Senco Gold Ltd — Q3 FY26

Senco Gold Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=vl_gBxgogZM Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q3 FY26 earnings conference call of Senko Gold Limited 0:08 8 seconds hosted by Asian Market Securities. As a reminder, all participant lines will be in the listenon mode and there will be 0:16 16 seconds an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an 0:23 23 seconds operator by pressing star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. 0:32 32 seconds Vikrarand Kashab from Asian Market Securities. Thank you and over to you sir. 0:39 39 seconds Uh good morning everyone. On behalf of Asian market securities I welcome you to the Q3 FI26 earning conference call of 0:46 46 seconds Senko Gold Limited. Today we have on the call with us Mr. Swankar Singh MD and CEO and Mr. Sanjay Banka group CFO and 0:54 54 seconds IR head. Without much much ado, I now hand over the call to Mr. Swankar Singh for his opening remarks. Thank you and over to you sir. 1:03 1 minute, 3 seconds Thank you very much Vikrant. Happy morning to everyone. uh we would like to start the uh call uh yeah being grateful 1:12 1 minute, 12 seconds to all our uh investors for having their faith on us and on our team and on our performance and uh we must uh say that 1:21 1 minute, 21 seconds this particular quarter has been a historical quarter for Senco Limited. 1:26 1 minute, 26 seconds We've crossed 3,000 K of revenue uh an EIA of Rs 400 K and a PAT of rupees 264 1:34 1 minute, 34 seconds K uh in this particular quarter. So this is something which becomes much more special because we have seen that this 1:42 1 minute, 42 seconds particular financial year has been one which has been extremely volatile. The gold prices have reached uh 1 lakh 1:49 1 minute, 49 seconds 40,000 rupees for that particular quarter. post that it has gone up further more and currently it is in the range of 1 lakh 50,000 uh plus rupees. 1:58 1 minute, 58 seconds Uh there has been a growth of almost 65% in the gold rate and about 23% in the quarter itself. But in spite of the high 2:06 2 minutes, 6 seconds gold price, what is most encouraging uh is that the consumers have continued to keep their faith and confidence on the 2:14 2 minutes, 14 seconds gold and jewelry as a category. Uh we had dhantas uh in that particular quarter. The wedding season was in full 2:22 2 minutes, 22 seconds swing and keeping all those two aspects in mind we have seen that itself on the Dhanter month we have had a sales of 2:30 2 minutes, 30 seconds 1,716 crores for the month of October. But very important that we as a team have kept in mind is that at these high gold 2:39 2 minutes, 39 seconds prices how is the consumer behaving? It is not that you know the high gold prices is uh discouraging the consumer. 2:46 2 minutes, 46 seconds It is rather that their faith and trust on the commodity of gold or silver as a category is increasing. It is only up to 2:55 2 minutes, 55 seconds us as dwellers as to fit into the budget of the consumer create products whether it be in 22 karat, 18 karat, 14 karat or 3:03 3 minutes, 3 seconds even 9 karat which became uh you know allowed by the BIS uh uh agency by the government of 9 karat hallmarking and I 3:12 3 minutes, 12 seconds think we can proudly say that Senko gold and diamond has been one of the first few uh jewelry brands to have introduced 3:19 3 minutes, 19 seconds 9 karat jewelry in gold and in diamond jewelry as well. And it is this mindset of trying to understand the pulse of the 3:26 3 minutes, 26 seconds consumer and fitting to the budget of the consumer that is allowing and enabling us to continue to sell and continue to grow. Our our hyper local 3:34 3 minutes, 34 seconds strategy that we have been pursuing for the last one one and a half years uh studying very closely on the local consumer needs. uh the use of technology 3:43 3 minutes, 43 seconds in analyzing the data as to what is the exact uh you know product that is being sold uh at at the store level in term of 3:52 3 minutes, 52 seconds design in terms of budget I think that all have played on and it has become that much more important in today's day and time in analyzing the data and 4:01 4 minutes, 1 second exactly placing the right kind of product that is going to fit into the budget of the consumer. Our franchisee 4:08 4 minutes, 8 seconds uh revenue out of the total share has been 33%. Uh the own store uh revenue 4:15 4 minutes, 15 seconds has been around 65% and 2% has been on the other channel sales and I must tell you that this particular quarter because 4:22 4 minutes, 22 seconds the share of our own own store channels have been higher than that of franchisee. That has been one of the 4:29 4 minutes, 29 seconds major factors that has left led to a higher profitability. The fact that our diamond jewelry studded ratio uh sales 4:36 4 minutes, 36 seconds have also gone up by 38% in terms of value and 10% in terms of volume has also played a pivotal role in adding to 4:44 4 minutes, 44 seconds the profitability for that particular quarter. Now uh in terms of designs we have launched uh you know more than 4:51 4 minutes, 51 seconds 6,000 designs in gold and more than 3,000 designs in diamond for the quarter. uh new collection, new ranges, whether it be for weddings, whether it 4:59 4 minutes, 59 seconds be for uh you know everyday wear, gifting. I think that has always we have segmented all those uh various needs of the consumer and accordingly designed. 5:11 5 minutes, 11 seconds Uh our philosophy and our vision is that Senko Gold and Diamond should be known as a house of design. you know whether 5:18 5 minutes, 18 seconds it be in jewelry or in other accessories after all uh being from a place which is of art and culture design should be our 5:25 5 minutes, 25 seconds forte and that is what should make us continue to grow in the future. Uh we have also seen that the growth in the tier 2 and tire three markets have been 5:34 5 minutes, 34 seconds robust as well. Currently we have got 196 stores in the whole network and hopefully by the end of this quarter we should be uh reaching 200 plus stores. 5:46 5 minutes, 46 seconds Uh as we end this particular quarter we need to look forward this particular quarter we are seeing Valentine's Day it 5:54 5 minutes, 54 seconds is uh tomorrow. Uh so therefore we are seeing a decent traction from the consumers with relating to diamond 6:01 6 minutes, 1 second jewelry, everyday wear jewelry, couples coming and buying. So that has been you know the elements of love has been the campaign that we have launched. Uh the 6:09 6 minutes, 9 seconds wedding season also continues to remain strong and we are seeing that many consumers who are not only having weddings in the close proximity but also 6:19 6 minutes, 19 seconds in in maybe 6 months 8 months down the line but in this volatile gold crisis they are thinking that you know these 6:26 6 minutes, 26 seconds could be the good levels to buy and they are preponing their purchases and buying. So we continue to see a strong robust growth. Uh this particular 6:34 6 minutes, 34 seconds quarter we hope that we should be 25% plus uh growth that will continue to happen and going forward for the coming 6:41 6 minutes, 41 seconds year we shall remain focused. We shall remain strong. We shall want to drive our franchisee model in a much more stronger way. Work on the uh diamond 6:50 6 minutes, 50 seconds jewelry segment so that we increase our stud ratio. uh continue to uh work on the operational efficiencies, economies 6:57 6 minutes, 57 seconds of scale, building the brand and have a growth of 20% plus for the coming financial year as well. So thank you 7:05 7 minutes, 5 seconds very much for uh all your ideas, all your encouragements, inputs and we shall be thankful to our team for the great 7:13 7 minutes, 13 seconds performance. Uh please bank if you would like to say something. 7:16 7 minutes, 16 seconds Yes sir. Sir thank you very much once again gratitude to our investors. So as we have said that for the quarter the 7:25 7 minutes, 25 seconds revenue has grown by 50% YI to 3,000 crores the adjusted AIA like the AIDA 7:32 7 minutes, 32 seconds had grown by 46% from 80 cr to 44 cr but if you look at the custom duty impact of 7:39 7 minutes, 39 seconds in quarter two and quarter 3 last year then the uh adjusted Eida for last year quarter 3 was 107 cr and this this year 7:47 7 minutes, 47 seconds is 44 cr. So the existed AIDA margin is around 13.2%. 7:54 7 minutes, 54 seconds And PAT has grown from 33 to 264 689%. 7:59 7 minutes, 59 seconds But existed taking the impact of custom duty it has grown from 53 cr to 264 cr that is 390%. 