Bata India Limited (NSE: BATAINDIA) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Akhil Parekh — Analyst
Gunjan Shah — Managing Director and Chief Executive Officer
Nitin Bagaria — Company Secretary
Analysts:
Sameer Gupta — Analyst
Gaurav Johani — Analyst
Devanshu Bansal — Analyst
Muskana — Analyst
Chetan Thakur — Analyst
Aniket Salunke — Analyst
Kunal Bhatia — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Bata Limited Q3 and FY26 earnings conference call hosted by BNK Securities. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation. Conclude should you need assistant during the conference call please signal an operator by pressing Star then hash on your touchdown phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Akhil Parekh from BNK Securities. Thank you. And over to you sir.
Akhil Parekh — Analyst
Yeah, thanks Danish. Good afternoon everyone. On behalf of BNK Securities I would like to welcome you all for three. QFY26 conference call of MARTA India. From the management side we have Mr. Gunjan Shah, MBA and CEO Amit Agarwal, Director Finance CFO and Mr. Nitin Bagaria, AUPCS. Without taking much time I would like to hand over the call to Gunjan for his opening remarks post which will open the floor for Q and A session. Over to you sir.
Nitin Bagaria — Company Secretary
Thanks and good afternoon everyone and welcome to the BATA Q3FY26 earnings conference call. We have Gunjan Shah MD and CEO and we also have Amit Agarwal, Director of Finance and CFO joining us. We have shared the presentation as a pre read to the stock exchanges yesterday. I hope you had time to go through the same. We have already also shared the disclaimer which is part of the presentation. I now request to request Gunjan to take you through the performance summary. Thank you. Thank you Nitin.
Gunjan Shah — Managing Director and Chief Executive Officer
Hi everyone. Thank you for joining this call. This quarter we will do this slightly differently this time in the sense that while the presentation has been uploaded and I’m happy to take any questions on it, many of them are consistent pieces that we have showcased over a period of time.
So I will not be taking through every chart. I will give you some opening remarks on the highlights that I see and then as I said I’m more than happy to answer questions on the presentation or otherwise. So thanks once more and we’ll. So we saw turnover led growth of about 3% this quarter, right? It’s been welcome. After some time we do see signs of momentum and green shoots as I mentioned in my release. Also this was on the back of persistent implementation of the zero based merchandising project. Now it has scaled up to 400 stores and obviously higher marketing spend.
The second consecutive quarter that we have elevated our marketing spends double digit growth on marketing spends itself and we are seeing the results of that. We hope to continue that going forward. All the key metrics in ZBM have shown growth as you would have seen in the presentation and the overall margins growth is Double digit at 10%. Underlying PBT growth supported by various actions that we have talked about including but not only the customer. First there are now tangible improvements that we can see in terms of turns, availability, turnaround time in terms of resupply to stores and obviously a longer running project which was rationalization of agent inventory.
It is now at as for our records at very high levels now in terms of freshness, while overall growth was seen reasonably democratic across price points, so good to see even the lower price points doing better. But we did see obviously Hushpuppi’s power and floats from a brand perspective obviously driving growth disproportionately better. We also saw a significant turnaround. It has been under work for almost a year but the corner store channel which was in a way rationalize and put on pause is now showing both growth as well as extremely strong margin performance. So we’ll see and hear a lot more of it coming in the coming years.
As I talked about in the last quarter, the entire funnel for product creation I had broached open that topic last time. I had promised you that I’ll come back with a lot more flavor. We have shared with you now, a lot more color and detail on it. Happy to answer questions but you will see a lot more actions in the next few quarters specifically focused on basically the product channel getting the product funnel getting reimagined which we feel is a very very strong pillar for our growth going forward. The franchise network continued to expand. Now we are at about very close to 2000.
