Good evening, ladies and gentlemen. Welcome to the VIP Industries Limited Q3 and 9 months FY 2023 earnings conference call. From the senior management, we have with us today, Mr. Anindya Dutta, Managing Director, and Ms. Neetu Kashiramka, Chief Financial Officer. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Anindya Dutta, Managing Director, VIP Industries. Thank you, and over to you, sir. Good evening, everyone. Thank you for taking out time and joining the call. I'm assuming all of you have received a copy of the presentation, and would have had the time to glance through it. I'm just going to take you through some of the highlights that I've mentioned in the presentation. At the outset, I'm quite happy to announce a good set of results. Our growth continued to be at a high. We had a 32% revenue growth over last year, and even when we compare it with base, it is quite impressive at 22%. Quarter one saw just a 5% growth. After in quarter two, we scaled it up to 25, and we now continue to be at 20%+. In fact, the volume growth on the business has been also quite good, 25% year-on-year and almost 18% over base. Just a call out here, this kind of volume growth is happening on a completely altered supply chain at VIP. The revenue performance that I spoke about, if you would have noticed, it's quite well-rounded. It's good across brands and channels. Talking about brand first, you would have seen some exciting launches that happened in our portfolio during this quarter. Skybags did a FIFA collection, which did very well. In VIP, we had a Highlander, which is a rugged, hard luggage. In Carlton, we launched a couple of soft luggage, premium soft luggage range, and icing on the cake was our launch in Caprese with a range of products by Manish Malhotra. Not only the launches, the activations have been very strong. FIFA was activated with advertisements, using endorsers as Kartik Aaryan and many other celebrities. You would have seen some of these activations in Mumbai. We tried to go quite high decibel on it. In fact, the Manish Malhotra launch was far bigger than just the volume, but it was more to drive the imagery on the brand. And I would believe this is the beginning. We would have much more coming up on Caprese as we go ahead. Overall, at VIP, the premium portfolios have started again as we had gone into very high on driving the value portfolio. That was one key point on Q3. When I talk about channels, once again, all, all channel has played its role in the growth. In fact, not only the, the revenue growth, but also adding the strategic, element and the task that each of the channel has to do. Our general trade is leading us into driving penetration and accessibility. It increased its, you know, town penetration by 80 more towns in this quarter. Now, we stand at about 942 towns. We are aiming to be in every town, which is 50,000+ population. Equally, in EBOs, we have come back to a number of 443 EBOs. This does not include the 42 we have under fit- outs right now. Hopefully, we'll cross the mark 500, which we have taken the target for the year, before March 31. Pre-COVID, this was the highest store count was 485. Modern trade, another call out, we had some challenge and pressure during this quarter one because of the Future Group issue that had kicked in, it's still there. But the good news is, modern trade is moving beyond its expected numbers in the year and also above its base without Future Group. In addition to that, by the end of December, a large part of the Future Group stores that got shut has started coming up. Just to give you some broad numbers, 479 Big Bazaars that used to be there today has come up as Smart Bazaars in terms of 435 in numbers, right? So almost three-fourths of what stores used to be there has come in, and therefore, that's going to hopefully help us in the coming quarter. We were strong in these stores, and we should continue our dominance and our relationship with, you know, with the stores and channel. Along with modern trade, e-commerce has also fired well. Although this is here where we don't think that we have reached our full potential or we are ahead of what our expectation is, so there is a lot that's going on and would continue to happen on e-commerce. On a side note, we also have launched our direct-to-consumer Caprese website. This has kicked in about four weeks past, so we are live, and we are, we have started to get good. We would say, you know, green shoots at least on, on the whole, D2C business on Caprese. The international business is also doing quite well in its own way. Our strategy of going deeper in our high potential markets seems to be working. The growth that we are seeing is largely coming from lesser number of countries, but far more deeper. For example, as of now, in the UAE, we are starting to get double-digit market share in range in, in chains like Carrefour and Lulu. Sorry. That was on channels. If you talk, if you talk about our category performance, well, hard luggage continues to dominate in the recent past, but we have started seeing some early change of that in terms of soft luggage coming up. And with our supplies picking up in soft luggage, I think that's quite promising. Backpack, in particular, is looking quite well for us in quarter three as well. Net-net, overall good revenue growth. And highlight here would be, as I started by saying, this is completely on a remodeled supply chain, and I would like to give you some numbers