8:08 8 minutes, 8 seconds for this quarter and for the 9 month period uh the the revenue has grown by 30% console the adjusted has grown by 8:18 8 minutes, 18 seconds 133% that is from 298 cr to 694 cr and the adjusted pet has grown from 139 cr 8:26 8 minutes, 26 seconds to 417 cr that is 200%. So it's very important to understand that while we have been talking about a sustainable 8:34 8 minutes, 34 seconds business margin of around 7.2 2 to 7.5% and uh recently uh in in this quarter we 8:41 8 minutes, 41 seconds have given a uh guidance of around 7.5 to 7.8 for FY27. 8:49 8 minutes, 49 seconds So that is a full year margin but quarter 3 margins are usually higher. So last year we had given a detail that our 8:56 8 minutes, 56 seconds quarter 3 margin uh in in uh 23 was around 12.1%. 9:03 9 minutes, 3 seconds and quarter 3 margin in FY 24 was 11.1%. 9:07 9 minutes, 7 seconds So if you look at 13.1% it should be seen in that that context because the sales are quite high whereas the the the 9:14 9 minutes, 14 seconds fixed opex remains the same. Uh and if you look at we have ascribed this to two three reasons one is your product mix 9:22 9 minutes, 22 seconds has improved. Secondly, the the the lightweight jewelry where the customer does not get the same jewelry weight at other jewelers and then he's willing to 9:30 9 minutes, 30 seconds pay extra extra prices to us, extra making charges to us. Similarly, the diamond prices which we are offering are quite attractive and moreover some 9:38 9 minutes, 38 seconds impact of gold price rise has also come over. Overall, this is on the financial side. The working capital requirement has also increased. So what you have 9:47 9 minutes, 47 seconds seen is that the inventory value has increased from 2963 crores to 4602 crores. This has been funded by the borrowing as well as the trade payable. 9:58 9 minutes, 58 seconds Uh importantly uh we have focused very highly on the working capital efficiency and inventory management. We have implemented an AI based software which 10:07 10 minutes, 7 seconds help us to monitor the inventory real time and our inventory days have remained rangebound at 166 to 188 days 10:15 10 minutes, 15 seconds and going forward we look at similar trend in fact if we look at other players uh it is also in the range of 180 days. So as the ratio improves the 10:24 10 minutes, 24 seconds inventory days is likely to remain in the range up to 180 days. Uh moreover as far the labor code is concerned we have 10:32 10 minutes, 32 seconds analyzed the impact of labor code and we have taken a one time uh extraordinary impact of around 6.2 cr that's on on the 10:40 10 minutes, 40 seconds financial side. So you should we should see the result for quarter 3 and YD in the context of custom duty impact of 10:47 10 minutes, 47 seconds last year. U similarly from the banking side we have maintained a very good relationship with our working capital 10:55 10 minutes, 55 seconds bankers. our working capital limit which is 2400 cr and our blended manual uh during the last year due to this 11:03 11 minutes, 3 seconds elevated gold price uh we had to reduce the percentage of GML and it got increased uh the portion of CC and WCDL 11:12 11 minutes, 12 seconds got increased which led to our blended ROI slightly higher. We are very happy to note that our crate rating has been 11:19 11 minutes, 19 seconds uh first time crate rating while our current crate rating is being done by Ikra care age has done our second crate 11:26 11 minutes, 26 seconds rating and they've given us a rating of A1. So they are doing the rating for the balance entire amount and we are very 11:34 11 minutes, 34 seconds confident that with the enhanced rating from care the we can look at reducing 11:39 11 minutes, 39 seconds the the the blended blended uh ROI by 30 40 basis points in next year. So with 11:47 11 minutes, 47 seconds that we pause our discussion and opening remark and then thank you very much and we invite queries uh from you. 11:56 11 minutes, 56 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 the touchstone 12:04 12 minutes, 4 seconds telephone. If you wish to remove yourself from the question Q, you may press star and two. Participants are requested to use handsets while asking a 12:12 12 minutes, 12 seconds question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 12:19 12 minutes, 19 seconds The first question is from the line of Dwanchu Bansel from MK Global. Please go ahead. 12:26 12 minutes, 26 seconds Hi. So Ankar and team congratulations on a good performance and uh improving franchise interest for the brand. 12:33 12 minutes, 33 seconds Mr. Are you there? Yes. Hi. 12:36 12 minutes, 36 seconds As there is no response, I'm taking the next question from the line of Mi Sha from Namura. Please go ahead. 12:44 12 minutes, 44 seconds Uh I hope I'm audible. Hello. 12:54 12 minutes, 54 seconds Uh operator, am I audible? Mr. Sha, are you there? 13:02 13 minutes, 2 seconds I am there. Can you hear me? Uh am I audible? 13:06 13 minutes, 6 seconds Seems like uh there's a mute from your side. 13:18 13 minutes, 18 seconds Hello. 13:20 13 minutes, 20 seconds Hello. Operator, am I audible? Uh I can hear you. Am I am I audible? 13:27 13 minutes, 27 seconds Okay, perfect. Perfect. Thank you. Thank you for that. Uh so congrats on a great set of numbers. Uh so firstly just 13:33 13 minutes, 33 seconds wanted to check on uh uh the guidance of 25% salesman that you uh highlighted for 13:40 13 minutes, 40 seconds 4Q given this given the gold prices where they are and the increase that we've seen during the last quarter and 13:47 13 minutes, 47 seconds this quarter. It seems the 25% guidance seems quite low given the current uh momentum. uh do you expect a material 13:56 13 minutes, 56 seconds drop in ESPs in 4Q or a material drop in volumes which is leading to this lower guidance? So that is question number one. 14:06 14 minutes, 6 seconds No no I do not see any material drop in ASBs. I'm just looking see if you look 14:12 14 minutes, 12 seconds at the Q2 performance also you will see that there have been a drop in volumes uh even though the ASPs remain the same. 14:22 14 minutes, 22 seconds So we are about 45 days into the quarter. Uh in the month of March there is holy uh the exam seasons go on and 14:30 14 minutes, 30 seconds then we also start looking at consumers behaving in a manner that on 19th of April we have a tittity. So then 14:38 14 minutes, 38 seconds consumers start you know waiting for a titya and apicious day to buy. So yes our guidance of 25% is little on the 14:47 14 minutes, 47 seconds conservative side. Maybe uh you know as the uh you know we are closer to the end of the quarter this 25 might become 30 14:54 14 minutes, 54 seconds 35 but we are still giving a conservative guidance of 25 to 30%. 15:00 15 minutes Understood. Understood. So this is not a function of what you have seen thus far uh in 45 days of the quarter. fair to 15:08 15 minutes, 8 seconds assume that the growth momentum that we saw in third quarter continues in the first 45 days of the fourth quarter and 15:16 15 minutes, 16 seconds it is just the conservative uh way that you are thinking about it. 15:20 15 minutes, 20 seconds Yeah. Yeah. We need to I we believe in that conservative way. See the growth momentum of third quarter has to be also because of the dhantas but you know dantas doesn't happen uh every quarter. 15:32 15 minutes, 32 seconds Therefore yes uh it's it's it's that way to look at it. 15:37 15 minutes, 37 seconds Understood. Fair point. Second question again is on the margin front. Uh you know margin improvement of 7 and a half% 15:45 15 minutes, 45 seconds uh it was indicated it was a function of the product mix improvement and lightweight having higher margins. So as 15:52 15 minutes, 52 seconds far as the product is concerned, we probably thought if the studied ratio increases but given that the gold in the 16:01 16 minutes, 1 second stud uh prices, gold prices are significantly higher in the studied the margin profile for studied also goes 16:08 16 minutes, 8 seconds down. Uh is that understanding incorrect? Uh uh and if if not then what is driving the improvement in margin from 7.1 to 7.5? 16:21 16 minutes, 21 seconds See uh when we talk about product mix it is not merely the set ratio obviously on the diamond jewelry the margins are 16:28 16 minutes, 28 seconds higher but there are different types of jewelry right you know like you would see in case of other players high bullion sale in our case ble we don't 16:37 16 minutes, 37 seconds sell we don't sell bullion in our case the coin sales which I have said earlier is around four five% 7% and it is about 16:46 16 minutes, 46 seconds the jewelry as well there are different types of jewelry different prices if I sell more of antique jewelry, more of bulky jewelry as I said in the opening 16:55 16 minutes, 55 seconds remarks that if if I sell more of lightweight jewelry, the making charge effective making charge on lightweight jewelry is more much higher. Moreover, 17:03 17 minutes, 3 seconds moreover with the gold price rise since we charge the uh making charge on the on the value while I would have paid a 17:12 17 minutes, 12 seconds lower making charge to the car or vendor for getting the jewelry manufactured. 