Aditya Birla Lifestyle Brands Limited — Q3 FY26

Aditya Birla Lifestyle Brands Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=1tz37zdhbwc Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the third quarter earnings conference call of Adita Bella Lifestyle 0:08 8 seconds Brands Limited. The call will begin with a brief discussion by the company's management on the Q3 FY26 performance 0:16 16 seconds followed by a question and answer session. 0:19 19 seconds We have with us today Mr. Ashish Digshit, managing director ABLBL, Mr. 0:25 25 seconds Vishak Kumar, deputy managing director and CEO ABLBL. Mr. Dhindra Lodha, CFO, ABLBL. 0:36 36 seconds I want to thank the management team on behalf of all the participants for taking valuable time to be with us. 0:43 43 seconds I must remind you that today's discussion may include certain forward-looking statements and must be viewed therefore in conjunction with the risk that the company faces. 0:54 54 seconds Please restrict your questions to the quarter performance and to strategic questions only. Housekeeping questions can be dealt separately with the IR team. 1:04 1 minute, 4 seconds With this I hand the conference over to Mr. Dhandra Loda. Thank you and over to you sir. 1:12 1 minute, 12 seconds Thank you. Good afternoon everyone. 1:15 1 minute, 15 seconds Thank you for joining us today. I would like to welcome you all to the quarter CFR 26 earnings call for Aditella Lifestyle Brands Limited. 1:25 1 minute, 25 seconds As we reflect on demand during the quarter, it began on a strong note with healthy momentum through October and 1:31 1 minute, 31 seconds November before moderating in December partially due to a shift in wedding dates. 1:38 1 minute, 38 seconds 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. 1:48 1 minute, 48 seconds Against this backdrop through a sharply focused and disciplined execution across brands, ALBL delivered strong 1:55 1 minute, 55 seconds double-digit growth during the quarter with healthy performance across channels. This high growth on a 2:02 2 minutes, 2 seconds disciplined and tightly run cost base delivered strong operating leverage and further margin expansion. 2:10 2 minutes, 10 seconds Now moving to the financial performance of our business. Overall revenue grew 10%age Y to reach 2343 cr rupees led by 2:20 2 minutes, 20 seconds strong performance across brands and channels. Lifestyle brands grew at 9%age Y while emerging businesses grew at 2:28 2 minutes, 28 seconds 13%age versus last year. Overall business delivered 6% like to-like growth despite the festive shift 2:36 2 minutes, 36 seconds continuing its strong performance. Other channels also recorded a healthy rebound with both trade and e-commerce growing 2:43 2 minutes, 43 seconds double digit. Operating on a solid and profitable base, we expect growth momentum to remain strong and profitable going forward. 2:53 2 minutes, 53 seconds consolidated IDA up 21% in this quarter driven by strong operating leverage at the back of double-digit sales growth. 3:01 3 minutes, 1 second In absolute term, IDA stood at 4, 431 cr rupees compared to 355 cr rupes in the 3:09 3 minutes, 9 seconds same quarter last year. IIDA margin spended by 180 bips from 16.6%age in 3:15 3 minutes, 15 seconds quarter 3 FIR 25 to 18.4%age in quarter 3 FIR 26. PAT at 100 crores uh growing 3:23 3 minutes, 23 seconds 66% versus last year. Reported PA came at 69 cr versus a PA of 60 cr in the 3:31 3 minutes, 31 seconds previous year. This includes a one-time exceptional item pertaining to impact of labor code this quarter. Our net debt 3:39 3 minutes, 39 seconds reduced to 800 cr rupees as of December end from,000 cr in September end. Moving 3:46 3 minutes, 46 seconds to the year to date performance, uh overall revenue stood at 6,230 uh22 cr rupes up 6% yida 3:55 3 minutes, 55 seconds grew at 12%age in absolute terms to,54 cr rupees versus 940 cr rupes in uh 4:02 4 minutes, 2 seconds previous year with margin improving by 100 bits to 16.9%age despite higher advertisement spend 4:08 4 minutes, 8 seconds versus last year. reported PBT PAT was at 117 cr versus 21 cr rupes in last year. Our normalized PAT for the 9 4:18 4 minutes, 18 seconds monthly stood at 147 cr rupees up 55%age versus last year. We continued our 4:25 4 minutes, 25 seconds expended uh our network adding around 90 plus stores during the quarter as expansion momentum gained pace during 4:33 4 minutes, 33 seconds the quarter. These stores are larger and feature more impactful facets along with a sharper and more relevant assortment. 4:41 4 minutes, 41 seconds We expend we expect this momentum to continue with further addition meaningfully contributing to our sales growth. 4:49 4 minutes, 49 seconds Our footprint is now 3,300 plus stores spanning over 4.8 million square ft across more than 785 cities and town. 4:58 4 minutes, 58 seconds Turning to our lifestyle brands, uh the business delivered growth of 9% during the quarter. supported by healthy like to-like growth of 5%age. 5:08 5 minutes, 8 seconds This marks the sixth consecutive quarter of sustained like to-like growth. 5:13 5 minutes, 13 seconds Performance across other channels also improved meaningfully during the quarter while secondary sales continue to remain strong in line with past quarters. 5:23 5 minutes, 23 seconds Quarterly revenue for lifestyle brands stood at 2002 crores with an IMIDA eida margin of 20.6%age. 5:30 5 minutes, 30 seconds This is the highest aida margin excluding any one-offs both on pre and post India's basis for lifestyle brands 5:38 5 minutes, 38 seconds in last four years. Growth during the quarter was driven by a combination of targeted product portfolio upgrades 5:46 5 minutes, 46 seconds particularly in wedding categories and continued enhancement to the instore experience. 5:53 5 minutes, 53 seconds Ongoing renovation, the addition of relevant assortment and focus efforts to attract new customers to stores help 6:00 6 minutes deepen our customer engagement and further reinforce brand salience. 6:05 6 minutes, 5 seconds Our emerging business portfolio comprising Reebok, Vanusen inear and American Eagle now spans over 375 stores 6:14 6 minutes, 14 seconds with an addition of 20 plus store in this quarter. The store network delivered a robust 16% like to like 6:21 6 minutes, 21 seconds growth during the quarter. Segment revenue grew at 13%age on a comparable basis excluding forever 21 in the base. 6:30 6 minutes, 30 seconds Growth was even higher at 19%age. 6:33 6 minutes, 33 seconds Profitability improved by 790 base reflecting positive operating leverage and continued improvement in venus in their business. 6:43 6 minutes, 43 seconds Performance during the quarter were driven by strong product innovation and compelling marketing initiatives. 6:51 6 minutes, 51 seconds Rebok delivered a 20% plus growth in this quarter with a strong improvement in profitability. 6:57 6 minutes, 57 seconds Overall, Reebok's network expanded to 200 plus stores doubling from 100 stores at the time of acquisitions. 7:04 7 minutes, 4 seconds American Eagle remained on sustained profitable growth trajectory delivering doubledigit growth in quarter 3. 7:12 7 minutes, 12 seconds Venus in India business grew at double digit in this quarter marking a strong recovery after several subdued quarters. 7:19 7 minutes, 19 seconds Business also saw a sharp decline in losses and is consistently pursuing the path to break even. In summary, despite 7:28 7 minutes, 28 seconds festive wedding related shifts, ABL delivered accelerated momentum during the quarter. Performance was supported 7:35 7 minutes, 35 seconds by focus initiatives including product upgrades across categories enhanced retail experience discipline store 7:42 7 minutes, 42 seconds extension and sharper implementation across channels. Looking ahead a strong 7:49 7 minutes, 49 seconds score addition pipeline sustained detail growth and improving performance across other channels provide confidence in the continuity of this growth trajectory. 