Q3 25/26

Feb 2, 2026

Summary

Q3 revenue rose 10% and EBITDA 21%, lifting margin to 18.4%; lifestyle and emerging brands grew, while management plans continued expansion and expects improving profitability. Demand was affected by festive and wedding-calendar shifts.

Ladies and gentlemen, good day and welcome to the third quarter earnings conference call of Aditya Birla Lifestyle Brands Limited. The call will begin with a brief discussion by the company's management on the Q3 FY26 performance, followed by a question and answer session. We have with us today Mr. Ashish Dikshit, Managing Director, ABLBL, Mr. Vishak Kumar, Deputy Managing Director and CEO, ABLBL, Mr. Dharmendra Lodha, CFO, ABLBL. I want to thank the management team on behalf of all the participants for taking valuable time to be with us. I must remind you that today's discussion may include certain forward-looking statements and must be viewed therefore in conjunction with the risks that the company faces. Please restrict your questions to the quarter performance and to strategic questions only. Housekeeping questions can be dealt separately with the IR team. With this, I hand the conference over to Mr. Dharmendra Lodha. Thank you, and over to you, sir. Thank you. Good afternoon, everyone. Thank you for joining us today. I would like to welcome you all to the Quarter 3 FY26 earnings call for Aditya Birla Lifestyle Brands Limited. As we reflect on demand during the quarter, it began on a strong note with healthy momentum through October and November before moderating in December, partially due to a shift in wedding dates. Additionally, a portion of the festive season played out in the previous quarter this year compared to Quarter 3 last year, impacting sales growth in the current quarter. Against this backdrop, through a sharply focused and disciplined execution across brands, ABLBL delivered strong double-digit growth during the quarter with healthy performance across channels. This high growth on a disciplined and tightly run cost base delivered strong operating leverage and further margin expansion. Now moving to the financial performance of our business. Overall revenue grew 10% YoY to reach INR 2,343 crore, led by strong performance across brands and channels. Lifestyle brands grew at 9% YoY, while emerging businesses grew at 13% versus last year. Overall business delivered 6% like-to-like growth despite the festive shift continuing its strong performance. Other channels also recorded a healthy rebound, with both trade and e-commerce growing double digits. Operating on a solid and profitable base, we expect growth momentum to remain strong and profitable going forward. Consolidated EBITDA up 21% in this quarter, driven by strong operating leverage at the back of double-digit sales growth. In absolute terms, EBITDA stood at INR 431 crore compared to INR 355 crore in the same quarter last year. EBITDA margin expanded by 180 bps from 16.6% in Quarter 3 FY25 to 18.4% in Quarter 3 FY26. PAT at INR 100 crore, growing 66% versus last year. Reported PAT came at INR 69 crore versus a PAT of INR 60 crore in the previous year. This includes a one-time exceptional item pertaining to impact of labor cost this quarter. Our net debt reduced to INR 800 crore as of December end from INR 1,000 crore in September end. Moving to the year-to-date performance, overall revenue stood at INR 6,222 crore, up 6% YoY. EBITDA grew at 12% in absolute terms to INR 1,054 crore versus INR 940 crore in previous year, with margin improving by 100 bps to 16.9%, despite higher advertisement spend versus last year. Reported PAT was INR 117 crore versus INR 21 crore in last year. Our normalized PAT for the nine-month YTD stood at INR 147 crore, up 55% versus last year. We continued or expanded our network, adding around 90 plus stores during the quarter as expansion momentum gained pace during the quarter. These stores are larger and feature more impactful products along with a sharper and more relevant assortment. We expect this momentum to continue with further addition meaningfully contributing to our sales growth. Our footprint is now 3,300-plus stores spanning over 4.8 million sq ft across more than 785 cities and towns. Turning to our lifestyle brands, the business delivered growth of 9% during the quarter, supported by healthy like-to-like growth of 5%. This marks the sixth consecutive quarter of sustained like-to-like growth. Performance across other channels also improved meaningfully during the quarter, while secondary sales continued to remain strong in line with past quarters. Quarterly revenue for lifestyle brands stood at INR 2,002 crore with an EBITDA margin of 20.6%. This is the highest EBITDA margin, excluding any one-offs, both on pre and post-interest basis for lifestyle brands in last four years. Growth during the quarter was driven by a combination of targeted product portfolio upgrades, particularly in wedding wear categories, and continued enhancement to the in-store experience. Ongoing renovation, the addition of relevant assortment, and focused efforts to attract new customers to stores help deepen our customer engagement and further reinforce brand salience. Our emerging business portfolio comprising Reebok, Van Heusen Innerwear and American Eagle now spans over 375 stores, with an addition of 25 stores in this quarter. The store network delivered a robust 15% like-to-like growth during the quarter. Segment revenue grew at 13%. On a comparable basis, excluding Forever 21 in the base, growth was even higher at 19%. Profitability improved by 790 basis points year over year, reflecting positive operating leverage and continued improvement in Van Heusen Innerwear business. Performance during the quarter was driven by strong product innovation and compelling marketing initiatives. Reebok delivered a 20%-plus growth in this quarter with a strong improvement in profitability. Overall, Reebok's network expanded to 200-plus stores, doubling from 100 stores at the time of acquisition. American Eagle remained