Ladies and gentlemen, good day and welcome to Bata India Limited Q4 FY 2025 Earnings Conference Call hosted by JM Financial Institutional Securities Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an 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. Gaurav Jogani. Thank you, and over to you, sir. Thank you. Hello everyone. On behalf of JM Financial, it's my pleasure to welcome you all to Bata India's Q4 and FY 2025 earnings conference call. From the management, we have with us today Mr. Gunjan Shah, Managing Director and CEO, Mr. Amit Aggarwal, Director of Finance and Chief Financial Officer, and Mr. Nitin Bagaria, AVP and Company Secretary. I would now like to hand over the call to the management. Thank you, and over to you, Nitin. Thank you, Gaurav, and thank you, JM Financial team, for putting this together. Very warm welcome to all of you. I have with me Gunjan, MD and CEO, and also Amit Aggarwal, Director of Finance and CFO. We have shared the presentation with the stock exchanges last week. We'll be taking you through the same. We'll navigate the slides as well as the page numbers to stay synchronized. On page number two, you have the disclaimer. I'm sure you have gone through the same. I'll now request Gunjan to take over, and thank you once again for joining. Hi everyone. Good morning. Welcome to the call. I will jump to the presentation, slide number three. Also, in line with the previous presentations over the last couple of quarters, I will focus on a few focus levers that we are consistently driving amongst the overall strategy of driving growth profitably. Okay, so the three levers, just for refresh, driving same-store growth, portfolio evolution on a few focus portfolio levers, and the last one being inventory agility/complexity. We'll try and update you on the various initiatives and how that's been progressing. Within the store growth, there is zero-based merchandising. We made, obviously, some decent progress post the last quarter where we were scaling up the pilot, and the second one was on driving value proposition in the stores. If you can move to slide number five, you will see where we have tried to picturize what is the kind of change that we are trying to do through zero-based merchandising visually, besides, obviously, the numbers that I will talk about subsequently. I have also spoken about the numerical part, but this will pictorially tell you how the stores look different. Just to give you, the objective is to make the stores more inviting. As you can see in this example of one of the stores, the barriers to visibility inside, depth into the store, the number of fixtures that were on the store that have been reduced while simultaneously increasing seating, which helps and aids conversion, especially on the busy weekends, etc., when there is a surplus of consumers in the store. It also enables us to make the store more clutter-free, while the picture does not show that, but I will move you to slide number six, which shows on the left side what are the key inputs that go into, in a measurable numerical manner, onto zero-based merchandising. We are now to about 146 stores, so it's obviously a very large expansion from less than 40 or so last quarter. The pace has obviously gone up as we have learned to do this much faster. Obviously, we want to keep on doing this much faster. This stock quarter also, this will be a very large focus area. Associated with this is that the number of lines in the store have dropped by almost 40%. The inventories have dropped by about 25%. What we measure as availability of various size sets and articles has gone up significantly versus net of control by about 300 basis points. The retrieval time is a key measure for customer experience and success is reduced to less than a minute at 45 seconds, which is what the pilot was also. It is being done now at scale versus more than one and a half minutes for the rest of the network. What this shows is that despite the muted demand, etc., these stores do deliver significant key success factors. The ones that we measure for this MDM is that how are they doing versus control stores in the same city, and they are all in the positive as the numbers show to you, both in terms of consumer experience as well as in terms of financial outcomes. Okay, moving to slide number seven, the other lever was driving value proposition. We made, again, significant progress on this. Now it's spread all across the network. We would also have started seeing some impact of this from a volume growth objective, but still a long way to go in my view of what would define success for this. As you can see now, especially on the ladies Bata core essentials that we call, right, the price points have been already discovered. Last time I shared this, now it is spread across almost about the full network. Simultaneously, we have also introduced and launched the whole Power Move Plus collection, which is starting at a very attractive price point with some very cutting-edge designs that we have developed along with some of our China partners. We will expand this much, much larger. There are some exciting results in the latter part of the previous quarter, but we will see this going larger even towards the second