Khazanchi Jewellers Ltd — Q3 FY26

Khazanchi Jewellers Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=l3CjpjhyeO4 Published: 2 months ago

0:00 Ladies and gentlemen, good day and welcome to Q3 and 9 month FYI 26 results conference call of Kazanchi Dwellers 0:08 8 seconds Limited hosted by Kirin Advisers private limited. As a reminder, all participant lines will be in the mode and there will 0:16 16 seconds be an opportunity for you to ask questions after the presentation. 0:21 21 seconds Should you need assistance during the conference call, please signal an operator bypassing star then zero on 0:28 28 seconds your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. 0:34 34 seconds Hershilani from Kyan Advisor Private Limited. Thank you and over to you sir. 0:40 40 seconds Yes, thank you. On behalf of Advisor, I welcome you on the conference call limited for Q3 and 9 month F2. From the 0:49 49 seconds management team, we have Mr. Raja, chairman and joint managing director. We have Mr. 0:56 56 seconds Chief financial officer. Now I hand over the call to Mr. Rajesh Ma. Over to you sir. Hello everyone. 1:04 1 minute, 4 seconds Mr. Rajesh Ma chairman and joint paring director of Kaji jewelers. It's our pleasure to 1:11 1 minute, 11 seconds welcome you as we discuss our performance for Q3 and the first nine months of FI26. 1:19 1 minute, 19 seconds Q3 FI26 mark another milestone quarter for the company characterized by strong 1:26 1 minute, 26 seconds revenue traction, margin expansion and discipline execution. The quarter benefit from sustained festival movement 1:35 1 minute, 35 seconds and improved product mix and healthy demand across both wholesale and retail channels. Our diversified model once 1:43 1 minute, 43 seconds again demonstrate resilience and operating leverage enabling us to deliver robust growth while maintaining 1:51 1 minute, 51 seconds tight control over cost and our inventory cycle. On the B2B front, we 1:58 1 minute, 58 seconds continue to expand our partner ecosystem and deepen relationship with jewelry houses, wholesalers and organized retail 2:08 2 minutes, 8 seconds chains across India. Our ability to execute large volume orders with precision, timely delivery and design 2:16 2 minutes, 16 seconds differentiation remains a key competitive strength in the wholesale gold segment. 2:22 2 minutes, 22 seconds Our B2C business also delivered encouraging traction during the quarter supported by festival demand and improved realization. 2:33 2 minutes, 33 seconds I am pleased to share that our new 10,000 ft² large format showroom in 2:39 2 minutes, 39 seconds Chennai was successfully inaugurated on 7th Feb in the first 10 days since its opening. 2:48 2 minutes, 48 seconds We are we recorded a sale of approximately 20 crores. This strategic addition 2:57 2 minutes, 57 seconds significantly strengthen our retail footprint, enhance the customer experience and position us strongly in 3:05 3 minutes, 5 seconds the premium jewelry segment. This new flagship showroom will play a private role in driving higher retail 3:13 3 minutes, 13 seconds contribution and margin expansion going forward. 3:17 3 minutes, 17 seconds Our expansion into the natural diamond category under our premium brand Vajra by Khajanchi continues to gain momentum. 3:25 3 minutes, 25 seconds The positive response at trade exhibitions and subsequent orders inflows validate our strategic move into higher value categories which are 3:34 3 minutes, 34 seconds expected to meaningfully support profitability and grant premium premium premiumization over the medium term. 3:42 3 minutes, 42 seconds Looking ahead, we have a clear strategic vision over the next 2 three years. We aim to increase our retail contribution 3:49 3 minutes, 49 seconds from 10 to 25%. We plan to achieve this by expanding our product portfolio, onboarding new brands and further 3:57 3 minutes, 57 seconds strengthening our retail presence. As our retail mix improves, it will naturally enhance our margin profile, 4:04 4 minutes, 4 seconds drive strong profitability and create greater operating leverages in the years ahead. 4:11 4 minutes, 11 seconds Let me now briefly walk you through our financial performance. 4:16 4 minutes, 16 seconds 9 month FI26 financial highlights are as total revenue of 1,542.02 4:26 4 minutes, 26 seconds crores year onyear growth of 34.04% 04%. 4:31 4 minutes, 31 seconds EITA of 89.12 growth yearon-year growth of 96.91%. 4:38 4 minutes, 38 seconds EITA margin of 5.78% yearon-year expansion of 185 basic 4:45 4 minutes, 45 seconds points. PAT of 63.82 crores yearon-year growth of 96.92%. 4:52 4 minutes, 52 seconds Bat margin of 4.14% yearon-year expansion of 132 basic points. EPS of 25.76, yearon-year growth of 96.64%. 5:06 5 minutes, 6 seconds Now I will give you the results of Q3 FI26. The financial highlights are total revenue of 589.26 cron-ear growth of 49.6%. 5:18 5 minutes, 18 seconds AITA of 35.34 cron-year growth of 114.51%. 5:25 5 minutes, 25 seconds AITA margins of 6% yearon-year expansion of 181 basis point 5:32 5 minutes, 32 seconds of 25.13 cr yearon-year growth of 103.02% margins of 4.26% 5:41 5 minutes, 41 seconds yearon-year expansion of 112 basic points EPS of 10.12 rupees yearon-year growth of 1 or2.4%. 5:52 5 minutes, 52 seconds This performance highlights our improving operating leverage, efficient cost structure and strong product name. 5:59 5 minutes, 59 seconds Looking ahead, we remain focused on strengthening our wholesale partnership, accelerating growth in the diamond 6:06 6 minutes, 6 seconds jewelry segment, scaling our expanded de retail footprint and investing in technology and design innovation. With a 6:15 6 minutes, 15 seconds strong nine-month performance and an enhanced retail presence, we are confident in sustaining our growth momentum and delivering long-term values for our stakeholders. 