Monte Carlo Fashions Ltd (NSE: MONTECARLO) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Unidentified Speaker
Sandeep Jain — Executive Director
Raj Kapoor Sharma — Chief Financial Officer
Analysts:
Unidentified Participant
Mohit Dodeja — Analyst
Viraj Parikh — Analyst
Amit Kumar — Analyst
Yuvraj Kunwar — Analyst
Madhur Rathi — 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 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 touch tone phone. I now hand the conference over to Mohit Dodeja from MK Global Financial Services Limited. Thank you and over to you.
Mohit Dodeja — Analyst
Good morning everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Sandeep Jain, Executive Director, Mr. Rishabh Oswal, Executive Director, Mr. R. Sharma, Chief Financial Officer and Mr. Ankur, Company Secretary. I shall now hand over the call to the management for the opening remarks. Over to you gentlemen.
Sandeep Jain — Executive Director
Very good morning to everyone and thank you all for joining us today for earning call to discuss the performance performance for fourth quarter and financial year 2025. Let me start by sharing some financial and operational highlights for the fourth quarter under review. The consolidated revenue from operation was 206 crore. EBITDA was 6 crore and EBITDA margin reported at 2.77% while net loss stood at 10 crore for this quarter. For the financial year ending 2025 the revenue from operation was 1100 crore. On a consolidated basis representing a growth of around 4% year on year, EBITDA for the year stood at 187 crore which grew by 31% year on year EBITDA margins were reported at 16.95%.
Net profit for the year stood at 81 crore representing a growth of 36% year on year. The home textile segment remains a a key growth driver and is expected to sustain its support momentum. As of 31st March 2025 we have launched 12 reviews under the Cloak and Decker brand and we intend to scale this further with stores ranging between 500 to 1,000 square feet. Our youth focused brand rocket continues to perform well and on a steady growth path. We continue to pursue on our expansion strategy with Plan to open 45 to 50 EBOs across India including key focus area in west and South.
Our online channel is also gaining traction particularly through our own website reflecting the growth Reflecting the growing shift towards digital shopping to meet evolving customer expectations, we have partnered with quick commerce platforms such as Blinkit, Swiggy enabling delivery within 30 minutes. In addition we have collaborated with Salesforce to enhance operational efficiency and elevate customer experience and loyalty. I would also like to Inform you that the board of directors in its meeting held yesterday has recommended a final dividend of 20 rupees per equity share that is 200% having a face value of 10 rupees each for financial year 2024 25.
The final dividend will be paid upon approval by the shareholder and at the incoming annual general meeting. With this now, we open the floor for question and answer session.
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 the touchtone phone. If you wish to remove 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. The first question is from the line of Jigar and individual investor. Please go ahead. The participants user disconnected. The next question is from the line of Mohit Dodeja from MK Global.
Please go ahead.
Mohit Dodeja
Yes, thank you. Thank you for this opportunity. So, two questions from my side. So first is while the FY25 EBITDA margin increased almost 360 bits, 16.95 Q4 EBITDA margin was just 2.77%. Could you explain the seasonal and structural reasons behind this? Okay. And second question is inventory rose 16% year on year. So stocking or a reflection of slower secondary sales? Two questions from my side.
Sandeep Jain
Yeah, the first question is that EBITDA improved to 360 basis point year on year. But in the fourth quarter it has came down to 2.77%. The reason for that is that we have discounts which occurs in this quarter and also returns which comes into this quarter. So that normally affects the ebitda. And that is basically tendency which is happening from last so many years because third quarter basically is the heaviest quarter. In the fourth quarter we do have some returns and discounts. So that is why EBITDA goes down. So please see us as an annual basis because there may be a quarter to quarter variation, but on an annual basis I think it will be better to look at.
Mohit Dodeja
Okay, sir.
Sandeep Jain
Inventory. Yes, there is. There is a small amount of increase in the inventory, but I think that will be taken care of in the next two quarters.
Mohit Dodeja
Okay, thank you.
operator
Thank you. Participants who wish to ask questions may please press star and one at this time. I repeat, to ask a question, please press Star and one now. Next question is from the line of Viraj Parikh from Carnelian Asset Management. Please go ahead.
Viraj Parikh
Good morning, sir. Am I audible?