Hopefully this quarter we should cross the 2000 mark Ind promise. Business continues to expand through the KRO network reaches now 2000 plus a significant addition of almost more than double in the last one year. And the last piece was on E Commerce. We saw strong growth coming back across the channels Marketplaces.com as well as Omni. We also have launched our BATA app And now almost 14% of our D2C business.com comes through the app which is very encouraging within the first six months. Lastly to top it up, turnover increased by 3% as I mentioned earlier and EBITDA went up by about 200 basis points by as I said well rounded performance across channels from a margin perspective. With that I will come to a close on my comments. Thank you.
Questions and Answers:
operator
Thank you ladies and gentlemen. We’ll begin with a question and answer session. Anyone who wishes to ask a question I press star and one on the touchdown telephone. If you wish to remove yourself from the question queue, you may press star and two participants are request to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question comes from the line of Sameer Gupta from IAFL Capital. Please go ahead.
Sameer Gupta
Hello sir. Good afternoon and thanks for taking my question, sir. Firstly, if I look at large part of our initiatives that are being articulated in the presentation, these are focused on simplification of processes, lower inventory, lesser kit style lines while it improves efficiency and it also reduces the choice for the consumer. And on the other hand there is any, hardly any retail store addition during the year on an overall basis. Now initiatives are commendable. I’m not trying to downplay them but how does this, how does this solve for growth or how do we reach that, you know, double digit growth aspiration that we have laid out in recent quarters?
Gunjan Shah
Yeah, okay, thanks Amir. You’re right, there are a lot of bunch of things which are enabling a lot of simplification. But let me point out a few of them which will try and give you some flavor of where the. So the biggest one is in my view was let’s say for example the entire piece on elevating the marketing investments. We have significantly taken them up and you will see that continuously going up that’s driven continuously towards growth. Right. And there are, you know, obviously sudden, you know, we are also making sure that that is focused towards a few product campaigns.
Last quarter, for example, our single largest one was on the Festive collection and that’s given us the one prior to that was focused on only two of them which was Victoria Ballerina as well as the Power Easy Slide. And that’s given us great impact and you will see that going forward. The second one that’s there is I firmly believe and we have seen that in terms of the growth rate revenue per square foot also is that the zero based merchandising is giving us incremental benefit continuously now at the scale that it is, it is impacting the overall SSG also.
So that’s the second big piece, the third one and which I feel is going to be the longest in taking impact but will have the largest impact. Also in line with our aspirations going forward is the product one which I commented in Commentary. The reason that this is rationalization that you see in kits etc. Is also to get authority on the product going. So we want to make sure that the products at the end of this full funnel that I’ve talked about over the last four quarters, next four quarters you will see that our ability to make sure that the right kind of a product with the right authority from a design material as well as comfort perspective comes through to the consumers in a scale that is relevant enough and which will enable consumers to make our choices much easier for us.
So I think all of these combined together are supposed to drive growth. Besides obviously the one that I commented, which I’m sure you would have understood, which is expansion across channels. Right. Whether it’s franchise or whether it’s E commerce or even the MBO channel.
Sameer Gupta
Got it sir. This is very helpful. Second question is that there is a sharp jump in the key retail outlets this quarter and this is Both QoQ and YOY looks, looks very high for 1/4. So is there a renewed strategy towards this channel which is the EMBO channel. Been under pressure for some years now.
Gunjan Shah
Yeah, yeah. So the reason I’ve been talking about this for some time, Sameer. Right. And I think this is just the cumulative of that effort. So you know, things take time to gain momentum and then the results come through. Right. So this is a, this is a combination of that. It’s been in effort for the last about 4/4. It is not a revisiting the channel but basically trying to look at key. These are the big ones. So I believe we reach about 20,000 outlets in MBOs. Right. Roughly. It’s not a very easily trackable data but the key retail outlets within that are supposed to contribute to Almost these top 10% outlets, contribute to almost 25, 30% of the turnover and making sure that we are able to present our range right.