6:26 6 minutes, 26 seconds Finally, I would like to extend a warm invitation to all of you to visit our flagship showroom and experience 6:35 6 minutes, 35 seconds firsthand the craftsmanship, collection and elevated retail environment. 6:42 6 minutes, 42 seconds With these remarks, I now open the floor for your questions. Thank you. 6:46 6 minutes, 46 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 6:54 6 minutes, 54 seconds star and one on their touchdown telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are 7:03 7 minutes, 3 seconds requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 7:11 7 minutes, 11 seconds The first question is from the line of Venoa from VS Ventures. Please go ahead. Yes. Hi, good afternoon sir. 7:20 7 minutes, 20 seconds A very good afternoon. 7:22 7 minutes, 22 seconds Yes sir. Congrats on good set of numbers. Uh sir order look for like Q4 and ear27. 7:33 7 minutes, 33 seconds Could you repeat the question louder [clears throat] please? 7:35 7 minutes, 35 seconds Yeah sir. How does the order visibility look for Q4 and early 527? 7:43 7 minutes, 43 seconds Yeah, the overall segment of German jewelry looks good only as the prices are increasing. Uh there is a slowdown for a shorter period of time but overall 7:52 7 minutes, 52 seconds the prospective is very good. The whole industry is going to grow at a pace of 30 35% I believe. 7:59 7 minutes, 59 seconds Okay. And so what is our current working capital cycle and how is it moving like on quarter on quarter basis? 8:08 8 minutes, 8 seconds That's what current working capital is uh that's what our uh stock rolling cycle is uh somewhere around 50 days. 8:16 8 minutes, 16 seconds Okay. Okay. And uh so do you see any like u change in inventory levels due to the fluctuation in gold prices? So how is the inventory levels right now? 8:27 8 minutes, 27 seconds So the there are the fluctuations in gold prices but uh the demand is uh uh 8:35 8 minutes, 35 seconds the demand has not impacted much. So I believe that the working cycles and the stock rolling cycle would be nearly same 8:42 8 minutes, 42 seconds only maybe here and there there is a variation possibility of 10%. 8:49 8 minutes, 49 seconds Are you witnessing like any like competition from organized and uh like unorganized so how is competition over there? 9:00 9 minutes Now there is an improvement into the whole gem and jewelry segment. Now uh when there is a uh there is shifting of 9:09 9 minutes, 9 seconds business from unorganized sector to organized sector as a quality perspective and resale value perspective. All the consumers are 9:17 9 minutes, 17 seconds believing to buy a right product at the right price. So it all depends upon the design and uh gradually uh things are 9:25 9 minutes, 25 seconds improving and based on design the margins are also improving. 9:30 9 minutes, 30 seconds Okay. And so what is like the revenue contribution from our top five clients in the B2B segment? 9:38 9 minutes, 38 seconds That's what on a broader side if you say to it the maximum top five clients would be contributing somewhere around 15 to 20% of the total revenue. 9:49 9 minutes, 49 seconds Okay. And like going forward uh what do you think how will that mix look like? 9:56 9 minutes, 56 seconds See since we have been progressing on all the all the various parameters of our various verticals of our business we are expanding into B2B segment, B2C 10:05 10 minutes, 5 seconds segment and uh everything. So we are we are on a constraint basis we are defining that we are going to grow at a 10:12 10 minutes, 12 seconds pace of 30% in all vertical and since we have come up with a new showroom and our uh retail spread is 10:20 10 minutes, 20 seconds going to give a bigger share in the upcoming years. 10:25 10 minutes, 25 seconds Okay. And like what is the like the area of the showroom? The new showroom. 10:30 10 minutes, 30 seconds Yeah. The new showroom is total buildup area is of 10,000 square ft. 10:35 10 minutes, 35 seconds Okay. Okay. And uh like on the like on the geographic front so what is the geographical breakdown of our venture so 10:44 10 minutes, 44 seconds far like how diversified is right? since uh since since we have been an primary face in south India most of the revenues 10:52 10 minutes, 52 seconds are from Tamil Nadu and some upper parts of Andra and few parts of primarily our presence is in South India. 11:02 11 minutes, 2 seconds So so for like the the gold prices are quite quite volatile so are we using any 11:10 11 minutes, 10 seconds changing mechanism to manage this gold price volatility? 11:15 11 minutes, 15 seconds Yeah, we have been uh using that uh regular natural mechanism as we have been operating with the refilling strategy. Whatever we sell, we buy it 11:23 11 minutes, 23 seconds back and uh if there is a any extra orders, we buy it and we hedge it into the exchanges also when we follow that regular natural mechanism 11:32 11 minutes, 32 seconds and they have been like effecting in effective in protecting our margins right? Yeah, obviously correct. 11:40 11 minutes, 40 seconds There is no impact in fluctuation as per our margins are concerned. Margins are intact for that. 11:47 11 minutes, 47 seconds Okay. Okay. And so what was the like volume of code sold in Q3? 11:58 11 minutes, 58 seconds Exactly. I will share with you later. 12:02 12 minutes, 2 seconds Okay. Thank you. That's all from my Yeah. 12:09 12 minutes, 9 seconds Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. 12:18 12 minutes, 18 seconds The next question is from the line of Anil Par, an individual investor. Please go ahead. 