METRO BRANDS LTD (NSE: METROBRAND) Q3 2026 Earnings Call dated Jan. 28, 2026
Corporate Participants:
Nissan Joseph — Chief Executive Officer
Kaushal Parekh — Chief Financial officer
Analysts:
Tejas Shah — Analyst
Gaurav Jogani — Analyst
Devanshu Bansal — Analyst
Rahul Agarwal — Analyst
Sameer Gupta — Analyst
Navani Naredi — Analyst
Ankit Kedia — Analyst
Shraddha Kapadia — Analyst
Saurabh Kundan — Analyst
Akhil Parekh — Analyst
Presentation:
operator
Sam. It. Sa. Ladies and gentlemen, good day and welcome to the Metro Brands Limited Q3FY26 earnings conference call hosted by Avendus SpA. The management is today represented by Mr. Afike Malik, Chairman, Ms. Farah Malik Ganji Managing Director, Mr. Neeson Joseph, Chief Executive Officer, Mr. Pasha Parekh, Chief Financial Officer, Mr. Mohit Danjal, Chief Operating Officer. As a reminder, all participants will win 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 attached in phone.
Please note that this conference has been recorded. I now hand the conference over to Mr. Tejas Shah from Avindus Park. Thank you. And over to you sir.
Tejas Shah — Analyst
Thank you Ms. Khan. Good afternoon all. On behalf of our vendor Spark, I welcome you all to the three QFY26 running calls of microbrands. I’ll now hand over the call to Mr. Nishan for the opening remarks post which we’ll open the floor for Q and A. Over to you Nisan. Thanks.
Nissan Joseph — Chief Executive Officer
Thanks Tejas. Good afternoon. Thank you all for joining and welcome to our Q3 FY26 earnings call. As you’re aware, we posted a 15% growth in our stand alone business and our consolidated business. It was good to have a quarter without any unusual events or any offsets from the year before. The Kid Diwali and wedding season performed well and we’re pleased to see that the traffic stays steady both in our online and offline channels. Despite a frankly earlier festive Peugeot season that fell into Q2. I’m pleased to see that sales did come through with a strong mid teen percentage growth and we crossed the 800 crore mark for the first time on a consolidated basis.
The GST benefits continue to help specific parts of our business and our ongoing focus on premium products kept our sales of over 3,000 rupees at a 55% share of business. I’m also pleased to see the consistent growth from our multiple E. Com channels with our digital commerce business as it grew 24% and now reached a 12% share of our total revenue. On the EBITDA side, We grew by 16% for the stand alone and 18% for the consolidated business and we delivered a 33% EBITDA for both. On the PAT front, India’s accounting and a 3.3 crore accrual for the new proposed labor code from November 2025 dampened our PAT which was offset by a one time tax charge in the same quarter of the previous year.
Nonetheless, our pack grew by 33% and we achieved 16% for the quarter for both the stand alone and consolidated business. We opened 35 new stores this quarter and closed 11th, bringing our total new stores this fiscal year to over 100. Additionally, we’re excited to announce the launch of three new Metroactive stores. These stores are designed for athletic performance seekers, featuring brands like Nike, New Balance, Asics and Fila along with workout apparel to provide a complete experience. We’ll continue to invest in and refine this concept over the coming quarters. Meanwhile, our Foot Locker stores will continue to cater to lifestyle sneaker fans, which is a different customer segment than the performance sneaker.
As I mentioned on our previous call, our new Clarks partnership is off to a great start and we plan on opening Clark stores around Q3 of this coming fiscal year. In closing, I’m pleased to see our business improving steadily and growing with double digit increases and more importantly, our key metrics of EBITDA and PAT staying consistent to our guidance while we continue to invest in marketing initiatives and a significant amount in our new stores. Our differentiated banners, each with a Runway for growth, positions us well to cater to the complete footwear wardrobe of the Indian consumer.
With that, I would like to turn the call back to the operator and open it up for the Q and A session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press STAR and one on the touchdown telephone. If you wish to remove yourself from question Q you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Gaurav Chagani from JM Financial. Please go ahead.
Gaurav Jogani
Thank you for the opportunity and congratulations on the strong set of numbers. Jisan, you know we have been seeing slowdown across most of the discretionary consumption in Q3 also because of the early crude oil and early testing that has occurred in Q2. But you completely are defying the trend. So what has really helped you in this and how confident are you of sustaining these trends going ahead?
Nissan Joseph
Well, I think the evidence is in the numbers that we’ve now had a third quarter of double digit growth. So we see business trajectory headed the right way. There’s a lot of initiatives that we put in place in almost all of our banners to see how we can continue that growth trend. We don’t see anything significantly one way or the other that should dampen this or or a massive tailwind coming our way necessarily either. As always, we just see consistent growth happening and we hope to see these numbers continue. We see no reason for these numbers not to stay in the range that we’ve always guided to.
