Baazar Style Retail Limited — Q1 FY26

Baazar Style Retail Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=MmHdGsD8L5U Published: 9 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Bazar Style Vday Limited Q1 FI26 owned conference call. As a 0:09 9 seconds reminder, all participants line will be in listenon mode and there will be an opportunity for you to ask question after the presentation concludes. Should 0:18 18 seconds you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that 0:26 26 seconds this conference is being recorded. I now hand over the conference over to Mr. Suesh Samat from Stellar IR Advisor. 0:34 34 seconds Thank you and over to you sir. 0:38 38 seconds Thank you. Good afternoon everyone and thank you for joining us today. I have with us today the senior management team of Bazad Style Retail Limited, Mr. 0:48 48 seconds Shrian Sonara, managing director and Mr. 0:51 51 seconds Nitan Singha, chief financial officer who will present Baz Retail Limited on the call. The management will be sharing 0:59 59 seconds operating and financial highlights for the auto ended June 30, 2025 followed by a question and answer session. Please 1:07 1 minute, 7 seconds note this call may contain some of the forward-looking statements which are completely based upon the company beliefs, opinions and expectations as of 1:16 1 minute, 16 seconds today. These statements are not a guarantee of the company's future performance and involves unforeseen risk 1:23 1 minute, 23 seconds and uncertaintities. The company also undertakes no obligation to update any forward-looking statements to to reflect 1:31 1 minute, 31 seconds developments that occur after a statement is made. I now hand over the conference to Mr. Shrian Surana. Thank you and over to you sir. 1:41 1 minute, 41 seconds Good afternoon everyone. Welcome to our Q1 FI26 earning call. Our presentation has been uploaded to stock exchange and 1:49 1 minute, 49 seconds the company's website and I hope you had a chance to go through it. We are pleased to report that our strong growth 1:56 1 minute, 56 seconds trajectory has continued in Q1 FI26 with revenue reaching 378 KES a increase of 37% yearonear and 9% quarteron quarter. 2:06 2 minutes, 6 seconds Gross profit also demonstrated healthy traction rising to 136 KES reflecting a 49% growth year on year and 19% sequentially with healthy margin at 36%. 2:19 2 minutes, 19 seconds I would like to provide an overview of the current trajectory of our performance and share our outlook for the upcoming quarters. We remain on 2:27 2 minutes, 27 seconds track to achieve our FI26 guidance and are confident of delivering a revenue growth of 25%. While we prefer to wait 2:34 2 minutes, 34 seconds and assess the performance of the Q2 spec especially given the significance of the Duba pula festival in East India 2:41 2 minutes, 41 seconds before considering any revision to our guidance. It is important to note that the underlying demand on the ground continues to remain strong. A revised 2:50 2 minutes, 50 seconds outlook if any will be shared post completion of H1. 2:55 2 minutes, 55 seconds We expect to deliver SSG growth of 7 to 8%. Pre-industa margin is projected to 3:02 3 minutes, 2 seconds be at 7 to 8% while pre-indust margin is expected to be 3 to 4%. Additionally, we reaffirm our guidance of opening 40 to 50 new stores during FI26. 3:13 3 minutes, 13 seconds We anticipate a meaningful uptick in demand during Q2 and Q3 driven by the festival season including Raka Bandhan, 3:20 3 minutes, 20 seconds Dura Puja, Diwali and the wedding period which traditionally spur consumption and reinforce our confidence in the outlook. 3:28 3 minutes, 28 seconds The company's strong execution capabilities establish regional leadership and focus long-term growth strategy continue to underpin its robust 3:36 3 minutes, 36 seconds growth trajectory driven by the following key factors. One, our focused business strategy on value fashion in 3:43 3 minutes, 43 seconds the underpenetrated eastern region has enabled us to benefit from the shift from unorganized to organized retail 3:50 3 minutes, 50 seconds supporting our steady growth. Second, our product offering across categories remains a key strength. By providing a one-stop shopping experience for the 3:58 3 minutes, 58 seconds entire family, we are increasing customer convenience, football and footfall and market size. Third, our 4:06 4 minutes, 6 seconds clusterbased expansion approach supports operational efficiency by enabling better site selection, improved understanding of the catchment area and 4:14 4 minutes, 14 seconds faster ramp up of new stores leading to quicker economies of scale. Fourth, our continued focus on private labels is 4:22 4 minutes, 22 seconds yielding strong results. In Q1 F26, our portfolio of private labels has contributed 61% to the revenue, 4:28 4 minutes, 28 seconds amounting to 229 cr reflecting a 59% year-on-year growth. Notably, our brand square up recordes highest ever 4:37 4 minutes, 37 seconds quarterly revenue contributing approximately 99 cr. Our expansion journey continues with the total store 4:43 4 minutes, 43 seconds count in Q1 FI26 reaching 232, a 40% year-on-year increase and the total retail area now stands at 2.11 million 4:51 4 minutes, 51 seconds square ft reflecting a 41% growth over the previous years. Now, before coming to the profitability, I would like to 4:58 4 minutes, 58 seconds take a moment to provide you with a brief overview of how our business operates. As a value retailer with a strategic presence in eastern India, our 5:07 5 minutes, 7 seconds demand pattern is inherently seasonal driven by regional specific festivals that occur at various times throughout the year. Accordingly, our performance 5:16 5 minutes, 16 seconds is most appropriately assessed on a full year basis. For instance, in Q1 FI26, SSG appeared muted as each sales were advanced and captured in Q4 FI25. 5:28 5 minutes, 28 seconds However, after adjusting for the 15-day shift, the normalized SSG for Q1 FI26 stood at a robust 11%. Therefore, 5:37 5 minutes, 37 seconds evaluating SSG on a year-to- date basis provides a more accurate and meaningful representation of performance. The company remains in a strong expansion 5:45 5 minutes, 45 seconds phase. Strategically, investing in scaling operation through increased store count with net addition of 18 stores in Q1 FI26 and enhanced 5:53 5 minutes, 53 seconds technology integration. While growth related investment may temporarily impact operating margin, the company continues to deliver healthy actual 6:00 6 minutes financial growth. Now coming to the Q1 FI26 financial and operational highlights. As mentioned earlier, we believe that the pre-Indius view 6:09 6 minutes, 9 seconds provides a clearer reflection of our underlying expenses and profitability. 6:14 6 minutes, 14 seconds For this discussion, we will be referring to the financials on a pre-indust basis for greater clarity. In 6:20 6 minutes, 20 seconds Q1 F26, IITA for the quarter was 25 crores, up 14% yearon year and 114% quarteron quarter. Profit after tax came 6:29 6 minutes, 29 seconds in at 9 cr representing a year-on-year growth of 531%. However, it is not comparable on Q on Q basis due to a low base in Q4 FI25. 6:39 6 minutes, 39 seconds In terms of key operational metrics, pleased to share that our focus market shares have performed well. In Q1 F26 we 6:46 6 minutes, 46 seconds achieved a growth of 73% yearon year and 24% quarteron quarter with revenue reaching to 72.6 crores. Average store 6:54 6 minutes, 54 seconds size stood at 9123 ft² versus 9037 in Q1 FI25. Average transaction value stood at 900 versus 955. Number of bills stood at 7:03 7 minutes, 3 seconds 4.48 million up 45%. Quantity sold 15.06 million up 46%. 7:10 7 minutes, 10 seconds Sales per square foot at 66 663 versus 661 in Q1 FI25 SSG stood at minus 3% 7:17 7 minutes, 17 seconds whereas normalized SSG stood at 11% due to the preportment of Eid as explained earlier. Additionally, inventory days 7:25 7 minutes, 25 seconds were reduced to 116 days in Qi FI FI26 compared to 120 days in Q1 FI25. Trade 7:32 7 minutes, 32 seconds payable days stood 111 days in Qi FI26 from 153 days in Qi FI25. 