7:59 7 minutes, 59 seconds In parallel, emerging brands are expected to begin contributing more meaningfully supported by clearly defined strategy around growth and profitability. 8:09 8 minutes, 9 seconds This portfolio is expected to be 1/4 of a overall ABLE business in next 4 to 5 years. Together, these efforts will 8:17 8 minutes, 17 seconds deepen our presence across key micro markets both existing and new, while ensuring we are relevant in the life of 8:24 8 minutes, 24 seconds our consumer. that indeed is of strategic focus with disciplined execution to drive this strategy. We 8:32 8 minutes, 32 seconds believe the business is well positioned to translate this momentum into sustained long-term value creation. 8:40 8 minutes, 40 seconds Over to you. Thank you. 8:49 8 minutes, 49 seconds Thank you. Shall we begin with the question and answer session? Yes, please. 8:54 8 minutes, 54 seconds Thank you very much. We will now begin with a question and answer session. 8:58 8 minutes, 58 seconds Anyone who wishes to ask questions may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you 9:06 9 minutes, 6 seconds 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 assembles. 9:17 9 minutes, 17 seconds To ask questions, please press star and one. 9:24 9 minutes, 24 seconds The first question is from Vidisha Set from Ambit Capital. Please go ahead. 9:29 9 minutes, 29 seconds Yes. Hi. Uh my first question was that uh time and again since the de merger announcement, it has been called out that no fund raise would be made in 9:37 9 minutes, 37 seconds either of the two entities baring to the tomorrow business but in yesterday's filing it was mentioned that nearly 500 crores of NCD issuance was approved by 9:46 9 minutes, 46 seconds the board. Uh so can you please highlight as to what would be uh the utilization areas for this fund raise and by when are you looking to uh when 9:54 9 minutes, 54 seconds are you intending to raise it? Thanks Vidisha. You know uh at the time of de merger the company got the borrowings 10:01 10 minutes, 1 second transferred based on the allocation formula the 500 cr debentures which we repaid recently in the month of January we intend to raise it and you to 10:10 10 minutes, 10 seconds refinance the exist the debentures repaid there's no press bing got it so uh how should one be looking 10:19 10 minutes, 19 seconds at the reduction in the net debt amount because I think in earlier calls you' called out that every year the net debt would reduce by u I mean substantially 10:26 10 minutes, 26 seconds and by two three years it should be net cash. So any any thoughts over there? 10:32 10 minutes, 32 seconds So if you see from March beginning of 800 cr the September borrowings were roughly 1,000 cr which we reduced to 800 10:39 10 minutes, 39 seconds cr. The plan is to reduce it bring it to by another 75 to 100 cr but you know 10:47 10 minutes, 47 seconds Vishak and Ashish can talk on the growth growth capex after de merger which was the rational which we conveyed that the company will have the growth capital 10:56 10 minutes, 56 seconds available to them. Vishak Ashish Vishak you want to just come in. 11:02 11 minutes, 2 seconds [clears throat] 11:06 11 minutes, 6 seconds Okay. Uh let me answer this question. Uh just to give you an overall summary, the business uh generates through profit uh 11:15 11 minutes, 15 seconds which is through Eida uh a cash equivalent of close to 900,000 crores. 11:21 11 minutes, 21 seconds Uh part of it goes into working capital funding. Uh the other part goes into capeex. Uh typically we have been 11:30 11 minutes, 30 seconds spending close to 150 to 200 in the best years maybe 225 odd kind of capex. 11:37 11 minutes, 37 seconds uh one of the primary reasons for de merger was to create an entity which can reinvest back more aggressively into 11:44 11 minutes, 44 seconds growth. Some of those signals are visible here. This year a capeex will be uh north of 300 crores perhaps 320 330 11:52 11 minutes, 52 seconds crores and that's really why the debt reduction is not very large this year. 11:58 11 minutes, 58 seconds We still feel that over next three years which is what we had indicated the the net debt will be closer to zero in this although that's not the only goal we're driving here. 12:10 12 minutes, 10 seconds Okay sure uh the second question was on net basis what is the store edition of what could the store edition of 12:18 12 minutes, 18 seconds lifestyle brands look like for FI27 any any number or guidance that you'd like to call out? 12:26 12 minutes, 26 seconds So um we've added about 50 plus stores in this quarter. My sense is that we should add another 90 plus net stores in 12:35 12 minutes, 35 seconds the next quarter. So that would take the overall additions about 150 stores this year. We also have already built a 12:42 12 minutes, 42 seconds pipeline for next year of 120 odd stores and that momentum should continue. 12:48 12 minutes, 48 seconds Whatever we are able to find right up to November, December would be expansion for next year. So it should be another 12:55 12 minutes, 55 seconds significant expansion year going forward next year. Also we already have a pipeline of about 100 odd locations that 13:02 13 minutes, 2 seconds we've identified where our RBD team is looking at properties etc. Uh usually we convert half of that. So you should look 13:10 13 minutes, 10 seconds at another significant expansion year next year Visha. 13:15 13 minutes, 15 seconds Sure. I'll get back in the queue for further questions. Okay. Thanks. Thank you. 13:21 13 minutes, 21 seconds The next question is from Archa Menon from Morgan Stanley. Please go ahead. Uh hi, thank you so much for the 13:28 13 minutes, 28 seconds opportunity. Um my first question was mainly on the demand side and the revenue growth that's been posted. So is there any divergence this quarter 13:37 13 minutes, 37 seconds between the primary and secondary um sales growth and is there any element of channel restocking after the GST related um disruption in the second quarter? 13:49 13 minutes, 49 seconds So uh hi a uh three questions here. So first is the impact of GST has been pretty much digested through the 13:57 13 minutes, 57 seconds quarter. Okay. So there's no change in stocking or stockholding with any partner because of GST. So that's there was first couple of weeks of that but 14:06 14 minutes, 6 seconds that has been digested through the quarter itself. Okay. Uh to the second question around demand like uh Darmind 14:14 14 minutes, 14 seconds had said in his opening uh statement u October November were strong demand months. Uh December um the wedding 14:21 14 minutes, 21 seconds calendar was such that the last of weddings was on I think 5th December. So the the calendar was not the same after 14:28 14 minutes, 28 seconds 5th December. Uh Q4 again there are weddings and uh February on February March onwards there are weddings. So 14:35 14 minutes, 35 seconds that that impact of demand is there because of that. In terms of the last question you asked which was on primary versus secondary uh nothing unusual 14:44 14 minutes, 44 seconds usual uh practices around season launches and build up towards season and end of season is what has broadly happened. They've had robust secondary 14:52 14 minutes, 52 seconds sales across uh department stores which is what has led to an overall primary sales also being fairly healthy. Partner 15:00 15 minutes to partner there might be variation some higher some lower than uh secondary depending on uh their inventory situation. Also some partners would be 15:07 15 minutes, 7 seconds expanding more etc. So that would be the ups and downs but no uh general trend around uptocking or downtocking. 