Khadim India Limited (NSE: KHADIM) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
Rittick Roy Burman — Whole Time Director
Analysts:
Omkar Bhagwe — Analyst
Rutuja — Analyst
Priya Malik — Analyst
Anupam Jain — Analyst
Viral Jain — Analyst
Pratiksha — Analyst
Devanshu Bansal — Analyst
Ankit Shah — Analyst
Presentation:
operator
Sam sa. It. Foreign. Ladies and gentlemen, you are connected to Khadim India Limited conference call. Please stay connected, the conference will begin shortly. Thank you. Sa. Foreign.
operator
Ladies and gentlemen. Good day and welcome to the Khadim India Limited Q3 and 9 months FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Omkar Bhagwe from MUFG in time. Thank you. And over to you sir.
Omkar Bhagwe — Analyst
Yeah. Thank you. Good evening everyone and welcome to Q3 and 9 months FY26 earnings conference call of Khadim India Limited to discuss the results we have with us from the management, Mr. Ritik Roy Burman, the Managing Director and Mr. Indrajit Chaudhary, the Group CFO. They will take you through the results and business performance after which we can begin the question and answer session. Before we begin the conference, I would like to mention that this conference contains certain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company. As on date of this call, the actual results may differ materially.
These statements are not guarantee of the future performance of the company and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Dittik. Thank you. And over to you, sir.
Rittick Roy Burman — Whole Time Director
Yeah. Thank you. Good evening everyone. On behalf of Khadim India Limited, I welcome you all to today’s conference call to discuss our Q3 and 9 month FY26 results. We appreciate your continued engagement with the company and trust you have reviewed the financial results and investor presentation submitted to the stock exchanges. The third quarter of FY26 was marked by a relatively subdued demand environment particularly in value driven segments amid continued pressure on discretionary spending. While urban markets demonstrated pockets of resilience during the festive period, overall consumption trends remained measured. In this backdrop, we stayed focused on disciplined execution, prudent inventory management and calibrated marketing initiatives to protect margins and sustain brand visibility.
Our partnership with Skechers continues to progress positively. During the quarter, Skechers recorded a sequential doubling of sales reflecting strong consumer acceptance and improved throughput across pilot locations. This reinforces our strategy of strengthening presence in the premium and lifestyle footwear segments while maintaining balance within our portfolio. The Athleisure portfolio continues to witness steady consumer interest and we are selectively expanding distribution based on store level performance metrics. Among our sub brands, British Walkers delivered a healthy year on year growth of 9.9%, led by consistent traction in the men’s formal and semi formal categories. Sharon maintained stable performance with continued emphasis on refreshed designs and improved in store merchandising.
We are also intensifying localized marketing efforts and enhancing visual merchandising standards to drive higher conversion. Operationally, we remain focused on optimizing costs and improving working capital and efficiencies. Inventory was closely aligned to demand patterns to mitigate markdown risks, particularly during the extended festive cycle. Franchise engagement remains strong. We continue to work collaboratively to drive throughput and profitability at the store level. Let me now take you through the financial performance for the quarter and the nine months ended 31st December 20242025 for Q3 FY26 Revenue from operations stood at 86.2 crore registering a decline of 21.8%. Year on year EBITDA was 11.1 crore down by 31% with an EBITDA margin of 12.8%.
We registered a minor loss of INR 0.2 crore during the quarter. For the nine month FY26 Revenue from operations stood at 283.5 crore reflecting a decline of 12.5%. Year on year EBITDA Was 37.2 crore down by 24.5% with an EBITDA margin Of 13.1%. The decline in PAT during the period was primarily attributed to the impact of the revised Labor Code implementation and changes in recent government norms which resulted in higher employee related costs and compliance adjustments. As of the end of the quarter our retail Footprint stood at 864 stores comprising 195 company owned outlets and 669 franchise operated outlets.
E Commerce sales continue to contribute steadily and we remain committed to building a balanced omnichannel presence. Looking ahead, we remain cautiously optimistic. Our priorities remain unchanged, driving profitable growth through sharper product curation, disciplined cost management, brand investments and continued expansion in high potential segments. We believe our diversified portfolio, strong distribution network and focused execution will position us well as demand conditions gradually improve. I conclude my remarks and would be happy to take your questions.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on the restaurant telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a Question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rutuja from MKST Advisors. Please proceed.
