Baazar Style Retail Ltd (NSE: STYLEBAAZA) Q2 2025 Earnings Call dated Nov. 11, 2025
Corporate Participants:
Unidentified Speaker
Shreyans Surana — Managing Director
Analysts:
Unidentified Participant
Gaurav Jogani — Analyst
Palash Kawale — Analyst
Chirag — Analyst
Deepak Poddar — Analyst
Akash Jain — Analyst
Arman — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Hazar Style Retail Limited Q2 and H1FY26 earnings conference call hosted by Philip. Ladies and Gentlemen, good day and welcome to Bazaar Style Retail Limited Q2 and H1FY26 earnings conference call hosted by Philip Capital India Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 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 the conference over to Mr. Ruthu Chauhan from Philip Capital India Private Limited. Thank you and over to you sir.
Unidentified Participant
Good afternoon everyone. On behalf of Philip Capital Private Land Group I welcome all of you to the Q2H1FY26 earning conference call on Bazaar Style Retail Limited today. From the management we have Mr. Srian Surana, Managing Director, Mr. Nitin Singhania, Chief Financial Officer. The management will be sharing the key operating and financial highlights for the quarter and half year ended 30th September 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 companies beliefs, opinions and expectations. As of today these statements are not a guarantee of 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 call to Mr. Sriyan Surana for his opening remarks. Over to you Sir.
Shreyans Surana — Managing Director
Thank you. Good afternoon everyone and thank you for joining us today. Our investor presentation has been uploaded on Stock Exchange and on our website and I hope you had a chance to review it. Let me take you through the key highlights of our business performance, the initiatives driving our growth and the broader retail environment that continues to support our journey. The second quarter saw a strong demand uptick aided by the early arrival of festival season which is a key consumption period in our core market. Our regional leadership in the underpenetrated eastern region continues to strengthen as our customers increasingly graviate towards branded value fashion.
Our wide product portfolio serves the entire family driving higher footfalls and improved basket sizes. While festival timing can create some quarterly variation given our geographical mix as we expand into newer clusters and states this impact will gradually even out providing a more balanced growth. I am pleased to share that we have delivered another quarter of strong performance continuing our healthy growth momentum. Q2 FY26 marked a milestone period for us with our highest ever quarterly and half yearly revenue and operating metrics across key parameters along with profit growth. Starting with the financial performance in Q2FY26, revenue from operational grew 71% year on year to 532 crore, supported by strong growth across both our core and focus markets.
EBITDA rose 184% year on year to 69 crore reflecting improved operational efficiency and disciplined cost management. Coming to some noteworthy operating metrics during the quarter, our core market grew 70% year on year while focus for redeem recorded 77% growth. Underscoring the broad based strength of our brand and execution strategy, we are well on track to meet our new store opening guidance. Having achieved 72% of our FY26 target with 36 net stores added in the first half, we are in guidance with the growth of 40 to 50 stores for this fiscal year. Our total retail area now stands at 2.3 million square feet, a 38% increase over last year reinforcing our growth trajectory in the retail landscape.
The growth traction continued in our private label sales which grew 119% year on year in Q2FY26 and contributed to 58% of overall sales. Our sales per square feet saw a strong 22% uptick to 865 in Q2FY26 from 708 in the previous quarter. Importantly, our inventory days saw a decline from 108 days in Q2FY25 to 86 days in Q2FY26 underscoring our decision to invest in technology to streamline our operations. On the back of this visibility and a strong H1FY26, we are revising our top line growth guidance for FY26 from 25 to 30%. Our pre India’s EBITDA margin is guided at 7 to 8% and pre Indair’s PET margin at 3 to 4%.
India’s EBITDA is guaranteed at 14 to 15% and India’s PET margin without exceptional gain will be between 2 to 3%. Reflecting continued operational discipline and improving cost absorption, we are on track with our expansion plan. We reform our target of opening 40 to 50 stores this year reinforcing our confidence in the scalability and profitability of our model. Before we move to the discussion on the operational aspect of the business, we would like to highlight that we have undertaken a strategic reassessment of our lease term under Indes 116 to better align with our evolving store portfolio and expansion strategy.
As a result, we recognize a one time exceptional gain of 55 crore which has been disclosed separately in the financials. Going forward this will help in reducing the gap between the pre INDEAS and INDES profitability. We have provided detailed information on this adjustment in the investor presentation and including the pre India’s financials. In the interest of time, we will be happy to take up any specific queries relating to this separately on a one on one basis. After this call, please get in touch with our IR team for this on the Business Update Let me begin with our progress on some of our key pillars that we that will have identified through propel or future growth.
On legal transformation, we are making significantly headway in our digital and warehouse transformation journey with a planned investment of 2025 crore this year towards building an integrated and intelligent technology backbone. The implementation of SAP for enterprise resource planning expected to go live in the next six months, enabling real time data driven decision making across functions. Alongside this we are deploying INFOR for warehouse management, integrating the golden best advanced Replenishment Solution and DOMO for business intelligence and analytics. Together this system will streamline processes, enhances supply chain visibility and optimize inventory turnaround, laying the foundation for a future ready scalable organization Moving to the merchandising which continues to remain one of the strongest pillars of our business.