15:16 15 minutes, 16 seconds Understood. And uh how have trends been in January? 15:22 15 minutes, 22 seconds Uh you know uh the calendar is uh is uh is such that the most of the weddings began 15:30 15 minutes, 30 seconds uh from the the wedding season began postmukaranti. 15:34 15 minutes, 34 seconds So we've had an encouraging uh second half of January and my sense is that momentum should continue uh through uh through the next couple of months. 15:44 15 minutes, 44 seconds Understood. Very clear. And just finally so I think this quarter in terms of um your growth itself it's return to double digit growth which is your ambition 15:52 15 minutes, 52 seconds after many quarters. Um so do you expect this double digit momentum to sustain in 4Q and and 1Q? 16:00 16 minutes Thank you Arna. you noticed uh yeah I think uh you know we we've said this for uh some time you know we we want to be a 16:08 16 minutes, 8 seconds steady double digit growth and eida uh you know 11 12% uh steady uh sorry the pre India margins uh so that is 16:17 16 minutes, 17 seconds something which we should go on 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 16:25 16 minutes, 25 seconds wholesale side of business and the e-com side of business most of that is done so you should see a a more steady trajectory hopefully over the next few quarters. 16:35 16 minutes, 35 seconds Understood. Thank you so much. I'll get back into the queue. 16:41 16 minutes, 41 seconds Thank you. The next question is from Gorav Jani from JM Financial. Please go ahead. 16:48 16 minutes, 48 seconds Uh thank you for taking my question. Uh my next question is with regards to the wholesale and the uh the other piece of 16:56 16 minutes, 56 seconds the business within the Uh Gorov, I'm sorry to interrupt, but we 17:04 17 minutes, 4 seconds can't hear you very clearly. If you're on a hands-free, request you to use the handset, 17:18 17 minutes, 18 seconds can you hear us? 17:24 17 minutes, 24 seconds Gorov, you can hear us. Uh maybe there's a network issue. We request you to go uh to an area with better network and please rejoin the queue. Uh we'll move 17:32 17 minutes, 32 seconds to the next question. The next question is from uh Samir Gupta from India info line. Please go ahead. [clears throat] Hi good good evening everyone and thanks 17:41 17 minutes, 41 seconds for taking my question. Congratulations on a good set of numbers. Uh am I audible? 17:45 17 minutes, 45 seconds Yes. Hey, so firstly uh so there has been a GST cut uh for apparel below 17:53 17 minutes, 53 seconds 2,500 and above 2,500 there has been an increase u so just wanted to get a sense on what would be the blended price 18:01 18 minutes, 1 second decrease for a consumer of lifestyle brand uh plus and minus both these aspect increase or decrease I mean whatever has happened at the consumer and if you can help me with that number. 18:13 18 minutes, 13 seconds Okay. So Sam uh the parts of our business where it has a benefit uh especially uh brands like Peter England 18:21 18 minutes, 21 seconds uh brands like uh uh Reebok in in Paris etc. So there is uh benefits there. 18:27 18 minutes, 27 seconds There are some parts of business especially in wedding parts of business there's negative because those move from 12 to 18. Overall it's a small net negative but not a significant one. 18:37 18 minutes, 37 seconds Oh okay. However, but in lifestyle brands it would still be a decent benefit right because uh uh overall 18:45 18 minutes, 45 seconds discounted sales I mean the full price sell through etc. uh uh I guess you had indicated sometime that 50 60 50% of the 18:53 18 minutes, 53 seconds portfolio would be above and rest will be below. So 40% of the portfolio has actually benefited something like that. 19:01 19 minutes, 1 second Yeah. Uh it's like I said it's product to product. So let's say on t-shirts it's a gain on suits and blazers it's not etc. 19:10 19 minutes, 10 seconds Alltogether lended greater average with current sales ratio it's a small negative. If some other parts of grow business grow faster etc. It could be uh neutral also. 19:21 19 minutes, 21 seconds Got it sir. That's very helpful. Uh second question sir on the innerware and a pleasure segment. Now this quarter 19:28 19 minutes, 28 seconds seen a doubledigit growth and this is growth after many many quarters in this segment. Just wanted to get a sense on 19:36 19 minutes, 36 seconds what has led to this turnaround after so many quarters of business. 19:42 19 minutes, 42 seconds So I I think uh lot of uh initiatives which have been on the business they are coming into function now. So one of the 19:50 19 minutes, 50 seconds biggest things which has happened Samir is the kind of retail likes to like that we've had we've been fine-tuning our 19:56 19 minutes, 56 seconds retail model for innerware uh and retail like to like have been north of 30% in this side of business. evenly if you 20:05 20 minutes, 5 seconds look at it, it's been a very very strong 25 plus% luck for like that we've had in this business. So that has also improved 20:13 20 minutes, 13 seconds overall profitability because uh the retail profitability, retail viability is uh a lot better with that. Uh we have 20:20 20 minutes, 20 seconds also done various initiatives around product innovations, other things around methods of replenishing with distributors uh various things which are 20:29 20 minutes, 29 seconds going on which are you know intrinsic and hence likely to stay in the business. You recall that we've also had 20:37 20 minutes, 37 seconds some quarters of inventory correction which was a tough phase that we had to go through. uh most of that is behind us and uh as with that what happens is 20:45 20 minutes, 45 seconds you're able to infuse a lot of freshness of merchandise into the market that also spurs growth further. So uh I think it's 20:53 20 minutes, 53 seconds maybe a few more quarters of just fine-tuning that model and then it should be able to uh take off on a even stronger growth trajectory. 21:02 21 minutes, 2 seconds Got it. And uh you would still attribute this as most of the initiatives at your end industry is still where it was. 21:09 21 minutes, 9 seconds There is no real change there. 21:12 21 minutes, 12 seconds I would think so. I mean uh if you're saying are there significant tailwinds in this category? Not yet. Okay. Uh but 21:20 21 minutes, 20 seconds again uh to uh earlier question uh you know uh that you had uh BSC helps this 21:28 21 minutes, 28 seconds side of business also. So some of the uh impact of that should also start coming here. 21:34 21 minutes, 34 seconds Sorry come again. I didn't I didn't get that impact of what sorry the GST change again. Oh okay. of business also a good thing. 21:42 21 minutes, 42 seconds Yeah. For a lot of at leisure parts of business etc. It's a it's a good thing uh for this uh this part of business. 21:50 21 minutes, 50 seconds Got it. Got it. Yeah. That's that that is something we'll Yeah. And lastly certifies I think was also trying to ask this. Uh this is a wholesale under 21:59 21 minutes, 59 seconds lifestyle brands that has seen a growth of 21%. And past two quarters has been subdue before that it was good. Pre pre 22:08 22 minutes, 8 seconds that it was a decline. And I mean is there a change in strategy here? The segment has been bit of up and down in past few quarters. 