here. Currently, 73% of our volumes in quarter three was supplied by our own manufacturing facility in India and Bangladesh. And in a way, this has been the highest ever ratio reported in any quarter. Our capacities as of right now have increased 65%. Our own manufacturing capacities have increased 65% since pandemic. This year, we would be investing almost INR 100 crore in this financial year only to increase our capacities. And not everything of it has been spent, but in terms of, you know, actioning the spend and increasing the capacities underway, this is almost equally split between India and Bangladesh in terms of INR 50 crore each. We would have added almost 200,000 sq ft of manufacturing space in this year alone. All this is leading to good gross margin, sequential improvement of almost 1.3% and YOY improvement of 0.5%. This is largely happening on account of raw material prices and thankfully, ocean freight. Overall, in terms of our pricing and realization, we've been positive. In terms of overall expenditure, fixed cost expenditure, I think it has been in line with our increased revenue, increased business. Advertisement expenditure increase is a conscious decision, and I think that's, that's an investment, that's going very well into our brands and for our future. So overall, EBITDA margin flow through from, from, you know, above, has been lower. One large reason other than, you know, increasing in advertisement is, is the provision we did on, on the Future Group doubtful debt. That's almost taking out 1% out of the EBITDA. The, the, the, provision we took was of INR 6 crore. Lastly, I think we expect positive demand environment to continue in the coming quarter or the going quarter. We hopefully would continue on our growth trajectory to end the financial year on a good note and a high note. In terms of concerns, there is the COVID situation in China, which erupted suddenly. We have high dependence on China. However, it seems like it is passing off quickly. Our teams are working on mitigating the risk, and you know, quarter four is more about not just quarter four, but also preparing for a very big quarter one. So that's underway. With this, thank you. I conclude my opening remarks, and I open the floor for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their personal telephone. If you wish to withdraw 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 will wait for a moment while the question queue assembles. First question is from the line of Karan Khanna from Ambit Capital. Please go ahead. Thanks for the opportunity. So Anindya, my first question is on your gross margins. So I think they continue to lag as against your expectation of 15%-15.5% range, which you've highlighted in the past. So is it fair to assume that the majority benefit because of cooling off in raw material prices is getting paid out in your, in your margin? Yes, Karan. The answer is yes. And second, as a follow-up, what I wanted to understand is that, so you have 443 EBOs today. Can you help us understand between VIP and Carlton EBOs? VIP and Carlton EBOs is not part of our strategy. We are not doing Carlton EBOs specifically. We have done a few, more as an experiment. I can tell you, the strategic bit, which is, company-owned and franchisee, which is what we are driving. So 443 is... The split is 160 and 283. INR 160, INR 283. So you think that, there is room for perhaps, you know, improvement or cost efficiencies here, then, both VIP and Carlton EBOs perhaps can be clubbed in one in a certain geographies where you have both of the EBOs in the same location? Karan, there are extremely few, so therefore, that's not something that we are looking at in terms of separately. There are a few that we have done, Carlton, and maybe, yes, there could be opportunities, but we are talking in the order of magnitude of, you know, single digit numbers. So what I'm trying to understand is that, you know, despite the roughly perhaps 10% differential in gross margin versus your nearest competitor, your EBITDA margins are largely in line with your competitors. So in light of this, what are the initiatives which you could take to further drive cost efficiency? Yeah, so I think we're more benchmarking our, our business and our P&L from that point of view. Revenue growth is absolutely important. Investing behind that growth in a more sure-footed manner, which is, building our supply chain and strengthening that is absolutely important. We have a mix of brands, and other than the value brands, the other brands needs to be advertised, both in the form of, you know, brand building advertising as well as transaction building advertising, which is more e-commerce. So I think, you know, one is in relation to competition, one is in relation to what is the right thing for the business, and I think this is while in the right direction. I think as the scale goes up, some of these ratios will start playing up better, and that's what in the long run, one is looking for. Sure. So my second question is, you know, the e-commerce vertical, so we've seen that last quarter, e-commerce was 20% in terms of the revenue contribution, this quarter it's 13%. So I understand there's some seasonality also, but, can you help us understand that there has been market share, you know, any changes in the market share in the e-commerce segment? So to answer the first question, you're right, there is a strong seasonality. Seasonality in the sense that, maybe more property