Arvind Fashions Limited — Q3 FY26

Arvind Fashions Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=NfsNVK9Dfz8 Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the Q3 and FI26 results earning conference call of Urwin Fashion 0:09 9 seconds Limited. As a reminder, all participant line will be in the listenon only mode and there will be an opportunity for you to ask questions after the presentation 0:18 18 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchdown phone. Please 0:27 27 seconds note that this conference is being recorded. I now hand the conference over to Mr. Girchitlanga. 0:34 34 seconds Thank you and over to you sir. 0:37 37 seconds Thanks Danish. Uh hello welcome everyone and thank you for joining us on the Arvin Fashions Limited earnings conference call for the third quarter 0:46 46 seconds ended 31st December 2025. I am joined here today by Kulin Lalhai, vice chairman and non-executive director and Amisha Jen, managing director and CEO. 0:57 57 seconds Please note that results, press release and earning presentation have been mailed across to you yesterday and these are also available on our website arvinfashions.com. 1:07 1 minute, 7 seconds I hope you had the opportunity to browse through the highlights of the performance. We will commence the call with Fen providing his key strategic 1:15 1 minute, 15 seconds thoughts on our third quarter performance. Post that I will hand over uh the call to Amisha to take us through 1:23 1 minute, 23 seconds the financial performance and the business highlights. After the end of the call, after the end of the management discussion, we will have a 1:29 1 minute, 29 seconds Q&A session session. Before we start, I would like to remind you that some of the statement made or discussed on this call today may be forward-looking in 1:38 1 minute, 38 seconds nature and must be viewed in conjunction with risks and uncertaintities we face. 1:43 1 minute, 43 seconds A detailed statement of these risks is available in this quarter's earning presentation. The company does not undertake to update these forward-looking statements publicly. 1:52 1 minute, 52 seconds With that said, I would now turn the call over to Colleen to share his views. Thank you and over to you, Colleen. 1:59 1 minute, 59 seconds Thanks, Giza. A very good afternoon to you all. Thank you for joining us for the Q3 results. 2:05 2 minutes, 5 seconds I'm very happy to share that this quarter we have seen the highest yearon-year growth in several years. We 2:12 2 minutes, 12 seconds have grown at consistent double-digit growth rates over the past few quarters, which demonstrates that our growth drivers have fallen in place. The demand 2:21 2 minutes, 21 seconds environment was stable and we achieved a 4.5% growth led by healthy LTL growth of 2:28 2 minutes, 28 seconds 8.2% in the retail channel and around 50% growth in the direct online channel 2:35 2 minutes, 35 seconds leading to an overall 18% growth in Eida with a 40 basis points margin expansion. 2:41 2 minutes, 41 seconds Our PAT adjusted for the one-time wage code related charge has also grown by 65% which shows strong operating 2:49 2 minutes, 49 seconds leverage coming through moving forward with a strong addition in square footage a healthy LTL growth and 2:57 2 minutes, 57 seconds robust growth in our direct online and adjacencies. We hope to maintain this growth momentum. We continue to stay 3:05 3 minutes, 5 seconds focused on our mantra of profitable growth resulting in further improvement in return on capital employed. Irvin's 3:13 3 minutes, 13 seconds reacquisition of a 31.25% stake in AYDPL reinforces flying machine 3:20 3 minutes, 20 seconds strategic importance within the AFL portfolio with the brand positioned as a key key growth driver in the denimled youth fashion market. 3:30 3 minutes, 30 seconds I would like to now hand it over to Amisha Jen to take us through the specifics and more details about our financial perform. 3:41 3 minutes, 41 seconds Thank you Ken. 3:44 3 minutes, 44 seconds Good afternoon everyone. Wishing you all and your families a very very happy new year. Uh and a warm welcome to the investor call for the quarter ended December 31st to 2025. 3:55 3 minutes, 55 seconds Q3 of FI26 marked another strong quarter for us with revenue growth of 14.5% driven by consistent execution across 4:03 4 minutes, 3 seconds our direct to consumer channels. We deliver we delivered a robust 8.2% like forlike growth nearly 50% growth in 4:11 4 minutes, 11 seconds online B2C and a sustained doubledigit secondary growth in our wholesale channels. 4:18 4 minutes, 18 seconds In the quarter gone by, NSB stood at 1,377 crores as against 1,23 crores in the 4:25 4 minutes, 25 seconds previous year, same quarter and our EIDA was 195 crores versus 165 crores. 4:33 4 minutes, 33 seconds We continue to grow our direct channels. 4:36 4 minutes, 36 seconds These together now account for nearly 63% of sales, a 260 basis points higher share over last year. Retail growth is 4:45 4 minutes, 45 seconds very healthy at double digit with very good light for like at 8.2%. 4:51 4 minutes, 51 seconds Our expansion gathered pace and we've added over 41,000 square ft of retail space in this quarter. 4:58 4 minutes, 58 seconds We are in line to open 1.5 lakh square ft in FI26. 5:04 5 minutes, 4 seconds Our strategy is to pivot our online sales towards online B2C and that is also yielding really good results. Our 5:11 5 minutes, 11 seconds online B2C grew by nearly 50% taking its share to 17% with significant improvement in channel margin. 5:19 5 minutes, 19 seconds Coming to wholesale, the wholesale channels also grew double digit with some billing of Q2 which was which was impacted by GST transition earlier that 5:28 5 minutes, 28 seconds got moved into this quarter. Both MBO and department stores secondary sales have also witnessed a very strong double-digit growth. 5:36 5 minutes, 36 seconds Now moving on to brands. During this quarter, we acquired Flipkart stake in Flying Machine. We believe flying machine offers a tremendous growth 5:43 5 minutes, 43 seconds opportunity and going ahead, it will operate with a very sharply positioned 5:50 5 minutes, 50 seconds role. A Gen Z focused unisex fashion brand anchored in on trend expression with denim at at its core. Flying 5:58 5 minutes, 58 seconds machine will launch its dedicated D2C platform in fiscal 27 creating a directto channel more directly 6:06 6 minutes, 6 seconds communicating to the consumers building relevance community and cultural momentum with our Gen Z consumers at a 6:12 6 minutes, 12 seconds brand level. Further, US polo continued its momentum and grew exceptionally at over 25% led by impactful execution 6:20 6 minutes, 20 seconds across all consumer touch points. Growth in other brands was nearly too high single digit. PVH brands growth was 6:28 6 minutes, 28 seconds impacted due to geopolitical supply chain disruptions and transition to a new GST regime where GST rates have increased from 12% to 18%. 6:38 6 minutes, 38 seconds Talking about other categories, we those also grew really well and almost all of these growing in excess of 20%. 6:46 6 minutes, 46 seconds These were predominantly led by footwware which is now back to a very high growth. We believe that the decision caused by implementation of BIS norms is now behind us overall. 6:57 6 minutes, 57 seconds Adjacent categories grew at 23%. 7:00 7 minutes Among the other metrics that showed improvement are inventory freshness and gross margin. Inventory freshness, it is at an all-time high and gross margin is 7:09 7 minutes, 9 seconds improved by 50 basis points. We continued our focus on advertising spends. 7:16 7 minutes, 16 seconds Among the balance sheet metrics, overall working capital remained stable. 7:21 7 minutes, 21 seconds Inventory buildup was to mitigate any geopolitical disruptions. This has also helped us improve freshness and on-time season launch. 7:30 7 minutes, 30 seconds Coming to the PNN, the growth in Ibida at AFL in Q2 is 18.2%. 7:38 7 minutes, 38 seconds A 40 basis points led by gross margin improvement. 