METRO BRANDS LTD (NSE: METROBRAND) Q4 2025 Earnings Call dated May. 23, 2025
Corporate Participants:
Nissan Joseph — Chief Executive Officer
Kaushal Parik — Chief Financial Officer
Analysts:
Devanshu Bansal — Analyst
Gaurav Jogani — Analyst
Sameer Gupta — Analyst
Saurabh Kundan — Analyst
Sagar Jethwani — Analyst
Shraddha Kapadia — Analyst
Prerna Jhunjhunwala — Analyst
Umang Mehta — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Metro Brands Limited Q4 FY ’25 Earnings Conference Call, hosted by Emkay Global Financial Services Limited. 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. Please note that this conference is being recorded. I now hand the conference over to Devanshu Bansal from Emkay Global Financial Services Limited. Thank you, and over to you, Devanshu.
Devanshu Bansal — Analyst
Yes, hi. Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr Rafeat Malik, Chairman; Mrs Fara Malik Bhanji, Managing Director; Mr Nissan Joseph, Chief Executive Officer; Mr Kaushal Parik, Chief Financial Officer; Mr Mohit Dhanjal, Chief Operating Officer; and Ms Alisha Malik, President, Sports Division, e-commerce and CRM. I shall now hand over the call to the management for the opening remarks. Over to you, sir.
Nissan Joseph — Chief Executive Officer
Thank you. Good afternoon, everyone. Thank you for joining, and welcome to our Q4 20 FY ’25 earnings call. I’m pleased to share that our revenue continues its positive trajectory as we grew over 10% on a consolidated basis with the standalone business reporting over 9% growth for the quarter. Of course, if we didn’t have the leapier day last year to offset our standalone business, we’d also have been at a double-digit growth. I’m very proud of the financial discipline shown by the team as our EBITDA and PBT growth outpaced our revenue growth with the numbers improving 18% and 13%, respectively. Additionally, our EBITDA for the quarter came in at 31%, in-line with our guidance. For the year, our revenues grew by 6% for both the standalone and consolidated business numbers. Similarly to the quarter, our EBITDA and PBT outpaced the revenue growth posting an 8% EBITDA and a 7% growth for our standalone businesses.
As you — as you may remember, H1 was challenging for our business as we were impacted by fewer wedding dates, the distraction of a national election and unusual weather patterns that affected footfalls in various states. H2 had our business back towards our normal growth numbers with the consumer coming back to shop in our various different banners. Our gross margins remain healthy running in the high 50% range and above our guidance of approximately 55%. While our revenue per square-foot showed a slight degrowth, this is very much in-line with our expectations as this number is always going to be influenced by new stores and the mix of banners that we open and not a reflection of our business discipline as-is validated by our profit growth. Our e-commerce business continues to perform as it grew 45% for the quarter and wrapped up with a 20% year-on-year growth.
We continue to monitor and prudently expand our quick commerce space and we’ll continue to test this channel to ensure that we capitalize on any meaningful opportunity that it may present to us as it evolves. For the quarter, we opened 18 stores and closed five stores, which takes us to 70 net-new stores for the year. We’ve had quite a few milestones for the year. We opened our first Foot Locker store. We cleaned up the last of the FILA inventory. We were able to overcome the BIS issues for our core business, though its impact was minimal and continue to grow profitably despite there being a much more aggressive discount environment in the market. We also crossed the 900 store mark in the quarter. Last but not least, our consistent effort towards sustainability also yielded tangible results. We achieved our goal of recycling one pair for every pair sold ahead of our schedule, reinforcing our customer trust and our commitment to responsible retailing. I’m proud of the efforts of the team to continue our grow our various banners while sticking to our foundations of operational rigor and financial discipline. With that, I’d like to turn the call-back to the operator and open it up for our Q&A session
Questions and Answers:
Operator
Thank you. Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press R&1 on their touch to telephone. If you wish to withdraw yourself from the question queue, you may press star and 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 have a first question from the line of Sameer Gupta from IIFL Capital. Please go-ahead. Sameer are you there. Sameerai there. We will move on to the next question from the line of Gaurav Jogani from JM Financial. Please go-ahead.