12:25 12 minutes, 25 seconds Yeah, thank you for taking my question. Am I audible? Yes, sir. 12:30 12 minutes, 30 seconds Okay. I guess uh my question was a slightly general question. 12:35 12 minutes, 35 seconds um it's a reasonable expectation that uh the you know the current circumstances the global circumstances particular the 12:43 12 minutes, 43 seconds war might end soon. So if that's what would happen and if gold prices were to correct by say 15% or whatever uh to 12:52 12 minutes, 52 seconds what extent do you think that this would be good for demand because at such high prices uh currently you know a lot of 13:00 13 minutes the growth by you know jewelry retailers and wholesalers are coming from you know just a value growth as opposed to a 13:07 13 minutes, 7 seconds massive volume growth. So do you think that there might be a huge uh upsurge in uh volume oftake um you know if gold prices were to correct by 15%. 13:20 13 minutes, 20 seconds Yeah, in a near-term scenario, we do not see that there is a huge correction of 50% is anywhere possible. But even then 13:27 13 minutes, 27 seconds when there is a correction, the the volumes are gradually very high. And this has been happening in a very all 13:35 13 minutes, 35 seconds long period of time whenever we say a steep uh correction in the prices, the demand 13:42 13 minutes, 42 seconds goes up. Sometimes it have even reached dual. So the demands will surely improve if the prices come down 13:50 13 minutes, 50 seconds right. Um and and uh can you kindly opine on you know the growth that you've shown this particular quarter unless of 13:58 13 minutes, 58 seconds course you've already mentioned in your opening remarks which I may have missed. 14:01 14 minutes, 1 second Sorry. Uh what percentage of this close to 50% growth has been on account of volume as versus value. 14:10 14 minutes, 10 seconds That's what the value growth is uh around uh as for the revenue of last Q3 if you check then it has been around 14:18 14 minutes, 18 seconds 49.6% year on year for this quarter and uh overall value growth of 34.04% 04% 14:26 14 minutes, 26 seconds for the 9 months and uh since we are into various verticals of business and we are some lower margin verticals we 14:35 14 minutes, 35 seconds have do the lowest lower turnover and higher margin verticals we have improved a lot that has added up uh uh to improve 14:42 14 minutes, 42 seconds our AIA margins and fat margin right and my final question sir is that uh you know you're getting guidance of about 14:49 14 minutes, 49 seconds 30% going forward you know is that a conservative guidance or because it seems like you where you are geographically in the southern part of 14:58 14 minutes, 58 seconds India it seems like uh you're right where there's a lot of demand for gold and gold jewelry yeah obviously we always define in a 15:06 15 minutes, 6 seconds constraint basis only we always try to define constraintly and prove better so that has been our uh dial of working and 15:16 15 minutes, 16 seconds uh we feel that yes we are going to achieve much better than that but we are defining a growth of 30%. 15:23 15 minutes, 23 seconds Thank you. Um I will get the connection. Thank you so much. 15:30 15 minutes, 30 seconds Thank you. The next question is from the line of Vidiro from HNI. Please go ahead. 15:38 15 minutes, 38 seconds Hello. Yes. 15:42 15 minutes, 42 seconds So sir, I just wanted to understand your current depth uh position and as you look at the expansion over the next few 15:49 15 minutes, 49 seconds uh few years, uh do you plan to fund it largely through internal occurs or should we expect incremental borrowing? 16:01 16 minutes, 1 second Now as for the current requirements all the uh all the uh fulfillment of uh working capital requirement has been 16:09 16 minutes, 9 seconds filled by the internal segments on the future date if any expansion is planned on a bigger level then if any funds is 16:16 16 minutes, 16 seconds required that may be uh planned accordingly even and then the management decides about it. 16:24 16 minutes, 24 seconds Okay. So uh as the retail uh mix increases how should we think about revenue growth and margin trajectory 16:32 16 minutes, 32 seconds over the next 2 three years uh any broad guidance or directional targets that investor can anchor to 16:40 16 minutes, 40 seconds that's what uh overall since you have been in lesser participation previously into the retail segment now we are 16:48 16 minutes, 48 seconds planning to expand on the retail legs and uh uh we are uh in upcoming two years we are planning that at least 25% 16:56 16 minutes, 56 seconds of the total volume will be shared by the retail B2C uh sale. So in that case our bottom line is also going to improve 17:05 17 minutes, 5 seconds and uh we are going to have an uh additional uh revenue from B2C. 17:12 17 minutes, 12 seconds Okay. So uh on the B2C side could you el uh elaborate on how you are leveraging technology whether in design uh I mean 17:21 17 minutes, 21 seconds uh whether in design automation CRM or analytics uh to improve the customer acquisition and repeat the business. 17:31 17 minutes, 31 seconds Yeah, obviously on we have been working on various ERP systems for uh making our uh designing easy recognition of 17:38 17 minutes, 38 seconds requirement, customers uh demand, market scenario, everything has been analyzed and all the based on that analytical 17:46 17 minutes, 46 seconds data we are trying to get those products which are selling very fast. That is the primary reason that our working cycle is 17:52 17 minutes, 52 seconds running fast and we have been working uh with the various technologies for improving much more on that. 18:03 18 minutes, 3 seconds Okay. So, uh given increasing competition from organized and national jewelry players, what do you believe uh 18:12 18 minutes, 12 seconds differentiate your value uh proposition whether in pricing, design, innovation or customer loyalty? 