Khadim India Limited (NSE: KHADIM) Q4 2025 Earnings Call dated May. 26, 2025
Corporate Participants:
Unidentified Speaker
Rittick Roy Burman — Managing Director
Analysts:
Unidentified Participant
Masoom Rateria — Analyst
Arnav Sakhuja — Analyst
Bhargav — Analyst
Divyesh Dagliya — Analyst
Anupam Jain — Analyst
Sahil Vora — Analyst
Akhil Parekh — Analyst
Anupam Jain — Analyst
Presentation:
operator
Ladies and gentlemen, Good day and welcome to the Q4 and FY25 earnings conference call of Khadim India Limited hosted by MUFG Investor Relations. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Ms. Masoom Ratheria from MEFG. Thank you. And over to you.
Masoom Rateria — Analyst
Thank you very much. Good evening everyone and welcome to Q4FY25 earnings call of Khadim India Limited today to discuss the results we have discussed through margin contain certain forward about the company which are based on the beliefs and expect of the company as on date the actual may differ material statements are not involve risk and uncertainty that are difficult to insist over to you.
Rittick Roy Burman — Managing Director
Hello, Good evening. I hope I am audible on behalf of Khadim India Ltd. I am pleased to welcome you all to today’s conference call where we will be discussing our Q4 and FY25 results. We sincerely appreciate your time and interest in our company’s performance and we hope you have had the opportunity to review the financial results and investor presentation available on the Stock exchange. The global macroeconomic environment during the quarter remained challenging with shifts in consumer spending behavior leading to a muted demand. Despite these headwinds, we maintained steady revenue growth with Q4 revenue at 149 crores which is up 3.8% year on year.
Gross margin improved by 68 basis points driven by volume growth and better cost control. One of the key milestones during the quarter was the successful completion of our demerger process. The scheme of arrangement for transfer of distribution business of Khadim India Limited into KSR Footwear Limited has been approved by the honorable National Company Law Tribunal Kolkata Bench wiped this order dated 27th March 2025 the said scheme has been effective from 1st May 2025 and in terms of the said scheme, all the assets and liabilities as demarcated pertaining to the distribution business of Khadim stands vested with KSR Footwear with effect from the appointed date which is 1st April 2025.
KSR Footwear will be listed shortly and we believe this strategic move will enable sharper focus and better performance across both the retail and distribution segments. We are targeting breakeven in the distribution segment by FY26. With a renewed focus on cost reduction and sales growth, the retail business will continue to drive performance with a two pronged approach maintaining value focused pricing under the Khadim brand and premiumizing our sub brands through price enhancement. Looking ahead, we are excited about the launch of our new Apleisure segment in the upcoming spring summer season. This price sensitive range combined with our higher margin products is expected to contribute positively to our gross margin in the coming quarters.
As a part of our cost efficiency measures, we have also shifted some E Commerce warehouse operations to E Cart logistics allowing us to benefit from their scale and expertise while converting fixed overheads to variable cost. And as of FY25 our retail store network stands at 886 stores with 14 new stores already added during the year. This includes 213 company owned outlets and 673 franchise stores reflecting our continued commitment to an asset light expansion strategy. Looking ahead we are optimistic for FY26 expecting volume growth driven by reduced MRPs and new product introductions. Now moving on to Our financial performance Quarter 4 FY25 for the quarter we reported revenue from operations of 149.1 crores reflecting a 3.8% year on year growth.
Our gross margin for the quarter stood at 46.9% up by 62 basis points points as compared to the same period last year. EBITDA for the quarter stood at 15.18 crores. EBITDA margins for the quarter stood at 10.2% profit after tax. Q4FY25 was 0.92 crores showing a 10.1% decline year on year with margins at 0.6%. For the year ended, FY25 revenue stood at 623.7 crores with a slight increase of 1.4% and gross profit margin stood at 46.7% which has improved by 130 basis points through our consistent efforts in mineralization. EBITDA for the year stood at 66.6 crores with an EBITDA margin of 10.7%.