Sandeep Jain
Yes. Yes, you are audible.
Viraj Parikh
Good Morning. Congratulations on your results. I have a few questions firstly. So I mean just on the follow up on a previous participants question on the Q4 numbers, I mean last year we understand how the March 24 quarter went and we were taking corrective action towards it this year. And but historically I feel that Q4 as a quarter has been not a loss making quarter for us, but it has been either no profit, no loss, there’s been good amount of profitability there. How do we see, you know, that coming back in terms of, you know, company I understand that last quarter we do discounts and we account for returns in this quarter.
But if you can help me understand the outlook for FY26 and again how we look at Q4 and the discounting and the returns policy of the company.
Sandeep Jain
So first I, you know, come to the first question. This fourth quarter as you rightly mentioned, historically we have seen that this quarter basically have more discounts and returns. That is why it affects the profitability. And we normally have loss in this quarter but as compared to last financial year we have cut down this loss by almost half. The reason being is that adequate provisioning has been taken in the third quarter and we will ensure that in next year also we will take adequate provisioning to cut down the loss or to make it zero because it is very difficult to judge the exact discount which happens in the fourth quarter.
And as far as looking ahead in the guidance for Financial 26, I think we are very confident of achieving a double digit growth going forward in next financial year. And also we are very hopeful of improving our EBITDA from this level also. And if you see that whenever we have given guidance, we are giving the guidance close to a reality. So last year also we mentioned that we will have a flat year ahead and improvement in the margins. And if you compare the last year’s closing numbers, we have basically a grown of around 4% and also there has been improvement in the margins around 300 basis points.
So this year again we think of going for a double digit growth and improvement in the margins going ahead.
Viraj Parikh
Correct me if I’m wrong but the Q4 of FY22 and Q4 of FY23 both were very profitable quarters. Q4 for us where we were EBITDA at 14% we had PAT of 13 crore, 20 crore. So it has not traditionally been a lost in a quarter for us. That has just been a phenomenon of the last two years. So I mean before that also it was there but maybe we saw things turning post Covid for the company where Q4 kind of became profitable and you know, that continued. So how do we see that? Do we still see that Q4 would be at these levels of the last two years or do we see the improvement of what we saw in 2022 and 2023?
Sandeep Jain
Viraj There have been three reasons for that. The first reason is that if you compare financial 22, financial 23, the returns we used to take in May and June, so at that time returns were not taken in March. So that is why the effect of that returns were not there. And secondly the discounting have actually increased from financial 22 to financial 24 financial 25 and this is the same I think in each and every brand that now the USS starts very early. And the third is that more of our business is now going into SOR, so returns are more as compared to financial 22.
As we are increasing our business in LSS, we’re increasing in SOR, EBOs and SAS. So that also affects the profitability. But still the company is taking adequate provisioning to improve upon the fourth quarter results. And this year adequate provisioning has been taken. But still I think we have seen that the discount exceeded beyond our expectation in fourth quarter. But we will make sure that again this financial year we take adequate provisioning to make at least at a zero level for fourth quarter.
Viraj Parikh
Thank you so much for that answered my question. Secondly sir, when we are looking at the guiding of margins improvement for the upcoming years, can you help me understand is it going to be more of operating leverage being played? Because as I see this year, I mean our average realization across our four segments have improved really well. I mean cotton and woolen which are our two strong segments, despite having slight volume degrowth, our realizations have improved really well. So are we seeing that trend continue or we’ll see some cost efficiencies coming in in terms of employee cost and other expenses.
Sandeep Jain
Thanks for asking this question. Actually you rightly said that the realizations have improved. It is because the price hike has been taken last year and this year also we have taken a price hike. So luckily our brand has a pricing power and we can pass on the prices to the consumers even though the raw material prices have not increased much. So there’s a further chance of improvement in the EBITDA and the realization level in this year also. And also in this year particularly we have seen that the discount from as compared to last year it has come down.
So that is again added into profitability and that cost optimizations in case of expenses and also at the Discount level and the returns level and visa vis in the prices of the all the categories in where we are operating. So that will further improve the EBITDA level going forward.
Viraj Parikh
Just a bookkeeping question. I mean there was a very sharp increase in our other expenses this year which was around 33% of our revenue at around 203 crore. And that has become around 38% of our revenue at 220 crore this year. Around a 500bps increase. Is there any one off here or is this the kind of number we we should see going ahead?
