Monte Carlo Fashions Ltd (NSE: MONTECARLO) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Sandeep Jain — Executive Director
Dinesh Gogna — Executive Director
Analysts:
Unidentified Participant
Sunny Bhadra — Analyst
Diwakar Rana — Analyst
Madhur Rathi — Analyst
Kapil Jagasia — Analyst
Manan Shah — Analyst
Subrata Sarkar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Monte Carlo Fashions Limited’s earnings Conference call hosted by MK Global Financial Services Limited. As a reminder all participants line will be in 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 touch tone phone. I now hand the conference over to Mr. Sunny Bhadra from MK Global Financial Services Limited. Thank you. And over to you sir.
Sunny Bhadra — Analyst
Thank you Iqra. Good morning everyone. I would like to welcome the management and thank them for this opportunity we have with us today Mr. Disha Boswal, Executive Director, Mr. Sandeep Jain, Executive Director, Mr. R.K. sharma, Chief Financial Officer and Mr. Ankur Gowaba, Company Secretary. I shall now hand over the call to the management for the opening remarks. Over to you gentlemen.
Sandeep Jain — Executive Director
A very good morning to everyone and thank you all for joining us for today’s earning call to discuss the performance for third quarter and nine month ended of financial year 26. Let me start by sharing the financial highlights for the third quarter under review. The company reported revenue of 608 crore reflecting an year on year growth of 11% and EBITDA for the quarter stood at 166 crore with EBITDA margin at 27.24% marking a 7% year on extension and net profit increased by 11% to 107 crore. Now coming to the financial performance, for the first nine months the revenue firm operation stood at 996 crore which has increased by 11%.
EBITDA was 201 crore witnessing a growth of 11% and EBITDA margin reported at 20.3%. The company has reported a profit after tax of 107 crore which has increased 17% year on year. Coming to the operational performance for period, we saw a strong rebound in the sales across most categories. Our brand Rocket and Cloak and Decker brands delivered yet another quarter of consistent performance. The home textile segment also maintained its robust growth trajectory supported by healthy demand across all categories. Further, putwear sales surged to more than twice the level of nine months ended financially at 25 and the growth momentum is expected to continue in the coming quarters.
Online sales continue to show strong momentum through our own website and external portals reflecting the growing customer preferences for our digital channels. We remain strongly focused on expanding our retail footprint and are firmly committed to open 40 to 45 EBOs across India with a strategic emphasis on the western and southern region. During the quarter, our retail presence was further strengthened with addition of five new EBOs under clock and Decker taking a total count of 22 stores. Plans are underway to reach 25 to 30 EBOs of clock and Decker by the year end. To enhance customer convenience and reach, we have partnered with Queen Commerce platform such as Blinkit, Swiggy, Zepto to enable Express deliveries within 30 minutes.
Additionally, our strategy collaboration with Salesforce is helping us streamlining operations, elevate customer experience and build long term brand loyalty through our digital transformation. Further, we have expanded into overseas E commerce platforms for direct and indirect export through Zoom.com and StylishOp.com broadening its global presence. As per our earlier growth guidance of 10 to 15%. We are hopeful of ending the year at the higher end of the guidance and remain optimistic about achieving multi year growth going forward with this. Now we open the floor for question and answer session. 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 telephone. If you wish to remove yourself from the question queue, you may press Star and two Participants are requested to use handsets while asking a question question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Divakar Rana from Prudent Equity. Please go ahead.
Diwakar Rana
Hello. Morning. My first question is how much expense have you booked in the view of this labor law change?
Sandeep Jain
How much expense you have booked in.
Diwakar Rana
In the view of this labor law change?
Sandeep Jain
Labor law change labor 30.
Diwakar Rana
30 lakhs only is towards gratuity.
Sandeep Jain
It’s around 30 lakhs towards gratuity.
Diwakar Rana
Okay. Okay.
Diwakar Rana
Only 30 lakhs.
Diwakar Rana
So the employment benefit has been has increased by over 7 crores.
Diwakar Rana
Pardon the it’s not because the labor additional expense on labor code expense was only 30 lakhs. And that is only because of gratuity, nothing else.
Sandeep Jain
Okay.
Sandeep Jain
Okay. Okay. And the remaining part around 6 crores.
Diwakar Rana
Additional increments and all you know this is not not because of lack of this annual increase as far as salaries and wages are concerned but the extra expense which we have to book was only 30 lakhs.
Sandeep Jain
Okay. Okay.
Sandeep Jain
And also can you throw some light.
Sandeep Jain
On the increase in other expense? Is there any one of them.
Diwakar Rana
Their normal expense as far as percentage is concerned, if you compare it, it is almost normal. So there is no additional additional item.
Sandeep Jain
In this in terms of percentage similar.
Diwakar Rana
Percentage wise it is similar. If you see.
Sunny Bhadra
Okay. Okay. Thank you.
operator
Thank you. The next question is from the line of Jigar Nathani, an individual investor. Please go ahead.
