Baazar Style Retail Ltd (NSE: STYLEBAAZA) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Suyash Samant — Investor Relations
Shreyans Surana — Managing Director
Nitin Singhania — Chief Financial Officer
Analysts:
Bhavik Narang — Analyst
Palash Kawale — Analyst
Tanuj Pandia — Analyst
Arvind Arora — Analyst
Tanmay Gupta — Analyst
Devesh Advani — Analyst
Naitik Mutha — Analyst
Siddharth Jain — Analyst
Divyanshu Mahawar — Analyst
Chirag Maroo — Analyst
Kushal Goenka — Analyst
Rahil Shah — Analyst
Anuj Kashyap — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Bazaar Style Retail Limited Q4 and FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Suyash Samant from Stellar IR Advisors. Thank you. And over to you, Mr. Samant.
Suyash Samant — Investor Relations
Thank you. Good evening everyone and thank you for joining us today. I have with us today the senior management team of Baazar Style Retail Limited, Mr. Shreyans Surana, Managing Director; and Mr. Nitin Singhania, Chief Financial Officer who will represent Bazaar Style Retail Limited on the call. The management will be sharing operating and financial highlights for the quarter and year ended March 31, 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 risk 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. Shreyans Surana. Thank you. And over to you, sir.
Shreyans Surana — Managing Director
Good evening, everyone. Welcome to our Q4 and FY ’25 earning call. Our presentation has been uploaded on the stock exchange and the company’s website and I hope you had a chance to go through it.
At the outset let me highlight that the past fiscal that is FY ’25 has been a remarkable year in the growth journey of our company with the successful listing of the company equity share in September 2024, highest ever store addition of 52 stores versus initial expectation of 35 to 40 stores to make it to a total of 214 stores, spanning a total area of 19.21 lakh square feet as on 31st March 2025. Crossing INR1,000 crore mark in revenue by posting a 38% year-on-year growth to highest ever revenue of INR1,344 crore, surpassing our revised growth guidance of 30% for FY ’25, and our robust SSG of 13%, which stood above our expectation.
The performance is a result of our team’s well thought out and implement business strategy comprising of our focus on offering value fashion in Eastern region of India which offers huge growth potential on account of being under penetrated, rapid shift from unorganized to the organized. Secondly, our comprehensive product offering across categories providing a one-stop family experience. Third, our cluster based approach which enables improved operational efficiencies and enhanced brand visibility help us to have a better site selection, better understanding about the catchment, helping in faster achievement of economies of scale. Four, our focus on growing private label share, speaking of which, I am pleased to announce that our portfolio of 10 private label contributes 45% of our total revenue that is INR600 crores in FY ’25, which forms a robust CAGR of 64% over the past three years. Of this almost INR200 crores were contributed by one of our brands, Square Up and the other two labels, Miss19 and Awaya are close to INR100 crore mark.
Going ahead, we aim to remain steadfast on our growth strategy and look forward to a continuous trajectory. In the current fiscal we target to add 40 to 50 new stores in core and focus states and SSG of around 7% to 8% which is considered healthy in any retail business and our revenue growth of 20% to 25%. Now coming to the profitability. Before we delve into the numbers, let me inform you that while we report our performance in accordance with Indian Accounting Standard, we believe that the pre-Ind AS offers a clearer and more accurate reflection of our underlying expense and thereby profitability. Since Ind AS requires a creation of ROU asset when using an underlying asset, the treatment of lease rental and other related expenses are recorded below EBITDA in the P&L as against recording it as other expenses above EBITDA under pre-Ind AS. This difference in treatment of lease rental expenses leads to a significant gap between the reported Ind AS and pre-Ind AS figures, specifically from a PBT, cash flow and tax perspective.
For example, our reported Ind AS EBITDA in FY ’25 stood at INR29.6 crores while pre-Ind AS PBT stood at INR52.4 crore. Therefore we suggest looking at pre-Ind AS numbers for better understanding of business performance. I am happy to report that on pre-Ind AS basis EBITDA for FY ’25 stood at INR94.4 crores and including other income it stands at INR97 crores, marking a strong 31% year-on-year growth and meeting our guidance of 7% to 8%. Similarly, PBT grew at a robust 33% year-on-year to INR52.4 crore in FY ’25.
The profit after tax grew 7% year-on-year to INR31.7 crore after exceptional losses. Adjusted PAT stands at INR39.75 crore, which grew by 35% over FY ’24. Please note that this growth is despite us being in an accelerated growth phase requiring front loaded expenses at store as well as corporate level. Considering the future growth aspect, we have increased our office space, doubled our warehouse capacity and increased the manpower at back end operation, procurement, technology level and supply chain. Our results reinforce our position as a growth-oriented company committed to driving sustainable and healthy EBITDA expansion.
Now coming to Q4 FY ’25, revenue grew 55% year-on-year to INR345 crore. The SSG saw a growth of 20% in Q4 FY ’25, mainly due to preponement of Eid in Q4 FY ’25 by almost 11 days as mentioned on the last call too. Last year Eid was in the month of April on the 10th April and therefore its benefits was accrued in Q1. However this year the positive impact of Eid festival sales have been captured early on in Q4 FY ’25 itself. As a significant portion of our L2L stores are located in such states of Bengal, Assam and Tripura where sales are influenced by each season, the SSG in this season was positively impacted in Q4 FY ’25. Consequently, the upcoming Q1 FY ’26 will be on a high base year-on-year as well as quarter-on-quarter and should be assessed accordingly.
While local festivals and events may cause seasonal variance in quarterly performance, they tend to normalize over the full fiscal year, where our financial performance consistently reflects the strength of our business model. We therefore urge you to analyze the company’s performance on a trailing 12-month or a full year basis. The gross profit in Q4 FY ’25 grew 59% year-on-year to INR114 crore and EBITDA on pre-Ind AS basis grew 139% year-on-year to INR12 crore. The pre-Ind AS PAT improved year-on-year from loss of INR3.606 crore to a profit of INR3 lakhs.