Sandeep Jain
No, no, let me look at it. No, no, no. If you rightly see that the other expenses as far as I have with. Me it was the
Viraj Parikh
203 crore last year. 220.
Sandeep Jain
No, no, I am, I am talking about the annual basis. In annual basis it is. I just give you the. So there is a jump of around 16 crore.
Viraj Parikh
My question is more in terms of margin improvement here. I mean an absolute value. I agree it’s just a you know 16, 17 to kind of a jump. It’s around 8% year on year increase. But if I see as a percentage of our revenue last year it was around 33% of our revenue. This is around 38% of our revenue. I’m just trying to understand if there’s kind of any operating leverage which can come in whether is there any one off or this is the level I should sustain or keep 10% increase year on year.
Sandeep Jain
If you see the major reason was advertisement and business promotion expenses. So the turnover has not increased. But we have seen the 10cr of increase in the advertisement and business promotion and that is happening because the turnover is almost same. So that is as a percentage wise other expenses have gone up. But as I mentioned earlier also that we are looking forward for a 10% growth at least a double digit growth going forward. So that will definitely the advertisement expenses won’t be going into that kind of increase as we have seen last year. So that will definitely reduce the percentage of other expenses as compared to this financial year.
Viraj Parikh
Understood, understood. And so one bookkeeping question. I feel that our tax rate this year has been a little bit on the higher side around 29% of our revenue. Is there any kind of one off here? And there was a negative cash flow for Q4.
Sandeep Jain
So Mr. Akashanma is with me. So he will ask
Unidentified Speaker
actually this year there is a change in the long term capital gain structure. So this year defer tax has a element has changed. The context is okay so next year it will not be like this 29% has come because of this budget changes with respect to the long term capital gains. So it’s not, it’s just a information only. It’s not actual tax.
Viraj Parikh
What was your steady state tax example to the company? 25%.
Unidentified Speaker
Yes, yes. 25.168.
Viraj Parikh
Understood, understood.So I believe you, you know concluded some of our trade shows. So if there’s any kind of guidance or commentary you want to give. I know you’ve already given a kind of a double digit growth guidance, but is there something you would want to add on in soft comments in terms of the other trade shows went for the upcoming years?
Sandeep Jain
We just concluded our seven day winter trade show and the response was very good. We had more than 1500 retailers coming over for the trade show and we’ve gotten a very good order book that gives us the confidence to give a guidance of double digit growth for the next financial year and we are confident of achieving that. Also what we see is now especially winter as a category, a lot of other brands are pulling out of it. So that gives us a lot of leverage with bigger players like Reliance or Myntra or Amazon in terms of negotiating power and asking for better margins.
So we see that also playing out in the next couple of years.
Viraj Parikh
Thanks Sushant. Just a few more questions before I get in queue. Have we seen our EBO network expand really well this year? I think we’ve added on 60, 65 new stores and I believe we maintain the current guidance. So if you can just help me understand in terms of region wise what went well this year versus last year and how are we strategizing ourselves in the in different regions for the upcoming year where we are? I think the guidance remains same around 50, 55 stores for the next year. And also I saw in the presentation that you have even started being aggressive on the cloak and decorations exclusive stores of around you know, 12.
So maybe on both those lines if you could help me understand the strategy for next year.
Sandeep Jain
You rightly mentioned that last year we opened around 66 stores including everything. So this year also we have planned to open 45 to 50 Monte Carlo stores and 10 to 15 Clock and Decker store. And so the same the speed will continue I think going forward for next two years and we don’t see any problems, any challenges not to keep that pace with the EBO expansion plan.
Viraj Parikh
Can you give me some kind of region strategy of how we are looking to open stores across?
Sandeep Jain
So last year also we have said that 80 to 85% would be opening in the our main three main regions, that is Northern and Eastern and Central region. And the 20% balance would be opened in the western and southern region, 15 to 20%. And last year also the same strategy was adopted. So 15% was opened in southern and western region.
Viraj Parikh
Right. Thank you so much. All the very best. I’ll get back into you.
operator
Thank you. We take the next question from the line of Amit Kumar from Determined Investments. Please go ahead.