Profit after tax for the year stood at 5.06 crores and PAT margin stood at 0.8%. Looking ahead, we remain confident in our strategy and proactive approach. We are committed to building on our strong brand, expanding our retail footprint and innovating to meet evolving consumer demands. We believe that these efforts will lead positive outcomes in the coming quarters and we are excited about the opportunities ahead. With that, I conclude my update and I’M happy to open the floor for any questions. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their Touchstone phone. If you wish to remove yourself from the question queue, you may press 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of ARNAV SAGFUJA from Ambed Capital. Please go ahead.
Arnav Sakhuja
Hi. Thank you for taking my question. So I want to know in the retail segment, how many stores are we planning to open in SR26?
Rittick Roy Burman
In retail we are planning to open around 50 stores. Combining of Coco and franchisee in FY26.
Arnav Sakhuja
And what would be the mix of cocoa and franchisee amongst these 50 stores?
Rittick Roy Burman
Around 7 to 8 cocoa and balanced franchisee.
Arnav Sakhuja
And is there any renewable profitability guidance you can give us for the retail segment in FY26?
Rittick Roy Burman
Retail means as we have told that we are have reduced the MRP in our Khadim brand so there will be some margin reduction in that. So for that maybe in the first quarter and in the second quarter there will be some margin gross margin reduction. However we think that that will be combat with the value growth Already we have seen this year there is in FY25 the value growth value degrowth has stopped. We are static at whatever we have the volume we have sold in FY24 we have sold the same volume in FY25. Also in the last three years there were continuous value growth volume degrowth.
So I think we will be able to increase the volume that will increase the value sales. However the margin will be slightly in the in the lower side.
Arnav Sakhuja
And just one more question. So as you spoke about, as you saw mentioned in your opening comments and as we discussed in the last protocol as well, you’ve been piloting an athleisure segment, this new segment. So would the margins be better for this? What would be the margins in the.
Rittick Roy Burman
Athleisure segment at leisure margin will be more or less same as a footwear. We have kept value based product so that the more volume uptake is there. Because in that like as I said, when there’s a lot of competition if we keep a higher margin product I think that will not be able to sell from our store. So we have kept at the same level of margin what we generally get in our Khadim product. So more or less the margin will remain the same but it Will increase the value sales for our store with no cost.
Because already we are incurring fixed cost in the store.
Arnav Sakhuja
Okay, thank you.
operator
Thank you. Next question is from the line of Bhargav from Ambit Asset Management. Please go ahead.
Bhargav
Yeah, good afternoon and thank you for the opportunity. So my first question is that is there any timeline on the listing of KSR footwear?
Rittick Roy Burman
We are already in that timeline zone. But what has happened is that in the NCLT order there is a transfer of authorized capital from Khadim India to KSR which is pending in the mca. So once that that thing is done, which will be done within this week, we will be announcing the record date and the listing process will also start.
Bhargav
I guess in a month’s time it should get listed.
Rittick Roy Burman
Yes, we are already in it.
Bhargav
Second, what is the debt reduction plan in the retail business? Because I believe there will be close to about 100 odd crores of debt on the retail business.
Rittick Roy Burman
Yes, we have a plan of reducing the debt. But that depends on the cash flow and also the profitability of the business and some extraordinary income. So whatever cash is generated in excess of what is required will be used for reducing the debt. In the last 23 years we have already reduced the debt from 125 crore to 100 crore. And we will be again in the process of reducing the debt. Because if I look at your FY25.
Bhargav
Operating cash flow in the retail business, it’s closer to 44 odd crores, right?
Rittick Roy Burman
Yes.
Bhargav
So then we are generating good cash flows to sort of.
Rittick Roy Burman
So is it fair to say that.
Bhargav
In two years time we should be debt free in the retail business?
Bhargav
That will be aggressive statement but we’ll definitely try. Will another thing is that we have creditors also. We need. We also need to reduce the creditors debt so that the working capital cycle is also improved. So taking two both the thing together will definitely if the cash flow comes in we will reduce the debt. Because our debt is mainly working capital debt is that type of thing. So whatever excess cash you park in the cash credit account, your interest is safe. And as both companies become separate do you exercise any increase in fixed cost because there will be some duplication or you don’t.