Rutuja — Analyst
Hello. Yeah, am I audible?
Rittick Roy Burman — Whole Time Director
Yes.
Rutuja — Analyst
Thank you for the opportunity.
operator
Ma’, am. Can you please be little louder? We can’t hear you. Answer.
Rittick Roy Burman — Whole Time Director
You are not audible.
Rutuja — Analyst
Hello. Hello. Am I audible now?
Rittick Roy Burman — Whole Time Director
Yes, now.
Rutuja — Analyst
Okay. So sir, you indicated double digit growth in premium sub brands. So what percentage of total retail revenue do these now contribute?
Rittick Roy Burman — Whole Time Director
Sub brands?
Rutuja — Analyst
Yes.
Rittick Roy Burman — Whole Time Director
So sub brand would be about 40, 60%. And 40% is the mother brand Khadijah.
Rutuja — Analyst
Okay. And what is the margin differential versus Khadim’s mother brand? Can the premium become like 20, 25% of the mix in next year?
Rittick Roy Burman — Whole Time Director
No. Means the margin is slightly higher in sub brands. 2 to 3%. But what Ritik has mentioned here that the growth in British worker out of the sub brand there is a growth in the British worker which is the premium leather men’s former shoes. So there we have seen growth and also in Sharon. Sharon also we have seen which is around 10 to 15% of the total sales of the company.
Rutuja — Analyst
Okay, so like can this be like 20, 25% of the mix in next three to four years?
Rittick Roy Burman — Whole Time Director
Yes, we are already we are focusing on the premium brands and we are giving it to the location means retail. So in order to increase the these two premium brands more products have been this year new products are also been built on these two sub brands. Hopefully by as you call three to four years, this two will contribute around 20 to 25%.
Rutuja — Analyst
Okay sir, and one last question on the schedules partnerships. Can you please help us understand the revenue contribution so far and store rollout plan?
Rittick Roy Burman — Whole Time Director
It’s a very pilot project we have done this year. So it’s around 1.5 to 2 crores. But hopefully in next year we will increase. And now I think it’s around 20 stores.
Rittick Roy Burman — Whole Time Director
Yeah, right now we are giving it to only 20 stores. So before we were giving it to 10 stores. Now we have increased it to 20 stores and around 1 to 2 crores of turnover is coming from it. So we are, I mean meeting the Skechers team. We have gone for their displays and everything. So gradually we’ll increase the range as we deem it fit.
Rutuja — Analyst
Okay sir, thank you. Thank you so much for the answers. Thank you.
Rittick Roy Burman — Whole Time Director
Thank you.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star N1 on the restaurant telephone. The next question is from the line of Priya Malik from RMK Capital. Please go ahead.
Priya Malik — Analyst
Hello. Am I audible?
Rittick Roy Burman — Whole Time Director
Yes, yes Rhea, please proceed.
Priya Malik — Analyst
Yeah, so thank you for the opportunity. I meant to ask that the revenue declined 21.8% year on year in Q3 and 12.5% in nine months. While the gross margins are also compressed, can you break quarter three performance into volume decline versus price declines versus store closures impact?
Rittick Roy Burman — Whole Time Director
See what I can say about the decline is. See I also mentioned in my opening speech that we are doing lot of we are trying to make our working capital in a better situation. So especially in this quarter three what we did is we did skewed inventory purchase. Like we didn’t purchase so much of inventory. So maybe because of that some amount of sale would have got affected because this year the puja festival got over in September 30 itself. So after that October, November, December, we wanted to have a healthy inventory situation and even our creditors day situation because the market is also a bit subdued.
So we curtailed our purchase. So because of which there was, you can say some amount of the reduction in sales is because of that reduced inventory purchase. And apart from that we also closed lot of unprofitable stores in the past two years. So because of that reason also some of us declined. So it’s a culmination of both these two things. Around 7 to 8% decline is because of the store closure. And also here as Ritik pointed out, the creditors days has come down from 131 days in September 2025 to 117 days. So we are by March end we will again reduce the working capital means credit inventory days. So we have consciously done this. But however from the next year then after reduction of inventory we will now fill up with the inventory that are moving and hope that means the sales reduction because of inventory will not be in the next quarters. However there is a challenging situation in the market also.
So we are taking other avenues like the E commerce power to generate more revenue.
