Baazar Style Retail Ltd (NSE: STYLEBAAZA) Q1 2026 Earnings Call dated Aug. 04, 2025
Corporate Participants:
Unidentified Speaker
Suyash Samant — Account Manager
Shreyans Surana — Managing Director
Analysts:
Unidentified Participant
Gaurav Jogani — Analyst
Palash Kawale — Analyst
Rehan Syed — Analyst
Naitik Mutha — Analyst
Chirag Maroo — Analyst
Raj Sekar — Analyst
Videesha Sheth — Analyst
Deepak Poddar — Analyst
Arvind Arora — Analyst
Ashwin Kedia — Analyst
Subhanu Bangal — Analyst
Ashish Parakh — Analyst
Aastha Jain — Analyst
Hitaindra Pradhan — Analyst
Arman Kassym — Analyst
Devesh Advani — Analyst
Yash Tawani — Analyst
Presentation:
operator
Ladies and gentlemen. Good day and welcome to Bazaar Style Retail Limited Q1FY26 own conference call. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand over the conference over to Mr. Suyush Samanth from Taylor IR Advisors. Thank you. And over to you sir.
Suyash Samant — Account Manager
Thank you. Good afternoon everyone and thank you for joining us today. I have the time survey, the senior management team of Bazaar Style Retail Ltd. Mr. Sriyan Sonara, Managing Director and Mr. Nitin Singh, Chief Financial Officer who will present Bazaar Style Retail Ltd. On the call. The management will be sharing operating and financial highlights for the quarter ended June 30th, 2025 followed by a question and answer session. Please note this call may contain some of the forward looking statements which are completely based upon the company beliefs, opinions and expectations as of today. These statements are not a guarantee of the company’s future performance and involve unforeseen risks and uncertainties.
The company also undertakes no obligation to update any forward looking statements to reflect developments that occur after a statement is made. I now hand over the conference to Mr. Sriyan Soranath. Thank you. And over to you sir.
Shreyans Surana — Managing Director
Good afternoon everyone. Welcome to our Q1FY26 earning call. Our presentation has been uploaded to Stock Exchange and the company’s website and I hope you had a chance to go through it. We are pleased to report that our strong growth trajectory has continued in Q1FY26 with revenue reaching 378 crore, an increase of 37% year on year and 9% quarter on quarter. Gross profit also demonstrated healthy traction rising to 136 crore reflecting a 49% growth year on year and 19% sequentially with healthy margin at 36%. I would like to provide an overview of the current trajectory of our performance and share our outlook for the upcoming quarters.
We remain on track to achieve our FY26 guidance and are confident of delivering a revenue growth of 25%. While we prefer to wait and assess the performance of the Q2 especially given the significance of the Dunga Puja Festival in East India. Before considering any revision to our guidance, it is important to note that the underlying demand on the ground continues to remain strong. A revised outlook, if any, will be shared post completion of H1, we expect to deliver SSG growth of 7 to 8%. Pre Index EBITDA margin is projected to be at 7 to 8% while Pre Index PET margin is expected to be 3 to 4%.
Additionally, we reaffirm our guidance of opening 40 to 50 new stores during FY26. We anticipate a meaningful uptick in demand during Q2 and Q3 driven by the festival season including Rakshabandhan, Durga Puja, Diwali and the wedding period which traditionally spurred consumption and reinforce our confidence in the outlook. The company’s strong execution capabilities, established regional leadership and focused long term growth strategy continue to underpin its robust growth trajectory driven by the following key factors. One, Our focused business strategy on value fashion in the underpenetrated eastern region has enabled us to benefit from the shift from unorganized to organized retail supporting our steady growth.
Second, our product offering across categories remains a key strength. By providing a one stop shopping experience for the entire family, we are increasing customer convenience, footfall and market size. Third, our cluster based expansion approach supports operational efficiency by enabling better site selection, improved understanding of the catchment area and faster ramp up of new stores leading to quicker economies of scale. Fourth, our continued focus on private labels is yielding strong Results in in Q1FY26 our portfolio of private labels has contributed 61% to the revenue amounting to 229 crore reflecting a 59% year on year growth. Notably, our brand squareup records its highest ever quarterly revenue contributing approximately 99 crore.
Our expansion journey continues with the total store count in Q1 FY26 reaching 232, a 40% year on year increase and the total retail area now stands at 2.11 million square feet reflecting a 41% growth over the previous years. Now, before coming to the profitability, I would like to take a moment to provide you with a brief overview of how our business operates as a value retailer with a strategic presence in eastern India. Our demand pattern is inherently seasonal driven by regional specific festivals that occur at various times throughout the year. Accordingly, our performance is most appropriately assessed on a full year basis.
For instance, in Q1 FY26 SSG appeared muted as EID sales were advanced and captured in Q4FY25. However, after adjusting for the 15 day shift, the normalized SSG for Q1FY26 stood at a robust 11%. Therefore, evaluating SSG on a year to date basis provides a more accurate and meaningful representation of performance. The company remains in a strong expansion phase, strategically investing in scaling operation through increased store count with net addition of 18 stores in Q1 FY26 and enhanced technology integration. While growth related investment may temporarily impact operating margin, the company continues to deliver healthy absolute financial growth.
Now coming to the Q1 FY26 financial and operational highlights as mentioned earlier, we believe that the PRE index view provides a clearer reflection of our underlying expenses and profitability. For this discussion we will be referring to the financials on a Pre indices pre India’s basis for greater clarity in Q1FY26, EBITDA for the quarter was 25 crores up 14% year on year and 114% quarter on quarter. Profit after tax came in at 9 crore representing a year on year growth of 531%. However, it is not comparable on Q on Q basis due to a low base in Q4 FY25 in terms of key operational metrics, please to share that our surprise market shades have performed well.
In Q1FY26 we achieved a growth of 73% year on year and 24% quarter on quarter with revenue reaching to 72.6 crores. Average stores size stood at 9123 square feet versus 9037 in Q1FY25. Average transaction value stood at 900 versus 955. Number of bills stood at 4.48 million up 45%. Quantities sold 15.06 million up 46%. Sales per square feet at 663 versus 661 in Q1FY25. SSG stood at minus 3% whereas normalized SSG stood at 11% due to the preponement of EID as explained earlier. Additionally, inventory days were reduced to 116 days in QIFI 26 compared to 120 days in Q1FY25.