17:16 17 minutes, 16 seconds Let's say around uh 1 lakh 10,000 or 1 lakh 20,000 I would have paid in some 4 5%. But I'm instead of charging 15 16% 17:24 17 minutes, 24 seconds or 1 lakh 20,000 I'm charging 15 16% or 1 lakh 15,000 or 1 lakh 60,000. 17:32 17 minutes, 32 seconds So due to the gold price rise the making charge also increases. I'm not talking about the inventory gain. So that has 17:40 17 minutes, 40 seconds led to improvement in the margin profile from let's say 7 that's what we are saying 7.8 or up to 8%. That is one. 17:49 17 minutes, 49 seconds Secondly in quarter three the the mere sales volume itself is quite high while the office remains the same that mean 17:57 17 minutes, 57 seconds manpower marketing and other office remain the same. the sales volume has increased and that's why we said that if 18:04 18 minutes, 4 seconds you look at the margins in quarter three of FI quarter 3 of FI 23 and 24 it was in the range of it was in the range of 12% and 11%. 18:15 18 minutes, 15 seconds So we said that you can still look 9 and a half to 10% as a sustainable business 18:21 18 minutes, 21 seconds margin for quarter 3 for the whole year 7.5 to 7.8. So if you look at the the 18:29 18 minutes, 29 seconds press release when the aida margin for 9 months is 7.8%. 18:35 18 minutes, 35 seconds You can take 7.8 to 8% uh as far business margin is concerned and balance 18:43 18 minutes, 43 seconds 2 to 2 and a half% you can take it to price rise. 18:50 18 minutes, 50 seconds Got it. That that explains. Uh thank you very much gentlemen. Wishing you all the very best. Yeah. Thank you. Thank you. 18:58 18 minutes, 58 seconds The next question is from the line of Bharat from MC Pro Research. Please go ahead. 19:05 19 minutes, 5 seconds Uh good morning sir. Uh congratulations for a great set of numbers actually. So just uh one confirmation uh uh you 19:14 19 minutes, 14 seconds indicated that uh 27 sustainable AITA margin for the next fiscal should be in the range of 7.5 to 7.8%. Is that correct? 19:24 19 minutes, 24 seconds Yes, this is absolutely correct. 19:26 19 minutes, 26 seconds provided the price range remains elevated. B we are talking about the current price ranges otherwise between 19:34 19 minutes, 34 seconds 7.3 to 7.5 at a elevated price level 7.5 to 7.8. 19:41 19 minutes, 41 seconds So there's a gap of only 20 30 this is fine uh whichever the price moves. 19:48 19 minutes, 48 seconds Okay. Okay. And uh sir, next question uh is uh what would be the level of uh inventory hedging uh that we do 19:56 19 minutes, 56 seconds currently and what is the plan? So for 9 month FI 26, so what was the hedging uh proportion? What is the intention for uh 20:04 20 minutes, 4 seconds the hedging proportion in hedging proportion in FI26 and the same for F27 if you can provide guidance on this? 20:12 20 minutes, 12 seconds Thanks. 20:14 20 minutes, 14 seconds We've been mentioning that our hedging percentage is in the range of 55 to 60% 20:20 20 minutes, 20 seconds uh for the last 6 months 9 months. Uh uh in the in the last 2 three years it has 20:27 20 minutes, 27 seconds been in the range of 80%, there were times when we were up at 90%. But in the last six months in this high price gold 20:36 20 minutes, 36 seconds volatility uh there have been pressure on liquidity there have been pressure on maintaining the margins and in this kind 20:43 20 minutes, 43 seconds of a dynamic volatile scenario uh based on our prudent hedging policy uh and guidance we said that let us keep it at 20:51 20 minutes, 51 seconds 55 to 60%. uh that would ensure that we continue to focus on our business, we continue to manage our inventory well 21:00 21 minutes and uh also very important here to note is that the old world exchange of the consumers have also gone up. So the old 21:07 21 minutes, 7 seconds gold exchange maybe two years 3 years back was about 25 to 30%. But that old gold exchange today is in the range of 21:15 21 minutes, 15 seconds 45 to 50%. So when the old gold exchange comes in then automatically those price risks that we always talk about is you 21:24 21 minutes, 24 seconds know partially reduced and keeping all those aspects in mind uh you know we've also started to focus on the customer 21:32 21 minutes, 32 seconds advances uh with gold rate getting fixed that itself also starts working as a hedging tool. So keeping all of that in 21:40 21 minutes, 40 seconds mind we've kept our hedging ratios in the range of 55 to 60%. And sir, I just want to compliment here when we are saying about the hedging ratio, it is only considering GML and MCX position. 21:53 21 minutes, 53 seconds But this customer offer which we give where we give a fixed offer to the customer, it is as good as the future sale position or when we give a flexible 22:02 22 minutes, 2 seconds offer to the customer where the customer can go either way. Those are the additional impact which we don't uh get into too much details. These are the business strategies. 22:13 22 minutes, 13 seconds Okay. Okay. Okay. Uh but sir uh roughly if we like uh if you as you said like you know fixed offer to customer is also 22:21 22 minutes, 21 seconds uh given uh in the way of you know customer advances or the or this kind of a gold financing scheme. Uh so what 22:29 22 minutes, 29 seconds would be that proportion so we can you know get a sense of uh how the overall hedging works. 22:37 22 minutes, 37 seconds We don't want to discuss those details. 22:38 22 minutes, 38 seconds These are see finally these are strategic points and they are calibrated from time to time. We just want to give you comfort that we are we are very 22:47 22 minutes, 47 seconds cognizant of the risk management. Uh it's a it's a very uh the the the hedging policy considers the risk as 22:55 22 minutes, 55 seconds well as the balance sheet both. See what we and it varies from company to company. Let's say in the recent time when the when the gold price fell by 23:04 23 minutes, 4 seconds almost 10% from 5500 to 5,000 even 4,800 the balance sheet and how much margin 23:11 23 minutes, 11 seconds call would have come around 400 to 500 cr. So it it depends upon the dweller to dweller. So we have maintained a very 23:19 23 minutes, 19 seconds fine balance between the risk management business exy and and and the balance sheet as well. I think I can leave it 23:27 23 minutes, 27 seconds there that uh we are we are very much cognizant this this policy is approved by the board and our large investors are 23:35 23 minutes, 35 seconds fully aligned with our risk management policies. 23:39 23 minutes, 39 seconds Okay. So thanks for the clarification and all the best. Thank you. Thank you. 23:45 23 minutes, 45 seconds The next question is from the line of Vijay Chawan from Right Horizont PMS. Please go ahead. 23:53 23 minutes, 53 seconds Thank you for the opportunity and congratulations for good set of number. 23:56 23 minutes, 56 seconds So my question is the I have basically question on the inventory hedging level side. So that has been answered but is there any component of inventory gain 24:06 24 minutes, 6 seconds like we highlighted some less than 0.5% in quarter two. So is there any component that you can provide as a percentage? 24:14 24 minutes, 14 seconds I'll explain to you. See uh if you refer to our hedging uh slide in the presentation uh accounting is done uh 24:24 24 minutes, 24 seconds based upon cost or market price whichever is lower. That is first point. 24:28 24 minutes, 28 seconds So there is no inventory gain inventory gain for future. That means whatever inventory lying in my balance sheet it 24:36 24 minutes, 36 seconds is at a cost price. So there is no hidden inventory gain lying point one. 24:41 24 minutes, 41 seconds Point two in the gold price rise when I take my GML and NCX position there is in a hedging position it gives us a loss. 24:50 24 minutes, 50 seconds So the balance sheet uh in in a rising gold price in a in a hedging position in any 24:57 24 minutes, 57 seconds the scope of my question in any claiming to be 100% hedged or 90% hedged the inventory will have hedging loss and not 25:06 25 minutes, 6 seconds hedging gain. Whatever gain has come the gain has come to the P&L account but the in a rising price there will always be a 25:14 25 minutes, 14 seconds loss that loss is sitting in the inventory. So in quarter four when the price will rise they will have a relent gain and adjusted by the inventory 25:23 25 minutes, 23 seconds losses which are sitting in the inventory. You can kindly refer to my slide and it is more of an accounting issue. 