Go Fashion (India) Limited — Q3 FY26

Go Fashion (India) Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=W2ZXLlEHDfo Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Go Fashion India Limited Q3 and 9 months FY26 earnings conference 0:08 8 seconds call. Before we begin, I would like to remind participants that this conference call may contain forward-looking statements which are based on the 0:16 16 seconds beliefs, opinions, and expectation of the company as of today. These statements are not the guarantees of the future performance and involve risks and 0:25 25 seconds uncertainties that are difficult to predict. As a reminder, all participants line will be in listenonly mode and 0:32 32 seconds there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please 0:40 40 seconds signal an operator by pressing star then zero on your touchtone phone. 0:45 45 seconds Please note that this conference is being recorded. I now hand the conference over to Mr. Gautab Sarawagi, promoter and CEO of Go Fashion India Limited. Thank you and over to you sir. 0:58 58 seconds Yeah, good evening and a warm welcome to everyone present on the call. I have along with me Mr. R moan our chief financial officer and SGA our investor 1:06 1 minute, 6 seconds relation advisors. I hope you have all received our investor deck by now. For those who have not, you can view it on the stock exchange and the company 1:13 1 minute, 13 seconds website. Q3 has been a challenging quarter for the apparel industry mainly due to lower footfalls. During Q3 FI26 1:21 1 minute, 21 seconds revenue stood at 194 crores with gross margins of 464.3%. 1:25 1 minute, 25 seconds IBITA stood at rupees 52 crores and PAD stood at rupees 7 crores. However, the company has demonstrated uh resilience 1:33 1 minute, 33 seconds in its core operational fundamentals such as food price sales ratio, items per transaction and and customer 1:40 1 minute, 40 seconds conversion rates uh which have remained stable reflecting uh continued consumer relevance and disciplined execution. The 1:49 1 minute, 49 seconds overall retail environment remains subdued with discretionary consumption witnessing moderation across categories. 1:55 1 minute, 55 seconds Factory uh factors such as uneven festive demand, selective consumer spending and lower footfalls resulted in 2:02 2 minutes, 2 seconds a slower sales store sales growth during the quarter. The softness was largely industrywide in nature. The company 2:11 2 minutes, 11 seconds continued to prioritize full price sales ratio by maintaining a sales ratio more full price sales ratio more than 95%. 2:18 2 minutes, 18 seconds The discip this disciplined approach helped us maintain uh healthy gross margins at a stable 64.3% in Q3 FI26 2:28 2 minutes, 28 seconds which further highlights the strength of our pricing of our brand. Q3 FI26 was deeply impacted by a slowdown in our LFS 2:35 2 minutes, 35 seconds channel. One of our key LFS partners had a pause of fresh inventory intake across bands which affected our LFS sale by 2:43 2 minutes, 43 seconds 30%. We continue to engage closely with our LFS partners and expect this channel to normalize as we continue to supply uh 2:52 2 minutes, 52 seconds inventory to them. We continue to engage with our LFS partners to ensure that uh these kind of interim issues what we 2:59 2 minutes, 59 seconds have faced we don't face again to drive improved uh same source sales growth. 3:05 3 minutes, 5 seconds The company has undertaken focused initiatives around customer engagement and new product launches. In parallel, we had recently collaborated with a 3:13 3 minutes, 13 seconds leading influencer to showcase our bottom collection and enhancing the brand visibility and relevance among younger a younger audience. Such 3:21 3 minutes, 21 seconds initiatives are expected to support stronger customer traction and improve store level performance over the coming quarters. 3:30 3 minutes, 30 seconds Over the time, we have strengthened our position in the non-leggings category and it has further strengthened. Today a non-legging bottomware category gives us 3:37 3 minutes, 37 seconds a 65% contribution in our sales which in earlier times used to be less than 50%. 3:43 3 minutes, 43 seconds Moving over to the operational metrics of Q3 FI26, our store expans expansion strategy continues to remain calibrated 3:50 3 minutes, 50 seconds and selective with a clear focus on entering high potential markets. 3:55 3 minutes, 55 seconds As of 9 months of FI26, the company has added 49 stores and we expect to close FI26 with a net addition of 60 to 70 4:04 4 minutes, 4 seconds stores. Our approach to network expansion remains very disciplined with emphasis on store level profitability and strengthening band savings. We 4:12 4 minutes, 12 seconds continue to keep a close watch on inventory levels with inventory levels being at 114 days as of December 31st 4:19 4 minutes, 19 seconds 2025. Our inventory uh on the inventory fund we have seen an increase in our inventory for our new concept daily 4:27 4 minutes, 27 seconds concept which had increased our inventory marginally from the earlier times. 4:32 4 minutes, 32 seconds For the full year FI26, we anticipate [clears throat] in inventory levels to stabilize in the range of 100 days, ensuring operational efficiency and healthy working capital management. 4:42 4 minutes, 42 seconds Our strong focus on inventory and working capital efficiency will help us achieve the target of converting more than 50% of our IIDA into pre-India operating cash flows. 4:53 4 minutes, 53 seconds on our new initiatives including our international uh store in Dubai. Our daily and our daily concept are are 5:00 5 minutes demonstrating healthy unit economics in early stages and we remain excited about their performance in the coming quarters. As of now we have opened six 5:08 5 minutes, 8 seconds stores for our daily concept and we look to scale make it about 10 stores by March 2026. 5:16 5 minutes, 16 seconds In line of our commitment to shareholders, we've announced a buyback this quarter of 14 lakh 13,000 shares at a price of 460 rupees per share with a total size of Rs 65 crores. 5:28 5 minutes, 28 seconds Way forward smaller format stores the small size stores has been uh witnessing a sharp decline in performance because 5:37 5 minutes, 37 seconds the today's consumer is looking to shop with in a larger store experience. So in line with that we had we had 5:44 5 minutes, 44 seconds consolidated some of our smaller stores last year and we will look to continue some of our remaining smaller stores in the quarters to come. The company is 5:52 5 minutes, 52 seconds taking a cautious approach on new store expansion with a clear focus on strengthening sales sales growth. Our priority is to improve performance 6:00 6 minutes across the existing store network through better uh execution, enhance customer experience and operational efficiencies. Our immediate objective is 6:08 6 minutes, 8 seconds to move from negative same store to sales growth to flattish and then eventually taking it to low single digit supported by improvements in store level 6:17 6 minutes, 17 seconds productivity and throughut. This will be this will not only be driven by external factors but even by sharper uh execution 6:25 6 minutes, 25 seconds at a store level introducing new products and better engagement with our new audience. 6:31 6 minutes, 31 seconds Second, our foot our footprint expansion will be driven by careful selection of highquality locations through uh picking 6:39 6 minutes, 39 seconds and choosing the right location with strong unit economics. Lastly, recognizing retail is fundamentally a balance sheet business, we remain 6:46 6 minutes, 46 seconds sharply focused on cash conversion, higher inventory turnover and discipline capital allocation ensuring business 6:53 6 minutes, 53 seconds remains profitable and is a very rosy centric business. 7:00 7 minutes With this I would like to hand over the call to Mr. Armo for an update for Q3 and 9 months FI26 results and financials. Thank you. 7:09 7 minutes, 9 seconds Thank you Godam and good evening everyone. First I'll give the uh Q3 financial numbers. Our revenue for the quarter stood at uh rups 195 crores. 7:21 7 minutes, 21 seconds Gross profit stood at rups 125 crores with a gross GB margins of 64.3%. 7:28 7 minutes, 28 seconds Our AIA for the quarter stood at rupes 52 crores. EITA margins is at 26.7%. 7:36 7 minutes, 36 seconds Pat for the quarter stood at 7 crores. Pat margin is at 3.7%. 7:42 7 minutes, 42 seconds Coming to the 9 months FI26 performance revenue is at 642 crores. 7:49 7 minutes, 49 seconds Gross profit stood at 46 crores. GP margin at 63.2. AITA is at 187 crores with AITA margin at 29.2%. 8:00 8 minutes PAT stood at 51 crores with a PA margin of 8%. ROC and ROE excluding India's impact as on 9 months. FI26 stood at 8:10 8 minutes, 10 seconds 13.1% and 10.3% respectively. Cash and cash equivalent stood at 256 crores as 8:17 8 minutes, 17 seconds on 31st December 202. With this now we'll open the floor for the questions and answers. 8:23 8 minutes, 23 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 touchstone 8:32 8 minutes, 32 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 8:41 8 minutes, 41 seconds question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 8:54 8 minutes, 54 seconds The first question is from the line of Devanchu Bansil from MK Global. Please go ahead. 9:01 9 minutes, 1 second Yes. Hi Gautam. Uh thanks for taking uh my questions. Uh firstly sir wanted to understand uh how should we read uh your 9:09 9 minutes, 9 seconds SSG performance. Uh we were flat for a fairly long period of time but uh now reporting in the negative trajectory for last three quarters. 9:19 9 minutes, 19 seconds uh though you mentioned that from a retail parameter perspective uh footfall is the only challenge. Um but my concern 9:27 9 minutes, 27 seconds was that even footfall uh we are attributing it to weak consumption but is there a certain level of deterioration of brand strength so that 9:35 9 minutes, 35 seconds it is not attracting the relevant or amount of footfall. So uh your color on this will be very helpful. 