7:38 7 minutes, 38 seconds In summary, we are strengthening our market position by expanding our store network in core and focus reason, investing in supply chain and talent to 7:47 7 minutes, 47 seconds enhance efficiency and growing our private labels to build differentiation and trust. Operational improvements through technology, data analytics and 7:56 7 minutes, 56 seconds our omni channel models are progress progressing well with the anticipated festival tailwinds in the upcoming quarters including Raa Bandhan, Dura 8:03 8 minutes, 3 seconds Puja, Diwali and the wedding seasons. We remain confident in delivering a strong performance and achieving robust growth in the quarters ahead. With that, I 8:12 8 minutes, 12 seconds would like to conclude my opening remark and request the moderator to open the floor for questions. Thank you. 8:19 8 minutes, 19 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch on phone. 8:31 8 minutes, 31 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 8:38 8 minutes, 38 seconds handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. 8:48 8 minutes, 48 seconds The first question is from the line of Gorup Jagani from JML. Please go ahead. 8:56 8 minutes, 56 seconds Uh thank you for uh taking my question and congratulations on the strong set of numbers of numbers. 9:03 9 minutes, 3 seconds Uh uh so AJ my first question is with regards to you know uh the uh the other expenses increase now even if we look at 9:12 9 minutes, 12 seconds on the three India basis uh there is a sharp increase in the other expenses. Uh so can you please help us out uh how 9:20 9 minutes, 20 seconds these other expenses should be looked into going ahead and if there is any one-off in the other expenses line item item. 9:27 9 minutes, 27 seconds Uh thank you Gorov. Uh as we continued in our expansion phase several costs has been strate strategically frontloaded to 9:35 9 minutes, 35 seconds support the future growth and this incro increase in cost is aligned with our growth strategy. We have added more stores invested in hiring, upgrading our 9:44 9 minutes, 44 seconds warehouse infra and increasing customer engagement program to drive footfalls. 9:48 9 minutes, 48 seconds With revenue projected to rise particularly during the festival season, their proportion relative to topline will decline driven by operational 9:55 9 minutes, 55 seconds leverage and economy of scale. This means incremental gains will fully drive a bit improvement fueling our margin expansion and operating leverage. In 10:03 10 minutes, 3 seconds terms of number in FI25 our average operating cost stood at around 180 rupees square feet which in Q1 FI26 10:11 10 minutes, 11 seconds stood at 183 rupees per square ft. We expect this average operating cost of around 180 square ft to hold during the entire financial year and as I have said 10:19 10 minutes, 19 seconds that with the strong quarters ahead we expect a good uh sale per square foot. 10:23 10 minutes, 23 seconds So the entire thing will translate to ITA only in terms of margins. 10:28 10 minutes, 28 seconds Yeah. So uh so friends just one clarification when you say 180 + 12 that is on a uh a quarter on sorry uh that is for the quarter for a monthly basis. 10:39 10 minutes, 39 seconds Yes. 10:41 10 minutes, 41 seconds Yes. On the monthly basis it's average cost 18 per square. 10:46 10 minutes, 46 seconds Okay. This will be including staff cost and other expenses and everything. Everything everything. 10:52 10 minutes, 52 seconds Okay. Okay. So you said that is expected to remain in this 185 rupees per square foot kind of a range right for the year. Yeah. Yeah. Yeah. Yeah. For the year. 11:01 11 minutes, 1 second Okay. Okay. And on the uh the the gross margin side, you know, the gross margin has been a very uh healthy expansion this quarter around of around 300 plus 11:10 11 minutes, 10 seconds bits. Uh so so what is the guidance if any if you can provide on the gross margin? 11:17 11 minutes, 17 seconds So see the gross margin was higher uh largely because of this pullback by sales through that we have achieved but I think the things will get normalized 11:25 11 minutes, 25 seconds in the upcoming quarter as there will be a festival season promoting promotions rollouts along with the uses in the month of July. So I believe after all 11:33 11 minutes, 33 seconds the seasonal adjustment we anticipate a margin of up to 50 basis point increase uh by uh I will say because of the 11:41 11 minutes, 41 seconds inventory efficiency I think because of the private for the entire year. 11:47 11 minutes, 47 seconds Okay. So would that mean that in the remaining three quarters the gross margin would decline? So if you're saying only 50 bits for the entire year. 11:54 11 minutes, 54 seconds So it will not decline quarter quarter because but because but the sales would be higher and maybe for the Q2 and Q3 the margins which we have achieved last year. So it will be on a similar lines 12:03 12 minutes, 3 seconds or on a little bit of increase. So the increase that Q1 saw it will not be the single increase which Q2 and Q3 will see. So as a as because of the higher 12:11 12 minutes, 11 seconds revenue contribution over there. So as a percentage it will reduce but again from last year it will be higher by 50s. 12:18 12 minutes, 18 seconds No. So so that is the thing. I mean if you look at the Q1 margin Q1 gross margin has expanded by 300 bits. Okay. 12:25 12 minutes, 25 seconds Now if if I take for the entire year only a 50 bits gross margin expansion. 12:31 12 minutes, 31 seconds So would that mean that you know for the remaining 9 months uh from Q2 to Q4 there would be a decline in the uh gross 12:39 12 minutes, 39 seconds margin because you know only then would the 50 bits margin would justify for the entire year. area. 12:47 12 minutes, 47 seconds Um during the EOSS the margin will decline but uh uh during festive and others uh quarters it will be uh in 12:57 12 minutes, 57 seconds similar lines to last year. So what is happening is that for Q2 and Q3 if you see the numbers are very high in terms of revenue. So what will happen for the 13:05 13 minutes, 5 seconds Q2 Q3 maybe the margin will be similar to the last year only. So for the full 9 months on an average this 3% may become 13:13 13 minutes, 13 seconds 1% higher for the first 9 months and for the last quarter again there will be in USS on the January. So while the when the quarter 4 ends it will be typically 13:22 13 minutes, 22 seconds higher by 50 bits. This is what our uh assumption has been around this thing. 13:28 13 minutes, 28 seconds Uh okay. Uh sure. So I'll come back in the queue for more questions. Uh thank you. Thank you. 13:37 13 minutes, 37 seconds Thank you. 13:39 13 minutes, 39 seconds The next question is from the line of Palash Kavali from Nana Wells. Please go ahead. 13:45 13 minutes, 45 seconds Yeah, thank you for the opportunity sir and congratulations on good set of numbers. Uh sir, what was the rental for Q1? 13:55 13 minutes, 55 seconds Rental cost is 56 rupees per square foot. 14:00 14 minutes Okay. And what do you expect it to be for the full year? 14:03 14 minutes, 3 seconds It will be in similar lines only. It will be hovering around 56 to 57 rupees only. 14:10 14 minutes, 10 seconds And sir, what was it for the Q1 last year? 14:13 14 minutes, 13 seconds Last year it was 53 rupees. 14:16 14 minutes, 16 seconds Okay. And sir, any uh update on the insurance payment that you are supposed to receive? 14:22 14 minutes, 22 seconds See, in terms of insurance payment, we have received an amount of 3.48 crores including salvage value against the total asset loss of 4.24 crores. uh for 14:31 14 minutes, 31 seconds the inventory thing we are actively and consistently engaging with the insurance company to expedite the claim processing. We have submitted all the 14:38 14 minutes, 38 seconds documents for the to the collection of the inventory loss. I think given the complexity of the assessment and settlement process, our resolution 14:46 14 minutes, 46 seconds timeline is still under progress and we remain optimistic because we have submitted all the requisite documents as discussed with the insurance company and 14:54 14 minutes, 54 seconds we expect the matter to be settled in the upcoming quarters and we'll continue to keep you informed of any significant development regarding the uh inventory claim. 15:04 15 minutes, 4 seconds Okay sir. Thank you so much. That's it for my Thank you. 15:11 15 minutes, 11 seconds The next question is from the line of Rahan say from three NRA asset managers. Please go ahead. 15:18 15 minutes, 18 seconds Uh yeah, good afternoon team and thank for the opportunity. 