Kewal Kiran Clothing Ltd

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The Presentation which Kewal Kiran Clothing Ltd has uploaded on the Stock Exchange and their website, including the discussions during this call contains or may contain certain forward- looking statements concerning Kewal Kiran Clothing Ltd business prospects and profitability which are subject to several risks and uncertainties and the actual result could materially differ from those in such forward-looking statements.

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I now hand the conference over to Mr. Hemant Jain – Joint MD, Kewal Kiran Clothing. Thank you and over to you, sir.

Good afternoon, everyone and thank you for taking the time to join us today. Welcome to Kewal Kiran Clothing Ltd Q4 and FY26 Earnings Conference Call.

I am joined by Mr. Pankaj Jain – President (Retail) and Marathon Capital, our Investor Relations Advisor.

Consolidated revenue for Q4 FY26 stood at INR 325 crores, up by 12.4% year-on-year and for FY26 stood at INR 1,212 crores, led by strong growth in both volumes and value. Apparel volume growth on a consolidated basis saw an encouraging growth of 16% year-on-year driven by strong design capabilities and sustained consumer demand for our products.

Our performance reflects the scalability, resilience and execution strength of our operating model driven by: − Disciplined execution of focused growth strategies across brands and channels. − Strong consumer traction led by our fashion-forward design-led product portfolio,

− Agility in navigating a competitive landscape while sustaining market share and profitability.

Continued its sustained growth journey with double-digit sales growth in FY26 and now operates 457 EBOs. The SSG for Q4 FY26 is 6.8% and for the year FY26 is 9.4%.

With the strategic repositioning towards D2C model, the brand has started showing positive traction and consumer acceptance resulting in robust sales growth in FY26 and now operats 90 EBOs.

Recorded notable growth in both Q4 and FY26 year-on-year driven by renewed focus and targeted brand building efforts.

EBITDA came in at INR 238 crores for FY26 and INR 62 crores for Q4 FY26, reflecting a staggering 25% and 18% growth year-on-year respectively.

EBITDA margin expanded upward of 19% for both Quarter and FY26 driven by efficient operational performance surpassing our guided range of 17% to 18%. Our execution-led operational discipline enabled us to grow at scale while protecting profitability resulting in a strong EBITDA margin of 19.6% for FY26.

On the channel of sales front, our EBO, large format stores, MBO and online channel reported healthy double-digit growth in FY26 validating the effectiveness of our go-to-market strategy.

Revenue grew 16% year-on-year in retail and 8% year-on-year in non-retail in Q4 FY26. For FY26, retail grew 24% and non-retail grew 17% year-on-year underscoring consistent broad- based momentum across formats.

In line with our strategy to expand our brand footprint, we added net 57 EBOs in FY26, taking our total to 666 stores as on March 31, 2026.

The robust performance in FY26, particularly the contribution from Kraus casual, gave us the confidence to raise our growth and ambitions backed by an inorganic acquisition strategy. We continue to achieve the Vision 2028. However, we aim to further accelerate the growth target from 15% CAGR to 20% CAGR in the next three years and it is expected to be meaningfully supported by a well-defined acquisition framework.

While acquisitions may not materialize uniformly each year, our three-year strategic roadmap is designed to deliver this accelerated growth trajectory. Backed by our core principles of stability, sustainability and scalability, we remain confident in our ability to achieve these ambition.

With that, I would now like to open the floor for questions.

You are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from Shubham Jain from Counter Cyclical. Please go ahead.

Hello. Good afternoon, sir. Thanks for the opportunity. I just have two quick questions. Firstly, on the monetization side of our land in Goregaon, any update on that?

We are still under negotiations for that.

Okay. And what is your expectations? When can we complete that part?

As of now, the decision is still standstill. We can update this decision on a quarter-to-quarter basis on every con-call Okay, sir. Secondly, sir, on the acquisition that we had done in Kraus, 50% stake, are we planning to increase that stake going forward?

There is nothing changed for the first five years period. After that, there can be some.

And any other acquisitions that you have been planning in other segments in the form of inorganic growth?

We are open for opportunities, and we are also looking for some.

Okay, sir. Lastly, you have raised your guidance from 10%-15% to (+20%). Where are you particularly expecting that growth to come from?

So, what I am trying to say is that organically, our growth, we still say that it should be around 15%-18%. The additional vacuum of close to 5% shall be covered by an inorganic acquisition.

Okay, sir. Thank you. I will get back into the queue.

The next question comes from the line of Rushabh Shah from Buglerock PMS. Please go ahead.