Priya Malik — Analyst
Okay sir. Okay got it sir. And so what would be the underlying like for like volume growth excluding closed cocoa stores?
Rittick Roy Burman — Whole Time Director
Volume growth means it is a 2% degrowth. Is there in volume volume like last. Year there used to be a huge volume degrowth. Now it’s 2% compared to like to like stores. Like to like stores. And if you take closed stores then it would be higher. But yeah, that’s the, that’s this thing.
Priya Malik — Analyst
Okay, okay. And okay. And so now that the GST reduction has been fully operational for a quarter, what has been the elasticity response in the 500 to 1500 segment.
Rittick Roy Burman — Whole Time Director
Not much impact has come because this. Because this quarter is not a measure. Because we have taken. We have already. You have seen the sales degrowth. We have taken hit in the inventory. So I think in the first quarter we can first quarter. Because this quarter also in the fourth quarter also there would be inventory is less compared to the last year. So the full we can see the GST impact in the first quarter of FY27. I mean the GST impact is there, the margin has improved but the volume is not yet come in.
Priya Malik — Analyst
Oh okay. So got it. And so last question. So are you seeing any recovery in the ticket size or in only footfalls? Like I think recovery in ticket size or only footfalls or. And also is secondary growth stronger than the primary billing? Currently.
Rittick Roy Burman — Whole Time Director
Our retail is a secondary sale. So whatever we are seeing de growth in retail we are also seeing the degrowth in our franchise stores for which our primary is also reduced. So there is a degrowth in footfall. But hope we cannot because its impact is in total market. But whatever we are doing is we are trying to increase the UPT and also try to not to de go in volume. So these two steps we are taking. But we are more aggressive in our e commerce business because that is generating growth more than what we are expecting.
However, in this offline channel we will open new franchisees and some new cocoa in strategic location. These two will be the growth factor for the next year.
Priya Malik — Analyst
Okay. Okay sir. Got it. Thank you sir. Thank you so much.
Rittick Roy Burman — Whole Time Director
Thank you.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star and 1. The next question is on the line of Anupam Jain from Indra Securities. Please proceed.
Anupam Jain — Analyst
Sir, your other income was higher this quarter. Can you please explain?
Rittick Roy Burman — Whole Time Director
There is since we have closed some shops in this quarter. So this is mainly because of the impact of the liability written off for the index thing. So for that reason it has increased. Okay, so this won’t be the sustainable number going forward. No, no. That. That’s one of numbers.
Anupam Jain — Analyst
Second is how you had a GST input tax credit of somewhere around 23 crores in FY25 ending FY25. What is your number? Have you used that credit?
Rittick Roy Burman — Whole Time Director
I have. During from April to September the credit has been utilized. Now it will be around 1314 crores lying in our input tax credit. 1314 crore still left till now 9 months. But since now the again the GST has reduced so utilization will be less compared to what it was previous. What will the time period you have. Stock of hundred crores then it will be. Because that stock is GST paid stock. So the GST input will remain there. Because your input will only go down. If you have means stock means zero stock. Then there your input will be less. But as when you purchase the input is high. Since in the last three last quarter we our purchase is less. So our input utilization was higher.
Anupam Jain — Analyst
Okay. Purchase was less, input utilization was higher.
Rittick Roy Burman — Whole Time Director
Because when you purchase the input GST accumulate in your GST ledger. So if you reduce the purchase then the input accumulation is lower and your output utilization is higher.
Anupam Jain — Analyst
Okay. So when. When can we expect this to be set off? This whole utilize, this whole amount will be utilized. Because this will directly. Why I’m asking you. Why I’m asking is this will directly help in our working capital cycle.
Rittick Roy Burman — Whole Time Director
But this will not. I mean set up completely. Because you will have stock. You will have 90 to 100 crore stock in your company. So that stock we have to pay the GST and bring the stock everywhere. It’s a GST paid stock. So input credit will remain. I’ll tell until every stock is cleared it will remain.
Anupam Jain — Analyst
Okay. And then what is the amount that sustainably that will be in it? Cigarette. That will. That will have to. That will be stuck in there around.
Rittick Roy Burman — Whole Time Director
12 to 13 crores. Because it was when the GST was implemented it was there that GST will this. Because previously in the VAT regime for stock transfer you don’t have to pay gst. But now for stock transfer you have to pay gst. So GST wherever there is a stock line there will be a GST input line there. This is the logic of gst.