Rittick Roy Burman
Yes, in some cases I like the audit fees and all these things they rule you. But. But the two we are maintaining the. Two. Departments so the cost are totally different. And maybe some common expenses like the NSE BSE fees and all these that will be will be having incurring in both the company. That is very not a very Big amount. But that there will be some duplication.
Bhargav
And lastly I mean on the distribution side we have a factory in place. Whereas in retail we do most of outsourcing. But now with the demerger is there any change in plan or we continue with our in house manufacturing. On the distribution side the in house.
Rittick Roy Burman
Manufacturing will be catering to the distribution. But some product which we used to take from our manufacturing division will Kadim India will purchase it from KSR Control Ltd.
Bhargav
Okay sir.
Bhargav
Thank you very much and all the very best.
Rittick Roy Burman
Thank you.
operator
Thank you. Participants who wish to ask questions may please press star and one at this time I repeat to ask a question please press star and one. Now next question is from the line of Divya Daglia from Neo wealth and Asset Management. Please go ahead.
Divyesh Dagliya
Hi. Hi. I had a couple of questions. Number one, I wanted to firstly ask. With respect to the balance sheet split. That we’re going to see between both the businesses of KSR and Khadim India. How much is going to be split. To the distribution business and what proportion will stay in the company itself.
Rittick Roy Burman
The assets that are means that are eligible for. That are used for the distribution business will be has been transferred to KSR Footwear Ltd. Like the factory machinery molds, the factory buildings, the warehouse that caters to the distribution business. All the movable assets of this of these division has been transferred to this KSL and in Kadimin. Hello. Hello.
Divyesh Dagliya
Sorry.
Rittick Roy Burman
Sorry. Yes. And the retail. Retail assets has been kept in the Khadim India Limited. We have already the assets detail has been given in our sevy results. Which assets has been the demerge entity means in the discontinued operation has already been given. If you want a detail we can provide that. Yes please. That’d be helpful.
Divyesh Dagliya
And I just want to understand the loans, the borrowings we have in our books. That is not against any of these factories or it’s not place against any of the successes. Right. They’re against intelligence personality.
Rittick Roy Burman
Loan loans are generally of cash credit nature. So some portion of the cash has been given to the KSR footwear. And 100 crores of loans are kept in Khadim India Limited.
Divyesh Dagliya
So I believe the split is 120. So that’s 120 with KSR.
Rittick Roy Burman
Yes.
Divyesh Dagliya
Okay. Thank you so much.
operator
Thank you. Next question is from the line of Anupam Jain from Indira Securities. Please go ahead.
Anupam Jain
Thanks for your opportunity. Sir, what is the update regarding Punjab deals?
Rittick Roy Burman
It is pending before the High court. Already we have got a date and I think that has been done on 19th of this month and the next date would be in the month of July. We are in one of. The. One of the bidder has already got the payment and we have. We think that we will definitely get it within this financial year.
Anupam Jain
My primary question is also that why are we taking this vote using this case in court?
Rittick Roy Burman
Because we have. We have got the arbitration order in our favor for that. Against the arbitration. The. The government has moved to the court.
Anupam Jain
Okay. And the UP government that you have received till now the 560.
Rittick Roy Burman
All the payment, all the payment of government has been received.
Anupam Jain
Government is still pending. 25, 26 crore rupees. That was something around 32. 32 crores.
Anupam Jain
Okay.
operator
Thank you. Participants who wish to ask questions may please press star and one at this time. I repeat ladies and gentlemen, to ask a question please press one at this time. The next question is from the line of Raj Patel from RK Securities. Please go ahead.
Unidentified Participant
Thank you for the opportunity. Just two quick questions from my side. So can you please elaborate on what specific changes have you been observed in customer behavior and spending patterns and how are you evolving the consumer preference influencing the product development, pricing and marketing strategy? Apart from that, is there any notable shift towards online or omnichannel purchasing and how is the company adapting to this trend?
Rittick Roy Burman
Yeah, hi, thank you for the question.
Rittick Roy Burman
So. Regarding the consumer preferences, what I can say is that while there is a bit of. There was over the past many months there was a little bit of a inflationary pressure because of that, you know, we have taken the call of reducing prices in some of our. In our mother brand Cardins. So because of that, as the CFO mentioned a while back last year we were able to arrest the volume degrowth. We had to give discounts and all these things. So pricing wise, that is one consumer trend is there that they are looking for some sort of value.