on sustained profitable growth trajectory, delivering double-digit growth in quarter three. Van Heusen Innerwear business grew at double digits in this quarter, marking a strong recovery after several subdued quarters. Business also saw a sharp decline in losses and is consistently pursuing the path to breakeven. In summary, despite festive and wedding-related shifts, ABLBL delivered accelerated momentum during the quarter. Performance was supported by focus initiatives, including product upgrades across categories, enhanced retail experience, disciplined store expansion, and sharper implementation across channels. Looking ahead, a strong store addition pipeline, sustained retail growth, and improving performance across other channels provide confidence in the continuity of this growth trajectory. In parallel, emerging brands are expected to begin contributing more meaningfully, supported by clearly defined strategy around growth and profitability. This portfolio is expected to be one-fourth of overall ABLBL business in next four to five years. Together, these efforts will deepen our presence across key micro markets, both existing and new, while ensuring we are relevant in the lives of our consumer. That indeed is our strategic focus. With disciplined execution to drive this strategy, we believe the business is well-positioned to translate this momentum into sustained long-term value creation. Over to you. Thank you. Thank you. Shall we begin with the question and answer session? Yes, please. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Vidisha Sehrawat from Ambit Capital. Please go ahead. Yes. Hi. My first question was that, time and again, since the demerger announcement, it has been called out that no fundraise would be made in either of the two entities barring to the TMRW business. But in yesterday's filing, it was mentioned that nearly INR 500 crores of NCD issuance was approved by the board. Can you please highlight as to what would be the utilization area for this fundraise? By when are you looking to— When are you intending to raise it? Thanks, Vidisha. At the time of demerger, the company got the borrowings transferred based on the allocation formula. The INR 500 crore debentures which we repaid recently in the month of January, we intend to raise it and to refinance the existing debentures repaid. There's no fresh borrowings. Right. Got it. How should one be looking at the reduction in the net debt amount? Because I think in earlier calls you had called out that every year the net debt would reduce substantially and by 2, 3 years it should be net cash. Any thoughts over there? If you see from March, beginning of INR 800 crore, the September borrowings were roughly INR 1,000 crore, which we reduced to INR 800 crore. The plan is to reduce it, bring it to by another INR 75 crore to INR 100 crore. But Vishak and Ashish can talk on the growth CapEx after demerger, which was the rationale which we conveyed that the company will have the growth capital available to them. Vishak, Ashish. Vishak, do you want to just come in? Okay. Vishak, let me answer this question. Just to give you an overall summary, the business generates through profit, which is through EBITDA, a cash equivalent of close to INR 900 crores. Part of it goes into working capital funding. The other part goes into CapEx. Typically, we have been spending close to INR 150 to INR 200 in the best years, maybe INR 225 odd crore kind of CapEx. One of the primary reasons for demerger was to create an entity which can reinvest back more aggressively into growth. Some of those signals are visible here. This year, our CapEx will be north of INR 300 crores, perhaps INR 320, INR 330 crores. That is really why the debt reduction is not very large this year. We still feel that over the next three years, which is what we had indicated, the net debt will be closer to zero in this, although that is not the only goal we are driving at. Okay, sure. The second question was on a net basis, what could the store addition of Lifestyle Brands look like for FY 2027? Any number or guidance that you would like to call out? We have added about 50 plus stores in this quarter. My sense is that we should add another 90 plus net stores in the next quarter, so that would make the overall additions about 150 stores this year. We also have already built a pipeline for next year of 120 odd stores, and that momentum should continue. Whatever we are able to find right up to November, December would be expansion for next year. It should be another significant expansion year going forward next year also. We already have a pipeline of about 100 odd locations that we have identified where our RBD team is looking at properties, et cetera. Usually, we convert half of that. So you should look at another significant expansion here next year, Vidisha. Sure. I will get back in the queue for further questions. Okay. Thanks. Thank you. The next question is from Archana Menon from Morgan Stanley. Please go ahead. Hi. Thank you so much for the opportunity. My first question was mainly on the demand side and the revenue growth that is been posted. Is there any divergence this quarter between the primary and secondary sales growth? Is there any element of channel restocking after the GST-related disruption in the second quarter? Hi, Archana. Three questions here. First is the impact of GST has been pretty much digested through the quarter. There is no change in stocking or stockholding with any partner because of GST. There was first couple of weeks of that, but that has been digested through the quarter itself. To the second question around demand, Dharmendra had said in his opening statement, October, November were strong demand months. December, the wedding calendar was such that the last of weddings was on, I think, 5th December. So the calendar was not the same after 5th December. Q4, again, there are weddings and on February, March onwards, there are weddings. So that impact of demand is there because of that. In terms