Gaurav Jogani
And Anisha, one of the issues in the past for us had been the store opening. The store openings have also really picked up. So any guidance or anything that you can guide us towards the store opening, can this be the new normal in terms of store openings? And in addition, with the new formats also coming in, would there be any division in the guidance in terms of the store opening that you’ve initiated in the past?
Nissan Joseph
First of all, I would like to point out that we’ve invested in opening up six Foot Locker stores and three MetroActive stores. That’s our commitment to stay relevant and stay whole as a footwear retailer to the Indian consumer. Right. So it’s not like we’re hesitant at all to invest in new stores. And as you know, all new store concepts have a gestation period for it to get up and running and we’re happy to do that. And we see that as a necessity for growth. That’s number one. Number two, we will continue to open as many stores as make sense.
Fortunately, Garth, we’re not capital starved in any way to do that. We want to make sure that we open stores for profitability, we open stores for growth, we open stores to capitalize on on market and market share and we’re not going to be driven by a fixated number. I think our results speak for itself that as and when time comes we do accelerate growth when we see the right opportunity.
Gaurav Jogani
Sure. And just one last question for caution in terms of the accounting bid caution this time around. The absolute depreciation, if you look at it, has hardly increased on a Q2 basis and the other income has also slipped this time around and also the finance curve. So anything to read on these trends, especially the other income because it has dipped quite roughly in Q3.
Kaushal Parekh
Gaurav, you are right in terms of other income but this is purely the effect of payout of special dividend that happened in Q4 of last financial year. In the first half although our treasury was lower by 450 crores but we saw benefits of fall in interest rates that happened in H1 of this financial year. So if you see for entire nine months in absolute amount, our treasury income is still higher than last year though at a much lower investable surplus fees. So that’s, you know, this quarter vis a vis Q3 of last year broadly return in terms of Percentage has been same.
The delta is purely on account of, you know, lower treasury funds post payout. Of special dividends
Gaurav Jogani
And just on the finance cost and you know, the depreciation because you know there are multiple sort of things that has also happened. So ideally because this finance cost will also have an element of the it has gone down. So anything to read there?
Kaushal Parekh
No. So if you’re comparing it that last quarter, if you remember we had mentioned that in that particular quarter we opened four Foot Locker stores and hence absolute hit on account of index was higher in Q2 as compared to you know say Q1 or say when you compare this nine months as a whole. If you see nine months versus nine months our notional cost on account of indes is almost close to about 3940 crores versus 28 crores. 28, 29 crores last year.
Gaurav Jogani
Okay, okay, thanks. That’s helpful. That’s helpful.
operator
Thank you. The next question is from the line of Devanshu Bansal from MK Global. Please go ahead.
Devanshu Bansal
Hi team, thanks for the opportunity. Nisan, I wanted to better understand this growth improvement from 11% in Q2 to 15% in Q3. So the main aspect, right. So in terms of revenue per square feet we were flat in Q2, we are flat in Q3. Our omnichannel growth was about 30% over in Q2. This time around it is 25%. So what exactly has driven this growth improvement? So I guess within the core retail aspects the performance is more or less in line with Q2. In addition, we report these channel wise revenue that indicates that the RM sales that we do plus some subsidiary sales have near doubled on a combined basis.
So also if you could comment on the sustainability of growth in these segments.
Nissan Joseph
All right, so first things first, you know, while you refer to a flat square foot growth, it disguised because we opened up 100 stores this year. Right. And new stores seldom come in at the same time rate of sales as your base stores do. So you know 10% of our chain is actually that was new came in below. So the fact that we are flat to last year is a sign that you know, we’re actually doing well in our existing doors to maintain and keep that propped up. So that’s number one. Right. Number two, we also have zero wedding dates in January this year.
Right. So we should see that impact in December and that should have affected our sales in December. And while I’m not trying to single out a single month, it didn’t have an impact to us. Not because it wasn’t an impact, but it was because we were able to mitigate it through our performance of our regular products and what we’re doing out there. Right. There are no extraordinary subsidiary sales. There is no sales that are hidden in there. These are all our stores performing, getting better at performing both at an SSG level, both at a square foot level.
Though you won’t see that at the the total numbers. You know, overall performance has started to improve then. That’s the bottom line to it.
Kaushal Parekh
We just wanted to clarify the first point on sales per square feet. And this is for everyone. Our formula is very simple. We are dividing total sales by total square feet for the entire company at the end of the period. So. So although for all the stores that we opened in current year, we might just have four, five months of sales coming in in this financial year. But the denominator is full entire square footage. We’re not using average here.