Unidentified Participant
Thank you sir for the opportunity. My question number one is your inventory has grown faster than sales recently and roe is around 20%. 10%. Sorry. Roe return on equity is 10%. So what concrete steps are you taking to reduce inventory days and improve the return on equity over next 12 to 18 months? And is there any medium term ROE target the board is working towards?
Diwakar Rana
See, inventory has increased only because sales have increased. And also we are looking forward for a very strong quarter coming forward. That is why also the inventory has gone up. And as we guided we will be ending at the top end of our guidance that is around 15%. So that is why there have been little increase in the inventory. And as far as ROE is concerned, I think if you have to see the cash adjusted equity. So that is much higher because we are. We have around 300 crore of cash which is lying with us and cash adjusted roe is around 15%.
Okay.
Unidentified Participant
And sir, my second question is for the 35 megawatt PM Kusum Solar Project. Can you share expected CapEx tariff structure, funding mix and the annual pad contribution we should expect once operational?
Diwakar Rana
I would ask Bishop you to answer on this.
Unidentified Participant
Yeah, so I think it’s. The total tender is for around 49 megawatts. We can take an average costing of around 3 to 3.2 crores per megawatt. And looking at the recent increase in prices of the metals like silver and copper, it has impacted the cost of 1 megawatt by around 15 to 20 lakhs per se. And. But otherwise. What was the second part of your question?
Diwakar Rana
We should expect once the plant is operational.
Dinesh Gogna
We will share the exact numbers with you. We don’t have the.
Dinesh Gogna
But approximate the project IRR is around 18%. 18% IRR. IRR is 18%. So exact pad number yet to be, you know, quantified. But we, we are anticipating IRR of 18 as per the latest course data we have available with us. Because already the PPA we will be signing in, you know, in few months, maybe by next month we can sign it. So that that price and the cost which is running right now gives us around 18% of IRR.
Dinesh Gogna
And as far as the funding mix is concerned it will be around 70, 30. 70% will be debt and 30% will be equity equity and cost equity.
Unidentified Participant
Okay.
Unidentified Participant
Thank you sir.
Dinesh Gogna
Thank you.
operator
Thank you. The next question is from the line of Madhurati from Countercyclical Investments. Please go ahead sir.
Madhur Rathi
Thank you for the opportunity. Sir, I wanted to understand why are we getting into solar EPC when we are already apparel manufacturer. Sir, this is very. So no business segments or it’s nothing similar. So I’m trying to understand the rationale behind it. And then a sub question would be you said that the cost of 4 megawatts 3 was 3 to 3.25 crores and that has increased by 15 to 20 lakhs per megawatt. So is the, so the 18 IRR that we have mentioned, is it on a. Is it on the higher end because of these rising commodity prices?
Dinesh Gogna
Yeah.
Dinesh Gogna
So 18% IRR we’ve calculated is after the increase in prices. So 18% is the minimum IRR that we can expect. And I just want to clarify, we are not getting into EPC of solar. We are just investing the amount in a solar project, in a ppa. We are not getting involved in the EPC procurement, construction part of the. This is a purely financial investment decision taken on companies.
Dinesh Gogna
We have see, we have seen that our return on investment is basically around 9 to 10%. So with this it will go to 18% in this case. So it’s more of a financial decision than of going into epco.
Dinesh Gogna
It’s not a business decision. We’re not getting into the business of EPC of solar.
Dinesh Gogna
And it’s a separate subsidiary also it’s not in the same company.
Madhur Rathi
Got it. And sir, what is the. At what rate are we signing the PPA?
Dinesh Gogna
At 2.7. The average rate is 2.7.
Dinesh Gogna
2.7.
Dinesh Gogna
9. 2.79.
Madhur Rathi
Got it. And sir, I wanted to understand sir, even with such a strong winter season this year, sir, our sales have only grown by 10%. So why is that sir, Are we losing market share? Because the winters have been very strong in North India and where we have a very strong presence. I’m just trying to understand why are we not able to grow faster than the 10 to 12% in Q3.
Dinesh Gogna
Specifically Q3, it’s not about the faster growth or slower growth. We have given the guidance of 10 to 15%. Accordingly we have manufactured the merchandise seeing that this much we can sell. And we are already, we have said that we’ll be going ahead in the top end of this guidance, maybe around 15% we will end this year. So that is as per the guidance and as per the production we have done for this winter also. And the sale through have been better as compared to last winter. And we are very hopeful of going into next year with.
With more focus on the, you know, like revenues. So we forecasting approximately 15 to 20% growth for the next financial year. Also because we are lying at very low end of inventory cycle at our warehouses and also at our retail stores and our channel partners. Hope I have answered your question.
operator
Thank you. The next question is from the line of Kapil Jagasia from Carnelian Asset Management. Please go ahead.