7:45 7 minutes, 45 seconds Since there was early onset of festive season and wedding season, we entered EOSS a week earlier than usual. Overall 7:53 7 minutes, 53 seconds discount was higher but better channel mix cost efficiencies and selects have led to improvement in margin. In this journey of profitable growth the PAT 8:02 8 minutes, 2 seconds which is excluding code on wages impact in Q3 is at 44 crores versus a growth of 65% over last year. The growth in PBT is 8:10 8 minutes, 10 seconds nearly 20% again excluding code on wages. As we enter last quarter of the year we are reasonably con confident of maintaining our growth rate. We will 8:19 8 minutes, 19 seconds continue our store expansion and we hope to achieve a net square feet addition of 1.5 lakh square ft for this year. Our 8:28 8 minutes, 28 seconds consistent execution on product instore experience will help us deliver a healthy double-digit growth in retail and direct to consumer channels. 8:37 8 minutes, 37 seconds We also expect that the government initiatives will aid higher consumer disposable incomes leading to a demand improvement across categories in the medium-term. 8:47 8 minutes, 47 seconds The outcome will of course depend on how the market environment shapes up. Thank you 9:00 9 minutes team. Can we begin with the question and answer? Yes. 9:07 9 minutes, 7 seconds Thank you. Ladies and gentlemen, we'll begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their 9:15 9 minutes, 15 seconds touch on telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are request to use handsets while asking a question. 9:26 9 minutes, 26 seconds Ladies and gentlemen, we'll wait for a moment while the question Q assembles. 9:41 9 minutes, 41 seconds Our first question come from the line of Avin K from Motil Oswald Financial Service Limited. Please go ahead. 9:49 9 minutes, 49 seconds Hi sir, congratulations on a very good set of members. So if I heard right, you said like US growth is 25%. 9:57 9 minutes, 57 seconds For a brand which is almost at 2,000 crores. Uh uh what drove such a huge growth in this quarter? 10:05 10 minutes, 5 seconds Thank you. Thanks for your question. I think that's a great question and I think we're quite uh excited to see the way some of the growth drivers around us 10:13 10 minutes, 13 seconds polo are shaping up. I think kind of if you were to talk about how some of the some of the initiatives that were put in 10:20 10 minutes, 20 seconds place one large thing that we've been talking about is its product. I think the one thing that we're seeing is that US polar product elevation you is 10:28 10 minutes, 28 seconds extremely visible in the market. The consumer is taking that really well. 10:33 10 minutes, 33 seconds we've been driving premiumization and that is another trend that has worked extremely well for us polo. So all in all I think from a product assortment point of view our strategy is on point 10:41 10 minutes, 41 seconds and I think we've been growing extremely well. The second thing is we did double down on how our distribution looks like in US polo and our retail expansion has 10:49 10 minutes, 49 seconds been targeted towards that. Um so you know shutting down of non-performing stores but predominantly expanding retail uh has also led to significant 10:59 10 minutes, 59 seconds growth. The third piece is that the other categories have been doing really well and you know we've doubled down on that especially with US polo 11:08 11 minutes, 8 seconds and if you look at it from that perspective in aware footwear kids and women's wear have clocked upwards of 20 11:17 11 minutes, 17 seconds 25% growth as well. So I think from all in all I think our growth drivers in US polo have been uh have been significant. 11:24 11 minutes, 24 seconds We've also seen coming back to direct to consumer uh you know growth driver for us we've also seen an 80% plus growth in 11:32 11 minutes, 32 seconds online as well right so overall when you look at it both all channels firing retail doing extremely well and online channel doing really well uh that has 11:40 11 minutes, 40 seconds led to the growth of USO okay okay understood my only concern is that uh this isn't a case of channel filling or uh inventory stuffing which 11:49 11 minutes, 49 seconds led to growth in the near term we are like for like in US polo overall from a retail point of view the retail 11:57 11 minutes, 57 seconds growth is at 23%. And our like for like in US polo is at 11%. The other important thing to note is it's our mainline business in retail and our 12:06 12 minutes, 6 seconds direct to consumer business that is actually grown um faster. And when you look at our wholesale numbers also um 12:13 12 minutes, 13 seconds our wholesale while it is at double digit if you were to remove the outflow from of uh Q2 are actually between Q2 and Q3 we are 12:22 12 minutes, 22 seconds actually in line with the standard growth of wholesale as well. So it's really the consumer uptake that is driving us polo. 12:29 12 minutes, 29 seconds Okay that's a very good actually congrats. Thank you. 12:34 12 minutes, 34 seconds Yeah. Uh second thing is a little bit of bookkeeping question. And if you look at like employee cost, they have grown up by 23% this quarter. So is it a one-off or how should we reate? 12:47 12 minutes, 47 seconds Sure. So I think there are two parts to it. Employee uh benefit expenses have gone up slightly in this quarter more uh you know sort of putting in some money 12:55 12 minutes, 55 seconds towards the employee welfare expenses which is a one-off uh and also some of it is the ESOP charge. uh but I'll also 13:03 13 minutes, 3 seconds uh highlight one thing as we spoke last time also I talked about some of the growth drivers and one critical growth driver that we had highlighted was our 13:10 13 minutes, 10 seconds investment towards data AI and consumer centricity and so we've also had u you know we've kind of ramped up hiring 13:18 13 minutes, 18 seconds there and that's what you're seeing as well uh in the consumer intelligence piece and also invested towards some of the strategic pieces. uh while we've 13:27 13 minutes, 27 seconds done this what you will see coming next year is that you know these numbers should come in line with the growth of the business as well. 13:35 13 minutes, 35 seconds Okay. So most of it is like a study structural basis you'll see a similar kind of 80 growth run rate going forward. 13:43 13 minutes, 43 seconds Yeah, there will be small uh course uh hi gther here uh there could be small you know one time which will drop off 13:50 13 minutes, 50 seconds some of the staff welfare kind of a thing but yeah otherwise it will be pretty consistent like this no okay okay that's it from my side I'll 13:58 13 minutes, 58 seconds join the cube thank you sir thank you ma'am thank you thank you so much our next question come 14:05 14 minutes, 5 seconds from the line of kosu pawskar from IC direct please go ahead yeah uh good afternoon uh Ma'am uh 14:14 14 minutes, 14 seconds congrats for a good set of numbers. Uh my question is on flying machine. Now since we have consolidated it and we have brought uh the brand under our uh 14:22 14 minutes, 22 seconds uh uh PD uh so now we will definitely look up uh look uh to redefine the strategy for the brand. Suppose the rein 14:30 14 minutes, 30 seconds uh you know uh how much time will it take you know brand to really you know get back to its uh you know original uh 14:38 14 minutes, 38 seconds uh you know growth rate or maybe you know uh from uh when when when we can see brand really start performing and 14:45 14 minutes, 45 seconds adding materially uh to the growth and profitability of the company. 14:52 14 minutes, 52 seconds Sure. Thanks for the question. I just want to kind of step back and talk about uh you know flying machine holistically. 15:00 15 minutes You know if you were to kind of look at from a market point of view we believe that there is a tremendous opportunity in front of us in flying machine as you 15:07 15 minutes, 7 seconds can see from a denim point of view there's a large gap between the number one player in the market and rest of the brand. We have a belief that flying machine with its equity that it holds 15:16 15 minutes, 16 seconds and the positioning that it has had we believe that it can be one of the largest denim players both in men's and 15:23 15 minutes, 23 seconds women's segment and tying to that also one big thing that one big push you will see is us addressing the Gen Z consumers 15:31 15 minutes, 31 seconds in the market right so from a portfolio point of view flying machine is actually really really well positioned to kind of take on that space right and that's why 15:39 15 minutes, 39 seconds we're bullish about it now given that We will also see that our channel strategy will align that way. So we will have a bigger bolder digital strategy. You will 15:47 15 minutes, 47 seconds see us launch the flying machine.com in the coming fiscal year and some of those initiatives will start lining up as we start you know working closer towards 15:56 15 minutes, 56 seconds the market in terms of how we targeting the consumer serving the consumer and addressing the consumer from a product portfolio point of view. Now having said 16:03 16 minutes, 3 seconds that what you will see in this quarter what the way we've performed we've seen a 17% like for light in flying machine in the stores as well and our B2C on flying machine has grown by about 40%. 