half of this calendar year. Obviously, parallelly, we are also expanding this across the network. This kind of a price point deserves to be there across the network. It will go to all Bata stores. Hopefully, that should also drive volumes for us and therefore volume-driven revenue growth. Slide number nine, I'm moving to the next lever, which is basically on certain focus portfolios. One first one is floats, and therefore the volume category. It continues its attractive growth trajectory, as you can see here. Now at pretty large volumes, it also continues its growth rate of almost 40%+. As you can see out here, it's almost more than doubled in the last two years, backed by solid volumes. Obviously, as I mentioned, it comes at a, in most stores, it comes at a premiumized ASP. As you can also see, we are also trying to use some amount of science behind how we are trying to display it with a silhouette-led display with the range now expanding, but simultaneously trying to bring out a story, as you can see in the pre and post photographs that have been done. We are also investing big time in this portfolio behind collabs, which we see is one of the key drivers for consumer interest, especially in the youngsters, both kids as well as below 10, as well as 10-15 or 10-16. We will increase collabs. We are down with this Marvel, Donald Goes Live. It has actually gone live already in stores, right? We will have obviously some more campaigns coming across going forward. We hope that this growth rate trajectory continues on this part of the portfolio. Moving to slide number 10, another piece that has actually taken a lot of our effort has been power portfolio. Besides the Move Plus, which was a price point driver, we have also introduced two new technologies. Easy Slide has been there for some time. Now it is getting scaled up. Now we are taking it to 1,200 doors. We are also resetting the price point on this to make it even more attractive. Also, the Stamina Plus collection, which is at a premium end at about INR 4,000 MRP, has shown some good results in the first launch last quarter, and that has been taken to almost all the doors. The technology as well as the premium objective on Power continues while we do the Power Move+ that I talked about in value propositions. Continuing forward to slide number 11, Hush Puppies continued its expansion on the premium side, right? As you can see, consistent quarter-on-quarter store expansion, and that journey continues both through the franchise model as well as the COCO model. We have also associated that, shared with you last time with Vir Das and Sahiba Bali, and they were the centerpiece of the office speaker campaign, the Ease Please that you see, and that has given us some very good results. It's also burnished our credentials on taking the comfort premium credentials of Hush Puppies into the semi-formal space, and we expect that to unlock revenue growth for us going forward. On slide number 12, moving on to the inventory agility lever. Obviously, a whole bunch of numbers that are flowing in the next couple of slides, as you can see. They are continuation of the updates that I've shared with you all in the previous presentations for the last couple of quarters. On slide number 13, if we can move there. The number of lines overall across the network, while I talked about the ZBM stores, right, overall across the network also reduced by almost about 30% year- on- year. The top articles, the way we look at it is that while we reduce, the whole success of this is that while we reduce inventory and complexity, we keep on increasing our size fulfillment as well as ability to satisfy consumers in store. It's a dual balance objective. We develop, deliver both, then it's excellence on this front. That has gone up, as you can see on the numbers. It's 12% better than where it was last year, despite significant reduction of availability, and 7% better on overall. The clutter at stores. Basically, the objective is that total net lines, including any discontinued lines at stores, are what is clutter at store, and that lines per store is the active lines that we are sending into the stores, right? Both of them have significantly reduced. The next chart on 14 on inventory agility is more talking on financial terms. The inventory is a significant drop, 16%. This is over a continuing drop over the last almost now five quarters that we have managed to do. That has shown up in terms of terms also. We still see some more meat going forward on this entire piece, not only in total quantity but also on the quality of inventory, which is what you see in the aged inventory. That is about 30%-35% lower. Yeah. In that line and the potential that we see on this, I'll take you through the slide number 15. We have launched off a large transformation project with an external partner on what we call as customer first, on how are we able to make sure that everything that we are doing through the organization comes through the value chain and impacts the consumer. Consumer centricity, making sure that we are agile enough to adapt to trends. The pipeline is kept efficient enough so that we are able to react fast, driving it through operational excellence, making sure leakages