Thanks for the opportunity, sir. Sir, a few calls back, you have said that you see significant export potential for our flagship brands like Killer, Kraus, especially in markets with a strong youth. So, I just wanted to have to look out for those markets. Which are those markets? What is the export potential and any internal targets you have to reach in exports for the next five years?

For KKCL, the exports do not actually contribute significantly. However, most of the countries which they export to, including Kraus, is Middle East and Saudi. Okay, you have known the case scenario that over the last three months it has been disturbed. And that’s the reason exports have been a little bit disturbed. Going to the article, which has been said right now that all the channels have been growing. And we think that the exports are going to remain constant or may degrew for the next year.

Okay. So, my second question is, KKCL has also launched the Athleisure segment. So, how has that segment grown for us?

It’s a part of the entire brand, okay. Some categories move upward; some categories move. We are not treating it as a separate format.

Yes. So, sir, what do you think about this segment? And this segment going ahead in the next, let’s say, four to five years, can be as big as the jeans segment that we have?

Too early to speak about it. As I said that we are treating it as a category only or as one of the category sales for us. We are not treating it as separate or a sub-brand.

Yes. As I said, I wanted to know more from your vision perspective. And this question is not for just, let’s say, two to three years, but a long-term thought process. The question is that newer brands or categories like Killer Junior, Kraus, and also the older ones like Lawman, Integriti. Do you think that these can become as big as the Killer brand? And like any steps we have taken, we can see them as a huge brand like Killer Jeans over the coming years?

Every brand was launched with a separate mindset, separate price bracket, and a separate TG.

So, definitely, we had some problems for some of the brands. We have re-strategized our strategy and we have started seeing attraction towards it. And I definitely feel that all the brands have that potential to go where Killer is as of today.

Fine, sir. Thank you. I will get back to in the queue.

Thank you. Your next question comes from the line of Arpan Rathod from Insight Advisory. Please go ahead.

So, what is the impact? Are we able to pass on in terms of revision in price or are we looking at revision in channel pricing?

It is like that as you have said that there is a situation of war, and no one knows how long this war is going to continue. What would happen, what would the situation be? How the prices of oil will behave or how the cotton prices will behave. As of now our endeavor was to not lose the revenue and we should not reduce our market share. So, it could happen that we may get hit by few percentages in the profit. Or some percentage we will pass on to the consumer. As of now, we are not impacted much. What is going to happen going forward nobody knows. So, depending on how the day-to-day situation will evolve, we will take the decision based on that.

But yes, in future there is a possibility that certain percentage will be borne by the company and certain percentage we will pass on to the customers. As of now our theory is that we don’t want to lose revenue. Our major focus is revenue. Even if we have to take a hit of 1% or 2%, the company is ready to take that kind of hit.

That’s good to hear. Sir, any color on the working capital?

I just should not comment about the other companies but normally, what happens is that our company is cash rich. It is possible that we get some advantages or we can get some benefit on the value and volume. We won’t get the same impact as other companies. But nobody knows what the situation is going to be. It is very clear that we will see day-to-day and then take a decision. But there should not be a business loss.

Yes, sir, the line for the current participant has dropped from the queue. We will move on to the next question. The next question comes from the line of Lakshmi Narayanan KG from Tunga Investments. Please go ahead.

Thank you. Good results, especially on the working capital front. We have done pretty well. And I think we have sustained the operating margins also or we can enhance it to a couple of basis points. So, a few questions. From a sales of Kraus brand, how much that actually contributed to the growth for the full year? I think this full year is the first financial year with Kraus both in the baseline as well as towards the end of FY26. That is my first question.

Sir, growth for Kraus has been upwards of more than 20%.

How much Kraus contribute now? Is it available compared to last year to this year?

We generally give the numbers on a consol basis scenario. We don’t give brand-wise numbers.

Got it. Due to GST, there have been some pricing revisions. Is there any stock level loss we have to take or is that entire pre-GST stock out of the system? Can you tell me how that actually happened?

After the GST changes which happened on 22nd of September, for the 3rd Quarter, the company had to pass on the entire GST benefit to the consumer. Going forward or maybe for FY26, we feel that the impact of GST is neutral for the company. For some brands, it is more and for some brands, it is less.

Got it. And are there any price increases we have taken in the last few months?

We have not taken any price hike yet. We operate at the same prices. The product mix changes a little bit. That is up to season-to-season, of course. But we have not done any price hike. So, we have a room in future if we have to hike the prices, we have that room.

And the e-commerce channel, is it growing ahead of your growth or is it in line with your company’s growth? It is in line with the company.

And in terms of full price sales, can you just give a sense of how much it was for the Men’s Wear and Women’s Wear because usually they are around 65%.

Full price sales was close to around 60%.