18:21 18 minutes, 21 seconds That's what since we have been in the industry for more than five decades, we have an very wide uh design library and 18:28 18 minutes, 28 seconds our designs are widely accepted among both the segments B2B and B2C and uh we have been always working on the 18:36 18 minutes, 36 seconds technologies and the client requirement understanding and designing products in such a fashion that uh uh it does not 18:43 18 minutes, 43 seconds fall very heavy on the pockets of the clients also because the prices are increasing. So we have been always concerned about uh considering the 18:51 18 minutes, 51 seconds requirement of our clients and preparing the designs accordingly. So uh in that case we have our own design library 19:00 19 minutes which has been widely accepted that is that acts as an what do they say that represents Hajanchi as a very different among the other competitors. 19:12 19 minutes, 12 seconds Okay. So my last question is in Q3 uh FYI 26 revenue growth was strong around 49.6%. 19:20 19 minutes, 20 seconds So could you help us understand like how much of that that was the volumedriven versus realization lead and considering 19:28 19 minutes, 28 seconds gold price movements during the uh during the quarter 19:33 19 minutes, 33 seconds [clears throat] 19:35 19 minutes, 35 seconds that's what we have grown on the volume base if you take up we have grown around 7 to 10% in between but overall the margins have been improved so much 19:43 19 minutes, 43 seconds because we are working on the various vertical on the various vertical so Uh some other 19:50 19 minutes, 50 seconds verticals where the margins are less we have reduced our margins. Uh we have reduced our volumes there and on other verticals where our margins are high we 19:58 19 minutes, 58 seconds have improved on that. That has improved our EIA margins and PR margins. 20:05 20 minutes, 5 seconds Okay. Uh thank you sir. That's all from my side. Thank you. 20:12 20 minutes, 12 seconds Thank you. The next question is from the line of Mahesh Sit from V Capital. Please go ahead. 20:21 20 minutes, 21 seconds Uh yeah. Hi, can you hear me? Yes sir. 20:25 20 minutes, 25 seconds Yeah. Uh so uh sir, our AITA margin has expanded to uh 6% in uh this current 20:32 20 minutes, 32 seconds quarter. Uh so how much of this improvement is sustainable like versus festival operating level? 20:41 20 minutes, 41 seconds Yeah, that's what I told you. Since we have been working on various uh different type of projects higher higher value addition uh varieties and we have 20:50 20 minutes, 50 seconds also introduced various brands for selling up of premium jerseys that have added up additional margins of AITA and 20:57 20 minutes, 57 seconds we have been constantly working on that and we are going to our AIA margins are going to improve much higher as the 21:05 21 minutes, 5 seconds share of B2C segment is also going to improve at an higher pace as our store rooms have opened. 21:14 21 minutes, 14 seconds Okay. Uh and like with uh our P nearly doubling year on year, so should we expect this similar earnings growth in 21:23 21 minutes, 23 seconds FY27 or like will uh will it get moderated going further? 21:30 21 minutes, 30 seconds Oh, as the as the demand for our designer products has been increasing and we have been working on the uh 21:37 21 minutes, 37 seconds better uh higher margin products are aita margins and fat margins are going to improve at a same pace. 21:47 21 minutes, 47 seconds Okay. Okay. 21:49 21 minutes, 49 seconds uh and uh tell me also uh break down your uh revenue mix between uh plain 21:56 21 minutes, 56 seconds gold jewelry, studded jewelry and diamond like how this mix is evolving. 22:04 22 minutes, 4 seconds Currently I don't hand have the handy data I can give you. You can drop in your question in the mail or with the kan advisory so that I can answer it with details to you. 22:14 22 minutes, 14 seconds Uh okay sure I'll connect with Kir. Uh okay. Um okay and uh like what is the current uh change to sales growth for 22:22 22 minutes, 22 seconds your retail business like how should we think about this trajectory over the next few quarters? 22:29 22 minutes, 29 seconds So there we have opened up our new showroom here on 7th of Feb from there in the last few days alone we have made 22:37 22 minutes, 37 seconds a turnover of nearly 20 crores here. So as projected we are planning that yes the store is at least going to fetch us 22:45 22 minutes, 45 seconds a revenue of nearly 500 crores and in the upcoming years we are going to add up a few more showrooms and things are going to improve on a retail basis which 22:54 22 minutes, 54 seconds are going to improve up and okay got it and uh like one more thing 23:01 23 minutes, 1 second as we see a lot of peers in the industry are expanding aggressively by opening more showrooms and increasing their geographical presence. So how does 23:10 23 minutes, 10 seconds company view this trend and uh like as you already told that we'll be planning this uh more showrooms right for going 23:18 23 minutes, 18 seconds forward. So like how uh since we have since we have started up with our flagship showroom now uh we are 23:26 23 minutes, 26 seconds going to have an very uh what do they say right type of manage system understanding that clearly and on later 23:34 23 minutes, 34 seconds on we will uh think of expanding on aggression. Okay. Got it. Got it. Thank you. Thanks. 23:43 23 minutes, 43 seconds Thank you. 23:47 23 minutes, 47 seconds Thank you. A reminder to all the participants, if you wish to ask a question, please press star N1. 