Over the past few quarters we have significantly strengthened our team by bringing in experienced professionals from leading retailer and apparel companies. We this infusion of talent, the overall retail environment this infusion of this infusion of talent, the overall retail environment in India remains highly supportive of our growth strategy. Tier 2 and Tier 3 makes market continues to lead the consumption momentum driven by rising disposable income, aspirational lifestyle and a clear shift from unorganized to organized retail. Simultaneously, Tier 1 markets are witnessing strong participation from younger value conscious consumer who seek both affordability and style. Despite global macro uncertainties, domestic consumptions remain resilient with customers increasingly prioritizing the quality experience and value A space where bazaar style is naturally positioned as a leader.
When we look at the broader retail landscape, the value segment in India is still at the nascent stage with enormous untapped potential. Unlike developed markets such as the US or European where one or two large players dominate the space, India currently lacks a single national value retail leader. This creates a wide and open opportunity and Bazaar style aims to fill this white space. We believe India’s consumption story will be value retailer driven and our proposition style for the entire day is rupees 1000 captures that essence perfectly. It’s an offering that combines aspiration with affordability and this positioning has connected powerfully with the consumer across our market.
Now coming to the operational parameter same Store sale growth stood at 22% in Q2FY26 and 10% in H1FY26. Private label contribution was 58% in Q2FY26 versus 45% in Q2FY25 and 59% in H1FY26 versus 48% in H1FY25. Total store count is reach 250 in Q2FY26 up 36% year on year. Retail area now stands at 2.3 million square feet, a 38% increase from last year. Focus market performed well with Q2FY26 revenue at 71 crores up 77% year on year and H1FY26 revenue stood at 144 crores, up 75% from the last year. Average transition value for Q2FY26 stands at 1,500 and 958 in H1FY26.
Number of bills grew 69% year on year to 5.63 million in Q2FY26 and 58% year on year to 10.11 million in H1FY26. Quantities sold increased 63% to 19.5 billion units in Q2FY26 and increased 55% to 34.5 10 million units in H1FY26. Sales per copied stood at 865 in Q2FY26, up 22% year on year and 768 in H1FY26, up 12% from last year. Inventory days for the quarter reduced to 86 from 108 days while trade payable days stood at 70 compared to 81 for the same period last year. As a value retailer with strong presence in eastern India, our demand is seasonal and influenced by regional festivities.
Hence our performance is based on a full year basis. We remain in an expansion phase investing in new store and digital capabilities. While this investment may temporarily affect operating margins, absolute growth continues to be strong. Revenue for Q2 FY26 stood at 532 crores, reflecting a strong 17% year on year and 41% quarter on quarter. Gross profit for the quarter increased to 162 crore, representing a robust rise of 76% year on year and 20% sequentially. Gross margin remains healthy at 31% expanding by nearly 90bps on a year on year basis. For the first half of FY26 our revenue stood at 910 crore reflecting a strong growth of 55% over the previous year.
Gross profit for the period increased to 298 crore, registering a healthy year on year growth of 63%. On the expenses front, manpower cost increased by 40% year on year primarily driven by our ongoing expansion initiatives and the addition of senior leadership. Talented. Moving on our India’s EBITDA for Q2FY26 stood at 69 crore reflecting a robust growth of 184% year on year and 19% quarter on quarter. On a half yearly basis, EBITDA rose by 92% year on year to 127 crores on pre index. EBITDA for Q2FY26 stood at 33 crores reflecting a robust growth of 933% year on year and 33% quarter on quarter.
On a half yearly basis, EBITDA rose by 132% year on year to 58 crores. To sum up, Bazaar Style is firing on all cylinders. Our differentiated value proposition, discipline expansion model, accelerating digital transformation and strong operating leverage. We are building a future ready, scalable and profitable retail business positioned at the heart of India’s consumption story. Thank you for your continued trust and support. With that, I will conclude my opening remark and request the moderator to open the floor for questions.
operator
Thank you very much sir. 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 yourselves 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 Jogani from JM Financial. Please go ahead.
Gaurav Jogani — Analyst
Hi. Thank you for taking my question and congratulations on a strong set of revenue growth numbers. My first question, you know, is with. Regards to your guidance of, you know, revising it to 25 to 30% for the year. Now even if I take the higher. End of the guidance at 30%, that would mean that, you know, H2 revenue growth would be somewhere in the range of around 16% only. So just wanted to have your thoughts on the same that do we expect significant deceleration in H2 to have the guidance of 30%? So yeah, obviously the Q3 though I think we are. Dhurga Puja is a significant cultural and commercial Event in the eastern India. But I think our business model is not land on it. But again, Durga Puja plays a very important role for us. So Q2 becomes a bigger quarter across all the quarters.
But while saying that, I think we have grown at a 55% year on year. And the guidance that we have revised from January 2030 is again as I said, we have a conservative approach towards revenue. We target more but try to achieve the numbers that we say. So 30% is the guidance. I think mathematically what you are saying is correct. But I hope we’ll be able to achieve 30% revenue.