22:15 22 minutes, 15 seconds So two three things uh one is I also ask the same question uh you know one is we 22:22 22 minutes, 22 seconds had the uh base effect of Centro and the transition that we went through in Centro in the past that is out of the base now. So you know so you will see a 22:31 22 minutes, 31 seconds in that sense a more applesto apples comparison. uh beyond that uh there is also the strong secondary sales growth 22:39 22 minutes, 39 seconds which we've uh we've had in the last few quarters which is helping us. So those are some of the factors which are going in. Likewise on the uh e-commerce side 22:49 22 minutes, 49 seconds of business we went through one phase correction lot of things that we did to sharpen the model. Large part of that is also done and that also again is 22:57 22 minutes, 57 seconds reflecting in the numbers. Just for my understanding sir on the wholesale piece this is a mix of consignment as well 23:05 23 minutes, 5 seconds outside sale or now it's primarily outright sale that we book in this sorry 23:13 23 minutes, 13 seconds can you repeat that samir I'm so sorry so what I mean is that the wholesale channel the the sales the way you record 23:20 23 minutes, 20 seconds 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 23:28 23 minutes, 28 seconds distributor computer and to the retailer and uh with the margin how does it work? 23:33 23 minutes, 33 seconds So we recognize revenue when we sell to our uh customer. Okay. Our entire terms of trade are built around that that we 23:41 23 minutes, 41 seconds recognize revenue when we sell to the partner. 23:45 23 minutes, 45 seconds Sell to the partner not the end consumer not to the end consumer. In in retail consignment retail sales we recognize 23:52 23 minutes, 52 seconds that when we sell to end consumer. uh in the wholesale side of business we recognize revenue when we sell to the party. 24:00 24 minutes Got it sir. And there is no change in the accounting over the over the years. This has always been the case. 24:05 24 minutes, 5 seconds No no always been the case. In fact uh we are extremely conservative in the way we recognize revenue uh in the way we 24:12 24 minutes, 12 seconds recognize docy all of that. So uh no change in the way we uh recognize revenue. 24:18 24 minutes, 18 seconds Got it sir. Got it. Uh that's all from me. I'll come back in the future sir for any follow-ups. Thank you. 24:27 24 minutes, 27 seconds The next question is from Dwanchu Bansal from MK Global. Please go ahead. 24:33 24 minutes, 33 seconds Hi Vishak. Uh thanks for taking my questions. Uh so first question is on retail channel growth. Uh uh if we 24:40 24 minutes, 40 seconds compare this uh growth with some of the other players that have reported so far uh it's it's a tad weaker. uh even the 24:48 24 minutes, 48 seconds LTL that we have reported is uh running a tad weaker versus uh the other players. So I just wanted to check 24:55 24 minutes, 55 seconds within the uh marketplace. So what is leading to uh this weakness uh for our brands? 25:03 25 minutes, 3 seconds So if you split the uh brands in the market into brands which have a significant wedding impact versus brands 25:11 25 minutes, 11 seconds which don't have uh impact of wedding calendar. In our own portfolio you'll see that. Okay. Uh whether it's on 25:18 25 minutes, 18 seconds Reebok, whether it's on American Eagle, it's on Innoware, uh they would have all had very very high aggressive uh double digit uh secondary growth uh L2L growth. 25:28 25 minutes, 28 seconds Parts of business which have had a greater dependence on weddings, the evaporated after 5th December. So you 25:35 25 minutes, 35 seconds see the impact of that. Uh so it's it's more of phasing thing. Uh if you look at our retail sales, YD uh December, it's 25:43 25 minutes, 43 seconds still double digit. it's at 10% for lifestyle brands itself. So some of it you you know you you get the benefits of calendar in some quarter you don't in 25:52 25 minutes, 52 seconds the other even if you see it for the overall industry itself you will see that pattern for uh brands which have a greater dependence on weddings. 26:01 26 minutes, 1 second Uh that's fair vish but I was taking from a 9-month perspective also. uh so if we see our uh retail sales growth has 26:09 26 minutes, 9 seconds been uh a tad weaker versus what other players have reported uh so even on a n 26:17 26 minutes, 17 seconds no 10% like for like a 10% like for like in in three quarters which is YT no that is like for like sir but uh from 26:26 26 minutes, 26 seconds a consumer perspective I guess it's the retail channel revenue growth which matters right so like for like is okay 26:33 26 minutes, 33 seconds but from a market perspective I guess the overall growth is a better metric to track your market 26:39 26 minutes, 39 seconds share. So that growth has been tad weaker versus what other players have reported and the difference is almost to a tune of 500 600 basis points. 26:49 26 minutes, 49 seconds No, I was just don't know uh uh it's our retail overall would also be about 8%. 26:57 26 minutes, 57 seconds So yeah the other I was referring to if you want from urban fashion perspective we reported almost uh 13% growth in 9 27:06 27 minutes, 6 seconds months right so so possibly and maybe we could look at comparisons etc but all I want to assure 27:15 27 minutes, 15 seconds you is that in our brands we are at a like to like of 10%. uh to the question Arjuna asked earlier uh some of the 27:23 27 minutes, 23 seconds 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 27:30 27 minutes, 30 seconds the overall growth Q4 will see that even more where there is about a 90 net store addition that you will see so if you 27:38 27 minutes, 38 seconds look at it we will enter into next financial year with a 150 store larger network than last year that itself you 27:46 27 minutes, 46 seconds know broadly is a 5% extra business in retail that you would have next year. 27:52 27 minutes, 52 seconds Sure. Sure. And uh Vishak just one uh bookkeeping understanding. So your rent expense uh which is largely uh 28:00 28 minutes franchisee commissions in my opinion uh has been on a declining trend by about 100 to 150 basis points uh both in Q2 28:09 28 minutes, 9 seconds and Q3. Right? So what is driving this change as in uh are we shifting from u uh franchisee stores to company stores? 28:18 28 minutes, 18 seconds Is that uh leading to this change? 28:22 28 minutes, 22 seconds Not really. So look, it's a uh it's a it's a network of stores. It's a balance of stores and uh coco stores. So uh uh 28:32 28 minutes, 32 seconds we've been driving a lot of initiatives around cost reductions. Uh there is uh also you you must recognize that um when 28:40 28 minutes, 40 seconds you had a retail network which has grown 10% on like for like whereas your store costs grow at about 5 to 6%. So that also gives you the cost leverage right? 28:51 28 minutes, 51 seconds So that's this is commission right this must be percentage of sales. So, so we have we 28:58 28 minutes, 58 seconds have uh a significant number of PCO stores where we pay the rents directly and an equally strong network of 29:06 29 minutes, 6 seconds franchisee stores where it's a percentage commission. Where it's a percentage commission, the percentage doesn't change. It it helps the franchisee to make a better ROI. 29:17 29 minutes, 17 seconds But this in the P&L rent expense that we report, this is largely the commission paid to the franchises. If you could confirm that, right? 