and, you know, retail property driven. So the big days and all that are really big for e-commerce. So it's not only for one company, I think for overall fashion, for a larger same quarter, larger sector or industry, quarter two is far bigger in the year as far as e-commerce is concerned. So e-commerce overall gains salience in overall market during quarter two for luggage industry. So to that extent, if you have lower share in a gaining in a sector which is gaining salience, you may tend to lose overall share. But if it is for that quarter, it would even out over a period of time. Sure. My last question is for Neetu. If you can help us understand what's the balance between group, and, you know, what was the deferred tax income that was credited to the PNL, if you could explain that with lower current tax rate during the fourth quarter? Yeah. So the lower tax rate is on account of receipt of dividend from Bangladesh, which we are in turn giving it back to our shareholders. Therefore, we get the tax benefit, and that's where the effective tax rate is going to be around 18%-19% for the year. Sure. And, on your future, group, any guidance? We have around INR 12 crore of exposure for this. 12 crore. All right. That would be my last question. Thank you, and all the best. Thank you. Thank you. The next question is on the line. Please go ahead. Then just talk. Please go ahead. Yeah, my first question is a generic one. So can you touch upon the overall demand environment, specific observations, if you have any, on subtrends like premium versus mass, and then metro versus non-metro? And last, on how this is really playing out, as in, in most of the categories we are hearing that December, December came, so quarter had a very tough time. So if you can touch upon the subtrends as well. So Tejas, on the demand part, I think, till, you know, as we say, fingers crossed, we are looking good. The demand seems to be good throughout quarter three. And it's getting driven by the same cohorts that has driven the industry in the past. There is increased amount of travel, outing. There is good expenditure on weddings. You know, there... We are also seeing things like backpack and all that is slowly possibly getting more year-round kind of purchase, and there is, you know, repeat happening. So overall, the demand seems good for the industry, and hopefully it seems like at least in the near future, while there are talks about, you know, various, you know, where one is reading in the news and seeing there are pressures getting faced in the other sectors, I don't see it right now for our industry in the immediate short term. In terms of geographies, yes, there is a higher demand in tier two, tier three, and downward cities. It's more, it's very measurable on my business, but qualitatively we can get a sense of that. Maybe that's also coming from the unorganized shift to organized. Having a better play there or a bigger play there gives more dominance of unorganized in the, in the tier two, you know, non-populous cities. Did that answer your question? That was the last question on the- Yeah. Yes, I think, yeah. And, just expanding on the organized, organized has been a... Sorry, your voice is- Your voice is breaking, actually. This is Tejas. Hello? Yes. Yeah. Yeah. Just to confirm, with China opening up, are you seeing or are you, picking up any early trends of unorganized also bouncing back, with China sourcing also getting sorted as we go on? Honestly, not seeing that trend, but yes, keeping a watch out for that, because yes, that could be a possibility. It's not, it's not a major jump, but it will start fueling what was not fueled so well. So keeping a watch out, but no, no early signs right now. ... And last one with the volatility that we have seen in margins in the recent past, how should we go for the margins for this year? And if you can give some sort of guidance here as well, your guidance on margins? As I said, we can't give you a definitive number, but it seems on the right track. I think the fundamentals that I've been talking about and what is there on the presentation continues to be pointing towards a better margin environment going forward in the coming year. I think the overall commodity and raw material prices are softening. The ocean freight is down, is much lower than before. So, you know, it may not have kicked in into the business as of now, but it will as we go ahead. So on one side, the tailwind is prices coming down. On the other side, the headwind is also the mix and, you know, the value category growing and the unorganized sector, you know, pushing the growth further. So there will be some kind of a, you know, set off happening. It's difficult to predict that part because the volatility is more there, and margin is a, is a result of that. What's happening is we are pretty, pretty sure, clear that, you know, we will want to have a good balance between margin and share, right? Not trading off one for the other. Therefore, we will have to pick and choose our battles depending on how the environment is. So anywhere between 50-52, 53% is what we would try and keep the ship on, is how I stand to it. Sure. And the last one on maybe certification. Ma'am, you said that this year would be 8%. Did I hear you correct? Yeah, you are right. So it will normalize by next year? No, it will be in the range of 18%-20%, because we will continue to do this. Okay. Okay. Okay. Thanks a lot. Thank you. Thank you. The next question is