Our major focus is on the West. We have already done well in the East. So, now we are focusing on the West, and we are having a very good result. Yes, the kind of focus we put on the North, we did not get the benefit which we wanted from the North. But yes, we are majorly focused on the West and South this year also. See, what happens that it bound to go up and down. You cannot achieve 100% of your expectation. But if you are not here, you can do it anywhere. At the end of the day, we have to achieve that business target. The major focus is that no matter where you get the business, you should first complete the business target. Yes, we are focusing on a territory. But in West we got a good benefit. We did not get as much benefit as we expected in the North.

In the other segment, which includes innerwear, perfume, glasses and so many other things, that has actually also grown ahead of our overall growth. Can you just explain as to within that, which segment is growing faster in others?

Our focus is on the Apparel business. All the accessories business is impulse buying. Our major focus is on the Apparel side like jeans, shirt, trousers, T-shirt, winterwear, jackets, sweatshirts, sweaters. So, our major focus is on that. We are not majorly focusing on the innerwear or some socks or some of the accessory’s business. Yes, we do that. Because the brand is all about the lifestyle, we have to keep all these things. But our major focus is on the Apparel.

Thank you, sir and I will come back in queue.

Thank you. The next question comes from Manoj Thakur from Motilal Oswal. Please go ahead.

Good afternoon and congratulations on a great set of numbers, both on the operational front and as well as on the revenue growth. So, I just had a couple of questions on my side. So, regarding our development and progression of Kraus, on the margin front, how we were about one year back and how we are doing now. What has been our focus in creating the additional EBITDA margin that we can get from Kraus?

What happens is, if you look at it drastically, there has not been a lot of change in profit because as the turnover of your company increases, your fixed cost comes down. That can be one benefit and some-percentage for the temporary basis that a benefit of GST has been passed on. So, it’s all mixed. We should be happy. You guys should be more happy that a good profit is coming it’s better.

Yes. Great set of numbers, as I said. Also, on a store guidance level, what are we targeting for next couple of quarters and full year?

Full year should be around net around 50 to 70 odd stores. These are all majorly EBOs? All EBOs.

Yes. Okay, sir. I will just come back in the queue for further questions.

Sure. Thank you. The next question comes from the line of Arpan Rathod from Insight Advisory. Please go ahead.

Thank you for taking my call. So, continuing from the conversation wherein I dropped out, can you give some sense on the working capital? Can you be a little louder and clearer?

Okay. My question is regarding the working capital. What are the short-term and long-term working capital days which we are looking at?

Okay. The working capital should stay anywhere between a limit of 130 to 140 odd days.

And this is same for Kraus and the company on a standalone basis?

This is the overall limit structure. Kraus, it will be a little higher. Any specific reason?

Okay. Most of it, business is skewed towards LFS and Retail. That’s the reason.

Currently, we are the manufacturing company. We are not the vendor-based company. So, you have to think that what we manufacture there is a WIP. When we are manufacturing, our 50 days to 60 days go in manufacturing. You should do comparison for both, one is manufacturing days and selling days. If you combine both then it will surely come to 130-140 odd days.

My second question is link to that only Kraus, currently, everything is outsourced in terms of manufacturing, correct, right? Yes.

And considering that we have on a standalone basis enough capacities wherein we can actually absorb that manufacturing also, any plans there?

That’s not the plan for the immediate future also. Currently, KKCL is only operating at 100% efficiency structure.

Okay. So, any CAPEX, considering that the growth targets have been revised upwards, obviously, with acquisition, but then also on a standalone basis, you will need some capacity expansions.

So, not much. As we said close to around INR 30 crores to INR 35 crores is the requirement for CAPEX that includes the frontend as well as the backend on a year-on-year basis.

Sure. Secondly, in the opening remarks, you made a pointed remark on growth alongside acquisitions. So, any plan which has been drawn up, I know it’s very difficult to point at any specific company currently, but which segment or like we did Kraus. So, which would be the other segment which we will be looking at? Any broad strategies around that? Obviously, the name, value, everything can’t be discussed currently, but broad parameters just for our understanding.

So, more importantly, we are right now open for all the company structure. We just decide whether we can add to the synergies and we look it from an ROCE perspective, whether we get that synergy and ROCE can deliver. We are also open for our competing categories also, as well as premium, as well as the value segment. We are even open for any gender specific.

So, that’s it from my side. Thank you and all the best.

Thank you. The next question comes from the line of Sahil Doshi from Thinqwise. Please go ahead.

Hello. Good afternoon, sir. Good afternoon. Just one on the Integriti bit, which we said it’s done exceedingly well this quarter. And so, could you just talk a little more on Integriti and for FY27 with the pivot in the brand strategy, can we start expecting better numbers on that?