23:55 23 minutes, 55 seconds The next question is from the line of Bhaskar Kandra from Three Head Capital. Please go ahead. 24:03 24 minutes, 3 seconds Hello. Good afternoon sir. Can I? Yes sir. Yes sir. 24:06 24 minutes, 6 seconds Thank you. And first of all congression for good numbers sir. Sir my first question is can you uh can you sir 24:13 24 minutes, 13 seconds provided Q3 revenue each segment B2B contribution and B2C and each segment 24:20 24 minutes, 20 seconds margin uh that's what I told you last year we 24:27 24 minutes, 27 seconds have been configured our B2B uh B2B has been the primarily 90% and 10% was our 24:34 24 minutes, 34 seconds B2C participation as our B2C bigger showroom flagship showroom has come up only there so The impact of this B2B 24:41 24 minutes, 41 seconds expansion would be seen into the Q4 and uh as for the margins are concerned our 24:48 24 minutes, 48 seconds uh B2B margins are uh AITA margins if you define would be somewhere around uh uh 6%. 24:56 24 minutes, 56 seconds And uh for the retail segment uh these margins are around 10 to 11%. 25:04 25 minutes, 4 seconds Thank you sir. Sir my second question is in the next year FI27 how 25:10 25 minutes, 10 seconds store exemption plan how much how many store we are added any plan we cannot define now the management is 25:20 25 minutes, 20 seconds under the discussion of uh how the things are going to operate in the upcoming year that would be defined uh as and when it has been decided. 25:30 25 minutes, 30 seconds Okay sir or sir my last question is sir this year this quarter any inventory gain in this quarter 25:38 25 minutes, 38 seconds inventory gain you are talking about yes generally the overall contribution if 25:46 25 minutes, 46 seconds you take there are inventory gains of around 1.5% are there it differs it is not it differs somewhere around 1 to 1.5%. 25:58 25 minutes, 58 seconds Okay then. Thank you sir and Chris for your patience. Thank you. Thank you. 26:04 26 minutes, 4 seconds Thank you. The next question is from the line of Raj Sha from Sha Ventures. Please go ahead. 26:12 26 minutes, 12 seconds Yeah. Hi, good afternoon. Um I have some couple of questions. 26:17 26 minutes, 17 seconds Uh yes. So sir can you tell me what is your average ticket size in retail versus hotel? like uh how does customer 26:26 26 minutes, 26 seconds uh behavior like how does the how does customer behavior uh differ across segments? 26:35 26 minutes, 35 seconds It all depends upon the client's requirements. As for the B2B is concerned we have clients who have been 26:42 26 minutes, 42 seconds taking ornaments from us. They have they buy it in the what they say on a lower category clients also we have who are 26:49 26 minutes, 49 seconds operating with the small showroom and we have bigger clients also who have been working on multiple branches also. So in 26:57 26 minutes, 57 seconds that case it is an diversion. So it is not it cannot be defined as for the ticket size. So some jewellers which are 27:04 27 minutes, 4 seconds having what they say many branches spread over they are buying much higher than us. Say one single client may have 27:13 27 minutes, 13 seconds some 5% of our total volume that and there are clients which are which of the lower denominations also. 27:21 27 minutes, 21 seconds Okay. Okay. Yeah. 27:23 27 minutes, 23 seconds And uh I also want to know about the working capital like uh how much incremental working capital will be required to support uh the targeted increase in total consumption? 27:36 27 minutes, 36 seconds That's what for the new showroom we have planned uh we have planned that we are going to take up an inventory of somewhere around 150 crores in that and 27:45 27 minutes, 45 seconds we have started operating that. So based on that uh inventory requirements we would be able to achieve uh what we have defined. 27:55 27 minutes, 55 seconds Okay. And uh sir are you seeing any shifts in consumer demand like towards a 28:01 28 minutes, 1 second lightweight or lower car uh like if you see like there is a very much of 28:10 28 minutes, 10 seconds increasing gold prices as well. So do you see any shift? Yeah, there is a there is a shift in the uh what they say 28:18 28 minutes, 18 seconds lighter weight jewelry uh for the marriage purposes. uh there is a detection of say 20 25% in the weight 28:25 28 minutes, 25 seconds range of the same product. So we have been catering and we have been working on those designs that we can reduce the 28:32 28 minutes, 32 seconds quantum of cold and uh give the output of uh same time and uh that has been happening and we have been catering much 28:39 28 minutes, 39 seconds better for all the demands of that client and uh yes lower carage demands also for the minimal jewelries people 28:46 28 minutes, 46 seconds prefer to buy global carage and we have been manufacturing lower carage jewelry also. So as far as the south is 28:53 28 minutes, 53 seconds concerned uh up to 18 and 22 carats are of uh on the mark but uh there is a demand for 14 karat and ro carats are very low. 29:03 29 minutes, 3 seconds Okay. Okay sir. Uh I also want to know about uh like uh your business expansion uh like what is your strategy like uh to 29:12 29 minutes, 12 seconds build brand recall nationally like especially outside your core geography. 29:20 29 minutes, 20 seconds That's what a future uh we company management has a future plans also since we have a strong presence in south India we have plans of expanding in south 29:28 29 minutes, 28 seconds India primarily we have a very big market here in south India so we are planning to expand in south India 29:34 29 minutes, 34 seconds initially then later on as the uh company progresses there are plans that we can diversify pan India 29:43 29 minutes, 43 seconds okay uh let's uh uh I also want to know about aa margins like over the medium 29:51 29 minutes, 51 seconds term what would be the uh ideal steady state for the ainta margin uh profile once the retail mix stabilizes. 