of the last question you asked, which is on primary versus secondary, nothing unusual. Usual practices around season launches and build up towards season and end of season is what has broadly happened. We have had robust secondary sales across department stores, which is what has led to an overall primary sales also being fairly healthy. Partner to partner, there might be variations, some higher, some lower than secondary, depending on their inventory situation. Also, some partners will be expanding more, et cetera. So that would be the ups and downs, but no general trend around up-stocking or down-stocking. Understood. How have trends been in January? The calendar is such that most of the wedding season began post Makar Sankranti, so we have had an encouraging second half of January, and my sense is that momentum should continue through the next couple of months. Understood. Very clear. Just finally, I think this quarter, in terms of your growth itself, it has returned to double-digit growth, which is your ambition after many quarters. Do you expect this double-digit momentum to sustain in 4Q and 1Q? Thank you, Archana. You noticed. I think we have said this for some time. We want to be a steady double-digit growth and EBITDA 11%-12% steady pre-interest margins. That is something which we should go up momentum. If you see, even in the last few quarters, our retail has been very strong. We had some course corrections to do on the wholesale side of business and the e-com side of business. Most of that is done. You should see a more steady trajectory, hopefully, over the next few quarters. Understood. Thank you so much. I will get back into the queue. Thank you. Thank you. The next question is from Gaurav Jogani, from JM Financial. Please go ahead. Thank you for taking my question. My first question is with regards to the wholesale and the other piece of the business. Gaurav, I am sorry to interrupt, but we cannot hear you very clearly. If you are on a hands-free, request you to use the handset. Gaurav, can you hear us? Gaurav, you can hear us? Maybe there is a network issue. We request you to go to an area with better network and please rejoin the queue. We will move to the next question. The next question is from Sameer Gupta from India Infoline. Please go ahead. Hi. Good evening, everyone, and thanks for taking my question. Congratulations on a good set of numbers. Am I audible? Yes, Sameer. Okay. Firstly, there has been a GST cut for apparel below INR 2,500, and above INR 2,500, there has been an increase. Just wanted to get a sense on what would be the blended price decrease for a consumer of Lifestyle brand, plus and minus both these aspects, increase or decrease, I mean, whatever has happened at the consumer end, if you can help me with that number. Sorry. Samir, there are parts of our business where it has a benefit, especially brands like Peter England, brands like Reebok in apparel, et cetera. There are benefits there. There are some parts of business, especially in wedding parts of business, there is negative because those moved from 12% to 18%. Overall, it is a small net negative, but not a significant one. Oh, okay. But in Lifestyle Brands, it would still be a different benefit, right? Because overall discounted sales, I mean the full price sell-through, et cetera, I guess you had indicated sometime that 50%-50% of the portfolio would be above and rest will be below. 40% of the portfolio has actually benefited, something like that? Yeah. It's like I said, it's product to product. Let's say on T-shirts it's a gain, on suits and blazers it's not, et cetera. All together, blended weighted average with current sales ratio, it's a small negative. If some other parts of business grow faster, et cetera, it would be neutral also. Got it, sir. That's very helpful. Second question, sir, on the Innerwear and athleisure segment. This quarter has seen a double-digit growth, and this is growth after many, many quarters in this segment. Just wanted to get a sense on what has led to this turnaround after so many quarters of weaker. I think a lot of initiatives which have been under business, they are coming into fruition now. One of the biggest things which has happened, Sameer, is the kind of retail like-to-like that we've had. We've been fine-tuning our retail model for Innerwear, and retail like-to-like have been north of 30% in this side of business. Even by sea if you look at it's been a very, very strong 25% plus like-to-like that we've had in this business. That has also improved overall profitability because the retail profitability, retail viability is a lot better with that. We've also done various initiatives around product innovations, other things around methods of replenishing with distributors. Various things which are going on, which are intrinsic and hence likely to stay in the business. You recall that we've also had some quarters of inventory correction, which was a tough phase that we had to go through. Most of that is behind us and with that, what happens is you're able to infuse a lot of freshness of merchandise into the market. That also spurs growth further. I think it's maybe a few more quarters of just fine-tuning that model, and then it should be able to take off on an even stronger growth trajectory. Got it. You would still attribute this as most of the initiatives at your end, industry is still where it was. There is no real change there. I think so. If you are saying are there significant tailwinds in this category? Not yet. But again, to earlier question that you had, GST helps this side of business also. So some of the impact of that should also start coming here. Sorry, come again, I did not get that. Impact of what, sorry? The GST change, again- Oh, okay. also a good thing, yeah. But for a lot of leisure parts of business, et cetera, it is a good thing for this part of business. Got it. Got it. Yeah, that is something we will do, yeah. Lastly, sir, if I may squeeze in, I think Gaurav was also trying to ask this. Sir, the