Devanshu Bansal
So Kaushal, my question was growth pickup between Q2 and Q3. Right. So obviously you’ve added stores that 100 stores on a LTM basis was Q4, Q2 also. And that is true for Q3 also. But in Q3 our growth was 11% and in Q3 in Q2 our growth was 11% and Q3 our growth was 15%. So ideally when there is no pickup in revenue per square feet in both the quarters and then in online channel Omni Channel Also we reported 30% growth in Q2 and this time around it is 25%. So I just wanted the bridge as in between Q2 and Q3.
What has led to this improvement?
Nissan Joseph
Well, you’re anchoring what you’re saying, Devanshu, on sales per square foot. Right. And that’s the entire anchor that you’re basing it on. It’s obvious that we are having comp store growth. We’re having new store growth as well, but we’re having comp store growth. So you cannot hinge it on per square foot sale when as Kaushal mentioned, if I open the store at the very last day of the quarter, we’re taking all year revenue, dividing it by that square footage and all quarter revenue and dividing it by that quarter. So it’s always going to be a little bit muted if you open new stores.
I think your entire formula would be reversed if we just did it on a comparable store basis, which as you know, we don’t disclose. But I think you should be able to infer that quite easily.
Devanshu Bansal
Sure. Nissan, I’ll discuss this offline. The second place or the second question was on Sports and Ethel Space. There is Nuclear Ability Pass, who has deep funding and fetching capabilities. There are celebrity endorsements as well, and they have recently come up with a unique format like Sports Yard in Bangalore. While I agree that we play across the consumer needs for fashion, comfort, functional, etc. But our salience towards this particular category is currently lower. So how are we sort of working towards improving the internal agility so that our portfolio salience is also aligned to the evolving needs of the consumers?
Nissan Joseph
So, first of all, I think the market size for athletics is big today, both for performance and for fashion, and I think it’s going to continue to grow. So that’s number one. So we’re not talking about a. A static or shrinking market, we’re actually talking, on the contrary, growing market. That’s number one. Number two, what we are our retailers first and foremost. Right. And if you notice the concepts of Footlocker and MetroActive, they’re retail concepts. These concepts carry brands that are in that sports space to create that salience for themselves. And then we capitalize on it by giving them an avenue to sell and reach different parts of India, different consumers in India.
So it’s not necessarily for us to have that. Where it is of utmost necessity for us is in the Fila business. We have to have that competency in the Fila business. We’ve invested heavily in design studios. Have we been a little set back on Fila because of the BIS norms? Absolutely. Do I believe that we’ve got all the right things in place to capitalize on that growth? Absolutely. There too. So you’ve got to look at it. Holistically as opposed to, I hope there’s many players that come into this space because the space is huge. And the more players that come into it, we actually increase the size of the market more than you realize. Right. So it is something that we’re very good at, which is the retailing part of it, which, all said and done, every brand comes to life only because it has an amazing retail presence. So I think we got. It’s not like we’re missing the entire formula here. There are bits and pieces we don’t have specifically for our villa business that we’re growing.
We have a design office in China, we have design teams here, we have marketing staff, we have agencies working on it. So it is putting that ecosystem together.
Devanshu Bansal
Now, really encouraging that the BIS related challenges are just getting extended quarter by quarter. So that reflection is still not happening. So that was the main concern here.
Nissan Joseph
What is being extended quarter by quarter?
Devanshu Bansal
The BAS related challenges?
Nissan Joseph
Yes. No, because you know we work seasons out right. So we don’t in that business you’re not working on a next day delivery program. We have to quite simply put we have to buy componentry from around the world and assemble them in India, some of which there isn’t the technical expertise to do so so there are some obstacles to it. Absolutely. More than just a BIS reason. But it is a challenge and we’re okay with that because we’re here for. The long run with plus
Devanshu Bansal
sure there’s a couple of bookkeeping questions. The store closures were a bit higher in Q3. Is this a one off or are we making some strategic portfolio corrections and disclosures can continue in the next few quarters as well. And secondly there must be some loss related to these write offs. So. In which line item does this get recognized.
Kaushal Parekh
On? First question on store closure Devanshu Nothing much to read about. If you see overall store closures for nine months it’s around 18. On a base of almost thousand store it is still up 2% and we don’t expect our store closures to change significantly from here on broadly every year it would be in that range of around 2 to 3% which is basic cleanup that we keep doing every year. In terms of your second question on loss related to store closures, this will all go into other expense line items.
Devanshu Bansal
Is the amount significant question or can you call that out for this quarter maybe?
Kaushal Parekh
No, it’s not significant, it’s not material. Otherwise I would have called it as I did for other expenses.
Devanshu Bansal
Sure. And last question from Mayim From a clean based pat margin that you have reported the difference is 1 1/2% for nine months but for Q3 the difference is 1.1%. So going forward what is the run rate to go ahead with and also placing a request if you can consider sharing the detailed pre India like most other retail companies do in the listed. Space.