30:01 30 minutes, 1 second That's what since the overall retail share of uh in overall sales the retail shares or we are we are uh of the vision 30:09 30 minutes, 9 seconds that it is going to improve from 10 to uh 25%. So the AITA margins are going to obviously improve. So since the emitter 30:18 30 minutes, 18 seconds margin is at 6% now currently so it is expected to improve uh somewhere higher 20 to 30% from here. 30:27 30 minutes, 27 seconds Okay. Okay. That's great sir. Uh thank you so much for giving uh the about the insight for the for the business. Uh thank you. Thank you so much. 30:37 30 minutes, 37 seconds Yes. Yes. Yes. Thank you so much. That's all from my side. Yeah. Thank you. 30:44 30 minutes, 44 seconds Thank you. The next question is from the line of player Jane from Green Capital. Please go ahead. 30:54 30 minutes, 54 seconds Yes. Uh Miss Jane, your line is unmuted. Please proceed with your question. Yeah. Hello. Am I audible? 31:01 31 minutes, 1 second Yes. Yes. There are a few questions with me. 31:11 31 minutes, 11 seconds I mean uh I think we have one of 10 10th square which is a flag seed s room. So 31:18 31 minutes, 18 seconds what capex was good for that flag seed s room and what do you expect? 31:32 31 minutes, 32 seconds Hello. Yeah, your question is not clear. 31:34 31 minutes, 34 seconds Your voice is breaking it. Sir uh I'm asking what capex was incurred for the 10,000 square ft² flagship store room and what ROI do you expect? 31:47 31 minutes, 47 seconds Uh the capex for the uh coming showroom was around 12 crores and uh for the uh total revenue what you have defined that 31:55 31 minutes, 55 seconds we are expecting uh uh from this showroom is somewhere around 500 crores for the retail division and as I have 32:02 32 minutes, 2 seconds defined already that there retail margins would be of somewhere around 10 to 12%. In that case uh that would be the return on uh the new show return from the new showroom. 32:13 32 minutes, 13 seconds Okay. And what is the payback period for uh new to room investment based on current performance benchmark 32:22 32 minutes, 22 seconds somewhere around uh what do you say we are overall uh stock inventory you are talking about or you are talking about capex 32:33 32 minutes, 33 seconds so I'm talking about the capex yeah capex part it can be covered in one and 32:40 32 minutes, 40 seconds a half years Okay. And that is you incurred around 12 crores from that flagship. Okay. So, uh you increase 32:50 32 minutes, 50 seconds retail contribution and what at what cost and in two three years and how many new stores we can expect? 32:59 32 minutes, 59 seconds Yeah, I cannot define on the figures uh currently but the management is planning to open few more stores in upcoming years. And uh as for the retail share is 33:08 33 minutes, 8 seconds concerned, we are going to improve the retail share from 10% to 25%. 33:13 33 minutes, 13 seconds Are any plans you know like will future retail expansion be company owned or franchiseeled? 33:20 33 minutes, 20 seconds Initially whatever uh plan we have currently would be company owned only. 33:27 33 minutes, 27 seconds Later on when the expansion plan is on a very wide range we can think of the second portion. 33:34 33 minutes, 34 seconds And sir like you know you are I I mean scaling the retail part. So what will be 33:41 33 minutes, 41 seconds the impact on like employee cost and store level operating expense as there will be a lot of maintenance involved 33:48 33 minutes, 48 seconds and what percent of like revenue expense as percent of revenue 33:55 33 minutes, 55 seconds that will be uh that's what as the retail store is concerned I've already defined that uh 34:06 34 minutes, 6 seconds as for the AIA if you calculate on a it would be somewhere at around 1 to 1.5% of the AIA 1%. 34:15 34 minutes, 15 seconds And so one last question like do you foresee any risk of inventory uh of sellers obsense uh has you spend into premium and diamond categories? 34:28 34 minutes, 28 seconds I could not get your question. Your voice is breaking. 34:32 34 minutes, 32 seconds So do you see foresee any risks of inventory uh you know like as you expand 34:38 34 minutes, 38 seconds into premium and uh 9 month categories there are no much risk here because uh 34:47 34 minutes, 47 seconds always as we are catering lots of designs and patterns and diamonds also we are procuring as per the requirement higher quality diamonds are only sold in 34:56 34 minutes, 56 seconds South India VBS we are dealing with VBS EF quality only so in that case we don't find anywhere for that. 35:05 35 minutes, 5 seconds Answer one more question. What is uh uh you know like margin difference between wholesale and retail segment? 35:14 35 minutes, 14 seconds That's what uh margins with regards to wholesale are somewhere around 5 to 6% and retail margins are 10 to 12%. 35:22 35 minutes, 22 seconds Okay. Fair enough. 35:25 35 minutes, 25 seconds That's Thank you. 35:30 35 minutes, 30 seconds Thank you ladies and gentlemen. Anyone who wishes to ask a question may press star N1. 35:36 35 minutes, 36 seconds The next question is from the line of Anel Parik an individual investor. Please go ahead. 35:43 35 minutes, 43 seconds Um thank you again. So uh the management just mentioned that you know you want to take your retail contribution to about 35:50 35 minutes, 50 seconds 25%. Just wondering when is that likely to happen? How long is it likely to take a year or longer than a year? 35:59 35 minutes, 59 seconds As for our performance uh here in the current store, we are uh we are of confident that it can be uh reached easily in one to one and a half years. 