Amit Kumar
Yeah, hi, can you hear me?
Sandeep Jain
Yes, yes, we can hear you. Thank you.
Amit Kumar
Thank you. Thank you so much. Sir, just one question. On the LSS side, you indicated that you are sort of ramping up. I remember a couple of years back and actually it was exactly on the same issue of SOR that, you know, he did not want to do, you know, too much business on that side and wanted to do a little bit more, you know, on the outside sales. Is there a little bit of a reversal in strategy on that side, the LSS side?
Raj Kapoor Sharma
Yeah. Hi. So, yeah, I would like to clarify that. So there’s a lot of different in the market situation two years back and today. So the last three, four winter seasons have not been that good. And for other brands, winter season constitutes a minority part of the revenue. So now their focus is shifting entirely from winter towards pre winter and summer category range where there is less risk involved. Now that leaves lesser brands in the market to service the winter wear market for players like Reliance or all of these large format stores saying that we are increasing our sale and number of doors with Reliance and all the other major large format stores.
But these are at a better term than what we were doing a couple of years back. So we were not comfortable with. The terms are still sor, but in terms of our negotiating power, in terms of our power in terms of what merchandise is to be displayed in these stores, that has increased in the past couple of years and that gives us confidence to perform better in terms of discounting and return percentage in these chains.
Amit Kumar
It’s more of a tactical.
Raj Kapoor Sharma
It’s more of a tactical approach.
Sandeep Jain
Yes. You can say.
Amit Kumar
You know, just sort of a follow up, you know, to the previous participant also. So I mean, you know, April May, we’ve already sort of seen, you know, half the summer, you know, over. So both from the EVO side and wholesale, EV obviously have sort of fairly good data in terms of sell throughs and any sort of color from wholesale also. I’ll appreciate that. I mean, how do you sort of see. Because. At a point in time previously we also had a view that we also were looking to sort of balance our portfolio towards more summer and that way a more even sort of financial performance over the years, over the quarter rather. So what is happening on that side? If you can just give me a little bit of color.
Raj Kapoor Sharma
Yeah, so let me give you some broader picture. So we begin this year with a muted start. So April was not that great, but may we begin very well. And we have seen some of the sales recovery which we lost in April has happened in May as far as EBO levels are concerned. So now I think going forward we see that we should have a very good year ahead because of three or four factors which are I would list out. One was basically there was a lot of, you know, apprehension about among all the retailers, among all the customers also Indopap war.
So fortunately which ended sooner than expected. So that was one reason which affected, you know, some of the like sentiments. And second was there have been three, four months we have based it on the trade wars which has happened across the world and India cannot remain insulin due to that. So in that case also we just signed FTA with UK and also FTA with US is also in the pipeline and we are talking to EU also. So those things will definitely boost the export as well as boost the economy. So the third factor I think which will contribute in our sport, in our sport of like we are talking about the growth, the third is that as already RBI reduced the interest rate two months back and in June policy it is widely expected that they will go for another 25 basis cut on the interest rate.
So that will again further, you know, bring down the inflation and boost the economy. And fourth, which is a very very, you know, a factor which is very favorable to us is that IMD has announced that the monsoon for this year would be 105% as compared to last year. And we also have seen that the Bombay, the monsoon have come 15 days before and in Kerala it has also arrived. So it is widely expected that the monsoon this year should be very, very good. And that would, you know, definitely help us in containing the food inflation, food security and there would be a very big boost to rural economy.
So all these factors I think are now running in our favor as compared to last financial year. So that gives us the confidence of maintaining double digit growth target. Even though Risham has rightly said that in our trade show we got very good orders. And based on that we have the visibility of sales coming in second quarter and third quarter and fourth quarter. So there’s no reason that we should not see double digit growth. This year and as well as improvement in the ebitda.
Amit Kumar
I understand the macro factors and I understand the winter. Winter is any. Which is a sort of, you know, strong point, you know, for the company. And I think second quarter, third quarter is typically, you know, winter sales on wholesale, etc. You know, where you end up, you know, booking. I still just wanted to understand on the summer side. Right. So we were also looking to sort of, you know, balance because the brand is very much towards the winters. So we were looking to sort of ramp up on the, ramp up both the brand visibility as well as sales on the summer side also.