Kaushal Parekh
On an ongoing basis I think you know it should be around that 1.2 1.3% YTD that percentage is higher because as you remember in Q2 we opened four Footlocker stores. So whenever we open this big size store where the rent free periods are slightly higher because the stores are higher and are bigger and it takes more time for you know in the fit out of the store. That’s why you get that higher hit. If you take Q2 exceptional hit on account of opening those four five footlocker stores broadly it should be in that range of around 1.2 to 1.3%.
Obviously if we increase our store new store openings, it will move in line.
Devanshu Bansal
Sure. Kaushal, please consider that P and L request. So if you can provide a detailed P and L across line items it would be very helpful to better analyze your performance.
Kaushal Parekh
Sure. We leave Ellis.
operator
Thank you. Ladies and gentlemen. In order to ensure that management is able to address questions from all the participants in the conference, please limit a question, two questions per participant. Do you have follow up question? We request you to rejoin the queue. The next question is from the line of Rahul Agarwal from Ikea Asset. Please go ahead.
Rahul Agarwal
Yeah, hi, good evening, this is Rahul from Ikigayasa. Just two questions. Firstly just on the top line, right? I mean positive surprise on the growth side of it, you know, incremental color on you know, SSGs or bill cuts. Average order value will really help, you know just to understand the volume and pricing bit. If could just throw some more light in terms of, you know, how are the cohorts looking across across India and across categories that will help. That’s question number one. Question two was on the inventory health, you know last quarter we were about 785 crores of inventory.
If you could throw some light on, you know, how is that moving into December and you know, how do you see that settling down over the course of the year? And thirdly, just as a bookkeeping question, just want to know the exact scope square foot area you’ve used to calculate the revenue per square feet. Those are my three questions. Thank you.
operator
Management line has been drafted. Please stay connected, we will connect to the management. That’s. It. We have connected with the management. Yes sir, go ahead.
Kaushal Parekh
Sorry for this inconvenience. I think our line got dropped. Rahul, on your first question on top line, you know on a medium to long term scale we have always guided that our average CAGR should be around 15%. And broadly if I have to give you a back of the envelope calculation as to how we reach that, it’s basically broken into three parts. The first one being like to like growth broadly in that mid to high single digit range every year if you open say 100 store on a base of thousand that is about 10%. That 10% is expected to give you half revenue for the first year in which you open.
So that is another 5%. And then the last one third is impact of annualization for the stores that we opened last year which will have full 12 months revenue this year. So broadly that’s the breakup. So when you see a number you would Broadly be able to gauge as to what particular quadrant has performed though we don’t give specific numbers but we give enough details to sort of gauge in terms of the overall top line with respect to inventory. As of December, we have seen slight buildup of inventory which is in line with the season Q3 being the season.
And also considering our store opening plan so broadly in line, nothing much. You know, we don’t, we don’t see anything abnormal there. Broadly in line with what we saw, what we see year on year.
Rahul Agarwal
Got it. And just a bookkeeping question on the. Exact square footage you’ve used to calculate. The revenue per square foot, please.
Kaushal Parekh
It is 13 lakh 90 thousand odd square feet.
Rahul Agarwal
Okay. All right.
Kaushal Parekh
We only take store revenue.
Rahul Agarwal
That’s the standalone store revenue. Right.
Kaushal Parekh
Overall store revenue. That was, that is something that was. I was trying to explain that even if we open stores, say on last day of December, we will not have anything in top line but what the denominator will have store square footage of that particular store.
Rahul Agarwal
Got it. Thank you so much and best wishes to surpass the 1000 store milestone next quarter. Thank you.
Kaushal Parekh
Thank you.
operator
Thank you. The next question is from the line of Sameer Gupta from IIFO Capital. Please go ahead.
Sameer Gupta
Hi team. Good afternoon and thanks for taking my question. I just have two questions. Firstly, I understand there is some benefit of GST reduction this quarter. And last time around you had pointed out that 40% of metro Mochi and 90% of walkway typically will benefit due to the GST cut. Now if you could help us understand this quarter, if you just cross up the sales, let’s say you include GST and you calculate growth, what would that number be.
Kaushal Parekh
So broadly? You know, if we take that 40% it would be about 3% higher broadly.
Nissan Joseph
For the whole — for the whole business.
Sameer Gupta
Lower. 3% lower. You mean the growth
Nissan Joseph
gross would be 3% higher.
Kaushal Parekh
Higher. There is no impact on the net sales, Sameer, because you know the entire GFC amount is now broken up into two parts. One is GST that you pay and the meaning has been offered as discount to the customer.
Nissan Joseph
Samir, we recognized gross sales lower. Yeah, to your point. Correct. Correct. If GST was not there, we would have had gross sales that were 3% higher.
Sameer Gupta
So. Okay, let me rephrase my question. Let’s say in 3Q you had a 811 crore of sale and in 3Q of the base you had 703 crore of sale. If I gross both up and then calculate the growth which is 15% on net, what would this number be.
