transition. But more importantly the team that has worked on it has been also a very stable team. And we think this is a very sort of steady handover which we’ll get from the business over a period of time.
Devanshu Bansal
Got it. Ashish, thanks for taking my questions.
operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one, we take the next question from the line of Rajiv B from Nuama. Please go ahead.
Rajiv B
Yeah, thanks for the opportunity. So first a few housekeeping questions. If you can tell me the cash in hand. Currently the cash burn during the quarter, the capex number and the free cash flow for the quarter and nine months.
Jagdish Bajaj
So as I covered in my speech, the company as a whole we have roughly 2,100 crore cash. With ABFR standalone we have around 1600 crore rupees cash in this quarter. The case bond was not there. Whatever you know, from 2100 to 1500, 1600 crore with me has happened in H1. That is number one capex across business for nine months is roughly 300 crore including security deposits.
Rajiv B
Sure. So secondly on Galvis Lafayette, so what is the total capital employed in in this bit and in terms of let’s say a steady state number, what is the kind of ROC you are looking from this? And thirdly, what is the model here in terms of is it an SIS model, is it a trading model? How do we get our permission here?
Jagdish Bajaj
So I think it’s a combination of multiple models. The store investment is by us directly but we have differential arrangements with different kinds of brands and also different categories. Beauty for example is by and large a concession model. In luxury brands there is a commission model. Most of the business however is on a large part of fashion business is on buy and sell for the brands which don’t exist in India. As you know, we have lodged close to 250 brands in the store of which 70% don’t exist in the country. So many of these brands the inventory is on our books.
Overall as I mentioned, the gross investment in fixed assets is about 125, 130 crore or in that range the inventory would be about 60, 70 crores and therefore the total capital employed will remain in the range of 150 to 200 crores, 180 to 200 crores in that. As we expect the business over time. I mean there’s still some way to go. We have a few luxury brands which are to enter towards the middle of next year. There’s an FNB which is still six months away. So there is some part of the store proposition which is yet to be completed.
In steady state model we expect the store to make between close to 15 to 20% in first two, three years on the revenue and as we go forward this is a one time investment. Over a period of time this business will grow as Indian consumption grows, as the luxury market around the world and in India showing we are very confident of a strong trajectory on this.
Rajiv B
So you’re saying 30 to 40 crore is our take, is it? That is the EBITDA.
Jagdish Bajaj
This is our business. So it’s not somebody else’s take, Is that the question you’re asking? This is a business fully invested by us. But on inventory we have different arrangement inventory and margin we have different arrangements with different nature of brands. Some are concessioners, some are revenue shares, some are buy and sell. So each one of them of course have different margin structure also depending on what’s the level of exposure investment we are making.
Rajiv B
So I was asking for example for this 200 crore investment or let’s say 70 crore inventory in this case what is the peak revenue you’re looking for and then associated let’s say EBIT level.
Jagdish Bajaj
So this business may start with 150200 crore over a period of time will grow we think over the next 34 years should be able to get to much higher revenue on that. And that’s the number on which we look to make about 20% store profitability.
Rajiv B
What is the size of this store?
Jagdish Bajaj
90,000 square feet.
Rajiv B
That’s all from my side. Thanks a lot.
operator
Thank you. We take the next question from the line of Sameer Gupta from India Info line. Please go ahead.
Sameer Gupta
Hi sir. Good evening and thanks for taking my question as a whole business ABFRL including tomorrow on a pre index EBITDA basis by when do you envisage a positive EBITDA? I understand Taswa TCNs tomorrow are still under losses and at least two of the three you expect to be break even in FY27. So any, any guideline you have internally that you know 28 will be the first year of positive EBITDA on a pre and S basis or it can stretch beyond that. Any, any color here.
Jagdish Bajaj
So first to get some. Where do we stand today for the entire business without Tomorrow we are 9 month EBITDA positive or breakeven and this is pre index numbers. Yeah and therefore the losses even at consolidated today. This includes all the losses that we talked about currently in TCNs, Taswa, own galleries, Lafayette, etc. With all that included we are breakeven today, X tomorrow and we expect as these businesses mature, TCNS turnaround, that’s what’s scaling up etc. The profitability for X tomorrow business will grow sharply over next two three years. It’s already breakeven for this nine month and next year full year onwards we should start making pre indefinite profit which will increase.
Post that as far as tomorrow is concerned, today it Is at about 12 to 15% sort of losses compared to its revenue and on a secondary basis we expect tomorrow as we have mentioned in our various sort of presentations, including investor presentations to be somewhere between FY29 is when tomorrow should break even. So the two trajectories are slightly different but this is really what are the internal goals we have set for ourselves.
Sameer Gupta
Got it sir. That’s fair. Second question is sir, the understanding was that it is a subdued quarter for wedding related categories. You also mentioned that during the Birla lifestyle brands call, but we’ve seen a Sabyasachi Stella Performance 44% growth thus far is doing well this quarter as well. Healthy ltl also. So is it like these brands have been an exception versus the overall category or there are certain one offs in this quarter?
Jagdish Bajaj
First of all there are no one offs and let me explain both the comments that were made as Sangeetha in her commentary Vishak earlier in ABLBL commentary said this quarter part of Festive had shifted to Q2 and therefore to that extent the business didn’t get that benefit. Secondly, weddings in the second half of December were also low and therefore it is a fair representation Fair comment to say that the wedding bill related businesses didn’t have the benefit of a very strong quarter from timing point of view. Having said that for different reasons Taswa because it’s growing very very rapidly I think in a very accelerated manner and this is been established over last year and a half too.
