Purple Style Labs Ltd (PERNIASPOP) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Your passcode has been confirmed. Please wait while you are joined to the conference. The conference is now being recorded.
Moderator: Ladies and gentlemen, the conference call for Purple Style Labs Limited will begin shortly. Thank you for your patience and please stay connected.
Moderator: Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '27 earnings conference call hosted by Purple Style Labs 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Agarwal, Whole-time Director and Chief Executive Officer from Purple Style Labs Limited. Thank you, and over to you, sir.
Abhishek Agarwal (Purple Style Labs Limited): Hi. Good afternoon, everyone, and welcome to our Q2 and H1 FY '27 earnings conference call. Along with me, we have SGA, our Investor Relations advisors. I hope all of you have gone through the investor presentation uploaded on the exchanges and our company website. For all those who are joining for the first time, please refer to slide 3 on our presentation for a quick overview of
Abhishek Agarwal (Purple Style Labs Limited): core business Pernia's Pop-Up Shop, which is one of India's largest and fastest growing multi-designer luxury omni-channel platforms, serving customers across domestic and international markets. We have 1,100 plus active designers and 2 lakh plus products listed on our online platform. We operate 14 stores in 11 cities, including two international stores in London and New York. Next, on slide four, you will find a summary of our growth journey since PSL acquired Pernia's Pop-Up Shop in February 2018, when it was primarily an online-only platform. Moving to slide five. So, let's start today's call by understanding what are the key drivers of our business. The luxury consumer base is broadening in India beyond the ultra-rich, and there's a shift in spending towards personal consumption. In parallel, the wedding and occasion wear industry is also getting boost from multiple celebration and events, especially in the high-end weddings, and the rising affluence is fueling aspiration for differentiated occasion wear. Further, the Indian designer brands industry is leveraging the high growth of both of these trends in the luxury market. Our industry has seen emergence of hundreds of new designer labels over the last decade, which is compounding aspiration, discovery, and splurging on Indian designer wear. Over the next few slides, let us understand the growth trajectory of each of these three industries in parallel to one another. First, let's start with the landscape of India's luxury industry. On slide six, you can see that luxury consumption in India continues to grow across categories, driven by disposable incomes, rising disposable incomes and evolving consumer aspirations. The luxury consumption in India is estimated to touch INR 7.6 lakh crores by 2040, which is approximately USD 8 billion, growing at around 13% CAGR. Pernia's Pop-Up Shop omni-channel platform currently operates in the apparel and accessories category primarily, with recent foray into real jewelry from our flagship stores. Now, let's move to slide seven to understand the size of the wedding and occasion wear industry, where luxury segment offers a strong growth opportunity. The luxury wedding and occasion wear industry is expected to reach INR 1.35 lakh crores by 2040, with a higher CAGR versus the overall industry, thereby increasing its share from 6% in 2025 to 15% in 2040. Pernia's Pop-Up Shop majorly sells luxury wedding and occasion wear through its large format flagship stores and is one of the largest and fastest growing players in this sector. Moving to slide eight, we have given insights into the top 1,000 designer brands as an industry, which is our core market. Indian designer wear market has grown very rapidly over the past decade to currently over 10,000 crores and is expected to cross INR 1 lakh crore by 2040. The consumer base for top 1,000 Indian designers is also expected to grow approximately four times to 1.5 million by 2040. Riding on these industry tailwinds, Pernia's Pop-Up Shop continues to strengthen its market leadership position as a global omni-channel platform for Indian designer brands. We have already grown our market share in the corp- in the core top 1,000 designers market from 2% to 6% between 2020 to 2025, and are targeting INR 2,100 crores GMV by 2030, with more than 8% market share. Our long-term target is to achieve INR 20,000 crores GMV with an 18% market share by 2040. Now, let's move to slide nine, where we have presented an analysis on how we approach the growth from the angle of customer matrix. The key driver of our long-term growth strategy is simultaneously expanding our customer base and increasing our wallet share within the Indian designer wear buyers. As per industry projections, the industry the Indian designer wear customer base is expected to grow to 1.5 million by 2040. In the same timeframe, we are looking to increase the percentage of customers shopping from Pernia's Pop-Up Shop from 20% in 2025 to 25% by 2030, with a long-term target of 40% by 2040. Apart from widening our customer base, we also see a significant potential in increasing average spendings of of our customers. In the 2020 to 2025 growth phase, we had increased our average wallet share from designer wear customers from 17% in 2020 to 32% in 2025, and are currently targeting to grow the same by to to 34% by 2030 and 45% by 2040 in the long term. Our customer strategy is not limited to just adding more customers, but also build deeper customer relationships, capturing a large share of their overall Indian designer wear spending. Now, before we move forward, let us glance through slide 10 to familiarize ourselves with our historical journey through three distinct generations, which was also a part of our Q1 presentation. The first generation, from FY '19 to '21, was about laying the foundation. The second generation, from '22 to '24, was about scaling the footprint and deepening category in luxury womenswear and menswear.