Nissan Joseph
I want to make sure I understand your question exactly correctly. Right. So if you took last year’s gross and this year’s gross, what would the delta cost by the gst? Right?
Sameer Gupta
No, I’m just interested in the total growth number and it will imply the gst.
Kaushal Parekh
Let me try and explain. On a net sales. That is what I was trying to explain you. On a net sales basis there is no difference because earlier it was gross sales minus say 18% GSE. For simplification. Right. That is how you are getting net sales right now it is. We are selling at MRP offering discount to the customer for differential GFC and the remaining GST has been paid to the government. So on a net sales basis there is no difference at all between 3, 4 GSE number and that is the number that you are seeing in the financials.
Sameer Gupta
I understand. Kaushal, what I basically am trying to understand is the. What the consumer at the end of the day is paying, what is the growth in that number? Because ultimately post four quarters, that is the sustainable number. This anomaly is because you are paying lesser GST to the government versus what you were paying last year.
Kaushal Parekh
So around 3 to 4% less is what the customer is paying. On our entire portfolio. On specific sales, if it is below 2005, if, if the item was with MRP was below 1000, the overall differential would be around 6, 7% from a customer point of view. And if it was between 2,500 2,000, the differential would be somewhere in the range of 11%. So these are the percentages based on which customer would pay slightly lower.
Sameer Gupta
Got it. So it is suffice to say that on a consumer level the growth will be somewhere on the ballpark of 12% versus the reported 15% that you have clocked.
Kaushal Parekh
No, no. That’s what I’m trying to explain. On a net sales basis there is no difference.
Sameer Gupta
Okay, that’s fine.
Kaushal Parekh
Earlier it was 118, minus 18. That was giving you net sales of 100. Right now it is 11% discount. 7 rupees go sales and again 100 gets recorded as net sales. So on a net sales basis there is no difference at all.
Sameer Gupta
But the consumer is paying 11% lesser. Right? Because that 11% is now the discount.
Nissan Joseph
Correct, correct. Well that, I mean that adds up to 3% on a company wide basis.
Sameer Gupta
Got it. Sir, this is, this is really helpful. Second question is on footlocker. Now the commentary in the press release suggests that the expansion from here on would be measured. First of all, is this a correct interpretation and would this mean a pause in footlock or store addition in the near term? And if at all, what can we expect for FY27, 28, if any number you can give. And lastly, is it solely bis which is the constraining factor here?
Nissan Joseph
Yeah, so thanks for asking that question. Because BIS is something that affects not only us but but also global companies that operate in India. Right. Some of the best global companies are also dealing with it. Yes, it is primarily because of BIS that we’ve slowed the growth down. We haven’t stopped the growth, but we’ve slowed it down till we have visibility. We were actually assured that by this quarter the BIS issues would be resolved, which it hasn’t been by the global brands. Now we’re being told it would be Q4 of this year, I’m sorry, Q2 of next year before it will be resolved again.
It’s a wait and see. Right. Till we have visibility. It’s hard for us to invest significant capex and also significant opex in getting these stores open till we know that it has fully the inventory it needs. Having said that, it’s not like these stores are not doing great sales. They’re just doing about 20, 25% less than we would have anticipated had we had the right product in these stores. So it’s not like we’re going to stop growing these stores at all. But we’re going to be much more measured because you don’t always get good real estate as and when you’re ready.
And we want to make sure we don’t miss on those opportunities. And that’s what I meant earlier on by saying we are investing in new stores despite the fact that it may not be profitable right away. Especially these new concepts because of BIS litigation issues.
Kaushal Parekh
I mean, just to add, what we mean is we will not be be aggressively scouting for space for footlocker. At the same time, if we get a good real estate property at a good rent, we will be more than happy to go ahead and open a footlocker store.
Sameer Gupta
Got it. This is very, very clear. Sir, thank you very much for taking all these questions And Nisan, best of luck and congratulations on your reappointment.
Nissan Joseph
Thanks Amir.
operator
Thank you. The next question is from the line of Naveen Naredi from Naredi Investments. Please go ahead.
Navani Naredi
Hello. Am I audible?
operator
Yes ma’.
Navani Naredi
Am. Congratulations on the good sector result and thanks for the opportunity. So I just have one question. It’s regarding will we also be getting benefited from Indian Europe fta? And if yes, then how are we Planning to tap this opportunity towards better monetization.
Nissan Joseph
So we don’t see any benefits directly come to our business from the European fda. However, I think it encourages our footwear manufacturing to keep investing and growing their capabilities, which in the long run is always good for us because we source a vast amount of our goods from India. That’s where we see the advantage. But that’s a little bit, bit more long term memory.
Navani Naredi
Okay. And also on the macroactive, like why did you open the first floor in Indore? I mean, why not Delhi or Mumbai?