Anupam Jain — Analyst
Okay. And in Punjab government. What is the case? Update. Any update on that?
Rittick Roy Burman — Whole Time Director
It’s pending in the High court. And there are two, three dates already. We have. We have our hearing done. Maybe within next two to three months some hearing output will come.
Anupam Jain — Analyst
Okay. So your margins have declined. Because in the last nine months you have guided that you want volume growth. Not sort of volume growth has come but your margins have declined. Can we see this increasing in FY27.
Rittick Roy Burman — Whole Time Director
In third quarter the margin has improved again in the next. In the next year with the premium product being sell and the percentage is higher. The margin will definitely improve.
Anupam Jain — Analyst
Okay. Any guidance that you want to give right now means.
Rittick Roy Burman — Whole Time Director
We are fixing the new means margin for our new product for the. I think by the end of this quarter we can guide a picture for the next next financial new product is. Your new product is for the SS26 and AW26. That is. Sorry, I didn’t get it. This is the new product that we create for our spring summer season and for our puja.
Anupam Jain — Analyst
Okay. Okay. Okay. Okay. And what will be your debt guidance? Because as you’re looking to cut down your working capital, will this also be reduced? Your debt will be also be reduced this year.
Rittick Roy Burman — Whole Time Director
This year means date will be remain at because we have reduced the stock. So again some stock we require. So it will be more or less in the 110 crore range. Whatever we have in December 114 we will be having 110 crore date.
Anupam Jain — Analyst
Okay. So it will be almost flat to a slight growth. Okay. Okay. Excellent. From my side. Thank you.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star and one on the touchstone telephone. The next question is from the line of Viral Jain from smg. Please proceed.
Viral Jain — Analyst
Yeah. Hi. Am I audible?
Rittick Roy Burman — Whole Time Director
Yes. Yes.
Viral Jain — Analyst
Yeah. Thank you for the opportunity. I’ve got a couple of questions. So my first question was with regards to the inventory. So just wanted to know has the inventory cleanup largely conclude.
Rittick Roy Burman — Whole Time Director
Inventory? We have reduced the inventory as I told from inventory days of 131. It has come down to 117 days now. And by next quarter we will be landing up around 105 to 107 days. But after that when we are cleaning up inventory we are also have to build some inventory for the new product. So that will be there. But we will be ranging in this in within these days in inventory level.
Viral Jain — Analyst
Got it. And my next question was with regards to the sale. So what percentage of sale in Q3 came from the promotional discounting?
Rittick Roy Burman — Whole Time Director
Around 20 to 22% in our Coco.
Viral Jain — Analyst
Okay, 20 to 22%. Got it. And are the franchisees under the margin pressure?
Rittick Roy Burman — Whole Time Director
Franchisee margin because of their sales reducing. They have some margin pressure. But we are trying to increase their secondary sale so that their margin pressure is sorted out. And also they are like us reducing the cost. They are also in the efforts to reduce their costs.
Viral Jain — Analyst
Got it. And now that the franchisee share is 76% of the network. So what is the ROE ROCE difference between the COCO and the franchisee model? Can you get it back means? So as we saw that the franchisee share is up to now the 76%. So what can be the roce difference?
Rittick Roy Burman — Whole Time Director
Store count you are talking About? Store count is 76 Percentage of network Store Store count. That means.
Viral Jain — Analyst
Yeah, yeah.
Rittick Roy Burman — Whole Time Director
Store count. But in our sales 60% comes still comes from our Coco. So where the means the margin Is compared to more compared to the franchise. Because franchisee there are two types of franchise. One is the EBO franchise where we sell the product. Where there is also commission based franchise where the means the stock is in our books give them commission. Where the margin is slightly lower compared to Coco. And.
Viral Jain — Analyst
Got it, sir. And as we saw that the store count has been reduced from 893 stores in Q2 FY26 to 864 stores. So what is the total number of the stores in the cocoa model in FY26?
Rittick Roy Burman — Whole Time Director
Around 195 is Coco and balance is franchise.
Viral Jain — Analyst
Got it. And what will be the average store level EBITDA loss of those closed stores?
Rittick Roy Burman — Whole Time Director
There are the means store closed is around. There are around ranging from 5 lakhs to 25 lakhs in a year EBITDA loss per year. Yes, EBITDA loss.