But having said that, it’s not that they are looking in all products for value. There is also a segment of consumers in our country that are looking for, you know, value added products. One is total value, another is value added products. So there also we have done a lot of work in our sub brands. We are changing lot of elements in our products. We are changing historically whatever soles we were using, we are trying to use better soles, better materials. We are trying to give better comfort into our products. We are trying to make our products less serious looking because of the, you know, the casual need of the consumer.
The consumer wants to wear casual stuff. Okay. So all of that work is also going on A lot of work has gone on behind it. Many of it has come into effect and a lot would come into effect regards to the product in the near future for our sub brands. Yeah. And regarding the online bit. Online bit. Yeah, online people are consuming products online but you know you need to promote the online products digitally, which we are doing. And I would say online online is not as upbeat as it used to be during COVID times, but it still has its fair share.
Lot of people are buying online. But the other part is because most of the brands are offering discounts now. Almost six, seven months in a year. So you know the discounts that you get on your this on your e commerce sites, you are also getting it in the stores. So that way also the sale is happening from the store also who are looking for the discount.
Unidentified Participant
Okay. And my second question was what is your outlook on the consumer demand trends for the upcoming quarters and how does the company expect this to impact the revenue growth? Additionally, could you provide the guidance on anticipated margin and any key factor that may influence the probability going ahead?
Rittick Roy Burman
Yeah. See so I can just repeat the question once again.
Unidentified Participant
So what is your outlook on consumer demand trend for the upcoming quarters and how does the company expect this to impact the revenue growth? Additionally, could you provide guidance on anticipated margin and any key factors that may influence the profitability going forward?
Rittick Roy Burman
Okay. Okay. So the consumer trend in the upcoming quarters, I mean it should be, it should be good, it should be better than before of course, but inflationary pressures remain. But this premiumization trend is there. Then we are we. I will not comment now but we are looking for some collaborations also brand collaborations, etc. So through that also we expect to have more premium customers walk into our store so that they can consume that product also and they can. What do you call that they can have a look at our sub brands also. So that is one, that trend is there, premiumization trend is there and the value value customers we have reduced the prices.
We expect volume growth from that in the coming quarters. Along with that we have also changed certain policies regarding, you know the channels that we use for selling our products which is franchisee then company owned outlets and then we have changed certain policies. So due to the change in those policies we are seeing rejuvenated renewed sales growth in many a strong market of ours in many in Assam, Bihar and many other eastern zone states. So keeping all these things in mind, I will not give any number but I hope, we hope we are all hopeful that we will have a good sale growth in the coming quarters.
Unidentified Participant
Okay, that was all from my side. Thank you.
operator
Thank you. Next question is from the line of Sahil Bora from ANS Associates. Please go ahead.
Sahil Vora
Good afternoon, sir.
Sahil Vora
I have a couple of questions. My first question is regarding E Cart logistics. So the shift of warehouse operations to E Cart logistics is noted as a cost efficiency measure. Can you give us some quantifiable cost. Savings and operational improvements expected from this transition?
Rittick Roy Burman
So mainly we have shifted our E Commerce operation from our own warehouse to E Cart. So in our own warehouse it was related a fixed cost thing. So when we move to this E Card it is a nature of variable how much article we keep in that E card logistics. The cost is dependent on that. And in terms of the infrastructure, their infrastructure is much better compared to us because they deal with this E Commerce business. They have all the all these things which reduces the sales return.
And also we can do the claim at the proper time. And in terms of cost, there is around 20% of cost reduced from whatever cost we are doing in our own warehouse.
Sahil Vora
Okay, sir. And how has this affected the company’s. Fixed versus the variable cost structure?
Rittick Roy Burman
As I told you, the the cost in terms of fixed cost that we are doing in our own warehouse to our own workers and through our own rented place that that has gone out and in place there is a cost in terms of it is a nature of variable thing how much we sell per unit cost. If we sell more then the cost will be more. If we sell less, the cost will be less. But in terms if we keep the same number of items we have seen the cost has reduced by 20%.