Gaurav Jogani
Thank you for the opportunity. I hope I’m audible.
Operator
Yes, Gaurav. We can hear you.
Gaurav Jogani
Yeah. So my first question, Nissan, is on the FILA part. FILA last year because we were consolidating and there were certain losses in the business. If you can give us a sense what kind of a profitability we have been able to achieve or rather had we breakeven on the FELA business this year in FY ’25?
Nissan Joseph
Yeah. Thanks, Gaurav. As you know, last year, the first two years of the FILA acquisition was meant to be a cleanup phase, right? And it took us a little bit longer than I would have liked. But the good news is it’s behind us. This year is going to be all about repositioning the brand this year and next year, it’s going to be about repositioning the brand. So I don’t see where FILA is going to play a significant role in moving the needles for the overall company business, but it’s definitely not going to be dilutive to all that we’re doing.
Gaurav Jogani
So, just on the follow-up on this. I mean, mean if you can give us a sense, last-time as per our calculation, there was a INR38 crores kind of EBITDA loss that we did in that business. So at least that has been now become flat on a Y-o-Y basis. I mean, there is no incremental loss or there is some loss in that business.
Kaushal Parik
Gaurav, you know last year, if you remember, overall loss that we had posted for FILA was around INR58 crores. This year, we have been able to reduce this amount significantly somewhere closer about 50 odd percent. We expect to see further improvement in this number as Nassan mentioned, in the coming year and obviously much better performance from next year onwards once we start opening our EVO stores.
Gaurav Jogani
Sure. Thanks. Thanks,, for that. And my second question is with regards to the overall demand trajectory. As you have clearly mentioned, that the first-half was impacted due to fewer wedding days and also the elections happening. And now because we are — and last year also we saw a lower number of store openings. So are you confident of reverting back to the historical revenue CAGR that you have witnessed of 15% to 18% from FY ’26 onwards. And what would be the guidance in terms of store openings for the next two years?
Nissan Joseph
So I think when it comes to going back to our growth trajectory, we’ve had two quarters of double-digit gains, Gaurav, which bodes well. It shows a trend. It’s not a one-off. We’re going to continue to see things affect the business from time-to-time. We’ve had some disruption with our neighboring country. Those kind of disruptions will come and go. But overall, we’re seeing the consumer sentiment settle into now a pattern that I would say is more reflective of a steady-state of business as opposed to the lumpiness of the post-COVID — the post-COVID highs and the post-COVID lows. I think we’re starting to see a little bit more of a trajectory of consistency. And with that, we remain committed to our guidance of 15% CAGR and don’t forget, it’s CAGR.
So we’re not going to jump right back up to 15%, but I can see — we see the business heading back that way. And as far as new stores go, it’s not about the number of new stores we opened Gaurav, as-is shown by the financial discipline we have. We didn’t add as many stores as we would have liked, but we were more than okay with that because we didn’t feel that the commercials on the stores that were presented at that time were correct. What we’re committed to doing is opening stores that are meaningful and profitable for the organization. However many that adds up to, right? So if it comes to a certain number, it comes to a certain number. It’s not a target fixation of the number, it’s a target fixation on continuing to operationally and financially deliver to the Metro promise.
Gaurav Jogani
So, thank you for the detailed answer. I will come back-in the queue for more.
Nissan Joseph
Thanks, Saurav.
Operator
Thank you. We have our next question from the line of Sameer Gupta from IIFL Capital. Please go-ahead.
Sameer Gupta
Hi, good evening, everyone, and thanks for taking my question. Sir, firstly on, I understand that last quarter you had mentioned around five to six stores in Fila by August this year. So just wanted an update on where are we on those? And second subquestion to this would be that we have had our cleanup done by 3rd-quarter. BIS-related issues are sort of sorted now with local manufacturing coming in. So what is really stopping us in this particular format? I mean, I understand there is a repositioning of the brand, which is to be done. So are you still iterating between how that reposition needs to be done and that is what is taking time.