Trade payable days stood at 111 days in QIFI 26 from 163 days in QIFA 25. In summary, we are strengthening our market position by expanding our store network in core and focus region, investing in supply chain and talent to enhance efficiency and growing our private labels to build differentiation and trust. Operational improvements through technology, data analytics and our omnichannel models are progressing well with the anticipated festival tailwinds in the upcoming quarters including Raksha, Bandhan, Durga Puja, Diwali and the wedding seasons. We remain confident in Delivering a strong performance and achieving robust growth in the quarters ahead.
With that I would like to conclude my opening remarks and request the moderator to open the floor for questions. Thank you.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch on phone. If you wish to remove yourself from the question queue, you may press star and 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. The first question is from the line of Gaurav Jagani from jmfl. Please go ahead.
Gaurav Jogani — Analyst
Thank you for taking my question and congratulations on the strong set of numbers. So my first question is with regards to, you know the other expenses increase. Now even if we look at on the three India basis there is a sharp increase in the other expenses. So can you please help us out how these other expenses should be looked into going ahead and if there is any one off in the other expenses line item.
Shreyans Surana — Managing Director
Thank you, Gaurav. As we continued in our expansion phase, several costs have been strategically front loaded to support the future growth. And this increase in cost is aligned with our growth strategy. We have added more stores invested in hiring, upgrading our warehouse infra and increasing customer engagement program to drive footfalls. With revenue projected to rise particularly during the festival season, their proportion relative to top line will decline driven by operational leverage and economies of scale. This means incremental gains will fully drive EBITDA improvement fueling our margin expansion and operating leverage. In terms of number, in FY25 our average operating cost stood at around 180 rupees square feet.
Which in Q1 FY26 stood at 183 rupees per square feet. We expect this average operating cost of around 180 square feet to hold during the entire financial year. And as I have said that with the strong quarters ahead we expect a good sale per square feet. So the entire thing will translate to EBITDA only in terms of margins.
Gaurav Jogani — Analyst
Yeah. So. So just one clarification. When you say 180 per square that is on a. A quarter. On. Sorry, that is for the quarter for a monthly basis.
Shreyans Surana — Managing Director
Yes, yes. On the monthly basis. It’s the average cost over 80 rupees per square feet.
Gaurav Jogani — Analyst
Okay. Will be including staff cost and other expenses.
Shreyans Surana — Managing Director
Everything. Everything. Everything.
Gaurav Jogani — Analyst
Okay. Okay. So you said that is expected to remain in this 185 rupees per square feet. Kind of the range, right? For the year?
Shreyans Surana — Managing Director
Yeah, yeah, yeah, for the year.
Gaurav Jogani — Analyst
Okay. Okay. And on the the. The gross margin side, you know, the gross margin has been a very healthy expansion this quarter around of around 300 plus bits.
Shreyans Surana — Managing Director
So.
Gaurav Jogani — Analyst
So what is the guidance if any if you can provide on the gross margin for it?
Shreyans Surana — Managing Director
So see the gross margin was higher largely because of the full price sales that we have achieved. But I think that things will get normalized in the upcoming quarter as there will be a festival season promoting promotions, rollouts along with the USA in the month of July. So I believe after all the seasonal adjustment we anticipate a margin of up to 50 basis point increase by I will say because of the inventory efficiency. I think because of the private labors for the entire year.
Gaurav Jogani — Analyst
Okay, so would that mean that in the remaining 3/4 the gross margin would decline? So if you’re saying for the 50 days for the entire.
Shreyans Surana — Managing Director
So it will not decline quarter quarter because. But because. But the sales would be higher and maybe for the Q2 and Q3 the margins which we have achieved last year. So it will be on a similar line. So on a little bit of increase. So the increase that Q1 saw, it will not be the similar increase which Q2 and Q3 will see. So as a as because of the higher revenue consumption over there. So as a percentage it will reduce but again from last year it will be higher by 50.
Gaurav Jogani — Analyst
No, so, so that is the thing. I mean if you look at the Q1 margin, Q1 gross margin is expanded by 300 wips. Okay. Now if I take for the entire year only a 50 bash gross margin expansion. So would that mean that you know, for the remaining nine months from Q2 to Q4 there would be a decline in the gross margin because you know, only then would a 50 pips margin would justify for the entire year.
Shreyans Surana — Managing Director
During the EOSAs the margin will decline but during festive and other quarters it will be in similar lines to last year. So Gaurav, what is happening is that for Q2 and Q3 if you see the numbers are very high in terms of revenue. So what will happen for the Q2 Q3? Maybe the margin will be similar to the last year only. So for the full nine months on an average this 3% may become 1% higher for the first nine months. And for the last quarter again there will be any USS on the January. So by the when the quarter four ends it will be typically higher by 0.50 bits.
This is what our assumption has been around this thing.
Gaurav Jogani — Analyst
Okay. Okay, so I’ll come back in the queue for more questions. Thank you.
operator
Thank you. The next question is from the line of Palash Kavali from Nuana Wealth. Please go ahead.
Palash Kawale — Analyst
Yeah, thank you for the opportunity, sir. And congratulations on good set of numbers. So what was the rental for Q1?
Shreyans Surana — Managing Director
Rental cost is 56 rupees per square feet.
Palash Kawale — Analyst
Okay, and what do you expect it to be for the full year?
Shreyans Surana — Managing Director
It will be in similar lines only. It will be hovering around 56 to 57 rupees only.
Palash Kawale — Analyst
And so what was it for the Q1 last year it was 53 rupees. And so any update on the insurance payment that you are supposed to receive?
Shreyans Surana — Managing Director
See, in terms of insurance payment, we have received an amount of 3.48 crores including salvage value against the total asset loss of 4.24 crores. For the inventory thing. We are actively and consistently engaging with the insurance company to expedite the claim processing. We have submitted all the documents for the full extent of the inventory loss. I think given the complexity of the assessment and settlement process, our resolution timeline is still under progress and we remain optimistic because we have submitted all the requisite documents as discussed with the insurance company. And we expect the matter to be settled in the upcoming quarters and will continue to keep you informed of any significant development regarding the inventory claim.
Palash Kawale — Analyst
Okay sir, thank you so much. Back to you.
operator
Thank you. The next question is from the line of Rehan Syed from three Netra Asset managers. Please go ahead.