The engagement of these outlets is. Right. There is an engagement program which rewards them for the right performance, gets the display right. So that is the journey that we are on. I think there is enough scope on expansion itself as well as making sure that the engagement becomes better. So you will hear a lot more of it going forward. But it’s in the works for last four quarters so it’s not a sudden thing.
Sameer Gupta
Got it, sir. Again, very helpful. Last one if I may squeeze in just a bookkeeping one. So nine months, FY26. Can you just share the broad growth numbers for different brands? Batash, Puppies, Power, any other, you know, which is meaningfully large.
Gunjan Shah
Can we do something on that or. I will need to come back to you Sameer on this in interest of time in case I have a handy. I will comment on it in some other question.
Sameer Gupta
Sure sir. I’LL come back in the queue. Thanks. Thanks for answering all the questions.
Gunjan Shah
Thanks Sameer
operator
Thank you. Our next question comes from the line of Gaurav Johani from JM Financial. Please go ahead.
Gaurav Johani
Thank you for taking my question. So my first question is with regards to the GST impact you had, you know, called out in the earlier quarter at that had an impact of around 400bps last time around. Now if we total up the Q2 plus Q3 revenue that total, I think last year it’s the sales has kind of declined. So would it be prudent to say that, you know, the sales whatever we have lost because of the GST disruption that does not come back entirely and possibly could benefit going ahead as well?
Gunjan Shah
Okay. It’s a little difficult Gaurav, to do a complete arithmetic on this because you know there was an impact which was some amount of impact was channel but a decent amount of impact was also consumer hesitancy. Now for sure, as I mentioned, even at the last quarter when I said that post that we have seen and that momentum as I gave in my opening remarks, we continue to see that through the quarter, how much of it was a plus, minus etc? Very difficult to state. But we do see momentum continuing. So which I would say is I think underlying structural impact of GST 2.0 which should continue in general for the foreseeable future.
Gaurav Johani
Okay, sure sir, got it. My next question, you know is with.
Gunjan Shah
Regards to the, the channel issues, if I may just clarify. The channel issues that we had faced. Obviously the last, I mean the quarter two they have completely eliminated. So it’s reasonably now it’s a reasonably steady state, comfortable for everyone. There is no confusion whatsoever in the channel. So I think in that manner I think those wrinkles have got removed.
Gaurav Johani
Okay. Okay. So just one allied question to the GST question only. I mean because of this rate reduction, have you now seen more attractiveness because you know, because of the earlier rate hike the the mass end kind of was getting more impacted. Have you seen more recovery now in this part of the portfolio?
Gunjan Shah
Not as much as I would have liked Gaurav, but yes, better than what we have seen over the last seven, eight quarters.
Gaurav Johani
Sure. So my next question is with regards to the zero based merchandising performance, the one that you mentioned about the quarter performance. Now if you look at the delta, the delta is around 5 odd percent versus the overall stored network. So would you say that this is very early stage delta that you are getting and as the time progresses this delta can even grow bigger or you largely Expect the Delta to be around this range only.
Gunjan Shah
Okay. So it’s a Delta versus rest of network. So as soon as the rest of the network, I mean Once the ZVM now is 400 stores, our ambition is to take it to almost the full network or a large part of it by the end of this year. Right. In the next few couple of quarters. So the Delta is not the only relevant metric. But I understand where you’re coming from. See, this is purely driven by giving us a much better curated choice to consumers, making it easier for consumers to make decisions and making the full, you know, the machinery working towards the consumer experience.
Right. But there are many other parts that will add on to this, hopefully. Right. As I said, just one example that I elaborated on to a previous question was on the product piece. Now that piece is supposed to give us Delta. That’s why we are putting so much of effort on it. I feel that it’s very good. Some examples of it that we have launched in men’s dress La Floats is a classic example that we’ve been on it for almost three years now. They are all examples wherein we get the authority on the product and that gives us significant purchase from a consumer attraction perspective. So they should add on. Yeah. All the other initiatives, marketing investments being elevated. Right. Will add on to it.