15:23 15 minutes, 23 seconds I have a question regarding the technology and supply chain service with the recent appointment of a new K for supply chain. what structure or digital 15:31 15 minutes, 31 seconds improvements are being added for uh back end efficiency or inventory optimization optimization and how are 15:38 15 minutes, 38 seconds you leveraging leveraging tech for improving inventory terms and things uh across and for location 15:48 15 minutes, 48 seconds sorry I just missed the first part of your question can you just come again with the question uh sure sir sure with the recent appointment of a new uh a for the supply 15:56 15 minutes, 56 seconds chain what structure or digital improvements argument planned for back and efficiently inventory. 16:04 16 minutes, 4 seconds Okay. So in terms of because this year uh I have told in last year called last call also that this year has been a year of tech for us what we have taken. So in 16:11 16 minutes, 11 seconds terms of uh supply chain uh we are we have we are just on the phase where we will be implementing the info warehouse 16:18 16 minutes, 18 seconds management solution and uh which will be live by uh month of November if everything goes smooth. On the inventory side, we are working on a ars called 16:27 16 minutes, 27 seconds gold red which works on the of constraint and I think uh their implementation has also started. Uh so I think which will lead to a faster supply 16:36 16 minutes, 36 seconds chain structuring which will again increase the inventory turn and we expect the numbers to look visible by 16:43 16 minutes, 43 seconds this year financial year itself. We will be able to see the uh technological benefit that will be derived from these uh implementation of these softwares. 16:51 16 minutes, 51 seconds Apart from that the entire back end ERP we are planning to ship it from Genesis to SAP Hana retail. I think all the 17:00 17 minutes these measure measures will help us to improve our uh supply chain. 17:05 17 minutes, 5 seconds Oh okay. Okay. I just want some more clarification regarding the what is the average payback period for new stores 17:13 17 minutes, 13 seconds opening the last 12 to 18 months especially in the frontented uh uh entreprene 17:26 17 minutes, 26 seconds so on an average uh on the capex side it takes around 18 months uh to recover and for the entire investor it takes around 17:33 17 minutes, 33 seconds 31 to 33 months for the recovery uh in terms of focus market the the focus market performance has been good but 17:41 17 minutes, 41 seconds still if you compare to core market it will take additional 2 three months maybe extra because that is the uh states where we are developing our 17:49 17 minutes, 49 seconds market but yeah I think gradually maybe a year later when that focus also shifts to core uh it will come to similar 17:56 17 minutes, 56 seconds numbers okay thank you for clarification if I have more question I will come I will I 18:11 18 minutes, 11 seconds Thank you. 18:15 18 minutes, 15 seconds The next question is from the line of Natik from NV alpha fund. Please go ahead. Uh hi sir. Uh congratul. 18:25 18 minutes, 25 seconds So my first question is if you could give us uh the debt on the books as on date and cash flow from operations that you have generated after paying lease during the water. 18:37 18 minutes, 37 seconds So uh total net borrowings as on date for the Q1 is 157.43 18:44 18 minutes, 44 seconds which we have already stated in the last earning call that it will gradually reduce and will be uh around 120 cr at the end of the financial year. 18:56 18 minutes, 56 seconds Right. And what will be the cash flow generated post lease for the quarter 19:04 19 minutes, 4 seconds cash generated from operations post payment of lease? 19:10 19 minutes, 10 seconds Uh it is around so uh around 26 CR after adjustment of lease payment. 19:20 19 minutes, 20 seconds Right. Got it sir. So my second question is you know the 183 per square ft uh the cost you mentioned that includes rental 19:27 19 minutes, 27 seconds cost also question sir both rental employee cost and all the 19:36 19 minutes, 36 seconds other expense excluding depreciation and interest right got it and and so my last question is you know what is the corporate 19:42 19 minutes, 42 seconds expense as a percentage of sales for us it is it stands at 6.15% for this quarter And that's it. Thank you. 19:56 19 minutes, 56 seconds Thank you. 19:59 19 minutes, 59 seconds The next question is from the line of Cherab from Keynote Capital. Please go ahead. 20:06 20 minutes, 6 seconds Yes, thank you for the opportunity. Uh congratulations and for the great set of numbers. Uh my first question is that you have 20:14 20 minutes, 14 seconds mentioned that I think in Q1 our full price sales was better. Could you just give me a number what was the percentage 20:21 20 minutes, 21 seconds of full price sales for Q1 FI26 and FI25? 20:25 20 minutes, 25 seconds So 92% was the full sales group in Q1 FI26 against uh 89 in Q1 FI25. 20:35 20 minutes, 35 seconds Okay. Uh second thing I would like to know that our payable days is around 4 months if I'm not wrong. If I'm not 20:42 20 minutes, 42 seconds wrong uh could you just uh let me know uh the is this one reason if we improve 20:50 20 minutes, 50 seconds our payable days to like 90 or 60 days going forward can it become incremental on our gross margin if that is the 20:59 20 minutes, 59 seconds strategy or not that if you could just highlight that too. See uh you can say uh uh yeah there will be a 21:07 21 minutes, 7 seconds benefit in the gross margin uh once we reduce it. But yeah I think with the growth that we are aiming we we want to reduce to 90 disc just so that the 21:16 21 minutes, 16 seconds sourcing becomes easier for the manufacturers also and whatever if they are able to earn on their sourcing they will transfer it to us and we would like 21:24 21 minutes, 24 seconds to transfer it to the consumer uh so that uh that the entire chain becomes is on the value side only. you don't 21:32 21 minutes, 32 seconds have to increase the prices and this will be a little bit impact on the loss also 21:40 21 minutes, 40 seconds right sir point so can I expect that with improvement in debt that we are working on this numbers is expected to 21:47 21 minutes, 47 seconds gradually go down to 90 days by f 27 or 28 21:59 21 minutes, 59 seconds hello hello yeah yes you can expect by FI 26 and FI 27 you will see the numbers gradually going down and it will be around 90 days as you said. 22:10 22 minutes, 10 seconds Perfect. So my second question is related to store level warehouse size uh as a percentage of entire uh store uh 22:20 22 minutes, 20 seconds store size the we generally don't have the uh backend warehouse as such. So it is 22:29 22 minutes, 29 seconds generally 20 to 300 200 to 300 square ft² of back end space for keeping the material at a store. 22:37 22 minutes, 37 seconds Okay. And the number of days inventory exactly keep and keep and so totally depends on season to season. 22:43 22 minutes, 43 seconds Uh so for example because we are majorly our revenue comes from the festivaldriven uh seasons. So as I have told in the previous so the inventory 22:52 22 minutes, 52 seconds looks higher before any festival uh starts and it looks lower when the festival or the season ends. So at the 23:01 23 minutes, 1 second maybe when the festival is in on the full run the inventory per square foot at the store level goes up to 2500 23:07 23 minutes, 7 seconds rupees also and uh when the inventory at the end of the season the store inventory comes down to around 1,700 23:14 23 minutes, 14 seconds rupees. So that is the word rating before and post any festival season. 23:21 23 minutes, 21 seconds You mean per square feet are you talking about? 23:25 23 minutes, 25 seconds Yeah. First inventory. So I'll just tell you for example on 31st March our inventory was at around 2700 rupees 23:32 23 minutes, 32 seconds square feet which has come down to again 292 at June. 23:40 23 minutes, 40 seconds Perfect. So my next question is that uh as you said that our corporate I think that the percentage of sales around 10 23:46 23 minutes, 46 seconds percentage today uh what kind of stable a beta margin pre-indis we can expect uh 23:55 23 minutes, 55 seconds down the line 3 years like because this expense is going to uh showcase some operating leverage of course but could 24:03 24 minutes, 3 seconds you just highlight uh at current SSSG what we have around 7 to 8% what kind of a bit margin on that level we can do. 24:12 24 minutes, 12 seconds So see uh this year as I said the guidance is 7 to8%. Last year the entire year profit overhead was around 5.7%. 