25:30 25 minutes, 30 seconds Yes. So going ahead we it is safe to assume that like typically the gross margin that we have around 9.9% for this 25:37 25 minutes, 37 seconds quarter three so it doesn't have any inventory gain component right no 9 so 9% is a bit margin gross 25:47 25 minutes, 47 seconds margin is more than 15 16% and we I'm talking 19.9% for quarter three only so it is 19.9 for gross profit yeah so 25:56 25 minutes, 56 seconds it doesn't have any component of inventory it it has the impact of relation gain. 26:03 26 minutes, 3 seconds So I am using two words one is inventory gain and relation gain. Relation gain means whatever inventory has been sold at a higher price in the in the quarter 26:12 26 minutes, 12 seconds three that we call relation gain. Yes, it has impact of relation gain and I I clarified it in the opening remark 26:19 26 minutes, 19 seconds itself that two to two and a half% for the full year on a on a 6,400 cr you can compute the number back of envelope that 26:27 26 minutes, 27 seconds is on account of price r balance so out of I'm repeating sir 10.8 rate is my evida margin for 9 months and uh out of 26:36 26 minutes, 36 seconds that you can take two 2 and a half% as a relation gain or inventory gain whatever you are referring to. Similarly in quarter three the the AITA margin is 26:45 26 minutes, 45 seconds 13.2% you can take around 9 to 9 and a half to 10% as the business margin balance you 26:53 26 minutes, 53 seconds can take as the relation gain or inventory gain which you are referring to. 26:57 26 minutes, 57 seconds Yeah. Yeah. That answers my question perfectly. Uh the second question is on the because we are seeing lot of shift towards the low carat products and also 27:07 27 minutes, 7 seconds the stud studded item side. So can you provide some breakup of the range maybe let's say the uh plain gold jewelry has 27:15 27 minutes, 15 seconds maybe 20% making charges or some margin and maybe 30% for the side ratio. So is there any breakup or range that you can 27:23 27 minutes, 23 seconds provide so that we understand that uh how the product category movement puts uh let's say positive pressure on the um gross margin. 27:34 27 minutes, 34 seconds So see the gross margin is a function of own store sale and franchise sale and we've said it earlier and I'm giving you 27:42 27 minutes, 42 seconds ballark number. Let's say from the own store we make 20% gross margin. When we make a sale to franchising we make 27:49 27 minutes, 49 seconds around 7 to 8% margin. So you can take 60% 35% and 5% on exports and e-commerce. 27:57 27 minutes, 57 seconds This these are the broad three areas. 28:00 28 minutes I'm repeating sir 60% own store sales 30 [clears throat] 35% franchise sale balance four 5% the e-commerce and 28:08 28 minutes, 8 seconds exports. From the own store we make around uh 18 to 20%, from franchising we make 7 to 8%, from e-commerce and other 28:16 28 minutes, 16 seconds we make around 5%. Now within this 20% of own store I'm not I don't want to give you the breakup. So you can visit 28:23 28 minutes, 23 seconds the store and understand that the jewelry making charges can vary from 6% to 25%. So if you want to go for an 28:31 28 minutes, 31 seconds antique jewelry or or a pulky jewelry, we can charge around 24 25% along with discount in the respective periods. 28:38 28 minutes, 38 seconds Okay. So these are net of discount in that this range you are referring right 6 to 25%. I have these are the gross amounts. 28:48 28 minutes, 48 seconds These are the gross amounts. Okay. Okay. It will vary from time to time sir. These are based upon market dynamics. 28:54 28 minutes, 54 seconds These are based upon the competitive situation in the market and the competitive advantage and as you are aware we are a second most trusted 29:02 29 minutes, 2 seconds brand. The customers are willing to give us extra fee for the trust and faith and the comfort and the design which they get from us. 29:10 29 minutes, 10 seconds Yeah. Yeah. Yeah. Thanks for the clarification. And the last part on the any guidance on the next year store edition. 29:19 29 minutes, 19 seconds Next year sir we continue to focus on uh 18 to 20 stores. uh our focus will be 29:26 29 minutes, 26 seconds that we should open more franchisee stores you know broadly uh uh 8 to 10 own stores 8 to 10 franchises if 29:36 29 minutes, 36 seconds possible we will open more franchises and less own stores but 18 to 20 stores is our next year's guidance 29:43 29 minutes, 43 seconds okay thank you for all the territory and good luck for the future thank you 29:50 29 minutes, 50 seconds the next question is from the line of Dan Shu Bansel from MK Global Please go ahead. 29:57 29 minutes, 57 seconds Yes. Am I audible now? Yes sir. Yes. 30:01 30 minutes, 1 second Yeah. Hi. Uh congratulations S Swanka and team on good performance uh as well as improving franchisee themselves. Uh 30:09 30 minutes, 9 seconds sir uh I wanted to understand the traction in uh schemes for monthly grammage uh that are there right. So 30:18 30 minutes, 18 seconds typically such schemes gain good traction in times of high code price and provide some comfort on future growth as 30:26 30 minutes, 26 seconds well. Uh however when we see our December 25 balance sheet uh the growth in customer advances is somewhat softer 30:34 30 minutes, 34 seconds right. So uh what initiatives are we taking to uh improve uh onboarding of consumers under such schemes. 30:42 30 minutes, 42 seconds So see December uh quarter three it being a danter quarter most of the consumers who have been doing their 30:51 30 minutes, 51 seconds advances and savings uh you know they kind of redeem it during the festive season. So that is how uh you know it 30:58 30 minutes, 58 seconds looks low but going forward uh with the targets in place with the teams in place and uh uh you know with the 31:06 31 minutes, 6 seconds communications in place we are putting our best efforts that we continue to raise these advances back which will 31:13 31 minutes, 13 seconds also help us with the cash flows and also help in the future uh uh sales that we can book and I think that the 31:21 31 minutes, 21 seconds traction of the consumer at these is that see what had happened previously two three years back that are advanced scheme were more flexible in terms of 31:30 31 minutes, 30 seconds pricing and in the last one and a half two years the gold prices kept on going up. So the consumers felt that the savings scheme was not as useful but now 31:39 31 minutes, 39 seconds with the fixed rate option coming in I think consumers know that they can continue to look it at an EMI and fix it 31:46 31 minutes, 46 seconds at various rates. We have certain uh marry gold for big wedding customers where if they can do some 6 months, 11 31:54 31 minutes, 54 seconds months kind of booking uh they will get some extra benefit on the discounts of you know making charges on discounts. So 32:00 32 minutes all of that is there. I think u uh we we have our certain limit set by the companies act ROC and we will try to 32:08 32 minutes, 8 seconds maximize and utilize as much limits that have been given uh from the government to uh raise the advances. 32:16 32 minutes, 16 seconds So, so swanker just a small followup here. So currently we must be at around 200 cr of such uh deposits right first 32:23 32 minutes, 23 seconds customer deposit but uh from your equity perspective I guess 500 cr can be raised through such schemes right 25% 32:31 32 minutes, 31 seconds correct dansu you are right we are raising the so we are first of all we have to take the rating so we are taking 32:39 32 minutes, 39 seconds the rating for a higher amount let's say 500 cr and when we file the uh this return for this purpose which is which 32:46 32 minutes, 46 seconds will file by august It will go up to 500 cr and we are taking all steps to raise these funds and and we are aware that 32:54 32 minutes, 54 seconds this son sad merry gold they give us a good handle because the customer footfall increases. So we are fully fully cognizant then you would have seen 33:02 33 minutes, 2 seconds that how we are promoting we are sweetening the offer without compromising on the margin. So uh so depending upon the offer we are 33:11 33 minutes, 11 seconds sweetening the offer without compromising the margin to increase these limits you would see a good traction. So March 26 balance sheet you 33:20 33 minutes, 20 seconds will see a higher number because customers will like to reta sir last question uh is on the uh again 33:30 33 minutes, 30 seconds on the balance sheet side which appears to be a bit stretched. Uh I understand uh that high gold price and uh festive 33:38 33 minutes, 38 seconds preparation would have led to increase in inventory. Uh but u uh this needs a strategic focus right in terms of 33:46 33 minutes, 46 seconds inventory optimization. Uh so what is your thought process uh around in inventory optimization going into the next