29:26 29 minutes, 26 seconds In the reported P&L, this is the franchise commission that largely it is the variable rent. So it is both 29:34 29 minutes, 34 seconds franchise commission as well as the variable rent which you pay to mouse. 29:38 29 minutes, 38 seconds Yeah, that was my question. So why is that as a percentage of sales you're saying? 29:47 29 minutes, 47 seconds Okay, is that question answered? I think it's the leverage operating leverage of having a higher uh like to like sales which is what is bringing that down. 30:00 30 minutes Sure. I'll take this offline. Uh maybe uh I I'll take this. It will be better you connect offline. 30:06 30 minutes, 6 seconds We'll Sure sir. Sure. Sure. No. 30:09 30 minutes, 9 seconds What is the Sure sir. No issues. Thank you. Thanks for the attention. 30:17 30 minutes, 17 seconds Thank you. 30:19 30 minutes, 19 seconds The next question is from Ankit Kyia from Philip Capital. Please go ahead. Uh two questions from my side. Um in the 30:27 30 minutes, 27 seconds quarter we saw you know gross margins decline marginally. Um industry trend suggests that the discounting is actually reducing and you have also done 30:35 30 minutes, 35 seconds that. We can see that in the channel checks. Uh so what is leading to this gross margin decline? 30:43 30 minutes, 43 seconds uh not sure where you're seeing gross margin declining K uh which where are you seeing because actually gross 30:51 30 minutes, 51 seconds margins have fairly healthy uh Dinda you want to respond to that which uh the CGS 30:58 30 minutes, 58 seconds for corresponding Q3 FY2 5 was 41.1 this time it is 41.4 four it is of the 31:07 31 minutes, 7 seconds overall business including you know lifestyle brands plus various other businesses so I think uh this is a 31:15 31 minutes, 15 seconds composition of various business lines it's more in the range more or less business mix then uh any shift 31:24 31 minutes, 24 seconds and the change is only so if you can highlight in uh lifestyle uh what is the gross margin expansion we are witnessing due to lower discounting 31:33 31 minutes, 33 seconds and which business is actually dragging the gross margin down from the mix perspective. 31:38 31 minutes, 38 seconds Okay. This is at the publish result level lifestyle. I have to dig out separately. We can connect separately. Yeah. 31:46 31 minutes, 46 seconds Sure. Um my next question is on inaware. 31:49 31 minutes, 49 seconds Uh we have seen strong growth in the innerware category. Uh what is leading to this growth um overall and I what 31:57 31 minutes, 57 seconds changes are we doing in the inware category from a medium-term perspective? 32:02 32 minutes, 2 seconds So I answered Samir asked a similar question. So let me just tell you that two three things are happening which you should uh you know uh see the see the 32:10 32 minutes, 10 seconds benefits of that. Uh one is of course the sales growth that you've seen and like I was explaining earlier as inventory freshness improves the health 32:19 32 minutes, 19 seconds of overall inventory improves etc that is giving us a good impact that is also giving us a significant impact on profitability. In fact our losses in 32:28 32 minutes, 28 seconds this business this quarter have h haveved. So that is again something that uh is reflected in the overall numbers. 32:35 32 minutes, 35 seconds The other like I was explaining to Samir very significant improvement in retail performance. So retail like for like and 32:41 32 minutes, 41 seconds likewise in department stores etc. very strong same store performances that we've had which have bring which have 32:49 32 minutes, 49 seconds brought down the fixed cost as a percentage of sales resulting in both overall growth as well as improved profitability. In addition to that 32:58 32 minutes, 58 seconds running a lot of uh initiatives around uh quality of uh replenishment mechanisms to distributors running 33:04 33 minutes, 4 seconds pilots around uh lot of new product initiatives uh many things which are going into into driving overall uh 33:12 33 minutes, 12 seconds overall traction in this category. So it's it's uh a lot of those things are falling in place quite nicely and so 33:19 33 minutes, 19 seconds over 2 years if I have to see do you think you can have a mids singledigit margins by fi28 in this business and 33:28 33 minutes, 28 seconds what will be the ebo strength if I have to see from a medium-term say two years out uh given that now unit economics is 33:35 33 minutes, 35 seconds set for the business product is new everything is changed yeah yeah so u first question the fi 28 I 33:45 33 minutes, 45 seconds hope is going to be a profitable uh year. Uh I don't want to comment on what kind of profitability but I'm hopeful 33:52 33 minutes, 52 seconds that FI28 will be a profitable year. I think that's the kind of trajectory that we've built for ourselves right now. Uh yes uh you're right on the network part 34:00 34 minutes the retail network we've got a reasonably robust proof of concept. Now we also want to uh strengthen further 34:07 34 minutes, 7 seconds the uh partnerdriven model here. Here's a model which can work nicely. Service through distributors, neighborhood catchments, tight sharp stores which 34:16 34 minutes, 16 seconds have a nice sharp assortment which is relevant for that neighborhood. So some of those also we are working on different sizes and formats to be able 34:24 34 minutes, 24 seconds to scale that. That can be a pretty significant exponential scale up. So don't want to put a number on that now. 34:30 34 minutes, 30 seconds But uh by and large you you should expect to see a significant scaling up of the retail network 34:37 34 minutes, 37 seconds and um what it's been more than a decade now we are doing this business 34:42 34 minutes, 42 seconds [clears throat] 34:43 34 minutes, 43 seconds right and we have had cycles u what gives you confidence now this change what we are doing is there because you know the some of the D2C startup brands 34:51 34 minutes, 51 seconds both on at leia and in our side have started to become aggressive while some have also closed shop but we are seeing new competition also emerge Right. Uh 35:00 35 minutes and the market leader is slowing growth and some of the private labels are also started to do well. Um now 35:09 35 minutes, 9 seconds you know the changes which you have you know talking of you know how confident that these are the right changes to be 35:16 35 minutes, 16 seconds done in the market. Now I think first thing is uh the biggest thing which gives me confidence 35:22 35 minutes, 22 seconds personally is the uh consumer acceptance of uh of this brand and this category. I think the consumer stickiness on those 35:31 35 minutes, 31 seconds who've ever tried the product is very high and that gives us tremendous confidence. So a lot of initiatives by 35:38 35 minutes, 38 seconds which we've been able to generate trials they've all translated into secure business with consumers. So that's the first thing. Second is I think it's a 35:46 35 minutes, 46 seconds fairly wellestablished distribution network with the kind of distribution points that we've got with the kind of retail presence that we've got presence 35:54 35 minutes, 54 seconds in department stores etc. I think it's a fairly u you know uh uh strong network 36:00 36 minutes which is also getting uh steadily more uh welloiled machine kind of thing in terms of replenish this you know is 36:07 36 minutes, 7 seconds Ankit it's a sticky replenishment business so you know as you keep getting better and better at that process and the wheel is nicely balanced uh it it's 36:16 36 minutes, 16 seconds a nice flywheel that works for you we are fairly close to that in my sense so uh you know I would say that some of the 36:24 36 minutes, 24 seconds uh last few years learning also come in handy in terms of making sure that we do the right thing going ahead 36:30 36 minutes, 30 seconds and between at le 3070 or would at le 36:39 36 minutes, 39 seconds uh let me take last quarter's exact numbers maybe if we just put that together uh 36:47 36 minutes, 47 seconds that number but broadly you'd be right but let me not make a mistake on that so I'll give you a a sharper number no worries you can take the next 36:55 36 minutes, 55 seconds question and answer in between. Thank you. Thank you. 37:02 37 minutes, 2 seconds The next question is from Rajiv Bharti from Noama. Please go ahead. 