Nissan Joseph
Yeah. So what we want to do is come up with a format that can cater to tier 12 cities, not so much the metro cities. And that’s why we’ve opened up in stores like Indore and Jodhpur and Dehradun also we want to use these places is to really refine the concept, learn from the concept. You don’t want to do that in your metro cities from day one. Right. So that’s how we wanted to do it. And eventually we think it’s a great play for those kind of markets as well.
Navani Naredi
Yeah, 100%. And even I appreciate that because I also feel this is a good strategy. Like usually anybody would like to tap the metro cities first, but I think this is like underrated market when there is a lot of penetration which we can get from that market. So congratulations once again and looking forward to meet you soon in the next quarter.
Nissan Joseph
Thank you, Navini.
operator
Thank you. The next question is from the line of Ankit Keda from Philip Capital. Please go ahead, sir.
Ankit Kedia
We have a format called Shoe Depot which we started couple of quarters back. Just wanted to know how we account for that. This is like a factory outlet which I’ve seen in multiple cities. So how does the store in us, you know, because all the brands are housed in this format. So how do we account for that? And what is the. All the inventory which is left over from end of season sale is what do we sell in that format or how do we, you know, manufacture separate inventory for that store?
Nissan Joseph
So let me explain the concept and then Kaushnan will walk you through some of the other questions you had. First of all, we do need outlets, as any retailer does. Typically, retailers will have anywhere from one in every 10 stores to one in every 15 stores as an outlet to clear goods. Right. Instead of relying heavily on a very concentrated period of time which we call the end of season sales in India, we would be good to have an output valve all year long. So that’s the first point we have about 19 metro and Mochi outlets and Crocs outlet stores.
So it’s not like we were not operating the outlets before. We were just never called out because we operated under the Metro banner or the Mochi banner or the Crocs manner. But from a real estate perspective, when you go rent a 1000 square foot metro, 1000 square foot mochi and a 500 square foot crocs, you’re not going to get get as good a rental deal as if you rent 2,500 square feet and house all your brands in there. So that’s number one. So you’re able to get some economies of scale on the rental side. Number two, it’s not always that everybody has the same inventory problem.
Sometimes Mochi may have a little bit more to get rid of, sometimes Metro may have a little bit more. Sometimes it might be Fila that has a little bit more. Right. This gives us the flexibility to put in there what we needed to do to liquidate and perform its primary function, which is to liquidate products. So that’s the reason for the concept. So I guess I wanted to make sure we explained that because I don’t think we’ve ever called that out today, you know, we have eight repos operating today. Seven, sorry, seven operating today. You know that just a little over.
The concept’s only a little over a year old, but it actually replaces our other outlet stores.
Kaushal Parekh
And in terms of number ankit, it is currently being classified in the Metro.
Ankit Kedia
Understood. My second question is on online traction. Do we manufacture separate inventory, low quality for the price points we are selling online or is it purely the liquidation channel for the store inventory which is not getting sold?
Nissan Joseph
Well, it’s a combination of both. First of all, there are no low quality products. I want to make that very clear. But you can achieve price points differently when you manufacture shoes. And it’s not a question of quality, it might be a question of embellishments or the manufacturing method you use. And we do create an online line of goods and that’s exclusive to the E Commerce channel because we don’t want it to create a dissonance with our inline stores. But we also want to be able to cater to the eyeballs and the zip codes that E commerce can penetrate.
So it’s important for us to play in that area not because we don’t think we’re serving the consumer well in the places where we have sourced, but because we believe a disproportionate number of those sales are going to zip codes where we don’t have a penetration or probably never will have a penetration for the foreseeable future. So that’s why we play it that way. But it’s not a discount game for us. It is not something that we just want to make sales at any cost. It has to make sense. It’s got to also be with price points that don’t in any way affect the stature of the Metro, the Mochi brand.
Ankit Kedia
Sure. And my last question is if you look at the price point between 1500 and 3000 and lower than 500 for this quarter we have seen more than 100% growth in price points which are lower than 500 at the same time growth in a price point between 1500 and 3000. The growth is single digitized by Google. So ideally that price point should have grown the fastest. Given that the GST cut is maximum there and more footfalls would have drive there, the product would have become significantly cheaper for the consumer. So anything to read at these two price points from the consumer uptake.
Kaushal Parekh
Ankit Broadly what we’re seeing is the number percentage has remained almost similar 4% below below 500 versus last year 8% between 500 to 1500 again same as last year we have seen slight dip. When you see Q3 numbers between 1500 to 3000 and above 3000 has increased by 1%. So broadly similar. Nothing much to read into because all our formats are growing obviously. Obviously over a period of time. If we expand walkways slightly more aggressively you might see some change but that also won’t be material because all other formats of ours are also growing simultaneously.
So we don’t see any significant impact there.