are, how do you say, tightened up. Last but not the least, making sure data is at the core of all the decisions that we take, including innovation. It is going to result in tangible outcomes that we foresee over the next several quarters. The project has already been kicked off, and we are looking at great benefits, furthering already some initial signs that we have seen on this front that I shared with you in the last previous slides. Slide number 16, a few other highlights. Now franchise stores stand at about 625. For the first time after a long time, we have started seeing some revival and contribution from the less than INR 1,000 price point, which shows up in our volume growth. Though we would have desired much more so that we can also result that into revenue growth, which we are hopeful for going forward. Overall, NPS stands at a high of 85. Efficiency parameters in the stores have gone up. We are also in our distribution business expanding now key retail outlets, which are our activation program for the MDOs to now almost about 1,400 outlets. We have installed a larger saver Apex in the backend in Batanagar in the PU DIP machine. This backs our commercialization of the IM EVA machine that we did last year. These are all in line with what we feel is the right strategy for manufacturing, which is automated Apex technology intensive and IPR-driven is what we want to own while we use contract packers for the manual labor-intensive pieces, fashion-driven. We were also recognized for some awards. We ran a few campaigns, as you can see out here during the quarter, and also collabs with fashion designers. With that, I will take you to the last slide, which is slide number 18, and I will invite Amit to talk on this. Amit, yeah. Good morning, everyone. From a financial slides perspective, the overall revenue from operations stood at INR 788 crore, which is a value decline of about 1.2% compared to the previous year, same quarter. The gross margin was at about INR 455 crore, while there is an erosion of about 230 basis points versus the last year's same quarter. EBITDA margin reported is at about 25.5%. The change versus last year is about 14 basis points lower. Now, in the EBITDA margin, there is a change in accounting for one of the licensed brands based on the index. Like-to-like EBITDA margin versus last year would have been about 23.5%. From a PAT perspective, overall PAT stood at about INR 46 crore, which is a decline of about 215 basis points versus last year's same quarter. What do you have? Yeah. 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 touchdown telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Sameer Gupta from India Infoline. Please go ahead. Hi sir. Good morning and thanks for taking my question. Sir, firstly, on the gross margin contraction this quarter, now I understand that increased franchising operations will also lead to some gross margin dilution. If you can maybe quantify the impact of that and rest if there is any gross margin contraction, the reasons for that. Okay. A couple of factors contributed to it. One is obviously the mix with obviously franchise and e-commerce does, as I mentioned in the past, have a different implication on the way it flows through from a gross margin to EBIT level. Also, the fact that we have been consciously providing value proposition while we are parallelly working towards resetting the cost structures for some of our lead products, like the kind of example that I mentioned, Sameer, in my presentation, and that should pan out over the next. Both of these, I think, have contributed to the gross margin that you see. Got it, sir. Second is, sir, more bookkeeping question. If you can help me with the channel mix in terms of revenues for this year, Coco, franchisee, multi-brand distribution, and e-commerce. Should be basically about for the year, can I have it handy? Retail would be about 70% COCO. You will have franchise at about 7.5%, e-commerce at about 10%, and you will have IND at about 12%-13%. I hope that's probably yeah, Sameer? Great, sir. I'll come back in the queue for follow-ups. Thank you. Thank you. The next question is from the line of Videesha Sheth from Ambit Capital. Please go ahead. Yes, hi. Morning. Thank you for the opportunity. The first question was that you ended the year with 100-odd stores being added. So how should we think of store addition momentum going forward? Yeah, it should be a little higher going forward, Videesha. Right now, as we look at it, right, obviously, as I mentioned, we would want to continue, and we've largely retained, which is about an 80-20 ratio between franchise and COCO. It should be a little higher next year compared to the previous year that we've seen. Got it. If you could just help with the revenue contribution of the revenue mix from the key brands that you operate, being Bata and Hush Puppies, Comfort, etc.? Okay. We don't share that, but basically, I would say that the second and the third largest brands after Bata, which is the largest by far, right, is Hush Puppies and Power. They would be in the strong double digits in the range of about 20%. Noted. Noted. Just two small clarifications from my end. In slide number six, when you're talking about the output of