Gaurav Johani
Okay. Okay. And so just last question from my end is in terms of the channels itself, you know, we have been consistently seeing two. Two things. One is your premium products continue to consistently grow at a very decent pace. And at the same time the online. And the. The online channel continues to also grow at a faster clip. So probably if you can help us out, one, how the contribution for the. The online channel now has changed. And also on the part that, you know, that is it margin dilutive? It is margin accretive, the same line, something on that sort.
Gunjan Shah
Okay. All right, so if I can just rephrase contributions, how they moved for E Commerce as well as how are they from a margin perspective? Is that. .
Gaurav Johani
Yeah Yes. Yes.
Gunjan Shah
Okay. All right. So growth rates have been very strong, I would say. I think we can do a lot more and there’s a lot of work that is upward both from making sure that our, you know, penetration in terms of both inventory options as well as partners keeps continuing. I think you’re there with most of the partners, including the quick Bombers guys. There are a bunch of business partnering that we are doing with some of the partners also in terms of their newer initiatives. And how can we participate in it from a category as well as From a consumer experience perspective.
So that should funnel. There is another large piece that we are trying to do in terms of making sure that we also create certain kind of a brand presence online which is in addition to what we are anyways leveraging from the offline brand presence. Right. So floats is a classic example. My contribution of Floats online is still not as much or nowhere close to what it is offline. So there is a huge Runway that I have in terms of driving it and therefore the necessity of putting brand presence. Now both of these combined together. Coming to your question, we should see this growth continue.
It is now in I would say mid double digits in terms of contribution from an E commerce perspective and we look at it purely E commerce, not just the omni part which is additional. And the second one is from a contribution perspective or profitability I would say broadly it’s at par. It might be slightly lower than overall profitability. But my sense is scale gives us great benefits in this and I think at the growth that it is it will hopefully not be a drag anymore.
Gaurav Johani
Thanks Gunjan. Thanks for answering the question.
Gunjan Shah
Thank you Gauravar.
operator
Thank you. Our next question comes from the line of Devanshu Bansal from MK Global. Please go ahead.
Devanshu Bansal
Hi. Thanks for taking my questions sir. I wanted to check obviously you mentioned that growth is not handy with you. Can you tell us how big is the size of Hushpupis for us as. In broad ballpark range if you can.
Gunjan Shah
is about overall it’s in the range of about I think 700 crores I would say. Right. And in retail stores it contributes to anywhere between 15 to 20%.
Devanshu Bansal
15 to 20%. And this 700 crore is like consumer. Level sales that we do or is it like there is
Gunjan Shah
B2B largely. So there is no big difference between consumer sale and the realized or understood?
Devanshu Bansal
Understood. So the intent of asking this question. Was from prospective increase in competitive intensity in this space. Right. So there is another brand class where lights have been acquired by Metro plus we are seeing incremental focus of expansion in terms of their value brand which is walkway as well. So I wanted to check what steps are we sort of taking to protect our businesses at both the value end as well as at the premium end.
Gunjan Shah
Okay. So while I cannot comment specifically on competition but we keep a track of it. Devanshu. Right. For sure. I mean that’s part and parcel of doing business. The second thing to just keep in context, right both ends the market is significantly fragmented. So it’s not like it’s A duopoly or a monopoly. And there one person directly takes a shy of slice of the pie. But that doesn’t mean that there is a consumer trend, there is a competition. There are trends that we can identify and obviously learn from also. So that’s a continuous exercise. Irrespective of that, both at the lower end as well as the higher end, there is, there is opportunities as well as challenges which we need to be cognizant of and therefore incorporate in strategies.