36:10 36 minutes, 10 seconds Okay. And and what would be the steady state back margin uh you know once you do get to 25% retail contribution of your top line? First of all, same page 36:19 36 minutes, 19 seconds as we are going to uh as we are going to uh what do they say 36:26 36 minutes, 26 seconds uh going for an 10 to 25% of our detail share in that case uh obviously 36:33 36 minutes, 33 seconds we are going to uh achieve our pet margin somewhere around uh 25 to 30% better than here. 36:41 36 minutes, 41 seconds So 4.1% is what you have today and do you think it you might do uh 25% more than that? That's the idea. 36:52 36 minutes, 52 seconds Yeah. Yeah. 36:54 36 minutes, 54 seconds Okay. And and just and just uh kind of thinking about where you would like uh strategy wise this business to be four 37:01 37 minutes, 1 second five years from now. Where would you like the retail contribution to be? So are you happy at 25% or would you like it to be much higher? 37:09 37 minutes, 9 seconds It should be much higher only but we are always defining at a constraint level and uh since all the other uh verticals 37:17 37 minutes, 17 seconds also we are going to grow at a 30% pace in that uh we are going to achieve much higher only but we are defining at a constraint 37:26 37 minutes, 26 seconds thank you so much thank you thank you the next question is from the 37:35 37 minutes, 35 seconds line of Sjit Malu from HNI please go ahead 37:45 37 minutes, 45 seconds Uh chet your line is unmuted please proceed with a question 37:56 37 minutes, 56 seconds are you able to hear me as there is no response from the current participants so we'll take the next question from Aran an individual 38:04 38 minutes, 4 seconds investor please go ahead uh congratulations on the new showroom. Uh how has the football been so far sir? 38:14 38 minutes, 14 seconds Football have been very nice. It is uh much more than what we expected and we have been working on various marketing 38:21 38 minutes, 21 seconds strategies and advertisements also. So we are expecting uh a very better output here. 38:28 38 minutes, 28 seconds Uh what would be your marketing expense as a percentage of your revenue? 38:35 38 minutes, 35 seconds Then out of the total revenue for this current year we are planning uh somewhere around uh somewhere around 75 to 1%. 38:47 38 minutes, 47 seconds Okay. Uh so there has there have been videos uh on social media whereas are claiming that they are selling every gallery for around 3% flat making 38:55 38 minutes, 55 seconds charges. Do you think that model is sustainable and is that a threat to the entire industry or especially the retailers like you who are working on a very big level? 39:06 39 minutes, 6 seconds Yeah, it is not that actually is mainly concerned on the designing prospective. 39:12 39 minutes, 12 seconds It is not that whatever we define a similar type of product it cannot be taken as an just an investment 39:19 39 minutes, 19 seconds prospective selling a 3% item and all would be some which is of machine mechanism are very very minimal which 39:26 39 minutes, 26 seconds would designs uh which are uh just for the investment purpose sort of design. 39:31 39 minutes, 31 seconds So that is not there. There is a trace for designer jewelry always and uh things have been working because people 39:39 39 minutes, 39 seconds spend uh like to spend they are spending say 1 lakh rupees on buying a gold. In that case additional if they pay they 39:46 39 minutes, 46 seconds pay 5,000 extra or 7,000 extra they are buying a piece of jewelry which defines their dignity. So it is always been decided by the client in such a fashion. 39:55 39 minutes, 55 seconds Uh so in that case I don't find any threats of her. 40:00 40 minutes Okay. So uh you have been selling chains for around 1% uh which has been uh seen online. So how do you think that would 40:07 40 minutes, 7 seconds be sustainable or is that is there any other product that which you have been selling at around just 1%. 40:13 40 minutes, 13 seconds That's what that's what I told you know that is an uh selected few designs which are machine made and which are the own production and it is an opening 40:21 40 minutes, 21 seconds attraction we are defining so to increase our footfall. So very very minimal portion of stocks we define that way. 40:30 40 minutes, 30 seconds Okay. So you do have your own do you have your own manufacturing unit or is everything sourced up from outside? 40:36 40 minutes, 36 seconds That's what we have tieups with all the major factories India and we have been working on that style only since our primary focus is on uh uh what they say 40:45 40 minutes, 45 seconds diversified designs. We cannot bring all the best under one roof. So we have been working on that uh type of uh module. 40:56 40 minutes, 56 seconds Okay fine. Uh and what about the have you kept only south Indian jewelry in your retail showroom or you have been 41:02 41 minutes, 2 seconds catering to other hot Indian and Bengali jewelry as they say? 41:08 41 minutes, 8 seconds No, we have been procuring designs from pan India. We have dioxid factories all over the uh all over India and it's not 41:17 41 minutes, 17 seconds constrained south Indian jewelry only and uh since uh there is an what they say after internet expansion and various 41:24 41 minutes, 24 seconds Instagrams and everything it is all type of jewelries are preferred by all type of client it's not restricted to one particular design or one particular 41:32 41 minutes, 32 seconds market okay now your major client today is south Indian customer so that is what we 41:41 41 minutes, 41 seconds wanted know if you have North Indian customers also. 41:44 41 minutes, 44 seconds Yeah, we we we have North Indian clients also. We have South Indian clients also. 41:49 41 minutes, 49 seconds We have clients from uh uh all over. We are catering all type of jewelry. 