Now what you’re basically indicating is that microfactor being as it may, April, May, whichever way it will go. But how do you sort of manage that also? I mean we understand that Monte Carlo is a very strong brand on the winter side, but how do you sort of manage that balance between winters and summers which you were sort of aspiring to some time back Every year I think what are the steps that the company is taking is what I’m trying to understand.
Sandeep Jain
Yeah, so every year if you see the volumes in Samada growing, even if we have this year volume with summers that the volumes have grown even though the winter volumes have not grown. So summer is one area where the company is continuously growing from last four, five years. That is why the overall percentage of summer wear has actually increased from last 3, 4 years as compared to winter wear sales. But definitely winter wear has been a very huge segment. So it might take one or two more years, you know, for a company to have around 45 to 50.
But as of now I think we have reached almost 30 to 35% of summer. We are sales including total garment sale in whole year. So that is a very good percent. If you talk about, you know, around 10 to 15 years back it was just 4 to 5%. So the company is taking steps to improve its summer sales year on year. And also it has been visibility in our volumes also as far as summer sales are concerned.
Amit Kumar
Appreciate that. Thank you.
operator
Thank you. Next question is from the line of Yuvraj Kuwar from MK Global. Please go ahead.
Yuvraj Kunwar
Hi sir. Hope I’m audible sir. Thank you for taking my question. So we see tie ups with Blinkit, Zepto and Swiggy are notable. So which geographies and product types are seeing the most traction?
Raj Kapoor Sharma
So as you know, blinkit itself, around 50% of its revenue comes from Delhi NCR region. So with Blinkit and Swiggy we are piloting in the Delhi NCR or the Northern part of the country as of now. So these are basically pre winter and winter clothing along with, we are also speaking with Swiggy on an exclusive tie up for our home furnishing category.
Yuvraj Kunwar
Okay. And you opened about 12 evos for the brand Clock and Decker. So how many you moved if you could share their revenue contribution, the store level economics compared with the core brands.
Sandeep Jain
See when we opened our Cloak and Decker Evo, it’s a discount, basically economy discount brand. So we targeted around 8,000 rupees per square feet sales. So I am pleased to share that we have been achieving this kind of sales in the last one year where we have started. It’s almost like eight months and already 12 EBOS we’ve opened. So we are getting a sale of around 8,000 rupees per annum. So that was the initial target which we have set for ourselves. And so that is why, you know, the inquiries which are coming from the market, basically the people who have opened their earlier Clog and Decker ebos.
So some of the inquiries which we have received for this financial year was the person who is already running the CND ebo. So it seems that we are going into the right direction. But still it is very early to say about, you know, like how would be the sales in this financial year. So. But we are very positive that the initial response has been very encouraging.
Yuvraj Kunwar
Okay. Okay, thank you. Thank you. Thank you.
operator
Thank you. We take the next question from the line of Jimmy from MK Global. Please go ahead, Jimmy. Sir, your sound is a bit distant. Could you please come closer to the mic?
Unidentified Participant
Hello, Am I audible now?
Sandeep Jain
Yeah, yeah.
Unidentified Participant
So I see that the working capital day is being elevated. So what are the key initiatives that are driven to improve the cash conversion?
Sandeep Jain
Can you please repeat it?
Unidentified Participant
Working capital days. So what I’m trying to see that working capital days are elevated. Right. So are there any key initiatives that are underway to improve the cash conversion?
Sandeep Jain
Yes, we are working on the working capital days because we see that key now. We have installed, as we said in our investor presentation also that we have installed salesphere software, a tableau software. So that led us to give us, give us the better planning as far as the retail merchandiser concerned in our reviews, even at our, you know, other stores. So when we plan, when we can plan better, definitely we can sell more on the, the lesser inventory in our reviews also. So that would help us in improving the working capital risk going forward.
Unidentified Participant
Okay, sir, thank you.
operator
Thank you. We take the next question from the line of Maitrisha from Sapphire Capitan. Please go ahead. Yeah, my questions have been answered. Thank you. Thank you. We did the next question from the line of Shivang from MK Global. Please go ahead. Shivang. Sir, your line is unmuted. You may please ask the question.
Unidentified Participant
No. Hi, I was looking at the MBO channel and I saw that it sent 7.9% y OI. So was this driven by rationalization of some kind or demand side challenges? And if yes, how are you trying to revive or retrace this challenge?