16:14 16 minutes, 14 seconds Department store has grown by about 35%. 16:17 16 minutes, 17 seconds So you know to the to the question that you're asking we're already seeing green shoots. We're already seeing that the brand is you know sort of on its path 16:25 16 minutes, 25 seconds and we will need another couple of uh seasons maybe two to three seasons where you start seeing the brand sort of coming into its more of its mainstream 16:33 16 minutes, 33 seconds growth as well. But I would also emphasize that it's already on that path. Now obviously given the movement that you know given that we've now 16:42 16 minutes, 42 seconds bought the stake etc. what you will see us do is line it up better in terms of how it we will cater to the Gen Z consumer through other marketplaces. So 16:50 16 minutes, 50 seconds it's it opens up a few more avenues for us as well and you know we are quite bullish about it we will see momentum in this brand continue over the next few seasons. 17:01 17 minutes, 1 second So my my related question to uh it is since uh you are making it more uh a Zenzi focused kind of a brand what how 17:10 17 minutes, 10 seconds will be the pricing differentiate uh you know uh differentiation will be with some of the brands which are already there in the market. Uh so you know uh 17:18 17 minutes, 18 seconds some of the premium brands which are already there in the market and their focus might be something else but you are focusing more from the you know Zenz 17:25 17 minutes, 25 seconds uh kind of a uh brand concept. So will there be any material price difference uh which will be available in the market? 17:34 17 minutes, 34 seconds See I think when you look at flying machine it is actually very well positioned to be this strong uh youth denim brand and when you look at the 17:43 17 minutes, 43 seconds product market fit I think it's got actually a phenomenal product market fit as well. uh we our products are priced exceptionally well for the value that 17:51 17 minutes, 51 seconds we're offering and uh so from that perspective I feel that from a consumer point of view it's actually very well poised uh to serve that uh segment of 18:00 18 minutes the consumer okay cool thanks thanks for the understanding and all the best for you ahead thank you 18:09 18 minutes, 9 seconds thank you our next question come from the line of Priyank from Capital please go ahead Hello. Uh I hope I'm audible. Uh yes. 18:20 18 minutes, 20 seconds Yeah. So my question uh uh team my question is on the on the when I have to look at non-controlling interest uh 18:27 18 minutes, 27 seconds which has dropped quarteron quarter and also on a long-term run rate. What explains this? Is it PVH uh uh uh some 18:37 18 minutes, 37 seconds some I mean uh the growth issues at the PBH and what what would that be if you can elaborate on that? 18:45 18 minutes, 45 seconds So hi Priyank Gilder. Here you see in the last quarter there was a code of wages impact on the PBS business 18:53 18 minutes, 53 seconds which subdued its profitability uh by by some some bit. There was a FM model change also where we moved to a 19:02 19 minutes, 2 seconds different model with a couple of our partners. So for because of which we had to reverse some of the sales and take uh take a negative uh position on the P&L. 19:12 19 minutes, 12 seconds So those are the two which explain the large part of the drop. However, having said that, I think when the GST was rolled out, there were some headwinds on 19:20 19 minutes, 20 seconds the PBS business uh early in October and some sometime till November post which business has stabilized. I think there 19:28 19 minutes, 28 seconds was a price increase and you know consumers found it a little difficult to absorb and buy but since um middle of 19:35 19 minutes, 35 seconds November till December and now we are seeing quite healthy growth and those numbers are coming back. So largely it is attributed to some slowdown in Pv in 19:43 19 minutes, 43 seconds the early part of the quarter. a uh labor code impact and a FM uh yeah the largely the P impact early in the 19:51 19 minutes, 51 seconds quarter was because of the GST uh where prices had to be increased I couldn't get the first point move to 19:58 19 minutes, 58 seconds the different business partners and uh could you explain me that uh what was the change in the business model yeah for the flying machine we had to 20:07 20 minutes, 7 seconds move to an S so model with couple of our partners so whatever was the inventory we had to take it back and you know we started recording sales on a secondary 20:15 20 minutes, 15 seconds basis. So the residual inventory at the at that transition time had to be recorded as a reversal of sales in our books 20:24 20 minutes, 24 seconds which increased the loss and hence the minority interest went down. 20:28 20 minutes, 28 seconds I think in PVH the only I think the PVH the only point is that given the GST transition from 12 to 18%. 20:37 20 minutes, 37 seconds Uh we did pass on and uh increase prices there. So I think there was an interim blip that we saw in terms of that 20:45 20 minutes, 45 seconds sticker shock but what we've seen now is that uh the sales are stabilizing over there. 20:51 20 minutes, 51 seconds Got it. So ma'am uh when have to just uh reconcile the like to like numbers the 20:57 20 minutes, 57 seconds US polar would have grown at 11 FM at 17 PVH might have seen slight decline. uh 21:06 21 minutes, 6 seconds so so if the numbers are so high so what uh so the balancing number comes only for arrow which would also would have been negative how how does this 21:14 21 minutes, 14 seconds reconcile on a total 8% like to light growth that we have reported see yeah so see all our brands have grown I 21:22 21 minutes, 22 seconds mean while we've grown overall at 15% our brands u you know sans US polaro have grown at about u single digits uh 21:30 21 minutes, 30 seconds and you know like for like for for example you were talking about has grown grown at uh for FM has grown at about 11%. PVH has also grown. The thing with 21:39 21 minutes, 39 seconds arrow has been that there have been two uh two things. One is we did see a little bit of a supply disruption because of the movement of goods from 21:48 21 minutes, 48 seconds Bangladesh and uh some of the key inventories were a little delayed into the market which were got streamlined a 21:55 21 minutes, 55 seconds little bit from post November and now we're kind of on track right so there was this minor uh uh you know sort of that movement led to us participating 22:04 22 minutes, 4 seconds into the wedding piece a little later uh which impacted arrow a little bit while Arrow has grown it has grown in early single digits uh overall All what we see 22:13 22 minutes, 13 seconds now is that all our brands are actually on a pretty solid positive growth. 22:20 22 minutes, 20 seconds Sorry, I'm just uh reconciling the numbers again. Uh you said US polo light to light growth would have been uh early 22:28 22 minutes, 28 seconds double digits and FM also 11%. Is that right? Sorry, say that again please. 22:38 22 minutes, 38 seconds Uh I'm I'm saying uh just getting a clarification on the numbers that you spoke out. US polo would have been 11% 22:45 22 minutes, 45 seconds and even FM uh flying machine would have been 11% on the light to light growth. 22:50 22 minutes, 50 seconds Yeah. But share of Priyank share of FM is very low you know while the number is double digit. The share is very low and hence you know on an overall basis the weighted average will still be 8%. 