Kapil Jagasia
Sir, my question is regarding the price hikes which you had indicated that you had taken during this year. So despite that I can see the difference between volume and value growth. The value growth being much lesser than the volume growth across all product segments. So can you indicate like why is this, Is this the impact of USS or can you highlight on this?
Dinesh Gogna
There has been impact of USS but that is already taken into the price. So there is no impact on the margins as far as margins are concerned. But yes, US is increasing every year and that is why we have to increase our price also. So that is why the margins are not impacted. But there has been a certain reduction in the value and the volume mix is more.
Kapil Jagasia
Okay, so the gap between the volume and value growth will continue in the next year also. Like how is your sense on this being on the uss? Increase in uss?
Dinesh Gogna
I think we more or less it will remain stable at this level.
Kapil Jagasia
Okay. And sir, how is your booking for the next quarter Q4 like the winter product is selling well or the summer has picked up? Like can you give some sense on it?
Dinesh Gogna
See as I already mentioned, we had a very strong trade show in summers which dispatches will start in this month and already we have started. So we are seeing a very fourth strong, very strong quarter. The fourth quarter which is coming now as compared to last fourth quarter of last financial year. And because the retail inventory is very low at our channel partners also and at our warehouse also the sales have been much better. So we anticipate going forward we might grow at 15 to 20% for next financial year.
Kapil Jagasia
Okay.
Dinesh Gogna
And we see a strong trade through coming and in winters for that would be starting in the 21st of March of this financial year.
Kapil Jagasia
But context, you have indicated that there have been more participation in the uss. So this year’s USS participation was earlier for us or how can you give some sense on that?
Dinesh Gogna
It was same. It was same as last year. There was no change. It’s almost same.
Kapil Jagasia
Okay, sure. Thank you.
operator
Thank you. The next question is from the line of Amar Ahir from Raiden Capital. Please go ahead.
Unidentified Participant
Yes, we are audible.
Unidentified Participant
Sir, I wanted to ask you that what are the total number of stores or distribution channels that we started right now and how many of Them will come in Q4 and F11. And also what is the share of like India and the international sales?
Dinesh Gogna
Just hold for a moment.
Dinesh Gogna
That is already available in the presentation.
Dinesh Gogna
490 are already there in the presentation. So total store we have is 490 as of now. And we expect another four to five showrooms. I think we will open in next two months, February and March. It may be more also. I need to check it again. And the international presence is very, very less. I think Mostly we are 99%. We are a domestic market only. We have just started online sales in Dubai and some other areas. So. But mostly 99% business comes from the domestic market only.
Kapil Jagasia
Okay, so 4 to 5 was chosen the next two months. And for FY27.
Diwakar Rana
Again we are maintaining the same guidance of 40 to 45 stores.
Unidentified Participant
For the full year. FY27, right?
Unidentified Participant
Yes.
Unidentified Participant
Okay. And any margin or revenue guidance for FY27?
Dinesh Gogna
Sir, I’ve already indicated that we would like to grow around 15 to 20% over this year’s base. This year will be ending at 15%. So on this base we are anticipating a growth of 15 to 20% for next financial year.
Unidentified Participant
Okay, sir. Okay, sir. And can you help me with the retail and e commerce mix of your sales?
Dinesh Gogna
E Commerce is around 12% in nine months. Retail contributes almost 40% of this nine months period.
Unidentified Participant
ECommerce is 12%. Retail is 40%. Right.
Dinesh Gogna
E Commerce is 12% of the total business. E Commerce and 40 contribution by retail sales radio stores.
Unidentified Participant
Okay, so thank you so much. That’s from my side.
operator
Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Subrata from Mount Intra. Please go ahead.
Unidentified Participant
Hello.
Dinesh Gogna
Yes. Yes, you’re audible.
Unidentified Participant
Yeah. Sir. Three four things to understand. One is like whatever you are saying, like because there is a low despite a very strong winter, because we have like our. Our production was planned accordingly. And that’s why we have registered a 10% growth. So in this situation is what kind of difference? At least you can give some idea. Like what is the difference between prim and secondary sales of our product which has reduced our inventory? This is number one. Second, when you are. When you are projecting that we will grow in next like year throughout the year at a 15% rate.
That means we are supposed to do a very strong Q4. And number two, generally what happened during the weak season, like there are a lot of inventory return and that depressed our margin to only 3% for example, in last year. So Are we expecting significant higher margin in Q4? So these are the two main aspect first and then I will have some.
Dinesh Gogna
Follow up questions as I’ve understood your question clearly. See this year as I already reiterated that whatever we have planned we normally plan six to eight months in advance. So that inventory was planned and the growth was anticipated was 10 to 15%. But we are still hopeful of ending at 15% once we have the final year, once we have the fourth quarter ended in this financial year and as far as quarter four margins are concerned, we anticipate that our quarter four should be better as compared to our last quarter four of last financial year and volume growth and value growth both would be there because we have a very strong, we had a very strong retail trade show for summers so that dispatches are happening in Jan, Feb and March.