wholesale under Lifestyle brand, that has seen a growth of 21%, and past two quarters has been subdued. Before that it was good. Pre that it was a decline. Is there a change in strategy here? The segment has been bit of up and down in past two quarters. So two things. One is also asked the same question. One is we had the base effect of Centro and the transition that we went through in Centro in the past. That is out of the base now. You see in that sense, a more apples to apples comparison. Beyond that, there is also the strong secondary sales growth, which we've had in the last few quarters, which is helping us. Those are some of the factors which are going in. Likewise, on the e-commerce side of business, we went through one phase correction, a lot of things that we did to sharpen the model. Large part of that is also done, and that also again is reflecting in the numbers. Just for my understanding, sir, on the wholesale piece, this is a mix of consignment as well outright sale, or now it's primarily outright sale in that we book in this? Sorry, can you repeat that, Sameer? I'm so sorry. What I mean is that the wholesale channel, the sales, the way you record it, is it on a consignment basis? You record the end consumer sales and the inventories on your books till that end, or do you book the sale to the distributor and to the retailer and with the margin? How does it work? We recognize revenue when we sell to our customer. Our entire terms of trade are built around that we recognize revenue when we sell to the partner. Sell to the partner, not the end consumer. Not to the end consumer. In retail consignment, retail sales, we recognize that when we sell to end consumer. In the wholesale side of business, we recognize revenue when we sell to the partner. Yes. Got it, sir. There is no change in the accounting over the years. This has always been the case. No, always been the case. In fact, we are extremely conservative in the way we recognize revenue, in the way we recognize gross and fee all of that. No change in the way we recognize revenue. Got it, sir. Got it. That's all from me. I'll come back in the future for any follow-ups. Yeah. Thank you. The next question is from Devanshu Bansal from Emkay Global. Please go ahead. Hi, Vishak. Thanks for taking my questions. So first question is on retail channel growth. If we compare this growth with some of the other players that have reported so far, it's a tad weaker. Even the LTL that we've reported is running a tad weaker versus the other players. I just wanted to check within the marketplace, what is leading to this weakness for our brands? If you split the brands in the market into brands which have a significant wedding impact versus brands which don't have impact on wedding calendar, in our own portfolio, you'll see that. Whether it's on Reebok, whether it's on American Eagle, it's on Innerwear, they would have all had very high, aggressive, double-digit secondary LTL growth. Parts of business which have had a greater dependence on weddings, the weddings have operated after 5 December, so you see the impact of that. It's more of a phasing thing. If you look at our retail sales, YTD December, it's still double digits at 10% for Lifestyle brands itself. Some of it you get the benefits of calendar, and some quarter you don't in the other. Even if you see it for the overall industry itself, you will see that pattern for brands which have a greater dependence on weddings. That is fair, Vishak, but are you taking from a 9-month perspective also? If we see our retail sales growth has been a tad weaker versus what other players have reported. Even on a 9- No. It is a 10% like-for-like. A 10% like-for-like in three quarters, which is YTD. No, that is like-for-like, sir. But from a consumer perspective, I guess it is the retail channel revenue growth which matters, right? Like-for-like is okay. But from a market perspective, I guess the overall growth is a better metric to track your market share. That growth has been a tad weaker versus what other players have reported, and the difference is almost to a tune of 500-600 basis points. No. I was just checking. Our YTD retail overall will also be about 8%. The other I was referring to, if you want, from a win fashion perspective, we reported almost 13% growth in 9 months, right? Possibly, maybe we could look at comparisons, et cetera. All I want to show you is that in our brands, we are at a like-to-like of 10%. To the question Archana asked earlier, some of the impact of the retail expansion will start showing now. This quarter itself was a significant impact of net expansion that you will start seeing in the overall growth. Q4 will see that even more, where there is about a 90 net store addition that you will see. If you look at it, we will enter into next financial year with a 150 store larger network than last year. That itself broadly is a 5% extra business in retail that you will have next year. Sure. Vishak, this one, bookkeeping understanding. Your rent expense, which is largely franchisee commissions, in my opinion, has been on a declining trend by about 100-150 basis points, both in Q2 and Q3. Right? What is driving this change? As in, are we shifting from franchisee stores to company stores? Is that leading to this change? Not really. If you look it's a network of stores with a balance of FOFO stores and COCO stores. We've been driving a lot of initiatives around cost reduction. Also, you must recognize that when you had a retail network which has grown 10% on like-to-like, whereas your store costs grew at about 5%-6%, that also gives you the cost leverage. Right? But this is commission, right? This must be percentage of sales. We have both I am talking about. Yeah. We have a significant number of FOCO stores where we pay the rents directly and an equally strong network of franchisee stores where it is a percentage commission. Where it is a percentage commission, the percentage does not change. It helps the franchisee to make a better ROI. But this in the