the zero-based or sorry, of the value proposition date, I just wanted to check that is it fair to interpret that the opening price points are currently available only in 600 stores out of the entire network? Okay. No, no, no. The value proposition. You're talking on slide number seven? Slide number seven. Sorry. Slide number seven on the left-hand side. Yeah, yeah, yeah. No, so this is basically trying to talk about that overall universe, which is the price point that you see. So let's say, for example, the core price point is 799, Videesha, right, would be a core in, let's say, for example, about 800 stores. What is the opening price point for the balance 600 stores? From a full portfolio on the table, we have an opening price point, and that's basically suitable as the opening price point in the store for, let's say, about 600 stores, which are being taken to 800 as part of driving the value. Understood. On the slide earlier to that, which is on the zero-based merchandising, the input or the output list is being showcased in this slide. That would be for all the 146 stores or, again, it would be a sample out of 146 stores? No, no. This is for all 146 stores. Got it. Got it. I'll get back in the queue for the question. Thank you. Thank you, Videesha. Yeah. Thank you. Ladies and gentlemen, before we take the next question, we would like to remind that you may press star and one to ask a question. The next question is from the line of Gaurav Jogani from JM Financial Institutional Securities. Please go ahead. Thank you. My question is with regards to just the lower other expenses this quarter. You did, I think, mention that there is some adjustment with regards to the license rights. If you can explain that a bit in detail and what exactly it is. Yeah. I'll ask Amit to do this. Yeah. Hi, Gaurav. In terms of, see, there is a change in the construct of one of our license brands, and in line with the earlier, the royalty what we were paying towards the usage of the brand was being charged as other expenses. However, in line with the index requirement due to change in the structuring of the agreement, the same has been led to creation of an intangible asset, which you would see in the balance sheet side also. Therefore, once I create an intangible asset, the amortization and the financial liability of the same gets charged in the form of my depreciation and finance cost. Okay. On a like-to-like basis. Yeah. Yeah. No, so my question, sir, would this be a recurring in nature? I mean, every quarter now this will be a? Yes. Yes. It will be a recurring. So we will have three more quarters where there will be numbers may not be comparable with reference to the previous year. Once we reach quarter four of 2026 financial year, then numbers start becoming like-to-like. Sure. That explains the reason why the other expenses have declined so much on a YoY basis. Yeah. Apart from that, also, there is an improvement or underlying initiatives which we have run, which has led to improvement in overall other expenses. If you look at purely from a P&L perspective, if I exclude the gross margin impact, the overall cost structure, which is including your employee expenses, finance cost, depreciation, and other expenses, overall the spend is marginally lower versus last year. In terms of percentage of revenue, it has marginally grown up by 30 basis points, which also includes one of exceptions of about, let's say, 100 basis points in terms of my employee cost, which should not be recurring in nature. Sure. You are saying the employee cost is higher by 100 basis points approximately this quarter, right? Because the run rate was around INR 100-odd crores a quarter basis, roughly. Yeah. Yeah. Okay. Okay. And sir, my next question is with regards to the overall demand conditions. So you did highlight that in the 146 stores where you have implemented the zero-based budgeting, there you were able to see a better revenue conversion volume, etc. But what about the remaining? Is it largely because of the muted demand environment exactly, or there is some other issue as well because of this the overall revenue performance has not been being flattish rather is what I would say. Yeah. Yeah. No, so obviously, we know that the demand conditions have been tight, Gaurav. However, within that, what we see is that our ability to do two, three things, right? One is provide the right kind of portfolio to consumers, which they are looking for, and many of them are, what we see very clearly, are looking for some kind of a relief from the overall inflation that they have seen, and therefore, value for money. The second piece is our ability to showcase that to the consumers in a tangible way, which is, are you able to showcase them in a non-cluttered way? Are you able to showcase them in a full-set manner, which is all sizes, etc., our ability to make sure that they are served well. Those are the ones which are resulting in the delta performance that we see and which we are measuring for, which is why we are looking at it very aggressively across the various levers that I have talked about, and hopefully, that should result in the overall network getting impacted over a period of time. Okay. Sure. Sir, just lastly, I mean, on the