fiscal? Uh any targets if you would like to share here? 33:59 33 minutes, 59 seconds No. See we are uh as I mentioned before uh using technology uh AI tools uh uh 34:07 34 minutes, 7 seconds softwares uh data analysis uh our merchandising team is very much closely monitoring what is the exact kind of 34:16 34 minutes, 16 seconds products that are selling what are the reasons for non-con conversion and based on that we will be u making sure that we 34:24 34 minutes, 24 seconds are keeping the right kind of products and our supply chain continues to remain strong. uh with the gold price going up, 34:32 34 minutes, 32 seconds one has to understand that it is not just about the quantity of gold that you're keeping at the store, but it is also ex the exact uh you know quality of 34:41 34 minutes, 41 seconds the design and the kind of products that you're keeping it. So we will not want to increase and you know unnecessary 34:50 34 minutes, 50 seconds stocks. We are analyzing on those stocks which are not selling uh beyond a certain number of days and we are focusing on recycling it and fulfilling 34:58 34 minutes, 58 seconds those stocks which are selling. So we are doing a very scientific approach across the country and uh we will ensure 35:05 35 minutes, 5 seconds that uh you know all the uh number of days of inventory that we have it does not unnecessarily increase uh because of 35:14 35 minutes, 14 seconds the gold price going up but it remains under control. 35:18 35 minutes, 18 seconds So just a small feedback here Sanka. So I take your point that you're taking strategic actions. One, if you could 35:25 35 minutes, 25 seconds provide some guidance around the number of uh days of reduction that we are targeting uh uh going ahead into uh the 35:34 35 minutes, 34 seconds coming uh fiscal would be very helpful u uh to sort of better track your performance on inventory optimization. 35:44 35 minutes, 44 seconds So we are not targeting any reduction as such. So we have clarified it earlier also uh uh targeting reduction is an 35:51 35 minutes, 51 seconds outcome. What we are targeting is improving the efficiency of uh uh inventory sales across all stores across 36:00 36 minutes our portfolio in east and north and west right and you are aware that no there are always regional disparities between 36:07 36 minutes, 7 seconds the various zones and the pricing. So if you ask me state question we are certainly are looking at improving 36:14 36 minutes, 14 seconds inventory efficiency. We are looking at uh uh suppling out slowmoving inventory. 36:21 36 minutes, 21 seconds We have also seen as the trend is changing that the high weight inventory which has been prepared and which is which is not selling. We will take a 36:29 36 minutes, 29 seconds call. So you will certainly see a outcome which will be in terms of number of days what we are constantly working with inventory optimization. 36:39 36 minutes, 39 seconds So the answer is that we are looking at this thing and it will depend upon market dynamics. What you are seeing 36:46 36 minutes, 46 seconds inventory there is the value the quantity of inventory remains the same. 36:51 36 minutes, 51 seconds what inventory quantity per store was there two year back it remains the same now due to Mr. limited point that I was sort of 37:01 37 minutes, 1 second indicating is that if the focus is on lightweight jewelry or lower carriage jewelry uh then in KG terms also at a 37:08 37 minutes, 8 seconds personal level that should uh see some reduction right so that was the limited point but I can take this uh offline uh maybe for participants to take the 37:18 37 minutes, 18 seconds questions here yes yes yes thank you thank you thank you 37:25 37 minutes, 25 seconds next question is from the line of rupes from long equity D partners please go ahead. 37:31 37 minutes, 31 seconds Uh hello sir thank you for the opportunity and congratulation on a very good set of numbers. 37:37 37 minutes, 37 seconds Uh first first question sir is this 200 odd stores we have. Can you give rough 37:43 37 minutes, 43 seconds split in terms of you know mature stores uh new stores maybe in between stores 37:50 37 minutes, 50 seconds what is what kind of uh annual revenue they are doing? What kind of margins they are doing? what kind of same same uh store sales growth they are doing some split would be very helpful. 38:03 38 minutes, 3 seconds So basically uh rep if you look at the uh the definition we when we say same stores for the current year that means 38:11 38 minutes, 11 seconds stores set up prior to April 24. So in the last two years you can take around 38:18 38 minutes, 18 seconds 40 stores which are the new store right around 40 number own and franchises taken together out of 196 156 are old 38:27 38 minutes, 27 seconds stores two number here and there 40 are new stores. Now uh obviously uh as you have said that when you look at the 38:36 38 minutes, 36 seconds return on equity the blended return on equity which had come down due to the uh IPO fund infusion and uh subsequently to 38:44 38 minutes, 44 seconds the QIP my existing store. So the SSG SSG means the growth of old stores which 38:52 38 minutes, 52 seconds have which are around 155 or 156 that number we given is what 21% right out of 39:00 39 minutes 30% growth 70 I I have always said the SSG growth is 70% of total growth if it is if the total growth is 20% SSG is 39:09 39 minutes, 9 seconds 14%. If the total growth is 30% SSG is around SSG is around 21% in the quarter three the SSG growth is around 21%. 39:21 39 minutes, 21 seconds Out of here of SSG growth is around how much? 39:24 39 minutes, 24 seconds 39 39% in three but this is misnomer because in quarter three the growth itself is 50%. So from the 50% we we can 39:33 39 minutes, 33 seconds look at I mostly refer referring to the YTD number. So the the growth is there. 39:39 39 minutes, 39 seconds uh now out of that you would be happy to know that we have got around 8 to nine store which have crossed 15 100 cr so we 39:47 39 minutes, 47 seconds are constantly looking at increasing the store turnover so we are not looking at this 20 uh 20 20% SSD our target is 39:56 39 minutes, 56 seconds clearly to take all store to 100 to 150 cr level the new store which we set up in the first year they give a revenue of 40:05 40 minutes, 5 seconds 18 to 20 crores but I think these are too much details So uh obviously a new store takes time to mature. The maturity 40:13 40 minutes, 13 seconds speed is momentum is higher in east and slightly uh slower in other markets. 40:22 40 minutes, 22 seconds Okay. Okay sir. The the the second question sir is non east was roughly 1100 k. So that is 9 month number I 40:32 40 minutes, 32 seconds assume. And then where where do you see this uh non east in fi27? 40:40 40 minutes, 40 seconds So see uh you know the growth rate that we are seeing in the non- east market is you know as much as maybe a little 40:47 40 minutes, 47 seconds higher than that of the east market because the base is lower. So we are continuously looking at 25 30% uh growth 40:55 40 minutes, 55 seconds in the non- east market while an 18 to uh 20% growth in the uh east market. So this is how one has to look at the overall numbers. 41:06 41 minutes, 6 seconds But this number can go to let's say 2,000 K in FI27 at least at least around 1,500 to,600 cr 41:15 41 minutes, 15 seconds of the farms. But maybe uh we have to recheck the number for FYI FY 27 that 41:21 41 minutes, 21 seconds 1700 clearly I see well let's say if it is around 1300 1300 into 30 41:30 41 minutes, 30 seconds correct okay okay and and sir uh I mean you you talked about this realization gain of uh 41:37 41 minutes, 37 seconds 3 three and a half% in Q3 2.5% in 41:40 41 minutes, 40 seconds [clears throat] 41:41 41 minutes, 41 seconds 9 months of this year if if I mean for whatever reason let's say gold prices go down from let's say 41:48 41 minutes, 48 seconds $5,000 to $4,000 we what kind of realization loss can we see and then which this 7% 7 to 8% 41:57 41 minutes, 57 seconds margin guidance number you give if there's a realization loss can can the margin be something like 5% or or I mean 42:05 42 minutes, 5 seconds can you just explain that if if the price goes what happen to the realization gain or loss the ea shall continue to remain between 7.2 to to 7.8%. 42:18 42 minutes, 18 seconds Uh this kind of price fall if it happens I think based on our prudent hedging policy uh today our hedging is at 55 to 42:26 42 minutes, 26 seconds 60%. And then the hedging percentage will go up to 75 to 80%. So uh in this 42:34 42 minutes, 34 seconds kind of sudden price fall as you are expecting to happen then we will accordingly uh you know uh our treasury 42:41 42 minutes, 41 seconds team will take the call and we'll manage uh the situation accordingly. So I think our EIA historically over the last four 42:48 42 minutes, 48 seconds five years have continued to remain between 7 to 8% and we will continue to make sure it remains between 7 to 8%. 