P&L rent expense that we report, this is largely the commission paid to the franchisees, if you could confirm that, right? In the reported P&L, this is the franchisee commission. Largely, it is the variable rent. It has both franchisee commission as well as the variable rent, which you pay to malls. Yeah, that was my question. Why is that as a percentage of sales reducing? Okay. Is that question answered now? I think it is the leverage, operating leverage of having a higher like-to-like sale, which is what is bringing that down. Sure. I will take this offline. Maybe I will take this Devanshu, it will be better you connect offline. We will explain to you. Sure thing. Sure. No issues. Company-owned versus the COFO and the others. Sure, sir. No issues. Thank you. Thanks for taking the question. Thank you. The next question is from Ankit Kedia from PhillipCapital. Please go ahead. Two questions from my side. In the quarter, we saw gross margins decline marginally. Industry trends suggest that the discounting is actually reducing, and we have also done that. We can see that in the channel checks. What is leading to this gross margin decline? I am not sure where you are seeing gross margin declining, Ankit. Which area are you seeing that? Because actually, our gross margin is fairly healthy. Dharmendra, you want to respond to that bit? Ankit, the cost for corresponding Q3 FY 2025 was 41.1. This time it is 41.4. It is of the overall business, including lifestyle brands plus various other businesses. I think this is a composition of various business lines. It's more or less- Within the range band. More or less business mix- Yeah Than any shift. And the change is only point. Yeah. If you can highlight in lifestyle, what is the gross margin expansion we are witnessing due to lower discounting? Which business is actually dragging the gross margin down from the mix perspective? Okay, this is at the published result level. Lifestyle, I have to dig out separately. We can connect separately, yeah. Sure. My next question is on Innerwear. We have seen strong growth in the Innerwear category. What is leading to this growth overall, and what changes are we doing in the Innerwear category from a medium-term perspective? I think Sameer asked a similar question. Let me just tell you that two, three things are happening, which you should see the benefits of that. One is, of course, the sales growth that you are seeing. Like I was explaining earlier, as inventory freshness improves, the health of overall inventory improves, et cetera, that is giving us a good impact. That is also giving us a significant impact on profitability. In fact, our losses in this business this quarter have halved. That is, again, something that is reflected in the overall numbers. The other, like I was explaining to Sameer, very significant improvement in retail performance. Retail like-for-like, and likewise in department stores, et cetera, very strong same-store performances that we've had, which have brought down the fixed cost as a percentage of sales, resulting in both overall growth as well as improved profitability. In addition to that, Ankit, we are running a lot of initiatives around quality of replenishment mechanisms to distributors, running pilots around a lot of new product initiatives, many things which are going into driving overall traction in this category. A lot of those things are falling in place quite nicely, Ankit. Over two years, if I have to see, do you think you can have mid-single-digit margins by FY 2028 in this business? What will be the EBO strength if I have to see from a medium term, say, two years out? Given that now unit economics is set for the business, product is new, everything is changed. Yeah. Yeah. Ankit, first question, the FY 2028 I hope is going to be a profitable year. I don't want to comment on what kind of profitability, but I'm hopeful that FY 2028 will be a profitable year. I think that's the kind of trajectory that we've built for ourselves right now. Yes, you're right on the network part, the retail network, we have got a reasonably robust proof of concept now. We also want to strengthen further the partner-driven model here. There's a model which can work nicely serviced through distributors, neighborhood catchments, tight sharp stores which have a nice sharp assortment, which is relevant for that neighborhood. Some of those also we are working on different sizes and formats to be able to scale that. That can be a pretty significant exponential scale-up. Don't want to put a number on that now, but by and large, you should expect to see a significant scaling up of the retail network. And it has been more than a decade now we are doing this business, right? And we have had cycles. What gives you confidence now, this change what we are doing is there? Because some of the D2C startup brands, both on athleisure and Innerwear side, have started to become aggressive. While some have also closed shop, but we are seeing new competition also emerge, right? And the market leader is slowing growth, and some of the private labels have also started to do well. Now, the changes which you are talking of, how confident that these are the right changes to be done in the market now? I think, Ankit, first thing is the biggest thing which gives me confidence personally is the consumer acceptance of this brand and this category, as the consumer stickiness on those who ever tried the product is very high, and that gives us tremendous confidence. A lot of initiatives by which we have been able to generate trials, they have all translated into stickier business with consumers. That is the first thing. Second is, I think it is a fairly well-established distribution network with the kind of distribution points that we have got, with the kind of retail presence that we have got, presence in department stores, et cetera. I think it is a fairly strong network, which is also getting steadily more loyal to machine kind of thing in terms of replenish. You know, Ankit, it is a sticky