Yep. We have changed the price strategy for that and we have started seeing interesting results.

We have also started gaining counters on the multi-brand as well as chain store formats. We feel the growth will be in line with what we are talking about the company.

Okay. So, meaning the transition in terms of modern trade and number of counters, are we complete in terms of the entire plan? No. There is huge vacuum left.

Okay. Understood. So, additionally, basically, these all new pivots from Lawman and Integriti should start contributing higher— Pankaj Jain; From 1st Quarter of this year itself.

So, if I had to just correlate, if I see standalone which is your traditional business, say this quarter maybe has been 8% kind of growth and for full year is 13%. So, directionally, do we think that this should start picking up at a much higher level? Should be in upward of 15%.

Understood. Sure. And just a follow on in terms of brand, if I see the segment mix, the bottom and the denim, which typically have higher margins, this quarter, we have seen an improvement in terms of the share of bottoms and denims. But if I see in the standalone, at least our gross margins are not showing a similar momentum. So, is there some strategic call here or just wanted to get a sense on this?

The mix would have also changed because of the change in the price brackets for some of the brands, right.

Okay. Because I think we used to say 41, 42% gross margin should be normal on an annualized basis. Is that the band which we should--.

But going forward also, the gross margin should stay anywhere between 41 to 43 range.

And just lastly, we have spoken about a few pivots, and you have made a presentation on that.

So, if you can talk about some of these pivots and where are we in that journey and anything--

Any pivots in particular, which will be the focus for ‘27?

Too early to answer that, Sahil. Maybe a Quarter 2 concall or a Quarter 3 concall will be able to elaborate on it.

Sure. Understood. Perfect. That’s it from my end and great work on the balance sheet again.

Thank you. The next question comes from the line of Manoj Thakur from Motilal Oswal. Please go ahead.

Hi, sir. I am rejoining again. So, one clarification on the movement of other income that we have seen in FY26 Q4. Can you put some light on that?

The other income has gone down. You are talking about the quarter or the full financial year? This quarter.

So, it’s generally mark-to-market. That’s the reason it has gone down.

So, majorly it is that. What would be the quantum of the mark-to-market?

So, if you look at the annualized number our other income should stay somewhere between INR 30 crores to INR 35 crores.

Okay. Got it. And also, one more question coming related to Kraus. Are there any plans to do a further acquisition of the remaining shares? Not for the first five years.

Okay. And in the starting we have said then we would do one more inorganic thing. Would that be a 100% full buyout or how would be the structure or we can get the details later on?

Okay. We will update you about the companies and after the buyout actually happens.

So, it is too early to say right now. It is not possible to say anything because it all depends on which company we are going to buy out, what deal we are going to do, and at what value we are going to buy. I cannot say anything right now because if the deal does not happen then there is no point talking about it.

Yes. I agreed. Sure. So, thank you. And that’s it for my side.

Thank you. The next question comes from Arpan Rathod from Insight Advisory. Please go ahead.

Sir, one question on the store addition target. How many company owned-company operated stores are we looking to add up in this year?

Sure. And the SSG numbers which we have started disclosing that’s a welcome move and this is for, would be for company owned stores only, right? For all the EBOs. Okay. Thank you.

Thank you. The next question comes from the line of Madhur Rathi from Counter Cyclical Investments. Please go ahead.

Sir, firstly, sir, instead of paying dividends, sir, have you thought about doing a share buyback?

It’s a company policy. Yes, already the promoter has 74 point somepercentage. So, right now we are not thinking about the buyback. If there will be anything then we would let you know.

It’s too early to say anything. And even we are not thinking on that.

Sir, dividend is taxed at 36% and if you do buyback, then it will be taxed at 30%. So, Sir, there was a tax advantage, because of which I was asking and the shareholders to get the same amount of money, the government will get less money. Anyway, recently, in the last 2-3 years our working capital has exploded, especially receivables has gone up from about INR 170 crores to INR 320 crores in the last two 2 years. So, sir, is this expected to be a mean revert?

We say that our working capital should stay somewhere between 130 to 140-odd days and it will stay in that limit only. The business has also expanded from the base as you are asking for.

Understood, sir. Sir, so for this FY27, sir, what kind of top line are we looking at?

As we said in this concall also, growth strategy organically stays somewhere between 15% to 18%. However, if we look at any inorganic growth, the growth for a 3-year period stays at 20%. Sir, CAGR.

CAGR, yes. Thank you very much, sir. Best of luck.

Looking at our performance over the last four to five years, including FY2022 through FY2026, we have grown by 18.6%, and we expect to maintain this trajectory going forward.