And also we are able to able to get better infrastructure and better service to our customer.
Sahil Vora
Yes, that sounds promising. Sir, I wanted to know if there are other similar efficiency initiatives underway or plan.
Rittick Roy Burman
Yes. Already in our own in own warehouse we have implemented a new system. We used to. The software that we used to do in our warehouse was our homegrown. Now we have shifted to D365 Microsoft D365WMS and we have already implemented the first phase. In the second phase we have all this we can means all the stocks will be means from the rack. It can be built so that the FIFO basis of means in the physical count also we can do the FIFO basis of billing which will improve our means.
The stock aging can be improved drastically. And also the obsolescence of stock can be reduced. So these type of things are already in the pipeline which will first phase is already implemented. The second phase will be implemented after the festive season. All right, understood.
Sahil Vora
So my next question is regarding the. Expansion of the retail store network. So the retail store network has expanded. By 18 new stores which includes both company operated and franchise outlets. Sir, I wanted to understand the strategy rationale for maintaining this mix and how does the company ensure consistency in brand. Experience across the franchise stores?
Rittick Roy Burman
We have last year we have also closed our cocoa around 30 owned store because they were loss making. So we have taken a conscious call that in terms of loss making store we will not keep it, we will just close it and we will open a store where the rental is less and comparatively the cost is lower. So that’s why you can see only 18 has been added. But 30 store of cocoa has also been closed. So effectively it will be a 48 store has been opened. And also in terms of combination we generally keep more on 80:20 ratio of our own store to franchisee because in our own store there is lots, there is capex also and in case of franchisee the capex is on the franchisee so this ratio will be maintained so that the efficiency in the capital can also be done and the sales can also be increased.
Sahil Vora
Understood. And sir, lastly what are the growth target for store editions in FY26 and which markets or formats are prioritized for. Expansion in the retail network?
Rittick Roy Burman
So as I have already told 50 stores and that will mainly be in the eastern northeastern side of the country because and also in the southern India. So because in this geography the brand is very prominent and out of that around 7 to 8 would be our own cocoa store and balance would be franchisee Franchisee it will be a combination of both EBO and frm. FRM means from we send the stock to the franchisee and in case of BBO we sell the stock to the franchise. So the it will be a method both the method taken together will be around 4042 stores and Coco around seven to eight stores.
Sahil Vora
Got it. Sir, thank you for the detailed responses. And all the very best. Thank you.
Rittick Roy Burman
Thank you.
operator
Thank you. We take the next question from the line of Akhil Parik from BNK Securities. Please go ahead.
Akhil Parekh
Hi, thanks for the opportunity. So I have three questions on the. Retail business and one on the distribution front. The retail. If I look at it, our gross margins have declined over last four, five quarters and one reason you have said that we are giving more push to volumes. Is it now safe to assume the gross margins which we clocked in FY25 at around 56% we are closer to bottom now and from 26 onwards we should see stabilization in the gross margins and hopefully improve from there. That’s my first question.
Rittick Roy Burman
No, I think there because in if you see that in the last year, in the last two quarter the we have reduced the prices of Khadim and the. And the margin has come down but this year it will be full year of operation of the lower prices and in certain categories in children product in school we have also taken a conscious call of reducing the price because of the economy. So I think the margin is not at. But in FY26 it will come to a level playing field. Means in FY26 margin will be the margin that will be sustaining for the next years.
However, as our MD told that in the sub brands, in some sub brands there are some product where we are increasing the margin seeing its demand and the acceptability. So with that also we will try to improve some margin but in FY26 we will bottom out in terms of the margin. Hello.
Unidentified Speaker
Yeah, hello.
Akhil Parekh
Hello. What are the safe assumption for margins?
Rittick Roy Burman
Basically for 26 cents. So this it’s purely dependent on the volume. Volume thing how much the combination of Khadim and sub brands. So at at present I cannot predict the what will be the margin but it will be lower than whatever we have done in this year.
Akhil Parekh
Okay. Okay, fair enough. And would you be able to give the pre index margins for FY25 for our retail business?
Rittick Roy Burman
Can you come back again the pre.
Rittick Roy Burman
Index EBITDA margins for the retail business for FY25. Just a minute. It is around 15.61.