In terms of key operational metrics, sales per square feet stood at INR679 per month in Q4 FY ’25 versus 19% up year-on-year, INR721 in FY ’25, up 12% year-on-year. Total number of bills stood at 3.7 million in Q4 FY ’25 and 14.4 million in FY ’25, the highest level ever recorded. The average transaction value stood at INR995 in Q4 FY ’25 and INR997 in FY ’25. Private level contribution was at 47% in Q4 FY ’25 versus 42% in Q4 FY ’24 and 45% in FY ’25 versus 38% in FY ’24. Our inventory per square feet reduced by 239 compared to last year from INR2,954 per square feet in the previous year to INR715 per square feet in FY ’25.
Lastly, as highlighted earlier, the shift towards organized retail chain is gaining momentum serving as a significant tailwind for our business. This evolving consumer preference marked by growing brand consciousness and a demand for value driven pricing continues to align perfectly with our core proposition. With the scale that we have achieved at INR1,344 crore of revenue size backed by healthy share of private labels and our successful cluster based approach, we believe that we are well placed and ready for the next leg of growth. We remain focused on accelerating our store expansion by deepening our presence in core markets and stabilizing new clusters in key focus regions. With a clear strategy in place, we are confident in our ability to create long term value and are excited about the strong result we aim to deliver in the upcoming quarters.
With that I would like to conclude my opening remarks and request the moderator to open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Bhavik Narang with Bastion Research. Please go ahead.
Bhavik Narang
Hi. Am I audible?
Suyash Samant
Yeah. You are audible.
Bhavik Narang
Thanks for taking my question. I just had a few quick ones. Firstly on the private label front, I believe there were initial efforts entered into the e-commerce or quick commerce channel, so how’s that initiative going?
Shreyans Surana
In terms of private label, as I have mentioned in the last call also, regarding the e-commerce our focus is mainly on the offline business. But yes, on the e-commerce side we are delving into two strategies, one is on the omni-channel account, which is from the store the deliveries to the residence or the office of the consumer, which is going very well. This year we have registered almost INR2.5 crores of revenue around that. And the second was to launch private labels on quick commerce platforms like Blinkit, which we started two months back and it is also going well. We are not displaying all the products that we have in our range of Style Baazar, but whatever we think is suitable for the quick commerce platform, we are just building that assortment on the quick commerce platforms.
Bhavik Narang
Okay. So going forward, is it expected to become a substantial part of our revenue?
Shreyans Surana
No, I do not think. I think e-commerce or quick commerce will always be a channel for us. And in the next three years I see around 2% to 3% of the total revenue coming from all the platforms, including omni-channel, quick commerce and e-commerce.
Bhavik Narang
Okay. And secondly, could you provide an update on the fire insurance payment that we were expected to receive in this quarter? Or maybe any recent developments on the GST order that we have received previously?
Shreyans Surana
So on the insurance side, we acknowledge that the amount is substantial and recognize the significance to the business. But please be assured that we are actively and consistently following up with the insurance company to expedite the processing of our claim. However, at this stage, it is challenging to provide a definitive timeline for the litigation. We remain optimistic about our outcome. We have submitted all the requisite documentation in support of our claim. And we believe it is compliant with the terms of the policy. We will continue to keep you informed of any material development as they arise. We are just awaiting their revert on the entire thing.
And regarding GST, in February we have received the GST order from the Additional Commissioner, Kolkata North. The order was in reference to a showcase notice covering the period from March 19 to May 19, with the total demand of INR10.66 crores comprising INR97.23 in tax and INR9.69 crores in penalties. We have filed the writ petition against the order in the Honorable Court of Kolkata. Okay. And lastly a bookkeeping clarification, could you just share the SSSG and ATV for Q4 FY ’24?
Nitin Singhania
SSG was 20.4% for Q4. And for the entire year it was 12.69%, 13%. And ASP is 304 for this financial year.
Bhavik Narang
No, I meant Q4 last year.
Nitin Singhania
Last year.
Suyash Samant
Last year Q4 ASP was 309. This year Q4 FY ’25 ASP is 312.
Bhavik Narang
And SSG.
Suyash Samant
SSG for last year…
Nitin Singhania
SSG for last year was 26.6% for the quarter and 9.5% for the financial year.
Bhavik Narang
Okay, got it. Thank you.
Operator
Thank you. Next question comes from the line of Palash Kawale with Nuvama Wealth. Please go ahead.
Palash Kawale
Thank you for the opportunity. Hope I’m audible?
Shreyans Surana
Yeah, you are audible.
Palash Kawale
Sir my first question is what was your inventory per square feet for the full year?
Nitin Singhania
Inventory per square feet is INR2,715 for the whole year.
Palash Kawale
INR2,715. And how do you see from…
Shreyans Surana
So, from last — INR2,715 which last year was INR2,954. And going forward also we are seeing because we are in a Eastern India focused business where there is a lot of fluctuation every quarter in terms of sales. So always there will be an inventory fluctuation going with every quarter. But every year if you see for almost for last two years we are reducing our inventory by almost INR200. In December quarter also we reduce it by INR200. In March also we have reduced it by INR200. And with all the technological advancements that are taking place in that organization we are expecting this momentum to continue for this year also.
Palash Kawale
So how SAP implementation is going on? When can we expect it to be operational?
Shreyans Surana
So I will just tell you about the entire technological advancement including the SAP. So we have planned to invest around INR20 crores to INR25 crores in technological advancement this year. And the key advancement will be integration of SAP HANA retail which we have already started. It may take around nine to 12 months. So maybe the SAP will go live maybe in the calendar year 2026, maybe in the last quarter or maybe in the next — first quarter of the next financial year. Advancement. The integration of SAP HANA retail is majorly for enhancing the efficiency, reducing the manual process and the real-time data driven decision. We are also deploying in-force system for warehouse management to bring more transparency and accuracy across the supply chain. I think these are the two factors and apart of that we are also working on ARS, an inventory management tool which will further reduce our inventory per square feet in the stores.
Palash Kawale
Okay. And then for account-keeping purposes, what can be a post-Ind AS profit margin for you next year on a growth of 20% to 25% sale? Because there is a huge difference between pre and post-Ind AS, I just wanted to clarify what can be the PAT margin on Ind AS basis.