Viral Jain — Analyst
Okay. And so my last question was with regards to the future prospect. So are we moving towards a largely asset light model over the next three to five years?
Rittick Roy Burman — Whole Time Director
Yes, obviously asset light model things will expand more through franchisee and in case of Coco will only open where there is a strategic point and there is profitability.
Viral Jain — Analyst
Got it. So that was all from my side. All the best for the future. Thank you.
Viral Jain — Analyst
Thank you.
Rittick Roy Burman — Whole Time Director
Thank you.
operator
Thank you. A reminder to all participants, anyone who wishes to ask a question may press star N1. The next question is on the line of Pratiksha from Investing Alpha. Please go ahead.
Pratiksha — Analyst
Hello. Hi sir. I hope I’m audible.
Rittick Roy Burman — Whole Time Director
Yes, yes.
Pratiksha — Analyst
So my first question is. So East India remains our strongest region. So the expansions in the south and west, are they delivering better growth than the core east region? What is the comparison there?
Rittick Roy Burman — Whole Time Director
Still East India is giving a better growth than south and West West. We are not opening new store now. We are opening franchising east and some parts of South. So our concentration for the next two, three years will remain in east and South.
Pratiksha — Analyst
Okay. Any divergence in demand between metro city versus tier 2 or 3 markets?
Rittick Roy Burman — Whole Time Director
Franchises are doing a little bit slightly better than what you call that the Cocos. So Cocos are mainly in Tire 1 Metro type of markets and franchisees are in little smaller markets than that. So that trend we can say is there.
Pratiksha — Analyst
Okay. And another question was on the TNL side like the nine months of gross margins have declined to 48.2%. Was this 53.1% last year? So how much of this decline is the structural or just in temporary basis?
Rittick Roy Burman — Whole Time Director
See, the gross margin for the first two quarter declined because as we told we sold lots of in the USSS and continued the yes for six months. And also there was. We have taken a price cut in the last year. We have reduced the prices. We have also reduced prices during the GST cut. So more or less we have seen around 20, 25% of the sales are discounted sales where the margin impacted and also around 3 to 4% has been because of the price cut. So both these taken together has made the decline in the gross margin.
However, in third quarter the gross margin improved compared to first two quarters.
Pratiksha — Analyst
Right, right. And so what will be the normalized, you know, steady state gross margins for FY27?
Rittick Roy Burman — Whole Time Director
I think around 49, 50% will be the steady state of gross margin in FY27.
Pratiksha — Analyst
Okay, got it. And EBITDA margin is now about 13% and it was 15 or more than 15% earlier years. Suppose pricing reset any and GST benefit, GST benefit pass through what is the realistic EBITDA margin band over the to the coming years like two years in.
Rittick Roy Burman — Whole Time Director
The period see the EBITDA margin decline because of the decline in sales. Okay. Means we have tried to reduce the cost but the reduction of sales is more compared to the reduction of cost. However, I think based on the cost structure and the sales and the margin for the next year we can expect in FY27 around 14 to 14.5% EBITDA.
Pratiksha — Analyst
Okay. And one last question. Can premium brands lift blended margins meaningfully?
Rittick Roy Burman — Whole Time Director
Yes, we have seen the margins in British workers and Sharon is higher. And if we if the composition of sales shifts towards the premium brand, obviously the margin will improve.
Pratiksha — Analyst
All right sir, that was really helpful. That’s it from my side. Thank you.
Rittick Roy Burman — Whole Time Director
Thank you.
operator
The next question is on the line of Devanshu Bansal from MK Global. Please proceed.
Devanshu Bansal — Analyst
Hi sir, thanks for the opportunity. So you have captured what I’m going to ask in previous questions. But as a management, there has been a big demerger that has happened right in our company. If you could lay down your strategy for the demerged entity Khadim in terms of growth margin, balance sheet, that would be really helpful for us to appreciate and track your performance. Right. So but here maybe from a three year, five year outlook perspective, as in how you are trying to expand the network in terms of products, what are your key focus areas in terms of gross margin, etc, EBITDA margin, etc.
Then it will give us a better picture as in how to track your performance. So tidbit, queries, clarifications, etc though are really helpful. But if you could lay down from a strategic thought process perspective, how are you shaping the next three to five years for Kadium will be really helpful. Maybe if you would like to answer now or through a detailed ppt that’s up to you. But I guess I thought I’ll just make this case in this call to get a better clarity on next three to five years.