Unidentified Speaker
Sorry, 15.61. No, but this is a post index margins right? Not the Pre index.
Rittick Roy Burman
Around 4% is the rent cost so you can subtract it from that.
Akhil Parekh
Okay, so around 11 and a half percent is the pre index margin for FY25. Okay, and just last two more questions. One is would you be able to quantify the interest and depreciation cost for the retail business for FY25?
Rittick Roy Burman
Yes, already that has been given in our SEBI thing retail and this is the result that has been given in the SEBI thing is for retail only and the depreciation for the.
Akhil Parekh
Okay, sorry, my bad point. And lastly on the distribution front. Would. We expect this business to turn PBT positive from this year FY26.
Rittick Roy Burman
Now FY26 will be if we will definitely be in the EBITDA positive but it’s dependent on other factors also the volume and the prices. But definitely in FY27 with the lower lowering of cost reduction initiative. That will be taken this year. We will be profitable in KSR in FY27.
Akhil Parekh
Okay. That’s all from my side and best. Wishes for coming quarters.
Rittick Roy Burman
Thank you.
operator
Thank you. Next question is from the line of Bhargav from Ambit Asset Management. Please go ahead.
Bhargav
Just clarification. When you mentioned that margins in the retail business may be lower because of price cuts, you are referring to gross margins and not EBITDA margins, right? Yes.
Rittick Roy Burman
Yes.
Bhargav
Gross margin because of volume growth. There is a to argue that EBITDA margins may actually expand given the volume growth which can come in the result. Right?
Rittick Roy Burman
Yes.
Bhargav
Okay. Thank you for the claim.
operator
Thank you. We take the last question from the line of Anupam Jain from Indira Securities. Please go ahead.
Anupam Jain
Thank you. What will be the roce and ROE for carbon embarrass for FY25?
Rittick Roy Burman
We can come back with with this answer to you in one to one basis. Okay.
Anupam Jain
Okay. And second question that I had was your franchise store has quite increased since a lot five years. If I will have to see the number on 543 stores it has a reach to 6,723 currently. But yet the contribution has not increased that much. What will be your strategy after the remix? As the remix has already happened. What will your strategy in this?
Rittick Roy Burman
No, this. This is mainly because our franchisee the sale that we book is MrP lesser trade discount. For that reason also it is less. And the franchisee in Coco we book the sale at mrp. So now there is will be a mixture of FRM and TFM where the sale will be booking will be in the in the full value. So there we will see the franchisee means contribution will increase. But in previously means the sales booking is is a discounted value. And also the mainly our franchisee consists of tier 4, tier 3 where the sales volume is also less.
So both of the taken together the franchisee sales remains lower compared to the Coco sales.
Anupam Jain
And overall what will be the SSG growth? Because I can see in the last 34 years there has been no SSG growth.
Rittick Roy Burman
SSG growth will come only if the volume increases. Because since we are not we are slightly decreasing the sp. So if the volume increases then only SSG growth will come and with the macroeconomic scenario not so good. So we think that is the the lowering of the prices in the Khadim brand will improve the volume and that will bring the SSG growth in our store.
Anupam Jain
Yeah, volume degree growth has been arrested.
Rittick Roy Burman
Last in the last financial year. Last financial that has gone by so now expected that volume growth would come and that would, that will give us ssg. Renovation is also being done in stores that would also give us ssg. So. Yeah.
Anupam Jain
Okay. And with that future apparel that you’re launching, this will be launched in all stores.
Unidentified Speaker
Yeah. Now we are expanding it to as many, many more stores. In the beginning it was limited to around 20 stores. Now we are increasing it to around 50 to 75 stores. So we’ll slowly expand it in all stores.
Anupam Jain
When will be fully filled up and especially when will this be fully filled up in your company own stores? It’s there in our company owned stores mainly and some of it, whichever franchisees feeling confident to keep it, we are also billing it to them. We have a, we have aim to you know, at least complete our entire company owned stores by end of this year. So that will stretch your working capital.