Shreyans Surana
So, as you rightly said that there’s a huge gap between the pre-Ind AS and Ind AS, and I think for us it’s almost around 45% on the PBT levels. And going forward, we expect on the PAT side pre-Ind AS 3% to 4% as guidance for the PAT for the next coming year and 2% to 3% will be the guidance for the Ind AS numbers at the PAT side.
Palash Kawale
So yes, 2% to 3% for FY ’26 and ’27 would be good assumption to make on Ind AS basis, right?
Shreyans Surana
Yes, yes. And 3% to 4% will be on the pre-Ind AS basis.
Palash Kawale
Yeah. Okay. Okay. And sir, we have already, you have already added nine stores, so and you’re guiding for 40 to 50 stores. So is that safe? Is it safe to assume that you are keeping the guidance conservative and you might be going beyond the guidance?
Shreyans Surana
So whenever we start a financial year, we take a target that we can achieve and then we focus to beat that target. That is always the stride that company strives for. But as of now the guidance would be 40 to 50 stores only and and the revenue guidance would be around 20% to 25% only.
Palash Kawale
Okay. Sir, how is the competition going on in the new area that you are entering? Are you able to gain the market share, take the market share away from the incumbents in that area?
Shreyans Surana
So I will not say whether we are able to take that but to the SSG growth for the focus states looks very good and promising. Whether if the average SSG for the entire company is 12.7% whereas the SSG for only focus states would be higher than that.
Palash Kawale
Oh, got it.
Shreyans Surana
So I think we are, we are, we are gaining the traction the focus states.
Palash Kawale
Okay. Okay, that’s really helpful. Yeah, that’s it from my side for now. All the best and thank you for the answers. Thanks very much.
Shreyans Surana
Thank you.
Operator
Thank you. Next question comes from the line of Tanuj with JM Financial. Please go ahead.
Tanuj Pandia
Good afternoon, sir. Am I audible.
Shreyans Surana
Yeah, you’re audible.
Tanuj Pandia
Congrats on the great set of results, sir. Sir, just wanted to know how is the current demand for the month of April and May for us?
Shreyans Surana
See, in terms of current demand, as I said that because of the Eid shift from 10th April to 31st March, there has been a shift of sales from April to March. But on ground, the May looks good to me as of now. And overall, this year looks good to me in terms of the demand that we see on ground.
Tanuj Pandia
Okay sir. There were some protest in one of our stores which led to the closure of that store also. So what was that impact in the Q4 business? And how long was that impact? Like was the store closure for one or two days or that was a long closure and how is the situation now?
Shreyans Surana
So that incident took place in Dhuliyan, Murshidabad and that was in Q1, it was on around 12th or 11th April. So one of the stores in Dhuliyan, Murshidabad district it suffered a significant damage because of a mob lynching incident and resulted in an estimated INR25 lakhs loss in inventory and INR15 lakhs in assets. A joint survey was promptly connected by our insurance company and the team and I think we have completed all the necessary formalities including regulatory compliance and license renewal for operations. The store is expected to reopen in the first week of June.
Tanuj Pandia
Sure, sir. We have repaid around INR20 crores of debt in FY ’25, am I right? So, how much do we expect to repay in FY ’26 and ’27?
Nitin Singhania
So the total debt in our books is INR166 crores, out of which bank borrowings is INR122 crores. So coming years debt will be INR80 crores and INR40 crores will be bill acceptance. So INR120 crores against the INR166 crores will be the total borrowings in our books coming year.
Shreyans Surana
That is our target.
Tanuj Pandia
Okay. Thank you, sir. That’s all from my side. Thank you.
Operator
Thank you. Next question comes from the line of Arvind Arora with A Square Capital. Please go ahead.
Arvind Arora
Hello. Hello. Hello. Could you please repeat your growth guidance? You mentioned 25%, correct? Can you please give us break-up of how much you are achieving through SSG and how much we can achieve through new store expansion?
Shreyans Surana
20% to 25% would be the overall guidance, and 7% to 8% will be the SSG.
Arvind Arora
7% to 8% and remaining would be due to new store, correct?
Shreyans Surana
Yeah.
Arvind Arora
So Shreyans, last time when we discussed, you mentioned like the SSG store is like 4.5% to 5%, then the store would be able to absorb the inflationary braces, correct?
Shreyans Surana
Correct.
Arvind Arora
So, if we go like for the Q4, and if we see SSG growth in the Q4 is like 20% and then I see private level sale is also at 47%, correct, but still we are in PAT negative in quarter four, could you please share the reason why is it so?
Shreyans Surana
See, historically Q4 is always a dull month for our company. But because in March it was Eid and the Holi put together, so March month was very good. But January and February, because of late arrival of winter led to a huge discount in winters in the month of January, because we do not want to carry winter stocks for the entire year. So we generally tend to give a huge discount, so the discounts which were supposed to start from maybe 10th or 12th of January, we had to start from the 1st January itself, because of the late arrival of winter. As a result, January was, I can say, EBITDA killer. While saying that, if you compare our data from last year to this year, from a loss of almost INR3.06 crores, we have been able to come to profit of INR3 lakhs. And I think in coming years, if the arrival of winter is good and if we do not have to give too much discount in January, we can have a better quarter in Q4 in terms of profitability.
Arvind Arora
Okay. Could you please quantify the numbers like due to the discount loss that we have offered?
Shreyans Surana
See, I cannot quantify the number right now, but I can just tell you in terms of January because the discounts is almost 50% on the winter articles so the discounts and the EBITDA — as a month it’s a loss-making month for us and because of that the entire quarter numbers tend to change.
Arvind Arora
Okay. And moving further, so if you talk about FY ’26 guidance, like you are giving the guidance of 20% to 25%, correct? Last time when we discussed for the Q3 you gave the guidance like from 25% to 30%. And then when we closed the revenue, it’s 38%, correct? So is it like we are like highly conservative or our targets, like internal target is very low. I would rather not say conservative, it’s like very low. And then so just trying to understand how we like failed the target…
Shreyans Surana
See, internally we often tend to take a target which may be higher, but as a company we decide that, yes, we have to stick to the numbers that we will be 100% able to achieve. Post that there’s always, as I said, everyone works towards higher numbers so that we can relate that higher number. But as practice, from not only post-IPO but as practice we tend to take numbers on account while discussing with the entire team. And we take those numbers which are easily achievable. So, the pressure to achieve higher will be there, but again if we are able to achieve the numbers on which we make our business plan, we will be able to have a higher profitability.