in the line of course, from Kotak Mutual Funds. Please go ahead. Yeah, good evening, team, and, congratulations on a good performance. Thank you. My first question is on the Caprese brand. Just wanted to know what price points are we sort of targeting when we are looking at significantly scaling up this brand? And also, which channel will we be targeting to sort of scale up this brand? Thanks, Varun. Yes, I think it's a very pertinent question, because it's something that we are starting off now. So, somewhere the Caprese brand may have been going towards, let's say, a price point of INR 1,000 and below. We are definitely looking at the mid-premium and the slightly above range. So anywhere between, you know, INR 2,000-INR 4,000 range, is what will be the mid part of what the brand should have once we get enough scale. And we'll also do enough, which is above INR 5,000 as well. So if I won't say we are shifting from a premium or A to B, we're just repositioning ourselves to what the brand started off with, which is, you know, where there is a larger void, where there's a play of great design and great brand, and therefore there is a value creation happening. So that will be, let's say, our sweet spot would be about INR 2,500-INR 3,000, if I was to narrow it down somewhat. That's on the brand and the pricing. In terms of channel, we're looking at more direct to consumer in all form to begin with as we create penetration. So it's not only the e-commerce points, but that's why we started experimenting with not experimenting, we have launched our D2C website, and we've done all the preparation in terms of back-end to enable it scale up. So that will be another key go-to-market tool. We could also be looking at, and there are some pilots going on, where we are looking at exclusive you know experience stores which will be in malls, where we would bring in the Caprese premium experience to the consumers. But as I said, that's a pilot stage. If it works commercially, that's something that we could scale up in a big, big in the coming future. Okay. So secondly, just wanted to know, in terms of what has been the progress, in terms of backward integration. So we were looking at manufacturing trolleys and wheels, subsequently, to further make ourselves more competitive. So where are we in terms of our game plan? Oh, I can't tell you, concrete stuff right now, but that's something that's on. There are a couple of pilots that has happened on that in terms of, you know, understanding of what model will work. You will see me talking about it or rather, doing it in the coming financial year, right? I think we are more focused on making sure that Availability and the whole supply chain was usually stressed in terms of us scaling up to the demand. With every growing quarter, I think the demand is higher than what we expected, and, so therefore, that has been the big focus. But as we scale, as we cross that peak in this coming quarter, which is quarter one, these are some of the priorities that will be taken on in a big way. Lastly, on the e-commerce bit, I believe we are number three in terms of market share on the e-commerce side, which is lower as compared to offline. Any key learnings from some of our competitors where we can sort of implemented increase on market share, or we want to continue to dominate the offline and be a third or the second largest player of the online platform? So Bhargav, one, I think, number three is not something that I see it as, but you're right that there is no definitive data to corroborate that. But one thing is sure that we do not share. Whatever I have shared in the other four channels, I don't have that, and I definitely don't have leadership in e-commerce. So whether it is number two or number three is not so important. I think what you're asking, and the answer is that everything we are doing is to make sure that we strive and get first to our majority share, to our leadership market share, and then to aspire for the fair share within that channel. So what are we doing to sort of boost up? Because essentially, we believe some of our competitors are spending a lot to acquire traffic. So are we going to go into that direction, or we'll just focus more on product functions to create a differentiation? So I think we're doing all that is required, as I said. So therefore, if there is spend, then, you know, it's all about the intensity of spend and not about whether one is doing that or not. So whether within the portals like Amazon or Flipkart, are you spending more on performance marketing? So you would have noticed us treating our brands through, you know, thematic advertising and you know, other digital mediums, right? But you've not seen, let's say, competition doing too much of, let's say, advertising in other mediums, let's say till about quarter three. And possibly most of that was getting into e-commerce. We are looking at that, or rather, we have kind of made our plans to balance it out slightly more in favor of e-commerce going forward. So we will increase our intensity of spend in e-commerce. With the other part is portfolio and pricing as well. So there is many... So there's continuously happening. The pivots are the same. I think the continuity and the intensity is important, and as we are going, we're continuously increasing that. So it's not about starting something, it's more about increasing the intensity of what you're doing. Thank you for the clarification on all the