9:43 9 minutes, 43 seconds Yeah. No, I think see Danchi from a brand perspective I don't see that uh yes we want to as a brand uh increase 9:51 9 minutes, 51 seconds our younger audience uh as a customer base but from a brand strength and relevance perspective I think uh we are 9:57 9 minutes, 57 seconds very much there see from a product perspective if you see today 65% of our sales are coming from the other value 10:05 10 minutes, 5 seconds added products and that's how the market the bottom market is heading in direction so I think from a from a brand relevance and product relevance 10:13 10 minutes, 13 seconds perspective I don't think is an issue. I think uh the the overall footfalls in Q Q3 has been very weak. See we've done 10:21 10 minutes, 21 seconds many channel checks also and we have seen uh similar uh kind of trajectory in 10:27 10 minutes, 27 seconds other places as well. Uh so the overall macro scenario obviously has had to do a lot the footballs issue has had to do a lot with our SSG. 10:37 10 minutes, 37 seconds uh other thing which I mentioned in my speech uh our SSG in are in a very small so see today what has happened because 10:45 10 minutes, 45 seconds the bottomware market has become a wider market with so many products the very small stores from an experienced perspective uh becomes a little bit of 10:53 10 minutes, 53 seconds an issue and we have seen softer and larger degrowth in SSD in those very small stores. 11:01 11 minutes, 1 second So I think the larger attribute to a negative SSD is obviously the the overall macro scenario and footfall and these small stores which have degrown a 11:10 11 minutes, 10 seconds lot more than normal because of the size. 11:14 11 minutes, 14 seconds Uh fair enough Gotham but uh this footfall uh issue uh is it also related to consumers sort of preferring to show 11:23 11 minutes, 23 seconds up more online or via quickcommerce channels uh where our presence is very limited. Right. So are you also thinking 11:31 11 minutes, 31 seconds on ramping up our presence in these channels because uh footfalls etc may remain weak right. So if the consumer preference is shifting towards other 11:39 11 minutes, 39 seconds channels uh or maybe uh through formats where they are getting the entire wardrobe rather than preferring to go 11:48 11 minutes, 48 seconds for a standalone bottom wear store. So how are we sort of focusing on capturing such consumption of agents? Yeah, see in 11:57 11 minutes, 57 seconds fact uh yeah I mean rightly said Danchu I think look online and quickcommerce has always done well and for us because we are having a very small contribution 12:05 12 minutes, 5 seconds so that's a channel for us to build so our online channel has seen decent traction our quickcommerce also we have been live on blinket and zero and we've 12:12 12 minutes, 12 seconds seen very good traction there so I think as that channel picks up speed for the apparel category our share also in the 12:19 12 minutes, 19 seconds ecom space will organically grow so from an ecom and quickcommerce perspective we are there present with our sales and 12:27 12 minutes, 27 seconds inventory across all channels. I think it's just a matter of time once it picks up speed it will also start reflecting in our revenue numbers. 12:36 12 minutes, 36 seconds Fair enough. Fair enough. And uh lastly got them few uh clarifications on the MFS side uh our re revenue mix has 12:46 12 minutes, 46 seconds improved uh towards EBU right so it is 80% EBU this time around versus 74% last year. uh the gross margin for this 12:55 12 minutes, 55 seconds channel is about uh in my understanding 3540% better versus the NFS channel right but if we see from a companywide 13:05 13 minutes, 5 seconds perspective uh this should have reflected in 250 300 bits better gross margin on a bio basis but this is flat 13:13 13 minutes, 13 seconds right in this quarter so is this largely due to deterioration in gross margin profile of LFS channel as well so what explains that so uh Yeah. 13:23 13 minutes, 23 seconds Yeah. See, we are also studying that and I will come back to you on that. But at the outset when we we are looking at it right now. Last year we had started EOS 13:32 13 minutes, 32 seconds is a little late at the EO level. This time we had started a a little earlier where usually we start. Last year our 13:39 13 minutes, 39 seconds USS start date itself was late. So because the quarter 3 had a weak 10 days 13:45 13 minutes, 45 seconds of uh more USS week that could have had an impact on the EBO gross margins which 13:54 13 minutes, 54 seconds is not reflecting in the upside of the overall company gross margins because of low LSS. We anyway studying this we'll come back to you with more clarity 14:02 14 minutes, 2 seconds around it but at the outset it looks uh because of the start of early USS which is by a week 10 days. 14:10 14 minutes, 10 seconds Okay. And uh from a model perspective is your LFS sor based or uh as in the partners can return the inventory in 14:19 14 minutes, 19 seconds case they are closing the store or how is it? 14:21 14 minutes, 21 seconds Yeah. So so usually it is like this uh so it is based on sor. So what we do as per India standard is on because it's on 14:30 14 minutes, 30 seconds sor uh we show it as dattors in our books. We show it as sale when we dispatch the goods. So it is in our 14:38 14 minutes, 38 seconds books but because it is sor as per India's 115 we have to put a provision for sales return based on historical trends. So whatever 14:47 14 minutes, 47 seconds is the last three years of historical trends of return we provide it on a quarterly basis. So the provision of 14:54 14 minutes, 54 seconds sales return is inbuilt for any stock which is coming back through the year. 15:00 15 minutes No that's fair but what happens in terms of store closures right. So we have had so yeah so if Yeah. Yeah. Yeah. For example, yes, your question is right. 15:08 15 minutes, 8 seconds Suppose today an LFS decides to shut 20 stores. Uh those 20 stores stock will come return and it'll be booked as a 15:16 15 minutes, 16 seconds sale return. But what happens? Uh such uh increase in return will reflect in 15:23 15 minutes, 23 seconds the next year's provisioning because you tend to usually take a three-year average of for a provision of sales return perspective. But to your question 15:32 15 minutes, 32 seconds uh if NFS shuts 30 40 stores or whatever stores the stock coming back will be shown as a sales letter. 15:40 15 minutes, 40 seconds Fair enough. Uh thanks for taking my question. Sorry I'm sorry. Thank you. Thank you Danu. 15:47 15 minutes, 47 seconds Participants who wish to ask a question you may press star and one at this time. 15:52 15 minutes, 52 seconds The next question is from the line of Gorav Jugani from JM Financial. Please go ahead. 16:00 16 minutes Uh uh hi thank you for taking my question. Uh my first question is again with regards to the LFS channel only. 16:05 16 minutes, 5 seconds This quarter we have seen uh 137 odd LFS getting shut QQ. So one what is uh you 16:13 16 minutes, 13 seconds know uh what was there anything specific this quarter that we saw such large closures and uh how do we look for expansion in LFS going ahead? 16:24 16 minutes, 24 seconds Yeah. So see uh Gorov this uh stores are largely one of our key LFS partners they have changed the format of that store 16:31 16 minutes, 31 seconds and they changed it they rebranded and changed the format of the store. So when that happened uh all the external brands 16:39 16 minutes, 39 seconds had to move out of that of that of those particular stores including us. So the reason we have exited this role is 16:46 16 minutes, 46 seconds because uh that key partner had decided to change the format uh and uh and 16:52 16 minutes, 52 seconds rebrand it. Now moving forward uh LFS expansion from a store edition perspective uh we will whenever we do 17:00 17 minutes get an opportunity for adding new stores we will selectively choose which location makes sense and then we will select uh like in pantaloons we have 17:08 17 minutes, 8 seconds been expanding and adding stores over the last few quarters. Even in Reliance we are getting new stores. So selectively on the basis of what is being proposed to us we will select 17:17 17 minutes, 17 seconds those locations and move forward. As far as quarter 3 is concerned our quarter 3 revenues were deeply impacted because 17:25 17 minutes, 25 seconds for one of our key LFS partners uh we were not able to dispatch stock for about close to 45 days. uh they were not 17:34 17 minutes, 34 seconds taking inventory across brands for a period of 45 days and because of that we were not able to dispatch stock and that 17:41 17 minutes, 41 seconds is why we've lost 45 days of dispatches which has resulted in 30% drop drop in sales and that's why our Q3 numbers 17:49 17 minutes, 49 seconds overall numbers have got deeply impacted because of this dispatch issue which happened in November and little bit of December as well 17:57 17 minutes, 57 seconds so can we expect this to you know come back in Q4 in from uh because of 18:06 18 minutes, 6 seconds you see not really because uh see what happened that one and a half months which we have lost your act see what happens how do we recognize stock at an 18:15 18 minutes, 15 seconds LFS store right we keep a base stock we decide a maximum stock level now based on the maximum stock level and the 18:23 18 minutes, 23 seconds closing stock at an LFS store you're basically only sending the difference at the at so in January or February it's 18:31 18 minutes, 31 seconds not that you're going to be sending additional stock. You're going to be sending stock only to the extent of the maximum stock level. So the 45 days what 18:40 18 minutes, 40 seconds we have missed out that increase in number will not see in January and February. 18:48 18 minutes, 48 seconds But if that 45 days we have missed out uh they would have you know again sold. 18:52 18 minutes, 52 seconds Yeah I understand but see ours is a you see lot of ours is a replenishment business. the sales will happen you keep replenishing the your sales will happen 19:00 19 minutes you keep replenishing the uh store right but your maximum based off is only to a certain level so if you have not 19:07 19 minutes, 7 seconds replenish 45 days you have you you have to a large extent lost out on a lot of secondary sales now we will not be able 19:14 19 minutes, 14 seconds to recover those secondary sales in the coming months so technically you're sending only that much stock which is there in the base stock 19:23 19 minutes, 23 seconds I haven't gotten just uh some reading on thating part so how many LFS now we can model into you know open uh at least for 19:32 19 minutes, 32 seconds Q4 and the rest of the the couple of years going ahead. 19:35 19 minutes, 35 seconds See it's difficult to say uh it's difficult to give a guidance on how many LFS stores we will be opening next year. 19:41 19 minutes, 41 seconds It all depends on how our partners expand and in that proposal of expansion what we think would be relevant. So it's 19:48 19 minutes, 48 seconds going to be very subjective to what is being proposed to us. See sometimes a partner can uh decide to add 70 stores 19:55 19 minutes, 55 seconds 80 stores but certain key markets you wouldn't want to be part of that market. 