Rittick Roy Burman — Whole Time Director
See I can give you a brief answer to this question. As I already told that means we have already closed 6065 stores. So now it has reached to a level where now we are trying to fix the same number of stores. And for the last three years we have seen a decline in our sales. So what? What we are trying to reach in FY27 is that there is no dip in the sales. We remain at the same sales because we have reduced the cost and we are further trying to reduce the cost. So our main objective is to keep the sales at least the volume.
There is no volume de growth and with the price there is an increase in the asp. There might be some growth in our sales. And we will try to make a margin as I have told you our gross margin of around 49 to 50%. And we will try for EBITDA margin of around 14 to 14.5% in FY27. So FY27 will be a benchmark year where we’ll caliber everything and try to improve from that part. So what have we done? We have corrected our inventory, we have taken call on our stores, we have closed the store which are bleeding.
So we have changed our product profile. We have now implemented British workers Chiron premium brands to bring in some margin. We are concentrating on E commerce so that some part of the lost sale comes from E commerce. We are trying for some institutional sale from there also generate margin. So what we have seen if we are able to generate sales our margin in EBITDA level will improve and we will definitely give a good result. And based on that we are preparing our budget for this year. I can give you a detailed analysis of that in future mail or I can share you with our ppt.
So you better give a mail to our IR consultant. We’ll provide you with the detailed data.
Devanshu Bansal — Analyst
Sure sir. And just what I could gather is from a top line perspective FY27 should be more like a 350 crore kind of a top line with 1414 and a half percent EBITDA margin. And at that EBITDA margin what is the path that you are anticipating Sir? Pat margin at 14 fat margin. Should it be like 2% or how.
Rittick Roy Burman — Whole Time Director
Around 2, 2, 2.52 to 2.5%.
Devanshu Bansal — Analyst
Okay. And on the balance sheet concept as in how much are you planning to invest? Or maybe that optimization that we have done in FY26, would it continue in FY27?
Rittick Roy Burman — Whole Time Director
So we will keep the inventory we have already optimized. Now we are taking up the data’s optimization. So I think some improvement in working capital will come from the data’s end. Some money has been stuck in our institutional. We will try to generate that money. Once that money come, our working capital will be sorted out. And also through good sales and ebitda, margin means total efficiency of the business will be improved.
Devanshu Bansal — Analyst
And out of total stores which are864, you said about 200 stores are cocoa. And for the rest of the 660 stores there are stores where in some component the stock is with us. So what is that number? As in for how many franchisee stores.
Rittick Roy Burman — Whole Time Director
The stock is with us around 70 stores.
Devanshu Bansal — Analyst
Okay. So broadly for 270 stores, ballpark, the stock is with us. For red stall it is with HIV side.
Rittick Roy Burman — Whole Time Director
Yes.
Devanshu Bansal — Analyst
Okay. Okay, great. Sir, just. I’m sorry I’m repeating this but if you could lay down your next three to five year growth and margin roadmap in your next ppt that would be really helpful in terms of tracking your performance. And there’s a good corporate practice as well which will be really appreciated. Thank you so much.
Rittick Roy Burman — Whole Time Director
Okay. Okay. Devanshu.
operator
Thank you. The next question is from the line of Ankit Shah, an individual investor.
Ankit Shah — Analyst
Yeah. Hi. So you mentioned that the inventory is reduced to 117 days and which you are looking to further reduce to 105 days. So in absolute amount what would this be? And also if you could give similar number for the debtors also what has been the reduction?
Rittick Roy Burman — Whole Time Director
Now the inventory is around 123 crores compared to 140, 145 crores previous quarters. So definitely we’ll try to reduce it to 115. 110 to 115 crores. And in data we have as you told in third quarter there is no improvement in data. But from the fourth quarter we will try to reduce the data to the extent possible. And in FY27 we’ll try to reduce the data to a normalized level.
Ankit Shah — Analyst
So within this data is only say 20, 25 crores is Punjab. The rest is all your franchisees, right?
Rittick Roy Burman — Whole Time Director
Franchisee. And yes it’s franchisee. 32 crores is from Punjab. Balance is once the Punjab payment comes Then data dress will reduce drastically.