24:20 24 minutes, 20 seconds And typically I think there will be an operating leverage and in next 3 years with the operating leverage kicking in with the gross margin in the full price 24:28 24 minutes, 28 seconds through with all this tech thing that we have done is going to improve will help us to achieve a bit of 9 to 10% by fi 28. 24:38 24 minutes, 38 seconds So 7 to8 this year 8 to 9 next year 9 to 10 maybe the f 28th numbers and uh and keeping keeping SSG in mind 24:46 24 minutes, 46 seconds of 7 to 8%age only right yes perfect uh that is it from my I'll join back with you thank you so much 24:54 24 minutes, 54 seconds thank you thank you next question is from the line of gorab jugani from JMFL please go 25:04 25 minutes, 4 seconds ahead uh hi thank you for taking my question again uh so my question you know again is with regards to the uh the the the 25:13 25 minutes, 13 seconds other expenses per square feet share so if I look at the base quarter you know the base quarter the other expenses per square feet was around 154 rupees and 25:21 25 minutes, 21 seconds this quarter it is around 183 rupees as you mentioned now if I look at for the remaining nine the remaining nine months the expenses 25:30 25 minutes, 30 seconds have only increased from there on so you know uh what will drive uh given that the festival is also coming that you will also have higher activity levels. 25:38 25 minutes, 38 seconds So, so do you think that it can remain at this 183 levels? 25:44 25 minutes, 44 seconds If you see the last three quarters Q2, Q3 and Q4, FI25 also it was around 187, 25:51 25 minutes, 51 seconds 188 and 184 and this quart is around 182. So technically what has happened all the cost that has been frontloaded 25:58 25 minutes, 58 seconds last year. Okay. And with the growth in revenue so there it will not be increasing that much and it will be at the same tune because all the expenses 26:07 26 minutes, 7 seconds that has been increased you have taken that hit last year itself. So the 180 base has been created and that base is only going for the quarters. 26:16 26 minutes, 16 seconds Okay. Okay. Okay. Got it. Got it. So so it is the leverage now kicking in these nine items right that will benefit. Correct. Correct. Correct. 26:25 26 minutes, 25 seconds Okay. Okay. uh and on the rental also I mean uh while optically it seems that you know the rental as uh sir mentioned 26:34 26 minutes, 34 seconds uh that you know it's been around what so that will be the including the rental only uh the the pre-indust number what will be the total rental actually of the 26:42 26 minutes, 42 seconds pre-indust number if you can give us that number that will be helpful 56 will per square will be the I think 26:50 26 minutes, 50 seconds the numbers which will be around for the FI 26 also and for Q1 it is around 54 So on the similar lines 26:57 26 minutes, 57 seconds okay and has this gone up because we are opening higher square credited stores or any other reason for that one. 27:04 27 minutes, 4 seconds Yes. First thing is uh see the rental is a byproduct of where you open the stores because in the last financial year there are a lot of stores which has open in 27:11 27 minutes, 11 seconds tier one and metro cities uh which has a higher rental as a cost. I think the mix of all the things has in impacted the rent per square that way. 27:22 27 minutes, 22 seconds Okay. because largest chunk of stores have been opened in the metro and tier 1 in last financial year. As a result, uh the rentals are showing at 54 for this 27:30 27 minutes, 30 seconds quarter one which is not very high. If you see from Q1 Q1 FI25, uh it was around 45 which is in 54 for the stores 27:39 27 minutes, 39 seconds and that is majorly because of uh the uh stores opening in Metro and one. 27:45 27 minutes, 45 seconds Okay. uh and sh given that this time around the festive season is in Q2 uh and last year I think it it was a mix of 27:53 27 minutes, 53 seconds Q2 Q3 so do you see some benefit acrewing in Q2 itself this year this year yeah we we we we will have uptick in 28:01 28 minutes, 1 second demand because of the early pressure so 11 days shift from Japuja from Q3 will happen into Q2 which will have impact on 28:09 28 minutes, 9 seconds higher sales of from Q2 okay okay and lastly on the capex front 28:16 28 minutes, 16 seconds What is the KPEX guidance for this year and the next year? 28:23 28 minutes, 23 seconds Uh 1390 to uh 1350 per square 1390 to,400 per square ft for the store openings. 28:32 28 minutes, 32 seconds Okay. So can you give me the total I mean the maintenance kics and everything what kind of uh everything it will for put for everything it will be around 90 to 100 cr for this year. 28:42 28 minutes, 42 seconds 90 to 100. 28:43 28 minutes, 43 seconds Yeah. with all the tech and everything all the warehouse infra also have taken uh back end operations everything put together 28:51 28 minutes, 51 seconds sure sure so so because you know there will be a good savings in terms of our uh uh inventory also I mean we don't 28:59 28 minutes, 59 seconds expect uh the incremental track from the inventory uh so would that mean you know that that could help in better cash 29:08 29 minutes, 8 seconds position this year versus last year given that you know there will also be a better profitability and lower uh outlow 29:14 29 minutes, 14 seconds in terms of the uh uh the working capital. 29:19 29 minutes, 19 seconds Yeah, you can say. So apart from that uh because I think this year we will be also having the insurance receivable as a one of the cash flows in inflow for 29:27 29 minutes, 27 seconds this year. So I think with that plus internal app acrals yeah will help us will give us a better cash flow from last year. 29:36 29 minutes, 36 seconds Okay. Okay. Sure. Thank you. And that's all. Thank you. 29:46 29 minutes, 46 seconds The next question is from the line of Raj from Fiden. Please go ahead. 29:52 29 minutes, 52 seconds Uh yeah. Hi, thank you for the opportunity. Uh couple of questions from my side. Uh firstly again on uh rent so 29:58 29 minutes, 58 seconds rent uh quarter on quarter so for close to around 18% growth. 30:04 30 minutes, 4 seconds wanted to understand the reason for this. Is it because only because of the new stores or in the existing stores as well are we seeing some uh the increase 30:13 30 minutes, 13 seconds in the rental uh cost mainly because of competition. So how is the competition panning out in this industry right now because everyone is quite aggressive on store openings. 30:23 30 minutes, 23 seconds So see uh in terms of rental with the existing stores because we are in we are having an agreement with them. So whatever as a part of agreement every 3 30:31 30 minutes, 31 seconds year there's a incremental clause 12 to 15% depending on uh landlord to landlord. So that is taking place 30:38 30 minutes, 38 seconds there's no extra rental as I said that because lot of store openings has happened in metro and tier one which typically has a higher rental compared 30:46 30 minutes, 46 seconds to tier three tier four cities. So that is one of the reason and at the back end last year versus this year in last year 30:53 30 minutes, 53 seconds the Q1 the warehouse that were that we were having was only 86,000 ft² whereas this year uh in Q1 the warehouse that we 31:00 31 minutes had was around 1.86 lakh square ft² similarly on the office space. So there are a lot of there were a lot of expenditure at the back end also which has increased uh for the supporting the 31:09 31 minutes, 9 seconds future growth. I think that is why the per square ft is a percentage as you can see the rentals have increased but as I said that uh this will the trend for the 31:18 31 minutes, 18 seconds entire year and in tier 2 tier three because of our expertise in the zone as we follow the cluster based approach is 31:25 31 minutes, 25 seconds better than any other players as we are able to check out the uh uh areas where you want to open the stores at the similar renters that I said between that 31:34 31 minutes, 34 seconds is why I said I said the entire year average will be around 56 only. 31:37 31 minutes, 37 seconds Okay. was sorry you you said there was some from 12 to 15% of uh rental cost increase in the agreement each year what 31:44 31 minutes, 44 seconds is that number so every 3 years it is around 12 to 15% it's an average this is a standard agreement with every retail 31:51 31 minutes, 51 seconds player so between 12 