float side, your floats have been really doing well for you. Has this now been expanded across all the stores, or still it remains in terms of the presence limited to most of the metro towns or certain kiosks that you were trying to open earlier? It is across stores. It is across stores, Gaurav. In some stores, it is now resulting in basically some of the places where we have opened kiosks, which is to cater to basically where we might not have the right kind of store footprint, or we want to have a point of sale which shows up consumers' floats proposition. Sure. Sir, I think last time you did mention that this has already crossed, I think, INR 1 billion plus in revenues for us. Any number that you would want to put out for this brand? At the run rate, in fact, it crossed out by a handsome margin. I'm assuming INR 1 billion is INR 100 crores, right? So it crossed it by a handsome margin last year. And this year, my sense is if this continues momentum, we should be in the range of about INR 200 crores. Okay. Sir, sure. Thanks. I will come back in the queue for more questions. Thank you, Gaurav. Bye-bye. Thank you. The next question is from the line of Ankit Kedia from Phillip Capital. Please go ahead. Sir, my first question is on the inventory. We are introducing more of the power products in the stores, which could be at a higher ASP. Two, we are reducing inventory in the stores of other products. Floats two years back was not there. Apple was not there two years back in the store. So what kind of the inventory are we reducing in the stores? I understand the clutter getting reduced, but what are these new products replacing in the store? Okay. There are two, three pivots that are there on this, Ankit. I mean, obviously, we can speak a long time because there's a lot of effort that's gone in. The results are now being seen, but it's been in the works for almost about a year, right? The first thing that's there is the one that I'm sure you can tangibly see is reducing the aged inventory, which is basically to do with on two fronts, right? One is reacting fast on a slow-moving product, and the second one is to make sure that we are also ordering in the right manner, right? Now, the technology of Blue Yonder that we've implemented, some of the processes and governance that have been put in place, etc., etc., leading up to that. Reduction of aged inventory, which is redundant inventory, does not provide proposition. We don't market it to consumers is one big lever. The second one is basically making sure that we are able to have sharpish collection for the new products. Now, making a new, let's say, for example, a new sandal or a new loafer, just by itself, at least we believe, does not basically lead to great success or great probability of success. We need to present a collection to consumers, which is what, let's say, this entire Power Move Plus is. It's a collection of articles which are basically sitting in a certain proposition of, let's say, in this case, value at a certain technology at a certain democratized price, and therefore leads to pitching a story to the consumers and hopefully a good chance of success that we have seen, or Floats for that matter, or let's say the office sneakers from Hush Puppies. That is the second piece. That That has also forced the teams to be far more choiceful in the new products that they bring in. The last piece that's there, and which is, I think, the one that is going to result in a lot more work going forward, is cannibalization. Is there a distinct reason for a product to be on the shelf? I mean, if it's another sandal with the same black color, if it's the same slip-on with the same brown color, are you offering enough reason for the consumer to be able to see it differently versus another one against it right on the shelf? Are the price points enough different, etc.? Which has also resulted in that is what I have talked about in ladies' value proposition, that one is the value proposition of opening price points, etc., but the other one is the collapse price points. That results in questioning that do you need the same sandal, which was at, let's say, for example, INR 799, and you have another one at INR 899. They might not necessarily need to coexist together. Either one of them will serve the proposition to the consumer. These are three broad levers. Obviously, it results in a lot more work, but effectively, that's what is resulting in this. Excellent. Sir, in a lean demand environment, what we have seen in the last two or three quarters, if the demand doesn't play out, do we see higher discounting? How does the supply chain at the back end work, given that you're more sharper in the inventory today? Yeah. It does result in that. It comes with a lag, and which is what I answered to someone else who was talking about it, that we are now also making sure that the products that we are looking for value proposition, we want to reset the cost price. The volumes go up on a per article basis. My ability to amortize costs and therefore get per pair cost down goes up, etc. They do result in that. What it also helps is that because you have got limited conscious choices of new products, your ability to react is far better. If a product is