Ankit Shah — Analyst
Okay but so basically if I look at your current run rate it’s around say 380, 400 crores. Of that 40% is say roughly say 150 crores is your franchisee revenues. Okay and so, but, but so we are actually carrying debtors which are more than one years of our revenues.
Rittick Roy Burman — Whole Time Director
Because the debtors in debtors there is institutional debtors. So that has increased where there is no sales. So but it’s more than 16 months and it’s more than 6 months Data is there. So that’s what the reason we have taken one. We are taking one at a time. We have done inventory. Now we are focusing on the data. So hopefully the data stays will try to reduce it to 120 days.
Ankit Shah — Analyst
No. How much is institutional debtors out of this? 198.
Rittick Roy Burman — Whole Time Director
It’s around 35, 36, 160. The franchisee, your franchise revenue is 150. So you’re actually carrying one year of debtor. Yes, but still we’ll try to. Because we have taken the call on the primary sales that sale has been reduced and the data’s the payment cycle has is slow. So for that reason we are getting less sales. But still we are trying to improve the data days. Once the cycle improves the data days will also improve.
Ankit Shah — Analyst
Okay. And just one more question. I saw your website is completely revamped which is a much better experience than earlier in so so now what is our if you can help what is our online percentage of say out of this three like say current run rate. If you were to say what is the like how much are we doing on online end. Secondly what is the margin net margin after logistics and you know the marketplace commission. What is the margins that we make on online?
Rittick Roy Burman — Whole Time Director
See we around 3 to 4% of the sales comes from online. In online there are two types of sales. One is the sale from our own website and the omni sales from the retail. So there the margin is around 10% and whereas in the marketplace the margin is 1 to 2%. So what we have done we have shifted the total the online operation to third party with E cart. So we are trying to reduce the cost so that we generate more profit from the online. Next year we have a target of increasing the online sales to 10%.
Out of that maximum sale will come from the khadims.com and britishwalker.com which is our own website. We are also in a plan of launching the sports shoe pro.com and we are focusing on. We are Increasing our marketing costs on there so that we can generate more revenue from there and get more margin.
Ankit Shah — Analyst
Yeah, we are doing a lot of focus in our own websites now, which previously we didn’t do much. So we are putting a lot of focus in our own website, khadijah.com, britishwalker.com Some other websites also and come up. So we are going to have a very deep penetration through our own websites. And so. No. So E Cart is basically Flipkart, right?
Rittick Roy Burman — Whole Time Director
Yeah, that’s Flipkart, Amazon, all those places. No, E Card is owned by Flipkart, right? Yes. Own My Crypt. But they keep the stock for the market, the all the marketplaces. So basically our own own website is managed by us, including marketing, shipping, everything. And only the third party marketplace is managed by Flipkart. Yes. Yeah. But actually see Myntra, which is the biggest fashion platform today in India, on that we don’t have any presence at all. Like and you know, that is owned by Flipkart. So I don’t understand. We have some presence on. Hello. Yeah, yeah, we have. It’s not right that we don’t have any presence in Myntra. We have got some presence on Myntra, but you know, like for online also we are developing new products so that, you know, we can have a profitable sale from these marketplaces also. Because what we have seen.
Ankit Shah — Analyst
What we have seen is by selling too much also in these platforms, what you end up doing is incurring losses. That’s why we are focusing a lot on our own website. And what we are doing is we are developing exclusive lines so that we can, you know, which are more premium looking or like we are trying to develop lines which would be profitable in marketplaces also. So that, that exercise we have just started. So once we are able to provide products in that, we hope that in these marketplace places also we can have a meaningful profitable sale.
Until then we are giving a lot of focus on our own websites and omni sales and most all our own website stocks get serviced from our stores. So, you know, the shipping cost also reduces because your. Whatever order is coming from Bangalore will get service from the Bangalore stores or whatever comes from Calcutta will get service from the Calcutta stores. So that sort of a ecosystem we are trying to do.
Rittick Roy Burman — Whole Time Director
Yeah, and look, you mentioned about west and that you know, invest, you are defocusing. So just the thought that, you know, maybe for west you can move completely online and whatever, you know, franchisee and stores you have, there’s no point, you know, now continuing if you’re anyway defocusing. So why not shut the entire west region because it will release a lot of capital also. No. They see there are some franchisees who are doing good business. They don’t want to stop. But yes we are some state like Rajasthan. We have come out in Gujarat. There are some good stores that we are. But that we don’t want to stop now because they are doing their profitable. And EBITDA is also positive.