variables. Thank you, [Bhargav]. Thank you. The next question is in the line of Manish Poddar from Motilal Oswal. Please go ahead. Yeah. Hi, so, actually, just wanted to understand three set of questions. One is, if I look at the manufacturing, so now 73% is your own manufacturing. What is the other 25? So this 73% is what, is the, what revenue, what sales has happened, how 73% of that has been manufactured in-house, right? So in terms of pure sourcing, we are looking at an in-house rate of about 60% in the coming year, right? And roughly about 20-25% will be, let's say, outsourced within India, and maybe have about 10-15% at the outer limit. This is including Caprese from China. That's the rough breakup, but it's not a limiting thing. So I think depending on what's making more commercial sense, the splits can get altered. Did I see that understanding that, you know, if you look at the delta change in manufacturing from April till now, large parts of this, and even if you are saving at least what are there, a large part of that is got deducted by the mix of, higher share of airship, is that how it is? So yes, and also the fact that this is the time there is the ocean trade and the inflation was very high. Would a larger part be the mix part rather than the inflation part? That is what I'm trying to understand, because if I do enough math, the margins. Maybe 70% mix and 30% factor. But we can examine this closely and come back, but this are immediate or judgment. Okay, just two more questions. One is on this Future Retail store, let's say, now another new entity. So, how many stores are we reaching now? Because you're reaching out 3-4 stores, and I think earlier we were relying, I think, 400-odd stores. So how many stores have we reached now? No, we reached to everything that is open. What I was telling you is that under the banner of Reliance, out of the 279 Big Bazaar, Smart Bazaar, which is the Reliance banner, is 275 stores, and I reached to all the 275. As and when they are opening the stores, they intend to open all the 279. So effectively from beginning of year, which was about 21 stores, now we are 61 stores. You're right. Okay, thank you. Just one more thing, this one just, insurance balance payment. When is that expected to come, to come across? Hopefully in this quarter. Okay. So there is no, let's say, continuing insurance. The timing of the thing is the difference. Yeah, so it's in the slot leg. Okay. Okay, fair enough. Thank you. All the best. All the best. Yeah, thanks. Thank you. Next question is from the line of Tushar Sarda from Athena Investments. Please go ahead. Yeah, thank you for the opportunity and congratulations on good service so far. I wanted to know when you increase your manufacturing, how much can gross margin expand? Because, you will have other manufacturing costs which can in the, PNL, right? So just on the material side, the expansion should be a lot more. Yeah. So therefore, the comparison is versus, not manufacturing and buying from China. So, you know, the labor cost advantage and the duty arbitrage, the duty arbitrage is large. So, you know, it is more compared to our earlier supply chain, where we were buying from China, where we bring in the raw material, make it in Bangladesh and bring it in India. The duty is not there. So there is a 15% advantage in the raw material part of it, which is, like you see, about 50% of our, business. Right? So that's a definitive advantage. Now, there is a labor cost advantage, which could be, you know, offsetting with, you know, increase in, freight or, or other areas. So straight away, there is this advantage, that is there in manufacturing, at least. I mean, what kind of gross margin will you target? I'm assuming that if you set up the facility, you will manufacture yourself, if all other things are equal, unless the costs in China really come down. So like-to-like basis, if the raw material prices are same for both China and Bangladesh, we will have a 3%-4% benefit, if all the other factors remain the same. Okay. So what kind of gross margin one would look at in three years down the road, when things are normal, you know? Right now, inflation is distorting all the numbers. Did you say three? Yeah, three years down the road when things are normalized. I think then, you know, going back to about a 55% is what we have put as an ambition. We are goal seeking that, and I think we... It's all about putting the right strategy at the right time in place to inch up there, along with share and growth. Okay. Okay. Thank you very much, and all the best. Thank you. Before we take the next question, wait on the line of silence. Limit your question to two for silence. At the same time, you may join us you for any follow-ups. Thank you. The next question is on the line of Nihal Mahesh Jham from Nuvama. Please go ahead. Yes, sir. Thank you so much for the management. So a couple of questions from my side. First, on the e-com channel, as you aggressively target to scale that up, what has your experience till now been in terms of, you know, the kind of margins this channel gives us? I feel if you look at a lot of the other categories, there is a lot of discounting and a lot of old seasons, which ends up being free or sold, which ends up impacting the kind of margins you make on this channel. So has your experience till now, the 3% sales that we've seen, been similar, or we have seen a different experience? And going forward, also, we expect this channel to be