So we see that Kiwi end this year at 15% as compared to last financial year as far as overall growth is concerned. Now the reason why I’m saying 15 to 20% growth for next financial year is very, very, you know, simple is that because our sale through at retail level is more as compared to last year’s sail through. So that gives us the confidence that we would be having a lower inventory at our channel partners also at our retail partners also. So that is giving us a confidence that in forthcoming trade show which is going to happen at in around last week of March we should have more orders and we anticipate a growth of 15 to 20% going forward next financial year.
Unidentified Participant
Sir, one clarification sir, like this just only on the margin side to understand a little bit more like the December quarter we do 20% margin for example sir, both FY24 as well as this year 27, 28%. Whereas when we go to March quarter every year we do a negative operating margin or a very slim 2, 3% margin. So what I. What I’m trying to understand is the primary reason for this is like whenever there is a inventory return from the store level that depress our margin or we have to sell, we have to sell at a much discounted price to clear the inventory.
If we anticipate that this year there is a very low inventory then we will not come out with a discount sale. So can you give some idea of how strong that margin can be vis a vis negative or a 3% margin? Let’s say we have done operating profit of. In March 24th our operating profit was minus 10 crore. In March 25th our operating margin profit was only 6 crore vis a vis like in March 26 what kind of operating margin, absolute number or in terms of percentage some guidance because even if we go throughout the year at 2515% then we need to clock anyway to 70 to 80 crore of like sales which is almost 30% above the March 20.
At March 25plus the margin upside should come. So any any idea sir, at least some clarity.
Dinesh Gogna
I think partly you have answered my question. So yes, definitely the sales figure which you are referring is we should need to have that kind of sales figure to achieve 15% growth at the year end. And secondly we have rightly mentioned so as the sales more so there will be less returns as compared to last financial year. That will add into profitability and also that will add into our margins also. So I am hopeful that as compared to last financial year fourth quarter this quarter we should have better margin, better revenues and overall growth would be around 15% of this financial year as compared to last financial year.
And as far as EBITDA is concerned you were talking about the operating margin. Last year we ended at around 19%. So we indicated in second and third Concord also that we should be around 100200 basis point plus as compared to last year’s margins and already growth. I’ve indicated. I think I have answered all the three questions.
Unidentified Participant
Okay sir, last a small priority generally. Sir, what kind of margin depression we anticipate in Q4 because of inventory return?
Dinesh Gogna
See, I can’t say as of now, but I am giving you future.
Unidentified Participant
Sir, I’m not not talking about future only. I’m talking about last one or two years. Your experience, what kind of margin compression you experience in Q4 because of inventory return. That’s.
Dinesh Gogna
Not quantified it sir, as of now if you want we can quantify it.
Unidentified Participant
And send it to you.
Dinesh Gogna
But the general logic is the margin.
Dinesh Gogna
Compression is because because of returns which we get.
Unidentified Participant
Yes, I know it sir. I’m talking about only from a historical perspective what kind of margin compression we experience used to on in Q4 because of inventory return.
Dinesh Gogna
So we will quantify it and send.
Dinesh Gogna
It to you over email.
Dinesh Gogna
We don’t have that number with us right now.
Dinesh Gogna
And for basic understanding please refer to our overall guidance which is 15% and better margin as compared to last year 100200 basis point plus for full year. Please refer to us as a company for a full year basis because we don’t have a debt of quarterly guidance and quarterly margins.
Unidentified Participant
Okay, so last year we have done 17% overall. This year we expect it to be 18% plus overall throughout the year 17%.
Dinesh Gogna
Was without other income and with other income it was 19%. So we expect minimum 100 to 150 basis point plus as compared to last financial year. And the revenue growth again I would say that upper end of our guidance which is around 15%.
Unidentified Participant
Thank you sir. Thank you.
operator
Thank you. The next question is from the line of Madhurati from Countercyclical Investments. Please go ahead.
Madhur Rathi
Thank you so much for the opportunity. Once again, sir, what. What will be the cost of debt for the solar EPC project that we are that will be making investments in.
Dinesh Gogna
It will be at a very competitive rate around 7%.
Dinesh Gogna
7.5.
Madhur Rathi
Got it.
Madhur Rathi
And sir, we are expecting a 30 revenue growth for Q4 on a YML basis for us to achieve the 15% revenue growth for the whole year. So can you help us understand sir, why is because our strongest quarter has been the Q3 and the winter season. So what is changing in the business that we are expecting such a strong growth for Q4?
Dinesh Gogna
See, we have indicated in the last financial call also that our summer business is now growing faster than the winter wear business. And that is where the contribution from summer we are altogether has reached to almost 46% as compared to 54% of winter. And every year this dynamic is changing. So that is why we expect a more stronger quarter going forward. Particularly this, this, this quarter which is we are basically fourth quarter. So we see that there has to be a very good growth. Then only we can reach 15%. As already indicated that we had a very strong trade show for summers.
So summer growth, summer is growing faster than the winter wear segment.