42:58 42 minutes, 58 seconds Okay. Okay. That that is good to know sir and and and final question sir is you said that studed ratio is not the 43:05 43 minutes, 5 seconds only high value business there are some other parts of the business which are also high value like antique jewelry so 43:12 43 minutes, 12 seconds on 9 month basis whatever 8,8500 cr revenue we have can you split it between 43:18 43 minutes, 18 seconds let's say regular regular business and a high value addition business 43:24 43 minutes, 24 seconds no see I'll tell you there in as said that the higher margins comes from one is diamond studded jewelry, gemstone 43:33 43 minutes, 33 seconds jewelry, antique jewelry and also very lightweight jewelry where if we are creating very nice beautiful lightweight 43:41 43 minutes, 41 seconds designs within the budget of the consumers whether it be in uh you know 18 karat, 14 karat or 9 karat international designs there also the 43:50 43 minutes, 50 seconds consumer is willing to pay a 1 to higher making charges because of the design. So uh so when it comes to lower making 43:59 43 minutes, 59 seconds charge items which are mostly standard machine-made items those are the ones which brings down the overall uh you 44:06 44 minutes, 6 seconds know making charge scenario but the moment it is exclusive handcrafted uh very modern then the premium list goes 44:15 44 minutes, 15 seconds up by 1 2%. So it's very I I don't think we will be comfortable to share the uh ratio of what is premium what is not 44:22 44 minutes, 22 seconds premium those are strategic in nature but leave on that our forte is to create 44:29 44 minutes, 29 seconds lightweight jewelry and uh cater to the needs of the consumer and for that if it is of jewelry within 50,000 a consumer 44:37 44 minutes, 37 seconds is willing to pay 50,000 but if that makes that 1% higher making charge and it's a great design they are they'll be 44:44 44 minutes, 44 seconds happy to do so. So that's how it is. I must mention to you that our ATV this year has gone up to about 90,000 rupees. 44:54 44 minutes, 54 seconds So those prices are going up. Now 90,000 rupees in today's day and time is what 5 to 6 g. So we've been the masters of 45:03 45 minutes, 3 seconds creating lightweight affordable jewelry of various ranges. So that is our USP and that is what is helping us to grow in these challenging uncertain markets. 45:16 45 minutes, 16 seconds So, so I I get all of that uh sir, but my I mean that is the right metric to track. I mean the studed ratio is is a 45:24 45 minutes, 24 seconds incomplete metric to understand how the business is moving toward you know higher value addition. So I I would request you if you can find some way to 45:32 45 minutes, 32 seconds figure out uh to to share this number because that is the right right metric to track the business. 45:41 45 minutes, 41 seconds We'll keep keep the point in mind and see what can be done. 45:49 45 minutes, 49 seconds Thank you. The next question is from the line of Raj Sarav from Finvesttors. Please go ahead. 45:59 45 minutes, 59 seconds Yeah. Am I audible? Yes, you are audible. 46:07 46 minutes, 7 seconds Uh uh sir, yes you are audible. your Yeah. So, uh very congratulations for 46:13 46 minutes, 13 seconds this stellar set of numbers. So, um though you replied, but I want some more color on that. The the rapid gold price 46:20 46 minutes, 20 seconds fluctuation which occurred in Q4 all the way from uh almost $4,500 to $5,500 and 46:28 46 minutes, 28 seconds then again sudden drop to $4,400 and now settling around $5,000. 46:35 46 minutes, 35 seconds So realization losses how much that can be and how that is managed. 46:44 46 minutes, 44 seconds Uh so so I'll just tell you that this sudden volatile price movement happened for a matter of 7 to 10 days only. 46:53 46 minutes, 53 seconds Right? So therefore it has not been of that much of a great impact uh in terms 47:00 47 minutes of uh overall purchase and average rate of procurement and rate of sales. It has 47:06 47 minutes, 6 seconds just created a lot of turbulence uh you know in in our uh hedging uh uh hedging action I would say because there was a 47:15 47 minutes, 15 seconds time and we all uh you know part of the market have faced it that every day based on your hedging percentage because 47:24 47 minutes, 24 seconds you are on the sell side and the prices are going up you are being c you know having calls on mark to market and that 47:31 47 minutes, 31 seconds based on every day your sales are happening to a certain extent and the Marktomarket calls are of a difference. 47:37 47 minutes, 37 seconds So it created a lot of you know those 7 10 days was very much volatile and not a very comfortable situation but to assure 47:46 47 minutes, 46 seconds you that it this sudden movement up and sudden movement down is not something that has created that much of an impact. 47:53 47 minutes, 53 seconds It is the continuous movement up uh which has been the one which is creating impact and creating those extra 2 and a 48:01 48 minutes, 1 second half 3% profit for gold price rise and uh this current movement has not been of of a that much of a great impact. 48:11 48 minutes, 11 seconds Okay sir. And sir uh while I'm going through the last 3 four years uh results quartly results so what I found that we 48:19 48 minutes, 19 seconds are having a substantially higher operating or a beta margin in Q3 and that is north of always uh more than 10% 48:28 48 minutes, 28 seconds to be precise more than 11%. So uh just uh on steady gold price just just let assume a scenario when the gold price in 48:37 48 minutes, 37 seconds next year uh settle at the same price which is right now. So in that case what 48:43 48 minutes, 43 seconds is actually our margins in Q3 see margin in Q3 48:51 48 minutes, 51 seconds as we said uh that my sustainable business margin is 7.5 to 7.8 eight uh 48:58 48 minutes, 58 seconds when in in Q3 the sales are usually substantially higher and and hence in Q3 49:05 49 minutes, 5 seconds since the sale is higher gross margin absolute amount is higher and hence margin percentage looks higher at around 49:13 49 minutes, 13 seconds 9 9 to 9 and a half% it can go up to 10% also if let's say next year gold price remain the same and if the sales grow by 49:21 49 minutes, 21 seconds 60% then my opex remains the same opex will be let's say 200 cr in one quarter and let's see I'm just giving you ball 49:29 49 minutes, 29 seconds number 4,000 cr 4,000 cr 20% 800 cr 800 cr minus 200 cr 600 cr then 600 cr upon 49:39 49 minutes, 39 seconds 4,000 cr 15% uh will be uh will be the uh aida margin without doing anything. 49:48 49 minutes, 48 seconds So if the sales are higher absolute margin becomes extremely high. 49:54 49 minutes, 54 seconds Okay. So it is just the you say operating leverage when we when we sell uh Yeah. Yeah. That's what we s Yeah. 50:02 50 minutes, 2 seconds Exactly. That is exactly the operating leverage which comes into full play in Q3 and Q1. 50:10 50 minutes, 10 seconds Okay. And while Q1 Q1 I'm sorry. Yeah. 50:15 50 minutes, 15 seconds Sorry I'm adding sir. So while these are the features of Q3 and Q1, we still look 50:22 50 minutes, 22 seconds at conservative AIDA margin of 7.5 to 7.8 for the whole year. Which means that 50:29 50 minutes, 29 seconds if I'm looking at 10 or 11% in Q3, it can be lesser in Q4. So that you full 50:38 50 minutes, 38 seconds year blended margin of 7.5 to 7.8 and that is not a quarteronquarter variation. I hope that clarifies sir. 50:46 50 minutes, 46 seconds Yeah, that's clarify sir. Uh just wanted to confirm sir on steady steady gold prices what is our gross margins 50:55 50 minutes, 55 seconds margin you already talked about what is our gross margin at steady gold prices 15 to 16% sir you can take 15.5 to 16 or 51:05 51 minutes, 5 seconds you can take 15 to 15.5 and our intent is to improve it with a higher stud ratio and operating leverage. 51:14 51 minutes, 14 seconds Yeah, we have not compromised on our we have not compromised on our making charge so far and if you look look at 51:23 51 minutes, 23 seconds comparative numbers for the industry it remains to be superior and superlative. Okay. The north of 15% you said sir. 51:32 51 minutes, 32 seconds Yeah. Yeah. 51:33 51 minutes, 33 seconds Yeah. And sir uh with rising gold prices now gold prices has been like 5,000. So 51:41 51 minutes, 41 seconds what is the traction uh in the business right now? You are seeing uh the footfalls and uh any any effect negative 51:49 51 minutes, 49 seconds effect actually I'm rooting I'm just wanted to rule out from you from your the so you are talking about the the 51:58 51 minutes, 58 seconds gold price rise and its impact on the consumer. So the negative effect if you may say is that people are looking for 52:07 52 minutes, 7 seconds uh jewelry which is of lower weight so that it is as per the budget of the 52:14 52 minutes, 14 seconds consumer. So see what's happening is gold price has gone up by 65 70%. But the consumer's budget has not gone up by 52:21 52 minutes, 21 seconds 65 70%. It has gone up by say 20 25%. So that is where we need to make sure that 52:28 52 minutes, 28 seconds how we can reduce uh the gold weight or make the purity of the product lower. 