The designers, whether it’s Sabisti, Tarun and other businesses. I think again this would give you a sense of the belief that we had in these businesses that currently they’re under penetrated with time. These businesses are set to grow at fairly rapid rate. Therefore they will see several years this kind of growth with or without the wedding date. I mean business these numbers would have been even better if the wedding dates were stronger in the second half of December. So I would say because of they stand out compared to what the market is.
Sameer Gupta
Got it. So it’s basically an organic performance. And had the wedding quarter been better the performance also would have been better. That’s the correct understanding.
Jagdish Bajaj
Right. Because they’re all in different phases of the business. These are not as mature business as let’s say some of the larger business of lifestyle brands are.
Sameer Gupta
Got it. That’s very helpful. Last question if I may. Squeeze in. So deferment of EOs s in front loans 12 days and the competitors have had it bang in the middle of December like a shopper stop and a lifestyle rational for differing. I understand but is there a risk of market share loss? Because you will probably be having an end of season sale where most customers looking for discounts they might have already had shop in your competitors. So as a strategy, can it backfire?
Jagdish Bajaj
Any strategy can backfire. But I think this should give you a sense of confidence that we have got to in our merchandising cycle in this business. It’s taken us some time and a fair bit of understanding of business. You can be sure we have thought deeply about it. It’s very difficult as you’re rightly alluding. It’s a different call, difficult call. But we also believe over a period of time, in the peak period of Christmas, winters when consumers are actually buying and holidays when consumers are actually buying and shopping for the right reason. Every good retailer over a period of time should try to maximize margins apart from sale in this business.
We are confident that whatever we lose in this period we will be able to gain back in the month of January or February or at least the quarter. And that’s what Sangeetha was indicating.
Sameer Gupta
Great. Sir, one last question if I may squeeze in. So sorry for this but I think Jagdish mentioned the gross cash numbers. Can I also have the net cash numbers for like end of 3? Q.
Jagdish Bajaj
With me is around 800 crores. So consolidated sorry standalone entity has a 750 crore of long term debt. So from 1600 you can take that down. That’s why he’s talking about 800 crores. There is a further tomorrow because of the fundraise is sitting on a net cash of about 400500 crores.
Sameer Gupta
Okay. So basically 800 crore net cash in standalone entity plus around 400 for tomorrow. So overall a 1200 crore kind of a net cash.
Jagdish Bajaj
No, no, no. There is also multiple subsidiaries. So I think, I think the number maybe Jagdish you want? Yeah, because each of the subsidiaries. So what I’m trying to say. Firstly these borrowings are long term in nature. So you know, like I have 600 crore cash with debentures and small, you know, WCDL here and there, 800 crore borrowings. So 800 crore cash. With my subsidiary there is a more borrowing than the cash they have. So if you see it a net level I will have around 600 crore rupees.
Sameer Gupta
600 crore net cash on a console level.
Jagdish Bajaj
That’s right. There is some debt in the subsidiaries as well.
Sameer Gupta
Got it sir. Yeah, that’s all from me. Thanks. Thanks a lot. And all the best for the future.
operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one, we take the next question from the line of Garima Mishra from Kotak Securities. Please go ahead.
Garima Mishra
Thank you so much for the opportunity. Again, our first question on the pantaloon segment. Is there any sense you can give us on the contribution of owned to the let’s say 3500 odd crore revenues in nine months that Pantaloons reported?
Jagdish Bajaj
It’s very small Dharma and that’s why we’re not splitting it at this point of time. It’s a very small revenue on the that base.
Garima Mishra
Got it. Second question was on tomorrow. So 31% YoY growth in the nine month period, pretty healthy number. Was there any inorganic component to it? That’s number one. And second, within tomorrow which sub brand or sub brands are driving up this fast growth?
Jagdish Bajaj
So Garma, there is no inorganic. Even last year our growth was close to 30% on full year which was fully organic. They said again 30% growth for nine months is fully organic. So there’s no. That just reflects the sort of level of momentum that these businesses have. And the way tomorrow is rising now over a different period of time, different brands sort of have trajectories. Some of the bigger brands are slightly slower growing on relative terms. But there are many brands which have grown north of 40, 45% as well. Bevkoof, which was one major brand that we had sourced, acquired and which was struggling to growth in the early years is now beginning to record 40 to 50% growth.
Nobero is another very strong brand which has been growing at a very rapid 35 to 40% growth CAGR over 3, 4 years. So there are multiple parts of the businesses. As we acquire the businesses, we understand the operations, figure out the opportunity. We are able to practically without exception in every business we are able to find opportunity to grow between 30 to 40%. Of course it takes time to understand and correct the inventory cycle and product proposition in some of the cases. So we are driving two things Garuma and this one is many of these brands operate with gross margins which are much lower because they have been chasing growth.
We actually get into each of the business, improve the inventory cycle, improve the gross margin product proposition, premiumize it, manage the inventory flow a little better. The second thing that we do is to make sure that their channel strategy is right between balance between D2C marketplace and offline. And increasingly we are finding that offline is improving help us improve both the gross margins as well as the brand visibility and familiarity. So we are taking some of the most successful brands more rapidly in offline. And third is really driving the organic performance which is efficiencies of performance, marketing and all that to drive the growth in each of the business.
Garima Mishra
Got it Ashish. And last question from me again on tomorrow. What proportion of let’s say the nine month 26 revenue came via the online.
Jagdish Bajaj
I think 95% of the business while we have started to open stores. But even now at a nine month level, 95% of the business, we don’t expect this to remain at this level. I think as these brands are finding traction in offline we will bring that share down. But I think these from 95, maybe it will come down to 85, but these are primarily online first brands.
Garima Mishra
Understood. Thank you so much.
operator
Thank you ladies and gentlemen. With that we conclude the question and answer session. 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. Now you can disconnect your lines. Thank you.