more margin contributor. You're right. There is a pressure on margins in some of, you know, channels, which is trying to gain, let's say, volume through attractiveness on price. However, when you see for my business, the net margin, when I take out the direct selling costs in other channels using promoters and all that, I don't see the difference to be so big. In fact, there's, you know, in some quarters, the gross margin, the e-commerce margin is a tad better only. So I think in the long run, this is something that is going to not only stay but will grow significantly. It will be a game of getting more scale here, and also to start the premiumization journey here through marketplace operation, right? Where the pricing is ruled by the brands and you are listed everywhere. So it's a long journey. It's not long, it's a journey, and I think this is not a channel that we had a head start at all, right? So compared to not only within the industry, but others, I think we are catching up, and what I see in the long run will become that this channel will become, you know, large and a major channel for my consumers to buy VIP products. And therefore, we have to get the margin and share both right in this channel. Got that point. Just a follow-up on this was that, basically, what are the channel pricing practices that you're following? Do we have a different range of SKU itself, or are we trying to keep the pricing similar across our franchise ABOs and the distribution channel? So increasingly, the e-commerce and is a separate set of products, because that's where the channel conflict is highest, because the price discovery is the easiest for anybody on e-commerce. But yes, within our other, let's call it the physical channels also, there are ranges which are different, right? That does add to some complexity, so we're trying to find the right balance between where we would like to see exclusives and where we want to see a common range there. So it's a mix of both. There are some in non-e-commerce, there are some ranges which are exclusive to all the channel and and the rest is common. And this mix is only slowly changing in favor of more common products. Understood. My last question was on Caprese. Do we still have the target of maybe wanting to reach INR 500 crore of top line in this segment in the next couple of years? Well, I can't put a number to that, but what you're saying sounds too aggressive. We are trying to see it's a very, very fragmented market, right? So if at all, anything in three years' time, I would like to take an ambition of being in a fragmented market, the brand of choice, the market leader in this. Now, that translates into what growth is something that we'll have to work out and, and either come back or maybe take as a, as a management target here. Yeah. Just, just a follow-up, if I may, that if I look at this category, which is a lady handbag segment, has not seen any brand really scale up beyond the INR 100-INR 150 crore kind of a market. So what, as per you, has been the limitations and what are the aspects that we are targeting to improve, which can, you know, scale us to be a much bigger brand, not specifically maybe the number I mentioned? I think go-to-market has been a limitation in this, because this product needs a close experience as people buy it. So therefore, and you also haven't seen very large companies coming into this category. So I think e-commerce, direct-to-consumer commerce, is changing that. And also to that extent, we may not have been fully able to leverage our national network in the bags business into this, which possibly all other players may not have. So go-to-market is possibly one key pivot on which, you know, scale up or a brand share in the category can go up on. Yeah, but you're right that this is... globally, this is a very fragmented market. So I don't expect consolidation at all to happen. It is a very large space, right? So therefore, you know, even getting within such a fragmented market, a high share or, you know, market leadership will be a very, very strong initiative. Thank you, Mr. Jham. You may join the question queue for any follow-up. The next question is from the line of Akhil Parekh from Centrum Broking. Please go ahead. Hi. Thanks for the opportunity. My first question is on the, would you be able to highlight what would be the price differential for a luggage, for an unbranded luggage, which is arriving from China? We say a mass branded luggage, and has the price differential between the two declined meaningfully over the last two years since the onset of pandemic? No, I am afraid I don't think I will be able to give you a specific answer on that, because we haven't tracked a particular product and compared it with this, because the product, you know, two products are not alike. I mean, this is the features, it could be quite differently costed and differently priced, therefore, right? But once again, I would think that it is there are all reasons to believe that the gap is narrowed. Clearly, let's say, a large part of bag making is high labor cost. And the for our labor cost in China and in Bangladesh and in India is significantly in favor of first India and then Bangladesh. Bangladesh would be most favorable. So to that extent, that's definitely the difference that should change. The other thing is productivity. Even if you keep raw material from China as same raw material, right? If at the source, if the raw material price is same to all