Arvind Arora
Okay, understood. Okay.
Operator
Thank you. Next question comes from the line of Tanmay with Bank of India Mutual Funds. Please go ahead.
Tanmay Gupta
Yeah. Thank you for the opportunity. Sir, what could be…
Shreyans Surana
Sorry, I lost your voice. Can you come again with your question?
Tanmay Gupta
Sir now can you hear me?
Shreyans Surana
Yeah, now it’s audible.
Tanmay Gupta
Sir, my question is that what should be the optimum cost of retailing per square feet we expect in next year including rent?
Shreyans Surana
See, there is no optimal cost of retailing because it tends to change from city-to-city, so metro would be having higher cost per square feet. But in our scenario if I say, so our average for the entire financial year of FY ’25 is around INR176 per square feet.
Tanmay Gupta
So we should expect around 7%, 8% increase on that?
Shreyans Surana
In terms of, considering the inflation cost, yeah, you can consider that.
Tanmay Gupta
Okay.
Shreyans Surana
7%.
Tanmay Gupta
7%. Understood. Okay, sir. So if 8% SSSG and 7% increase in increasing cost of it, we should expect around 50 bps or 100 bps increase in EBITDA margin pre-Ind AS basis for FY ’26?
Shreyans Surana
Yeah. Mathematically, yes. Correct. You’re correct. That’s why our guidance is also 7% to 8% only for this year for EBITDA. This year we have achieved around 7.2% including other income. And our guidance is also 7% to 8%.
Tanmay Gupta
Understood, sir. Sir, if I look at the cash flow statement, there is a increase in financial assets of around INR75 crores. Is that due to the security deposits?
Nitin Singhania
Yes, there is. There is two account for that. One is the insurance receivable for which the amount is yet to be received by the insurance company. So INR47 crore amounts to that and remaining INR18 crores to INR20 crores is against security total deposits which we have given during the year.
Tanmay Gupta
So sir, INR47 crores will be received from insurance company and another what you said?
Nitin Singhania
Security deposits given to landlords for opening these stores during the year was INR20 crores, approximately.
Tanmay Gupta
Understood. Okay. If I look at the cash flow statement sir, if I adjust the rentals also would it be suffice for the next year we would be opening 50 — 40 to 50 stores internal accrual or do we need external borrowings or fundraise?
Shreyans Surana
So we don’t need to have any borrowings further on the account of opening new stores. I think the internal accrual will be sufficient for that once we receive the insurance fund.
Tanmay Gupta
Okay, so that could be — so INR47 crores would be suffice for the new store additions. And INR2.5 crore per store is basically your store addition cost if I’m not wrong?
Shreyans Surana
INR2.25 crores to INR2.5 crores.
Nitin Singhania
And that’s including inventory.
Shreyans Surana
Inventory and asset put together.
Tanmay Gupta
Understood. Okay, sir. Thanks a lot.
Shreyans Surana
You’re welcome.
Operator
Thank you. Next question comes from the line of Devesh Advani with the Reliance General Insurance.
Devesh Advani
Hello, Am I audible?
Shreyans Surana
Yeah, you’re audible.
Devesh Advani
Sir, on EBITDA margin front the margins have declined by 50 basis points in this — for the whole year. Right? And also if you will see post-Ind AS figures from profit before tax it has just increased by 1% since the top line has increased by 38%. So how should we look at the figures? Should we look at post-Ind AS. Pre-Ind AS the PBT is coming at 33% growth. So how do you look at the figures? And also going forward how do you see profit growing in FY ’26?
Shreyans Surana
So in terms of more accurate view, I think pre-Ind AS gives you a clear picture. As you rightly said that our EBITDA has reduced by 0.4% from last year. But majorly on the account of corporate overheads that we have built. If you see our margins, EBITDA margins at the store has increased from last year from 12.7% to 13%. But the corporate overhead has increased by 0.7%. As I’ve already mentioned on the call, on the count of warehouse capacity, doubling our warehouse capacity, doubling our office capacity and hiring a lot of professionals for the future growth. So that is the decision and I think in the next coming two, three years we will start getting the operating leverage of all the expenditure that we have built this year. Coming to the current financial year if I say, so we are — as I said, our guidance is the around growth — to grow around 20% to 25% revenue with a pre-Ind AS EBITDA of 7% to 8% and with a PAT margin of 3% to 4% on pre-Ind AS.
Devesh Advani
Okay. Okay. If you could also define post-Ind AS figures?
Shreyans Surana
So post-Ind AS, again, the revenue remains same, 20% to 25%, whereas EBITDA would be 14% to 15% and the PAT will be 2% to 3%.
Devesh Advani
Okay. Thank you. Thank you so much.
Shreyans Surana
Thank you.
Operator
Thank you. Next question comes from the line of Naitik with NV Alpha Fund. Please go ahead.
Naitik Mutha
Hi sir, thanks for taking my question. Sir, I just wanted to understand the cash flow a little better and when we IPOed we were around INR150 crores, INR160 crores of debt, we raised around INR180 crores during the IPO, and now we are again back at INR180 crores of debt on a full year basis, despite fundraising. Now we have only spent, I understand we have expanded, and we have spent INR100 crores on the capex and still we are sitting at the same levels of debt that we were at before IPO. So sir, how are we thinking about this and what is the reason for this, sir?
Shreyans Surana
So in terms of debt if I say, so first, it’s INR167 crores of debt lying in the book, out of which INR44 crores accounts for the bills discounting. So the actual debt is around INR122 crores only. Out of INR122 crores, INR18 crores is the bank balance, cash in bank that we have in our books, so net debt becomes around INR104 crores. Out of INR104 crores, INR47 crores is lying with the insurance company, because we are awaiting the payment from insurance coming that way. And the balance payment has been used, I can say, the debt has been used for opening stores because initially our expectation was to open only around 35 stores to 40 stores, but we have opened 53 stores in terms of net addition. And in terms of opening stores, we have opened 58 stores. So I think on that account this debt is there, because we have expedited our growth.
