1. At a Glance – The Fashion Brand That’s Acting Like a Startup Again
You know those people who finally become stable in life… and then suddenly decide to “reinvent themselves”? That’s exactly what Credo Brands (MUFTI) is doing right now.
After building a ₹600+ crore apparel business with decent margins, the company has decided: “Let’s spend more on branding, reduce profits, close stores, and confuse investors.”
And guess what? They’re doing it proudly.
Q3 FY26 numbers came in like a reality check:
Revenue down ~6% YoY
Profit down ~56% YoY
Margins shrinking
Stock down ~40% in 1 year
But management says: “Relax. We’re investing for the future.”
Classic.
This is where it gets interesting:
Company is still profitable
Still generating cash
Still trading at ~10x earnings vs industry ~30x
Still paying dividend (4% yield)
So the question becomes:
Is this:
A temporary fashion slump?
A smart brand repositioning?
Or a slow-motion retail disaster?
And more importantly…
Are you buying a discounted brand… or a declining one?
2. Introduction – MUFTI, The Midlife Crisis Edition
Credo Brands is not some new-age D2C startup pretending to be profitable.
This is a 25+ year old brand trying to stay relevant in a world where:
Gen Z buys from Instagram
Millennials chase Zara sales
And everyone else waits for Myntra discounts
MUFTI sits awkwardly in between:
Not cheap enough for mass market
Not premium enough to flex
And now management has realized: “We need to change perception.”
So what’s the plan?
Spend more on branding
Upgrade stores to “MUFTI 2.0”
Focus on premium positioning
Accept lower profits
Yes, they literally said profits will take a hit.
From concall:
Ad spend going to 8–10% of revenue
Profit will be impacted for “next couple of years”
Let that sink in.
This is not a growth story. This is a reinvention story.
And those are always risky.
So tell me:
Would you trust a fashion brand trying to change its identity… while sales are falling?
3. Business Model – WTF Do They Even Do?
Let’s simplify this like explaining to your cousin who thinks Zara manufactures clothes in Spain.
Credo Brands:
Designs clothes in-house
Outsources manufacturing
Sells under MUFTI brand
Distributes via stores + online
That’s it.
No factories. No heavy capex. Just branding + distribution.