52:33 52 minutes, 33 seconds That is number one. Number two is that old gold exchange has gone up you know 52:41 52 minutes, 41 seconds because consumers do not have so much of liquidity to buy it with their liquid money. So they are utilizing the old 52:49 52 minutes, 49 seconds gold and that is also a very strong part of our strategy and I think it's a strategy for the industry also that how we can utilize and recycle the old gold 52:58 52 minutes, 58 seconds lying in the households. So that is also another thing that will keep the industry moving forward and make sure that we continue to sell our new 53:06 53 minutes, 6 seconds products and new designs and serve the customer. Third is yes there are some consumers who are sitting on the 53:14 53 minutes, 14 seconds sidelines on the fence at these high gold prices. People are thinking what is the point of going to the jewelry store. 53:21 53 minutes, 21 seconds What can I buy? And it is for them that we have to come with 9 karat or 14 karat lightweight gold and diamond jewelry 53:29 53 minutes, 29 seconds that is within their budget or even look at other options and make those customers buy. So footfalls in in the like like I said the volumes have gone 53:38 53 minutes, 38 seconds down the 10% for the whole year 3% for the quarter uh footfalls also if I look and analyze uh it has compared to the 53:46 53 minutes, 46 seconds previous year come down by 10 15%. So so it is lesser footfalls but those customers who are buying is is buying a 53:54 53 minutes, 54 seconds little more jewelry or the prices are making them buy more jewelry and that's how the business is going on. 54:01 54 minutes, 1 second Okay. So that helps sir. And the final question is sir, you are still looking at 25% year on your growth in the Q4. 54:10 54 minutes, 10 seconds Yes. Is it correct sir? Q4. Yes, correct. Very much so. 54:15 54 minutes, 15 seconds Okay. Thank you very much sir and uh best of luck for future endeavors. Thank you very much. Thank you. Thank you. Thank you. 54:22 54 minutes, 22 seconds Thank you. The next question is from the line of Palavi an individual investor. Please go ahead. 54:30 54 minutes, 30 seconds Yes sir. Palabi from Samikshan. I just wanted to understand what would be our gross margin guidance for 4Q uh given 54:37 54 minutes, 37 seconds that we have uh I think inventory uh disclosed in the presentation cost is 13,500 54:44 54 minutes, 44 seconds approximately I missed your question. Can you kindly 54:51 54 minutes, 51 seconds repeat? Yeah, thank you for sharing in your presentation first the uh average uh cost uh for gold and yeah you know I 55:00 55 minutes think you've given it 11,500 uh in 2Q 13,500 in 3Q uh so based on that data point 4Q also 55:08 55 minutes, 8 seconds we should see some 150 basis point of uh uh realization gain uh would that be a 55:15 55 minutes, 15 seconds fair assumption in the gross margin no we don't want to comment on realization gain for Q4 see all a 55:24 55 minutes, 24 seconds function of h how much price is volatile in quarter 4 we have seen only uh 45 days where the prices were very high 55:33 55 minutes, 33 seconds obviously there there will be or would have been relaxing gain in 40 in the first 20 days right after that the 55:40 55 minutes, 40 seconds prices have come down so let's entire let's entire quarter span out and uh then only we can I don't want to make any conjecture on the rest of 45 days. 55:52 55 minutes, 52 seconds Uh as you said this is a function of the market prices, market factors and also 55:59 55 minutes, 59 seconds accounting classification of the prices loss uh gains and losses adjusted to create an account inventory in OCA 56:08 56 minutes, 8 seconds account but once again we sustainable AIDA margin of seven 7 and a half to 7.8% 8% 20 basis points here and there. 56:18 56 minutes, 18 seconds Right. My second question would be so assuming if we take a call probably by the end of by end of 4Q that gold prices 56:26 56 minutes, 26 seconds are likely to stay at similar level for the whole of next year no decline no increase. So in that situation uh we 56:33 56 minutes, 33 seconds will increase our hedging ratio to back to 80 90% is my understanding correct sir. 56:41 56 minutes, 41 seconds Yes. Yes madam. If if the gold price are in a downward trend and or there is a amount of stability and our balance 56:49 56 minutes, 49 seconds sheet and liquidity is allowing us we will go back to 80 90%. But till that 56:55 56 minutes, 55 seconds time it will range between 55 60 65 uh till till that stability is achieved. So 57:04 57 minutes, 4 seconds it is just so our hedging ratio just to confirm this uh is just dependent on the once we get stability we take it up so that the margin requirement doesn't 57:12 57 minutes, 12 seconds fluctuate uh it's not even about the decline it will be more about the call will be based on stability 57:19 57 minutes, 19 seconds stability exactly ma'am right now it is not at all in a stable situation right sir thank you sir 57:28 57 minutes, 28 seconds thank you the next question is from the line of jes an individual idual investor please go ahead. 57:36 57 minutes, 36 seconds Hi sir is my voice audible. Yes. Yeah. Yes. Yes. 57:42 57 minutes, 42 seconds Congratulations sir for a great shot of numbers and amazing PPT. Just one question from my end. Uh what is our current hedging policy as on date? How 57:50 57 minutes, 50 seconds much percentage are we hedged as on date? 57:55 57 minutes, 55 seconds Yes. We've already explained this question earlier. No I think repeated questions are coming from the same subject. Yeah. 58:03 58 minutes, 3 seconds Okay. So, so we I you kindly refer to our slides. Uh we are saying that it's a board approved policy. It's a prudent 58:10 58 minutes, 10 seconds policy. Uh we say minimum 50% has to be hedged. We have the during this quarter also we 58:17 58 minutes, 17 seconds maintain hedging in the range of 55 to 60% and due to the elevated gold price working capital challenges margin calls 58:25 58 minutes, 25 seconds we will remain in the this range and as Paluji asked from Savika that if the gold prices are stable or if it falls we 58:33 58 minutes, 33 seconds can again take it to 85 to 90% but at the current elevated pressure due to working capital challenges it will 58:39 58 minutes, 39 seconds remain in the range of 50 60%. And it's a board approved policy. Yeah, thank you sir. That's your my question was. Thank you. 58:48 58 minutes, 48 seconds Thank you. 58:50 58 minutes, 50 seconds Thank you. The next question is from the line of Sonal from Precient Capital. Please go ahead. 58:59 58 minutes, 59 seconds Hello. Hi sir, this is Sonal Manaz. I hope I'm audible. Yes. Yes. Yes. 59:05 59 minutes, 5 seconds Okay. Sir I wanted to understand uh from a disclosure perspective uh you've given uh sales realization you've given your 59:13 59 minutes, 13 seconds top line in Kors uh just back calculating some numbers in terms of volume of items sold or let's say 59:22 59 minutes, 22 seconds gramage or tonnage of whatever gold sold uh is it fair to assume that the volume is flat y for 9 months 59:31 59 minutes, 31 seconds uh if we measure it in terms of tons of gold if we measure it in terms of let's say items sold. 59:41 59 minutes, 41 seconds I want to understand the volume growth basically for 9 months. I want to understand volume. 59:46 59 minutes, 46 seconds So the volume as I as I mentioned the volume deg growth in quarter three was minus 3% like quarter on quarter and for 59:56 59 minutes, 56 seconds the whole 9 months if you look at it it is minus 10%. That is for the for gold 1:00:02 1 hour, 2 seconds and for diamonds uh if you look at just diamonds as a as a product then it is up 1:00:08 1 hour, 8 seconds by 12 and a half% for the 9 months that these are all numbers. 1:00:15 1 hour, 15 seconds So how do you measure volume shanker here? Is it in terms of gramage of gold uh or is it in terms of items sold basically? 1:00:23 1 hour, 23 seconds No no gramage. We are measuring in terms of grammage. 