Nissan Joseph
Okay. So we’re not in any way confused about how to reposition it. We’re very clear that, A, it needs repositioning and B, how it needs to be repositioned. But repositioning a brand and establishing brand salience is not an overnight task, right? If it was everybody would be doing it. It takes a little bit of time and it takes a little bit of trial and error as well, right? We’re not going to get everything right the first time around. And even as far as BIS goes, while we’ve been able to duplicate a lot of the production to India, it’s not everything either. So that is still a challenge for our and business. So there are some challenges, but equally, we see the opportunity that if we reset the brand Correctly, reposition it properly for the Indian market, for that consumer that’s discerning, it has some legs behind it.
Sameer Gupta
And where are we on that five to six stores by August as per the last guidance, are we still on-track or are there more hiccups expected?
Nissan Joseph
Yeah. No, we definitely intend to open more stores in H2 of this year, right, fiscal H2 of this year, and that’s definitely staying on-track. So we’re not deviating from that.
Sameer Gupta
Okay, sir. That’s fair. Sir, second question is on-store expansion. Now I understand that there were issues in FY ’25 related to rentals and you mentioned commercials were not viable in the previous participants’ answer. But where are we on those now? Are those now coming back to sort of more viable so that we can come back to, let’s say, a desirable retail area growth this year or it’s still a challenge?
Nissan Joseph
No, it’s a good question. So we are seeing the rentals never come down, right? It’s like taxes and rentals always keep going up. But the good news is, I think it’s coming off its peak that it had earlier in the year. We’re starting to see that peak flatten down a little bit. It’s not going to go back to the levels and we’re acutely aware of that. But we are seeing it get more favorable for us to open stores.
Sameer Gupta
Super, sir. That’s all from me. I’ll come back-in the queue for follow-ups.
Nissan Joseph
Thank you.
Operator
Thank you. We have our next question from the line of Saurab Kundan from Goldman Sachs. Please go-ahead.
Saurabh Kundan
Thank you very much for the opportunity. Nishan, as you mentioned in your opening remarks that revenue per square feet, as you said, will always be impacted by store addition and the mix of stores that you had. So, can we sort of assume that in that case, at the current store addition pace that you’re adding stores at, that this number may just remain flattish in the near-to-medium term? Is that a fair assumption?
Nissan Joseph
Yeah, I think flattish with some inflation at some point in time. But if we open up more metro and Croc stores, that is going to go grow. If we open up other banners, it’s not going to grow as fast. So it’s really a mix of stores, Saurab, than it is anything else, but there is constant inflation happening as well. So I would say, I wouldn’t factor much of that kind of growth coming in. It will be just growth coming in from SSGs, which will then translate to square-foot growth.
Saurabh Kundan
Right. Thank you. And, thanks for that. And my next question is actually around Walkway. While we understand your plans and aspirations over the long-term for this format and the kind of TAM it can open up for you in the overall footwear market. Can you share with us where we are right now? And what are the exact store-level variables that we are still testing that are holding us back from expanding stores here as of now. That’s a TAM.
Nissan Joseph
So I think like you rightly said that the TAM for the Walkway consumer is significant. We’re acutely aware of that sort of. I don’t think there’s anything holding us back per se. Yeah. Just like FILA, positioning, evolving, getting a brand right, getting a retail concept right is an ongoing work-in progress. At some point there, we start to feel-good about where we are with it, and that’s when we start pressing down on the accelerator. Don’t forget, it’s going to be dilutive to my square footage that you just asked about. But on the flip side, I think the opportunity is intense and I think we definitely feel that we are closer to cracking that and don’t see any obstacles from where we sit today for us to get that banner growing.
Saurabh Kundan
Right. Thank you.
Operator
Thank you. We have our next question from the line of Sagar Jetwani from PhillipCapital PMS. Please go-ahead.