Shreyans Surana — Managing Director
Okay.
Gaurav Jogani — Analyst
And sorry I missed out on the guidance that you also revised for the pre index margins, both the pre index. EBITDA and the PAT margins for the year. If you can just reiterate that.
Shreyans Surana — Managing Director
So we have not revised the guidance. We have said key on the index because the PET with the exceptional gain it will be more so without exception. Again the PAT for India’s is between 2 to 3% only. So we have not revised the guidance for PAT or EBITDA but the guidance has been only for the revenue.
Gaurav Jogani — Analyst
Okay, okay. And have you given the number for the EBITDA also the reported EBITDA margin. What you are looking out? The reason for asking this is, you. Know, if we look at your gross. Margins, also your gross margins for H1 has expanded by 150 bits. So, so how should one look at the gross margins here?
Shreyans Surana — Managing Director
So the gross margin for the entire year, as we have already communicated in the earlier call, it will be 50 pips only because there Q4 there will be another USS of winter. So the margin will be around so 34% overall. So for the full, full it will be a 15 pips increase. Five zero.
Gaurav Jogani — Analyst
Right. Okay, okay, okay. And apart from this, you know we have seen this rent per square feet, you know, increasing sharply around approximately 20% for H1. And I think you have also highlighted that, you know you’ll be spending 20 to 25 crores towards tech and all. So, so two parts to this. One, the tech cost would be capitalized or would it be taken to the.P and L and also on the rent per square feet.
Shreyans Surana — Managing Director
So in terms of rent, first square feet, as I already mentioned, the earlier cost, it depends on the tier that you are opening the stores in. So for us, 56 to 57 rupees is the annual rental per square feet for this entire year. In terms of per square feet rental, that is we are going to charge on the PLL and in terms of capital expenditure on the tech. So again it’s divided into two parts. So for example SAP will be implemented and will be live by next year.
So the cost of SAP will be capitalized but as N4 will be live I believe by the 1st of January so the cost will be heading to the PNL. So it will depend a domo will be live by December first week itself. So the cost will be on the pnl. So it will depend on the tech to tech and when is the implementation and will it will like get live on in which period? But so when you. So would it be hitting because your.
Gaurav Jogani — Analyst
Capex for H1 has already been I think near 80 crores all. So why does this increase your capex. For the the year? How much capex are you anticipating for the year?
Unidentified Speaker
So our plan is to have around 100 crores as our total capex throughout the year and as we have already opened more than 36 stores in the first half I think another target is to open between 40 to 50 stores. So for the balance six months the 20 crore is the planned capex that we have in our mind. Okay, sure. So I’ll come back into the queue for more questions.
Gaurav Jogani — Analyst
Thank you.
operator
Thank you. The next question is from the line of Paresh Kawale from Noama Wealth. Please go ahead. Sorry to interrupt. Your voice is muffled.
Palash Kawale — Analyst
Yeah. Is it okay now? Hello.
Shreyans Surana — Managing Director
Yeah, it’s better.
Palash Kawale — Analyst
Yeah. So sir, my first question is on inventory. So inventory has came down. Do you expect this to go like this train to go further and inventory to come down in in terms of number of days?
Shreyans Surana — Managing Director
Yeah. So we say for the September as it’s a plan that we have in our mind we have been able to execute and as result you can see that the inventory per square has reduced by 246 rupees from last year. And I believe that the ARS system and the thing that we are implementing on the tech side we are working on it. Is it further? So you will see that in expecting the 31st of March also.
Palash Kawale — Analyst
Okay and so what can we expect on the pad side? On the ported pad side for next year FY27 is expected to go towards 5%.
Shreyans Surana — Managing Director
So the target by for effort is between 4 to 5% the PET.
Palash Kawale — Analyst
Okay, okay. Yeah. Yes but now that you reassess your leases won’t that difference between pre industry post index which used to be very large would come down and yeah, so.
Shreyans Surana — Managing Director
Yeah it will reduce but the impact of India’s adjustment will persist. It will be substantially lower. But, but yeah you can say that it will be only there are difference that I believe from the next year it will be only 10% of the difference between both pre and post as a profitability difference.
Palash Kawale — Analyst
Okay sir, that’s really helpful. And sir, just one more question. How many stores are in pipeline? Again same question as last participant. Are we being very conservative in terms of growth? Because even if I look at your inventory levels year on year that have grown by 25% so won’t even at least a 20 growth be possible for H2?
Shreyans Surana — Managing Director
See again I am retweeting myself that as a plan we have taken 30% for the entire year out of which I think the first six months we have achieved 55%. So from 25 already revised guidance 30%. And because this quarter will be the big season for us because it has got all the winter wedding chat. So I think after going this quarter only I will be able to give that answer to you your question. I don’t want to comment something I don’t know but I think this is a big quarter for us. So let this quarter go then only I will next call.
I will tell you the answer for this question.
Palash Kawale — Analyst
Okay sir, and how many stores are in pipeline right now?
Shreyans Surana — Managing Director
As I said, 40 to 50 is the target for this year and we have already opened 36 stores and two has been open in this quarter. So 38 technically I think another 10 stores will be in pipeline for this financial year.