37:09 37 minutes, 9 seconds Yeah. Uh good afternoon sir. Thanks for the opportunity. Uh so continuing on the inner web piece if you can um clarify 37:16 37 minutes, 16 seconds what is uh the GT channels contribution in your uh entire mix. 37:24 37 minutes, 24 seconds So when you say GT you mean the trade uh business the trade trade. Yeah. Yeah. Yeah. 37:29 37 minutes, 29 seconds Uh just check I'll give you an accurate number. Um it's around 50%age. It's still less than 50. 37:38 37 minutes, 38 seconds Yeah. 37:39 37 minutes, 39 seconds Got it. And and the other part is in terms of the capex number which you've highlighted the 330 cr can you split between your lifestyle brand and youth 37:47 37 minutes, 47 seconds brand how how does it stack? The line share would be for the lifestyle brands. 37:52 37 minutes, 52 seconds Probably 80% of that spend would be lifestyle brands, maybe a little more than 80%. Uh we've invested a lot more 37:59 37 minutes, 59 seconds both both in terms of uh expansions and renovations. We've also made stores larger uh created stronger shop facads 38:07 38 minutes, 7 seconds etc. So uh it's been a fairly significant uh impact on the lifestyle side of business. uh and and and you you 38:14 38 minutes, 14 seconds made one comment and and there's an opening remark in terms of you know you're looking for a steady growth. So assuming that you look for let's say 10% growth on the top line on a conservative 38:23 38 minutes, 23 seconds basis for the entire piece um then on the back of the and and the comment which was made was that you know 38:30 38 minutes, 30 seconds the emerging brands will become 1/4 of the turnover uh in 5 years that means you're you're projecting for a you said 38:37 38 minutes, 37 seconds 22% kind of a growth on the emerging brand side uh with bulk of the capex routed on the lifestyle brands I mean uh 38:45 38 minutes, 45 seconds how how does uh is this is this that capital right the the emerging brand category. 38:55 38 minutes, 55 seconds So two three uh uh responses to that Raj. Uh so first is that uh the emerging 39:02 39 minutes, 2 seconds business is still on a lower pace. So uh relatively speaking it right now needs lesser capex but u we are not um averse 39:10 39 minutes, 10 seconds to adding more uh for that side of business as well uh as we as we scale up there. Um I'm personally between you and me and I've said this earlier as well. 39:20 39 minutes, 20 seconds I'm hoping more for a 12% kind of a steady state growth and we should uh aim for that. We will have pluses and minuses over quarters but we should we 39:29 39 minutes, 29 seconds should be able to drive something closer to that. uh and definitely uh Innerware, Reebok these of business have a very 39:37 39 minutes, 37 seconds large role to play in overall driving because there the uh the base itself is relatively small and we should be able to scale up much faster in that side of 39:45 39 minutes, 45 seconds business. Reebok has had a uh has had a very good uh quarter and the momentum looks very good. We've already doubled our network from what we bought on 39:53 39 minutes, 53 seconds Reebok. We should exit this year. We've already 200 plus. We should exit this year with 230 plus stores on Reebok. And 40:01 40 minutes, 1 second I think there is still um a very large um set of markets which are available for putting up stores on on on Reebok. 40:10 40 minutes, 10 seconds So I think uh while a lot of questions have been around in a way there are various other parts of business which are also poised for fairly strong growth. 40:18 40 minutes, 18 seconds Uh I think also also just to add to that uh we have a fairly large distribution of 40:24 40 minutes, 24 seconds uh lifestyle brand stores and a significant part of our capex goes in renovations and making upgrading those 40:32 40 minutes, 32 seconds stores and therefore in absolute terms the the because those number of stores are so much higher uh and the emerging 40:41 40 minutes, 41 seconds businesses are relatively newer they have less renovation needs. Uh that's also another reason why uh the current 40:48 40 minutes, 48 seconds capeex that won't be the case all the time is significantly higher in lifestyle. 40:53 40 minutes, 53 seconds Sure. So so thanks for this this 12% number. Uh so if I reverse look the number becomes 24% for the rest of the category. So what is the network edition and the SSG assumptions in this? 41:06 41 minutes, 6 seconds So on a steady state and we have said this earlier this year as well uh 6 to 6 7% of like forl like is what we should 41:15 41 minutes, 15 seconds expect uh in the in the lifestyle side of business and the rest of the growth comes through expansion. uh of course 41:23 41 minutes, 23 seconds every year is not going to be the same but let's say in a 3,300 store network if you're able to add even say 200 41:30 41 minutes, 30 seconds stores that is 5 6% growth that is coming out of u network expansion in that side of business I think there is headroom for at least 3 four years of 41:39 41 minutes, 39 seconds growth like that in terms of network expansion so I was asking from let's say you 41:46 41 minutes, 46 seconds brands and innerware uh segment uh piece okay there the headroom for growth is even stronger Rajie uh you know because 41:55 41 minutes, 55 seconds uh let's let's look at it this way if say a brand like um Louis Phipe has a network of 500 plus stores there's no 42:03 42 minutes, 3 seconds reason why a brand like Zebok cannot have more than in fact category like that can have an even larger uh play in 42:11 42 minutes, 11 seconds terms of network size so in that side of business it's even more aggressive uh growth possibilities that exist likewise 42:18 42 minutes, 18 seconds in inner there is also the possibility of many the opport opportunity of many more neighborhood markets as well. So there again the um the headroom uh is is 42:27 42 minutes, 27 seconds much larger beyond the beyond the part around the what what you would call GT GT or general trade. 42:35 42 minutes, 35 seconds Sure. So just one last question on innovate. Has there been any price hike? Sorry indeed. 42:42 42 minutes, 42 seconds Has there been any price hike on the entire in portfolio? 42:46 42 minutes, 46 seconds No actually we passed down the GST benefits to consumers. So you you uh you know uh you would have seen that uh you 42:54 42 minutes, 54 seconds know a lot of segments which had a 12% which moved to 5%. So we passed that on to consumers. 43:01 43 minutes, 1 second Sure. Uh that's all from my thanks a lot and all the thank you. 43:08 43 minutes, 8 seconds The next question is from Tjas Sha from Aendis Spark Institution Equities. Please go ahead. 