Raj Kapoor Sharma
Yeah, so thank you for the question. As we’ve been saying that MBO as a segment is on a downfall overall across the country, smaller MBOs are not able to compete with bigger EBOs or national chain stores in terms of offering discounts to the customer. So. So what we see is smaller MBOs getting shut down and bigger MBOs will convert into SIS. So if you see even though our number of MBOs have reduced the number the sales which come from MBO and SIS is at is almost flat. So that means bigger MBOs which are now converted into SIS are doing bigger, I would say higher revenue per store as compared to previous years on also in some states like West Bengal and Northeast we realized that we had a lot of MBOs approximately 150 which were doing a very less amount of average per store sale.
So what we’ve taken a call is we are going to shut down these 150 odd MBA outlets and instead open our own exclusive brand outlets to service these markets.
Unidentified Participant
Got it. Thank you.
operator
Thank you. Next question is from the line of Madhurati from Counter Cyclical investments. Please go ahead.
Madhur Rathi
Thank you for the opportunity sir. I’m trying to understand sir. Our inventory cycle as well as our working capital cycle has constantly increased over the past three to four years. But sir, in the same time we are saying that you have given higher discounts during this Q4 as well as why is this inventory not reflecting in our balance sheet? And sir, when can we expect some hard improvements in our inventory and working capital cycle going forward?
Sandeep Jain
See, I don’t see a major improvement happening in the inventory cycle as our businesses, as Rishi rightly said that NBAs are also converting into SIs and LFS business is also growing. So inventory will remain in the cycle. So even in cocoa we book that inventory in our books also. So in that case we don’t see a very significant improvement in the inventory level but it will remain at this level plus minus 5%.
Madhur Rathi
So going forward if I consider if we can stretch our debtors or if we can stretch our Creditors. So what should be the working capital or cash conversion cycles we can expect on a conservative basis going forward? We can maintain.
Sandeep Jain
Debtors will definitely come down because we are now tying up with some distributors also to have us advance payment basically on that cycle. So debtors will be coming down, but creditors basically have come down because of MSME where we have to, you know, make the payments in 45 days to our creditors. So that is basically as per the government, you know, regulations. So 45 days payment we have to make to all our, you know, vendors. But in that case we do get a cash discount from those vendors. So that reflects the other, other income. But the credit days have come down.
Madhur Rathi
Can you quantify the amount of benefit we should get from this debtors? The time of the distributors for our debtor days?
Sandeep Jain
No, can you please repeat it?
Madhur Rathi
Can you quantify the amount of better days? The amount by the debtor day should come down because of us tying of the distributors.
Sandeep Jain
We expect five to 10 days of debtor day should come down going forward.
Madhur Rathi
Sir, what was the price hike that you took last year and what is the price that you expect in the coming FY26?
Sandeep Jain
So. So last year across all categories, on average 6 to 8% price hype was taken and this year 8 to 10% per price ag was taken.
Madhur Rathi
The guidance we are giving is on a very conservative basis and if because of strong monsoons, winters are good, we can expect even further revenue growth. Is that understanding correct?
Sandeep Jain
Yes, we can revise our guidance in Q2. So if we see that everything is being as per the expectation, we may revise our guidance upwards in Q2 onwards.
Madhur Rathi
So that was from my end. So thank you so much and all the way.
Sandeep Jain
Thank you.
operator
Thank you. Ladies and gentlemen, to ask a question, please press N1 now. I repeat, participants who wish to ask questions may please press N1 at this time. Next question is from the line of Jiggar, an individual investor. Please go ahead.
Unidentified Participant
Thank you, sir, for giving me this opportunity. My first question is, what initiative the company is planning to undertake to improve ROE going forward? Hello?
Sandeep Jain
Yes.
Unidentified Participant
Am I audible, sir?
Sandeep Jain
Yeah, you are audible.
Unidentified Participant
What initiatives the company is planning to undertake to improve the ROE? Our ROE s are around 10%. So from an individual shareholder perspective, what can we expect to have to improve going forward?
Sandeep Jain
I think the same steps which we have taken last year of improving our margins definitely will improve our ROE also going forward in this financial year. As we talked about our improvement in EBITDA margin going forward in this year. So definitely we’ll see that the ROE is going to improve this year as compared to last year.