Palash Kawale — Analyst
Okay, okay, that’s it from my side. Thank you. Thank you for your answers.
operator
Thank you. The next question is from the line of Shayans J from Swan Investments. Please go ahead.
Unidentified Participant
Hello, can you hear me?
Shreyans Surana — Managing Director
Yeah, no worry. Yeah.
Unidentified Participant
So my first question is typically when you open your store, how. How is the SPSSF of that store? Can you explain the ramp up time a new store takes reach the matured store? I mean I’m just trying to understand. When you open a new store, what is the typical cycle? How does the SPSF move?
Shreyans Surana — Managing Director
So see in terms of SPSF it again depends on the tier that you are opening. What we have seen in last two years because as a strategy we have taken two approach. One is to open more stores in Metro and Tier 1 also because that cities give us higher SPSF and second to open in the same cities where we are located. So that is also giving us a good profitability in terms of a simple business model. If I say so. Typically when a store gets open, so the financial aid that it gets open it delivers a EBITDA of 5 to 6% on an average and when it completes one full year, it gives you a EBITDA of 8 to 10%.
And on the maturity which is the L12 stage, it gives you a EBITda of 13 to 15%. If you are in tier 2, tier 3, tier 4 and if you are in metro and tier 1, it gives you around 12% of EBITDA when it gets mature, all at pre index at store level ebitda.
Unidentified Participant
How does it compare with the revenue, sir? How much revenue does typically a new store do versus an old matured store per month or OA per annum? You can help us understand.
Shreyans Surana — Managing Director
So I think as of now we are at 9200 SPSF. And if I talk about the newer stores, it has yielded this year more than 9,000 square feet to us because of the more stores getting opening in Metro and Tier 1 for this financial year. So it is in line with the older stores. That way you can say in terms of spsf.
Unidentified Participant
Okay, okay. And is there also a possibility with say you’re opening newer stores in Metros and tier one, so those stores tend to higher revenues versus the other older stores that we would have had.
Shreyans Surana — Managing Director
Excuse me, can you just come again with a question? Can you be little loud because I’m not able to hear you properly.
Unidentified Participant
I’m saying, I’m saying, have we come across a situation where say you’re opening newer stores in tier one and Metro cities. Is there a possibility that newer stores tend to do higher revenues versus the older metro stores which were in tier to work?
Shreyans Surana — Managing Director
Yeah. So a Metro stores typically gives you a SPSA of more than 10,000 square feet, whereas tier 2, tier 3 gives you a SPS of around 8,000 to 8,500 rupees typically. So the SPSF will always be higher on the Metro and Tier 1. Again, the rental will also be higher on tier tier one and metro cities.
Unidentified Participant
Also, the last one year, how many stores out of the 36 that we’ve opened or 38 we’ve opened would be in the metro? Can you help us with the breakup?
Shreyans Surana — Managing Director
So I can take this question offline in terms of the breakup, but overall, as I said, the average SPSF for all the stores that has been opened this year on the annualized basis is more than 9,000 square feet, which is in line with the number that we have achieved for the overall company level sales.
Unidentified Participant
Got it. Got it. And my last question is.
operator
Please rejoin the queue for more questions.
Unidentified Participant
I’m just. This is my second question.
operator
We have other participants waiting for their turn. Please rejoin the queue. Thank you. The next Question is from the line of Chirag from Keynote Capital. Please go ahead.
Chirag — Analyst
Yes, thank you for the opportunity. Congratulations Shreyanshri for a good setup. Number one thing I would like to. Know is the update on the insurance. Money which we are expected to receive due to the fire incident. Is there any update on that?
Shreyans Surana — Managing Director
Thank you Shirag. So on the insurance claim as you said last call also that we have received already the asset part which is 3.48 crore and in relation to the inventory the company has submitted all the documents related to the insurance claim and the assessment process by the insurance is in progress. We are in continuous communication with the insurer to ensure timely completion. The company is following up on the matter and any further development will be communicated as and when they occur. We expect the decision very soon. But I don’t have any fixed timeline on my hand.
But I think the first part of the insurance has already been resolved and this is the inventory part in which the discussion is going on.
Chirag — Analyst
As inventory part is a bigger chunk of the money. Once this received, can I expect that the current run rate of stores that we have about 40 to 50. We are going to utilize this money to increase the additional stores or could you just let me know what are your thoughts? If this money gets received where it is going to be used.
Shreyans Surana — Managing Director
The guidance will remain largely intact. We will be opening 42,50 stores and the plan has been made in such a way that within the insurance money coming in it will be used for the working capital efficiency because on the capex front we are already inventing the we are doing this internal approvals and the banking limits. So the plan will be intact between 40 to 50. We will not be increasing the speed of store count.
Chirag — Analyst
Fair enough, fair enough. Generally Q3 are the strongest because the so based on month longer and are we seeing the same traction of growth which has been going forward.