23:04 23 minutes, 4 seconds Got it. And one last thing on a overall strategic part when have to look at 9 23:09 23 minutes, 9 seconds months performance uh uh despite the uh solid performance on the top line what 23:18 23 minutes, 18 seconds we are yet witnessing is uh not all the gross I mean yet on the AITA level the uplifting has been done only via gross 23:27 23 minutes, 27 seconds margin gains. I mean the gross margin mix of course with the retail going up is also going up but it's not completely 23:34 23 minutes, 34 seconds populating down into the AITA margin which means that we are yet on a investment journey for our brands. Uh 23:42 23 minutes, 42 seconds when do we see uh the gains coming from the operating leverage and not only via gross margins which which which will 23:51 23 minutes, 51 seconds give us a confidence that the brands uh which are expected to turn around are uh 23:57 23 minutes, 57 seconds are actually performing uh well so I think I think the if I were to step 24:05 24 minutes, 5 seconds back as you may have noted that you know we've expanded our margins by 140 bips over the last two years with a focus on cost and other efficiencies and so with 24:13 24 minutes, 13 seconds confidence on growth around double digit we believe that operating leverage is possible in the business and we expect epida to grow more than 15% and I think 24:21 24 minutes, 21 seconds that's something that you've seen consistently as well we have seen operating leverage year-over-year on fixed cost exclus excluding the onetime 24:28 24 minutes, 28 seconds costs as well right so I think with all of that in place we have also said that you know we want to make sure that we will continue to invest towards 24:36 24 minutes, 36 seconds advertising as well and we do to spur growth also so I think we are in line with uh with that kind of an investment 24:43 24 minutes, 43 seconds and uh given our growth trajectory we're confident that we will be able to see more than 15% in terms of epida growth. 24:52 24 minutes, 52 seconds All right. Thank you. Thank you sir. 25:00 25 minutes Our next question come from the line of Tesa Sha from Evidence Spark Constration Equities. Please go ahead. 25:08 25 minutes, 8 seconds Uh hi uh thanks for the opportunity and uh congrats on good set of numbers. Uh just uh wanted to start with uh could 25:16 25 minutes, 16 seconds you help us understand the strategic rational behind increasing the online B2C uh contribution and which of the three 25:23 25 minutes, 23 seconds objectives it is primarily aimed at? Is it growth, profitability or working capital efficiency? 25:30 25 minutes, 30 seconds Yes. So I think I think at a broad level uh you know we've called out that direct to consumer is a key growth driver for 25:38 25 minutes, 38 seconds us and us kind of getting more and more closer to the consumer. It does a few things for us as a consumer organization as a brand organization. As we stay 25:46 25 minutes, 46 seconds closer to the market, our learning and understanding of the consumers uh increases and how we kind of pull that back into a feedback loop. Not just from 25:55 25 minutes, 55 seconds the way of how we are communicating to the consumer but also from a perspective of how we are serving the consumer the learnings around product and our entire 26:03 26 minutes, 3 seconds value chain. Right? So there's one large element of saying that as a brand we want to be closer to the consumer and want to make sure that we are center of 26:10 26 minutes, 10 seconds culture you know adapting to whatever the consumer is shifting towards and we are able to do that faster and hence we've always maintained that we would 26:19 26 minutes, 19 seconds like to take this number of us from a direct to consumer point of view. we do want to take it to about a 75%, we are 26:26 26 minutes, 26 seconds at 63% if you were to look at it from a share of business point of view, right? 26:30 26 minutes, 30 seconds Um overall it also a second point is I think it allows us to actually also maintain pricing and keep that in check. 26:37 26 minutes, 37 seconds It allows us to continue to control the discounting allows us to kind of again bring some of those gross margin and epid numbers in check. Right? So I think 26:45 26 minutes, 45 seconds that's the last second piece of it in terms of how it will enable us to improve overall structural economics of the business as well. 26:55 26 minutes, 55 seconds Got it. Okay. Uh second uh just wanted to know what are the you spoke about the distribution uh interventions that we 27:02 27 minutes, 2 seconds would have made in uh uh in in US polo to deliver this kind of robust growth. 27:07 27 minutes, 7 seconds So first uh uh if you can elaborate a bit on distribution intervention that uh that you would have made recently and second what is the uh wide space or or 27:16 27 minutes, 16 seconds total universe which is available the way you see it today uh which which gives you visibility of two to three 27:22 27 minutes, 22 seconds years growth in this particular brand and so the first part of your question was 27:30 27 minutes, 30 seconds on distribution for US polo right yes yes yeah so see I think I'll kind of go back to again saying that you know our growth 27:38 27 minutes, 38 seconds driver um as a growth driver I think there are a couple of things that we had called out one is retail expansion 27:46 27 minutes, 46 seconds second is kind of doubling down on focus on making sure that we drive retail efficiencies and hence like for like growth the third being digitization in 27:53 27 minutes, 53 seconds general right um and obviously driving adjacent categories now when you apply this to us polo it's been it's firing on 28:00 28 minutes all of these fronts um in terms of retail stores we've been at a pretty solid expansion uh trajectory and by the 28:09 28 minutes, 9 seconds end of this year overall at a portfolio level we will add net uh 1.5 lakh net square feet addition is what we will end 28:15 28 minutes, 15 seconds up doing uh US polo you know obviously is driving a good uh chunk of this at the end of the year US polo will be at 28:23 28 minutes, 23 seconds about 400 plus stores and we would have added close to 60 stores in in US polo um having said that US polo is clocking 28:31 28 minutes, 31 seconds very well in terms of the retail like for like also plus on top of that when we look at the online uh play in US polo 28:39 28 minutes, 39 seconds I think what we're doing is ensuring that the right product is reaching the consumer through this online channel as well and there we are also seeing that 28:47 28 minutes, 47 seconds the uh growth in online of US polo as a brand is actually pretty strong so all in all if I were to look at it our direct to consumer channel strategy is 28:54 28 minutes, 54 seconds actually playing out really well for the brand perfect and and last one if I may yeah uh how's the what what's your read on 29:03 29 minutes, 3 seconds the uh health of inventory and working capital as it today but there at least on paper it looks like it has grown faster than 9 month growth revenue 29:11 29 minutes, 11 seconds growth yeah I will answer I will take that you see health of inventory we are we are perhaps at the best ever health of inventory our you know inventory which 29:20 29 minutes, 20 seconds is more than 2 years is uh lowest ever I think the last 3 four years uh yes I agree that uh the inventory levels seem 29:27 29 minutes, 27 seconds a little higher but uh please understand that we are nearing an election in Bangladesh in February and to derisk some of those issues and you know almost 29:36 29 minutes, 36 seconds 15% of our product comes from Bangladesh. So to derisk that we actually took a conscious call to invert 29:44 29 minutes, 44 seconds uh some of the inventory in early uh or you know late December which is showing up. We believe that you know this is transitionary over the as situation 29:51 29 minutes, 51 seconds stabilizes we will we will come back to you know normal inventory terms of between 3.8 to four sometime somewhere there actually. 30:02 30 minutes, 2 seconds Thanks and uh all the best for coming quarters. Thank you. Thank you so much. 30:10 30 minutes, 10 seconds Our next question come from the line of Prakash Kapadia from Kaparia Financial Services. Please go ahead. 30:19 30 minutes, 19 seconds Yeah, thanks for the opportunity. couple of questions from my end. Uh you know you've been guiding and achieving you 30:26 30 minutes, 26 seconds know the mid team's growth over the last few quarters and you've been talking about you know some of the tailwinds over the last you know few months. So 30:35 30 minutes, 35 seconds given some of these tailwinds uh shouldn't you know growth aspirations now be slightly higher than what you know we've been targeting and achieving 30:44 30 minutes, 44 seconds of that you know broadly 11 to 14% uh sales growth range and also it'll be helpful if you could comment on you know 30:52 30 minutes, 52 seconds adjacent categories how crucial is that you know to our growth strategy what is the contribution of adjacent categories 31:00 31 minutes to our uh sales now and uh you know lastly what would you know top 10 cities be contributing to our overall sales? 