Let me try and tackle a brief manner both of them on the lower end. See there are, there are two large pieces that we are trying to do. One is that even there One big step we took about a year back and which is now started showing some results, obviously aided by the GST impetus also is the value proposition piece. We have got the value proposition right, and that is now showing signs of consistent traction to us. Right. So that’s one big piece. The second one that’s there is accessibility. Right. We are now at almost about 700 franchise stores.
We hope to get to thousand hopefully in the next couple of years. Right. If not earlier. And that gives you a significant leeway, especially when you are talking of the slightly mass end of the products. Right. So that’s one, two pieces that are there. On the top end piece, let’s say Hushpuppi is specifically the example that you mentioned. There is a significant expansion. This one is already now sitting at cocoa plus franchise. We are at about 160 evos. Right. We should be hopefully aiming for a 200 exit in the next rolling 12 months or so.
So it will see a significant continuous traction in terms of expansion. In addition to that there are a few other things. The biggest one is in terms of product, there is a desire and we see very clearly that there is, you know, getting the best kinds of product, the best kind of materials behind the product. Right. And nuances on design, color, etc. Right. Is the ask is even higher here and the more we get into, let’s say departmental stores, etc. That’s giving us even more need for it as well as urgency for it. So I think those pieces will help us. So expansion on both ends as well as making sure that we get the product proposition right will be the key to making sure that we continue the growth traction on these ends.
Devanshu Bansal
Thank you for this elaborate answer, Gunjan. So last question from my end, I. Guess I read somewhere that we intend to increase our export business as well. So with recent signing of fta, what kind of a scale are we targeting? From an export perspective over the next two, three years.
Gunjan Shah
Okay, so exports is, and I mentioned this in the past, so basically we have over the last, I think one, one month here, set up basically a dedicated sourcing hub. Right. Which applies not only to India, but also to the globe of fata. Right now, obviously, with the FTA that has just come in. Right. It will obviously take some time to get operationalized, which we all know. But that doesn’t stop us from making sure that the groundwork also gets accelerated. So I will not be able to give you numbers, but the ambitions are pretty large on that front and we are wanting to make sure that.
And because we’ve got a large footprint of butter in Europe also, so there is invariably a lot of synergy. So even the global VATA system is now looking at it, even with even more urgency of how can we expand exports dramatically. We have been in the ballpark of about 700,000 to 1 million pairs. Historically. You will see a significant jump over the next two, three years. I can’t comment numbers right now, but I’m sure in the next couple of quarters I will have numbers for you.
Devanshu Bansal
Thank you. Thanks for taking my questions.
Gunjan Shah
Thanks, Devanshu.
Muskana
Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their Touchstone telephone reminder. In order to ask a question, you may press star and one on your touch on telephone. Our next question come from the line of Muskana from Swine Investment. Please go ahead.
Gunjan Shah
Hi. My question would be like, how many stores do we have for Hushpuppis and how many stores do we aspire to grow in the coming years? Okay. Hi. Muskana. We have, as I just mentioned in the prior question, we have about total of 160 evos. About 125. 135 are Coco and 25, if I remember our franchise. Just help me. I’m just checking the numbers somewhere. So. Okay. And we should be aiming for, as I said, in the next 12 months, reasonably ambitious. But we should be aiming for about 200 plus. These are the four on stone, right? I wanted to know. Exclude the brand outlet. Yeah.
Muskana
Okay. Okay, fine. So these are exclusively for Hushpati, right?
Gunjan Shah
That’s what your question was?
Muskana
Yeah. Yeah. Okay, cool. Thank you.
Gunjan Shah
Yeah Thank you, Muskana
operator
Thank you. Ladies and gentlemen, in order to ask a question, you may press star and one on your touchdown telephone. Our next question come from the line of chetan Thakur from M3 Investment Private Limited. Please go ahead.
Gunjan Shah
Hi, Chetan.
operator
Mr. Thakur, you may please proceed ahead with your question.