Rittick Roy Burman
No, it shouldn’t stretch because we are also, we are also you know canceling lot of designs which we feel is not, I mean it’s not trendy enough anymore for the Indian economy. So we are keeping that check in our mind. Like nothing should put a stress on our working capital because we are also canceling lot of designs, we are putting it in discount, trying to take them out. Whatever trends we feel are does not work anymore for the Indian consumer. So that way it should be fine.
Rittick Roy Burman
So you’re saying around looking at 40 stores in your company owned stores to add your SVG segment every quarter.
Unidentified Speaker
Yeah, you can say.
Rittick Roy Burman
Internally. Yeah.
Anupam Jain
And I had a last question. So you’re usually Kolkata more in the terms of brand visibility. It has reduced quite significantly in the last two, four years after pandemic and it is much more aligned with the older people. That is what the feedback has been generally. And there is a compilator that is providing much better at a lower price point and a better quality. That is what we are hearing. So how are you addressing that? Sorry, can you. Who is offering what? Can you come back again? Your PR in this segment basically is offering at a lower price point and a better quality and footfalls has been low due to that also. That is the feedback that we are receiving. How much you own should have on this?
Rittick Roy Burman
No, maybe some of the peers are offering at a lower price. But if you see our. I don’t know where you have got this feedback from but if you see our product quality, the color combinations and such. The only problem which we actually had was for the last three, four years our prices had increased a bit too much. Especially in the mother brand KHADIS So that’s where some people might have said that the product has become too expensive. But we have taken a call on that and we have reduced the prices. But when it comes to the product attributes and the color combination, the look, I think you should do a more thorough research.
I don’t think it’s that much affected the price. We were affected for a while where we have taken the call.
Anupam Jain
Okay, fair enough. So do you think the footballs will come back? What are your football guidance for next year and what you’re targeting internally?
Rittick Roy Burman
I mean footfall guidance. We want to grow our parents we used to be 1 crore few years back. So we want to reach there as fast as possible and then grow beyond that. That would be the footfall guidance. And more than one thing is footfall. And we also want to have a. You know, we want to have meaningful stores. We will not just. Just to, you know, just to have an unprofitable sale open store wherever we feel like we want to have stores in meaningful locations. So these things will help us to increase our sale and our footfall.
I think there’s lot of scope left in that the market that we are in the existing market itself. There are many, many markets still left where if we focus and open the store we can increase the. You are asking for footfall and volume growth, right? The footwall is increased like that. Yeah. Because you have to open the storage. I won’t comment on percentage but some of the markets which we are focusing now in northeast and many of the eastern states where I felt we felt that the sale has dropped much beyond what the Khadim brand popularity is in those markets.
So now that we are coming back with a full fledged renovated shops with fresh merchandise in those kind of markets in many eastern locations I think that would give the increase in footfall for us. That would be the main source of increased footfall opening franchisees in these locations.
operator
May I request that you rejoin the queue for further questions? Is there are several the participants waiting.
Unidentified Participant
Just one last question. How many franchisees we have taken over because we introduced a new model also.
Rittick Roy Burman
We are planning to. We have taken over almost 50 now. So we’ll as the opportunity arises we’ll take over many more. Whoever is wherever it’s needed. It’s not that we’ll take over everywhere but wherever it’s needed we’ll do it.
operator
Thank you. We take the next question from the line of Akhil Parekh from BNK Securities. Please go ahead.
Akhil Parekh
Just one bookkeeping question. What would be our effective tax rate for the retail operations going forward in 26 and 27 the effective tax rate.
Rittick Roy Burman
Will be the the margin the 3022 25% 25.2% because the losses that we have give was there in the FY20 and 21 has already been adjusted with the profit for the next for the last three years so now it will be on this means the whatever taxes that come will have to be paid.
Akhil Parekh
That’s all from my side. Thank you.
operator
Thank you. As there are no further questions from the participants I now hand the conference over to Ms. Masoom Ratheria from MUFG for closing comments.
Masoom Rateria
Thank you everyone for joining on the call today. I would also like to thank the management for sparing time and addressing the questions. Today we are MUFG the Investor relation Khaadim India Limited. For any queries please feel feel free to reach out to us. Thank you.
operator
On behalf of Khadim India Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Rittick Roy Burman
Thank you.
Masoom Rateria
Thank you. It.