Sagar Jethwani
Yeah. Thanks for the opportunity. How do you expect the footwear realizations to move-in FY ’26 given that we have added FILA, Foot Locker and New, of course, they are in the ramping-up stage and also we are adding the metro Mochi stores. So how do you see that realizations going up?
Kaushal Parik
Sagar Rina, if you see, historically our ASP growth has been in that range of around 3% to 5%. With all this format coming in, we are in the last question, obviously, we are growing — we will be growing our Walkway segment too. So we’ll see growth all across. Our e-com is also growing. So we broadly expect our ASP growth to be around the range that we have seen historically, we don’t expect it to change materially, at least if I have to speak about, say, next year. Once this format start delivering you know, contributing significantly to the revenue, obviously, we will see changes in average AS over a period of time.
Sagar Jethwani
Okay. And also if you could comment on the footwear realization split between the Tier-2 and beyond towns versus metro plus Tier-1 cities, so that would be helpful.
Kaushal Parik
See, we don’t — we don’t see significant difference to be very frank. Obviously, you can’t compare, say, a Phoenix in Mumbai to say our store in Patna. But I’m just saying broadly, we don’t see significant difference in metro cities, certain malls, etc., ASPs that tend to be higher than say on an average that you see for-country as a whole. But largely wherever we go, we see that kind of population who wants to — who tires to sort of buy product from us and they’re more than happy to pay or buy at the price that we operate.
Sagar Jethwani
Yeah. And lastly, what were the footwear realizations this quarter?
Kaushal Parik
Yeah. As I said, overall, if you see our ASP increase is around 3%, if I have to specifically talk about footwear, it is somewhere in the range of 5% to 6%.
Sagar Jethwani
Okay. Thank you and all the best.
Operator
Thank you. We have our next question from the line of Sharddha Kapadia from Smith Limited. Please go-ahead.
Shraddha Kapadia
Hello, am I audible?
Operator
Yes,. Yes, you are.
Shraddha Kapadia
Hi, and thank you so much so much for the opportunity.
Operator
Sorry to interrupt, your voice is quite breaking. Can you use handset?
Shraddha Kapadia
Yeah, hello, is this
Operator
Little bit ma’am.
Shraddha Kapadia
Yeah, and that should be common. So what is in both, is it the channel mix higher ASP or customer acquisition? And what is the expected contribution which we expect for FY ’26?
Nissan Joseph
Thank you., can you please repeat your question, at least the initial part, we couldn’t get exactly what you wanted to ask.
Shraddha Kapadia
Also, basically, this is with regards to the e-com, which is there, it has grown 45% for the quarter. So what is driving this growth? Is it the channel mix higher ASP or new customer acquisitions? And if you could help with the targeted FY ’26 contribution?
Nissan Joseph
So it’s — if you see our five-year CAGR for e-com has been around 53%. For last year, for last quarter, we grew at 45% and if you see for the year, it was around 20%. To be very frank, we are growing across all the channels that are available for us to sort of tap. And obviously, our focus, as we have discussed this multiple time is on growing our omnichannel business, which is which is predominantly full-price products getting delivered from our store. So it’s a mix of mix of products that we see. Apart from that, obviously, we keep — we keep pushing and strengthening our positioning across various categories. So take, for example, men’s and handbags are will be our focus area and we will — we expect that to sort of increase in the coming years. So it’s like over a period of time, strengthening and using all the avenues that are there to grow this channel and most importantly, to grow this profitably. We don’t want to grow this by offering significant discount. We want to limit that. But at the same time, we would want to target and be among the top player across all the categories that are available online?
Shraddha Kapadia
Sure. Thank you for the detailed answer. Sir, any contribution which you expect for FY ’26, if you could just give a brief number, would it be similar to the current FY ’25, right?
Nissan Joseph
Yeah,, as I said, we had — e-com has been growing at a pace slightly faster than a offline business. So we expect this contribution To keep rising over a period of time. It is 10.6%. Maybe if you force me to put a number, maybe I’ll say it will increase by 1% or 2% in coming — in the coming year or so. Yeah, that’s how we will sort of look at this. As I said, we don’t want to push this sales by offering discounts. We want this to be profitable.