Chetan Thakur
Hello. Say, am I audible now? Hi. Hi. Good afternoon sir. So there’s two questions. One is when I typically observe the footfall at your store, what is quite evident to me is that there is a fair degree of brand recall for customers who are in their 30s and above who have experienced the brand and hence there is a large degree of recall when it comes to Bata. But when I look at the cohort which is say in their 20s or mid-20s, so to speak, there the recall remains quite low even now.
So what would be your take there? What is your data that you’re seeing and your experience and how do we address this? And the second question is more from your mix of in house manufacturing and outsourcing because we’ve seen a VRs which has happened in Hosur as well along with Bata Nagar that happened. So how are you looking at the mix between outsourcing and own manufacturing and what are the pros and cons for both of them?
Gunjan Shah
Okay, from an age profile of consumers etc. Your anecdotal observation is actually not very. Is actually not very inaccurate. Right. So our average age of consumers as per our CRM database is in the right. So about 31, 32 is what I remember. Right. It’s got a little younger over the last, I think let’s say three, four years. But it’s in that ballpark of 31, 32. Right. So so there is a bunch of consumers largely I would say between 25 to 30. Also there are the what our consumer research etc Chetan says is on two fronts.
One is that awareness. I don’t think that’s a problem. So even the 20 consumers know butter. Do you have relevance from a product profile perspective of what they’re needing and wanting? From an experience as well as product profile there is areas to work upon. I will give you two large but there are many other flavors to it. One is this whole sneakers and you will see that work coming through more and more. But that space is very, very dominant in their consideration of relevance etc. From a footwear perspective. The second one that there is online.
Right. A lot of their consumption, their discovery experience comes from online as well as even digital interface with brands etc. So we have tried to move a lot of our digital spend which is much easier anyways. A lot of our marketing spend has moved digital and within digital also has moved from, you know, celebrities towards social media influencers, etc. Right. So that piece is also the other big pivot that I think is work in progress. We need to continuously keep doing more. Now that’s on one end. The other piece is also making sure that you are able to, you know, as I said, you are able to make sure your stores look younger.
So the whole piece that was there of Sneaker studio Bata Red 2.0 as well as now this whole ZBM piece of making sure that the consumer at the center of the store from an offering perspective are all working towards that same direction. But I would say that that’s an area that still needs a lot more improvement. I think with elevated marketing spends you will be able to attract those consumers a lot. Your second question was can you just repeat yourself sourcing?
Chetan Thakur
So the mix between outsourcing and in house.
Gunjan Shah
So it’s a long run strategy Chetan, that I’ve been talking about for some time now. Right. We were, let’s say about four years back at almost 30, 35% contribution of our product coming from in house manufacturing. From a long term strategy. We see that coming down gradually. Right. And we are now sitting in the mid teens I would say roughly. And that will continue to taper. Not to say we have not invested. So we have invested in capex as well as technology on certain key lines. But the large principle that I mentioned even earlier and the VRs and actions are in those same lines are basically to do with, you know, wherever I have got an IPR which is technology driven, wherever I’ve got automation and wherever I’ve got large capex. Right. Low labor is what I would like to keep in house. Rest of it is better off done through contract manufacturers.
Chetan Thakur
Just a follow up on the second bit. So when we do in house versus the contract manufacturing, does it not elongate. The market time for us or. It does not matter really.
Gunjan Shah
Intuitively you’re right. But what we are doing is we are doing it differently. So we are also consolidating our contract manufacturing partners. So they were about 120 plus till about three years back. Now they are down to 60. We will see further rationalization of it. Ideally our goal post on this is to have only 15 partners. Right. So yeah, so that will give us a significant amount of lead time is one big thing that is not the bigger one. The bigger one is leveraging and cross leveraging best practices, technology and innovation, product development, becoming an extended arm, etc. So a lot of those benefits are far higher and obviously much better quality control.