Madhur Rathi
Got it.
Madhur Rathi
Sir, what was the inventory level as of Q3? FY25.
Dinesh Gogna
And see it is.
Dinesh Gogna
We can’t say right now because once we have the returns with us, which we see that it should be lesser than last year, then only we can see the inventory level of fourth quarter. But if you want inventory of inventory of third quarter that I can let you know the total inventory of the company.
Madhur Rathi
Sorry sir, please.
Dinesh Gogna
Yeah.
Madhur Rathi
Sir, what was the sales?
Dinesh Gogna
Now it’s 529. As. As I guess 503.
Madhur Rathi
29 versus 503. Okay, got it. And sir, what was the sales return for last year?
Dinesh Gogna
Just, just hold for a moment. I can let you know percentage terms.
Madhur Rathi
The last dates were at 13%.
Dinesh Gogna
Yes.
Madhur Rathi
Was 13% or 17%? It was 13%.
Dinesh Gogna
13% for the whole year or only.
Dinesh Gogna
For the Q4 nine months? It was 13%.
Madhur Rathi
Okay. And so what was the figure for this year?
Dinesh Gogna
This year it is 17% as of now.
Madhur Rathi
But we make adequate provision for each quarter for the expected returns and as well as expected discounts.
Dinesh Gogna
We, we, we have made more provision but we anticipate less returns in fourth quarter. So provision you normally we make as per the last year’s basis. So our auditors have advised us to make this provision. But we anticipate a lesser returns so you might see a surprise in fourth quarter.
Madhur Rathi
Okay, got it. So that was from my. Sir, thank you so much and all the best.
operator
Thank you. The next question is from the line of Manan Shah from Manibi. Please go ahead.
Manan Shah
Yeah, hi sir, thank you for the opportunity. Just want to clarify one understanding. So basically what you are saying is for the fourth quarter as the returns will be lower, hence your contribution absolute margins will be higher and your absorption of cost will be better, which will probably lead to better EBITDA margins.
Diwakar Rana
Yes, you’re right.
Manan Shah
Understood. So very high chances that we could see mid teens sort of a margin in Q4 this year considering the kind of growth that we are anticipating.
Dinesh Gogna
Please refer to our annual guidance. So I can’t comment about the fourth quarter individually but overall guidance, what we have given for full year, we will stick to that.
Manan Shah
Right. Understood sir. Secondly sir, on the returns side you mentioned that you made provisions on the basis of last year. But in terms of percentage and even in terms of absolute, the returns are actually on the higher side. Right? You just mentioned that nine month return was 13% last year versus 17% for the current year. So. So then the provisions are higher, right? Than what they were last year.
Dinesh Gogna
Sir, actually provisions are made on the basis of last three years trend basis and sometime returns are received higher. So however, we have given a complete reconciliation at page number 15 of our investor presentation. You can refer the completed concession there at.
Manan Shah
Okay, so you’re saying that last three year average is closer to 17%.
Dinesh Gogna
No, no, it was lower.
Dinesh Gogna
But average of last three years last.
Manan Shah
It was lower but it was, we received higher. So this year we as everything is okay, we expect the actual return to be lower. So we have made that provision. Also at the end of each quarter we provide as per India’s 115 guidance, we provide adequate provision for expected returns as well as expected discounts.
Dinesh Gogna
Also the last year season was not good, so returns were more in last year. So this year the sales will have been better at the retail level and also at our channel partners. So we anticipate that the return should be lesser as compared to last year’s level. To summarize it.
Manan Shah
Understood. Sir, lastly this year we witnessed early onset of the winter. However, the severity at least in the month of December was not severe. And it is only off late when you know real severe winter has started. So in this season do you expect your full price sell throughs to be at par as last year or there will be more discounted selling this year since you know the harsh winter has been relatively later during the season.
Dinesh Gogna
So full price sale was more. If you talk about MRP sales. But I think overall discounting will remain same as compared to last year’s level.
Manan Shah
Understood. And overall, in terms of quantum, the returns that you’re expecting in Q4, do you expect it to be say half of last year or. I mean how much lower returns are you expecting in Q4? Hello? Hello?
Manan Shah
Hello.
Manan Shah
Am I audible? Hello?
operator
Just give me a moment. The management line got dropped I guess. Please stay on the line. I’ll reconnect them. Ladies and gentlemen, thank you for patiently waiting. We have the line for the management reconnected over to you, sir.
Manan Shah
Yeah. Hi sir, I’ll just repeat my questions. You mentioned that we are expecting lower returns this in the Q4. So. So in terms of saying percentage, if you can quantify how much lower returns are you expecting this year, say 20% lower versus last year or any sort of expectation on that side.
Dinesh Gogna
The exact figure though I might not be able to give because we still. The sale is running and it will be ending at around 20th of February. So then only I can give you the exact returns. But one thing is very, very, you know.
Manan Shah
Sure.