to 15% so 15% is a standard for tier 2 tier three and there are some agreements which is only 5 to 10% which has 12% increment every 3 32:00 32 minutes years okay I understand and technically uh so the other players are also mentioning that investment there some uh pressure 32:09 32 minutes, 9 seconds in terms of demand mainly because uh the influx of people from the neighboring countries has completely stopped. So how do you feel the situation on ground in terms in terms of west? 32:20 32 minutes, 20 seconds So see in terms of number target that we have taken we have been able to achieve that number. I think the numbers would have been better uh if the flow from the 32:28 32 minutes, 28 seconds neighboring country was there because there are some pockets in Bengal. Yeah. 32:32 32 minutes, 32 seconds where the sales are very good because of their uh when they come during the festival seasons but this year because of the government policy and whatever 32:40 32 minutes, 40 seconds the reason uh they have not been able to come into shop. So I think these numbers are without there and we expect as the 32:47 32 minutes, 47 seconds things between the both the neighboring gets good. I think in the upcoming quarters with the strong festival 32:54 32 minutes, 54 seconds quarters that we have uh if their inflow starts again coming back we will be having higher numbers as as a target we are meeting the targets that we have 33:01 33 minutes, 1 second set. So for us we have met the targets in Bengal whatever we have taken. Yeah we could have done better if their intros were there. 33:10 33 minutes, 10 seconds Thank you. Thank you. Thank you. 33:19 33 minutes, 19 seconds Ladies and gentlemen, please limit to two questions per participant and come back in the queue for a followup. 33:27 33 minutes, 27 seconds The next question is from the line of Danch Adwani from Bajage. Please go ahead. 33:36 33 minutes, 36 seconds Hello. Hello. Yeah. Hi. 33:39 33 minutes, 39 seconds Yeah. No, no, no. Congratulations on good set of numbers. Uh so what what sort of uh numbers do you see going 33:48 33 minutes, 48 seconds forward in Q2 and also what is your guidance going forward as far as top line and bottom line is concerned corrective. 33:57 33 minutes, 57 seconds So we I anticipate a stronger uh upcoming quarter with our guidance uh of revenue will be around 25% only uh till 34:06 34 minutes, 6 seconds the time Q2 concludes. I think post that only we will uh uh see if we want to revise the guidance or not. And uh in 34:13 34 minutes, 13 seconds terms of uh AITA at pre-ind it's around 7 to 8% and at PET it's around 3 to 4%. 34:19 34 minutes, 19 seconds As a guidance okay thank you. Thank you. 34:30 34 minutes, 30 seconds Thank you. The next question is from the line of Vidisha from Ambic Capitals. Please go ahead. 34:37 34 minutes, 37 seconds Hi, good afternoon. I just had one small question and I'm not sure if it's repetitive in nature but uh can you help help us understand 34:44 34 minutes, 44 seconds the differential between the sales per square ft in metro and tier one cities versus tier 2 and tier three cities 34:55 34 minutes, 55 seconds just to have a higher uh per square uh so for maybe for just on an average if I tell you so the metro and tier one 35:03 35 minutes, 3 seconds cities on an average would give us a SPS of more than 12,000 per square Whereas maybe tier 2, tier three, tier four average will be around 8,000 or 8,500. 35:13 35 minutes, 13 seconds Exact numbers I think we can take offline. But yeah, that is the numbers that we are generating from metro tier 1 and tier 2, tier three. 35:20 35 minutes, 20 seconds Got it. Got helpful. Thank you. That's Thank you. 35:28 35 minutes, 28 seconds The next question is from the line of Deepak Podar from Safire Capital. Please go ahead. Yeah. Am I audible? 35:36 35 minutes, 36 seconds Yeah, you are. 35:37 35 minutes, 37 seconds Yeah. Uh, thank you very much uh for this opportunity. So, just first up, I just wanted to understand what's the gross margin difference between private label versus other brands. 35:48 35 minutes, 48 seconds It's majorly around 1 and a half% as a difference. 35:53 35 minutes, 53 seconds Oh, so I mean uh it's not much then I mean gross margin difference is only one and a half%. That's what you're saying. 35:58 35 minutes, 58 seconds So basically see right now our aim is not to increase margins. Our aim is to stabilize our brand because it has been 36:06 36 minutes, 6 seconds postco only when we started this journey and we are at 61% sales as of now for this quarter. Our objective is that 36:14 36 minutes, 14 seconds higher will be the sales in private table more will be good the better will be the experience of customer with the private tables higher will be sale in 36:21 36 minutes, 21 seconds the future where we can work on improving the margins over there also. 36:25 36 minutes, 25 seconds So right now we are just seeing that the margin should be in the similar lines with the other labels. So the the private labor gets that competitive advantage over other labels. 36:35 36 minutes, 35 seconds Okay. I I understood and and so you mentioned about this year pre-India pack margin of 3 to 4%. Now can you suggest something on the post India as well? 36:44 36 minutes, 44 seconds What sort of a range we so uh 14 to 15% will be thea margin and pat margin will be between 2 to 3%. 36:54 36 minutes, 54 seconds Okay. But but given the run rate of I mean interest and depreciation we are currently having uh because of all these these liabilities uh at at at 14 15% 37:03 37 minutes, 3 seconds EITA margin it will be difficult to achieve two 2 to 3% of PAT margin right at 26 25 26% kind of a tax rate 37:12 37 minutes, 12 seconds no I think we will be able to achieve between 2 to 3% with the numbers that we have prepared and uh I think uh with all the assessment and working that is going 37:21 37 minutes, 21 seconds on we will be able to achieve this number of 2 to 3%. 37:24 37 minutes, 24 seconds two to two to 3%. And and and when uh when we said four to 5% I think fat margin in FI27 um in the previous call. 37:35 37 minutes, 35 seconds Correct. So we we meant uh pre-Indius or what? 37:39 37 minutes, 39 seconds Yeah. So for the discussion purpose we only talk about pre-Indas because that is I think the most accurate way to look at the numbers. So yeah it was uh 37:47 37 minutes, 47 seconds pre-Indius only. India and just one final small thing um I mean given the kind of store growth we are seeing and 37:55 37 minutes, 55 seconds even the SSG is quite uh good so a 25% CGR I mean over next 2 three years is what one should look at at a company 38:02 38 minutes, 2 seconds level for us yes 100%. 25% is the number. I think it's a balanced growth approach which will help you in achieving sustaining the margins also and having a healthy profit bottom line. 38:15 38 minutes, 15 seconds That's very helpful sir. I would like to wish you all the very best. Yeah. Thank you so much. Thank thank you so much. 38:22 38 minutes, 22 seconds Thank you. 38:24 38 minutes, 24 seconds The next question is from the line of Arind Aurora from Aquare Capital. Please go ahead. 38:31 38 minutes, 31 seconds Hi uh congratulation on good of that of number number my questions are mainly you're saying your revenue guidance 38:38 38 minutes, 38 seconds would be same uh for the current year like it's 25%. So like could you just give me give us a break up on SF growth what you are expecting? 38:50 38 minutes, 50 seconds So see uh quarter one we have grown by 37% as a revenue growth for the full year is around 25%. The revise if 38:59 38 minutes, 59 seconds anything we have to revise we will take this call after the first half of the uh this financial year. In terms of SSG it 39:07 39 minutes, 7 seconds is around 7 to 8% as a guidance for this year. 39:10 39 minutes, 10 seconds Okay. same like what you alluded on uh quarter four correct correct correct okay and uh current quarter despite the 39:20 39 minutes, 20 seconds SSP growth is in uh SS is in negative we still are paid uh paid positive so can 39:27 39 minutes, 27 seconds we assume same for the remaining period as well as well yeah for this all the remaining quarters we can expect the same 39:35 39 minutes, 35 seconds okay thank you that's all from my from Thank you. The next question is from the 39:44 39 minutes, 44 seconds line of Ashwin Kadia from LKNi Capital Management Private Limited. Please go ahead. 