43:14 43 minutes, 14 seconds Uh hi, thanks for the opportunity and uh sorry if I'm repeating the question but I logged in a bit late. Uh can you 43:21 43 minutes, 21 seconds provide some regional color on the lifestyle brand performance? Uh specifically are we seeing any uh demand 43:28 43 minutes, 28 seconds pressure in urban IP heavy markets let's say Bangalore, Hyderabad, Pune. 43:36 43 minutes, 36 seconds Okay. Hi uh uh yes we missed having first question from you. uh uh just to give you some color, one is that uh 43:45 43 minutes, 45 seconds pages this year uh small towns have had a good run. Okay. So while I can't give you regional uh that there haven't been 43:54 43 minutes, 54 seconds too many regional biases but clearly um uh small town India has had a good run you know that small town India went 44:02 44 minutes, 2 seconds through few tough quarters this year it's been you know our own same store growth pages in small town ITG would be 44:08 44 minutes, 8 seconds about 13 14%. Okay. So, small town India has had a has a much stronger uh run. Uh other than that, I can't uh point out 44:17 44 minutes, 17 seconds any region specifically which has grown more or less. 44:22 44 minutes, 22 seconds Perfect. Very assuring. Second, uh Pash you spoke about the lifestyle portfolio. 44:27 44 minutes, 27 seconds Now, lifestyle portfolio uh has a really strong loyal base of customers. Uh but but the growth is moderating and it's 44:34 44 minutes, 34 seconds actually uh it answers there. itself that it's a very mature portfolio or at least the size is huge in terms of both distribution uh and in the absolute 44:44 44 minutes, 44 seconds number. So what are the biggest uh or where are the bigger wide spaces is it new formats locations geographies that 44:51 44 minutes, 51 seconds can actually uh help us to go into let's say double digit growth sustainably and not this just one or two low base high base kind of uh triggers. 45:03 45 minutes, 3 seconds Uh it is uh simple answer all of these that you've said and a few more I think uh each of [clears throat] these very 45:11 45 minutes, 11 seconds very large brands uh you know uh fashion business doesn't have a billion dollar brand uh most other categories have very 45:18 45 minutes, 18 seconds very large brands so you know let me put it this way uh take a brand like uh say Louis Philippe which has 500 plus stores 45:28 45 minutes, 28 seconds the uh opportunity for a brand like Louis Philip in India should be about 1500 stores So maybe the the the methods 45:35 45 minutes, 35 seconds of opening these stores, the formats will have to be more nuanced. We'll have to find the right regional assortment requirements etc. But we've been figuring formats which have worked. 45:44 45 minutes, 44 seconds There have been formats which have been more casual driven, formats which are more wedding driven and so on which have worked fairly well. Uh we have also 45:52 45 minutes, 52 seconds created um we just uh put a bridge to luxury store from uh we called Philippe which we opened in DF Prominard in in 46:00 46 minutes Delhi which has again been off to a very good start. So a lot of new formats uh new new segments new usage occasions 46:08 46 minutes, 8 seconds with consumers uh as they as they emerge again are other growth possibilities. 46:14 46 minutes, 14 seconds 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 Venus or in Ellen Sulli. 46:22 46 minutes, 22 seconds So that is again another uh opportunity for growth. Uh so there are various segments. So there is of course 46:29 46 minutes, 29 seconds distribution and presence etc. Uh many of our partners are also looking at aggressive growth plans. Some of the department stores are looking at growth 46:36 46 minutes, 36 seconds plans that adds to that. Uh the the e-commerce space also with quick commerce is also driving consumption. 46:43 46 minutes, 43 seconds and there is opportunities for growth there. So 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. 46:54 46 minutes, 54 seconds Yeah. Uh my next question pertains to Reebok from from day one since we acquired it looks very promising. Uh but 47:03 47 minutes, 3 seconds uh and then when we look at the other player numbers also in this space that's actually very very healthy. So and then you also called out there's a huge opportunity to expand footprint as well. 47:13 47 minutes, 13 seconds So where 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 47:22 47 minutes, 22 seconds route to market itself is not very clear or as of now before we scale it up. 47:28 47 minutes, 28 seconds Okay just uh just to give you some facts here we've more than doubled our business in the last 3 years. Okay, in 47:35 47 minutes, 35 seconds Rebok. Okay, we have more than doubled our business. Uh, in spite of all the market challenges or whatever that might 47:43 47 minutes, 43 seconds 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 47:51 47 minutes, 51 seconds that we had uh inherited. So, it's been at a fairly significant pace, but you would argue it was on a small base. And 47:59 47 minutes, 59 seconds you're right. So the good news is that we're still relatively uh on a on a small number and hence the headroom for 48:06 48 minutes, 6 seconds growth is quite significant. Uh let's look at what are all the things which are going into the mix which have to 48:13 48 minutes, 13 seconds make this uh this faster growth happen uh continuously. Uh first is on product assortments itself. So a lot of very 48:21 48 minutes, 21 seconds good work has happened in Rebok across categories. So Reebok which was uh you know um in in its early years in India 48:30 48 minutes, 30 seconds very very strong across multiple categories had uh you know uh got limited to largely lifestyle kind of 48:37 48 minutes, 37 seconds footwear uh uh before we we we we took it over as we've gotten into this 48:44 48 minutes, 44 seconds segment you know and uh we we've added a very strong line of walking very strong line of performance footwear some very 48:51 48 minutes, 51 seconds very good running uh shoes you know in the in the segment in fact we have some very top quality you know most of the 48:58 48 minutes, 58 seconds running shoes in India carbon plated running shoes are all about 10,000 bucks we've got very nice uh carbon plated running shoes at 9,000 rupees and so on 49:07 49 minutes, 7 seconds so there's a very strong assortment of footwear that we've been able to generate also big lever for growth you know we've been able to leverage our 49:15 49 minutes, 15 seconds expertise on apparel creation and apparel uh product uh designing etc very strongly when we took on the brand uh the apparel contribution was about 25%. 49:26 49 minutes, 26 seconds Today it's a little more than 36% already. That is again driven growth and but I still say that there are many segments which we can do even more of. 49:34 49 minutes, 34 seconds So 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 49:43 49 minutes, 43 seconds exists on on geographical markets that we will scale to. So it's it's very very exciting times in this segment. I also 49:51 49 minutes, 51 seconds think consumer acceptance uh more and more health and fitness is is becoming even stronger as as market trend. So 49:58 49 minutes, 58 seconds this is uh an interesting time to be debuffed. Thanks. That's all from my thanks. 50:07 50 minutes, 7 seconds Thank you. The next question is from Gorov Jagani from JM Financial. Please go ahead. 50:15 50 minutes, 15 seconds Uh hi, thank you for taking my question again. Hopefully I'm audible this time. 50:20 50 minutes, 20 seconds Uh one question now from my end is on the Yeah. Uh just one question on my end from the margin front you know the 50:27 50 minutes, 27 seconds others uh segment uh that is the uh the rebok innerware etc business together is now shown a very good decent margin this 50:35 50 minutes, 35 seconds quarter around. So if you can you know break it uh how this improvement was and how much sustainable this is going ahead uh given that you know you have also 50:44 50 minutes, 44 seconds mentioned that innerware business losses have half now. So when can we expect this business to uh you know become 50:51 50 minutes, 51 seconds profitable and where are the other pieces of the business on the profitable journey? 