Dinesh Gogna
Is that key as sales we have been better, so returns will be less as compared to last year.
Manan Shah
Okay, got it. On the solar EPC side, is it safe to assume that the ROI at which we must have bid these projects will be upwards of 15%.
Dinesh Gogna
18% IRR is around 18%.
Manan Shah
Okay. And any more projects for which we have bid and announcement is yet. I mean where we have built but the result is yet to be announced.
Dinesh Gogna
No, no. As of now we have not bid anything. It’s the only period which we have built.
Manan Shah
Okay, sure. Thanks. I’ll get back in the queue.
operator
Thank you. The next question is from the line of Sheetal Shah, an individual investor. Please go ahead.
Unidentified Participant
Hello sir. Am I audible?
operator
Yes. Yes sir.
Unidentified Participant
Thank you for giving me the opportunity, sir. Sir, last year Q3FY25 our volume growth was flat but our profit was up 25%. Right, sir. And in this Q3FY26 our volume growth is up 17% but our net profit is up only 12%. So can you elaborate sir? Is it due to pricing pressure or something?
Dinesh Gogna
It’s due to the early start of uss. Nothing else have been there. That is why the margins were not impacted.
Unidentified Participant
Okay, sir.
Dinesh Gogna
Yeah.
Unidentified Participant
And. And the second question is, sir, our cotton sale is, is up 25% this. This year, this quarter. Yeah.
Dinesh Gogna
The cotton sales have been growing, you know, faster than the winter sales. If you see that in nine months the winter has grown by 13.9% and the cotton segment has grown by 22.13%.
Unidentified Participant
Yes, yes. Okay.
Dinesh Gogna
So cotton growth has been. We have, we. We have been saying in the past also that the cotton segment will keep on growing faster than the woolen segment because of being a geographical country and nine months of summer. So cotton segment has been growing faster than the winter segment and the contribution of cotton is also in the mix is increasing every year.
Unidentified Participant
Okay, sir, answer my last question. Is a woolen sale as per your expectations of winter sales as per your expectation this time or less than your expectations are?
Dinesh Gogna
No, it is meeting and exceeding our expectation.
Unidentified Participant
Okay, but because in the last call, sir, you are very confident about the sale. This and the winter was also very severe, sir. But our sale is risen by only 10 to 11%, sir. That’s why I’m asking, sir.
Dinesh Gogna
See again, I would say that I think I have answered this question in the past, you know, two, three times the same thing. See, whenever we plan for a production for a year, we give our guidance also. So in the beginning of this year we indicated that we’ll be growing at 10 to 15%. And we have never said that we will be missing our guidance. We only said that there may be a chance where the guidance can be revised upwards. But we have never said that we will miss our guidance. So in 10 to 15% till date we have achieved around 11%.
And again, I am reiterating that we will be ending around 15%. So you can assume that the fourth quarter is going to be better than this nine months. Then only I can achieve my 15% target and the total full financial target. We are basically ending at the top end of the guidance. So we should appreciate that the company is actually, you know, at par with the guidance which have been given in the earlier con calls.
Unidentified Participant
Okay. Okay, thanks a lot.
Unidentified Participant
Suggestion from my side, sir. Instead of venturing into unrelated field, sir, why should not be concentrate on our core business and grow our business by at least 20, 25% where other retailers are also growing in good times? Sir, this was only my suggestion.
Unidentified Participant
Sir.
Unidentified Participant
Our growth trajectory is A fixed at around 12 since last many years is fixed at around only 10 to 15%, sir. So our suggestion is to try to make it grow by at least 20 25%, sir.
Dinesh Gogna
See I think already we have indicated for next year 15 to 20%. And this year already we have grown. Maybe we’ll end around 15%. So that 10%, 5% is gone. Now already we have said that now we are in a position where we can go for a multi year growth of 15 to 20%. And this we are indicating in our this. So I don’t see any reason why we should not grow. Because all the levers are in place to get this growth for next four to five years.
Unidentified Participant
Okay, so my best wishes to you and your team, sir. Thank you sir.
operator
Thank you. The next question is from the line of Subrata from Mount Intra. Please go ahead.
Subrata Sarkar
Hello sir, Only a small clarification on the. And some understanding on our ETS side effective tax rate Basically so last year it was 29. So having been move into the new tax regime and this year what is our expectation?
Dinesh Gogna
So you are checking the tax rate on the quarter three check tax rate.
Subrata Sarkar
No, no clear sir. I’m talking about full year, sir. So what is our eta? What should be our effective taxes this year and why it was elevated last.
Sandeep Jain
Year it will be always be 25% 1.6, 25.168. This is our tax tax bracket is 25.
Dinesh Gogna
Okay, so on a full year basis it will be 25.
Dinesh Gogna
Say.
Dinesh Gogna
Yes, yes, yes.
Dinesh Gogna
But the last year it was little bit higher sir or my difference.
Dinesh Gogna
Actually tax rate will remain the same. It may differ only because of the difference. Capital gains only. And quarter to quarter difference is arises because of defer tax.