41:55 41 minutes, 55 seconds Whereas we have been selling Japan, Pi everything which are primary designs used for North Indians. So it is an what 42:04 42 minutes, 4 seconds they say blended of fan India client range. Everybody likes and every type different type of design. 42:13 42 minutes, 13 seconds Okay. So what is the revenue mix between your south Indian which is your forte and and 42:21 42 minutes, 21 seconds that's separately database we don't have but uh overall uh jewel return since we are in south India primarily we are 42:28 42 minutes, 28 seconds focusing on uh uh customer requirement it cannot be diversified as whether this 42:35 42 minutes, 35 seconds is sold to south Indian or north Indian okay question uh what would be the average margin at which uh each what 42:44 42 minutes, 44 seconds average of of the product in the retail company it all depends chain items and all the 42:54 42 minutes, 54 seconds start with 3% 4% and kundi goes to 22% also 23% household 43:04 43 minutes, 4 seconds okay thank you so much thank you the next question is from line 43:13 43 minutes, 13 seconds of church Malo from HNI please go ahead yes yes 43:22 43 minutes, 22 seconds so like my question is regarding the revenue from the show business so like uh what kind of revenue are we targeting 43:29 43 minutes, 29 seconds for the next quarter and for FI27 from the showroom business that's in upcoming years uh we are 43:37 43 minutes, 37 seconds planning to have an revenue of around 500 to 550 crores from this showroom uh like uh I think they have the margins 43:45 43 minutes, 45 seconds of 10 11% right because they are more or less into retail segments. Yeah. 43:51 43 minutes, 51 seconds Right. And so like and so overall uh what kind of revenue are we targeting for like Q46 43:59 43 minutes, 59 seconds and F37 and what will be the AIDA margin going forward? 44:04 44 minutes, 4 seconds That's all. This share of this new showroom share would be for another one one and a half months only for the Q4. 44:10 44 minutes, 10 seconds The participation of this new show revenue would be there in the upcoming year. Surely we are we are working on achieving what we have defined. 44:20 44 minutes, 20 seconds No sir, I'm talking about overall revenue like at the business level. 44:24 44 minutes, 24 seconds Yeah, overall revenue that at the constraint level we are defining that we are surely going to grow in all verticals by uh somewhere around 25 to 30%. 44:33 44 minutes, 33 seconds uh yos yeah year on year okay okay sure and the margins will be 44:41 44 minutes, 41 seconds expanding from 6% like is it sustainable that's what the share of retail is going to increase no so they are going to obviously improve 44:50 44 minutes, 50 seconds okay okay okay uh Mr. Maru, you want to ask more questions? 45:00 45 minutes No, that's it for my All right. Thank you. Thank you. 45:04 45 minutes, 4 seconds The next question is from the line of Shak Sakshi Shindi from Shaha Consultancy Limited. Please go ahead. 45:14 45 minutes, 14 seconds Hello. 45:14 45 minutes, 14 seconds Uh yes, your line is unmuted. Please proceed. Am I audible? Yes. 45:20 45 minutes, 20 seconds Yes, you are. Uh so my question is what safeguard are in a place to manage credit risk in the wholesale segment. 45:31 45 minutes, 31 seconds Primarily we do not uh have an any style of credit strategy. We do not give much credits to the client. Our uh portfolio 45:38 45 minutes, 38 seconds type of business is on mainly primarily focus on designs and cash and carry business. Our average credit cycle is only two weeks. So we do not find any threat on receiving that. 45:51 45 minutes, 51 seconds Okay. And how much capacity utilization are you currently operating in the manufacturing and is there a room to scale without significant capex? 46:04 46 minutes, 4 seconds That's what I'm telling you know the company do not own any their own manufacturing unit on a future date they have a plan of having their own unit and 46:13 46 minutes, 13 seconds uh since we have been working with various uh factories span India so we do not find any difficulty as and when 46:20 46 minutes, 20 seconds required by what type of product is required in much demand we manufacture that way okay 46:29 46 minutes, 29 seconds what is your dividend policy and how Should investor think about capital returns versus reinvestments? 46:38 46 minutes, 38 seconds That was the as in as and when we have already defined two dividends here being an startup government with just now we 46:47 46 minutes, 47 seconds being listed and it is two and a half years and we have defined two dividends in the upcoming years. Yes, the policy of strong dividend policy would be defined and the management would be 46:56 46 minutes, 56 seconds sharing their progress with the shareholders and stakeholders. Okay. Okay. Thank you. Thank you. 47:03 47 minutes, 3 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to Mr. Hershel Ghaniani for closing comments. Over to you sir. 47:14 47 minutes, 14 seconds Yes. Thank you. Thank you everyone for joining the conference called of Kadi Limited. If you have any queries you can write us. 47:23 47 minutes, 23 seconds Once again thank you everyone for joining the conference. Thank you so much. Thank you and all. 47:30 47 minutes, 30 seconds Thank you. Thank you everyone. 47:33 47 minutes, 33 seconds Thank you very much on behalf of Kirin Advisers Private Limited. That concludes this conference. Thank you also joining us today.