39:50 39 minutes, 50 seconds Hi, congratulations on the superlative growth. I had two questions. Uh uh one was how many of your uh focus markets 39:59 39 minutes, 59 seconds will move to uh core markets? Uh that was one and second we've hired somebody to supply chain. So how do we see our 40:08 40 minutes, 8 seconds warehouse capacity or the supply chain growing and technology technology? 40:13 40 minutes, 13 seconds So coming to your first question uh in terms of focus markets see generally it is the number of stores and the time that we spend in the market on which we 40:22 40 minutes, 22 seconds take a call whether it has shifted from focus to core. uh for us up and jaran are the two states where we are focusing 40:30 40 minutes, 30 seconds very much and I think in upcoming in upcoming two years they will shift from focus to core as a state because with 40:38 40 minutes, 38 seconds the larger number of stores opening in those areas and with the better knowledge about that catchment we'll be able to achieve we are able to achieve 40:45 40 minutes, 45 seconds good margins and I think there's a huge potential also so that will be the focus areas for us in terms of warehouse yeah we have hired a lot of good people uh 40:54 40 minutes, 54 seconds from a big ational uh chains uh on the supply chain and with the technology uh in upgrading our infrastructure in the 41:01 41 minutes, 1 second warehouse with with the info coming as a warehouse management solution by November. uh I think uh by this year and 41:10 41 minutes, 10 seconds itself uh the warehouse will be very highly upgraded by this year calendar year itself and maybe in the next year 41:18 41 minutes, 18 seconds the entire benefit of the supply chain will start passing onto the stores which will again uh will be showing in 41:25 41 minutes, 25 seconds the bottom line uh that's great news I have one more question any numbers you had in mind for up jaran how many stores you have mapped 41:33 41 minutes, 33 seconds places how many they will grow two next two three years up See in terms of uh not directly as a 41:41 41 minutes, 41 seconds number but what I can say is that 30% of the stores are opening in the focus market. So for example in 22 stores that 41:48 41 minutes, 48 seconds we have opened uh in Q1 around seven stores have been opened in the mix of UB Jagan and other focus chains. So that 41:56 41 minutes, 56 seconds will be the ratio for this year and post this year again we will have an analysis on which where to open the stores. Maybe the next year the numbers may look higher for UP. 42:07 42 minutes, 7 seconds Thank you. We wish you a great great festival season. Thank you so much for answering questions. Thank you so much. 42:14 42 minutes, 14 seconds Thank you. The next question is from the line of Shuhanu from three head capital. Please go ahead. 42:22 42 minutes, 22 seconds Hello. Hello. Yes. Yes. 42:28 42 minutes, 28 seconds What is the 1812? Pardon? What was the Q126? 42:41 42 minutes, 41 seconds Hello. 42:41 42 minutes, 41 seconds I think I'm disappearing on the voice side. I'm not able to get your question. Can you come again? What is the AS in Q13? 42:51 42 minutes, 51 seconds Okay. AS price for the Q1 uh 26. 42:58 42 minutes, 58 seconds So it is around 267 for Q1 FI 26. 43:08 43 minutes, 8 seconds Uh in FI2 it was 286. 43:16 43 minutes, 16 seconds Okay. My question my another question is uh your one of PR called V2 they are 43:23 43 minutes, 23 seconds they also similar online but they are same sorry uh they are 43:34 43 minutes, 34 seconds hello am I am I able yes you're able but your voice is not clear there's some disturbance coming in so the question is 43:41 43 minutes, 41 seconds not any clear it can just be little clear and loud so we can answer your uh 43:49 43 minutes, 49 seconds what is your uh guidance in sales sales per square feet going forward going forward so on an average with 7 to 8% as a uh 43:59 43 minutes, 59 seconds SSG guidance I think we expect uh overall revenue uh to grow by 5% every 44:06 44 minutes, 6 seconds year and uh in next two years we expect numbers to reach around 10,000 rupees of SPSS 10,000 next two years. 44:21 44 minutes, 21 seconds Next two years. 44:22 44 minutes, 22 seconds Yeah. Next two years. So 8625 8654 was the FI25 and with five 7% SSG and with the stores that we are opening we expect 44:31 44 minutes, 31 seconds in by FI27 we will be uh somewhere between uh 98 to 10,000 of SPSF. 44:37 44 minutes, 37 seconds Okay. Thank you. Thank you. 44:42 44 minutes, 42 seconds Thank you. The next question is from the line of Pavani from Amara Capital. Please go ahead. 44:50 44 minutes, 50 seconds Yeah. Hi. So, just wanted to understand like what are we working on to increase the sales per square feet like uh in 44:58 44 minutes, 58 seconds terms of like uh uh what is the target that we are seeing over the next two years? what is the strategy and the levers that you are working on to 45:06 45 minutes, 6 seconds increase the sales per square feet uh in our business model. Yeah, I think first thing was is on the product side. We are working a lot on 45:15 45 minutes, 15 seconds the product and uh I think uh we want to uh maintain the name value. So I think we are doing everything uh that average 45:24 45 minutes, 24 seconds Indian wants. So they want a high perceived value item at an unbeatable price point and we are working on that. 45:30 45 minutes, 30 seconds So the product is the I will say the most important lever that we are working on. Apart from that the assortments. So what we need to keep in with stores we 45:39 45 minutes, 39 seconds are working on that also with lots of technology that we are building at the back end which will help us to have a clear understanding about the catchment 45:47 45 minutes, 47 seconds and so that we can create a assortment in a manner which that the zone wants. 45:53 45 minutes, 53 seconds For example, the athleisure category has been very popular postco and the sales of this track pants and 46:00 46 minutes the this t-shirts of athletes wear has increased but metro and tier one has a higher contribution compared to maybe tier 2 tier three. So what kind of 46:08 46 minutes, 8 seconds assortment that you want what kind of product category that you want to add that is on that is on which we are working and I think with that we will be able to achieve this SPS. 46:19 46 minutes, 19 seconds Okay. And are the gross margin similar in all the categories like the the sports wear in compared to the casual wear or the ethnic wear. Is it similar 46:27 46 minutes, 27 seconds across the category or it different? So it is little bit of different but not a very high differences between all of them. It depends on the price point 46:35 46 minutes, 35 seconds also. So maybe the first the first price point which is which we call entry price point may have a little lower margin 46:41 46 minutes, 41 seconds compared to popular and premium uh price points for any category. 46:48 46 minutes, 48 seconds Okay. Okay. And anything on the data management side like what consumers are sampling the stores and uh how we can uh 46:56 46 minutes, 56 seconds give more of their uh like what they are looking at in terms of data management to use the leverage the data and get it 47:03 47 minutes, 3 seconds converted into monetized industries anything on that sort of thing are we working on working on yeah so the second thing was the consumer I just missed on that first one was the product second was the consumer 47:11 47 minutes, 11 seconds side so we are working on that also so we have got a more than 1.2 2 million database and uh on which the entire team there's a separate team which are 47:20 47 minutes, 20 seconds working on that data set which works on what was the what is the regency how many times a customer has visited to the stores why they have not been visiting 47:28 47 minutes, 28 seconds to your stores to create that couponing offers for those people and to make sure that they come again back to the store 47:36 47 minutes, 36 seconds so there's a lot of work going on there also at the back end got it all thank you thank 47:44 47 minutes, 44 seconds Thank you. The next question is from the line of Ashish from Bio Capital. Please go ahead. 47:51 47 minutes, 51 seconds Uh yes sir. So um I I had one question. 