the three, there is an advantage to India and Bangladesh over both, you know, labor cost. And today, we are seeing productivity is coming at par. With there is no major difference in technology. I think productivity is over a period of time, at least in my Bangladesh unit, I'm getting closer to China productivity already. Okay, sure. This is helpful. And, just a complementary question to that is, like, we have diversity with our supply base, and, you know, we have also found vendors based in Turkey and Bangladesh. What are the challenges which unorganized players might be facing from diversifying their supplies? Because I believe that they were largely dependent on China prior to the pandemic, and because of the disruption in China, they have not been able to check the, enough supply base. So any specific challenges which they might be having and they might not be able to, you know, get their supplies from India and Bangladesh? Well, they need to then have manufacturers in India and Bangladesh who are scaling up to supply the unorganized sector. So I mean, that's the challenge in terms of if there is no ready capacity, so much that could take over. So this could be fueling many, you know, setting up a manufacturing happening. I mean, that's something that I'm saying more as a theoretical answer to your question, that is the only way the supplies can happen. And the challenge for them would be to not finding vendors in India or who have the capacity to give them the products that China was giving them. Sorry, if I understood correctly, I think because they don't have manufacturing base, and that's why they are not able to manufacture in India and Bangladesh. Yeah, that's right. Manufacturing was in the past. That's why the whole industry was going to China. Got it. Got it. And the second and last question is on the, the gross margins front, right? The value segment continues to do well. Hypothetically, Aristocrat and Alfa reaches that, 40% mark, will we still be able to achieve a 50%-52% of gross margin? Yes, I think it should be. Given that, you know, the prices, raw material prices and our manufacturing efficiency is going up, the benefit of that will start kicking in, right, as we go along. So I think it will go even if Aristocrat reaches the mark that you said. But as I said, that these are things that are not with one change that will happen. I think it's a gradual change that needs to happen. And one is pushing things in that direction. Thank you, Mr. Parekh, thank you for your follow-up. The next question is from the line of Harsh Shah from InCred Capital. Please go ahead. Thank you for taking my question, sir. So my question from a longer term point of view, when I look at your presentation, that is right there, it shows that the organized sector share has increased from 45% in 2018 to 52% in 2022. But when we see, let's say, three to five years from now, we are only expecting that to 60%. And secondly, even if we look at the presentation, we've covered a lot of ground over the last three years, presently 80%. So, when we look at our, the growth in the luggage space over the next three to five years, if you were to achieve growth, how do you see our luggage space grow over the next five years? I think the industry in terms of value terms should easily grow anywhere between, you know, 15%, thereabout CAGR over the next three to five years. The underlying volume growth could be lesser. But, I mean, this could be the aggressive side of the growth that I would put. But, yeah, expecting a 15% CAGR over the next five years, given India's context, should not be something that we could be shy of. So 15% is something which you are giving for the industry and not something, right? Yeah. We can, yeah, we can grow at a higher pace, given the kind of things we have in play. Yeah, and depending on the category, what share we have, and yes, of course, you know, if the industry is growing at that pace and given our share ambition, that we would have and continue to have, it will define our growth. Okay. And secondly, how do you look at the, within the backpack space, how do you look at the mass segment and our, our position and presence there? Because much of the, I mean, unorganized players play there, and that's a big opportunity for us. But on the flip side, the margins there are quite low. So, how do you think of the fact, the mass backpack space? So you're right. Actually, in every category, the low-priced, there is a low price segment, and it is always the largest part of it, so that's why every category looks like a pyramid. But this is not where we would want to, you know, dive into the low price ones to begin with, our budget. I think for us, there is a huge opportunity to grow in the mid segment itself, right? And that's what we are targeting to begin with. But yes, there will be something that we will do to make the people to upgrade from the low price to the mid price. Okay. We are not looking to replicate what we've done in the Aristocrat, in the luggage space, in the backpack space. Well, yeah, in simple terms, the answer is no. Okay. Okay, bye. Thank you so much, sir. Bye-bye. Thank you. Next question is from the line of [Arjun Davis] from [Scriptures]. Please go ahead. Yeah, good evening, sir. Couple of questions. So you people are targeting a growth of around 62%-63% in FY 2024. So what would be the margins if you achieve those growth margins? 20%. 