Dinesh Gogna
Defer tax because I’m not talking about.
Subrata Sarkar
Quarter to quarter, sir. So like for example sir, last year our PBT was 112 and our net profit was 80. So it. It’s effectively 29%. Is it because of capital gain you are talking about?
Sandeep Jain
Yes, yes it is because of capital.
Dinesh Gogna
Because of capital gain.
Dinesh Gogna
Yes.
Subrata Sarkar
Okay, so this year also it will be like that only, sir.
Dinesh Gogna
No, I think. Don’t think because the captain indexation I think is not in current year. So I don’t think it will be this year.
Manan Shah
Okay, so this year it should be 25%, sir.
Dinesh Gogna
Yes.
Subrata Sarkar
Thank you sir.
operator
Thank you. The next question is from the line of Manansha from Manibi. Please go ahead.
Manan Shah
Yeah. Hi sir. Thanks for the follow up. My question was on the employee expense this quarter we have seen a significant Jump in our employee expense sequentially as well as ion wise. So what led to this sort of an increase?
Dinesh Gogna
No, as far as percentage is concerned, it is hardly half percent.
Manan Shah
So I’m just saying frequently we see almost a 20% jump in our employee benefit expense. And Even on a ym y basis, this is a 23% more or less jump in our employee expense.
Diwakar Rana
No, no. If you see nine months period, the difference is 0.7% and that is because of the wage and increments. That’s all. So there is no significant increase. It’s only because of the annual increments that takes place. It was 10.37% last nine months. It is 11% now.
Manan Shah
Okay.
Manan Shah
And in terms of advertisement and business promotion, there is around 20 to 30 pips sort of an increase.
Dinesh Gogna
It was 3.63 last year, 3.77 this year. So just point one four percent higher.
Manan Shah
Okay? Okay, got it.
Manan Shah
Sure. Thank you.
operator
Thank you. The next question is from the line of Jigar Nathani, an individual investor. Please go ahead.
operator
Sir.
Unidentified Participant
Over the last few years, since fiscal year 2022, your data days and inventory days have increased sharply which has pushed the cash conversion cycle higher and coincided with Roce falling from over 20% to low teams. Now what concrete operational steps are you taking to reduce data days and inventory levels over the next 12 to 24 months? And what would you consider a normalized level for these metrics? Thank you.
Dinesh Gogna
So inventory level will remain same. As the sales will grow, the inventory will also grow. But the debtor days I think we should be bringing by 5 to 10% in next financial year.
Unidentified Participant
Okay.
Unidentified Participant
And sir, what are the biggest risks that could prevent Monte Carlo from improving return on equity over the next two years?
Dinesh Gogna
I think there are all the areas where companies are showing improvement. So I don’t see any biggest risk over there. It’s only that the economy is doing well. If we move into recession, then it is risk for each and every company in India. But as of now, as we see that this year will be growing around 7.5% and next year forecast is also around 7%. So I don’t see any risk to anyone, any company in India as far as consumption is concerned. Unless and until we have some macro events happening or geopolitical events happening, I don’t see any reason to fear about.
Unidentified Participant
Thank you, sir.
operator
Thank you. A final reminder to all the participants. If you wish to ask a question, you may press Star and one now. To ask a question, you may press Star and one now. The next question is from the line of subrata from Mount Intra. Please go ahead.
Sunny Bhadra
Hello sir, one small clarification again on the data and inventory side. In terms of absolute numbers it will be. It will keep on rising. But in terms of these days of sales, why it has gone up like if I can highlight like till last year till FY23 also it was around inventory days was around 213. Whereas last year it was almost 312. So. So why it has gone up to that extent is, is it our strategic decision to hold more inventory? And given that this time we have a better sales, can that inventory level come down in terms of days not in terms of absolute number.
Dinesh Gogna
Last year on the basis sales 167 days.
Diwakar Rana
See, see, you have to see. Don’t, please don’t look at quarter to quarter inventory days number please.
Sunny Bhadra
See, I’m talking about absolute numbers. Annual number, sir.
Diwakar Rana
So annual number last, Last year was 100amounts.
Dinesh Gogna
Last year as for balance sheet is 167 days.
Diwakar Rana
167 days. So 169 and 145. So that was the difference of last to last year. And this year we see at the same level of this year also inventory days.
Kapil Jagasia
Okay, so we don’t have any intention to reduce inventory days or data days.
Unidentified Participant
This is our strategic decision basically.
Diwakar Rana
See, as the sales will go up, definitely inventory days will come down. And the reason is that you know, we have our sale based retail stores are opening up and also our large formal stores are online or sale based. So inventory level will remain at this level. So there might be a, you know, reduction of 4 to 5% next year, but not beyond that.
Kapil Jagasia
Okay, got it.
operator
Thank you. The next question is from the line of Diwakar Rana from Prudent Equity. Please go ahead. As there is no response from the participant. We’ll move to the next question.