31:09 31 minutes, 9 seconds Those are my questions. Thank you. 31:13 31 minutes, 13 seconds So I think um you know uh thanks for the question. I think when you look at our growth over the last three quarters and as you pointed out I think we've done uh 31:22 31 minutes, 22 seconds we've shown significant momentum and that's also on the back of again the the strategic growth drivers that we had set up right that the team has been really 31:30 31 minutes, 30 seconds focused on ensuring that we drive solid execution behind the the strategy that we've kind of put together now we 31:38 31 minutes, 38 seconds continue to be uh confident that we will be able to post double digit growth uh for this year right now as you mentioned 31:45 31 minutes, 45 seconds uh in terms of the tailwinds which are external the government stimulus and the uh GST uh rationalization etc. We do 31:54 31 minutes, 54 seconds believe that in the medium term that should help build the consumer demand and we remain hopeful that you know that will uh contribute as well. Having said 32:03 32 minutes, 3 seconds that I would still say that we are confident that we will you know start driving towards and we will maintain a trajectory of growth between 12 to 15%. 32:12 32 minutes, 12 seconds we have been delivering at a little higher end of that and you know given the growth drivers that are in place we believe that we'll continue to clock uh 32:19 32 minutes, 19 seconds in that direction in terms of the second question that you asked um around the adjacent categories um we are 32:28 32 minutes, 28 seconds an overall from a portfolio point of view our five brands are actually pretty solid and as I had mentioned last time 32:36 32 minutes, 36 seconds as well that for us we do believe there is significant room for us to grow within this portfolio U and our other categories obviously are 32:45 32 minutes, 45 seconds a key driver of that. Um having said that the mainstream business and I'll come back to the conversation on all our brands. The mainstream business actually 32:52 32 minutes, 52 seconds which is more from an apparel point of view actually keeps clocking in the same uh in the same uh range as well. 32:59 32 minutes, 59 seconds Adjacent categories are critical because as you look at our brands consumers are expecting this and our brands are actually uh more from a lifestyle 33:07 33 minutes, 7 seconds positioning point of view. These are end-to-end brands and hence uh you know for us the adjacent categories are critical. Uh in terms of when I look at 33:17 33 minutes, 17 seconds brand by brand I think overall from a portfolio point of view about 25% odd of our portfolio sits within the adjacent 33:26 33 minutes, 26 seconds categories and this drives significant growth. We do believe there is headroom for growth over year. Footwear has come back to 20 plus% plus and so is in aware 33:34 33 minutes, 34 seconds in that range. Women's has clocked about 50% plus growth. While all of this still women's is still in very very early days 33:41 33 minutes, 41 seconds but the overall our belief is that you know these are some of the growth drivers of the future. While we continue to drive it I will kind of still 33:49 33 minutes, 49 seconds emphasize that our mainstream from an apparel point of view actually it's quite heartening to see the way our brands have been growing uh in the men's apparel space as well. 33:58 33 minutes, 58 seconds Okay. Okay. And if you could uh have that uh top 10 cities contributions from here on you know how does uh growth uh 34:07 34 minutes, 7 seconds you know pan across is it pan India is it more aspirational is it beyond the top 20 cities some color or context will help. 34:17 34 minutes, 17 seconds So overall if you look at a brand portfolio we are present across about 150 cities and uh you know we will close 34:24 34 minutes, 24 seconds the year at about in the entire portfolio we'll close this uh year with about thousand plus stores within our portfolio. We do believe there's a 34:32 34 minutes, 32 seconds potential for us to expand within the top tier cities further and we will only keep going in that direction. We will 34:39 34 minutes, 39 seconds also try to we will continue to improve the boxes the size of the boxes and our retail expansion will continue from a net square feet addition as well. Right. 34:46 34 minutes, 46 seconds So from that perspective to answer your question, we do have a focus on the top tier cities and we will continue on the specifics. We will get back to you on those numbers. 34:55 34 minutes, 55 seconds Sure. Thank you. 34:59 34 minutes, 59 seconds Thank you so much. Our next question come from the line of Palash Kawal from Noama Asset Manage. Please go ahead. 35:08 35 minutes, 8 seconds Hi, thank you for the opportunity. Hope I'm audible. Uh my first question is on channel mix. So when do you see this uh 35:16 35 minutes, 16 seconds uh growth in online? Did you see stabilizing or rever to reversion in this in this uh channel? 35:25 35 minutes, 25 seconds Can you sorry just can you uh yeah repeat the question? 35:30 35 minutes, 30 seconds So my question was on channel growth the when do you see this growth in online D2C stabilizing? Uh you have been 35:38 35 minutes, 38 seconds growing pretty well in the channel. So when do you see the growth reversing to mean? 35:45 35 minutes, 45 seconds So you know over the last four years uh we have been actually trying to 35:52 35 minutes, 52 seconds uh defocus on B2B while increasing our focus on B2C. I think the importance of both the channels will always remain and 36:00 36 minutes as we go ahead I think B2B is largely you know used during the last tower events plus some other events that uh 36:09 36 minutes, 9 seconds that are there but B2C will be a continuous focus and as we as as as of today we see we see there is a there's a 36:16 36 minutes, 16 seconds big traction and there seems to be quite quite a lot of natural demand which is coming so uh I mean we we are currently 36:24 36 minutes, 24 seconds clogging more than 50% and Yes, I mean at some point this will become stabilized and we believe that it could be you know overall online growth we'll 36:34 36 minutes, 34 seconds continue to grow at 12 to sorry 20 to 30% year on year in the in at least in the next uh near future. 36:41 36 minutes, 41 seconds Okay that's that's really helpful and is this one of the biggest driver for gross margin expansion for you? 36:49 36 minutes, 49 seconds There is surely an advantage of uh you know increasing share of the B2C where as Misha said earlier you know we are able to control the pricing and 36:57 36 minutes, 57 seconds discounting. However, I think a large part of our improvement is coming from you know both retail as well as B2C. 37:05 37 minutes, 5 seconds Uh so uh this this expansion should continue going forward as well. Right. Yes. 37:13 37 minutes, 13 seconds Okay. Okay. And uh next question was on uh uh can you uh uh like can I can we 37:20 37 minutes, 20 seconds see the success of adjacencies in other brands like Arrow and SM? Is that possible? 37:30 37 minutes, 30 seconds See I think I think like I said I think every brand has its journey and uh currently you know we are building 37:37 37 minutes, 37 seconds adjacent categories where we believe there is relevance and we will continue to drive that and the scope of that and the scale of that is something that we 37:45 37 minutes, 45 seconds will drive from where the brand stands right as we are looking at arrow and FM and you know we've been on this journey and arrow is a little ahead of FM in 37:52 37 minutes, 52 seconds terms of uh the direction and uh you know how the brand is now positioned and turned around while we are on this journey whenever it is relevant wherever 38:01 38 minutes, 1 second it is relevant we will start driving additional uh you know sort of buildout of some of these other categories but 38:08 38 minutes, 8 seconds you know it's it's more to do with the the way the brand is built out and I wouldn't kind of have a uh say that you know all brands will kind of go at the 38:16 38 minutes, 16 seconds same pace on that okay thank you thank you thank you so much yeah that's it for me 38:24 38 minutes, 24 seconds thank you our next question come from the line of NA from White Pine Investment Management please go ahead. 