20:00 20 minutes So it's very subjective to what is being proposed to us. So I think that we will be able to only know next year as we are 20:07 20 minutes, 7 seconds proposed with the list of stores and goam coming back to the EOS are you seeing any recovery uh in the momentum 20:15 20 minutes, 15 seconds uh of any sorts in the uh the a month past five January to indicate you know that from a negative 4 and a half% SSG 20:23 20 minutes, 23 seconds that you're witnessing deeply probably uh you will go flattish uh of that sorts or it continues to remain as it was I 20:32 20 minutes, 32 seconds Think I think see we seeing two trends Goro I think what is happening is our midsize stores our stores which are slightly higher than 500 ft 600 ft see 20:42 20 minutes, 42 seconds because see our product range has increased right 65% of our sales are coming from the non-leggings category the value added categories so today the 20:50 20 minutes, 50 seconds consumer wants display and experience of shopping when you're seeing so many products so we are seeing two trends right uh the smaller stores the very 20:58 20 minutes, 58 seconds small stores are obviously seeing a decline because we are not able to display all the new products. The slightly larger stores which are the 600 21:06 21 minutes, 6 seconds 700 ft stores, they're seeing good increase. Some of the stores are actually showing very good positive SSD as well. So I think over a period of 21:14 21 minutes, 14 seconds time as our small stores uh phase out of the system and the newer stores what we cautiously add becomes of a relevant 21:22 21 minutes, 22 seconds size you will also see improvement in SSD from that perspective. But largely the improvement of SSD is going to be obviously relating footfalls. So I think 21:30 21 minutes, 30 seconds both these things hand in hand will play a very important role in the recovery of the SSD from being negative to a mids single digit of positive. 21:40 21 minutes, 40 seconds But Gotham in this scenario that you know the completion uh then there could be possible drag on the margins because you know cost will keep on escalating at 21:49 21 minutes, 49 seconds a certain pace. So would it be fair to assume that you know at least uh over the next three four quarters you might see a decline in the AITA margin just because of the negative leverage. 22:00 22 minutes See I'll tell you what we are planning to do as a company right now we are being very careful with expansion. So right now we are prioritized and 22:07 22 minutes, 7 seconds thinking how do we get the SSD back to positive. Today we are at minus 5%. Our aim is to get to mid single digit to 5%. 22:15 22 minutes, 15 seconds Right? So from minus 5 we have to take it to plus 5. So all our efforts right now as a company is to see how we can fix this and get this into posit. Of 22:23 22 minutes, 23 seconds course the overall footfalls is going to make a very big uh contribution to this but we are also going to be putting in smaller efforts at a at new products uh 22:32 22 minutes, 32 seconds looking better looking stores to fuel that. So our first priority over the next one year is to definitely put 22:39 22 minutes, 39 seconds entire focus on improving SSC and maintaining margins. So on the expansion fund we are going to be very selective in our expansion in the coming quarters. 22:48 22 minutes, 48 seconds So that because of expansion there should not be a IDIA hit in the P&L because what happens when we areing new 22:56 22 minutes, 56 seconds stores immature stores which are not matured they are a load on the P&L because you're paying the full rent and salaries without the store being 23:05 23 minutes, 5 seconds matured. So we are taking one step back and saying look hey we will be very careful in our expansion not go overboard with the expansion so that 23:12 23 minutes, 12 seconds margins don't get compromised during this recovery period. 23:17 23 minutes, 17 seconds Sure. So then can we expect the store opening to even come down next year in the APO format versus the 6070 that we're expecting this year? 23:27 23 minutes, 27 seconds See uh honestly gor we are not guiding we are not giving uh unlike like earlier times like earlier times we used to be very clear with our guidance on how many 23:34 23 minutes, 34 seconds store openings this time we have seen that our margins because of uh flattish by because of negative margins have 23:42 23 minutes, 42 seconds taken a hit. So and as a management we have taken a conscious call to slow down the store expansion and do it selectively. See that does not mean that 23:50 23 minutes, 50 seconds we will not expand. See wherever we are getting a very good opportunity and where we should feel that we should be there we will also expand. But we are 23:56 23 minutes, 56 seconds not setting ourselves a target. We at during this recovery period of taking SSG from minus 5% to plus 5%. We don't 24:05 24 minutes, 5 seconds want to compromise on the health of the PL. Got it. Go. Thank you. And that's okay. 24:13 24 minutes, 13 seconds Thank you. The next question is from the line of Ankit Kadia from Pillar Capital. Please go ahead. 24:20 24 minutes, 20 seconds Uh Gotham just continuing from the previous question. Is it fair to assume next year stores opening could be around you know sub 50 stores or even lower 24:28 24 minutes, 28 seconds than that because this year with 60 70 stores also your margins have been hit and next year also the recovery is question mark. So definitely the stores opening would be below 50. 24:39 24 minutes, 39 seconds Um so Ankit I know where you're coming from and honestly it's very difficult for me to give a guidance right now. It 24:46 24 minutes, 46 seconds all depends uh when does the SSG pick up speed right and suppose if things go well and next year by I'm just giving a 24:54 24 minutes, 54 seconds hypothetical example by next year middle or maybe the second quarter we come back to positive SNG then maybe we we also start increasing our footprint as well 25:02 25 minutes, 2 seconds so it all depends on the recovery of the SNC so it's very difficult to give a number for next year whether it will be below 50 or above 50 it's very difficult 25:10 25 minutes, 10 seconds to predict but as management we feel that we will not go to an extreme of not opening also like for example if we get 25:19 25 minutes, 19 seconds a good mall which is coming up in in a Mumbai or a Bangalore or any other city where it's a prospective mall or very prospective high street we will definitely go and open there but we will 25:27 25 minutes, 27 seconds not go overboard and try to open everywhere also at the same time so we keep a good blend so given that it take 3 months to 6 25:35 25 minutes, 35 seconds months to open a store and today with you at minus 5 6% like for like growth next 6 months store opening will be 25:43 25 minutes, 43 seconds muted at least that we can assume Yes, it will be muted that that but so it's difficult to give a number but I can tell you it will be muted for sure 25:51 25 minutes, 51 seconds because we're going to be very cautious in our approach. 25:53 25 minutes, 53 seconds Sure. Uh second is on also sorry just extending to see we'll also be doing a lot of relocation market. So what will happen sometimes 26:02 26 minutes, 2 seconds like I explained to you right we have some sometimes very small stores which are not doing well today the consumer wants a slightly better experience. So in the same market we might start the 26:10 26 minutes, 10 seconds older store and open a new store. there might be some V locations which will have a positive impact on the revenue number as well. 26:18 26 minutes, 18 seconds uh Gotham we would appreciate if you can share the uh area of the stores today you know at a 800 900 store network we 26:26 26 minutes, 26 seconds don't know what is the area given that bulk of the store closers of smaller stores are behind us and now we opening 26:33 26 minutes, 33 seconds yeah so what I'll what I'll do now in the next probably after this earnings call once we have calibrated the entire data uh we will share the data with 26:42 26 minutes, 42 seconds everyone key how many stores are there which are the smaller stores so everyone has clarity on that and how How many more store closures are remaining for the smaller stores and can 26:50 26 minutes, 50 seconds you just share uh the decline you are seen in the smaller stores? 26:55 26 minutes, 55 seconds Yeah, we will share first we are calibrating the data. So once we have calibrated the data we'll be happy to share. 27:02 27 minutes, 2 seconds Okay. No, because on the previous question you said that the smaller stores are significantly uh negative. 27:08 27 minutes, 8 seconds SSG are declining. So at least some data you would have to pass that comment right. See we have seen see we've seen no I'll tell you like for example where our company average level is minus 5%. 27:19 27 minutes, 19 seconds The smaller stores we have seen a slightly higher deg growth of more than 9 10% efficiency and sometimes numbers are not fully respected. Even when we 27:28 27 minutes, 28 seconds are visiting stores and when we are interacting with the consumers the consumer feels that okay in a slightly larger store of a 600 500 600 ft the 27:37 27 minutes, 37 seconds newer bottles the newer style are better on display. So it becomes easier to shop. In a very compact store of 200 square ft, it becomes very it it becomes 27:46 27 minutes, 46 seconds very difficult to display all the items to the consumer. So from an experienced personal perspective also it hampers. 