1:00:27 1 hour, 27 seconds Gramage of gold. Okay. I will I will like to add here that India import of 1:00:34 1 hour, 34 seconds gold remains at 800 tons 800 850 tons for last 10 years while the jew and and the jewelry consumption remains in the 1:00:43 1 hour, 43 seconds range of 450 to 500 tons for last 10 years and the jewelry market size has increase from 30 billion to 120 billion 1:00:52 1 hour, 52 seconds almost three times. So uh volume is not a factor in jewelry industry. People don't consume jewelry by volume but by 1:00:59 1 hour, 59 seconds volume. So there is a high possibility that even for next year and if the gold prices again rises by 50 60%. You will 1:01:08 1 hour, 1 minute, 8 seconds not see any volume because customer budget will not increase the 50 60%. So he will end up buying a low jewelry 1:01:16 1 hour, 1 minute, 16 seconds lowage jewelry. He will he may go for a silver cable jewelry with diamond. He can go for a smaller size jewelry to 1:01:23 1 hour, 1 minute, 23 seconds maintain his pocket size. But we will continue to go by grow by 20 to 25% and so on depending upon our SSG as well. 1:01:32 1 hour, 1 minute, 32 seconds Got it sir. Thanks for explaining sir. 1:01:34 1 hour, 1 minute, 34 seconds Thank you. That's it from my side. Thank you. Thank you. Thank you. 1:01:39 1 hour, 1 minute, 39 seconds The next question is from the line of Abhiji from Antic Stock Broking. Please go ahead. 1:01:45 1 hour, 1 minute, 45 seconds Hi sir. So thank for the opportunity and uh congrats on a very strong set of numbers. Uh [clears throat] so my first 1:01:53 1 hour, 1 minute, 53 seconds question was on in the staff cost you said that uh there was about 6 and a half crores of impact from uh uh the new uh labor code. Right. 1:02:05 1 hour, 2 minutes, 5 seconds Correct. Correct. 1:02:06 1 hour, 2 minutes, 6 seconds Uh and that has not been separately shown. It's basically a part of the staff cost. So we have to separate it and look at the margin. 1:02:16 1 hour, 2 minutes, 16 seconds Yeah. Yeah. This is a one time because later the impact will be far lower in the forthcoming quarters. 1:02:24 1 hour, 2 minutes, 24 seconds Yeah. Yeah. Correct. Correct. This is this is impact will be will not be substantial as you've seen in other companies because we have we have the 1:02:32 1 hour, 2 minutes, 32 seconds labor code has come around five six years back. We have been aligning and calibrating our structure of the cost 1:02:39 1 hour, 2 minutes, 39 seconds for own staff as well as third party. We have been preparing oursel ourselves for a long time and as you said know we are a employer of choice we are a great 1:02:48 1 hour, 2 minutes, 48 seconds place to work our focus is for social value addition so we've been preparing oursel for those lines okay so the staff cost during the 1:02:56 1 hour, 2 minutes, 56 seconds quarter should be about 47 crores 469 million if we remove the 6 and a half crores from that 1:03:04 1 hour, 3 minutes, 4 seconds u correct uh that is one and if I then look at the fourth quarter and 1:03:11 1 hour, 3 minutes, 11 seconds for you know for the year as a whole uh ITA margin still would be at about even if we cut it down it will be still at 1:03:19 1 hour, 3 minutes, 19 seconds about 10%. for the year. Uh correct me if I'm you know substantially wrong. 1:03:25 1 hour, 3 minutes, 25 seconds Correct. Correct. See no no so we have given this number a bit margin for the whole for the for the 9th month. Right. Right. 1:03:32 1 hour, 3 minutes, 32 seconds So for the n month for the full year also even if we don't have a great fourth quarter in terms of 1:03:41 1 hour, 3 minutes, 41 seconds margin you know so 9 month margin is 10.8. 1:03:46 1 hour, 3 minutes, 46 seconds So that should easily the the full year margin also should be around that. Then 1:03:53 1 hour, 3 minutes, 53 seconds uh you see uh in terms of overall numbers even if we have been guiding 1:03:59 1 hour, 3 minutes, 59 seconds that our EITA sustainable EITA is 7.5 to 7.8. So that is what we will keep guiding. 1:04:08 1 hour, 4 minutes, 8 seconds But with all these uh you know numbers and situations and and what we will discuss then the plus what you can add 1:04:16 1 hour, 4 minutes, 16 seconds certain pluses to it but yes a sustainable EITA margin of our guidance is 7.5 to 7.8 we will not comment more than that. 1:04:23 1 hour, 4 minutes, 23 seconds Yeah right right that that I agree and so I was just working around the figures and and you know coming to I mean this 1:04:31 1 hour, 4 minutes, 31 seconds year would be a extraordinary year in terms of margins. 1:04:36 1 hour, 4 minutes, 36 seconds Yeah. Yeah. This is a this is an ext so that that's why we are saying that 1:04:44 1 hour, 4 minutes, 44 seconds quarter 4 is still 45 days are pending next year uh we have given guidance of 7.5 to 7.8 date 1:04:51 1 hour, 4 minutes, 51 seconds right this year so far has been very good got it thanks thanks thanks for that that's it so my sir thank you 1:05:00 1 hour, 5 minutes thank you the next question it's on the line of wank from MIT please go ahead 1:05:07 1 hour, 5 minutes, 7 seconds uh hi sir this is from uh just one question on balora uh how do we see the integration over the next one year or 1:05:15 1 hour, 5 minutes, 15 seconds two in terms of the stores that will be acquired any color on the store economics and the profitability of those stores will help. 1:05:25 1 hour, 5 minutes, 25 seconds See, we will have a separate, you know, once the full acquisition is in place, we will have a separate call with the analyst with the strategy. But broadly 1:05:35 1 hour, 5 minutes, 35 seconds speaking, uh we just want to tell you that you know Senko being a 88 year old brand and over four generations we've 1:05:43 1 hour, 5 minutes, 43 seconds been serving customers. So Melora is one of our one of the many strategies that we have to uh connect with the generally millennial young generation customers. 1:05:54 1 hour, 5 minutes, 54 seconds If you look at it, our average ticket size uh even in in the you know traditional Senko business that we have 1:06:01 1 hour, 6 minutes, 1 second is in the range of 80 to 90,000 which is six to seven grams is of today's date and time right so therefore this will 1:06:10 1 hour, 6 minutes, 10 seconds only add to the portfolio of of design centric and catering to the young generation and that is how it is and 1:06:18 1 hour, 6 minutes, 18 seconds then we will you know once the full uh acquisition is in place currently it is the board's approval that has come in place and the final uh uh you know thing 1:06:28 1 hour, 6 minutes, 28 seconds is still pending. So we'll have a separate analyst call and share our ideas in detail. Sure. Sure. Thank you. Thank you sir. 1:06:37 1 hour, 6 minutes, 37 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to the management for closing comments. Over to you sir. 1:06:49 1 hour, 6 minutes, 49 seconds Yes. Thank you very much uh you know all my investors and well-wishers and and you know every quarter the questions 1:06:57 1 hour, 6 minutes, 57 seconds that all of you keep putting on us makes us think about it and you know formulate our strategies and how we can perform 1:07:05 1 hour, 7 minutes, 5 seconds better. Uh once again gratitude to the team that this particular quarter three has been a milestone historical quarter. 1:07:13 1 hour, 7 minutes, 13 seconds This year has been historical as uh you know sir was saying that with the gold prices moving up as in you know in a way 1:07:21 1 hour, 7 minutes, 21 seconds that has not been seen before. We are in the middle of history uh taking place and I think that as a growing company 1:07:28 1 hour, 7 minutes, 28 seconds our focus is how we can keep growing keep producing designs and products that we can serve the customer in these times also and to reach out to the dire 2 1:07:37 1 hour, 7 minutes, 37 seconds three four towns and cities. uh one thing in in the whole scenario we must remember macroeconomically that still 1:07:44 1 hour, 7 minutes, 44 seconds the play of unorganized to organized continues to happen. The more these gold price volatility comes in more the 1:07:51 1 hour, 7 minutes, 51 seconds regulation comes in. Just to inform all of you government is thinking of how to make hallmarking much more stronger. 1:07:58 1 hour, 7 minutes, 58 seconds Traceability will be a key factor going forward. So compliances, rules, regulations, systematic thinking, data 1:08:05 1 hour, 8 minutes, 5 seconds analysis, these all will become very very critical for the business to grow in the future. And I think that we at Senko Golden Diamond are are amongst the 1:08:14 1 hour, 8 minutes, 14 seconds few dwellers in the country who are you know preparing ourselves and poise to grow with penetrating into the smaller towns of the country also. So thank you 1:08:22 1 hour, 8 minutes, 22 seconds very much and and hope to uh connect with you all again in the next quarter. Thank you and happy Valentine's Day. 1:08:30 1 hour, 8 minutes, 30 seconds Thank you. 1:08:32 1 hour, 8 minutes, 32 seconds Thank you on behalf of Asian Market Securities. That concludes this conference. Thank you for joining us and you may now disconnect your lines.