Rehan Syed — Analyst
Yeah, good afternoon and thanks for the opportunity. Sir, I have a question regarding the technology and supply chain challenge. With the recent appointment of a new agency for supply chain. What structure or digital improvement are they in a landboard landscape or backend efficiency or inventory optimization? And how are you leveraging leveraging tech for improving inventory terms and reducing stock out across.
Shreyans Surana — Managing Director
Sorry, I just missed the first part of your question. Can you just come again with a question?
Rehan Syed — Analyst
Sure sir, sure. With the recent appointment of a new A for supply chain, what structure on digital improvements are going to stand for? Backend efficiency?
Shreyans Surana — Managing Director
Okay so in terms of. Because this year I told in last year called last Call also that this year has been a year of tech for us what we have taken. So in terms of supply chain we are. We are just on the phase where we will be implementing the Infor warehouse management solution and which will be live by month of November if everything goes smooth. On the inventory side we are working on a ARS called goldreg which works on theory of constraint and I think their implementation also started so I think which will lead to a faster supply chain structuring which will again increase the inventory ton and we expect the numbers to look visible by this year, financial year itself.
We will be able to see the technological benefit that will be derived from these implementation of these softwares. Apart from that, the entire back end ERP we are planning to shift it from Genesis to SEP hana retail. I think all these measures will help us to improve our supply chain.
Rehan Syed — Analyst
Oh okay, okay. Just want some more clarification regarding the what is the average payback period for new stores open in the last 12 to 18 months especially in the unpredicted enterprise and developing.
Shreyans Surana — Managing Director
More or less the geography for example core and focus I will say in that way. So on an average on the capex side it takes around 18 months to recover and for the entire industry it takes around 31 to 33 months for the recovery. In terms of focus market the focus market performance has been good but still if you compare to core market it will take additional 2, 3 months maybe extra because that is the states where we are developing our market. But I think gradually maybe a year later when that focus also shifts to core it will come to similar numbers.
Rehan Syed — Analyst
Okay, thank you for clarification. If I have more question.
operator
Thank you. The next question is from the line of Natic from NV Alpha Fund. Please go ahead.
Naitik Mutha — Analyst
Hi sir, Congressman with set of numbers and thanks for taking my question. So my first question is if you could give us the debt on the books as on date and cash flow from operations that you have generated after paying lease during the quarter during the quarters.
Shreyans Surana — Managing Director
So total net bank borrowings as on date for the Q1 is 157.43 which we have already stated in the last earning call that it will gradually reduce that will be around 120cr at the end of the financial year.
Naitik Mutha — Analyst
Right. And what will be the cash flow generated post lease for the water? Okay.
Shreyans Surana — Managing Director
Yes.
Naitik Mutha — Analyst
Generated from operations post payment of lease.
Shreyans Surana — Managing Director
It is around so around for 26cr after adjustment of lease payment.
Naitik Mutha — Analyst
Right. So my second question is you know the 183 per square feet the cost you mentioned that includes rental cost also.
Shreyans Surana — Managing Director
Operations, both rental employee cost and all the other expense excluding depreciation and interest.
Naitik Mutha — Analyst
Right, got it. And, and so my last question is, you know what is the corporate expense as a percentage of same forums it is.
Shreyans Surana — Managing Director
It stands at 6.15% for this quarter.
Naitik Mutha — Analyst
That’s it. Thank you.
operator
Thank you. The next question is from the line of Chirag from Keynote Capital. Please go ahead.
Chirag Maroo — Analyst
Yes, thank you for the opportunity. Congratulations Shreyan and Nitinji for the great set of numbers. My first question is that you have mentioned that in Q1 our full price sales was better. Could you just give me a number? What was the percentage of full price sales for Q1, FY26 and FY25.
Shreyans Surana — Managing Director
So 92% was the full price sales in Q1 FY26 against 89 in Q1 FY25.
Chirag Maroo — Analyst
Okay. Second thing I would like to know that our payable days is around four months. If I’m not wrong, could you just let me know the is this one reason if we improve our payable days to like 90 or 60 days going forward, can it become incremental on our gross margin? If that is the strategy or not? That if you could just highlight that too.
Shreyans Surana — Managing Director
You can see there will be a benefit in the gross margin once we reduce it. But yeah, I think with the growth that we are aiming, we want to reduce it for 90 days just so that the sourcing becomes easier for the manufacturers also and whatever if they are able to earn on their sourcing, they will transfer it to us and we would like to transfer it to the consumer so that the entire chain becomes on the value side only we don’t have to increase the prices and there will be a little bit impact on the loss margin also with that.
Right.
Chirag Maroo — Analyst
Fair point. So can I expect that with improvement in tech that we are working on this number is expected to gradually go down to 90 days by FY27 or 28. Hello. Hello.
Shreyans Surana — Managing Director
Yeah. Yes, you can expect by FY26 and FY27 you will see the numbers gradually going down. Will be around 90 days as you say.
Chirag Maroo — Analyst
Perfect. So my second question is related to store level warehouse size as a percentage of entire store store size.
Shreyans Surana — Managing Director
The we generally don’t have the backend warehouse as such. So it is generally 20 to 300200 to 300 square feet of back end space for keeping the material at a store level. Okay. And the number of days inventory that we keep in mera so totally depends. On season two season. So for example, because we are majorly our revenue comes from the festival driven seasons. So as I have told in the previous call also the inventory looks higher before any festival starts and it looks lower when the festival or the season ends. So at the maybe when the festival is in on the full run the inventory per square feet at the store level goes up to 2500 rupees also and when the inventory at the end of the season the store inventory comes down to around 1700 rupees. So that is the volatility before and post any festival season.
Chirag Maroo — Analyst
You mean per square feet when you’re talking about.
Shreyans Surana — Managing Director
Per square feet inventory. So I’ll just tell you for example on 31st March our inventory was at around 2700 rupees per se which has come down to again 2092 at June.
Chirag Maroo — Analyst
Perfect. So next question is that as you said that our corporate account has a percentage of sales around 6% yesterday. What kind of stable EBITDA margin pre index basis we can expect down the line three years like because this expense is going to showcase some operating leverage. Of course. But could you just highlight at current SSSG what we have around 7 to 8 percentage. What kind of EBITDA margin on premium level we can do.