Naitik Mutha
Right, sir. Got it. Sir, one more clarification regarding the fire incident that was, if I remember correct, March or in last year, right, FY ’24 March around.
Shreyans Surana
20th May.
Naitik Mutha
May. Sorry, May 20. And we did not take any provisions for that in the September balance sheet. But come to March again now we have taken. So any particular reason for not taking any provision back then?
Shreyans Surana
So we have not taken anything in the March rather in September, when we publish our result, then Q1 itself we have taken a hit of around INR10 crores in the exceptional loss account. That is why after that exceptional loss hit INR47 point crores something is pending from the insurance company. The hit was in Q1 itself. And in the current quarter we haven’t taken any hit.
Naitik Mutha
No, sir, I meant in terms of balance sheet, you mentioned the INR47 crores is lying with the insurance company because the debt in September was not as high, right, rate is higher by INR50 crores because the INR50 crores we have taken is balance from the insurance company which we have taken in March, not in September. So I was just trying to understand any reason we did not take it in September.
Nitin Singhania
Because 6th of September IPO was there and out of the funds which we have received from IPO and the sale proceed from Durga Puja, we have not taken any further loan or increased our loan.
Shreyans Surana
That time. Actually, that time is the peak season, so the cash flow from the sales was very high during that period. And till that time opening number of stores that were opened was around also around 20 only for this year. So I think on both accounts, as a result, the debt was not there. But post September was the season got over and we started opening stores and started paying off the entire that INR47 crores of inventory that was lying in the store, that creditor needs to be paid so we started paying that off. So gradually we required the debt for the same, we had to use our working capital levels.
Naitik Mutha
Got it, sir. Got it. Sir, just one more question. Have you seen our rental cost escalating during this quarter? Because I compare our rents have been slightly higher, the difference between pre and post-Ind AS?
Shreyans Surana
In terms of rental cost for the entire financial year last year also FY ’24 it was around 9% — 7.3%, sorry and this year also it is around 7.3%, including corporate overheads and along the store. In terms of per square feet cost, rental cost has increased from INR44 to INR49, but largely on account of opening more stores in the metro cities.
Naitik Mutha
Got it, sir. That’s it for now, sir. Thank you.
Shreyans Surana
Thank you.
Operator
Thank you. Next question comes from the line of Siddharth Jain with YES SECURITIES. Please go ahead.
Siddharth Jain
Hi, sir. Good evening. So coming back to something on the cash flows only. Sir, one thing. Am I audible?
Shreyans Surana
Yeah, you’re audible. Loud and clear.
Siddharth Jain
Yeah. So right now we have a cash balance of INR18 crores. And if I understood it’s correct, you said that INR47 crores is lying with the insurance company. So is it, I mean is this a deposit that we have given or is it a receivable that we are expecting because of the insurance claim?
Shreyans Surana
It’s just a receivable that we expected. Correct.
Siddharth Jain
So the INR47 crore if and when we receive so that we will be using for the store expansion that we planned. Correct?
Shreyans Surana
Correct.
Siddharth Jain
So right now the breakup that you gave of the debt that you currently have, so out of the INR104 crore that you just explained, so if we use this entire INR47 crores for the store expansion so there’s INR104 crores of debt that we have stands as it is. Am I understanding that correct, sir?
Shreyans Surana
Yeah, your understanding is correct.
Siddharth Jain
So I mean. So then how — is any, I mean do we have any plans to reduce this? So like you also mentioned that we plan to reduce the debt further from INR166 crores to — the INR122 crores of bank borrowing will go down to INR80 crores. That’s around INR42 crores. So how do we plan to do that sir? Because 40 stores of — 40, even if you take a 40 store expansion and INR2 crores and INR2.5 crores of cost per store that will equate to around INR80 crores of total fund requirement. If out of that INR47 crores comes from that insurance claim, balance INR40 crores I assume will be from the internal accrual. Upon that then there’ll be a INR40 crore of debt repayment. So do we anticipate an internal accrual of around INR80 crores to INR100 crores next year?
Nitin Singhania
Yes.
Shreyans Surana
Technically you are right.
Nitin Singhania
So one more point to be added. As Shreyansji already said during the opening remarks that inventory per square feet is getting reduced year-on-year. So that reduction in inventory will also increase our cash inflow.
Shreyans Surana
So on all the three fronts the efficiency is driving the cash inflow part, whether on the capex part, as I also already also mentioned this also there will be a capex of INR15 crores to INR20 crores on the technology side also. So if you need to consider that with the reduction in inventory and with — the include internal accruals that we plan we will be easily able to achieve the numbers that you just said.
Siddharth Jain
So INR15 crores to INR20 crores of technological investment will happen in FY ’26. So I mean I’m hopeful that we, and I wish that we can achieve this INR100 crores of internal accruals because that will be a great significant milestone for us. And there’s one more thing on the revenue guidance that you mentioned. So 20%, 25%, I mean, like other participants also mentioned, because when we do the math of 7% to 8% SSG. And so last year also we almost added 30%. Like the store count increased by 30%. This year also we are targeting a store count increase of around 20%, 25%. So are we being conservative in giving the revenue guidance or are we expecting a slow ramp up on those stores? Because 30% store addition in FY ’25 — 20%, 25% store addition in FY ’26. And the revenue guidance for FY ’26 being 20%, 25% which includes the SSG of 7% to 8%. So the balance which we are getting from the new store additions. So out of 250, 260 or 270 stores that we’ll end this year with 100 stores have approximately been added in the last one — in the last two years. So is there — the ramp up is that — the ramp up will be slow or how is it? Because the — I mean it’s not adding up well.
Shreyans Surana
Actually the ramp up is not slow. You have mentioned correctly. So from 162 stores we have gone to 214 stores, which is a growth of almost more than 30%. But from 214, if we add 40 stores, it’s a growth of around 20%. So while growing at the rate of 30% in store count, we have delivered a growth of more than 38%. And this year we are taking guidance to around 20% growth in overall store count, which is, if I take 40 as our base for this year’s growth. So we are targeting 25%. See as I said in my previous questions also that I told. It’s not the conservative number that we have taken. And it’s not like that the market is slow. It is just that as an internal policy we have this policy where we create a number on basis of that the entire back end working is happens. So in that we have taken this 25% but we strive for growing it further.