27:55 27 minutes, 55 seconds No, I agree because your core mode was a smaller store, high throughput, high margin business. Now that is getting disrupted because your average store 28:03 28 minutes, 3 seconds size is becoming 600 at least incremental store. See the no no see uh okay the unit economics of a 600 ft² 28:10 28 minutes, 10 seconds store and a 300 ft² store is not different even a 600 ft store from a unit economic perspect perspective comes 28:17 28 minutes, 17 seconds under the same category as well so it's not that my EU unit economics will go down because I'm opening a 500 600 ft 28:24 28 minutes, 24 seconds store see if today I would have gone and opened say 2,000 3,000 ft² store that's a completely different unit economics 28:32 28 minutes, 32 seconds but stores which are sub0 ft a similar unit for economics for a 200 ft² also and for a 55600 also 28:40 28 minutes, 40 seconds at least last 3 years since uh we started opening bigger stores sales per square feet has declined. Um if you see 28:48 28 minutes, 48 seconds uh now that could be due to market environment or it could be due to loss of market share or could be due to loss of footfalls. It could be either of it 28:55 28 minutes, 55 seconds but at least on the face of it we have seen a decline in sales per square feet. 29:00 29 minutes So uh yeah so your question is right uncle. So the sales per square feet would be more because of the footfalls in the overall macro scenario. It is not 29:07 29 minutes, 7 seconds because we have gone into a larger store and the unit economics are not as good as a smaller store. It's not because of that. 29:14 29 minutes, 14 seconds Sure. Uh my second question is on LFS. U you made a comment that the one of the large retailers is switching the stores 29:22 29 minutes, 22 seconds which had third party brands to private label brand. Now um correct do we have visibility that uh next year that won't 29:30 29 minutes, 30 seconds happen from the retailer or it's going to continue and we have been said that few hundred more stores could uh be closed in the medium term. 29:40 29 minutes, 40 seconds We are we are also trying to get that clarity on it but honestly if you ask me the truth I don't know uh can it happen 29:48 29 minutes, 48 seconds next year maybe yes so we are also speaking to our partner and trying to get that clarity so that we are also 29:54 29 minutes, 54 seconds prepared uh on if there are going to be such uh you know format changes at their end we will know about it so uh we are 30:03 30 minutes, 3 seconds trying to find out the minute you know you know I have some clarity on that maybe in the next earnings call or maybe in between that I'll definitely guide everyone on that. 30:12 30 minutes, 12 seconds Sure. And uh you know on the inventory part right uh our gross margins have expanded but uh 30:21 30 minutes, 21 seconds you know with the change in format and other things uh how are the commodity prices placed today and uh with the GST 30:31 30 minutes, 31 seconds you know pricing being more favorable at least for higher price points about thousand rupee products uh going forward 30:39 30 minutes, 39 seconds do you feel the need to reduce the discounting uh which we are giving to the consumer or the new labels have come 30:46 30 minutes, 46 seconds up uh how will that pricing change and how are the commodity prices uh honestly uh Ankit for the you're 30:55 30 minutes, 55 seconds talking about the GSC reduction right those products you're talking about right yes yeah so we were uh we were giving the benefit to the consumer we have not 31:03 31 minutes, 3 seconds changed our MRP for such products so we are continuing to give the benefit to the consumer uh there might be time 31:12 31 minutes, 12 seconds where we feel instead of taking a price hike for those products we just removed the discount what we were giving for the 31:18 31 minutes, 18 seconds GST benefit. So in short we have not taken the price hike but we'll get the benefit of that eventually but when we are going to start doing it we are we are deciding it internally once. 31:30 31 minutes, 30 seconds So we to answer your question we are not changing the MRP of those products where the GST was reduced wherever the GST was reduced we were passing on to the 31:38 31 minutes, 38 seconds consumer eventually instead of taking a price hike of those products which were due we would just remove that benefit without taking a price hike. 31:49 31 minutes, 49 seconds And in the other products sub thousands rupees where the discount was not available uh 5% remains 5%. Where are 31:57 31 minutes, 57 seconds you considering picking up price increase? 32:00 32 minutes No no not right. See uh uh uncle we are in a volume business right. So our entire company focus is to drive volumes. I have reviewed the products 32:09 32 minutes, 9 seconds under thousand. We have made very small correction in certain products where we have increased the pricing because it was under price to begin with but those 32:18 32 minutes, 18 seconds are very very few products largely we have not touched anything uh under thousand because we feel we are well priced. 32:26 32 minutes, 26 seconds Uh last question is on the&p spend. uh do you think uh at this point of time you need to be aggressive in ENTP 32:34 32 minutes, 34 seconds because previously you always said when demand is not there you don't want to spend because it is demand is not there consumers not going to walk in but has 32:42 32 minutes, 42 seconds that uh you know mind shifted that you have to go aggressive at this point see I think I think no I don't think we 32:50 32 minutes, 50 seconds have to spend more honestly so I think that logic of 2% of revenue still holds good this time it shows a little more 32:58 32 minutes, 58 seconds because our revenue this year has stayed flat but we had marketing budgets allocated for a growth revenue right so that's why as a percentage of of revenue 33:06 33 minutes, 6 seconds so slightly so higher but from how much we want to spend I don't think that number will increase we we are just 33:13 33 minutes, 13 seconds transitioning our digital marketing to a very different methodology where we are reaching out to uh the younger audience 33:21 33 minutes, 21 seconds and the millennial audience by different different type of personalized marketing see our marketing team to begin with was 33:28 33 minutes, 28 seconds a very old school orthodox type of marketing. It now changed over a period where it started pivoting towards more and more digital. So I think the way of 33:37 33 minutes, 37 seconds marketing is going to evolve but from a spend perspective I don't see our spend increasing. We used to spend two 2 and a 33:44 33 minutes, 44 seconds half% or two two to 2.2% we going to be around that number. So as a as a quantum of spend it's not going to increase. 33:52 33 minutes, 52 seconds Sure. And uh can I ask another question since I've taken a lot of time? Um it's just not the top it's just not topware given that bottomware is under pressure 34:00 34 minutes which is a pop bread and butter. Do you think it's prudent now for you to continue to expand topware uh you know aggressively or concentrate more on bottomware? 34:11 34 minutes, 11 seconds No no see uh see I'll tell you the top pair project what we have done the everyday concept that's just a pilot and 34:19 34 minutes, 19 seconds I cannot see the pilot needs its time right so now we've opened six stores so we that will take its own journey and 34:26 34 minutes, 26 seconds that is that decision making and that pilot is independent of bottom so we are not going to speed up that in any way uh 34:35 34 minutes, 35 seconds to show growth so that that pilot will go in its full speed uh It's going to take some time and it's for the future. 34:43 34 minutes, 43 seconds As far as bottom is concerned, see we are very very bullish on the on the on the category. Yes, this has been a time this has been a very tough time for the 34:51 34 minutes, 51 seconds category and the brand where we see headwind and the it's not reflecting in numbers but our conviction in bottomware is very much there. Even our recent 34:59 34 minutes, 59 seconds technopath study also emphasizes that how large that category is. So even from a short-term, midterm and long-term 35:06 35 minutes, 6 seconds perspective, our entire energy and strategy for bottom there is very much intact 35:13 35 minutes, 13 seconds draw over the next couple of so so over the next couple of years anit if you have to show growth and the numbers have to come it has to come from bottom 35:20 35 minutes, 20 seconds there. We cannot expect the pilot to take care of the gap of growth. The pilot is there and it'll take the pilot 35:28 35 minutes, 28 seconds in its own sweet time. We cannot we cannot rush the pilot otherwise we'll make we won't do justice to that project as well. Bottom is our main business and 35:36 35 minutes, 36 seconds we'll fix it and we'll bring it to we very bullish. Noted noted. Thank you Gotham. Yeah. 35:43 35 minutes, 43 seconds Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference please limit your 35:52 35 minutes, 52 seconds question to two per participant. The next question is from the line of Vashnavi Mandana from Anandrai. Please go ahead. 36:01 36 minutes, 1 second Hi uh thank you for taking my question. 36:03 36 minutes, 3 seconds I just wanted to understand that how much of this SSG decline can be attributed to the entire store size issue that we faced because you said 36:11 36 minutes, 11 seconds that the uh smaller stores saw a relatively negative SSG or rather the larger store saw better SSG performance 36:19 36 minutes, 19 seconds versus the footfall in general being weaker. 36:23 36 minutes, 23 seconds See I would personally very it's very difficult to quantify it. I would say this largely this SSG is negative because of the slowness and footfall and 36:32 36 minutes, 32 seconds the overall uh weak environment. It's very difficult to quantify but I would put it more towards the overall macro macro scenario. 36:41 36 minutes, 41 seconds So what I'm trying to get to is is that let's say in H2 right where we I think almost shut almost 40 to H2 FI25 we shot 36:50 36 minutes, 50 seconds I think almost 40 to 50 of the smaller store formats we gave us we we said that the store closures are almost done but 36:58 36 minutes, 58 seconds again now in this quarter we're coming up and we're saying that we're still seeing the performance of the smaller stores not being up to the mark which is 37:05 37 minutes, 5 seconds why we're shutting them again so I'm just trying to understand where are we coming in this entire buy a small store, large store, medium store and how should 37:13 37 minutes, 13 seconds we look at this in terms of our performance as well. 37:17 37 minutes, 17 seconds See uh the stores what we shut last year uh yes we did shut those stores and we have seen that when we shut those 37:25 37 minutes, 25 seconds smaller stores the revenue moved to the nearby larger stores. So we saw that it didn't have a very big impact on SSD because 40 stores as a base on such a 37:34 37 minutes, 34 seconds large number of stores will not move the SSD needle so much. Now as far as uh how many stores we are going to be shutting 37:41 37 minutes, 41 seconds uh we are calibrating the data of the smaller stores because we can't just shut those stores just like that. We'll have to also see when are the resale 37:48 37 minutes, 48 seconds renewals coming up. So as we get more clarity on that we'll definitely guide the market on how how many such stores in the smaller bucket is there and how 37:57 37 minutes, 57 seconds many of the smaller stores will be uh shutting in the short term. We will also guide that once we have calibrated the entire data. So and uh from your end 38:06 38 minutes, 6 seconds you'll also have clarity on what's happening. 