38:32 38 minutes, 32 seconds Yeah, I want wanted to again uh check the the light for light for uh the FM was it 11% or 17%. 38:43 38 minutes, 43 seconds The light for light for FM uh is 17% but like I had said earlier as well I think we need to keep in mind that it's a very small uh you know part of our uh from a retail portfolio point of view. 38:55 38 minutes, 55 seconds Understand? And can you give uh the light for light for arrow and uh the the branch? 39:04 39 minutes, 4 seconds So so usually you know the brand wise data we don't share uh I'm happy to 39:11 39 minutes, 11 seconds connect uh with you offline so that we can discuss some of these. 39:16 39 minutes, 16 seconds The reason I was asking wanted to know on the at least uh the formal uptake in the market how is it considering that 39:23 39 minutes, 23 seconds there is a marriage season I think upcoming yeah yeah I think see when you look at the quarter right I mean wedding season was 39:31 39 minutes, 31 seconds earlier this year and uh like I had mentioned the formal I mean for us arrow has been doing well uh you it's coming to the place uh slowly as we kind of uh 39:40 39 minutes, 40 seconds you know drive the transformation of this brand we are getting to a place and in a couple of seasons we will see uh a 39:47 39 minutes, 47 seconds shift there as well further. Um we are seeing an uptake. Uh but having said that uh you know arrow participates more 39:55 39 minutes, 55 seconds from a formal wear point of view and for ush the thing is that we partake in a very minimal level from a wedding perspective. So our observation on a 40:04 40 minutes, 4 seconds formal market would be only limited to the scope of what uh what we cater to. 40:10 40 minutes, 10 seconds Okay. And the last question on the margins on uh I I know you don't give brand but can you give a color when these arrow and fn can uh sorry the 40:18 40 minutes, 18 seconds arrow and fn yeah can uh break even or move to a reasonable number in a bit margins. 40:26 40 minutes, 26 seconds So Arrow as we speak uh post India is profitable and uh obviously there is a 40:33 40 minutes, 33 seconds journey between the brands. Uh flying machine as we have said earlier also I think this still work in progress and it 40:42 40 minutes, 42 seconds is about two to three quarters behind arrow and we are hoping that end of next year probably we'll see some uh some a bit profitability in that brand. 40:52 40 minutes, 52 seconds Got it. So once it stabilizes whenever year down the line or so where do you see the margins stabilizing at range? 41:00 41 minutes So arrow can reach uh you know uh mid mid single digit in my view uh within a year and flying machine as I said earlier can uh near a break even. 41:12 41 minutes, 12 seconds Okay. Thank you. 41:20 41 minutes, 20 seconds Thank you. Our next question come from the line of Ashtosh uh from ICS securities. Please go ahead. 41:28 41 minutes, 28 seconds Yeah. Uh thank you for the opportunity. 41:31 41 minutes, 31 seconds Uh so ma'am my question is on the uh overall demand scenario. So uh if you see that uh many of the value retailers 41:39 41 minutes, 39 seconds have specifically highlighted that uh the demand is very soft and they have given reasons like uh it's like overall 41:46 41 minutes, 46 seconds uh subdued demand uh along with the competition that is there. uh but for Arvin like uh how is the premium segment performing? 41:55 41 minutes, 55 seconds Uh and uh also just want to add in this uh one of the largest value retailer uh in quarter 2 uh said that uh the initial 42:05 42 minutes, 5 seconds GST benefits actually uh went to the large ticket items and they said that uh it will uh gradually flow to the uh discretionary side uh like the apparel. 42:16 42 minutes, 16 seconds So are you seeing any uh uh any on ground trends uh regarding that and overall premium segment how it is doing 42:23 42 minutes, 23 seconds the customer trend uh given it's almost like one month has already passed uh in Qo thank you 42:30 42 minutes, 30 seconds yeah so I I think for us um you know our our brands the one thing again going back to our strategy we have been 42:38 42 minutes, 38 seconds following a premiumization strategy and that uh we have seen has been doing well uh the demand from a consumer point of view has been actually pretty solid for 42:47 42 minutes, 47 seconds our brands and uh that stability we see and we are expecting that to continue in Q4 as well. Uh while it is only a few 42:55 42 minutes, 55 seconds weeks into Q4 uh we remain hopeful that we should be maintaining our trajectory of growth in the in the 12 to 15% zone 43:02 43 minutes, 2 seconds as we've communicated. uh in terms of the I mean I can't comment on uh the value retail part of it but I will say that from a GST perspective we do 43:12 43 minutes, 12 seconds believe that you know some of these initiatives should come back to uh you know boosting demand in a positive way in the medium term while we may not have seen an immediate uh effect. 43:24 43 minutes, 24 seconds Okay. Okay. Understood ma'am. And uh my next question uh is on uh the Q3 uh growth. So you said that there was some 43:32 43 minutes, 32 seconds spillover from quarter 2. So uh what would be the normalized growth for Q3 like if if we can exclude the spillover? 43:42 43 minutes, 42 seconds I think the impact could be you know less than a percentage I would say not much. 43:48 43 minutes, 48 seconds I think the way to read it would be if you look at MBO between Q2 and Q3 it would look at a normalized growth of MBO both put together. Yeah. 43:57 43 minutes, 57 seconds Okay. Okay. Understood. Thank you. Thank you ma'am. Thank you sir. Thank you. 44:05 44 minutes, 5 seconds Thank you. 44:07 44 minutes, 7 seconds Our next question come from the line of Andre Purushutam from Cognitive Advisor. Please go ahead. 44:14 44 minutes, 14 seconds Yeah. Congratulations for a good set of numbers. I wanted to ask um about margin levers on four subdimensions. Okay. So 44:23 44 minutes, 23 seconds I'll just teach take each of the subdimension one by one and ask you if I may. Firstly, you mentioned operating leverage, right? Now, I wanted to 44:32 44 minutes, 32 seconds understand apart from let's say the spreading out of overheads over a large number of stores etc. What are your sources of operating leverage and how do 44:41 44 minutes, 41 seconds you see that panning out in the near future? Okay. Uh what is your next question? 44:49 44 minutes, 49 seconds Keep going. Yeah. Second question. 44:53 44 minutes, 53 seconds Okay. The other three is pimization. How important is premiumization to you and how much is that contributing to 45:00 45 minutes margins? The third question is cost control. How important is cost control and where are the areas of cost control? 45:07 45 minutes, 7 seconds And the fourth question is that is the increasing percentage of online sales from the current 17% to whatever they 45:14 45 minutes, 14 seconds might be in the future. How how much will that contribute to improving margins? And have I captured all the margin levers or are there any other 45:22 45 minutes, 22 seconds significant margin levers that I have missed out on? 45:27 45 minutes, 27 seconds I think at a at a broad level I'll say that you know premiumization is a very important strategic lever and when we look at our product portfolio across our 45:35 45 minutes, 35 seconds brands we have been driving a premiumization strategy and what we have seen is that the consumer is responding really well to that. Our brands are not 45:43 45 minutes, 43 seconds are while they're premiumizing the product market fit is actually quite phenomenal and our brands are all positioned in an aspirational part of 45:51 45 minutes, 51 seconds their own individual segment. Right? So from that perspective premiumization is a very critical part of our strategy. 