So historically, guidance whenever you have guidance. So we have always beat our guidance that way historically, whether it’s internally, before IPO also whenever we had taken a growth, we have achieved higher than that. Rather in last three years CAGR also if you see, we have grown more than 35% year-on-year, it’s just that it’s a new phase we are entering into the focused states also. So just to be on the correct phase in terms of numbers that we project, we are taking the number on the account of, you can say, little bit on the conservative side that way, because we believe that it’s better to give the number that you say than to not to give that numbers whatever you commit. I think that has been one of the reasons that we are always at this end.
Siddharth Jain
Understood. So, sir, when do you all start classifying a store into like you start taking the store into consideration for SSSG, is it 18 months or how?
Nitin Singhania
It is 18 months.
Shreyans Surana
It is 18 months. So any store which is over 18 months comes under the SSSG tag, same-store sales growth.
Siddharth Jain
Got it. So sir, the stores which have been added in the last six months will not be a part of the 7% to 8% of SSSG for FY ’26?
Shreyans Surana
No.
Siddharth Jain
And also, the cost that we have incurred in FY ’25, like the doubling of the warehouse size and the HO cost, could you just give us the figure that what was the cost that was incurred for this?
Shreyans Surana
So corporate expense last year was around INR48.7 crores which has increased to INR77 crores. That is increase of around INR29 crores put together. Out of which 50% of expenditure majorly is on the account of employee cost and on the rental cost.
Siddharth Jain
Okay. So that’s the recurring expense that we are anticipating out of INR77 crores, 50% is a recurring expense balance can be a fixed expense.
Shreyans Surana
Yeah. And out of that also we see our HO cost last year was in terms of percentage was 5% which has increased to 5.74%. Typically in any retail chain it revolves around 5% only. So as I was saying higher we grow in next two years. So we will be getting a good operating leverage from the cost side also apart from the revenue and SSG and the gross margin side.
Siddharth Jain
Sir, one thing that I noticed, our store sizes have been reducing. Any strategic decision behind that?
Shreyans Surana
So I think it’s a mix of both. I will say because we are opening stores in cities also. And in cities you don’t tend to get a very big carpet that way. Sometimes you get, sometimes you don’t get. So as a result of mix of stores in high streets we are getting also our size — lower size stores I will say typically. And second thing because when we are going to Tier 3, Tier 4 and if we are anticipating the revenue will be limited. So we ask the landlords to if possible to reduce the size and give it to us even if they want to charge to INR2, INR3 extra on the rental also. But we don’t take the fourth floor that way when we try to do that. If this year we have been lucky because we are in Tier 1 metros and all together we have been able to implement this strategy. Otherwise it’s a mixed bag. We have –sometimes we have to take a call also to take the entire building that way if the site is very good.
Siddharth Jain
Understood, sir. And sir, last one question, what is our internal target for our in-house brands going forward for FY ’26 and FY ’27?
Shreyans Surana
So 47% is the number that we are right now at and — 45% sorry for the full year and we expect in the coming two years this numbers to get at least to around 65% in the coming two financial year.
Siddharth Jain
And what is the margin difference that we enjoy in this?
Shreyans Surana
So is it typically it’s 1.5%. That is the extra margin that we get around private label. And the target, I will say, is not to increase the price on that margin, it’s more of a reverse engineering, which we tend to work with the vendors around for the private label. And as of now we are just as I said one of our private label Square Up has already become INR200 crore revenue brand and two labels, Miss 19 and Awaya are close to INR200 crore mark. Our target right now is just to that all the consumer comes and buy our private label. They feel the quality of the product and then next time when they come under the umbrella of Style Baazar they ask for those private labels. So right now we are working for only with 1.5% margin in the private label category.
Siddharth Jain
What is the cost of debt that we are paying?
Shreyans Surana
It’s around 8% — 8.5% WCD and 9% to 9.25% on the normal working capital limit.
Siddharth Jain
And bill discounting?
Shreyans Surana
It’s on the similar range depending on the quarter which — it’s between — anything between 8.5% to 9.5%.
Siddharth Jain
Thank you so much. That was really helpful, sir. Thank you.
Shreyans Surana
Thank you.
Operator
Thank you. Next question comes on the line of Divyanshu Mahawar with Dalal & Broacha Stockbroking Private Limited. Please go ahead.
Divyanshu Mahawar
Yeah, thanks for the opportunity, sir. Is it possible to give the number for the SSG for the core state as well as the focus state?
Shreyans Surana
So for the core states for a full year, core state stands at 11.82% in terms of SSG and focus is around 20% because the number of stores are lower in the focus states in the SSG category. But yeah, it’s just is growing higher than the core on an both the average is 12.69%.
Divyanshu Mahawar
Is it right to assume that more this year of the next two to three years are more expansion would be coming in more focus state or it would be in similar range?
Shreyans Surana
I think the range will be for example this kind, it will be between 70 to 30. So 70% stores are over opening in the core states itself and 30% would be in the focus states.
Divyanshu Mahawar
Okay, sir. And one last question. If you look at on the demand side do we see any benefit coming out what the government has given in terms of income tax? Do we see any repercussion or benefit in terms of demand in the Tier 2, Tier 3, Tier 4, basically Tier 3 and Tier 4?
Shreyans Surana
See, in that side, because right now I think this is just the start of the month and this is the financial year in which the effect of this we will be able to see. What I feel is that all the stores in Tier 1, specifically in metros and Tier 1 will see the benefit of this. Because as the disposable income increases in the hands of the middle-class consumers, they tend to spend more, majorly on the account of fashion and on the account of food also. Yes, Tier 3, Tier 4 typically was always in the bracket which was around INR5 lakhs to INR6 lakhs only. So, I do not think a lot of pent up demand going over there. But yes, in Metro and Tier 1 I see the demand coming in.
Divyanshu Mahawar
Thank you so much and best of luck.
Shreyans Surana
Thank you. Thank you.
Operator
Thank you. [Operator Instructions] Next question comes from the line of Chirag with Keynote Capital. Please go ahead.