Chetan Thakur
Sure. Understood sir. So fair to assume that to address the first issue we will first need to Obviously address the product bit as well. And brand marketing can continue online and discovery can also help get conversions from the customers who are in the younger pool today. And to give you credit, we’ve seen the impact of store innovation. So that is quite visible and refreshing. So that should be a fair takeaway from this.
Gunjan Shah
Captured. Well, thank you.
Chetan Thakur
Sure, sure sir. Thank you so much. All the best.
operator
Thank you. Our next question comes from the line of Aniket Salunke from Sunrise Kids and securities Private Limited. Please go ahead.
Aniket Salunke
Hello, Gunjan this side. So my question was like you added 27 new franchisee outlets and ZVM expanded across 400 plus stores. So what is the expected ramp up timeline for revenue contribution for this new and updated stores? And like how are these performing versus company owned stores?
Gunjan Shah
Okay, okay though you’re, you’re talking of the franchise stores.
Aniket Salunke
Yeah, franchisee stores.
Gunjan Shah
Okay. So zbn, we have got a chart which clearly tells you how they are doing versus rest of the network. Right. So that delta that you see, basically just to make it easier for you, it’s 5%. We’ve seen that now over a very large network. These are the top 400 stores of our network. Right. And they are continuously doing better on very large scale. And as I said we will continuously expand. In fact now we have become more confident as well as we understand the process of expanding faster. So we hopefully this year we should be done with the ZDM agenda.
Also right now coming back to and coming back to the franchise piece, franchise model is attuned towards smaller consumer cohorts. Aniket right now historically BATA was not good at franchise. Right. Over the last about four or five years we have expanded it from less than 50 stores to now close to 700. As I have mentioned earlier in the call, we aim to be at about thousand plus in the next couple of years. Now this is largely driven in tier 3 and downward markets and smaller suburbs of the larger metros or cities or tier one tier two cities.
Right now these are consumer cohorts which are smaller, they are upcoming. Obviously they’re growing really fast because that’s where urbanization is all happening. Historically we were not able to tap into it easily and franchise is a very efficient, extremely profitable win win model which allows us to do that and that’s given us all this traction. So yeah, I hope that answers your question.
Aniket Salunke
Okay, so as you mentioned, like you are expecting 1,000 plus franchisee stores. So any guidance on revenue growth margin trajectory for the next two quarters?
Gunjan Shah
I will not be able to give you Guidance. But we obviously are doing this for growth, right? So the objective is to keep driving growth and franchise is one lever to driving that.
Aniket Salunke
Okay. And my next question is like how is E commerce and digital share trending and what initiatives are underway to expand, expand this channel.
Gunjan Shah
Okay. I answered that in a call in a question prior but it’s in basically mid teens from a contribution perspective it has been our fastest growing channel for the last almost five years or so now. It’s significant basis also. So it’s no longer a small base. It grew and I have shared that in the document also we grew in at about 15 odd percent last quarter and in fact our ambition is to grow it even faster going forward.
Aniket Salunke
Okay. And my last question is like on inventory and working capital. So I saw like that inventory efficiencies are 11% that was highlighted. So how sustainable are these improvements and like what are the risk of future inventory buildups if demand softens?
Gunjan Shah
Okay, I’ll hand over to Amit to answer that. Thanks for raising this. See what we are doing is a structural correction through the project customer first. What we talked about, what we have done is we have reduced the number of lines, therefore less inventory to be managed. Right.
Aniket Salunke
Okay.
Gunjan Shah
We are improving the freshness of the inventory. As we earlier mentioned that right now we are at one time all time low agent inventory and we have doing more science based data analysis in terms of predicting the future demand. So all that is helping us in ordering the right inventory. Right. So that we don’t end up having accumulated inventory which is not desired from a consumer perspective. So the inventory reduction, what you see is sustainable and you will see further reduction compared to where we are right now. Over the two year we may have done about 25% reduction. Right. But that trend will continue. You will see further improvement on that inventory side.
Aniket Salunke
Okay.