Ankit Kedia
Sure. And my last question is regarding the GST benefit which you’re passing on to the consumer now. It’s been nearly four months now. Does the discount still there or with the new product rising coming in with the new season being there discount will go off across the stores and now the new products are at a cheaper price point or you know we will keep some benefit with ourselves and or you know in some sort of categories pass on the full benefit to the consumer at the end level how does the bill you know you expect now.
In the new season.
Kaushal Parekh
So ankit all the existing inventory wherever we have a GST benefit on account of REIT regeneration discount continues. So please go and visit our store, buy something, you’ll see the discount on your invoice. This was on a lighter note second point. For all the new products that are getting added we are evaluating what is the final detail GST that we had to pay to the government and accordingly realigning our mrts. You know, we believe in maintaining our markup and passing on benefits to the customer wherever we get, just to make sure that customer continues to see value at the price point at which the product is offered.
So for all the new articles, we are revising our MRPs accordingly in line with the GST percentage reduction and that’s how we are taking this forward.
Nissan Joseph
But to be fair, we also have to keep an eye on our input costs. Right. So if there are input cost increases then we might use it as a way to mitigate some of those price increases. But it’s a balance of things. But foundationally, anything that was manufactured before the date of the new GSV will continue to get at a discount in our stores till the very last shoe is sold.
Ankit Kedia
Sure, that’s helpful. Sure. Kaushal, I’ll definitely go and buy something now. Thank you.
operator
Thank you. The next question is from the line of Shraddha Kapadia from Snips Ltd. Please go ahead.
Shraddha Kapadia
I’m audible.
operator
Yes.
Shraddha Kapadia
Yeah. Thank you so much for the opportunity and congratulations team on a good set of numbers. So just continuing with the previous participants question on the digital and the E Commerce which is there. So currently if you take a look then the digital Contribution is approximately 12%. Is there any medium term target for the E Commerce and the omnichannel mix?
Nissan Joseph
So it’s not so much as a target for that mix. We want to make sure that it is a profitable business at all times. Right. I think in healthy companies it’s always sub 20 healthy. When I say healthy I mean where they have good brands, good retail operations and customers understand their product. I think the range can be anywhere between where we are today and 20%. But that’s not necessarily a growth target we want to chase because we could get there tomorrow by discounting but we don’t want to do that. We will not do that.
We want to create a business that’s accretive both to our sales but also to our brand value.
Shraddha Kapadia
Sure, that is quite helpful. Also if you could help me understand the margin differential between the E Comm and the physical stores. Is there a huge differential?
Kaushal Parekh
It’s not. There is a differential because obviously we do use E Comm as a liquidation channel. Also apart from promoting full price sales which is primarily driven through, you know, Omni channel sales that happens to our stores. So since discounts are offered online, incoming gross, the reported gross margins if we see at the division level would be slightly lower than gross Margins that we report on an overall basis.
Shraddha Kapadia
Sure. Thank you. Also, if we take a look down current quarter, we have as much good EBITDA margin expansion. So is there any range which we should be considering going forward?
Nissan Joseph
I think 33% is a real good range, isn’t it? I think we should. It’s one of those things that I would tell you that what we need to do is ensure that we can continue to provide value to our consumers. Right. Are there operating leverages that we can get? Potentially, but I think maintaining that number is not an easy task in itself. But, you know, we’ve done it quite consistently. We’ve guided to it and I’m happy to say that we’ve hit our guidance almost every single time. Shabbat.
Shraddha Kapadia
Sure. Thank you so much. That was all from my side.
operator
Thank you. The next question question is from the line of Gaurav Toani from GM Financial. Please go ahead.
Gaurav Jogani
Thank you for taking the question again. I have just one question on the margin bid that, you know, what is the kind of drag that we’re seeing. On the margin because of the new. Ventures like, you know, Fila, Foot Locker or even retroactive, because these are now under a gestation period and they would be, you know, in certain losses or maybe at the level they will be profitable, but at corporate levels, quantify the drag because of them.
Kaushal Parekh
So Gaurav, as we have informed earlier formats like Footlocker, Metroactive, since we are largely dependent on third party brands, almost like 90% of our revenue would come through third party brands and hence our incoming margins there are lower as compared to margins that we report on an overall basis. So obviously over a period of time, as these grow, you will see some impact on our overall gross, on our overall reported gross margins. In terms of Sila, we had completed our liquidation last, last year itself. So in terms of Fila, we are not seeing any significant drag in our gross margins.
We had also told that, you know, once this format sort of stabilizes, I’m talking about Fila here, we expect it to be at least equal, if not accretive to the gross margins that, that they are reporting currently in that 55 to 58% range.