50:57 50 minutes, 57 seconds Okay. U I think we answered that partly when Ankit asked and Samir asked that question but let me attempt that again. 51:04 51 minutes, 4 seconds So one is that I'm hopeful that at least we have one quarter next year which is a profitable quarter on the inner webare 51:10 51 minutes, 10 seconds business and that should be hopefully uh the beginning of another era for that side of business. So that is uh on the 51:19 51 minutes, 19 seconds profitability part and lot of things are happening which which lead to that. 51:24 51 minutes, 24 seconds Biggest thing from a margin improvement perspective um uh is uh uh selling expense improvements. So we've managed 51:31 51 minutes, 31 seconds to significantly uh uh streamline selling expenses. Uh cost of doing business in that sense has has improved 51:40 51 minutes, 40 seconds and that should continue uh over some time as health of inventory improves. Uh that also improves realizations that is 51:48 51 minutes, 48 seconds again something which is which is giving us gains and that is a flywheel which should keep getting better over time. Um 51:55 51 minutes, 55 seconds overall also as uh overall scale improves the leverage of overheads and all other costs also then improves. So 52:02 52 minutes, 2 seconds we should we should we should see this uh improvements over over the next few quarters as well. Europe. 52:11 52 minutes, 11 seconds Yeah, just one thing you know while we understand uh the innerware business turning from losses to profitable will be a bigger driver for the margins but 52:20 52 minutes, 20 seconds how about the scale up of the margins in the the American Eagle and the Rebok part of the business as well how that 52:26 52 minutes, 26 seconds will uh shape up and in that context how can the margin expansion look like in the next few years? 52:35 52 minutes, 35 seconds Yeah, I'll separate American Eagle and uh Reebok. American Eagle is fairly um 52:41 52 minutes, 41 seconds uh you know um how do I say this? It's a very robust business but doesn't have 52:47 52 minutes, 47 seconds the same growth opportunity let's say as uh Reebok has. It'll grow steadily. 52:53 52 minutes, 53 seconds It'll grow steadily hopefully doubledigit growth and it'll continue to have a very good space in markets for consumers and it'll make decent money as 53:01 53 minutes, 1 second we do that. Debb has a much greater uh room for ex uh exponential growth. I think that's a segment where you should 53:09 53 minutes, 9 seconds see very very aggressive growth in times ahead and u like I was explaining to pages right through uh both uh product 53:17 53 minutes, 17 seconds categories as well as channel markets there is a very large growth opportunity that we should see as that happens a lot of leverages also come into play which 53:25 53 minutes, 25 seconds should also make the business more profitable as we go along. answer question. 53:35 53 minutes, 35 seconds Yes. Yes, that does. Thank you. Thank you. 53:42 53 minutes, 42 seconds Next question is from Kunal Bhya. I'm sorry. Kunal Bhya has dropped off. 53:48 53 minutes, 48 seconds We'll move to the next question. The next question is from J from HDFC. Please go ahead. 53:54 53 minutes, 54 seconds Yeah. Hi, thank you so much for the opportunity. uh uh a join late. So some of apologies if some of these questions are uh you know have already been 54:02 54 minutes, 2 seconds answered. Uh see on the lifestyle bit to begin with uh you guys had a nearly 100 bit margin expansion. Now this is 54:10 54 minutes, 10 seconds despite wholesale and you know online uh in I mean growing two times the pace at 54:18 54 minutes, 18 seconds which the core retail grew. I was just wondering how come this happened? what are the levers which helped you get there? 54:28 54 minutes, 28 seconds So yeah, you're right. We did discuss this. So basically it's coming from uh reduced selling expenses through better leverage. So as your same stores grow 54:37 54 minutes, 37 seconds better that that gives you um uh a better uh uh margin expansion. I think we have also been able to drive a lot of 54:46 54 minutes, 46 seconds cost reduction initiatives across the business including product cost, supply chain cost etc through the organization which have also made us uh you know uh 54:55 54 minutes, 55 seconds get uh some some benefits in terms of margin expansion. So it's uh if if the question is is it a one-off? Sure in 55:02 55 minutes, 2 seconds terms of uh this quarter is a good quarter. So sure it's it's it's there and in fact like Dinda said it's our best ever uh quarter in terms of margin 55:11 55 minutes, 11 seconds improvement and little lifestyle business but is it sustainable to a fair extent it is sustainable apart from the quartertoquarter seasonality it's fairly sustainable what what we've got here. 55:22 55 minutes, 22 seconds Uh well thanks. Uh the other bit is on the emerging businesses. Uh especially the inner way bit you know you know through our channel checks also at least 55:30 55 minutes, 30 seconds uh that's what we kind of picked up and maybe we were wrong for a for the longest time the assortment at least from a price point perspective were 55:39 55 minutes, 39 seconds quite divorced from what the woman really wanted. Now have we fixed this or how close are we in fixing it? where are 55:48 55 minutes, 48 seconds we in that journey of kind of marrying them together? 55:53 55 minutes, 53 seconds Okay. Uh so um yeah uh you know it's a huge country with a very very large you know we operate with some 5,000 outlets 56:01 56 minutes, 1 second which are a universe of uh you know and the universe actually larger uh which is there uh in the trade side itself and of 56:10 56 minutes, 10 seconds course there are different kinds of retailers with different assortment preferences. The most critical thing to uh to do well here is replenishment and predictability around replenishment. 56:20 56 minutes, 20 seconds Once you crack a set of uh winning products, uh the market wants you to then just keep replenishing extremely. 56:27 56 minutes, 27 seconds It's in some way almost a boring business where you just want extremely high predictable replenishments again and again and again. As you keep getting 56:35 56 minutes, 35 seconds better and better at that, uh your uh appeal with the with the channel also keeps getting stronger. Sure there are more price sensitive markets and you 56:44 56 minutes, 44 seconds have we have assortments which address that. So for instance we have a classic plus line which is a sharper price product. So there are assortments which 56:51 56 minutes, 51 seconds are unique to different needs of market which are which are addressed but I would still say the larger lever is extremely you know have a solid set of 56:59 56 minutes, 59 seconds product. We have a damn good product. We have a very high quality product. Uh fit is great. The repeat consumer uh the 57:06 57 minutes, 6 seconds behavior is very strong. Now just making sure that it is well replenished with very high uh degree of predictability becomes a very critical uh lever jet. 57:19 57 minutes, 19 seconds Thank you very much. We'll take that as the last question. 57:24 57 minutes, 24 seconds 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 57:32 57 minutes, 32 seconds in touch with Mr. Amit Di. You may now disconnect.