selling well in one part of the geography versus another, we move that stock out. Obviously, it slows you down if you have got more and more clutter in the pipeline. It does result in much better efficiencies, therefore lower intensity of markdown after a lag. Sir, my last question is on the focus product scheme announced in the budget. We have not seen the fine print of that from the ministry side. Do you think if implemented, we will see a lot more of the global brands come in the country or exports as an opportunity will open up for you to the fair end? How should we read that from a budget perspective? Okay. While we narrate the fine print in the details, as you have rightly said, there is not so much clarity. However, the piece is that, and I think there is already a lot of ecosystem that is developing because of BIS itself, Ankit, right, so that we can see evidence of that. From a Bata perspective, we are obviously consciously working on, I have mentioned this, on creating a complete structure within Bata India, which can basically cater to Bata globally. That's going to be an opportunity which will keep ramping up over a period of time. As we see tangible progress, I will keep updating you all on it. Thank you so much. If there is clarity on PLI or any other scheme, etc., it will only provide impetus on this going forward. Understood. Thank you so much. Thank you, Ankit. Thank you. Ladies and gentlemen, to ask a question, you may press star and one. Now, participants who wish to ask questions may please press star and one at this time. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead. Hi. Hi, Hi, good morning. Thank you so much for the opportunity. Gunjan, a couple of questions. Firstly, on the resetting of the business, that's the way I'm looking at it. Rahul, can you speak a little louder, Rahul? Yeah. Yeah, sure. Is this better? Yeah. Yeah. Okay. I was basically looking at Bata in terms of the entire resetting of this business. I understand the demand is weak, but you're obviously doing more premium, some automation focus, more efficient inventory management. From an investor perspective, what would you expect Bata to look like three, five years out? When you are tangibly measuring success of these changes, how should we look at it? Specifically, talk about financial metrics. Will the Bata look very different from what we are looking at today in terms of growth margins, in terms of balance sheet terms? Anything you want to highlight? That's the first question. Okay. Why don't you complete your question, Rahul? Sure. And second was a bit shorter term, let's say, next two years. You talked about volume growth, consecutive quarters now better, but obviously, pricing is playing its own part. The way to look at growth for Bata should be more format-wise, which you discussed about retail, FOFO, COCO, e-commerce, industrial, and what it entails when the salience changes, what it entails for the gross margin, operating margin, because assuming that whatever right now, fourth quarter you've reported, based on that salience and incremental growth outlook, how does this business look like in, let's say, two years? How should we look at growth and ASPs and different format growth, whatever you want to talk about? The related question also was on inventory and working capital. Should we expect more rationalization on inventory, which you alluded that we'll continue to work on that? So this 80 days of inventory of sales, which we look at, does it further decline and where does business stabilize over a two-year timeframe? Those are my questions. Thank you. Okay. All right, Rahul. They are pretty much linked together, Rahul. I'll try and see, we don't normally give forward-looking commentary, but however, at least from a trust area and an impetus perspective, I will try and give you a few markers and more than happy to see whether the team can connect with you offline also. One is that we want to make sure Bata is, how do you say, the heart of our consumer base, which is basically the middle-class Indian, is what it remains to be, right? How do we make sure that we are relevant to that? From From all the initiatives that I've wired, I'm talking about it, or the ones that we want to go going forward. Making sure that the product portfolio, our communication strategy, our stores, the way they look, the way the experience for consumers is all connected towards this one larger objective from a consumer perspective. The second piece that's there is that we want over the next not only two years, but also five years to make sure that it's a volume-driven growth trajectory overall, right? There might be some quarters up and down, but we want to make sure it's a volume-driven revenue growth trajectory. The third piece is this should come with the kind of initiative that I think we have already set in place, plus the larger project that I also alluded to in my presentation. It should come with an extremely aggressive objective on inventory agility overall, in general, right? That results into many facets, and some of them I have talked about. Some of them we'll expand as we roll out this project further in terms of complexity, the agility of bringing in new range, etc., the amount of choices