Gaurav Jogani
So because of the thing was that, you know, I understand on a gross level there will be differences, but I’m assuming that on the EBITDA level, you know, there would be some drag. And by drag I mean, you know, because we will be making lower profits. So is that an assumption, right? That as this business kind of scaled up, there is a scope of, for you to improve the EBITDA margins. That was largely what?
Nissan Joseph
Yeah, no, it’s a drag for a couple of reasons, Gaurav. One is, you know that it is a new it takes a while for it to settle in. Number two, we’re also investing heavily in the marketing of it. So you know, those are things that start to taper off as the brand starts, as the concept starts to establish itself. So yes, going forward it should have room for EBITDA improvements.
Kaushal Parekh
Having said that Gaurav, as of now contribution from our new format footlocker Metroactive Sila is not significant and hence we don’t expect significant improvement in the margin guidance that we’ve always given. Gross margins in that range of 55 to 58% is what we are comfortable with. EBITDA in that 30% range and PAT in that 15% range is what we are guiding for medium to long term.
Gaurav Jogani
Just one last bit, the breakup that you give to PPD terms of the in store of the channel online and others built this time around. You know there is a decent amount of that we have seen in the other segment. I mean the contribution is 2% out for this quarter and the H1 was just 1%. So is there something that has, you know, led to a decent 25 crores kind of a number for the others bid especially in this quarter?
Kaushal Parekh
It’s not, you know, actually at times, you know, these numbers also change on account of decimal. So there could be that effect of decimal there but we don’t see any significant number being present there.
Gaurav Jogani
Okay. Okay, sure. Thanks.
operator
Thank you. The next question is from the Liar. So Sourabh Kundan from Goldman Sachs. Please go ahead.
Saurabh Kundan
Hi. Thank you. I just wanted to know if you can quantify the volume growth over the last three quarters. Let’s say three or four quarters. What has been the trend in volume growth ?
Kaushal Parekh
So, broady Saurabh, we have seen our ASPs go up by approximately 2 and half 3%. We have reported overall 12% growth. So you know, balance 9% is coming from volume which will include both same store as well as new store addition that happened during the year.
Saurabh Kundan
Understood. But if you could tell me what it was, let’s say in 2Q and what it was in 2Q on a.
Kaushal Parekh
Yyou know our ASP growth Saurabh has been in that range pretty much, you know, 2 to 3%. So take for example in Q2 our overall growth rate was around 12%. So take out 3% from there and that’s how you get the percentage in this quarter our Overall growth is 15%. So if you take out 3%, 12% will be volume growth. So broadly in that range, our ASP’s growth has been largely consistent in that 2 to 3% rate.
Saurabh Kundan
All right, thanks.
operator
Thank you. The next question is from the line of Akhil Parekh from BNK Securities. Please go ahead.
Akhil Parekh
Yeah, thanks for the opportunity and congrats on a good set of numbers. I just saw one question pertaining to vi. Right. What is a typical inventory look like. For a footlocker store? Because we have. So ideally on such a small base. We shouldn’t be having a BIS related issue. Right. And if we have it for footlocker. And filler, why don’t we have that. Similar issue for our MetroActive stores?
Nissan Joseph
I don’t think we ever said it with a big drag on us. We’re talking about why we would be conscious in our aggressive growth plans for Footlocker. Right. So it wasn’t we were going to stop growing footlong. We just weren’t going to be as aggressive about it until we had clarity. To answer your question as to why we’re concerned about it, it is only 20% of the sales, but it is the 20% of the high heat sales that create uniqueness, that create a brand position for Foot Locker. And why does it not affect everybody else except Tila and Foot Locker? Well, Foot Locker, everybody in the world in the athletic sports is affected.
Right. So Thila falls in that category. It, it doesn’t affect the rest of our business because 85 to 90% of the goods we sell are sourced in India. So BIS does not apply loosely to us. Metroactive is also impacted by it because it’s heavily reliant on outside brands. However, they don’t need as much high heat product all the time. They have a different set of products. So it may not impact our MetroActive stores as much as it would impact our Foot Locker stores. So but to reiterate it, as Kaushal said, these aren’t significant parts of the business.
What’s significant to note is that Metro continues to invest knowing fully well that we may not get payback the very next day in some of these new concepts. But we’re more than happy to grow our business for the long term positioning of Metro brands.
Akhil Parekh
Sure, this is helpful. So just for clarity, when you say. High risk for 12, does it imply. That the higher end of the footwear. Is largely slave coated while relatively lower end maybe below 10,000 and below that is kind of domestically brokerage?
Nissan Joseph
Yeah, it’s a lot of things right. It’s collaborations that are done in one off factories. But to answer your question loosely, it definitely is. Product over 10,000. I would even go as high as saying most of it falls well over 15,000 rupees. That’s the kind of product we’re talking about.
Akhil Parekh
This is concluded. That’s all from my side. Thank you so much.
operator
Thank you. As that was the last question for the day. On behalf of Metro Branch Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.