Chirag Maroo
Thank you for the opportunity. First of all, congrats for the great thread of numbers Shreyans ji and team. Yes, I was asking that what will be the marketing spend for coming years as a percentage of revenue?
Operator
This is the operator. Speakers, please go ahead with the question. Ladies and gentlemen, the management line has been disconnected. Please be on hold while we quickly get them reconnected. The management line has been reconnected. Please go ahead.
Chirag Maroo
So my question is regarding what will be the marketing going forward as a percentage of revenue?
Shreyans Surana
It will be ranging between 1.5% to 1.7% only. As I said that because when the customers approach, it allows us to have higher marketing spending in absolute value. But because we are opening in the core states and in a particular state we are opening more stores, so it also allows us to have liberty that way, so that typically tends between 1.5% to 1.7%, which has been for more than five years now, that has been the range for the marketing.
Chirag Maroo
That is it from my side. Thank you so much.
Shreyans Surana
Thank you.
Operator
Thank you. Next question comes from the line of Palash Kavale with Nuvama Wealth. Please go ahead.
Palash Kawale
Thank you, sir, for the opportunity again. Sir, with all the guidance that you gave, is it fair to assume that within two to three years we will be at INR10,000 revenue per square feet and pre-Ind AS EBITDA margin between 8% to 10%?
Shreyans Surana
If you take the growth that we are taking right now, I think, yes, you can say that in the next few years the capacity that we have that we have, we will be reaching a mark of INR10,000 per square feet. And on that, the EBITDA range that you have said, yes, it’s quite possible to reach that number.
Palash Kawale
Okay. And sir, any plan to enter the neighboring states like MP or Chhattisgarh, since they are adjoining to your core states, so any plan to go there? And have you experimented with those states and any guidance or any color on that?
Shreyans Surana
Actually, as a company strategy we have always opened stores either in the adjoining area of the states if the taste is similar to a particular state. Right now the focus is majorly on UP and Jharkhand as a territory, I will say up, UP, Jharkhand and Bihar. And still there is a lot of stores that can be opened in these areas. As I said, we are not venturing into MP or Chhattisgarh, you can say. Once we have opened a store in Rayagada which is just adjoining the Odisha border, but not because it was in Chhattisgarh, but it was the Odisha border. And that showroom didn’t go well in terms of revenue, so we have also closed that store. So, there’s nothing to do with the territory, it’s just that as a strategy we want to go deep in the states, we want to open more stores in the state so that we can achieve economies of scale and profitability in three to four years only.
Palash Kawale
Okay, sir. Thank you. Thank you. That’s it from my side. Thank you for the answers.
Shreyans Surana
Thank you.
Operator
Thank you. Next question comes from the line of Khushal Goenka with Mangal Keshav Financial Institution. Please go ahead.
Kushal Goenka
Hello. Thank you so much, sir for the question. My question was on a broader sense. Since the company got listed there has been some news on fire, then the GST notice. Also on the revenue guidance last quarter you had guided for 25% to 30% growth and a like-to-like growth of 8% to 10%. And then after like two months you’re guiding for 20%, 25% growth and 7% to 8% same-store sales growth. Also money regarding the insurance, the CFO I guess he had clearly mentioned that you received the money in Q4 and now you’re saying you’re not sure. I completely understand sir that many things are not in your control. But sir, like so many news and deviation from the guidance also. So just wanted to get a broader sense. What exactly are we doing so that this does not happen and we stick to one kind of guidance.
Shreyans Surana
So there are two things to it. First thing in terms of operational guidance that we have given and I think we are happy that we are beating that guidance maybe we are giving — last quarter I have revised the guidance from 25% to 30% and we landed at 38%. So it’s good for the company that we are getting higher amount of revenue or the margins that we are targeting. Now coming to the question on the fire side, I think on the 6th of September when we listed post that the first quarter one result that was there, the entire this INR10 crore of loss was taken as a hit and the fire thing was explained.
What happens in the fire situation is that see whatever response that we get from the insurance company we tend to present that to the market. We are expecting this thing but as I said right now, right now I don’t want to give any date for the same. We have submitted all the documents, we are awaiting their revert and maybe it makes in a month’s time, maybe it takes three months. But yeah as a as all the papers are in line with the thing and we expect this to get close whatever we have understand from the consultants and all things, generally the big insurance claim certainly takes anything between 12 to 18 months. We got this fire around last May, 20th May. It has been a one year time and I think in next six months we tend — I hope that everything gets settled because there is no issues in the documents and everything that has been submitted to the insurance company. We are just waiting for the surveyor’s report. Once that goes through, I think we will tend to…
Kushal Goenka
Yes. Sir, I completely…
Shreyans Surana
Coming to the GST question that you have asked. So see GST — this GST demand is of May 19 and around I think May 19 to June 19, which is in the I think normal course of business with the government. Either it’s an income tax notice or GST notice which is not again in our control and we are fighting for it. We have filed the writ petition the. Even the penalty that has been imposed has been imposed under the section which technically cannot be imposed us on that section. So we are very hopeful that we will, we will, we have, we have filed for the writ application. It will come in the favor of company only. So this is the thing.
And as for the guidance, right now also I am giving the guidance of around 20% to 25% revenue and I hope that I am able to deliver higher than that. That’s my expectation. But we don’t want to have a higher revenue guidance and then we don’t achieve that.
Kushal Goenka
Yes, sir, I completely understand that. My point was just like we had our Q3 phone con call in January so in that you had mentioned 25% to 30% and now you’re saying 20% to 25%. I’m just, I just meant to say that you know it should be like it should not keep on changing. The insurance money also, I completely understand, many things are not in your — like you can’t control many things and it’s the government and whatever things are happening. But I mean to say that answer which is unique to all the quarters I think so that should be preferable like it should not change. I just had that point.
And sir, my next thing was in last quarter you had mentioned that for FY ’25 also —
Nitin Singhania
Actually 3% to 4% on pre-Ind AS. Right. So if I the adjusted PAT right, so before exceptional loss. So total profit from INR31.78 crores it will increase to INR39.75 crores, which will be 3%. So we meet our guidance if we exclude exceptional losses.
Shreyans Surana
That was also mentioned in the last call. And yeah, in terms of growth revenue target I think that time generally around 20%, 25% is the number that we gave and I think we are, we hope that we will achieve higher than that, 25%. But yeah that is the guidance.
