KHADIM - Khadim India Limited Share Price

In the recent earnings call on February 16, 2026, management of Khadim India Limited provided a cautious outlook for the upcoming quarters. The company reported a revenue decline of 21.8% year-on-year for Q3 FY '26, amounting to INR 86.2 crores, and a 12.5% decline for the nine months, totaling INR 283.5 crores. Despite the challenging market conditions and subdued demand, management remains focused on disciplined execution and optimized inventory management.

Key forward-looking points include:

1. Optimism for Future Demand: Management expressed cautious optimism about demand gradually improving, supported by a diversified product portfolio and robust distribution network.

2. Sales Goals: The company aims for a sales target of approximately INR 350 crores in FY '27, with a projected EBITDA margin of 14% to 14.5%.

3. Store Formats: As of December 31, 2025, the retail footprint included 864 stores"”195 company-owned and 669 franchise-operated. Management is prioritizing profitable growth through strategic expansions, especially in premium segments like Skechers and British Walkers, which have shown promising growth trajectories.

4. Debt and Working Capital Management: The company targets reducing debt levels to approximately INR 110 crores while enhancing working capital efficiency via inventory and debtor management initiatives.

5. Product Strategy: Management highlighted a shift towards premium and specialized footwear, with expectations that premium brands will contribute around 20% to 25% of total revenue within the next 3 to 4 years, enhancing overall margins.

6. Cost Control: Continued emphasis on cost management and marketing will be pivotal in protecting margins and driving brand visibility amid market challenges.

Overall, management is committed to implementing strategies that focus on cost efficiencies, product premiumization, and e-commerce growth to mitigate the current demand pressures while maintaining financial health.

Major Questions and Answers from Q&A Section

1. Question by Rutuja Gohil: "Sir, you indicated double-digit growth in premium sub-brands. So what percentage of total retail revenue do these now contribute?"

Answer by Rittick Roy Burman: "Sub-brands contribute about 60% to our retail revenue, while the mother brand Khadim's accounts for the remaining 40%. We aim to increase the premium sub-brands' contribution to approximately 20-25% over the next 3-4 years."

2. Question by Riya Malik: "Can you break Q3 performance into volume decline versus price declines versus store closures impact?"

Answer by Rittick Roy Burman: "The decline is mainly due to skewed inventory purchases; we reduced inventory to maintain healthy levels. Store closures contributed about 7-8% to the sales decline. Overall, we saw a 2% degrowth in volume excluding closed stores."

3. Question by Anupam Jain: "Your other income was higher this quarter. Can you please explain?"

Answer by Indrajit Chaudhuri: "This increase is primarily due to liability write-offs related to Ind AS compliance after closing some stores. This is a one-off gain and not sustainable moving forward."

4. Question by Viral Jain: "Has the inventory cleanup largely concluded?"

Answer by Indrajit Chaudhuri: "We've reduced our inventory days from 131 to 117 and plan to further decrease it to 105-107 in the next quarter. We're managing the balance between cleanup and building inventory for new products."

5. Question by Devanshu Bansal: "How are you shaping the next 3 to 5 years for Khadim in terms of growth and margin?"

Answer by Indrajit Chaudhuri: "Our focus is to stabilize sales and achieve an EBITDA margin of 14-14.5% by FY '27. We are concentrating on cost reduction, e-commerce growth, and launching premium products to enhance profitability."

6. Question by Ankit Shah: "What is the current online sales percentage and margin after logistics?"

Answer by Indrajit Chaudhuri: "Online sales currently account for 3-4% of total sales, with margins around 10% on our own website, compared to 1-2% from marketplaces. Our strategy includes enhancing our direct online presence while optimizing costs."

This summary captures the major questions and their respective answers during the Q&A session of the earnings call. Each key point has been distilled for clarity while retaining essential numbers and forward guidance.