38:09 38 minutes, 9 seconds All right. And one more thing if uh we can also get some more inputs in terms of how does the unit economics etc move for the slightly larger stores like what 38:18 38 minutes, 18 seconds the earlier participant was also suggesting uh because when very similar very similar veh and I'll 38:26 38 minutes, 26 seconds tell you why see you understand in in a I'll tell you why a 500 600 is very similar to a 2003 300 I'll tell you why 38:33 38 minutes, 33 seconds when we sign a store we sign on a rent to revenue ratio so if the rent to revenue ratio is in our budget whether 38:42 38 minutes, 42 seconds it's a 600 ft² store or whether it's a 200 ft² store your AIDA prior to staff expenses will be the same. Now coming to 38:50 38 minutes, 50 seconds staff expenses because that is the real difference between a 600 ft² store and a 200 ft store. In a 600 and a 200 the 38:58 38 minutes, 58 seconds number of people you employ for managing the store are the same. Your operating expenses also are pretty much the same. 39:05 39 minutes, 5 seconds So a 600 ft² store from a unit economics delivers the same unit economics what a 200 will deliver. The difference always 39:12 39 minutes, 12 seconds what happens is when you go past 1,000 square ft suppose you open a 1500 ft² the unit economics dramatically changes 39:20 39 minutes, 20 seconds because the electricity cost dramatically goes up. The number number of people you're going to be keeping in the store dramatically goes up. Then you'll have to keep separate 39:28 39 minutes, 28 seconds housekeeping stuff. the the entire mathematics on employee cost dramatically changes when it crosses 39:34 39 minutes, 34 seconds to,200 ft²,300 ft² sub,000 square ft² you're keeping the same number of people what you're keeping in a 2003 300 ft. So 39:43 39 minutes, 43 seconds the difference is really those other operating expenses in which the staff cost is the highest. 39:50 39 minutes, 50 seconds Okay, understood. Also one last question in terms of the newer stores that we're opening which are slightly larger in the um size are they in the again in the 39:59 39 minutes, 59 seconds nearby vicinity of the smaller stores or are we targeting different clusters or in the same cluster? 40:04 40 minutes, 4 seconds No no see that's that's see one more thing is see uh definitely during these times for SSD so we are ensuring that we are not giving any room for 40:12 40 minutes, 12 seconds cannibalization. So now when we are opening stores we are very careful that it's in the we're trying to open in different clusters where even the smallest remote chance of 40:21 40 minutes, 21 seconds cannibalization should not happen and that is why we are extremely selective and cautious in our approach of of sorop. 40:28 40 minutes, 28 seconds Okay. All right. Thank you. 40:31 40 minutes, 31 seconds Thank you ladies and gentlemen. You are requested to restrict your question to two per participant. The next question 40:39 40 minutes, 39 seconds is from the line of PRA Junjunwala from LR Securities. Please go ahead. 40:45 40 minutes, 45 seconds Thank you for the opportunity. Um I just wanted to understand your revenue mix of this quarter you have given bifocation 40:53 40 minutes, 53 seconds wherein um uh from non-legging sales is around 65%. 40:59 40 minutes, 59 seconds uh correct as a as a category uh that category is not seeing that kind of difficult time 41:06 41 minutes, 6 seconds in our opinion. Uh so I wanted to understand what is which which category is seeing slowdown or is it an overall 41:14 41 minutes, 14 seconds all categories are seeing decline at the same time or what is how 41:22 41 minutes, 22 seconds yeah I'll tell you I'll tell so P I'll tell you see the product mix change has uh very little to do with the negative 41:30 41 minutes, 30 seconds SSG and I'll tell you why when precoid when we had SSG of more than 15% of we 41:37 41 minutes, 37 seconds were double decency. Even that time the product mix was evolving and changing. 41:42 41 minutes, 42 seconds See product mix is something which evolves even when your SSG is positive or negative. So that has nothing to do with that. The real reflection of SSG 41:51 41 minutes, 51 seconds being negative is more to do with the footfalls. 41:54 41 minutes, 54 seconds It the main reason is that it is not because this product has gone down and this product has slightly improved that it is reflecting a negative SSG. The 42:03 42 minutes, 3 seconds main reason of Sency decline is because of of the decline in portfall. Suppose if we are having minus5% SSG today our 42:11 42 minutes, 11 seconds footfalls are down by minus 5%. So what directly correlates with ne negative SSG is the footfalls and not the product mix 42:19 42 minutes, 19 seconds because what we've seen in the past even in the good times when we had doubledigit SSG during precoid our 42:26 42 minutes, 26 seconds legging through our contribution was falling at that point of time and our other product sales was improving that was something which we had envisioned 42:34 42 minutes, 34 seconds that was anyways going to happen that legging as a category is going to continue to decline even in the future. 42:43 42 minutes, 43 seconds Okay. Um understood. And uh but then I'm just trying to understand because other apparel players are not have not been 42:51 42 minutes, 51 seconds declining every quarter the way you have been declining. So um and football uh in this quarter 42:59 42 minutes, 59 seconds especially given that you know uh the season has been decent and um uh you 43:06 43 minutes, 6 seconds know the foot uh the footballs have not been a complaint by many other categories in deficiency 43:12 43 minutes, 12 seconds u segment as well. So why would football be a problem for you for more than three quarters now? 43:21 43 minutes, 21 seconds See uh difficult to answer this question but see in quarter three of course our numbers are weak right so the first thing what we do is we do some channel 43:28 43 minutes, 28 seconds checks so we have seen uh we have seen a decline everywhere but the women's category we've seen a bigger decline and 43:35 43 minutes, 35 seconds this I'm saying about in general overall women's apparel irrespective of top wear irrespective of bottom wear irrespective of whether it's ethnic western or fusion 43:43 43 minutes, 43 seconds whatever little bit channel checks as a company we've done we've seen slowness everywhere 43:50 43 minutes, 50 seconds also isn't Any strategy change with respect to ownership of stores because you you all your stores are on your 43:57 43 minutes, 57 seconds books and any franchisee options that you are evaluating so that uh employ 44:05 44 minutes, 5 seconds see the the PCO model works very well for us uh and it gives us better control from a hygiene perspective also we've realized that Poco stores deliver a much 44:14 44 minutes, 14 seconds better customer experience because we have SOPs in place. So for us we are largely going to go to the coco route. 44:22 44 minutes, 22 seconds Uh franchisee route we are not against but we will do franchises very selectively in in markets where we are not having operational control. Very similar to what I have narrated earlier. 44:32 44 minutes, 32 seconds From a uh Rosi perspective see as the business improves once growth comes back onto the tables the margins improve automatically the ROSI will start 44:40 44 minutes, 40 seconds showing a better figure than what it is currently. But from a strategy of coco versus fo I feel we are going to 44:48 44 minutes, 48 seconds continue with the coco because that's a model that works for us because sometimes we feel from a coco perspective the store experience the 44:56 44 minutes, 56 seconds store look everything a look and feel everything can be well maintained in a cocoa model. 45:02 45 minutes, 2 seconds Understood. Thank you and all the best ladies and gentlemen. In order to ensure 45:09 45 minutes, 9 seconds that the management is able to answer all the questions from the participants, please limit your question to two per participant. 45:17 45 minutes, 17 seconds The next question is from the line of Risham Ma from Green Edge Wealth. Please go ahead. 45:25 45 minutes, 25 seconds Yeah. Um thank you for the opportunity. 45:27 45 minutes, 27 seconds So uh the first question is basically on the market share data as per the latest uh Technopac report. Can you call out what's your market share? 45:37 45 minutes, 37 seconds Yeah. So uh the report says that we are having the same 8% market share in FI24 what we had earlier and uh it shows that 45:45 45 minutes, 45 seconds the branded market for bottomware is about uh it's a 10,000 cr branded bottomware market as of 2024 in which we have a uh 8% market share. 45:57 45 minutes, 57 seconds Okay. And uh uh can you just call out the initiatives taken uh you know to drive footfalls uh as far as customer engagement goes. 46:09 46 minutes, 9 seconds Uh see I think uh driving footfalls to a very large extent is is determined on the consumer sentiment. So that's not 46:17 46 minutes, 17 seconds very much in our hands. So what best we can do from our end is to ensure that our product mix is good, our stores are well located and our marketing uh our 46:26 46 minutes, 26 seconds digital marketing is strong. These type of levers are in our control but the overall consumer sentiment which is there in the market is something which 46:35 46 minutes, 35 seconds we'll have to wait and watch how that improves. these initiatives of just ensuring that we have the right product mix and we're doing right digital 46:42 46 minutes, 42 seconds marketing is what we can do at our end to ensure that we deliver uh best SSDs. 46:49 46 minutes, 49 seconds So when you say customer engagement what you're essentially referring to is the digital marketing. 46:54 46 minutes, 54 seconds Yeah I think we started a lot of personalized digital marketing works very well. See today uh a lot of our digital marketing has moved to personalized customer where today a 47:03 47 minutes, 3 seconds consumer who's shopping in a go colors who's buying certain categories. We promote the other categories to WhatsApp to Instagram. So we our entire digital 47:11 47 minutes, 11 seconds marketing has become more personalized around the product with our with our existing customers and new customers. So we are leading our digital marketing is 47:19 47 minutes, 19 seconds more transitioning into product communication than just brand communication. 47:27 47 minutes, 27 seconds Like for example, if you're a user, you're a customer of Go Colors, you've been buying X number of products, but you don't you don't know that this product is available at a go colors. 47:35 47 minutes, 35 seconds Through our data, we will know that X person is buying this. So what we've seen in recent past when we are personalizing advertising communication 47:42 47 minutes, 42 seconds for that person uh that person is able to see okay this product is also available. So you are able to get that customer back to the store. So we are 47:50 47 minutes, 50 seconds just creating our digital is moving more personalized product link which works for us very well. So we do it direct and we also do it through influencer. 