Shraddha Kapadia
Sure. Thank you so much for your answer. Also, sir, is it possible to give the ASP for footwear excluding the accessories?
Nissan Joseph
ASP for footwear broadly is somewhere around 2,400 odd number if you just see for footwear.
Shraddha Kapadia
Okay, sir. Okay. Okay. And are we planning to take any price hikes for FY ’26?
Nissan Joseph
Not specifically. We are not seeing a significant increase in our input cost. So broadly, what we will see is mix of some cost increase and predominantly mix change. And we expect our ASPs to be in that range as we as we have seen historically around 3% to 5%.
Shraddha Kapadia
Okay, sir. Okay. Thank you so much for your answers. And all the best for future.
Nissan Joseph
Thank you.
Operator
Thank you. We have our next question from the line of Praina Junjunwala from Elara Capital. Please go-ahead.
Prerna Jhunjhunwala
Thank you for the opportunity. Just wanted to understand the Crocs brand. We’ve opened only 10 stores in the year, 10 to 11 stores in the year. How do we see this brand shaping up over the next two to three years?
Nissan Joseph
I think there continues to be an opportunity to grow the brand. It’s just not — as you know, Crocs tends to be a slightly higher-priced item. So it’s not — it’s not easy to go into your lower-tier markets with Crocs right away. But as India evolves and as India becomes more-and-more aspirational and there’s more disposable income. We see a long runway for crocs in India as we look to the future.
Prerna Jhunjhunwala
I mean, what should be the — should crocs grow at a higher-rate than the company average going-forward is what I was trying to understand
Nissan Joseph
No, I think no, we don’t have a plan to grow any faster. We don’t have a plan to grow slow necessarily. What we’re really focusing on is to move all growth across all our banners.
Prerna Jhunjhunwala
Okay. And how do we see the scale-up for FILA and going-forward in terms of stores and online presence? I know online is someone else, but for FILA online presence and for in terms of offline presence?
Nissan Joseph
Yeah. So FILA is in our offline foot Locker store. It’s also on the online foot locker store. It’s also online by its own.com in India. And we also have starting to go into our metro mochi doors as we start to reposition the brand. So it’s in all of those places and it’s performing to our expectations, right? But it’s not an overnight journey to build a brand, but it is performing to our expectations. So we’re quite pleased to see that happening.
Prerna Jhunjhunwala
Okay. And last question on profitability. How do we see the profitability of going-forward with respect to the inventory of non-BIs inventory that we have and do we have to take some discount measures to reduce them in the near-future to medium future?
Nissan Joseph
No, we don’t see BIS having any impact on our margins.
Kaushal Parik
So broad guidance as we have always given, gross margin in that range of 55% to 57%, EBITDA in that range of around 30% and PAT around 15% is what we would continue to endeavor to achieve.
Prerna Jhunjhunwala
Okay. Thank you so much. All the best.
Kaushal Parik
Thank you.
Operator
Thank you. We have our next question from the line of Umang Mehta from Kotak Securities. Please go-ahead.
Umang Mehta
Hi, thanks for the opportunity. Nissan, my question was on-store opening. I just wanted to check, I mean, what changed versus last quarter because demand environment, if anything, has only been steady, right? And rentals you said have started to kind of improve. So is it just that you don’t want to put a number, but nothing has changed meaningfully or has there been any change in the underlying kind of model for you?
Nissan Joseph
Yeah. No, what has changed, as I mentioned earlier on, is the fact that we do see rental peak — rental peaks coming down a little bit. So that’s always very encouraging. What has not changed is our commitment to growth, our availability of capital for the capex to the stores. There are multiple banners that we have that we can expand with. So we’re quite optimistic about opening stores, right? Putting a number on it, listen, it’s just a number that you and I pick. The reality is we’re going to be very aggressive on-store growth and we’re going to open as many stores as we see is meaningful and profitable for the organization.