47:54 47 minutes, 54 seconds The question was how much is the inventory per store at what percentage of our inventory is more than one year. 48:02 48 minutes, 2 seconds We generally follow more than twoear system. So we have a 2 year cycle that we follow as a policy and more than 2 48:09 48 minutes, 9 seconds years is around 2% which will which we gets reputed but maybe in next 3 4 months only. So that is the structure that we follow. So every more than two years it's around 2% only. 48:20 48 minutes, 20 seconds Uh but so can you give the give give the number for one year old also also. 48:25 48 minutes, 25 seconds So as a policy for this number only so I can share that number with you right now. And the second question that in terms of store and the total inventory 48:34 48 minutes, 34 seconds mix it depends on season to season as I said that total inventory for 31st March uh before the festival season it was 48:40 48 minutes, 40 seconds around 2700 which came down to 2092 as on 30th June. So similarly 70 80 to 20% 8020 ratio is between stores and warehouse and this was inventory. 48:52 48 minutes, 52 seconds Okay. Okay. Thank you sir. Thank you. Thank you. Thank you. 48:59 48 minutes, 59 seconds The next question is from the line of ASA from Pik Advisor. Please go ahead. 49:05 49 minutes, 5 seconds Thank you sir for giving me the opportunity sir. Uh my first question was related to um the competition. So we 49:13 49 minutes, 13 seconds are saying our competitors also increasing the number of stores like uh their target is 100 or 100 plus they are 49:22 49 minutes, 22 seconds expanding in the same region. So so how are we seeing us versus the competition? 49:29 49 minutes, 29 seconds So I will uh want to give you this answer into two parts. First thing see if you see at the macro level everyone is doing well. Even the compression is 49:38 49 minutes, 38 seconds doing well. Okay. So market is good enough for everyone. And the major reason behind is that I told in previous also the organized penetration is very less in tier 2, tier three, tier four. 49:48 49 minutes, 48 seconds There are only maybe three stores of organized players are only there in a particular small district or town as of now also. So there's a huge room. Now 49:57 49 minutes, 57 seconds coming to us and we are working on tech, we are working on product, we are working on store ambience, we are hiring 50:04 50 minutes, 4 seconds good talent just to ensure that the customer experience is best among all the retailers who are in our 50:12 50 minutes, 12 seconds competition. So we are trying to work on all the stuff uh to have an additional advantage over our competition. And even 50:20 50 minutes, 20 seconds if you see the numbers we whatever numbers that we are targeting we are able to achieve that number and the as I said the major reason is our advice to organization shift. Second thing is the 50:28 50 minutes, 28 seconds product uh in couple of years postcoid the product quality has improved uh significantly with the higher MOQ that 50:37 50 minutes, 37 seconds we have received minimum order quantity that we are able to give to the vendors and with all the designing team and the good merchandiser coming into the system 50:45 50 minutes, 45 seconds we have been able to uh create lot of fashion uh which we are not able to do it before covid but now I think there's 50:53 50 minutes, 53 seconds lot of under trading also happening so people who want to look good but uh they want a reasonable price are shifting 51:00 51 minutes from mid-segment brands to us that we have seen in metros and tier one also. 51:06 51 minutes, 6 seconds Right. Right. Sorry. So my second question is what is the SSD of the oldest stores tools that have been active like older than two years. 51:16 51 minutes, 16 seconds So for us 18 months is a criteria that we follow for L2L growth and for more than 18 months as I said last year we have done 12.79% for the full year. This 51:26 51 minutes, 26 seconds first quarter it's around minus 3% mainly because of prepment of Eid but for the full year we will be able to do 7 to 8% of SG. 51:36 51 minutes, 36 seconds Okay. And sir uh considering that uh the now the festival season is going to come shouldn't our gross margin should improve rather than you know giving the 51:45 51 minutes, 45 seconds full year a guidance of 50 bits point like Q1 improved by sorry Q1 it improved 51:52 51 minutes, 52 seconds by 300 bits even though there was no no festival season or anything and now then 51:59 51 minutes, 59 seconds in Q2 and Q2 will be Q3 the festival season so there will be of operation Everything 52:07 52 minutes, 7 seconds so what happens in Q2 Q3 Q2 Q3 as I said we will not be having a lower margins from last year quarter on quarter but it will be on a similar lines with the 52:15 52 minutes, 15 seconds festival taking place there are a lot of offers and promos that goes on ticket size offers and there are a lot of which directly have an impact on gross margin 52:23 52 minutes, 23 seconds itself so there will be no rise in gross margin for Q2 Q3 but with the uh for for the the the 3% advantage that is in Q1 52:31 52 minutes, 31 seconds will translate at the year end 2.550 That is the reason I am saying you that Q2 Q3 will not have a lower margins but it will not be a very it will not be 52:40 52 minutes, 40 seconds having a higher margin compared to last year of Q2 and Q3 because we will be passing on to lot of that margin to the 52:47 52 minutes, 47 seconds consumer uh consumer just to retain all my customers. 52:53 52 minutes, 53 seconds Okay. Thank you so much. Thank you. 52:59 52 minutes, 59 seconds The next question is from the line of Sadan from Maximal Capital. Please go ahead. Hello sir, thanks for the opportunity. 53:08 53 minutes, 8 seconds I hope I'm audible. 53:11 53 minutes, 11 seconds My question is with regards to the inventory management system. So what do you do with your older inventory like the purpose of inventory which are more 53:20 53 minutes, 20 seconds than 2 years old? So do you keep it in the like you know the um your back end warehouse or do you transport it to 53:28 53 minutes, 28 seconds central warehouse and you know it what is your strategy around that? Generally uh the entire inventory the the the how 53:35 53 minutes, 35 seconds the life cycle work is that that for the first two years it is sold through stores over the two years if there there is any leftover which is 1 or 2% that 53:44 53 minutes, 44 seconds comes to the central warehouse and from where the scrap sale happens do you take any provenence around the 53:53 53 minutes, 53 seconds older yeah we have a provisioning policy around uh uh older inventory uh and we 54:01 54 minutes, 1 second maintain Okay sir. And sir, second question is with regards to your mature to new store. 54:10 54 minutes, 10 seconds So what is your like current mature store count? Uh for the L2L groups I will just update you how many stores are there? 54:20 54 minutes, 20 seconds 145 stores are L2L stores SSD stores which we speak which is mature you can say. 54:28 54 minutes, 28 seconds Okay sir on the mic guidance and the numbers they calculate the beta margin at a store level comes around more than 15%. 54:38 54 minutes, 38 seconds So that be a fair assessment or uh am I over estimating? 54:43 54 minutes, 43 seconds No. So you estimated correct the mature stores gives typically between 14 to 16%. Uh and for the full year on an average it gives around 15%. 54:53 54 minutes, 53 seconds Okay sir. Thank you sir. at pre-industria. 55:01 55 minutes, 1 second Thank you ladies and gentlemen. In the interest of time, we will take last three participants. 55:11 55 minutes, 11 seconds The next question is from the line of Arman from Blue Sky Fil. Please go ahead. 55:18 55 minutes, 18 seconds Uh yes sir. First of all uh kind thanks for the opportunity and congratulations. 55:26 55 minutes, 26 seconds My question will be generally on our strategy because like we said a rental increase because we opened in areas of 55:33 55 minutes, 33 seconds Taiwan and metro and at the same time we also told that it is an underpented market entire two entire three. So what's the strategy of going forward? 55:44 55 minutes, 44 seconds How many stores will be opened in one metro and how many stores will be opened in tire two and beyond also currently of 55:51 55 minutes, 51 seconds the 232 stores how many are in TER and similarly tire two and beyond. 55:59 55 minutes, 59 seconds So in ter of strategy as you as uh what we are doing is a cluster based thing. 