Shreyans Surana — Managing Director
So see for us because the festival of Durga Puja came in September so obviously there has been a preponement of festival which led to a higher growth in Q2. But while saying that Q3 remains a very strong quarter for us both in terms of revenue and profitability because in our total count of 250 stores still more than 120 stores are such which relies purely on Diwali and shirt and I think all the stores including the Bengal Assam every store in terms of winter, in terms of wedding so all these things are celebrated in a manner in every state.
So I think there is a good sales in terms of winter. We are seeing a good traction this time. Winter is looking good and it started well. So we are seeing a good sales coming from winter stocks largely from across the zone. So I am expecting upcoming quarter to be a good quarter considering all the festivals line up in this quarter.
Chirag — Analyst
I’ll join back with you. Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management will be able to address questions from all the participants, kindly limit your questions to two per participant. Should you have a follow up question, please rejoin the queue. The next question is from the line of Deepak Podar from Sapphire Capital. Please go ahead now.
Deepak Poddar — Analyst
Am I audible, sir?
Shreyans Surana — Managing Director
Yeah, you audible?
Deepak Poddar — Analyst
Yeah. Okay. Thank you very much for this opportunity. So just first of clarification, I mean next year PAT margin is set on pre Inde, 4 to 5% on India’s. What is the expectation?
Shreyans Surana — Managing Director
3 to 4%.
Deepak Poddar — Analyst
Okay. 3 to 4% on India’s base. And, and out of this 250 stores we have how much would be mature and how would, how much would be new stores?
Shreyans Surana — Managing Director
So for our tension, 150 stores are. 152 stores are mature which is coming into annual condition and balance are new and below 18 months of aging.
Deepak Poddar — Analyst
Okay. Okay. And in terms of depreciation, I was just reading through. Because of this reassessment of lease terms, we are expecting 10% increase in depreciation expressed quarter on quarter. I mean can you, can you throw some more light on that? Yeah. Because of the reassessment our leasehold improvement depreciation will increase. Right. And that will be a 10% increment quarter on quarter going forward. So 42 crores is what we did in second quarter. So we expect 10% on increase.
Shreyans Surana — Managing Director
No, no, no, no sir, you are taking into consideration the index. I am talking about the pre index depreciation which will increase by 10%. Right? So, so, so it is 10 crore quarterly. So it will increase to 11 crore.
Deepak Poddar — Analyst
Okay. And what about India?
Shreyans Surana — Managing Director
So India is there will be a. Benefit of depreciation and interest put together. There will be a benefit of 5 crore quarter on quarter.
Deepak Poddar — Analyst
Okay. Okay. No, so if we take this quarter as a reference, I mean depreciation plus interest was around close to 60 crores. Right? So, so some reference point over that. I mean how should one look that 60 crores in India’s basis going forward.
Shreyans Surana — Managing Director
Yes, yes, yes. So, so out of that 41 crore was the, was the interest and depreciation under India’s. Right. And 20 crore was the depreciation under the pre index. So if you put together it was 61 crore. So the benefit will be 5 crore towards the depreciation and interest under Indian shares and 1 crore for expenses towards the depreciation on leasehold improvement. So ultimate benefit will be four core quarter on quarter.
Deepak Poddar — Analyst
Okay, understood. And just one last small thing in terms of private labels. So currently we are at about 59%. So any aspiration we have, I mean over next three years, guys, we want to take this private labels and what’s the private label margin different versus the other brands.
Shreyans Surana — Managing Director
So sir, I have said in my earlier call also our expiration is to reach 65% of the sales coming from private label by FY27 in terms of margin. Right now we want to scale our private labels. Rather one of our private label square app has already touched 227 crores of revenue for first six months this year itself. And idea is to scale these labels in terms of margin differentiation. As of now we have a difference of in different private labels between 0.75 to 1.5%. But going forward, once the labels are settled in the market and people are coming to the store asking for those labels, that is the time we will again go back to the whiteboard and plan the strategy around that.
As of now the idea Is to reach 65% of revenue by FY27 through private label sales. Expand the private label. Every person who is coming, we want one article or two articles of private label in his or her hand so that they can understand the quality that we are working on. And next time we can increase the quantity of those labels in the repeat purchase hand. Repeat purchases hand that way.
Deepak Poddar — Analyst
Understood. That’s very helpful sir. That would be it from my side. Wish you all the very best. Thank you.
Shreyans Surana — Managing Director
Thank you so much.
operator
Thank you. The next question is from the line of Akash Jain from Money Curves Analytics. Please go ahead.
Akash Jain — Analyst
Yeah, thank you so much. I have one very basic question, sir. I have been following the company only very recently. So as I understand the Q2 and Q4 gross margins are lower because of. The end of season sale. And Q1 and Q3 there is no end of season sales. So the gross margins are higher. But when I compare to some other. Players in the industry they do not. Show this kind of variation in quarterly gross margins. So can you help me understand why. We have such higher gross margin variation for us as compared some of the. Other larger players in the industry who. Have quite stable gross margins across borders.
Shreyans Surana — Managing Director
So the main reason behind is there the concentration that we are having in Bengal and Assam zone. So typically entire India, the Q3 is the biggest quarter for any retailer in the garment space. But because of our presence in Bengal and Assam in terms of the concentration that we are having. So the fluctuation in Durga Puja leads to a variation in the sales in both Q2 and Q3. So if a sale of puja is in Q3 only, so that time you will see the numbers matching with the all the national retailers. Q2 will have a lower margin because of July and August being the end of season sale.