that we make of bringing in the new range, but present it in a coherent manner to the stores, to the consumers in the stores, etc. Last but not the least, we would, and I'll end over at all times, and I think the amount of work that we have done on the cost efficiencies, etc., once we see the revenue growth trajectory, it should result into, obviously, operating leverage and therefore profitable growth for us. Does this also mean we should get back to value equal to volume growth this year, or you still think there is time? I'll refrain from giving a forward-looking statement, but the direction is in the endeavor of what I said. Okay. Based on the salience changes, more franchisees, more e-commerce growth, does that entail any meaningful changes on a beta margin? Obviously, you mentioned that. That was the, yeah, that other piece I did not comment on. Ideally, we would like, we are something that we have mentioned, that we want to make sure that this multi-channel model remains from a revenue pipeline perspective. I think each one of them caters to consumer cohorts, which are, yeah, there might be overlaps, but they are large enough, distinct consumer cohorts within that. For example, franchise allows us to have EBOs in towns and markets, which otherwise the COCO model did not have till, let us say, about four years back, in a very profitable way. That also we have fine-tuned now. We will expect all of these channels to grow. COCO will have its own source of growth driven by same-store growth. You will have a lot of franchise, both same-store growth as well as basically expansion, especially in the urbanizing India. A large part of our addition in the last two, three years have come through that and will continue going forward. E-commerce and multi-brand outlets obviously have their distinct strategies. It should basically largely be pronged on all these four, with the focus being on retail for sure. One follow-up, because you mentioned a number of stores opening should be higher than last year, but are you guys working with some kind of numbers here, or it's more about taking it very opportunistically? FOFO continues to expand faster than COCO, and then you'll end up doing, let's say, 100-120 stores, something like that? Or is there a hard number to work around it? No, there is. There is obviously targets and numbers that people in the teams carry on this road. There are also, more importantly, there are target areas that we want to be in, right? So there is a complete census mapping. Now, there's enough and more modules of multiple data integrators that give us the right kind of what we call as PTAs, which are potential trade areas, which is what we start as a universe. That universe, by the way, if I last remember, is at about 600 locations, right? So we have managed to successfully economically viable, how do you say, commercialize, let's say, about 100 last year. So there will be enough and more opportunities going forward. Perfect, Gunjan. Thank you so much for answering all my questions. All the best. Thank you, Rahul. Bye. Thank you. The next question is from the line of Rajiv Bharati from Nuvama. Please go ahead. Good morning, sir. Thanks for the opportunity. Sir, on slide number 14, the inventory reduction part. And there you have mentioned that aged part, right? Is it safe to assume that this 16.5 or the delta between the two is basically largely aged in the inventory reduction? I cannot mathematically do it, but the large part would be, which is what I mentioned to another gentleman on this call sometime back, which is that there are multiple levers towards this inventory. I think the one that is the fastest and the most profitable is reduction of aged inventory, which is being proactive and slow-moving SKUs before it becomes aged, as well as trying to be choiceful of what you bring into the stores, right? There are other levers that I mentioned about, but my sense is, yes, some mathematics will show that a large part of this would have been aged. Let's say the inventory turn on that aged part would be, let's say, 0.5 or something like that? No, no. It'll be lower. Yeah, it'll be lower. I don't know the exact numbers. I can offline get back to you, but it'll be lower. I mean, what I'm implying is it looks like close to INR 250 crore is the aged inventory out of the INR 765 crore. I was just wondering that the inventory turn on the rest of the portfolio is upwards of 3, 3.5, is it? I don't think that conclusion is right because I don't know how you got that 200, but aged inventory is in low single digits. No, so how I got it is 915 minus 765 is 0.37, right? No, no, no, no. They are very different. That is total inventory, Rajiv, whereas aged inventory is showing you a reduction of 37% from a starting point of X. Both of them are in low single digits as a percentage of the total inventory, which you see on the left top chart. Sure. And on slide number six, which is your sorry, not six. I mean, the best-in-class benchmark, by the way, on that aged inventory is low mid-single digits. It should be in the range of about 2%-3%, so less than 4%. We still have some way to go while we have reversed a large part of the reduction, but it is in that range. It is nowhere close to