Raj Kapoor Sharma
Also I would like to add that the company carries a big chunk of cash on its book which is which was till now invested in debt mutual funds which were leaving us a yield of 67% to 6 to 7% which we’ve now started investing in higher yield debt instruments.
Unidentified Participant
Okay. And so any revenue growth aspirations over next three years? I mean is there a vision the management is working towards in terms of top line or market expansion?
Raj Kapoor Sharma
Sorry, can you please repeat your question sir?
Unidentified Participant
Any aspirational growth target or revenue target over next three years?
Raj Kapoor Sharma
Yeah, we’re just focusing on double digit growth. We would not like to give an aspirational target and not be able to achieve it. So we are very conservative when you give our guidance. So we stick to our guidance of double digit growth in this year.
Sandeep Jain
Okay.
Unidentified Participant
And so my last question is any strategic plans to expand the export business over next few years if a good India US bilateral trade deal happens or anything like that.
Raj Kapoor Sharma
So yeah, so here I would like to add. So, so there are two parts of exports. One is producing goods for other brands and exporting it which Monte Carlo Fashions Ltd. As a company does not engage in. What we, when we say exports, what we are referring to? Export. Exporting Monte Carlo branded goods to other markets and then selling it. We’ve been able to. So for that we’ve already tied up with some online platforms like Amazon and sent some of our products to countries like US and Canada where they will be sold under the Monte Carlo brand name. Also last week we had two members from our team visiting Dubai for the IATF which is the International Trade Fair. And, and we’ve also tied up with styluses from the landmark Group in UAE to supply around 8 to 10,000 pieces of Monte Carlo products in the UAE market.
So this year we are experimenting with expanding global overseas and I think by the end of this financial year we’ll be in a better position to give guidance to tell about our strategy for global expansion. So again I would like to highlight that fta, we will not be involved or interested in exporting goods white labeled goods under other brand names. That is not what Montech always involved in.
Unidentified Participant
Thank you, thank you, thank you.
operator
Next question is from the line of Arjun, an individual investor. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Sandeep Jain
Yes.
Unidentified Participant
Hi sir. Thank you for the opportunity. I’m actually a little new to this company so I was hoping to ask like a bookkeeping question which I hope will help me understand the company a little Bit better. So sir, as I see that your. Finance costs are at about 48 crores, yet we have largely working capital of 300 odd crores. So I wanted to understand how does the debt figure move through the year? And I mean how, how, how high does the peak debt go that we have a high cost of borrowing and correspondingly the other income is at 35 crores at our investments at year end are something like 200 odd crores. So you know, like how does the cash balance also correspondingly move throughout the year? If you can help, you know, throw some light on this, it will be very helpful.
Thank you.
Sandeep Jain
Finance post is basically of two parts. One is the interest cost and second is the asset liability clm which, which is the rent. You know, we have to have the depreciation on the rent and some, some part goes to the finance cost. So that is the rent cost. So actual finance cost is only 34 crore rupees. And the other income is basically from government bonds, mutual funds and debt. That is again 34. So on net basis we are not paying any, any money to the bank as far as finance post is concerned.
Unidentified Participant
Okay, but 35 crores. And how much is your investment, sir?
Sandeep Jain
Around 290 crores as of now.
Unidentified Participant
Okay, so fine, fair enough. Okay, thank you. That helps.
operator
Thank you. We take the next question from the line of Viraj Parikh from Carnelian Asset Manager. Please go ahead.
Viraj Parikh
Thank you for the follow up. So a few questions were asked upon our working capital, especially our inventory days. So I believe that this year, so we had taken a call to, you know, decrease the kind of production we had because of kind of returns we had received last year. Right. And I feel that since evo cocoa inventory is part of the company’s inventory and that has increased by around 50% this year in terms of store count. How are we managing inventory at the cocoa level in terms of, you know, how many days of inventory are we giving them? So I’m just trying to understand on the strategy part of inventory management, the cocoa level.
I’m assuming that is what is majorly driving the spike in our inventory days, is that correct?