Umang Mehta
Understood. That makes sense. So basically, there’s a number, but you remain as optimistic as you were before. All right. And the second one was on FILA. So in the interview today earlier, you said that 50% of and foot locker you manufacture in India. So I’m assuming you have some suppliers already who are shipping you half of the line. Is there any capacity constraint at their end? End because right now, since you are still ramping-up, I’m assuming your requirement might not be that high. So what exactly is the issue? If you can shed some more light, it will help us understand.
Nissan Joseph
So when you — when you try to do a brand, you really need width of assortment more than you need depth. So it’s not a question of having scale. It’s a question of having capabilities available to you in different models and different parts of the assortment in India. So if there’s anything that’s going to be a challenge and going to continue to be a challenge till the ecosystem in India evolves is to get the kind of products we would like to see. Now having said that, there are ways to get it through BI-certified factories abroad and we are pursuing all of that. But it would be a lot easier if we didn’t have to deal with it among. It’s just that it’s one more wrinkle that we have to work-through.
Umang Mehta
Understood. That’s very helpful. Thank you so much and all the best.
Nissan Joseph
Thanks.
Operator
Thank you. We have our next question from the line of from Insightful Investments. Please go-ahead.
Unidentified Participant
Hi, sir. Thank you for the opportunity. So I just wanted a clarification. So according to what I have understood, Mochi, Metro and Walkway are the stores through which you sell your own brand shoes, am I right?
Nissan Joseph
Correct.
Unidentified Participant
Yeah. So going-forward, as you are looking to expand and Foot Locker, will we be seeing some reduction in the own brand sales or will the increase in number of Mochi and metro stores sort of make-up for that?
Nissan Joseph
Yeah. So the numbers we share with you are the numbers of owned brand sales that we sell-in a metro — in a mochi in a walkway, right, right? We run — we have been running that numbers for quite a few years. So we don’t see that changing,. So on an overall basis, immediately, we don’t see any shift in that overall math either.
Unidentified Participant
Okay, sir, understood. Thank you so much.
Operator
Thank you. Before we move on to the next question, a reminder to all participants, if you wish to ask any questions, you may press. We have our next question from the line of Devanshu Bansal from Emkay Global Financial Services. Please go-ahead. Devanshu, are you there?
Devanshu Bansal
Yes, hi, Nissan. H1 has been a weak base, which was impacted due to multiple factors. There were fewer weddings, elections, seatwaves, etc. If we were to segregate growth across the two halves of FY ’26, how would it look like? Can H1 see better trends vis-a-vis H2? I just wanted to take your thoughts on this.
Nissan Joseph
I like your polite way of asking us for a guidance, Rivanshu, that we don’t do. But I think it’s a sensible math in retail that if you look at a lower base, the propensity to have a better performance is higher than if you look at a higher base. However, there’s also something called momentum in retail. And once we start seeing that pickup, what I would encourage you to just think about really is in the long-term, we are pretty confident that we’re going to get back to our 15% CAGR this year wasn’t there. So that would at least tell you an indication of how we are looking at it long-term.
Devanshu Bansal
Understood. Secondly, I wanted to understand how has been the initial traction in the Food Locker store that we have opened and whether this is sort of leading to uplift in the confidence level for the expansion for this.
Nissan Joseph
Yes, to be honest with you, with the product that we got, we’re actually quite excited about what’s happened with Foot Locker. What’s unfortunate is we haven’t been able to get all the product we need due to BIS limitations, right? So from that standpoint, our commitment, our excitement on the opportunity and runway for Foot Locker remains untouched. Having said that, there are some short-term challenges. We fully expect the brands to step-up and figure out and close the loop on manufacturing within the next six to nine months, at which point we will accelerate the growth of Foot Locker. We do have more foot lockers planned to open later this year. So it’s not like we are hitting Total pause on it, but we have slowed it down till we get full visibility of how the brands are going to respond to BIS.