Sure, sir. Thank you. Thank you very much. Okay.

Thank you. The next question comes from the line of Naveen Baid from Nuvama Asset Management. Please go ahead.

Thank you. Thank you for the opportunity. Just wanted to check what was the same-store sales growth for the quarter?

I have already updated. The SSG growth for Quarter 4 was around 6.8%.

And what was the same-store sales growth for the full year? 9.4.

Thank you. We have a follow-up question coming from the line of Madhur Rathi from Counter Cyclical Investments. Please go ahead.

Sir, thank you for the opportunity once again. Sir, where do we see our average selling price moving over the next two to three years with Kraus under our acquisition? Do we expect the jeans, which is a higher ASP product, to scale from the current 50% level? So, how should we look at that?

See, it was a subdued for denim as a category for last year. This year we have started seeing that again the momentum has increased for denim. If that starts happening, definitely we will be able to gain much market share. Most of the brands of KKCL, including Kraus, are known for denim wear.

Right. So, going forward, either in terms of acquisition or in terms of organic growth, do we see the denim segment increasing as a category mix? So, what it is, 48% currently, can we expect it to move to 50% to 60% over maybe next two to three years?

I would put it like this. Five years or seven years down the line, it was upwards of close to around 60%. We have intended and tried to derisk the entire category mix and come down to close to around 45 or 48. I think with the retail expansion, all the categories move in the similar percentage structure. So, I think it should stay in the similar mix of what it is as of today.

And sir, on the acquisitions, where do we see this acquisition in terms of price point? Will it be a higher ASP price point whenever that happens? Or would it be on the similar price point that we are currently present in?

For Kewal Kiran, everything is open. We are generally menswear-led, more casual driven, more denim centric. There is a lot of vacuum on other side aspects, which we feel that KKCL can still synergize and explore. That’s one. Secondly, if there is something coming on the denim aspect, we are not even disputing that we should not look at it. So, KKCL is open on the gender mix that includes ladies and kids. On the menswear also, I feel there is more room on the value segment as well as upper premium price bracket. Right. So, nothing concrete as of now. That’s true.

Okay, got it. Since we have a target of INR 1500 crores for Vision 2028 and have already crossed INR 1,200 crore in revenue, getting to INR 1,500 crore over the next two years would require only about 12%–13% annual growth, which we believe is quite manageable.

The vision statement was made a year before, where we had trajected at close to around 15% to 18%. We have already delivered at 20%. We are changing our growth strategy for going forward from 15% to 20%, where we again say that that 15% will be organic, and that 20% will be from any inorganic buyout. So, but it will be in a three-year period. So, one year has already lapsed.

Maybe in the next two years, but if you look at a three-year CAGR, I will be able to deliver it at 20%.

Understood, sir. And sir, our EBO, that is company owned or franchisee owned, franchisee operated? The mix of both of them. So, what is the breakup?

Right now, around 15% to 20% should be COCO and 80% should be franchisee owned, franchisee operated. But going forward, that mix can change.

Sir, and what is the ballpark CAPEX to set up one EBO in terms of CAPEX and working capital?

So, overall, as I said that the CAPEX required should be around INR 30 crores to INR 35 crores on the company level. That includes the frontend as well as COCO stores.

Understood, sir. And sir, what were the exports for the current year? And sir, are we doing white label exports or exporting under our own brand?

Okay. We are exporting most of our brands and it is under our brand name only.

Okay. And sir, finally, sir, what is the rental as the percentage of top line?

We have very less COCO stores as of now. So, removing that percentage will be very miniscule.

Okay. Understood. Sir, so going forward, sir, the strategy is to do COCO or FOFO?

I am again saying we have explored Tier-2 and Tier-3 well in advance, where we are able to grab the franchisee operation stores. Going forward it’s a mixed perspective, which will be coming and then mix will keep on changing on a year-on-year basis.

Sir, and between our e-commerce, multi-brand store, EBO, where is the margin highest and how much working capital is required in each of these channels?

See, we generally give the bifurcation of retail and non-retail, where it includes EBO stores and LFS, where all other channels are part of non-retail. On the channel, the composite mix on the EBITDA margins is almost similar on both the levels and so is the working capital. Understood, sir. Thank you.

Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Hemant Jain for closing comments.

Thank you once again for joining us today. We truly value your continued support and confidence in KKCL journey. Should you have any further questions, please feel free to reach out to our Investor Relations Team. Thank you and have a great day ahead. Thank you so much.

Thank you. On behalf of Kewal Kiran Clothing Limited, that concludes this conference. Thank you everyone for joining us and you may now disconnect your line.