Shreyans Surana — Managing Director
This year? As I said the guidance is 7 to 8%. Last year the entire year corporate overhead was around 5.7%. And typically I think there will be an operating leverage. And in next three years with the operating leverage kicking in with the gross margin in the full price through with all this tech thing that we have done is going to improve will help us to achieve a EBITDA of 9 to 10% by FY28. So 7 to 8 this year, 8 to 9 next year 9 to 10 may be the FY28 numbers.
Chirag Maroo — Analyst
And keeping SSSG in mind of 7 to 8 percentage only, right? Yes, that is it from my friend. I’ll join back with you. Thank you so much.
Shreyans Surana — Managing Director
Thank you.
operator
Thank you. The next question is from the line of Gaurav Jugani from jmfl. Please go ahead.
Gaurav Jogani — Analyst
Hi, thank you for taking my question again. So my question you know again is with regards to the, the. The. The other expenses per square features. So if I look at the base quarter, you know the base quarter the other expenses per square feet was around 154 rupees. And this quarter it is around 183 rupees as you mentioned. Now if I look at for the remaining nine, the remaining nine months the expenses have only increased from there on. So you know what will drive given that the festive is also coming that you will also have higher activity levels.
So, so do you think that it can remain at this 183 levels?
Shreyans Surana — Managing Director
If you see the last three quarters Q2, Q3 and Q4 FY25 also it was around 187, 188 and 184 and this quarter is around 182. So technically what has happened all the cost that has been front loaded last year. Okay. And with that growth in revenue. So there’s. It will not be increasing that much. It will be at the same tune because all the expenses that has been increased you have taken that hit last year itself. So the 180 base has been created and that which is only going for the quarters.
Gaurav Jogani — Analyst
Okay, okay. Okay, got it. So. So it is largely the leverage now taking in these line items. Right. That will benefit.
Shreyans Surana — Managing Director
Correct? Correct. Correct.
Gaurav Jogani — Analyst
Okay. Okay. And on the rental also, I mean by optically it seems that you know the rental as the sir mentioned that you know it’s been around water. So that will be the. Including the rental on the uh. The. The three index number for what will the total rental actually of the pre investment number. If you can give us that number that will be helpful.
Shreyans Surana — Managing Director
56 will per square will be the. I think the numbers which will be around for the FY26 also. And for Q1 it is around 54. So on the similar lines.
Gaurav Jogani — Analyst
Okay. And has this gone up because we are opening higher square footage stores or any other reason for that one?
Shreyans Surana — Managing Director
This first thing is see the rental is a byproduct of where you open the stores. Because in the last financial year there are a lot of stores which is open in tier one and metro cities which has a higher rental as a cost. I think the mix of all those things has impacted the rent per square feet that way.
Gaurav Jogani — Analyst
Okay.
Shreyans Surana — Managing Director
Because larger chunk of stores have been opened in the metro and tier one in last financial year. As a result the renters are showing at 54 for this quarter one which is not very high. If you see from Q1, FQ1, FY25 it was around 45 which is included 64 for the stores. And that is majorly because of the stores opening in Metro and Tier 1.
Gaurav Jogani — Analyst
Okay. And given that this time around the festive season is in Q2 and last year I think it it was a mix of Q2 Q3. So do you see some benefit accruing in Q2 itself this year?
Shreyans Surana — Managing Director
Yeah, we will have an uptick in demand because of the early festival. So 11 days shipped from Durga Puja from Q3 will happen into Q2 which will have impact on higher sales of from Q2.
Gaurav Jogani — Analyst
Okay. Okay. And lastly on the capex front, what is the capex guidance for this year and the next year?
Shreyans Surana — Managing Director
1390 to 1350 per square. 1390 to 1400 per square feet for the store openings.
Gaurav Jogani — Analyst
Okay, so can you give me the total? I mean the maintenance capex and everything.
Shreyans Surana — Managing Director
What kind of everything it will for put for everything it will be around 90 to 100 crore for this year.
Gaurav Jogani — Analyst
90. 200.
Shreyans Surana — Managing Director
Yeah. With all the tech and everything. All the parts of the warehouse infra also have taken back end operations, everything put together.
Gaurav Jogani — Analyst
Sure, sure. So. So because you know there will be a good savings in terms of over inventory also. I mean we don’t expect the incremental drag from the inventory. So would that mean, you know that there could help in better cash position this year versus last year given that you know there will also be a better profitability and lower outflow in terms of the. The working capital.
Shreyans Surana — Managing Director
Yeah, you can say so. Apart from that because I think this year we will be also having the insurance receivable as a one of the cash flows in inflow for this year. So I think that plus internal accruals. Yeah. Will help us, will give us a better cash flow from last year.
Gaurav Jogani — Analyst
Okay. Okay, sure. Thank you. And that’s all coming.
operator
Thank you. The next question is from the line of Raj from Fiden. Please go.
Raj Sekar — Analyst
Yeah, hi. Thank you for the opportunity. A couple of questions from my side. Firstly again on rent, also rent quarter on quarter. So for close to around 18% growth. Wanted to understand the reason for this. Is it because only because of the new stores or in the existing stores as well are we seeing some increase in the rental cost Mainly because of competition. So how is the competition panning out in this industry right now? Because everyone is quite aggressive in store openings.
Shreyans Surana — Managing Director
So see in terms of rental with the existing stores because we are in, we are having an agreement with them. So whatever. As a part of the agreement every three years are incremental clause 12 to 15% depending on landlord to landlord. So that is taking place. There is no extra rental. As I said that because lot of store opening has happened in metro and tier one which typically has a higher rental compared to tier three, tier four cities. So that is one of the reason. And at the back end last year versus this year, in last year the Q1 the warehouse that we were having was only 86,000 square feet.
Whereas this year in Q1 the warehouse that we had was around 1.86 like square feet. Similarly on the office space. So there were a lot of expenditures at the back end also which has increased for supporting the future growth. I think that is where the first square feet is a percentage. As you can see the rentals have increased. But as I said that this is the trend for the entire year. And in tier 2, tier 3 because of our expertise in the zone as we follow the cluster based approach is better than any other Players as well.
We are able to check out those areas where we want to open the stores at the similar renters that I said between. That is why I said the entire year average will be around 56 only.
Raj Sekar — Analyst
Okay, you said there was from 12 to 15% of rental cost increase in the agreements each year. What is that number?