Sandeep Jain
See if I clearly understood your questions. You are talking about the how we are managing inventory at the cocoa level. So basically you know, when we supply the inventory to cocoa level, it is on seasonal season based like the summer inventory which we ship it to like February, March. So we conclude it in USS in July and August. So by, by I think 15 to 20 August, most of the summer merchandise has been sold off and some of it comes back to us. So then we supply the winter merchandise and again that cycle follows in March 15th and some of it comes back.
So the inventory stays there for four to five months every season. So that is being counted in the books at that point of time.
Viraj Parikh
So second question is beside having some kind of a, you know, reduced production for this year given the inventory last year shouldn’t our inventory been better managed this year? Then if you look at that the sales haven’t been good at a company level in terms of cocoa if the inventories spiked up despite production being low.
Sandeep Jain
As Rishabh ji has rightly mentioned about the trade show. So there are two things in it. So one is that you know when we hold a trade show so accordingly we receive the order for production and we produce the goods. And secondly it is up to us how much want to be, how much goods we want to supply. So sometimes the order received from the trade is you know, higher but we normally supply to at a lower side seeing the last sale through at the country level at the EBOs and also at the SAS level.
And then there are returns which we receive at the end of the uss. So those are also clubbed. So if we club the returns as well as the new orders. So accordingly as far as today is concerned we have to produce a little larger than last year to fulfill the demand from the market. So inventory as far as whatever we have and whatever we are producing it will take care of total sales which is happening in this year and will take care of the inventory also.
Viraj Parikh
Like this year our invent of 503 crore and last year was 435 crore. Do we have a breakup of how much of Coco finished good inventories in this number?
Sandeep Jain
Yeah, that we can mail it to you. I. I will ask Mr. R. Sharma to have a specific query from you and he can mail it to you. The specific requirements.
Viraj Parikh
Yeah. Secondly a previous car participant as on roe in terms of you know, how we can improve it. I would suggest that using our cash to grow the business rather than investing it for yields would be more prudent for our growth prospects. So any thoughts you have of how we are going to deploy our 250plus crore cash reserves.
Sandeep Jain
So there are some plans which have been discussed in the board meeting but I might not be able to disclose at this point of time. But maybe we come out with some of the points in next phone call.
Viraj Parikh
Understood sir. Thank you so much. We’ll wait for that.
operator
Thank you. Next question is from the line of Mohit Dodeja from MK Global. Please go ahead.
Mohit Dodeja
Yes, thanks for taking my question. So, persistence. Could you share your targeted store editions across formats for FY26 on whether you’re seeing higher potential in tier 2, tier 3 zones or midterms? And second is what was the SSG for quarter 4, FY25 across key formats? And how do you see it trending in that?
Sandeep Jain
See that the opening of stores would be spread across Tire 1, Tier 2, Tier 3, Tire 4 and Tire 5 stores. So we have marked out the, you know, areas where we see there is a lot of potential. So. But that is in all the areas. It’s not restricted to Tier 3 or Tier 4, but as far as SSG is concerned. So last year we had seen a decline of around 4% in SSG, same store growth.
Mohit Dodeja
Okay, sir, thank you.
operator
Thank you. Ladies and gentlemen. To ask a question, please press star and 1. At this time I repeat, to ask a question, please press star and 1. Now as there are no further, we have a question from the line of Madhur Rathi from Counter Cyclical Investments. Please go ahead, sir.
Madhur Rathi
Thank you for the opportunity. Once again, sir, do we have a breakup of how much of the inventory would be on our books for more than a year or more than six months and how much would be from the current season?
Sandeep Jain
That, that I. I think we can mail it to you.
Madhur Rathi
So on the margin front, so can we expect because of the operating leverage and price hikes to move to our historical 20 margin on FY then D checks?
Sandeep Jain
I’m confident that we’ll be touching 20 above 21 margin going forward in this one. 20 going forward, including other income.
Madhur Rathi
I’m sure excluding other income. Can we achieve that number 200 basis point? So, thank you so much and all the rest.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Sandeep Jain
Yeah, thank you everyone for participating in this earning call. And we hope that we have been able to answer all the questions. But still, if you have any query which has not been answered or any query which you want to mail it to us, please reach us@investorontecarlocorporate.com or our IR managers, Velour Advisors. Thank you very much.
operator
On behalf of MK Global Financial Services limited That concludes this conference. Thank you for joining us. And you may now disconnect your lines.