45:57 45 minutes, 57 seconds Overall as you as we've also communicated that gross margin expansion is something that is uh you know and premiumization is kind of u driving that 46:06 46 minutes, 6 seconds as well. Our focus has been on both on product uh strategy getting the right assortments out and ensuring that you 46:13 46 minutes, 13 seconds know we are driving premium within that segment as well right while offering great value to the consumer. Further this has led to uh GP improvement as 46:21 46 minutes, 21 seconds we've worked on the cog side of things but at the same time you know our focus has been to kind of continue to reduce discounting at an overall level as well. 46:29 46 minutes, 29 seconds So I think all in all that part of the strategy kind of hits very hard. We've also maintained that as a company we are very very sharply focused on driving 46:37 46 minutes, 37 seconds operating leverage and hence you will always see Eida you know growing faster than uh revenue and that obviously 46:45 46 minutes, 45 seconds brings in uh to the question that you asked obviously cost controls are part of it. We have seen over the last two years you've seen about 46:54 46 minutes, 54 seconds 140 basis points sort of an improvement in margin expansion uh with our focus on cost and efficiencies and that includes 47:02 47 minutes, 2 seconds fixed cost etc. So you know uh we are we continue to remain focused over that we will keep driving it we will uh as we 47:09 47 minutes, 9 seconds drive our channel expansion we do believe that opex will remain in line uh and that should lead to eida expansion as well. So operating leverage kind of comes and flows from there as well. 47:21 47 minutes, 21 seconds No, I'm sorry. I I didn't get give any specific answers to my questions. First of all, I asked about what is the source of your operating leverage and in terms 47:30 47 minutes, 30 seconds of premiumization, could you explain what is what are you doing actually in terms of your assortment etc that is leading to 47:38 47 minutes, 38 seconds what are your initiatives and cost control and does the increasing percentage of online sales increase your margins in any meaningful way? So I 47:47 47 minutes, 47 seconds would uh request you to give some specific color question. 47:54 47 minutes, 54 seconds We if I were to kind of go back to premiumization and I think we can talk about the merchandising strategy. Uh you 48:01 48 minutes, 1 second know for us uh premiumization comes from two parts right how are you looking at the brand and elevating the product portfolio in general to ensure that the 48:10 48 minutes, 10 seconds product mix is what is uh right from a consumer from a market and a channel point of view. So for us premiumization 48:18 48 minutes, 18 seconds comes in two lenses. One is a channel segmentation and ensuring that the product mix that we are aligning for that particular channel for that 48:26 48 minutes, 26 seconds particular store is matched to what the consumer segment is and our merchandising strategy and our merchandising grid is getting more and more sharper and aligned to a more sharper segment of a store of one. 48:36 48 minutes, 36 seconds Right? So that's that's one part of it. 48:38 48 minutes, 38 seconds The second from a premiumization point of view is you'll see significantly improved product and innovation being 48:46 48 minutes, 46 seconds brought to the market and that also at a very solid I've kind of mentioned this earlier also very very solid uh product market fit over there. What we are 48:55 48 minutes, 55 seconds offering from a price value equation point of view is also extremely good. So you know while maintaining the aspirational quotient of the brand remimization is being driven both from a 49:04 49 minutes, 4 seconds product mix point of view from the individual product and innovation offering point of view and how we are giving value to the consumer that's all 49:11 49 minutes, 11 seconds in all from a premiumization point of view does that does that help you if I could just come in here a little 49:18 49 minutes, 18 seconds bit not very much and I'm still not getting an answer of your the source of your operating leverage um because you know I understand operating leverage a 49:26 49 minutes, 26 seconds little better in a manufacturing situation in a no I can second I think I was you asked two questions I think we'll kind of park the premiumization part because I think 49:35 49 minutes, 35 seconds you're talking about both in the same breath so premiumization I hope you understood that part of the merchandising strategy and maybe we can pass that question 49:43 49 minutes, 43 seconds no what I've understood what you said on prem primization is that basically you are improving the product quality and you're improving innovation that's what 49:51 49 minutes, 51 seconds I got okay um I don't quite understand what your linkage to merchandising to premiumization was at least I didn't understand the connection. Um, 50:00 50 minutes so if you want we can have a separate conversation because I think merchandising is the key part of from a brand merchandising grid point of view 50:07 50 minutes, 7 seconds and product mix and product innovation are key drivers. So I think yeah if you're trying to relate this back to manufacturing maybe there could be a separate conversation on it. 50:16 50 minutes, 16 seconds If I could just come in here on a couple of examples of operating leverage in the business. Yeah, I think first of all on 50:24 50 minutes, 24 seconds on gross profit, one of the things we are seeing is constant sourcing advantage with scale. So I think one of 50:33 50 minutes, 33 seconds the ingredients into GP is when you have larger scale, you are able to get sourcing efficiency and of course as 50:41 50 minutes, 41 seconds Amisha was saying there's also we are working on better full price sell through and bringing our discounting down. So that's not necessarily 50:48 50 minutes, 48 seconds operating leverage, but that's one of the very large things that is going into GP enhancement today. 50:54 50 minutes, 54 seconds On the select side, the best way to think about operating leverage is through the length of productivity. So 51:00 51 minutes when your LTL is very high, your store level fixed costs remain the same, but your revenue goes up faster. So LTL when 51:10 51 minutes, 10 seconds it is in the high single digits you are getting operating leverage on your select X which is a again a a good operating leverage point and then below 51:18 51 minutes, 18 seconds your channel margin is your overall company fixed costs and we've reached a scale now where the fixed costs of the 51:26 51 minutes, 26 seconds company are will not in the years to come grow as much as the uh the scale of our CBA growth and our revenue growth. 51:34 51 minutes, 34 seconds So that is a third source of operating leverage. So at three levels you will be seeing operating leverage coming into the company. 51:42 51 minutes, 42 seconds Uh that that helps. And in terms of cost control and in terms of percentage of online contribution how does this um what are the cost control initiatives 51:51 51 minutes, 51 seconds that are still um relevant to you apart from what you've already mentioned in this list and in terms of does the percentage increasing percentage of 51:59 51 minutes, 59 seconds online also improve your gross margin online and then Amisha can talk about cost um see in online we look at in all 52:08 52 minutes, 8 seconds our channels a metric called CDA which is your contribution margin and our online channel contribution is very similar to our offline direct 52:16 52 minutes, 16 seconds contribution margin. So in terms of any shift between channels is not going to have a very major impact on our overall 52:24 52 minutes, 24 seconds EIDA because they are similar from a channel profitability perspective. I hope that clears your question. 52:30 52 minutes, 30 seconds Yes, that thank you that that helps a lot. Okay, thank you. Thank you. I finally got the answers to my questions. Thank you. 52:39 52 minutes, 39 seconds Thank you so much. A next question come from the line of Puja from Ingred Asset Management. Please go ahead. 52:46 52 minutes, 46 seconds Uh good afternoon and thanks for the opportunity. Congrats on a good set of numbers. I just wanted to get some understanding on the ASP. So uh how is 52:55 52 minutes, 55 seconds it balancing? Is it more towards the higherend brands or the lower-end brands? If you could uh provide me some clarity on that. 53:03 53 minutes, 3 seconds Absolutely. 