But because the puja shifted to September and September then then becomes a festival month for us. As a result festival buying happens and as a result the gross margin on the festival buying is more compared to non festival. So as a result the overall gross margin increases for that quarter. So this puja shift is actually because of that the variation for our company is there. But as we are opening more store in the focus market and as the concentration between the Assam, Bengal and other regions will be growing, I will say when the focus will grow the balance will come in the terms of revenue that we are generating from all the states that time I think the numbers will look similar to the national trend.
But as of now till the time we have a higher concern in this geographies so the number will look little skewed compared to the other retailers would have been even lower than what we reported. Yes, yes, yes, yes. That is what I’m saying. Because if for example in the September month maybe we would not have sold the festival stock resulting in the higher margins we would have sold or maybe some discount would have been going on in the month of September itself if Dua Puja was in October. Thank you so much.
operator
Thank you. The next question is from the line of Hitendra Pradhan from Maximal Capital. Please go ahead.
Akash Jain — Analyst
Hi sir. Thanks for the opportunity. So my first question is regarding you know, your corporate expenses this quarter. If you can give us the bifurcation like of your storable EBITDA margin and you know, your corporate expenses or just a color on the corporate expense and what part was due to the employees that you’re hiring and you know the other cost, take cost that you are, you know, wearing this contract.
Shreyans Surana — Managing Director
So in terms of company or at the company level, our total EBITDA stands at 6.8% on pre index out of which the store stands at 12.83% and 6% is the HO cost for the first half of this year.
Akash Jain — Analyst
Okay. And that’s like you know your employee like for the corporate, like I assume like the hirings that you are doing. For the supply chain and your ops, they are under the corporate expenses.
Shreyans Surana — Managing Director
Yes, they are. On the corporate expenditure.
Akash Jain — Analyst
I just want to understand sir, like you know your store label like employee expense, has that seen a material tick up or you know, it is more due to your hirings under the corporate umbrella.
Shreyans Surana — Managing Director
So I, I think in our employee cost overall has increased more on the corporate side comparatively than the store side. As I said that the overall the store metrics looks good only because we have been able to shift 12.83 at the store level EBITDA on pre and days. And if I talk about the mature stores, it has given us a bit of around 14% for the first six months. So that is well in the range that we have planned. On the overstore side, the corporate as we are hiring a lot of people from the stalwarts from the industry and considering the future plan that we have in mind.
So it’s is a front loaded. We are just front loading the expenditure on the manpower side at the corporate level.
Akash Jain — Analyst
Got it sir. Got it. Understood. And so my second question is related to the reassessment of the lease assets. Can you just elaborate like you know, what was the rest again because.
Shreyans Surana — Managing Director
Yeah. Can you just come again with a question. Yeah.
Akash Jain — Analyst
On the reassessment of the lease assets and the 55cr that you know, gains that you are taking onto your pnl. Can you just you know elaborate on, you know, what was the rationale behind it and why did you. What. What exactly changed in terms of the lease terms? Is it to do more with the renewal or why. Why did you take this accounting change this quarter?
Shreyans Surana — Managing Director
I think that there were multiple reasons to it. First thing, I think this particular system allows us to. First thing most important thing is that there’s a huge variation between INDES and pre indeas because of the lease handling that we were doing and we came to understand the correct approach while talking to Big four and everyone and then understood. And in this particular method we are assessing each lease individually after considering the business needs, store performance and market changes that are having on that store. And I think that is a very detailed list that they have prepared.
And as I’ve mentioned earlier also we’ll be happy to address a specific queries regarding this, but it will take a lot of time. I think in the interest of time, I will suggest you to have a prior appointment with the IR with the CFO and he will explain you that in the detail.
Akash Jain — Analyst
Yeah. Yes, that makes sense. Yeah. Thank you.
operator
Thank you. The next question is from the line of PR from 1 to 9 wealth. Please go ahead.
Unidentified Participant
Yep. Thank you for the opportunity and good afternoon sir. My first question is can you help me to understand what’s the percentage of revenue comes from the products or apparels priced above 1000 rupees? Any graph idea?
Shreyans Surana — Managing Director
So see as a company we don’t have very large assortment. Maybe 12 to 15% of the assortment is only is above thousand range. So the percentage of sales is very lower on the thousand and above side. On the garment side.
Unidentified Participant
Okay, second question is as you all know like from the 22nd of September the GST reduced from 12% to 5% for the products priced within 1000 to 2500. But for the garments those are priced above 2500. So their GST rate increased from 12% to 18%. However while I visited many of your style buzzer stored in and around Kolkata. So I noticed a good banner GST Bachat. So on that banner while I am checking that you are offering the discount of this 6.5% isn’t for the products those are priced above 2500. Like there are products 3000, 3500.
I can understand there are very few products on those price range. But even for those products 30003500 you are offering the 6.5% sort of discount. But actually on those price range GST increased from 12 to 18. So can you help me to understand your strategy here and how is it like you are observing the GST hike or what’s your strategy regarding this GST thing.