Shreyans Surana — Managing Director
So every three years it is around 12 to 15%. It’s an average. This is standard agreement with every retail player. So between 12 to 15%. So 15% is a standard for tier two, tier three and there are some agreements which is only 5 to 10% which has 12% increment every three years.
Raj Sekar — Analyst
Okay. The other players are also mentioning that in Westmingal there is some pressure in terms of demand. Mainly because the influx of people from the neighboring countries has significantly stopped. So how have you seen the situation on ground in terms of. In terms of.
Shreyans Surana — Managing Director
See in terms of number target we have taken, we have been able to achieve that number. I think the numbers would have been better if the flow from the neighboring country was there. Because there are some pocket in Bengal where the sales very good because of their when they come during the festival seasons. But this year because of the government policy and whatever the reason, they have not been able to come into shop. So I think these numbers are without there and we expect as the things between both the neighboring Indian gets good. I think in the upcoming quarters with the strong festival quarter that we have, if their inflow starts again coming back, we will be having higher numbers as a target.
We are meeting the target that we have set. So for us we have met the targets in Bengal. Whatever we have taken. Yeah. We could have done better if their interest were there.
Raj Sekar — Analyst
Thank you. Thank you.
operator
Thank you. Ladies and gentlemen, Please limit to 2 questions per participant and come back in the queue for a follow up. The next question is from the line of Devesh Advani from Bajaj. Please go ahead.
Devesh Advani — Analyst
Hello. Hello.
Shreyans Surana — Managing Director
Yeah, hi.
Devesh Advani — Analyst
Congratulations on good set of numbers. So what sort of numbers do you see going for in Q2 and also what is your guidance going forward as far as top line and bottom line is concerned for economics.
Shreyans Surana — Managing Director
So I anticipate a stronger upcoming quarter with our guidance of revenue will be around 25% only till the time Q2 concludes. I think post that only we will see if we want to revise the guidance or not. And in terms of EBITA at Pre indices around 7 to 8% and at PET it’s around 3 to 4% as a guidance.
Devesh Advani — Analyst
Okay. All right. All right. Thank you. Thank you.
operator
Thank you. The next question is from the line of Vidisha Seth from Ambic Capital. Please go ahead.
Videesha Sheth — Analyst
i, good afternoon. I just had one small question and I’m not sure if it’s repetitive in nature but can you help help us understand the differential between the sales per square feet in Metro and tier one cities versus tier two and tier three.
Shreyans Surana — Managing Director
To have a higher per square feet sale. So for maybe for just on an average if I tell you so, the metro and tier one cities on an average would give us a SPSF of more than 12,000 per square feet. Whereas maybe Tier 2, Tier 3, Tier 4 average will be around 8,000 or 8,500. Exact numbers I think we can take offline. But yeah, that is the numbers that we are generating from Metro Tier 1 and Tier 2 Tier 3.
Videesha Sheth — Analyst
Got it. But that’s helpful.
operator
Thank you. Thank you. The next question is from the line of Deepak Podar from Sapphire Capital. Please go ahead.
Deepak Poddar — Analyst
Yeah, am I audible?
Suyash Samant — Account Manager
Yeah, you’re audible.
Deepak Poddar — Analyst
Yeah. Thank you very much for this opportunity. So just first up I just wanted to understand what’s the gross margin difference between private label versus other brands?
Shreyans Surana — Managing Director
It’s majorly around one and a half percent as a difference.
Deepak Poddar — Analyst
I mean it’s not much then. I mean gross margin difference is only one and a half percent. That’s what you’re saying.
Shreyans Surana — Managing Director
So basically see right now our aim is not to increase margins. Our aim is to stabilize our brand because it has been post Covid only when we started this journey and we had 61% sales as of now for this quarter. Our objective is that higher will be the season, private level more will be good. The better will be the experience of customers with the private labels. Higher will be sale in the future where we can work on improving the margins over there also. So right now we are just seeing that the margin should be in the similar lines with the other labels.
So the private label gets a competitive advantage over other levels.
Deepak Poddar — Analyst
I understood. And so you mentioned about this year pre India’s pat margin of 3 to 4%. Now can you suggest something on the post Indians as well, what sort of range we are?
Shreyans Surana — Managing Director
Yes, 14 to 15% will be the EBITDA margin and pat margin will be between 2 to 3%. Okay, but.
Deepak Poddar — Analyst
But given the run rate of, I mean interest and depreciation we are currently having because of all these liabilities at at 14, 15% EBITDA margin, it will be difficult for to achieve 2 to.
Shreyans Surana — Managing Director
3% of PAT margin rate at 25, 26%. Kind of a Tax rate. No, I think we will be able to achieve between 2 to 3% with the numbers that we have prepared. And I think with all the assessment and working that is going on, we will be able to use this number of 2 to 3%.
Deepak Poddar — Analyst
2 to 3%. And when we said 4 to 5%.
Shreyans Surana — Managing Director
I think fat margin in FDA FY27 in the previous call. Correct. So we meant pre index. Yeah. So for the discussion purpose we only talk about pre index because that is I think the most accurate way to look at the numbers. So yeah, it was pre index only. And just one final small thing. I mean given the kind of store growth we are seeing and even the SSG is quite so a 25% CAGR. I mean over next two, three years. Is what one should look at at.
Deepak Poddar — Analyst
A company level for us. Yes, 100%. 25% is the number. I think it’s a balanced growth approach which will help you in achieving sustaining the margins also and having a healthy profit bottom line. That’s very helpful sir. I would like to wish you all the very best. Yeah, thanks so much. Thank you so much.
operator
Thank you. The next question is from the line of Arvind Arora from A Square Capital. Please go ahead.
Arvind Arora — Analyst
Hi, congratulations on good setup number. My questions are mainly you’re saying your revenue guidance would be same for the current year. Like it’s 25. So like could you please give me a, give us a breakup on SSP growth what you are expecting.
Shreyans Surana — Managing Director
See quarter one, we have grown by 37% as a revenue growth for the full year it is around 25%. The revise if anything we have to revise. We will take this call after the first half of the this financial year. In terms of SSG it is around 7 to 8% as our guidance for this year.
Arvind Arora — Analyst
Okay. Same like what you alluded on quarter four. Correct. Okay. And current quarter despite the SSC growth is in. SSC is in negative. We still are paid positive. So can we assume same for the remaining period as well?