replenishment business. As you keep getting better and better at that process and the wheel is nicely balanced, it is a nice fly wheel that works for you. We are fairly close to that in my sense. I would say that some of the last few years' learnings also come in handy in terms of making sure that we do the right thing going ahead. Between athleisure and Innerwear, would it be 30/70, or would athleisure be a higher percentage for us? Let me take last quarter's exact numbers. Maybe if we just put that together, I will share with that number. But broadly, you would be right, but let me not make a mistake on that, so I will give you a sharper number. Okay. No worries. You can take the next question and answer in between. Thank you. Yeah. Thank you. The next question is from Rajiv Bharti from Nuvama. Please go ahead. Good afternoon, sir. Thanks for the opportunity. So continuing on the Innerwear piece, if you can clarify what is the GT channel's contribution in your entire mix? So when you say GT, you mean the trade business, right? The trade, yeah. Just one second. I will give you an accurate number. It is around 50%. Little less than 50%. Yeah. Got it. And the other part is in terms of the CapEx number, which you have highlighted, the INR 330 crore. Can you split between your lifestyle brand and new brand? How does it stack? The lion share would be for the lifestyle brands. Probably 80% of that spend would be lifestyle brand, maybe a little more than 80%. We have invested a lot, both in terms of expansion and renovation. We have also made stores larger, created stronger shop facades, et cetera. So it has been a fairly significant impact on the lifestyle side of business. You made one comment and there is an opening remark in terms of you are looking for a steady growth. Assuming that you look for, let us say, a 10% growth on the top line on a conservative basis for the entire piece. The comment which was made was that the emerging brands will become one-fourth of the turnover in 5 years. That means you are projecting for a, let us say, 20% kind of a growth on the emerging brand side, with bulk of the CapEx routed on the lifestyle brands. Is this that capital right, the emerging brand capital? Two, three responses to that, Rajiv. First is that the emerging business is still on a lower base, so relatively speaking, it right now needs lesser CapEx. But we are not averse to adding more for that side of business as well as we scale up there. Personally, between you and me, and I have said this earlier as well, I am hoping more for a 12% kind of a steady state growth, and we should aim for that. We will have pluses and minuses over quarters, but we should be able to drive something closer to that. Definitely Innerwear, Reebok, these kinds of business have a very large role to play in overall driving because the base itself is relatively small and we should be able to scale up much faster in that side of business. Reebok has had a very good quarter and the momentum looks very good. We have already doubled our network from what we bought on Reebok. We are already 200 plus. We should exit this year with 230 plus stores on Reebok. I think there is still a very large set of markets which are available for putting up stores on Reebok. I think while a lot of questions have been around Innerwear, there are various other parts of business which are also poised for fairly strong growth. Also just to add to that, we have a fairly large distribution of lifestyle brand stores, and a significant part of our CapEx goes in renovations and upgrading those stores. Therefore, in absolute terms, because those number of stores are so much higher and the emerging businesses are relatively newer, they have less renovation needs. That is also another reason why the current CapEx, that will not be the case all the time, is significantly higher in lifestyle. Sure. Thanks for the 12% number. If I reverse look, the number becomes 24% for the rest of the category. What is the network addition and the SSG assumptions in this? On a steady state, and we have said this earlier this year as well, 6%-7% of like-to-like is what we should expect in the lifestyle side of business, and the rest of the growth comes through expansion. Of course, every year is not going to be the same. Let us say in a 3,300 store network, if you are able to add even, say, 200 stores, that is 5%, 6% growth that is coming out of network expansion in that side of business. I think there is headroom for at least 3, 4 years of growth like that in terms of network expansion. I was asking from, let us say, new brands and innerwear segment piece. Okay. The headroom for growth is even stronger, Rajiv. Because let's look at it this way. If, say, a brand like Louis Philippe has a network of 500 plus stores, there's no reason why a brand like Reebok cannot have more than in fact, a category like that can have an even larger play in terms of network size. So in that side of business, it's even more aggressive growth possibilities that exist. Likewise, in Innerwear, there is also the opportunity of many more neighborhood markets as well. So there again, the headroom is much larger beyond the part around what you would call GT or general trade. Sure. Just one last question on Innerwear. Has there been any price hike? Sorry, Innerwear? Has there been any price hike on the entire Innerwear portfolio? No. Actually, we passed down the GST benefits to consumers. You would have seen that a lot of segments which had a 12%, which moved to 5%, so we passed that on to consumers. Sure. That's all from my side. Thanks a lot, Anuj. Okay. Thanks, Aditya. Thank you. The next question is from Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Hi. Thanks for the opportunity. Sorry if I am repeating the question, but I logged in a bit late. Can you provide some regional color on the lifestyle brand performance? Specifically, are we seeing any demand pressure in urban IT heavy markets, let us say Bengaluru, Hyderabad, Pune? Okay. I could just Yes, we