Devanshu Bansal
Got it. Understood. Last question from my end is for Kaushal. Kaushal, there is some increase in other financial assets, right? So it is about INR179 crore versus about INR13 crore last year. Can you help us understand what is this increase related to?
Kaushal Parik
Devanshu, it is, you know, our investment in FDs because of the accounting classification goes into other financial assets depending upon the tenure for which — that FD investment is for. So the increase that you see is basically our treasury investment in bank FDs.
Devanshu Bansal
Understood. And from a capital perspective, because dividend was quite high relatively versus previous years. So from a capital sufficiency perspective, our balance sheet remains solid, right?
Kaushal Parik
Yeah, it remains solid. If you see our balance sheet, we have a treasury of around INR775 crores. In terms of our expansion plan, as we have always said, our — our annual cash accrual should be enough to sort of fund all the store openings and plans that we have. So we don’t see any problem that point-of-view. We — we have enough dry powder ready in case if something comes up.
Devanshu Bansal
Okay. Okay. And light to this, from a working capital optimization perspective, it’s been a pretty decent job this year. Can we expect some continuation of moderation in working capital or we have sort of achieved whatever efficiencies were there to be taken?
Kaushal Parik
Right. Devanshwa, as you would know, if you see on a long-term basis, our working capital has been around that 70 to 75 days in that range. It was insulated in last three years predominantly on account of BIS related front-loading of inventory that we had to do. We are seeing now that thing tapering off. We expect our working capital to be around this range. We don’t want to become too efficient and then lose out sales. So it’s a fine balance that we have to hit there, but around 70 to 75-day working capital is a decent number and that is what we would want to hold-on to.
Devanshu Bansal
Got it. Thanks,.
Operator
Yeah. Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have a follow-up question from the line of Sameer Gupta from IIFL Capital. Please go-ahead.
Sameer Gupta
Hi, thanks again. Two different set of questions from me. Firstly, overall capex in FY ’25, I see is at around INR86 crore and this is quite low versus last year. I understand store openings were low, but we had an understanding that you were investing in a new warehouse and that investment was around INR40 crores. So just wanted to get an update, is this done or we expect this to get stretched in the future year
Kaushal Parik
Or some year that cash outflow should happen in current year, most probably most of it will happen in the H1 of this current financial year.
Sameer Gupta
So that clarifies. Thank you. Secondly, sir, and sir, different offbeat question. Now when we are following retail this quarter, what we find is that South as a market and particularly the states of AP, Telangana have been called out for a very weak performance for different reasons. But just wanted to get an update, have you also witnessed something similar and any reasons that you can figure out why that is happening?
Nissan Joseph
So we are seeing a slight softness there. I think it’s hard to pinpoint what exactly might be causing it. But yes, you’re not incorrect that we noticed that other retailers have also in our communications with them expressed that same sentiment. Could it be some of the — could it be some of the slowing down in the IT sector, could it be — there’s also some — a lot of public works going on in Hydrabad. You know, these things happen and typically, when you look at the macro-level stuff, there’s no reason that area of the country should lag significantly. From time-to-time, we’ve seen when tourism is affected, the tourist areas get hit. So there’s always — but these things always rebound at the worst-case, they lap itself Sameer, but it’s not significant enough for us to be concerned about.
Sameer Gupta
Got it, sir. Thanks. That’s — that’s very helpful, sir. Thanks all. I’ll — I mean, I’m done.
Nissan Joseph
Thank you.
Operator
Thank you. A reminder to all participants, if you wish to ask any question, you may press star and 1. A reminder to all participants, if you wish to ask any questions, you may press star and now a reminder to all participants if you wish to ask any questions you may press and one now a reminder to all participants, if you wish to ask any questions, you may press star and one now. A reminder to all participants if you wish to ask any questions you may press star and one now. As there are no further questions, I now hand the conference over to the management for closing comments.
Nissan Joseph
Thank you. We don’t have any closing comments, and thank you everyone for attending.
Operator
Thank you. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you. Thank you for joining us and you may now disconnect your lines.