Ankit Shah — Analyst
Understood. And just one last question on franchisee sales. Whatever we are billing, our primary sales, whatever we are billing, what is our margin on that?
Rittick Roy Burman — Whole Time Director
We generate a margin of around 42% on the primary sense. Okay. Okay. Understood. Understood.
Ankit Shah — Analyst
Thank you. That’s it for my side.
Rittick Roy Burman — Whole Time Director
Thank you.
operator
Thank you. A reminder to all participants. Anyone who wishes to ask a question may press star N1 on the Touchstone telephone. The next question is from the line of Anupam Jain from Indra Securities. Please go ahead.
Anupam Jain — Analyst
Sir, you mentioned that sketchers do a 1.5 to 2 crore. Is that a per month for every month or was that for year?
Rittick Roy Burman — Whole Time Director
This is for this financial year. Okay.
Ankit Shah — Analyst
That’s a very small. And how many equation inventory do you carry? You’re rolling out Athleisure inventory because you’re rolling out athleisure at leisure.
Rittick Roy Burman — Whole Time Director
We have got around 40, 50 designs and inventory would be around say like 50 lakhs.
Ankit Shah — Analyst
Okay. So are you planning for an aggressive rollout for this or how many and how many stores are in this efficient inventory?
Rittick Roy Burman — Whole Time Director
Currently 70 stores. 70 stores. So you have 45 SKUs and inventory or that that you’re gaining is 50 lakhs. Yes. Okay. Any aggressive plan up to scale. Scale this up. That depends. We are means we are in. The main thing about our athleisure is our pricing is very good. Okay. It’s a very. It’s a very. What do you call that competitively priced product. So you know what we have seen is during the winter season the Athleisure sales drops a bit. This is our first year. Okay. So. But again the summers and all are coming. So we hope that the sales will increase again. And in Athleisure it’s mainly like every time you order something you have to order new designs. Okay. It’s your old designs. I don’t. The apparel industry works like that that the old designs are not always available.
Once you finish, some of them would be available but not all of them. So we’ll be taking it in batches like every quarter. We’ll take some new designs and display and see how it goes. Store rollout is Your less than 10% in your stores currently in Ethija. What I’m trying to say is what is your target to get at least 50, 60% in your store in Athleisure because your sales are dropping. Your one thing that you’re trying to do is increase it in online e commerce. What happens in Appleisure is that if you compare to our stores there are stores which are very small where we cannot put up that leisure thing. So that is also a hindrance for us because we don’t have a changing room for ladies. The at leisure we cannot give a changing room. So these are the factors that are taken into consideration. After that we are planning out to roll the in that leisure in our store.
Anupam Jain — Analyst
But do you have any target that we can try this?
Rittick Roy Burman — Whole Time Director
No. We will definitely increase the atleisure sales but we will not go whole hog because there are lots of store where we do not have the space to put in atleisure and there are some problem in changing room also we don’t have any changing room because in Athleisure you require the changing room.
Anupam Jain — Analyst
Will it be 50%? Will it be 30%?
Rittick Roy Burman — Whole Time Director
I think in our cocoa we will definitely go ahead. But in franchisee it depends on the franchisee whether they want to take that leisure because out of the 660 franchisee 50, 60% of the stories around 400 square feet, 300 square feet. So where at leisure will not be possible.
Anupam Jain — Analyst
Secondly, you said when you were giving guidance that you want to do again you are looking for institutional sales.
Rittick Roy Burman — Whole Time Director
Government. Institutional. It’s institutional in the form of school. Institutional safety issue. Where to the private companies. Yeah, okay. Okay, okay. Yeah that because I was confused because we are already stuck with the Punjab government and we are again looking for institutional sales. No government we have stopped for the last five years.
Anupam Jain — Analyst
Yeah, that’s what, that’s what that your intentions. Okay, thank you. Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to Mr. Omkar Bhagwe for closing comments. Over to you sir.
Omkar Bhagwe — Analyst
Thank you for joining. Joining us on call today. I would like to thank the management for sparing the time and answering all the queries. We are MUFG in time Investor Relations advisors for Khadim India Limited. For any queries please feel free to contact us. Thank you everyone and have a great day. Thank you.
operator
Thank you. On behalf of Khadim India Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.