missed having first question from you. Just to give you some color, one is that, Tejas, this year small towns have had a good run. Okay? While I cannot give you regional, there have not been too many regional biases, but clearly small town India has had a good run. You know that small town India went through few tough quarters. This year it has been our own same store growth, Tejas, in small town ITG would be about 13%-14%. Okay? So small town India has had a much stronger run. Other than that, I cannot point out any region specifically which has grown more or less. Perfect. Thank you, Shah. Second, Prashant, you spoke about the lifestyle portfolio. Now, lifestyle portfolio has a very strong loyal base of customers. But the growth is moderating, and it is actually, the answer is there. It says that it is a very matured portfolio. At least the size is huge in terms of both distribution and in the absolute number. So what are the biggest or where are the bigger white spaces? Is it new formats, locations, geographies that can actually help us to go into, let us say, double-digit growth sustainably and not this just one or two low base, high base kind of triggers? Tejas, simple answer, all of these at least a few more. I think these very large brands. Fashion business does not have a billion-dollar brand. Most other categories have very large brands. So let me put it this way. Take a brand like, say, Louis Philippe, which has 500 plus stores. The opportunity for a brand like Louis Philippe in India should be about 1,500 stores. So maybe the methods of opening these stores, the formats will have to be more nuanced, will have to find the right regional assortment requirements, et cetera. But we have been figuring formats which have worked. There have been formats which have been more casual-driven, formats which are more wedding-driven, and so on, which have worked fairly well. We have also created. We just put a bridge to luxury store from very simple called Philippe, which we opened in DLF Promenade in Delhi, which has again been off to a very good start. A lot of new formats, new segments, new usage occasions with consumers as they emerge, again, are other growth possibilities. Other parts of business, women's wear again is another. In two of our brands, we have very meaningful women's presence, whether it's in Van Heusen or Allen Solly. That is again another opportunity for growth. There are various segments. There is, of course, distribution and presence, et cetera. Many of our partners are also looking at aggressive growth plans. Some of the department stores are looking at growth plans. That adds to that. The e-commerce space also with quick commerce is also driving consumption. There is opportunities for growth there. I would say yes, while it might look like, look, these are large brands, I still think these are very early days in the evolution of these brands. Yeah. My next question pertains to Reebok. From day one since we acquired, it looks very promising. When you look at the other player numbers also in this space, that's actually very healthy. You also called out there's a huge opportunity to expand footprint as well. So what is the limiting point as of now? Is it that the brand product market fit is yet to be established before we scale it up very fast, or the route to market itself is not very clear as of now before we scale it up? Okay, Tejas, just to give you some facts here, we've more than doubled our business in the last 3 years, okay, in Reebok. Okay? We've more than doubled our business. In spite of all the market challenges or whatever that might have been, we have more than doubled our business. We have more than doubled our network. By the time we exit this year, we'll be close to triple of the network that we had inherited. So it's been at a fairly significant pace, but you would argue it was on a small base, and you're right. The good news is that we're still relatively on a small number, and hence the headroom for growth is quite significant. Let's look at what are all the things which are going into the mix, which have to make this faster growth happen continuously. First is on product assortment itself. A lot of very good work has happened in Reebok across categories. Reebok, which was in its early years in India, very strong across multiple categories, had got limited to largely lifestyle kind of footwear before we took it over. As we've gotten into this segment, and we've added a very strong line of walking, very strong line of performance footwear, some very good running shoes in the segment. In fact, we have some very top quality. Most of the running shoes in India, carbon-plated running shoes are all about INR 10,000. We've got very nice carbon-plated running shoes at INR 9,000, and so on. There's a very strong assortment of footwear that we've been able to generate. Also big lever for growth, we've been able to leverage our expertise on apparel creation and apparel product designing, et cetera, very strongly. When we took on the brand, the apparel contribution was about 25%. Today, it's a little more than 36% already. That has again, driven growth. But I still say that there are many segments which we can do even more of. That is again, driving growth. Then there is network, and we've still only scratched the surface on network, and there's a very large opportunity which exists on geographical markets that we will scale to. It's very exciting times in this segment. I also think consumer acceptance, more and more health and fitness is becoming even stronger as market trend. This is an interesting time to be Reebok. Thanks. That's all from my side. Thanks, Tejas. Thank you. The next question is from Gaurav Jogani, from JM Financial. Please go ahead. Hi. Thank you for taking my question again. Hopefully, I'm audible this time. Better, Gaurav. Just one question now from my end is on the. Just one question on my end from the margin front. The other segment that is the Reebok, Innerwear, et cetera, business together, is now