48:00 48 minutes Understood. And uh you know you've made these uh product changes right uh 48:07 48 minutes, 7 seconds no madam uh no no madam please let let her continue. 48:10 48 minutes, 10 seconds Okay madam please let her continue. No problem. Yeah please go ahead. 48:14 48 minutes, 14 seconds Yeah. So and you know with all these uh new product launches uh you know which we can see uh out there in the stores right. Would you say like you know 48:23 48 minutes, 23 seconds you've spoken that okay uh brand uh dilution is not an issue you know uh uh other issues are not there but do you 48:31 48 minutes, 31 seconds see that somewhere you know the value proposition for the customer has you know become a little bit weaker because if I see you know as we have westernized 48:39 48 minutes, 39 seconds our portfolio right uh westernware is you know somewhere where there is a lot of competition so if I just compare you know the merchandise for the new product 48:47 48 minutes, 47 seconds launches that we have done with let's say you know an offline store like a west side or even if we go lower you know on the value side you know zoo etc. 48:57 48 minutes, 57 seconds uh at least you know west side probably you know would have similar merchandise but at a much lower price point right so 49:04 49 minutes, 4 seconds then you know your customer is probably you know we're not seeing footfalls not because of other reasons but just because you know the value proposition 49:12 49 minutes, 12 seconds has weakened because you know yeah I understood your question in fact I'll tell you this is something which we covered in the tech so in fact 49:20 49 minutes, 20 seconds we added this in our presentation recently so if you so we put a triangle chart in our in that updated 49:27 49 minutes, 27 seconds uh slide on market size and our share in that what the study says is that sub more than 500 49:36 49 minutes, 36 seconds 500 to,000 and,000 and above contributes to more than 2/3 or maybe more than 70% of the bottomware market. The less than 49:45 49 minutes, 45 seconds 500 category is a very small category compared to the mid premium and the premium category. See the bottomware 49:53 49 minutes, 53 seconds category when you take the value added products like trousers, palazos, it's very difficult to price it sub 500 the 50:02 50 minutes, 2 seconds sub 500 to what I have studied is a very leggings market leggings oriented market. 50:07 50 minutes, 7 seconds No no sorry even let me sorry to interrupt I'm not referring to the sub 500 market. Okay so now let me be very specific you know for 50:15 50 minutes, 15 seconds example the wider bottom denims right uh which have been launched right. So now for example you know we our MRT is let's 50:23 50 minutes, 23 seconds say 1,300 but if you know I similar merchandise in let's say a website it's priced at,000 right uh then you know 50:31 50 minutes, 31 seconds clearly you know uh I I mean this is just one example that I'm giving you right so then clearly you know the value proposition for the customer becomes far 50:40 50 minutes, 40 seconds superior you know with our oh you're saying from a competitive pricing you're saying yes yes and this is just I'm talking about you know let's say offline competition right and if we move to 50:48 50 minutes, 48 seconds online you uh it's a different it's is a much wider world out there right with plethora of options there right so then 50:56 50 minutes, 56 seconds with that do you think uh you know let me put this differently that if let's say if you were to drop your prices okay 51:03 51 minutes, 3 seconds on some of your specific merchandise right like by x% do you think that is going to boost footfalls or do you think 51:11 51 minutes, 11 seconds that is that is not the case uh okay so I I understand your question I'll clarify that see what we try doing 51:18 51 minutes, 18 seconds is when we launch a product we try benchmarking it at what prices will a like to like product or a similar 51:26 51 minutes, 26 seconds product be selling in the market so maybe there's one product which you're mentioning maybe we have over overpriced it by 200 rupees maybe that's a one 51:35 51 minutes, 35 seconds product phenomena I'm not going into the specifics of that product in general when we are releasing products we benchmark to see that we are not very 51:43 51 minutes, 43 seconds expensive compared to competition we should be either on par or maybe lesser and that's how our pricing strategy is 51:50 51 minutes, 50 seconds so a we we don't want to put ourselves in a situation where we've launched a product at a premium realize that it is 51:58 51 minutes, 58 seconds very expensive to competitors like other competitors what you mentioned and then we drop the prices so to to begin with 52:06 52 minutes, 6 seconds we are ensuring that we are not pricing ourselves so much higher than what is available in the market so I'll give you another example what happened in our new concept what we opened the new daily 52:15 52 minutes, 15 seconds wear concept so certain products of men's wear uh what We launched in the licking road store and the other five stores as well. We we had priced it a 52:23 52 minutes, 23 seconds little higher. Then we realized that we had priced it a little higher than what is available in the market. We immediately changed the pricing because 52:32 52 minutes, 32 seconds that's a new category and segment for us. So we are also learning in bottom where because we have done it over so many years we when we are releasing a 52:40 52 minutes, 40 seconds product we keep studying what our pricing is and versus what is there available in the outside. Maybe an exact product is not available but at least I 52:48 52 minutes, 48 seconds like to like a similar product what price it is selling. So we try keeping that price parity to begin with. 52:54 52 minutes, 54 seconds Sometimes we make mistakes like that one product maybe you mentioned we did go wrong. I don't want to be specific about that product but in general it's a conscious effort that we get our pricing right from day one. 53:06 53 minutes, 6 seconds Right. So you don't believe that you know if we bring our prices down you know we are going to be seeing more footfalls right? 53:13 53 minutes, 13 seconds Not at all. Not at all. We have to begin with we are pricing our product very sharply and it's in line with if that 53:20 53 minutes, 20 seconds product is available out there it's in line with that right yes I'll give you a basic I'll give you a basic example right let's 53:29 53 minutes, 29 seconds take our legging product so you'll have you'll have leggings of different price ranges for a product of our spec and I'm 53:37 53 minutes, 37 seconds taking legging because right that contributes to 35% of the business I'm taking that product as an example if you take a product of similar specs you will see brands selling between 549 and 649. 53:50 53 minutes, 50 seconds So we are somewhere in between we at 599. So we are very mindful of that how we price ourselves. We want always 53:57 53 minutes, 57 seconds ensure that okay we are giving good comfort and quality but the pricing should be sharp right and I and I you know I do 54:04 54 minutes, 4 seconds acknowledge you know the um you know uh the fresh merchandise and you know the new product launches they're very much 54:11 54 minutes, 11 seconds visible in your store. uh in Mumbai at least right so I do acknowledge that right and and I have one more question if I can squeeze in 54:20 54 minutes, 20 seconds sure good please go ahead please go ahead thank you that's the last one so you know a lot was spoken about the store 54:26 54 minutes, 26 seconds sizes right uh uh so typically we've been in that 300 to 600 square ft uh uh kind of store size 54:35 54 minutes, 35 seconds uh so now the new stores that you know whatever calibrated u muted store count that you know we would be opening we are 54:42 54 minutes, 42 seconds all at thousand plus and also related question that when you say small stores I mean do we have definitions of small 54:49 54 minutes, 49 seconds medium large stores internally uh see so the new stores what we opening for the bottomware stores uh I'm not I'm 54:57 54 minutes, 57 seconds not talking about the pilot so for the new stores what we are opening for the bottomware will be sub will be below thousand largely so it'll be in that 55:05 55 minutes, 5 seconds range between 500 and th000 it will be mostly in that range but we are unlikely to cross thousand unless it's a it's a very good rental deal getting but we 55:14 55 minutes, 14 seconds largely going to be in that bracket of less than thousand. Uh when I talk about a small store yes any store which is 55:21 55 minutes, 21 seconds effectively lower than a 300 or 350 ft² store uh comes down to being of a small store. So it also depends on the depth 55:29 55 minutes, 29 seconds and the width of the store but being without being too technical anything below 350 and 300 is regarded as a small store where today we are not able to 55:38 55 minutes, 38 seconds display those products in a very small store. 55:41 55 minutes, 41 seconds Sure. Uh we'll look forward to you know more granular data on the store sizes uh in your next presentation. Thank you so much and all the best. 55:50 55 minutes, 50 seconds Thank you. Thank you. 55:52 55 minutes, 52 seconds Thank you. The next question is from the line of Samir Gupta from IFL Capital. 55:59 55 minutes, 59 seconds Please go ahead. 56:01 56 minutes, 1 second Hi, good evening everyone. Thanks for taking my question. Uh Goautam firstly on the LFS channel. Now even if we exclude the anomaly of this quarter uh 56:10 56 minutes, 10 seconds the growth or the performance in this channel has always been volatile. Some quarters it is up more than 20 30% some 56:19 56 minutes, 19 seconds quarters it is a decline. So if this is a replenishment model which you alluded to into an earlier participant's 56:26 56 minutes, 26 seconds question technically growth should be smoother like you know the the the way we witness in our EOS because that will 56:33 56 minutes, 33 seconds be the capturing the end level consumer and just a follow up on this again so the the LSS key partner that you're 56:41 56 minutes, 41 seconds talking about changes formats not buys for 45 days and they don't really inform us beforehand so that you can plan better. 56:52 56 minutes, 52 seconds Well, so I'll answer your your second question. Yes, we were obviously not informed. Once festive got over, EOS were on hold. We couldn't uh send stock. 