Shreyans Surana — Managing Director
Yeah, for this all the remaining quarters we can expect the same.
Arvind Arora — Analyst
Okay, thank you. That’s all from my channel.
operator
Thank you. The next question is from the line of Ashwin Kedia from Elkeny Capital Management Private Limited. Please go ahead.
Ashwin Kedia — Analyst
Hi. Congratulations on the superlative growth. I had two questions. One was how many of your focus markets will move to core markets? That was one. And second, we’ve hired somebody in the supply chain. So how do we see our warehouse capacity at the supply chain growing technology?
Shreyans Surana — Managing Director
Coming to your first question in Terms of focus markets generally it is a number of stores and the time that we spend in the market on which we take a call whether it has shifted from focus to core. For us, UP and Jharkhand are the two states where we are focusing very much. And I think in upcoming, in upcoming two years they will shift from focus to core as a state because with the larger number of stores opening in those areas and with the better knowledge about that catchment, we’ll be able to achieve, we are able to achieve good margin and I think there’s a huge potential also.
So that will be the focus area for us. In terms of warehouse, we have hired a lot of good people from a big national chains on the supply chain and with the technology in upgrading our interchange, the warehouse with the info coming as a warehouse management solution by November, I think by this year and itself, the warehouse will be very highly upgraded by this year, calendar year itself and maybe in the next year the entire benefit of the supply chain will start passing onto the stores which will again will be showing in the bottom line.
Arvind Arora — Analyst
That’s great news. I have one more question. Any numbers you had in mind for up Jharkhand, how many stores you have mapped places, how many they will grow to next two, three years, UP and Jharkhand.
Shreyans Surana — Managing Director
See in terms of. Not directly as a number, but what I can say is that 30% of the stores are opening in the focus market. So for example, in 22 stores that we have opened in Q1, around seven stores have been opened in the mix of UP, Jagan and other focus chains. So that will be the ratio for this year. And post this year again we will have an analysis on which to where to open the stores. Maybe the next year the numbers may look higher for up.
Arvind Arora — Analyst
Thank you. We wish you a great festival season. Thank you so much for answering questions.
Shreyans Surana — Managing Director
Thank you so much.
operator
Thank you. The next question is from the line of Shubanu from three Head Capital. Please go ahead.
Subhanu Bangal — Analyst
Hello. Hello.
Shreyans Surana — Managing Director
Yes. Yes. Pardon.
Subhanu Bangal — Analyst
Hello.
Shreyans Surana — Managing Director
On the voice side I’m not able to get your question. Can you come again?
Subhanu Bangal — Analyst
What is the ASP in?
Shreyans Surana — Managing Director
Okay. ASP average selling price for the Q1FY26. So it is around 267. For Q1FY26 it was 286.
Subhanu Bangal — Analyst
Okay, my question, my other question is your. One of us was PR called V2. They are. They are also similar line, but they are same. Sorry, they are average. Hello.
Shreyans Surana — Managing Director
Am I audible? Yes, yes, you’re audible but your voice is not clear. There’s some disturbance coming in so the question is not getting clear. If we can just be little clear and loud so we can answer your question.
Subhanu Bangal — Analyst
What is your guidance in 10 per square feet?
Subhanu Bangal — Analyst
So on an average with 7 to 8% as a SSG guidance, I think we expect overall revenue to grow by 5% every year. And in next two years we expect numbers to reach around 10,000 rupees of SPSS. Next year. Next two years.
Shreyans Surana — Managing Director
Yeah, next two years. So 8625. 8654 was the FY25 and with 578 was an SSG. And with the stores that we are opening, we expect in by FY27 we will be somewhere between 98 to 10,000 rupees of SPSS.
Subhanu Bangal — Analyst
Okay, thank you.
operator
Thank you. The next question is from the lineup. Yash Tawani from Amara Capital. Please go ahead.
Yash Tawani — Analyst
Yeah, hi. So just wanted to understand like what are we working on to increase the sales per square feet? Like in terms of like what is the target that we are seeing over the next two years? What is the strategy and the levers that you are working on to increase the sales per square feet? In our business model, I think first.
Shreyans Surana — Managing Director
Thing is on the product side. We are working a lot on the product and I think we want to maintain the name value. So I think we are doing everything that the average Indian wants. So they want a high perceived value item at an unbeatable price point and we are working on that. So the product is the, I will say the most important lever that we are working on. Apart from that, the assortment. So what we need to keep in with stores, we are working on that also with lots of technology that we are building at the back end which will help us to have a clear understanding about the catchment and so that we can create assortment in a manner which that particular zone wants.
For example, the athleisure category has been very popular post Covid and the sales of the strap pants and this T shirts of athleisure wear has increased. But metro and tier one has a higher contribution compared to maybe tier two, tier three. So what kind of assortment that you want, what kind of product category that you want to add that is on that is on which we are working and I think with that we will be able to achieve this spss.
Yash Tawani — Analyst
Okay, and are the gross margins similar in all the categories like the the sports wear in compared to the casual wear or the ethnic wear? Is it similar across the category or it differ?
Shreyans Surana — Managing Director
So it is little bit different but not a very high differences between all of them. It depends on the price point also. So maybe the first. The first price point which is which we call entry price point may have a little lower margin compared to popular and premium price points for any category.
Yash Tawani — Analyst
Okay, okay. And anything on the data management side like what consumers are sensing the store and how we can give more of their. Like what they are looking at in terms of data management to use the leverage the data and get it converted into monetizations. Anything on that sort of thing are we working on?
Shreyans Surana — Managing Director
Yeah, so the second thing was the consumer. I just missed that. First was the product and was the consumer side. So we are working on that also. So we have got more than 1.2 million database and on which the entire team. There’s a separate team which are working on that data side which works on what will the important body is that you can see how many times a customer has visited to your stores. Why they have not been visiting to your stores to create that couponing offers for those people and to make sure that they come again back to the store.
So there is a lot of work going on there also at the back end.
Yash Tawani — Analyst
Got it. All right, thank you.
operator
Thank you. The next question is from the line of Ashish from Deo Capital. Please go ahead.
Ashish Parakh — Analyst
Yes, sir. So I had one question. The question was how much is the inventory per store and what percentage of our inventory is more than one year.