Shreyans Surana — Managing Director
So pre GST scenario, so above thousand rupees cost sale price we were charging 12% from the customer. Right? And post GST revision the increase happened from thousand to 200 2500. So the GST rate reduced from 12 to 5% for this range thousand to 2500. So on that articles we are offering discount of 6.25% and rest we are not charging anything from the customer.
Unidentified Speaker
So we thought of transfer thought of passing it the benefit to everyone, any MRP of thousand rupees in our portfolio to the consumer.
Unidentified Participant
Yeah but in, in all of your stores like in Kolkata, be it in Axis Mall or whatever, on the promotional banner we can see that even for the products those are priced at 3,000.
Shreyans Surana — Managing Director
Yeah, we have, we have passed on because that is very very negligible quantity that we have in the store. So we have passed on the entire the 6.25 benefit to the consumer or across all the MRPs of thousand rupees.
Unidentified Participant
Okay. And on the GST front itself there is also a change of the GST in the value chain like in fabric, I mean all the raw material, I mean this entire value chain. So do you think that would be beneficial for the company or not?
Shreyans Surana — Managing Director
So see in the broader sense you can say obviously as the GST reduces the people will have more disposable income in their hand which will ultimately flow to the consumer section only. But it is not that it will immediately get in the supply chain in terms of product as we speak. It’s not that the fabric, there have been tax change in the fabric side. So I don’t think that each and every fabric, there are a lot of variation in the fabric structure also where the GST rate has reduced and where there has not been any reduction or an increase of gst.
So I think as of now we have not seen any reduction in the fabric price for at least this summer season. Buying that we are doing going forward, if any, because of any GST rate reduction on the fabric side, if any pass on that we get from the, from the merchandise fabric manufacturers, we will be able to passing again to the consumer because we don’t want to increase the price. We just want, we just want to have a fair pricing to. For the consumer.
Unidentified Participant
Okay, thank you. That’s a problem. I said.
operator
Thank you. The next question is from the line of Vijay Chauhang from rhpms. Please go ahead.
Unidentified Participant
Yeah, so my first question is on the consumer sentiment for the October month in terms of footfalls. So can you just adopt the try and show some light like how we are seeing for the October month or post Q2, what’s the consumer trend and sentiment? So that is my first question.
Shreyans Surana — Managing Director
Yeah, so in terms of consumer sentiment, I think we have witnessed a positive sentiment across the zone. The only challenge was I think with the rain this time the rain effect was from end of September till 15th of October. So the rain was there. But apart from that the footfall looks good to us. As I said, the winter uptake in sale has been good as of now. We were just discussing yesterday only with the entire team. The winter looks good to us and with the way the sales are happening, we expect a good quarter. We are expecting a good quarter this, this time.
Unidentified Participant
So is it fair to assume the SSH that we have reported in quarter two, will we be able to replicate in the quarter three or somewhere it will be on the lower side then because of the festival shift.
Shreyans Surana — Managing Director
I think obviously it will be subdued because of the festival shift in terms of SSG and moreover just to give everyone this Referencing the SSG also doesn’t give the clear view of any store mix because there are a lot of stores which are not under SSG category but are under the new focus market which has got a good sales coming in the month of October, November, December and because our starting concentration zone was more on Bengal, Assam. So I think the SSG will be reflecting the picture of Bengal and Assam at the corporate level. So just for example, in the first six months, if you see the focus states has given us SSG of 13% whereas the focus state has given a SY of 10%.
The focus rates are doing very well this year across the zones. So I think in terms of numbers, yeah, the numbers that we have planned, we are on track to achieve that number.
Unidentified Participant
Okay, and what will be the guidance for the next two years in terms of sales per square feet in terms of percentage growth if we are any targeting. And what is the normal SSSG that you would like to target for next.
Shreyans Surana — Managing Director
Three to four years in terms of revenue? I have told on my previous call also that I would like to start the year with a 25% revenue structure. And as the year go if there is an increase we would change the guidance. But the business plan will be created on the 25% revenue growth with the SSG of again 6 to 7%. So that will be the structured planned way to go ahead and for the next two years at least post that depends on the strategy that the company adopts to open more stores.
Unidentified Participant
Yeah, thank you for the great clarification. Thank you and good luck.
Shreyans Surana — Managing Director
Thank you.
operator
Thank you. The next question is from the line of Arman from Blue sky fintech. Please go ahead.
Arman — Analyst
Yeah, first of all, congratulations on just reiterating with the guidance part because like if we, if we 30% account also that means. We are.
operator
Sorry to interrupt. Can you please speak a little louder?
Arman — Analyst
Hello? Yeah, is it better? Hello. Hello. Hello.
operator
Yeah, is it better?
Arman — Analyst
Hello?
operator
Yeah, now it’s better.
Arman — Analyst
Yeah, yeah. Just reiterating on the guidance part, sir, because if still, if we take into account 30%, that means for H2 we are targeting just around 10 to 11% of growth. And already we are seeing October month getting good traction. Then are we really very conservative over here? Just on that front, I want to have an understanding from you.