Abhishek Agarwal (Purple Style Labs Limited): right. In the third generation after FY '24, we consciously trimmed the long tail both of both designers and customers and sharpened our focus only on luxury. Post FY '25, we have actively changed growth gears and opened large format stores in all the major markets like Mumbai, Delhi and New York. Moving to slide 11, let's discuss the most important pillar of our growth plan, the geographical expansion matrix. Our geographical strategy combines deeper penetration in established markets, expansion into near domestic markets, and build a strong international presence. In the long term, supported by a wide network of large format stores in all the major cities and the online platform, we believe in scaling Indian designer wear industry to a global customer base. Over the longer term, international markets along with Mumbai and Delhi are expected to do the heavy lifting for growth of the overall industry. By 2040, we are targeting a GMV of 4,000 crores from Mumbai, 6,000 crores from Delhi, 3,000 crores from rest of India, 3,000 crores from USA, and 4,000 crores from rest of the world. Now, let's focus on the near-term 2030 plan and understand the roadmap for the same on slide 12. We are targeting a total GMV of INR 2,100 crores by FY '30, with Mumbai and Delhi being the primary growth drivers during this phase. From Mumbai, we are targeting GMV of INR 500 crores by driving higher throughput from our recently opened Linking Road and Kala Ghoda Fort large format stores. In Delhi, we plan to establish a new 100k generation four store, which is expected to give us a significant jump. Once this new flagship store opens, then along with current large format stores, we are targeting Delhi's contribution to be 700 crores towards our overall FY '30 target of 2,100 crores GMV. For the rest of India, which includes Hyderabad, Ahmedabad, Bangalore, Kolkata, Surat, Chennai and Indore, and the India online business, we are targeting a GMV of INR 450 crores by 2030. To support this growth, we plan to upgrade our existing Gen-2 stores in Bangalore, Kolkata, and Ahmedabad to Gen-3 era stores. Internationally, USA, especially New York, remains an important growth opportunity with a GMV target of INR 270 crores by 2030. Our recently established physical presence in New York is expected to help us deepen customer engagement, strengthen international brand visibility, and drive higher online purchases from the rest of US as well. For the rest of the world, we are targeting a GMV of INR 180 crores by 2030. This market primarily includes the UK omni-channel business where we soon plan to upgrade our existing London store from Gen-1 to Gen-3 era, to increase the wallet share from large UK customer base. Apart from this, we plan to keep widening our online reach across Middle East, Australia, Canada, Southeast Asia and other international markets. As a company, our focus will be to approach each of these five markets in parallel with strategies as mentioned above to achieve the INR 2,100 crore GMV target by FY '30 as shown in slide 12. Slide 13 to 22 were already a part of our Q1 presentation. So I would, I've just reiterated it here to glance through the historical geographical expansion, customer growth, and category mix of Pernia's Pop-Up Shop over the last 8 years since its acquisition. Now, FY '27 is the ninth year of growth, which is riding on the seeds sown in FY '26, in the form of four large format stores in Mumbai, Delhi and New York. Now, let's refer to slide 23 to analyze our six-month FY '27 performance. So, PPUS GMV grew to INR 397 crores compared to INR 310 crores in six months of FY '26. During the same period, average order value has also improved from INR, to INR 84k from INR 69k, reflecting our continued shift towards higher-value products. As of September 2026, inventory level stood at INR 196 crores compared to INR 208 crores in September 2025, despite addition of New York and Linking Road, Mumbai, stores in March 2026. This also reflects in reduction of net working capital