showing a very good decent margin this quarter around. If you can break it how this improvement was and how much sustainable this is going ahead, given that you have also mentioned that Innerwear business losses are half now. When can we expect this business to become profitable, and where are the other pieces of the business on the profitable journey? Okay. Gaurav, I think we answered that partly when Ankit asked and Sameer asked that question, but let me attempt that again. One is that I am hopeful that at least we have one quarter next year, which is a profitable quarter on the Innerwear business, and that should be hopefully the beginning of another era for that side of business. That is on the profitability part, and a lot of things are happening which lead to that. The biggest thing from a margin improvement perspective is selling expense improvements. We have managed to significantly streamline selling expenses. Cost of doing business in that sense has improved. That should continue over some time. As health of inventory improves, that also improves realizations. That is again, something which is giving us gains, and that is a flywheel which should keep getting better over time. Overall, also, as overall scale improves, the leverage of overheads and all other costs also then improves. We should see this improvements over the next few quarters as well, Gaurav. Yeah. Just one thing. While we understand the Innerwear business turning from losses to profitable will be a bigger driver for the margins, but how about the scale-up of the margins with the American Eagle and the Reebok part of the business as well? How that will shape up, and in that context, how can the margin expansion look like in the next few years? Yeah. I would separate American Eagle and Reebok. American Eagle is fairly, how do I say this? It is a very robust business, but doesn't have the same growth opportunity, let's say, as Reebok has. It will grow steadily, hopefully double-digit growth, and it will continue to have a very good space and market for consumers, and it will make decent money as we do that. Reebok has a much greater room for exponential growth. I think that is the segment where you should see very aggressive growth in times ahead. Like I was explaining to Tejas, right through both product categories as well as channel markets, there is a very large growth opportunity that we should see. As that happens, lot of leverages also come into play, which should also make the business more profitable as we go along. Did we answer your question, Gaurav? Yes, that does. Thank you. Thank you. Next question is from Kunal Bhatia. I am sorry, Kunal Bhatia has dropped off. We will move to the next question. The next question is from Jay, from HDFC. Please go ahead. Yeah. Hi. Thank you so much for the opportunity. I joined late, so apologies if some of these questions have already been answered. On the lifestyle bit to begin with, you guys had nearly 100 basis points expansion. This is despite wholesale and online growing 2 times the pace at which the core retail grew. I was just wondering how come this happened, what were the levers which helped you get there? Jay, you are right. We did discuss this. Basically, it is coming from reduced selling expenses through better leverage. As your same store grow better, that gives you a better margin expansion. I think we have also been able to drive a lot of cost reduction initiatives across the business, including product cost, supply chain cost, et cetera, through the organization, which have also made us get some benefits in terms of margin expansion. If the question is it a one-off? Sure, in terms of this quarter is a good quarter, so sure it is there, and in fact, like Dharmendra said, it is our best ever quarter in terms of margin improvement in the lifestyle business. But is it sustainable? To a fair extent it is sustainable. Apart from the quarter-to-quarter seasonality, it is fairly sustainable what we have got here. Well, thanks. The other bit is on the emerging businesses, especially the Innerwear bit. Through our channel checks also, at least that is what we kind of picked up and maybe we were wrong. For the longest time, the assortment, at least from a price point perspective, were quite divorced from what the general really wanted. Have we fixed this, or how close are we in fixing it? Where are we in that journey of kind of marrying them together? Okay. India is a huge country with a very, very large. We operate with some 40,000 outlets, which are our universe of. And the universe is actually larger, which is there in the trade side itself. And of course, there are different kinds of retailers with different assortment preferences. The most critical thing to do well here is replenishment and predictability around replenishment. Once you crack a set of winning products the market wants you to then just keep replenishing extremely. It is in some way almost a boring business, where you just want extremely high predictable replenishments again and again and again. As you keep getting better and better at that, your appeal with the channel also keeps getting stronger. Sure, there are more price-sensitive markets, and we have assortments which address that. For instance, we have a Classic Plus line, which is a sharper priced product. There are assortments which are unique to different needs of market, which are addressed. But I would still say the larger lever is extremely—have a solid set of products. We have a damn good product. We have a very high-quality product. Fit is great. The repeat consumer, their behavior is very strong. Now just making sure that it is well replenished with very high degree of predictability becomes a very critical lever there. Thank you very much. We will take that as the last question. Ladies and gentlemen, on behalf of the management, we thank all the participants for joining us. In case of any further queries, you may please get in touch with Mr. Amit Dwivedi. You may now disconnect your lines. Thank you