Gunjan Shah
Yeah. So it is not coming at a compromise of ability to serve. Right. I mean it is at better or even higher availability in stores. Right. So it is not coming at the cost of that. It is both. Right. That is the whole objective of this project to customer first.
Aniket Salunke
Okay, got it. Okay, that’s all from my side. Thanks Amit and Gunjan.
operator
Thank you. Our next question comes from the line of Kunal Bhatia from Dalal Brochure Stockbroking.
Kunal Bhatia
Hi. Hi sir. Hi. Thank you for the opportunity. Sir, could you give us some, can.
Gunjan Shah
You speak a little louder?
Kunal Bhatia
Yeah. Can you hear me now?
Gunjan Shah
10%. Yeah, much better.
Kunal Bhatia
Yeah. Yeah. So could you give some sense on for the nine month period or how has the SSG panned and how has been the revenue per square feet? And then I’ll follow up with.
Gunjan Shah
Yeah, we don’t share the SSG numbers Kunal, but however what we have shared consistently has been basically the ZBM performance that has been significantly accretive. Right. So that continues the overall 9 month numbers are published and available. Right? I would say that they would be overall flattish I believe. Right. But the fact is that we had a GST disruption in one of the quarters. So yeah, that’s where the commentary will stand.
Kunal Bhatia
Okay. And sir, it’s been like a long period of time wherein the growth has been lagging around the single, single digit. Sir, according to you, what is the kind of assessment we have done in terms of the efforts? Put put. Because I agree to it. There are a lot of efforts being put in from the last couple of years now still there are some pain points which are old enough to be handled. So is it that the hard decisions are not being taken or what is the issue that we have still not being able to.
I agree there are some external factors also but what are the kind of things we will still require to do to get to a double digit kind of growth from this low base effect? If you could throw some light on the broader perspective in terms of the next say one or two year period.
Gunjan Shah
Okay, we don’t give any forward looking forecast Kunal, but if you look at it, I mean the slide number three on the presentation that has been uploaded. Right. Is exactly trying to answer the questions on how do we want to drive growth going forward. Right. And it also is consciously put in a sequence of gestation of work that is going backwards as well as going forwards. Right. So some of the works that are there in the points 1, 2 as well as 3 are significantly underway from an action perspective. So the inventory declutter, making sure that, you know, the consumer experience is elevated from a stores etc perspective as well as marketing investments are elevated are already underway and I have already commented on them.
I think the one that will give us even more impetus, I think there is a lot of scope in the next four quarters that you will see is the one on network expansion as well as in terms of the product funnel. So I think that chart itself answers the question that you’re talking about.
Kunal Bhatia
And sir, according to you, any older pain points which you have not been able to touch base upon and you do feel that maybe it’s a hard decision but if taken things could improve significantly.
Gunjan Shah
I think the biggest one, not a hard decision but the one with the longest gestation is the product piece. Right. Making sure that we’ve got a significant authority as well as our own stamp of design as well as comfort behind each product of ours is where the gestation is the longest. And. But there is now enough work underway as I have outlined the chart, which is, I think chart number 15, which I had opened up last time, and now I’ve given a lot more color to it. Right. Is the one that is the longest gestation, so not the difficult one, but the one that you will see a lot more effect coming through, not only in my calls to you all, but also in the stores going forward and hopefully traction from consumers.
Kunal Bhatia
Okay, so all the best.
Gunjan Shah
Thank you. Thanks, Kunal.
operator
Thank you, sir. Ladies and gentlemen, that was the last question for today. I would like to hand the conference over to the management of the barter. Thank you. And over to you, team.
Gunjan Shah
Thank you, everyone, for joining. It was lovely interacting. Over to you and the moderator for closing. Thanks.
operator
Thank you so much, sir. Ladies and gentlemen, on behalf of BNK securities, that concludes this conference, thank you for joining us. And you may now disconnect your lines. Thank you.