to INR 59 crores from INR 84 crores over the same period. To understand the growth from geographical perspective, let's see the slide 24. In India, Mumbai and Delhi remained our largest key markets and growth drivers during 6 months of FY '27, contributing GMV of INR 105 crores and 85 crores, respectively. On the international front, USA GMV contribution increased to INR 64 crores in 6 months of FY '27 versus INR 42 crores in 6 months of FY '26, attributable to the recent New York store. Moving to our financial performance on slide 25. For 6 months of FY '27, the revenue from operations stood at INR 262 crores compared to INR 214 crores in 6 months of '26. Gross profit increased to INR 103 crores from,
Abhishek Agarwal (Purple Style Labs Limited): INR83 crores in the corresponding period last year, while gross profit margin improved to 39% from 38% over the same period. EBITDA for 6 months FY27 stood at a loss of approximately 7 crores compared to a loss of INR5 crores in 6 months of FY26. While we have made progress in strengthening gross profitability, our focus remains on improving throughput and driving better operating leverage going forward. We have also made progress on the cash flow and working capital front. Operating cash outflow reduced to INR13 crores in H1 of FY27 compared to an outflow of 50 crores in H1 of FY26. Free cash, free cash flow also improved to INR19 crores from INR72 crores in the corresponding period last year. Slides 26 and 27 have a detailed breakdown of the P&L statements for a deeper analysis of the operating cost structure of the company and to understand the operating leverage better of our business model. Slide 29 to 31 have the P&L, balance sheet and cash flow statements for the last six quarters for your reference. Thank you. We are open now, we open now the floor for questions.
Moderator: Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question 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 a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all participants, please press star and one to ask a question. The first question comes from the line of Siddhant Lodha with Sancheti Fund. Please go ahead.
Siddhant Lodha (Sancheti Fund): Yeah, hi. First of all, congratulations on the recovery in EBITDA. One quick question, at a mature level in a store, what kind of operating EBITDA are we looking at?
Abhishek Agarwal (Purple Style Labs Limited): So, for us it is not a function of a percentage. So, if you let's say, take the current cost structure as an example, so you would notice that over Q1 and Q2, the fixed cost structures have not changed much. So, what we have done, we have taken given you the split of other expenses as well in terms of marketing, in terms of logistics and other expenses. And on the next slide, where you have the EBITDA to PAT bridge, we have also split the depreciation of ROU of assets and the, so if you see these costs they are pretty much fixed in nature unless we are doing an expansion. As of now, we have not done any expansion over the last six months in terms of cost structure, that's why seeing a flat cost structure. So, what tends to happen, let's say, Mumbai stores do a certain number in the first financial year, which is FY27. Now, whatever sales to deliver growth over the next three years without opening anything else, all of it technically flows from GP down to the EBITDA. So, hence it's not a function of percentage, it's more of a function of absolute number, which varies from store to store depending at what stage of break even they are.
Siddhant Lodha (Sancheti Fund): Yeah, so that was my question. On a store level, what kind of EBITDA can we do?
Abhishek Agarwal (Purple Style Labs Limited): There is nothing like a store level if you ask specific. So, see that's the reason we don't do store level analysis. We have 100 crore, the store changed gear in a window of 3 to 5 years. So, the cost structure also changes when that change happens. Unlike a lot of other
110 more turns of this transcript: log in to Stocksigma to read the full call.