53:05 53 minutes, 5 seconds So different uh different brands have different positioning and Aisha can add and Tommy CK of course are in the 53:12 53 minutes, 12 seconds premium segment you know CK we call it as a Bristol luxury and Tommy is of course premium and different brands of 53:19 53 minutes, 19 seconds different ASP so if you could be more specific or you know uh we could of course catch up offline also but we need 53:26 53 minutes, 26 seconds more specific uh question so I mean to ask that um how is the 53:33 53 minutes, 33 seconds overall ASP shaping up is it more towards the uh premium brands or are they contributing more or is it the 53:42 53 minutes, 42 seconds lower-end brand that are contributing more? 53:48 53 minutes, 48 seconds No. So I think if you were to look at a portfolio, I mean a portfolio outcome is a mix of how our uh overall mix of the brands, right? And we have our brands 53:56 53 minutes, 56 seconds that are staggered up from time machine that is positioned uh as a as a you know a denim oriented youth brand to as we 54:04 54 minutes, 4 seconds scale up to u you know users positioning lading up to Tommy and then to CK. So you know an individual brand from that 54:13 54 minutes, 13 seconds perspective will sort of you know overall from a portfolio mix point of view the ASP will obviously inch towards uh the weighted average of these brands as well. 54:24 54 minutes, 24 seconds Correct. So uh that's what I wanted to understand that how is it uh how is the uh segment wise 54:32 54 minutes, 32 seconds from the higherend brands or the lower-end brands 54:39 54 minutes, 39 seconds you are seeking uh segment wise which kind of segment are you seeking? 54:48 54 minutes, 48 seconds Can we probably understand this question offline a little better? Maybe we can we can connect with you. GL can connect with you and we can understand this better and maybe respond to you. 54:57 54 minutes, 57 seconds Sure. Sure. Thanks. Okay. Thank you. 55:03 55 minutes, 3 seconds Thank you. Our next question come from the line of uh Shrias J from Swan Investment. Please go ahead. 55:13 55 minutes, 13 seconds Hello. Hello. Can you hear me? 55:17 55 minutes, 17 seconds Yes, we can hear you. Please go ahead with the question. 55:20 55 minutes, 20 seconds Yeah. Hi Amisha this question is for you. uh so given your background what in your sense is is the market uh for denim 55:28 55 minutes, 28 seconds in India and when you sort of look at that market you know uh barring Levi uh there has been no other brand you know which has been constantly amongst the 55:37 55 minutes, 37 seconds top five you know uh so I'm just trying to understand uh you know uh what we hear and read is you know the top two 55:44 55 minutes, 44 seconds three four five that number keeps on changing and you know when you look at the growth rates of spiker killer uh Lee 55:51 55 minutes, 51 seconds Wrangler of those brands and you know even if I include FM in that breath you know FM is at motor 400 crores for the 55:59 55 minutes, 59 seconds last four five years so uh what gives you the confidence you know that the initiatives that you take uh will 56:06 56 minutes, 6 seconds actually drive uh growth from year on because you know in the past also we've done a lot of things in the SMPS but you 56:14 56 minutes, 14 seconds know something sort of doesn't work out so I just wanted to understand is it a a category problem is it a a brand problem 56:22 56 minutes, 22 seconds or what is actually happening underneath. 56:26 56 minutes, 26 seconds So I think I can uh you know given the denim category in general we do believe that we have actually a very solid 56:34 56 minutes, 34 seconds opportunity ahead of us. At the same time our brands are very well positioned to cater to that category. Um, you know, even even if I were to just talk about 56:43 56 minutes, 43 seconds our entire casual wear portfolio, which is which is laddering up from flying machine to US polo to Tommy and to CK, denim as a category, we are looking to 56:52 56 minutes, 52 seconds serve that and we believe that we have an opportunity to lead uh in each of these consumer demand spaces at that 57:00 57 minutes particular consumer cohort. We believe that we can kind of drive uh you know to a number one player in all of these uh spaces. Now coming back to the specific 57:08 57 minutes, 8 seconds question, I think for us the way we will go about building our brand is we are ensuring that we are a catering to the 57:16 57 minutes, 16 seconds consumer and ensuring that we are catering to the specific consumer need and that's the first step of it and then 57:24 57 minutes, 24 seconds what we will line up is three big things which will yield yield the results that we're seeking. I think it's important 57:31 57 minutes, 31 seconds that we have the right product portfolio and we feel extremely confident that with flying machine we've kind of honed in on and as I've seen now the recent 57:39 57 minutes, 39 seconds seasons we've honed in on what the right product portfolio is from a consumer point of view. We're building out the assortment and ensuring that our overall 57:47 57 minutes, 47 seconds our merchandising strategy is aligned from that consumer profile point of view. That's step one. Step two is we're also sharpening the way we serve and 57:56 57 minutes, 56 seconds reach our consumer. And that is another critical piece of it. you know how do you speak to that consumer? How do we how do we serve that consumer is an 58:04 58 minutes, 4 seconds important part we are actually doubling down on our marketing capabilities and going after uh this part of it. So you 58:12 58 minutes, 12 seconds know I have spoken about this earlier as well as part of our strategy. We are ensuring that we are going to segment the market. We're going to make sure 58:19 58 minutes, 19 seconds that we are going to start communicating in a in a more sharp manner and in a more current digitally oriented world. 58:28 58 minutes, 28 seconds and this consumer we're going to kind of drive that as well. So the way we are going to build the brand is going to be a second significant piece of uh how we 58:35 58 minutes, 35 seconds will go about it. The third is have ensuring that we are serving the consumer through the channel of choice. 58:41 58 minutes, 41 seconds This particular consumer sits within a certain type of channels and we want to make sure that we are catering to that consumer that way as well. Right? So how do we go about our social media 58:49 58 minutes, 49 seconds strategy? How do we go about our uh digital strategy? How do we make sure that our digital commerce, our retail is lined up to serving the consumer as 58:57 58 minutes, 57 seconds well? Right? So that's that's what we're after and you'll see us come out from a brand point of view in a more sharper way. Having said all of that, you know, 59:05 59 minutes, 5 seconds brands are built over a period of time and us what we are now seeking to do is build this consistency and consistently 59:13 59 minutes, 13 seconds season over season ensuring that we are we have a sharp brand positioning and we continue to cater to that consumer right 59:21 59 minutes, 21 seconds with the right cultural hooks with the right uh you know medium of communicating with the consumer. So to the question you're asking, I'm actually 59:28 59 minutes, 28 seconds extremely confident and bullish. I do believe that we have a great opportunity uh to take on this market. We do believe 59:35 59 minutes, 35 seconds that you know building out a brand of India uh and building out this brand for the youth is uh is also going to be a pretty solid positioning and the future 59:44 59 minutes, 44 seconds of flying machines. Having said that, I do believe our brand other brands like US Polo, Tommy and CK are all extremely 59:51 59 minutes, 51 seconds well positioned to service the consumer cohort they service consu uh service that consumer from a particular uh price point perspective as well. 1:00:03 1 hour, 3 seconds Okay. Uh and my uh second and last question is uh you know when you look at the overall uh business you know last 1:00:10 1 hour, 10 seconds two years if I just you know dial back uh 4 and a.5% growth and FI25 8 and a 1:00:17 1 hour, 17 seconds half% growth uh and obviously you know US polo and TV 1:00:31 1 hour, 31 seconds Hello 150 only. Are you there? 1:00:38 1 hour, 38 seconds Yes. Yes, I'm here. Uh so participant has left uh the queue. We'll go forward to the next participant. You want me to go ahead with the next participant? 1:00:48 1 hour, 48 seconds Uh no, I will reach out to the person who was speaking and I will uh finish the call. 1:00:56 1 hour, 56 seconds Uh thank you everyone for joining us on the call today. If you have any more questions, please feel free to reach out to us and we would be happy to answer them offline. 1:01:14 1 hour, 1 minute, 14 seconds Yes, I'm here. We can close the call, right? Hello. Yes. Yes. 1:01:22 1 hour, 1 minute, 22 seconds Thank you. On behalf of Urban Fashion Limited, that conclude this conference. 1:01:26 1 hour, 1 minute, 26 seconds Thank you for joining us. And you may now disconnect your lines.