Kushal Goenka
Sure. Last thing. Just wanted to confirm one thing in the investor presentation that have been sent, I think so the profit and loss consolidated Ind AS number, it is written in crores, but it will be millions, I guess because like the balance sheet is of INR17,541 crores. But I guess that will be in millions but it’s written in crores. So wanted to confirm that.
Nitin Singhania
Yeah, it is an error, typo error. Thanks.
Shreyans Surana
Thanks for highlighting that.
Kushal Goenka
Thank you, sir. Welcome.
Operator
Thank you. Next question comes from the line of Rahil S. with Crown Capital. Please go ahead.
Rahil Shah
Hi, good evening. Can you hear me?
Shreyans Surana
Yeah.
Rahil Shah
In the opening remarks you mentioned that your key focus has been you know the Eastern Indian market which is under penetrated. So is it still the state over there? Like is it still under penetrating and your focus lies there?
Shreyans Surana
Yeah, I think because still yet to cover a large part of UP, Bihar and Jharkhand in focus states also. And still we have just reached around 30, 35 stores in Odisha. It’s a big state to cover. So I think from UP to North is, there are 12 states almost catering to a population of more than 40 crores. I think there’s a huge room to open stores and next years also over there.
Rahil Shah
Yeah. Okay. And did I hear correctly that you plan to reduce your debt this year? So can we expect interest cost to go down, right for FY ’26?
Nitin Singhania
100%.
Shreyans Surana
So the thing is that as I said majorly the fund utilization has been done on the account of the insurance. Because we have not received the insurance payment. So that INR48 crore amount is something that which we are paying the interest. But we have not received that amount. So sooner we receive that better will be the — I will say the lower will be the interest cost.
Rahil Shah
And I’m sorry my line went bad in the previous answer you gave about the PAT guidance which was 3% to 4% for FY ’25. So can you please explain how was it met. But on the results it’s not showing.
Nitin Singhania
So so in pre-Ind AS, right, so the total PAT is INR31.8 crores.
Shreyans Surana
After exception losses.
Nitin Singhania
After exception losses. Right. So INR10.76 crores we have taken as an exceptional loss. So if we add back the exceptional loss after tax, so the profit will be INR39.75 crores. Adjusted PAT will be INR39.75 crores and that on total income will be 3%.
Rahil Shah
Okay. So it’s just on difference of the exceptional loss which will be. Okay. And lastly in the last call you had said that your target Is to reach 5% PAT margins in the next couple of years. Can we expect the same in FY ’27?
Shreyans Surana
We will try to reach in FY ’27. That is what our expectation is. Anything between 4% to 5%. So target is around 5% only. But yeah, you take a range of 4% to 5%.
Rahil Shah
Okay. All right. Thank you and all the best to you.
Shreyans Surana
Thank you.
Operator
Thank you. Next question comes from the line of Anuj Kashyap with A3 Capital. Please go ahead.
Anuj Kashyap
Hello. Good evening, sir. I wanted to know what is the breakeven for a new store?
Shreyans Surana
So generally, whenever a store opens in a financial year on average all the stores tend to get break even in the first year itself at the store level EBITDA on an average. For example, all the stores that has been opened during the financial year of ’24-’25 in this year itself it will be higher than the breakeven point in that way. So it will never — generally on the opening first year, it’s around 5% of the EBITDA that we achieve on an average. When it gets into the next full year run it gives me a EBITDA of around 8% to 10%. And on the final run when it goes into the SSG stage it gives us a EBITDA of 13% to 15% at store level.
Anuj Kashyap
And sir, you said sir that you are investing like INR20 crores, INR25 crores on the technology and all this stuff. What I wanted to know is as a company what we are planning to do is like we’ll have an app of Baazar Style and that will link to a PIN code specific store so that the channel to deliver the product can become omnichannel. So that is our strategy or what?
Shreyans Surana
So there are three things to it. On the tech front, whatever we are doing, we are trying to build the backend very strong so that all the growth that we are looking for the next three years we are able to achieve. So the simple thing for example SAP Hana Retail. So SAP is a world class tool and everyone knows about. Once we are able to implement that, I think it will enhance the efficiency, reduce the manual processes and will help us in the real time data driven decision. Similarly on the Infor again it’s more on a back end thing will help us to have a better I would say — it will bring more transparency and accuracy across the supply chain. And I think both of them could together will help us to have a faster lead time to store inventory which will in turn again increase the sales and reduce the cost overall level. So that is the thing.
On the omnichannel side, on the e-com side, that is not the I will say as an investment part that we are any investing in anything on the omni side that way. What we have done is that there is an omnichannel partner to us so who has an integration with our main ERP and as a result, whatever individuals or customer comes into the store and if they want to have have an article which is because of maybe of size issue or maybe of the color issue but they like it so they can order it from the store itself. And if in the cluster that where the store operates if any nearby store has got that article they to logistics it gets transferred to their home or their office.
Anuj Kashyap
I got it right. So the customer size level you have brought the third party into it. And the efficiency side we are what we are doing is investing so that the cycle cycle becomes more efficient from store to warehouse.
Shreyans Surana
Correct.
Anuj Kashyap
Thank you, sir. Best of luck. Thank you.
Shreyans Surana
Thank you.
Operator
Thank you. [Operator Instructions] Next question comes from the line of Bhavik Narang from Bastion Research. Please go ahead.
Bhavik Narang
Hi, thanks for taking my question again. I just wanted to know, of the 214 stores that we now have, how many would be the mature ones and the rest?
Nitin Singhania
So 139 stores is matured.
Bhavik Narang
So, 139 matured. Okay, got it. Thank you.
Operator
Thank you. Next question comes to the line of Anirudh, an individual investor. Since there is no reply from Mr. Anirudh we move forward.
Ladies and gentlemen, as there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr. Shreyans Surana for closing comments.
Shreyans Surana
Thank you, everyone, for making it to our quarterly earnings call for Q4 & FY ’25. If there are any further queries, please feel free to reach out to Stellar IR Advisor. Thank you, everyone, have a nice day.
Operator
[Operator Closing Remarks]