Credo Brands Marketing's transitional period: supply chain hit, strategic investments ahead

Credo Brands Marketing Limited reported its Q2 and H1 FY '26 unaudited financial results. For Q2 FY '26, revenue stood at INR164 crores, down from INR186 crores in Q2 FY '25, with a gross profit of INR94 crores and an EBITDA of INR48 crores (29.4% margin). H1 FY '26 revenue was INR284 crores, compared to INR310 crores in H1 FY '25, resulting in an EBITDA of INR79 crores (27.9% margin) and a PAT of INR25 crores (8.9% margin). The company attributes the revenue decline largely to a temporary supply chain disruption, which delayed product availability.

The company is on a transformational journey under "MUFTI 2.0," focusing on a more premium retail experience, enhanced merchandise, and strengthened brand storytelling. This includes opening five new premium flagship stores and increasing investments in advertising and digital marketing, with current marketing spend at around 5% of H1 FY '26 revenue, projected to rise to 6-7% by year-end. Sales through the company's website more than doubled year-on-year in H1 FY '26.

Despite challenges like soft demand and muted footfalls, the company maintains its long-term strategy, aiming for growth from FY '27 onwards after a flattish FY '26. The company intends to open approximately 20 stores this year while closing 23 old stores to optimize its retail footprint.