Shreyans Surana — Managing Director
We generally follow more than two year system. So we have a two year cycle that we follow as a policy. And more than two years is around 2% which will which we get reputed but maybe in next three, four months. So that is the structure that we follow. So every more than two years around 2%.
Yash Tawani — Analyst
But so can you give the number for one year old also?
Shreyans Surana — Managing Director
So as a policy we follow this number only. So I can share that number with you right now. And the second question that in terms of store and the total inventory mix, it depends on season to season. As I said that total inventory for 31 March before the festival season it was around 2700 which came down to 2092 as on 30 June. So similarly 70, 80 to 20%. 80:20 ratio is between stores and warehouse. This was inventory.
Yash Tawani — Analyst
Okay. Okay. Thank you, sir. Thank you.
operator
Thank you. The next question is from the line of ASA from Pica Day Advisors. Please go ahead.
Aastha Jain — Analyst
Thank you sir for giving me the opportunity. Sir, my first question was related to the competition. So we are saying our competitors also increasing the number of stores like the target of Monday or Monday plus like they are expanding in the same region. So, so how are we seeing us versus the competition?
Shreyans Surana — Managing Director
So I will want to give you this answer into two parts. First thing, see if you see at the macro level everyone is doing well, even the competition is doing well. Okay? So market is good enough for everyone. And the major reason behind is that I’ve told in previous calls, so the organized penetration is very less in tier 2, tier 3, tier 4 rather only maybe three stores of organized players are only there in a particular small district or town as of now also. So there’s a huge room now coming to us. We are working on tech, we are working on product, we are working on story ambience, we are hiring good talent just to ensure that the customer experience is best among all the retailers who are in our competition.
So we are trying to work on all this stuff to have an additional advantage over our competition. And even if you see the numbers, whatever numbers that we are targeting, we are able to achieve that number. And as I said, the major reason is on our rise to organization. Second thing is the product. In couple of years post Covid the product quality has improved significantly with the higher MOQ that we have received. Minimum order quantity that we are able to give to the vendors and with all the designing team and the good merchandiser coming into the system, we have been able to create lot of fashion which we are not able to do it before COVID but now I think there’s lot of under trading also happening.
So people who want to look good but they want a reasonable price are shifting from mid segment brands to us that we have seen in metros and tier one. Also.
Aastha Jain — Analyst
My second question is what is the SSD of the oldest stores that have been active like older than two years.
Shreyans Surana — Managing Director
So for us 18 months is a criteria that we follow for L2L growth. And for more than 18 months as I said last year we have done 12.79% for the full year. This first quarter it’s around minus 3% mainly because of preponement of EID. But for the full year we will be able to do 7 to 8% of SSG.
Aastha Jain — Analyst
Okay. And sir, considering that now the festival season is going to come, shouldn’t our gross margin should improve rather than, you know, giving the just full year guidance of 50 basis points when Q1 had improved by 300 deaths even though there was no, no festival season or anything. And now then in Q2 and Q2 will be feeling the festival season. So there will be scale of operations and everything, everything.
Shreyans Surana — Managing Director
So what happens in Q2, Q3, Q2, Q3, as I said, we will not be having a lower margins from last year quarter on quarter. But it will be on the similar lines with the festival taking place. There are a lot of offers and promos that goes on ticket size offers and there are a lot of which directly have an impact on gross margin itself. So there will be no rise in gross margin for Q2 Q3. But the 3% the advantage that is in Q1 will translate at the year end 2.50. That is the reason I am saying that Q2 Q3 will not have a lower margins but will not be having a higher margin compared to last year of Q2 and Q3 because we will be passing on to lot of that margin to the consumer.
Consumer just to retain all my customers.
Aastha Jain — Analyst
Okay. Okay. Thank you so much. Thank you. The next question is from the line of Ritendra Pradhan from Maximilian Capital. Please go ahead.
Suyash Samant — Account Manager
Hello sir. Thanks for the opportunity. I hope I’m audible. My question is with regards to the inventory management system. So what do you do with your older inventory? Like you have 2% of inventory which are more than 2 years old. So do you keep it in the like you know the your back end warehouse or do you transport it to central warehouse? What is your strategy around this?
Shreyans Surana — Managing Director
Generally the entire inventory, the how the life cycle work is that for the first two years it is sold through stores. Post the second two years if there is any leftover which is 1 or 2% that comes to the central warehouse. And from where the scrap sale happens.
Aastha Jain — Analyst
Do you see any provisions around the older inventory?
Shreyans Surana — Managing Director
Yeah, we have a provisioning policy around older inventory and we maintain that.
Aastha Jain — Analyst
Okay sir. And sir, the second question is with regards to your mature to new store mix. So what is your next current metro store count.
Shreyans Surana — Managing Director
For the L2L groups? I will just update you. How many stores are there? 145 stores are L12 stores. SHG stores which we speak. So which is a mature. You can say.
Aastha Jain — Analyst
Okay sir and so on the mature store like HBO guidance. And the numbers if I pay calculate the EBITDA margin at a store level comes around more than 15%. So that be a fair assessment or am I overestimating?
Shreyans Surana — Managing Director
No. So your estimation correct. The mature stores gives typically between 14 to 16% and for the full year on an average it gives around 15%.
Aastha Jain — Analyst
Okay, thank you sir.
Shreyans Surana — Managing Director
At pre industry beta.
operator
Thank you. Ladies and gentlemen. In the interest of time we will take last three participants. The next question is from the line of Arman from Blue sky fintech, please go ahead.
Arman Kassym — Analyst
Yes sir. First of all. Thanks for the opportunity and congratulations. My question is generally on our strategy because like we said a rental increase because we opened in areas of Taiwan and Metro and at the same time we also told that there is an underprened market in Tire 2 and Tire 3. So what’s the strategy of going forward? How many schools will be opened in. Tier one in my and how many. Stores will be opened in Tire 2 and beyond? Also currently of the 232 stores how many are in Tire 1 Metro and similarly tier 2 and beyond.
Shreyans Surana — Managing Director
In terms of strategy as you as what we are doing is a cluster based thing. So when we say cluster it’s a state that we are clustering. So Metro and Tier 1 are opening only in those states where we want to form that cluster. For example Bengal as a state. So that will have higher Metro and tier one count going in because we have got a good experience in state as a Bengal and we are opening a lot of stores. We want to capture the entire market of Bengal because that was the thing that we have seen in last two years.