Unidentified Participant
Hello.
Diwakar Rana
Hello.
operator
The next question is from the line of Sheetal Shah, an individual investor. Please go ahead.
Kapil Jagasia
Thank you for giving the opportunity, sir. Am I audible, sir?
Diwakar Rana
Yes. Yes.
Kapil Jagasia
Sir, my final question is that what external environment you aspire for our company to grow at around 20 to 25% for around four or five years. And sir, what internal anything you can do over a period of three, four years so that we can grow at the rate of double the growth what we are growing now, sir.
Diwakar Rana
See first of all we don’t only chase growth, we chase profitable growth. And we think that to go for a profitable growth 15 to 20% is a very comfortable level to have this kind of margins. You please compare all the other companies who are there in the market and who have a growth of 15 to 20% and maintaining EBITDA margin of 20, 21%. So we’ll be on par with, we’ll be on par with them.
Kapil Jagasia
Okay sir, any what internally sir you will do over a period of 3, 4 years. Sir, apart from increasing the EBOs and all that. Sir.
Diwakar Rana
See I think we have mentioned in our last 2, 3 con calls our brands like Rocket which is performing very well year on year clock and Decker has started performing from last two years. Our footwear has almost. We have seen a sale of 150% plus in case of footwear and online sale have grown 50% in this financial year. Our home textile should grow 15 this year and 25 next year. So all these I think new brands and new categories have started performing. That is why it is giving us confidence overall we can grow in this brand 15 to 20%.
Earlier these were the small brands and they were not contributing much to the revenues of the parent Monte Carlo brand. But now as the smaller brands, smaller categories now they are becoming big and the growth is also coming from these categories. So that is why it is giving us confidence that going forward within this category and with the established Monte Carlo brand, we can grow to 15 to 20% going forward.
Sandeep Jain
Okay, so.
Kapil Jagasia
So you mean to say on a larger base again we’ll go on 15 to 20%. Right sir, am I, am I understanding.
Diwakar Rana
We are indicating a growth of 15 to 20% for multi year ahead, not only for next financial year and we have all the labor in place to achieve this kind of growth. 15 already we approved this year. Even though, even though I won’t, I won’t see that most of the companies will be having this kind of growth and this kind of EBITDA in this financial year. You can always compare with other companies as well which are in our domain. But we are very confident that we will achieve this guidance. What we have given this year and except Covid year we have never failed any of our guidance which we have mentioned in our concord last to last year we clearly stated that the year is not good for us.
There have been some returns and we’ll be ending a flat year year. And we ended up late revenue. There was no decline in that. So last year we indicated 10 to 15% will be ending at the top end of around 14 to 15%. And next year we given a guidance of 15 to 20. And we always believe in under commitment and over delivering. That is what we have done in the past Also.
Kapil Jagasia
Yes, sir.
Sandeep Jain
Yes.
Kapil Jagasia
And sir, you have a cash in the book. Are any plan for buyback? Sir.
Diwakar Rana
Does that. We can. We can discuss all these things in the management when we put all these things to the board. So it’s not in my domain right now to speak on this.
Dinesh Gogna
Okay, sir.
Kapil Jagasia
We had lots of hope on you and your management, sir. Thank you very much. It was very assuring, sir. Thank you very much.
operator
Thank you. The next question is from the line of Divakar Rana from Prudent Equity. Please go ahead.
Unidentified Participant
Hello. I’m audible now.
Kapil Jagasia
Hello.
Unidentified Participant
Yeah.
Diwakar Rana
Hello. Yes.
Kapil Jagasia
Yes.
Unidentified Participant
Yes, sir, what is the. What that. What amount of debt are we taking for this solar power plant?
Dinesh Gogna
The 70:30 debt equity ratio on a project cost of around 120 to 150 crores.
Unidentified Participant
70:30. Okay. And what will be the peak debt for FY26 and FY27.
Dinesh Gogna
For Monte Carlo?
Diwakar Rana
So right now we are debt free company only. That will come from this older business only. That’s all. That is the subsidiary not in the parent company.
Kapil Jagasia
No.
Unidentified Participant
I am asking for the whole consolidated business debt.
Diwakar Rana
Yes.
Dinesh Gogna
Around 100 crores of debt will increase.
Diwakar Rana
For the solar next year. Next year.
Kapil Jagasia
Next year.
Unidentified Participant
Okay. Okay. Thank you.
operator
Thank you. Participants who wish to ask a question may press star and 1. As there are no further questions from the participant. I now hand the conference over to the management for closing comments.
Diwakar Rana
Thank you everyone for participating in the Earning con call and I hope that we have been able to answer all your questions. So if you have any further questions which you would like to know about the company, please reach us@investoraltecarlocorporate.com or to our IR managers, which is Velour Advisors. Thank you very much on behalf of.
operator
MK Global Financial Services limited That concludes this conference. Thank you for joining us. And you may now disconnect your lines.