56:03 56 minutes, 3 seconds So when we say cluster it's a state that we are clustering. So metro and tier 1 are opening only in those states where 56:10 56 minutes, 10 seconds we want to form that cluster. So for example Bengal as a state so that will have higher metro and tier one uh count going in because we have got a good 56:19 56 minutes, 19 seconds experience in uh status of Bengal and we are looking. We want to capture the entire market of Bengal because what uh that was the thing that we have seen in 56:28 56 minutes, 28 seconds last two years even metro and tier one is is giving us a phenomenal growth and both in terms of revenue and profitability. So we want to stick to 56:37 56 minutes, 37 seconds that structure. We not going uh across India. We will be going by state byst state approach. Wherever you want to have a higher number of store count, we will go in metro and tier one. So it's a 56:45 56 minutes, 45 seconds mix. Now coming to the assortment mix how to decide. So in that scenario, it's not a dec 56:55 56 minutes, 55 seconds luckily we got lot of stores in metro and tier one. So the mix of metro and tier one was higher compared to uh any 57:02 57 minutes, 2 seconds other year. uh maybe this year I think the ratio will be again uh 75 to 80% are 57:09 57 minutes, 9 seconds tier 2 tier 3 only metro and t1 typically is around 20% only last year was the only year where we got lot of uh 57:16 57 minutes, 16 seconds store expansion particularly in the region of Bengal as a we were able to open more stores in 21 57:23 57 minutes, 23 seconds okay so yeah yeah so so if we can assume that 75 to 80% of the stores now we are going to 57:31 57 minutes, 31 seconds open in this year or maybe uh next year will be in most likely in Tit and beyond. So what is the current state of 232 stores? 57:39 57 minutes, 39 seconds So 51 stores is in metro and tier one. 57:44 57 minutes, 44 seconds Okay. Okay. And is there a payback payback period difference between tier one and metro and tier 2 and beyond 57:52 57 minutes, 52 seconds because our average revenue like is different right 12,000 and 8,000 definitely rental cost is also different. So is there any pay difference? 58:01 58 minutes, 1 second It's almost on the similar range because the expensive is higher but again rental is also higher in those areas typically in terms of in typically in terms of 58:09 58 minutes, 9 seconds IBITA if I say so when the stores get mature the metro and tier 1 gives you a ITA of 13%. Whereas tier 2 tier three 58:17 58 minutes, 17 seconds four gives you a bit of 15%. But again the SPSF of metros are higher compared to that. So in in absolute value more or 58:25 58 minutes, 25 seconds less similar numbers only 15 to 18 months maybe 2 three months up and down. 58:31 58 minutes, 31 seconds Okay. Okay. Thanks a lot. That's it from Thank you. The next question is from the 58:39 58 minutes, 39 seconds line of Chak from Kenos capital. Please go ahead. 58:43 58 minutes, 43 seconds Yes. Uh thank you for the opportunity again. Uh sir you have mentioned that uh we would be opening 45 to 50 stores in 58:50 58 minutes, 50 seconds this FY26 right? Correct. And uh our first two is around 2.5 crores. So as 58:57 58 minutes, 57 seconds you said for FI26 will be 90 to 100 crores. Just wanted to understand how much are we spending separately for tech 59:04 59 minutes, 4 seconds warehouse and the store edition. If you could provide these numbers. 59:09 59 minutes, 9 seconds So 2.25 is not the capex it is including inventory. It's the cash flow that goes in when it is of capex. It is around 1.1 cr to 1.25 crores. 59:22 59 minutes, 22 seconds In terms of tech expenditures, we are planning to have 20 to 25 cr investment going in the technology side this year. 59:30 59 minutes, 30 seconds Uh which includes upgrading the upgradation of our warehouse also. 59:36 59 minutes, 36 seconds So uh if we add 40 40 to 50 stores uh still it would be requiring more than 20 59:43 59 minutes, 43 seconds 25 crores uh of the amount that you are telling about the capeex guidance for 9200 crores. So just wanted to 59:52 59 minutes, 52 seconds understand what can be a CFO expectation for after after lease expenses for FI26. 1:00:00 1 hour So uh in terms of expenditure yeah 50 to 55 cr will be in the new store openings 25 to 30 cr will be in the uh warehouse 1:00:07 1 hour, 7 seconds infra and technology application and uh 10 to 15 crores will be on the renovation of the older stores. So typically that is the break up of this 1:00:16 1 hour, 16 seconds entire uh 9200 cr right but we would also require for inventory right that one 1:00:23 1 hour, 23 seconds so in terms in terms of inventory whatever measures that we are taking I think uh there will uh the way we see 1:00:30 1 hour, 30 seconds the the inventory moving around I think the inventory part we will not be a very high uh uh I will say investment that we 1:00:38 1 hour, 38 seconds have to do because we are optimizing an inventory and uh that is helping us to grow. So for example on 31st March the absolute value of inventory is around 1:00:47 1 hour, 47 seconds 521 crores which has come down in the June to uh 442 crores and I think uh the way 1:00:56 1 hour, 56 seconds we are seeing the inventory in coming FI27 we expect the inventory to remain anything between 550 to 560 crores only. 1:01:05 1 hour, 1 minute, 5 seconds Uh as a result only 30 crores of inventory will increase in one year time whereas 45 stores will open. So that is because of the inventory optimization 1:01:13 1 hour, 1 minute, 13 seconds which is happening because of all the tech things that we are doing and uh all the manpower that we are hiring. So we are able to improve efficiency on the supply chain on the inventory side. 1:01:23 1 hour, 1 minute, 23 seconds Wonderful to hear this great expectation to build on. Uh second thing I wanted to know that when you talking about 7 to 8% 1:01:31 1 hour, 1 minute, 31 seconds is SSG are we talking it about on a normalized basis or we are thinking we are talking about after Q1 negative 3% 1:01:40 1 hour, 1 minute, 40 seconds is SSG on on after Q13% it's nothing normalized it's just annual level so after minus 3 1:01:48 1 hour, 1 minute, 48 seconds it will be for the entire we will be at 7 to 8%. Fair enough. Last thing from Could you just provide me if we have a 1:01:56 1 hour, 1 minute, 56 seconds size of house what would be the size? 1:02:07 1 hour, 2 minutes, 7 seconds Hello. Hello. Can you come again with a question? 1:02:11 1 hour, 2 minutes, 11 seconds I'm asking if we have any design team and how would the price? So for the entire see uh our buying and 1:02:20 1 hour, 2 minutes, 20 seconds merchandising team comprises of designers, merchandiser, sourcing guys and all together as a collective team they work uh the total team strength of 1:02:29 1 hour, 2 minutes, 29 seconds them is around 70 to 75 people as of now. Okay, that is it from Thank you so much. 1:02:38 1 hour, 2 minutes, 38 seconds Thank you. Thank you. 1:02:42 1 hour, 2 minutes, 42 seconds The last question is from the line of Natic from NB Alpha Plan. Please go ahead. Hi sir, thanks for taking my followup. 1:02:50 1 hour, 2 minutes, 50 seconds So my question is uh when did the warehouse cost or the warehouse rental started kicking in for us? You know when we move from uh 80 lakh ft² to 1.6 lakh 1:02:58 1 hour, 2 minutes, 58 seconds square ft and is all of this in Kolkata itself? 1:03:03 1 hour, 3 minutes, 3 seconds Uh yeah all of them are in Kolkata itself and it started from the July last year. So till Q1 it was 86,000 warehouse 1:03:11 1 hour, 3 minutes, 11 seconds that which we were operating and from July it was 1.86 click square of warehouse which was 1:03:19 1 hour, 3 minutes, 19 seconds and my second question is uh any plans to open warehousing space please apart from west also as you're expanding into the north more now. Yeah. 1:03:30 1 hour, 3 minutes, 30 seconds Yeah. So in terms of planning uh not right now but yeah as we open more stores in the north and the the clusters so we will also have this type of model 1:03:38 1 hour, 3 minutes, 38 seconds where there will be regional distribution centers going ahead once the number of store count increases on the any particular zone. 1:03:55 1 hour, 3 minutes, 55 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand over the conference to management for closing comments. 1:04:06 1 hour, 4 minutes, 6 seconds Thank you all for making it to our quarterly earning call for Q1 FI26. If there's any further queries, please feel free to reach out to Stellar Advisor. 1:04:15 1 hour, 4 minutes, 15 seconds Thank you one and all. Have a nice day. 1:04:18 1 hour, 4 minutes, 18 seconds Thank you. and Beha of Bazar Style Retail Limited concludes this conference.