57:03 57 minutes, 3 seconds It was a very uh it was something which came up uh very uh you know we didn't know about it. We obviously couldn't foresee it. Uh as far as format changes 57:12 57 minutes, 12 seconds also concerned, I think look format changes is very common. Not for this one LSS part. It happens anywhere. Brands 57:19 57 minutes, 19 seconds are always informed only at a particular point of time. They will never be well informed in advance. But that's how 57:27 57 minutes, 27 seconds retail works. But on the PO part definitely we should have been informed that this was coming but we weren't. 57:33 57 minutes, 33 seconds Luckily we were able to solve those things post December 15th and as of now things are running smoothly and we are also trying to work with the Delus 57:40 57 minutes, 40 seconds partner to ensure that such operation issues don't happen in the future. Uh on the volatility part uh Samir see I think 57:48 57 minutes, 48 seconds look there are two things right where can we where can we have volatility in NF one a if there is a fall in secondary 57:56 57 minutes, 56 seconds sales because of footfalls or b we have not replaced the store so properly I think the volatility in Q3 what we have 58:03 58 minutes, 3 seconds seen was a point that we were not able to get the purchase order and we were not able to replenish 58:10 58 minutes, 10 seconds I think the volatility depends on uh on which aspect whether it is secondary related or whether it is primary related. So this quarter we have seen 58:19 58 minutes, 19 seconds that it was more around the perspective of that we were not able to dispatch and that's why we saw a a fall in revenue in 58:26 58 minutes, 26 seconds LFS. In previous quarters there were some quarters where the secondary sales itself were low and we could only refresh based on what is sold. So I 58:35 58 minutes, 35 seconds think that was a very different reason altogether. 58:39 58 minutes, 39 seconds This is this issue what has happened in Q3 is more of a very direct operational issue rather than a I would say a consumer sentiment or market issue. 58:51 58 minutes, 51 seconds Got it. But the previous quarters are more reflective of the consumer consumer demand. 58:56 58 minutes, 56 seconds Consumer yeah that's why I'm saying it's not an apples comparison but yeah I mean at the outset it looks okay LFS has grown. I think the the underlying 59:04 59 minutes, 4 seconds reasons in what was maybe in the earlier quarters and what is today are different. 59:10 59 minutes, 10 seconds Fair point. Fair point. Uh second question again it's a follow up on an earlier participants question. So brand 59:17 59 minutes, 17 seconds relevance and strength. Now it's been 11 quarters of flattish same store sales and you're confident that the this is 59:26 59 minutes, 26 seconds brand strength is still very very relevant and strong and you alluded to the brand market share is is intact at 59:32 59 minutes, 32 seconds 8%. So the last three years then only two of these things can happen. One is that people have stopped buying branded 59:40 59 minutes, 40 seconds bottomware or they are basically shifting to unorganized. Uh is there a third thing that I'm missing? 59:48 59 minutes, 48 seconds See uh I feel uh I see I'll tell you from a brand relevance perspective no see we are very closely in touch with 59:56 59 minutes, 56 seconds the consumers who walking into go colors and buying right so we are very clear whether we are meeting the needs of the consumer who's buying. uh the consumer 1:00:05 1 hour, 5 seconds who's coming in is definitely buying and we are very very relevant. Yes, in the last few years when the overall footfalls have been low, our new 1:00:12 1 hour, 12 seconds customer acquisitions have been slightly as a low slightly on the lower sides where the actual quantum of new customer acquisitions have increased but because 1:00:21 1 hour, 21 seconds the base has increased the percentage has fallen slightly. So what we are also trying to do as an audience is to push up how we can push newer customer and 1:00:29 1 hour, 29 seconds newer audience acquisition especially in the younger age group. That is what we are focusing on. 1:00:38 1 hour, 38 seconds Got it. Uh wish you all the best for the future. Thank thank you sir. 1:00:45 1 hour, 45 seconds Thank you participants. You are requested to restrict your question to two per participant. 1:00:51 1 hour, 51 seconds The next question is from the line of Akil Parik from BNK securities. Please go ahead. 1:00:59 1 hour, 59 seconds Yeah, thanks for the opportunity and uh again my questions are around the competition and the gross margin part. 1:01:06 1 hour, 1 minute, 6 seconds Um uh uh also you know an interesting comment made by uh one of the largest consumer pie fans yesterday on a 1:01:13 1 hour, 1 minute, 13 seconds television that there's a silent shift happening in the consumer categories uh from organized listed traditional players to say unlisted agile smaller 1:01:21 1 hour, 1 minute, 21 seconds players basically and this is happening even in the apparel category where he cited an example of uh a few uh unlisted 1:01:29 1 hour, 1 minute, 29 seconds players like snatch soul store Bombay shorting rare rabbit these four brands combined have added 2,000 cr of revenue in last here basically while some of the 1:01:36 1 hour, 1 minute, 36 seconds listed players are still struggling. uh so my first question is how are we measuring this shift basically because I think there's something uh missing right 1:01:45 1 hour, 1 minute, 45 seconds because as as earlier participant also highlighted last 11 12 quarters SSG has been mutish so there's definitely some 1:01:53 1 hour, 1 minute, 53 seconds sales is happening but that is being taken away by uh some of this unlisted layer that is my first question second a corollary to it whether high gross 1:02:01 1 hour, 2 minutes, 1 second margin is is an issue uh uh uh uh for us basically being a listed player gross margins are very much visible in public 1:02:10 1 hour, 2 minutes, 10 seconds domain and have been on inclining trend for last five years now and we are seeing the similar trend happening in other listed apparel retailer who has a 1:02:17 1 hour, 2 minutes, 17 seconds very high gross margin basically and they are kind of struggling with the sales growth so yeah those are the two questions from my side I think you're 1:02:25 1 hour, 2 minutes, 25 seconds definitely right I mean see if you compare pre-covid and postcoid right uh the number of brands in the retail industry whether unlisted whether listed 1:02:34 1 hour, 2 minutes, 34 seconds whether digital whether offline has significantly increased uh right No, and I'm I'm speaking this from a generic perspective. I'm not talking about bottom wear, women's wear, men's wear. 1:02:44 1 hour, 2 minutes, 44 seconds There is a lot more supply of different different brands across different categories of apparel and the number of players today are far higher than what 1:02:54 1 hour, 2 minutes, 54 seconds it was. So that definitely makes an impact on it individual categories. As far as gross margin is concerned, see we are in a high gross margin category is 1:03:02 1 hour, 3 minutes, 2 seconds because of the kind of category we are in. We are in a very full face category. 1:03:07 1 hour, 3 minutes, 7 seconds So because we are able to achieve and keep that 95% of the sales ratio going that is very clear indicative in our 1:03:14 1 hour, 3 minutes, 14 seconds gross margins. So the gross margins what we are having is a very clear indication of full price sales ratio and lesser of discounting. Now the question is whether 1:03:23 1 hour, 3 minutes, 23 seconds we should reduce uh the selling price and push for volume. Even if we had to reduce the selling price how much would 1:03:31 1 hour, 3 minutes, 31 seconds we reduce? If we would have reduced probably by 100 rupees or 200 rupees that does not really change the customer's decision to buy that product 1:03:39 1 hour, 3 minutes, 39 seconds but then you'll end up taking a gross margin. 1:03:42 1 hour, 3 minutes, 42 seconds So from a product pricing perspective like I also me mentioned to we are keeping the the price of the product very sharply priced it reflects in high 1:03:51 1 hour, 3 minutes, 51 seconds gross margin because of lower or I would say negligible discounting. 1:03:59 1 hour, 3 minutes, 59 seconds Okay. But there's no way to kind of do the pilot project where we can kind of cut pricing around certain products and see if that increases the footfall 1:04:07 1 hour, 4 minutes, 7 seconds because as I said there is a similar problem with one of the another listed player uh in apparel segment. 1:04:14 1 hour, 4 minutes, 14 seconds See from a price deduction perspective I'm very clear look we don't have to really rework on our pricing. our pricing is very sharp and maybe in a few 1:04:22 1 hour, 4 minutes, 22 seconds products u you know maybe maybe if we are overpriced by 100 rupees or 200 rupees and maybe those those exceptions but largely I would say more than 90% of 1:04:32 1 hour, 4 minutes, 32 seconds our products are very very sharply priced so I don't really think that we need to take a price cut to boost 1:04:38 1 hour, 4 minutes, 38 seconds volumes I don't think that is required sure that's all from my side and uh best 1:04:45 1 hour, 4 minutes, 45 seconds luck for coming thank you so much thank you thank you so Thank you. The next question is from the 1:04:52 1 hour, 4 minutes, 52 seconds line of Balaji Vinad from NFA Asset Managers Private Limited. Please go ahead. 1:04:59 1 hour, 4 minutes, 59 seconds Uh good evening. Uh you know uh you mentioned that it's a little difficult to guide on store openings. uh which is 1:05:07 1 hour, 5 minutes, 7 seconds fine but I'm still uh unable to figure out why uh unable to guide on closures uh in the sense that you know if there 1:05:15 1 hour, 5 minutes, 15 seconds are stores which are like doubledigit SSD growth for say couple of quarters or three quarters uh aren't they like a 1:05:22 1 hour, 5 minutes, 22 seconds no-brainer call to shut them down and if so how many such stores are there which are on the double digit SSD growth category if you 1:05:31 1 hour, 5 minutes, 31 seconds yeah see I think uh no no we are happy to guide we just calibrating the data And the minute the data is ready on the 1:05:39 1 hour, 5 minutes, 39 seconds smaller stores or maybe negative stores, we will definitely uh pass on the data to everyone. It is not that we don't want to disperse the data. We just calibrating the data and seeing 1:05:46 1 hour, 5 minutes, 46 seconds different cuts of it and we are also seeing uh what what is the lease period of it before we take a call. So once we have full clarity on that data, we will definitely communicate it. 1:05:58 1 hour, 5 minutes, 58 seconds Secondly on the growth margin side uh you know with the uh mixed towards the value added uh compared to the 1:06:05 1 hour, 6 minutes, 5 seconds traditional uh so of course with the uh given the previous uh callers question as well uh we have seen the best of 1:06:13 1 hour, 6 minutes, 13 seconds gross margins right so we can't expect any expansion or anything of that sort from here on 1:06:19 1 hour, 6 minutes, 19 seconds yeah no see I think about at a see currently at a company we are between us around 62 to 64% of gross margin we 1:06:28 1 hour, 6 minutes, 28 seconds delivering right now. See from a gross margin delivery perspective, we are very happy and I I don't see any expansion 1:06:34 1 hour, 6 minutes, 34 seconds there, right? Uh what will really create an uptick in the EBIDA margins is that our sales improve, our SSDs improve and 1:06:43 1 hour, 6 minutes, 43 seconds our operating cost as a percentage of revenue falls. So I think that is where the work has to be done. From a GM perspective, we are we are very happy 1:06:51 1 hour, 6 minutes, 51 seconds with what kind of gross margins we are currently delivering. 