the 20%-30% that you are calculating. Yeah. On the overall volume growth at the company level, can you specify that number? How much is that? We do not share that, but as I have mentioned in my press release also, as well as my commentary at the start, the second quarter that we have seen reasonably broad-based volume growth in the mid-single digits would be the best. Why I am saying is because on slide six, right, the ZBM portfolio is having a volume growth of 8%. It is net of control. The way we see it is net of control, as you can see in the comments, right? It is not necessarily an absolute. It is how they are doing relative to the rest of the stores in the same consumer cohort or city. I got that. The next question is in terms of, let's say, this ZBM scale-up, we are probably a quarter behind what we had initially shot for, right? 250 by the end of Q4. Are you sharing what is the number you're targeting for, let's say, 2026, 2027? On the 2026. That's a very ideally, we would like to see, and I've mentioned this, yeah, we took a little while to scale up, but now the scale-up is happening at a pretty good pace. So my sense is that we should be covering about, ideally, my best guess is about 300-odd stores by June end, and that should cover us, my sense, is about 50% or 45% of our turnover and retail. Sure. Yeah. That's all right. Thanks a lot, sir, for all this. Thank you. Thanks, Rajiv. Thank you. The next question is from the line of Vikram Dam ani from the Damani Family Office. Please go ahead. Hi, good morning. Am I audible? Yes, Vikram. Apologies if I'm repeating the question, I joined now. Your voice is not clear. Is that better? Vikram, can you speak a little louder? You said you are repeating the question. No problem. Tell us. Is it better? Am I audible? Yeah. Right. I just wanted to get a sense of the opportunity that's arising from the implementation of the BIS norms. What percentage of opportunity on the implementation of the BIS norms? Okay. Your voice is coming and going. Yeah. Okay. Go on. Go on. Yeah. Yeah. What percentage of local sales would have been a few years ago, and going forward, what sort of opportunity that arises for local manufacturers? If you can just give me some light on that, please. Sorry to interrupt. Mr. Vikram, your voice is not that clear. Could you speak a bit louder? No, we heard the question, Vikram. We heard the first question. Yeah. Thank you. Yeah. Okay. Vikram, so basically, we are 100% localized. There was a small amount, but I had given this commentary almost about four, five quarters back when BIS was under transition. We had a seamless changeover, and we have had almost no hiccups except for maybe a few niche license brands, which also have now been sorted now. In fact, we are looking at this as an opportunity from an export perspective, which is what I commented on earlier to another question. Does that answer your question? Yep. Partly, what I actually wanted to sort of gauge is the overall sort of supply. How much was the BIS supply to India? 5%, 10% of the overall market, and if that's— Overall, minuscule. It was less than 5%, and that's now been eliminated. Good to know. Thank you so much. All the best. Yeah. Thank you, Vikram. Thank you. The next question is from the line of Udit Gajiwala from YES SECURITIES. Please go ahead. Yeah. Hi, then. Thank you for taking up my question. Just one clarification in advice. You have mentioned that the focus is on volume growth. If I look eight quarters back in the conquest, you were mentioning more of a premiumization as the strategy. Is there a shift in strategy or volume growth will come and premiumization will also be with it? If you can just explain a bit on it. Yeah. Yeah. No, so Udit, I think it's the latter of what you yourself mentioned right now, right? That is what my document or my presentation also was while you would have heard me at the start, right, that there is a consumer cohort, a large part of our target consumers who are looking for value proposition. Therefore, how do we make sure that we do it not only in the short term but also in the medium term structurally is what we are working on, some of the initiatives I have shared with you all. Simultaneously, that does not stop us from bringing in technology, innovation, brand, as well as basically premiumization being driven through it. That was the example that I told you from a portfolio lever, whether it is Power, whether it is Floats, whether it is Floats is a classic example. Consumers buying that kind of a footwear were buying it at a price point which was less than half of what the ASP of floats is. ASP of floats is almost 2x of the parallel products that we had on offer for consumers. So that parallel does do premiumization. Similarly, HP, there are a bunch of levers as well as the technology-driven offerings from Power. They will continue in parallel in short. Thanks for explaining. Thank you. All the best. Thank you, Udit. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you, everyone, for joining once again. It was lovely interacting with you as always. We look forward to connect again. Thanks. Thank you. On behalf of JM Financial Institutional Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the lines.