Even Metro and tier one is giving us a phenomenal growth and both in terms of revenue and profitability. So we want to stick to that structure. We are not going across India. We will be going by state by state approach. Wherever you want to have a higher number of store count we will go in Metro and Tier 1. So it’s a mix. Now coming to the assortment mix. How to decide? So in that scenario it’s not a decision. For example the Podia stores that I’m going to open last year luckily we got a lot of stores in Metro and year one.
So the mix of Metro and tier one was higher compared to any other year. Maybe this year I think the ratio will be again 75 to 80% are tier 2. Tier 3 only. Metro and tier 1 typically is around 20%. Only last year was the only year where we got a lot of store expansion particularly in the region of Bengal. As a result we were able to win more stores in Metro 21. Yeah.
Arman Kassym — Analyst
So if we can assume that 75 to 80% of the stores now we are going to open in this year or maybe next year will be in Most likely entire two and beyond. So what’s the current state of 232 stores?
Shreyans Surana — Managing Director
So 51 stores is in metro and tier one.
Arman Kassym — Analyst
Okay, okay. And is there a payback period difference between Tier 1 and Metro and try to try to and beyond because our average revenue like is different like 12,000 and 8,000. Definitely. Rental cost is also different. So is there any paid appears difference?
Shreyans Surana — Managing Director
Almost on the similar range because the SPSF is higher. But again rental is also higher in those areas. Yeah, typically. Typically in terms of EBITDA if I say so when the store get mature the metro and tier one gives you a EBITDA of 13% whereas tier two, tier three four gives you a bit of 15%. But again the SPSF of metros are higher compared to that. So in absolute value more or less similar numbers only 15 to 18 months. Maybe two, three months up and down.
Arman Kassym — Analyst
Okay, thanks a lot. That’s it from us.
operator
Thank you. The next question is from the line of Chirag from Keynote Capital. Please go ahead.
Chirag Maroo — Analyst
Thank you for the opportunity again. So you have mentioned that we would be opening 45 to 50 stores in this FY26. Right? And our first store is around 2.5 crores. So as you said that capex for FY26 would be 90 to 100 crores. Just wanted to understand how much are we spending separately for Tech warehouse and store edition. If you could provide these numbers.
Shreyans Surana — Managing Director
So 2.25 is not the Capex it is including inventory is the cash flow that goes in. When it is Capex it is around 1.1 crore to 1.25 crores. In terms of tech expenditures we are planning to have 20 to 25 crore investment going in the technology side this year which includes upgrading the application of our warehouse also.
Chirag Maroo — Analyst
So if we add 40 to 50 stores still it would be requiring more than 2025 crores of the amount that you are telling about the capex guidance for 90200 crores. So just wanted to understand what can be our CFO expectation for after. After lease expenses for FY26 then.
Shreyans Surana — Managing Director
In terms of expenditure. Yeah. 50 to 55 crore will be in the new store opening. 25 to 30 crore will be in the warehouse infra and technology application and 10 to 15 crores will be on the renovation of the older stores. So typically that is the breakup of this entire 90 to 100 crore.
Chirag Maroo — Analyst
Right. But we would also require for inventory. Right? That one.
Shreyans Surana — Managing Director
In terms of inventory, whatever measures that we are taking, I think the way we see the. The inventory moving around, I think the inventory part will not be a very high, I will say investment that we have to do because we are optimizing inventory and that is helping us to grow. So for example on 31st March the absolute value of inventory is around 521 crores. Which has come down in the June to over 42 crores. And I think the way we are seeing the inventory in coming FY27 we expect the inventory to remain anything between 550 to 560 crore only.
As a result, only 30 crores of inventory will increase in one year time. Whereas 45 stores will open. So that is because of the inventory optimization which is happening because of all the tech things that we are doing and all the manpowers that we are hiring. So we are able to improve efficiency on the supply chain on the inventory side.
Chirag Maroo — Analyst
Wonderful to hear this. Great expectations we’ll build on second thing, I wanted to do that. When you are talking about 7 to 8% as SSH are we talking about on a normalized basis or we are thinking. We are talking about after Q1 negative 3 percentage SSLC.
Shreyans Surana — Managing Director
After Q1 negative 3%. It’s nothing normalized, it’s just annual level. So after testing -3 it will be for the entire. It will be at 78%.
Chirag Maroo — Analyst
Last thing from my side. Could you just provide me if we have a size of 19 and how is what would be the size? Hello.
Shreyans Surana — Managing Director
Hello. Can you come again with a question?
Chirag Maroo — Analyst
I’m asking if we have any design team.
Shreyans Surana — Managing Director
So for the entire see our buying a merchandising team comprises of designers, merchandiser, sourcing guys and all together electricity collective team. They work. The total team strength of them is around 70 to 75 people as of now.
Chirag Maroo — Analyst
Okay, that is it for myself. Thank you so much.
Shreyans Surana — Managing Director
Thank you.
operator
Thank you. The last question is from the line of Natic from NV Alpha fund. Please go ahead.
Naitik Mutha — Analyst
Hi sir. Thanks for taking my follow up. So my question is when did the warehouse cost or the warehouse rental started kicking in for us know when we move from 80 lakh square feet to 1.6 lakh square feet. And is all of this in Kolkata itself?
Shreyans Surana — Managing Director
Yeah, it’s. All of them are in Kolkata itself. And it started from the July last year. So till Q1 it was 86,000 warehouse that which we were operating. And from July it was 1.86 of warehouse which was.
Naitik Mutha — Analyst
Right, right. And so my second question is any plans to open warehousing space apart from Western also as we are expanding into the north.
Shreyans Surana — Managing Director
Yeah. So in terms of planning, not right now, but yeah. As we open more stores in the north and the the cluster. So we will also have this type of model where there will be regional distribution centers going ahead once the number of store count increases on the any particular zone.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand over the conference to management for closing comments.
Shreyans Surana — Managing Director
Thank you all for making it to our quarterly earning call for Q1FY26. If there’s any further queries, please feel free to reach out to Stellar IR Advisors. Thank you one and all. Have a nice day.
operator
Thank you. On behalf of Bazaar Style Retail Limited Concludes this conference. Thank you for joining us and you may now disconnect your line.