1:06:55 1 hour, 6 minutes, 55 seconds Okay. And uh in terms of your uh you know uh capex per store on the incremental the large format stores uh 1:07:03 1 hour, 7 minutes, 3 seconds you know I mean uh suppose if you're present in a very nice uh area uh where you already have a couple of say uh 1:07:10 1 hour, 7 minutes, 10 seconds small format stores which for some reason or for negative SSG you decide to close that uh so to uh find an 1:07:18 1 hour, 7 minutes, 18 seconds equivalent uh you know larger store uh in a similar area wouldn't that be like 1:07:24 1 hour, 7 minutes, 24 seconds a challenge in the sense that the rent per square ft etc would be uh slightly higher than the u you know the smaller 1:07:32 1 hour, 7 minutes, 32 seconds format store is that is that right understanding no no see in such no no see in such procarations right we we for us rent to revenue ratio is what we look at rather 1:07:41 1 hour, 7 minutes, 41 seconds than rent per square feet so even if we are taking a slightly larger store you make a projected revenue for that particular and see what will be a 1:07:48 1 hour, 7 minutes, 48 seconds delivered even on a fair state basis so it will not be relocating a store from a smaller store to a midsize store will 1:07:57 1 hour, 7 minutes, 57 seconds not really result in the drop in ebida matters. 1:08:01 1 hour, 8 minutes, 1 second So that we are very careful that's that's one thing which I also had explained earlier in the call that uh 600 700 ft store if I'm opening from a 1:08:09 1 hour, 8 minutes, 9 seconds unit economics it will not really change much from the from a smaller store perspective. 1:08:15 1 hour, 8 minutes, 15 seconds Uh and are we changing anything on the agreement side in terms of the locking period etc compared to what it was earlier? No, no, our agreements our 1:08:23 1 hour, 8 minutes, 23 seconds agreements are very agreements are very standardized. We do a the lease from anywhere from 9 years to 11 9 years to 1:08:30 1 hour, 8 minutes, 30 seconds 12 years and our lock in periods are very standardized what the industry follows. So I think those are going to be very similar to what we used to do earlier. 1:08:40 1 hour, 8 minutes, 40 seconds Thank you very much. Wish you all the best. Thank you. 1:08:44 1 hour, 8 minutes, 44 seconds Thank you ladies and gentlemen. Due to time constraint that was the last question. 1:08:50 1 hour, 8 minutes, 50 seconds No no no madam. Uh if there are more questions please proceed from my side it's not a problem if there are more questions happy to answer. 1:08:56 1 hour, 8 minutes, 56 seconds Okay sir if please you can let the call continue if there are more questions. No problem. 1:09:01 1 hour, 9 minutes, 1 second Okay. Okay. So the next question is from the line of Mjit Ba from Samia Advisors. 1:09:09 1 hour, 9 minutes, 9 seconds Please go ahead. Uh hi thank you for taking my questions. 1:09:14 1 hour, 9 minutes, 14 seconds uh first I wanted to understand uh from the online channel perspective is our product structurally not suited for that 1:09:22 1 hour, 9 minutes, 22 seconds channel from a unit economics perspective and is that why it's been like such a small share over the years 1:09:29 1 hour, 9 minutes, 29 seconds I think uh we have kept we have kept that uh see I think our category is a very offline category because of the 1:09:38 1 hour, 9 minutes, 38 seconds colors the touch and feel the fitting I think women in general prefer and trying the product out in our 1:09:45 1 hour, 9 minutes, 45 seconds physical store. Like I remember even during the first wave or second wave of code when our offline stores were shut 1:09:53 1 hour, 9 minutes, 53 seconds but our ecom was up. It's not that we saw a sudden boost in our ecom sales. In fact when the store started again post 1:10:00 1 hour, 10 minutes uh post post the lockdown we saw a [clears throat] sudden shift in and surge in the store sales as well. So why I'm giving you such an old example is 1:10:07 1 hour, 10 minutes, 7 seconds because we've seen this product category is a very is a very touch and feel category and what we've also seen right I mean 1:10:16 1 hour, 10 minutes, 16 seconds and I'll be honest with you we did this customer feedback where we asked the consumer key why are you not shopping at a goal so that few customers said you 1:10:25 1 hour, 10 minutes, 25 seconds know your store is very close by it's faster for the consumer to go to the store try it rather than wait for the for the online order to get delivered so 1:10:33 1 hour, 10 minutes, 33 seconds sometimes what happens is your when you have a very large network of stores the consumer can very easily say look hey 1:10:41 1 hour, 10 minutes, 41 seconds I'll I'll go to the store nearby and get it much faster than me ordering it online 1:10:48 1 hour, 10 minutes, 48 seconds okay got uh my second question is you know uh as the mix has shifted from 1:10:55 1 hour, 10 minutes, 55 seconds about let's say 60% included leggings about 5 years back uh to you know much lower level now I would presume the 1:11:03 1 hour, 11 minutes, 3 seconds fashion element of our portfolio has gone up right and typically when I think about it a higher fashion element brings more supply chain complexity and the 1:11:12 1 hour, 11 minutes, 12 seconds higher risk of dead stock in the you know apperal retail business. So am I thinking of it in the right direction or am I missing something over there? 1:11:19 1 hour, 11 minutes, 19 seconds No no no your question is your question is very very valid. 1:11:23 1 hour, 11 minutes, 23 seconds Yes when you move from Chida to legging to other value added bottom products it will not be as core as leggings and truda. what you're saying is right. 1:11:33 1 hour, 11 minutes, 33 seconds Having said that, even then the product the category is still largely core. It is not as fast as fast fashion where 1:11:40 1 hour, 11 minutes, 40 seconds every season you're procuring and then you might end up with dead inventory. If a leggings stayed in season uh for 3 1:11:48 1 hour, 11 minutes, 48 seconds years, four years maybe other value added products will be for more than a year and closer to two years. So I think the time period of its relevance reduces 1:11:56 1 hour, 11 minutes, 56 seconds but it's not fast fashion. It's not as risky as fashion where you can end up with unsold inventory. That's not really the case. 1:12:05 1 hour, 12 minutes, 5 seconds But yes, your your question is right. 1:12:07 1 hour, 12 minutes, 7 seconds The relevance the the fashion portion slightly increases when we talking about non-leggings and for sure that goes without a saying. 1:12:18 1 hour, 12 minutes, 18 seconds Okay. And my last question was on the inventory days. uh you know we have seen over the years and I think I've read your comments on it over the last few um 1:12:26 1 hour, 12 minutes, 26 seconds you know years since you are listed but you know I see some apparel brands you can work with a significantly lower you 1:12:32 1 hour, 12 minutes, 32 seconds know inventory day number right so what is different in our category because that's one thing which sort of keeps a return on capital quite suppressed 1:12:40 1 hour, 12 minutes, 40 seconds overall despite having reasonably good margins uh right even in the best probably 20%. So that's where the question is. 1:12:48 1 hour, 12 minutes, 48 seconds Yeah. 1:12:49 1 hour, 12 minutes, 49 seconds Yeah. I think look I you know we've studied our sourcing model and our product portfolio. We feel on a steady 1:12:57 1 hour, 12 minutes, 57 seconds state basis 85 to 90 days of inventory is what is from a product perspective because we 1:13:04 1 hour, 13 minutes, 4 seconds have so many sizes size and colors. It will be very difficult to operate below 85 or 90 days. Yes there is room of 1:13:11 1 hour, 13 minutes, 11 seconds efficiency. We will keep improving but that is that number. So currently we at about 114 days and reasons why inventory has slightly gone up is because of muted 1:13:19 1 hour, 13 minutes, 19 seconds sales. Your inventory has inventory days has increased because of muted sales which I think in the coming quarters it 1:13:26 1 hour, 13 minutes, 26 seconds is stabilized. We've been very sharp with inventory. So this is a very uh this is a very temporary 1:13:34 1 hour, 13 minutes, 34 seconds increase in the inventory what we are seeing in this quarter. It'll stabilize in the coming quarters to come. But from an efficiency perspective, I think we 1:13:42 1 hour, 13 minutes, 42 seconds can bring it down to about 85 90 days which we have done it in the past and I think we'll be able to bring it down to that levels. Now whether going below 85 1:13:50 1 hour, 13 minutes, 50 seconds 90 days for our kind of category and our kind of sk little to go below 85 days. 1:13:57 1 hour, 13 minutes, 57 seconds Got it. And lastly related to working capital is there any lever on payable days or is that you know we get a better pricing and that's where the payable 1:14:05 1 hour, 14 minutes, 5 seconds days stay in the longer run. Yeah, we get a better pricing. That's why we keep our payable days low and that is reflects in the gross margin. 1:14:12 1 hour, 14 minutes, 12 seconds Okay, thank you for taking my questions. Yeah, thank you. 1:14:16 1 hour, 14 minutes, 16 seconds Thank you ladies and gentlemen. As there are no further questions, I would now like to hand the conference over to the management for the closing remarks. 1:14:28 1 hour, 14 minutes, 28 seconds Uh I'd like to thank everyone for uh being part of the call. Uh we hope that you we've answered all your questions. 1:14:35 1 hour, 14 minutes, 35 seconds If you need more information or any other questions, please feel free to contact Mr. Dendua from SCA or investor relation advisors. Thank you so much. 1:14:45 1 hour, 14 minutes, 45 seconds On behalf of Go Fashion India Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.