Shreyans Surana — Managing Director
So see, I think as a business we plan quarter on quarter. As I said that this quarter looks good to us. And with the winter being the biggest, I think product portfolio that sells in the month of November and December. But the winter is very unpredictable in terms of sometimes now it looks good and we have seen over the years sometimes the climate changes suddenly which leads to a drop of sale also. So I think the way we see this 30% guidance is more on the current structure. And I think with this quarter going on how this quarter spends up after December, then again we will be able to take a call but on a interest of I think everyone, whether it’s a stakeholder or the company.
We, we believe in conservative approach. So we would like to right now stick with 30 guidance only. And I think after seeing this quarter then we can come again next in next call.
Arman — Analyst
Okay. And so the second question is like we already have already told that we have a little bit of concentration compared to more concentrations of on West Bengal and Assam. And that’s why our numbers are pretty skewed compared to other players. So in. So when are we going to see that going to stabilize? I mean which financial year we are going to see that we’ll be on par with the.
Shreyans Surana — Managing Director
To be very frank, I don’t have an answer right now on that question. The reason is that though we are opening stores in all the geographies so what happened is that Bengal has a very high concentration of sales coming right now because of lot of stores getting open in the metro and here. So I think that is a good. I don’t find it as a challenge. I think if I’m able to achieve a good profitability. So that’s good for the company that way in terms of revenue. Yeah. As we are growing more on the focus states.
So the balance will, will come but not before I think FY26 or by end of FY28. Because that many number of store has to be open in those geographies which are more on. Which are more focused on like UP Bihar and Jharkhand to cover up the sales of Bengal. Because Bengal as a state also has a higher sales per square feet for us because there are a lot of stores in cities, Kolkata itself. So we have got very high basis from Bengal coming in. So I think it will take an at least 28 I would say to get things to get settled in terms of revenue contribution coming from both Bengal, Assam and other states put together.
Shreyans Surana — Managing Director
Okay. Okay. Thanks a lot.
Arman — Analyst
That’s all from my side. Thank you.
operator
Thank you. The next question is from the line of Gaurav Jagani from JM Financial. Please go ahead.
Gaurav Jogani — Analyst
Hi. Thank you for taking my question again. I just have one question. You know, if we add up the depreciation number only for the H1 and assuming that the Q2 number kind of fails. The depreciation for the entire year could be somewhere around you know 160 crore versus 100 crores last year. So the depreciation, the reported terms will see a sharp jump. Is that the right understanding?
Shreyans Surana — Managing Director
Just. Just a second. Gaurav. Gaurav. To discuss this we will take this offline. We can.
operator
Thank you. The next question is from the line of Palesh Kawali from Nwama Wealth. Please go ahead.
Unidentified Participant
Thank you for the opportunity again, sir. Sir, despite of large chunk of your stores being in Bengal, West Bengal and Pujo being pre owned your difference between your actual SSH and normalized SSG is very low. So what could be the reason for this?
Shreyans Surana — Managing Director
So see in terms of. Because see this word of normalized SSG just started from this April itself. If you believe we never you should report this. The only idea is the way we calculate the normalized SSG is that the period which is. Which is going in both the quarters. So for example this year 11 days has been shipped from last year October to this year September. So in terms of. For the calculation of this normalized SDG we have taken from a period from 1st July to maybe 19th of September of the last year also we have just shifted.
So that is a normal period without that festival shift that we have given in terms of SSG.
Shreyans Surana — Managing Director
So even despite of that the growth SSSG was 19%. So that is. That is encouraging. Okay. Okay. Thank you, sir. That’s it. From my side.
operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Achit Babad, an individual investor. Please go ahead.
Unidentified Participant
Yeah, hello, I’m a.
operator
You are audible.
Unidentified Participant
Yeah, I just wanted to know what is the growth guidance for FY27.
Shreyans Surana — Managing Director
So see as of now, as I said we aspire to grow by 25% every year. That is our aspiration. I have told previously in previous calls also. So that will be the number that will benchmark for the growth purpose.
Unidentified Participant
Okay. And one more question. Like the prox after tax guidance of 3 to 4% is excluding the exception income we got in this quarter.
Shreyans Surana — Managing Director
Well, can you just come again. And your voice is not audible.
Unidentified Participant
I mean. I mean we got exception income of 50 crores this quarter. Right. So the bad guidance of 3 to 4% it is excluding the 50 crores income we got in this quarter. Right.
Shreyans Surana — Managing Director
A bad guidance for Pre India is 3 to 4. And without this exceptional gain which happens to be on the India side is 2 to 3% without exceptional gate.
Unidentified Participant
Okay. Yeah. Thank you.
Shreyans Surana — Managing Director
Thank you.
operator
Thank you. Ladies and gentlemen, this is the last question for today. I now hand the conference over to Mr. Shrian Sharana for closing comments. Thank you. And over to you, sir.
Shreyans Surana — Managing Director
So thank you for joining this call. Love to see you in our next call. Thank you.
operator
Thank you, sir. On behalf of Bazaar Style Retail Limited, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Shreyans Surana — Managing Director
Thank you.