20%. Okay, and, if I remember correctly, you people were also planning a takeout of around INR 4,000 crore by FY 2026. This is around a 25% CAGR. So can we see the projection of 25% revenue growth from FY 2024 onwards? I don't know which remark you are talking about. I don't remember having spoken about an FY 2026 on this. I think it's been more a directional one in terms of the growth. I maintain what I said in the call today. The market is too volatile for us to have a good and a safe prediction for that long. Yes, we are predicting where it could grow more to build our supply chain and all that point of view. And there we are being aggressive so that we build supplies given the good growth rate. But I don't think it's fair to right now discuss in detail about, you know, whether it is INR 4,000, whether it is INR 3,500 or INR 4,500 for that matter. Okay, but what are the export opportunities you people are foreseeing in the coming years? So as I said, as of right now, we are more focused in going deeper into the markets we are, right? But we had roughly about INR 100 crore business in exports in pre-COVID. And I think we are much more than that coming back in this year itself and closing on. So I think we will take very aggressive growth on this, but compared to what is the size of the opportunity, it is not going to be like, you know, we want it to become, you know, bigger share of the global market and stuff like that. The focus is very, very large India and the India growth opportunity. But all the markets that where we have high, either right to success or already a good foot, in the door kind of a thing, is where we are going to go before. So it will be an aggressive growth in IB, that will take in the coming years. Maybe we'll look at about INR 200 crore-INR 300 crore in two years. Okay, and so lastly, what was the advertisement cost in Q3 versus last Q3? What was it? 30 crore versus INR 9 crore. Yeah, 29 versus nine. Yeah. So yeah. INR 29 crores now versus INR 9 crores last year. Okay. Okay. And then the percentages of this, what kind of advertisement will you target going forward? 10%-6%. Right. Thank you so much, sir. Thank you. Next question is from the line of Pulkit Singhal from the Dalmus Capital M anagement. Please go ahead. Thank you for the opportunity. The first question is on modern trade contribution. Pre-COVID, it was 30%, and now it's 29%. Can you help us understand how much was the Future Group contribution back then? How much is it now in Q3? And given that these stores are opening up, should we expect a sudden bump up going ahead for Q1? Yeah, I'm just getting the numbers for you. But before that, yes, as the stores start, we are seeing the stores which are becoming operational fully. When I say fully, means that, you know, in its full fully, our sales are coming back. So there should be a big bump up that we should get. But also what we saw when Future Group stores were down, in the catchment area, the other stores were able to take the bump in this, and that was a conscious strategy. So I won't expect to have this as a complete, you know, consumption growth, but it will kind of, you know, get into a new equilibrium within the catchment area. As far as your first question is concerned on, what was the contribution of- Future Group. Future Group to modern trade? 44%. Future Group to modern trade was 44% pre-COVID. Yeah. What is now? It's now 22. It's about 2022, but we can come back to you with more definitive numbers once we kind of look into this. On this. Right. Right now, the answer, I think, is confirming it's 44 versus 22 as we speak now in Q3. Yes. And then your market share, I mean, you have a dominant market share within. Does that continue even now? Yes, it continues in these stores. In fact, in modern trade, because of this Future Group issue, the modern trade team working was, you know, pushing, gaining market share in weaker accounts like a Vishal Mega Mart. We went, we went as strong in Vishal Mega Mart before. And, some more entry into some more regional chains. So that's also doing good, much better than what we were before in those weaker chains. But in the larger chains, we continue to have a good share. Okay. And we had some amount mentioned. I'm getting the amount. Is that supposed to be written off in the future purchase? Sorry, we are not able to hear you. INR 12 crores. Yeah, the amount that is received, the doubtful, I mean, that's supposed to be written off in the future purchase? As of now, we don't have clarity because there are some stocks lying and it is coming back, so we will get clarity only maybe by end of next quarter. Okay. And second, based on the raw material cost, I thought that the benefits of play out third quarter onwards because prices picked up in second quarter. So if you could just help us understand where are the raw material costs right now versus what you have booked in third quarter, so we get a sense of how much of, you know, benefit can go through and you'll pass some bit of it based on the market to get a sense of where we are. We got only 1/3 of the benefit. The benefit started actually coming only in the last month of the quarter, starting. Also, also the fact that as of right now, versus what we have with us in terms of stock and the pricing and, you know, how luggage industry works is also we got to cover whatever is from China. We got to cover a little ahead in time because of the Chinese New Year and all that. 4-5 months in lag. Yeah. We could work on the exact percentage, but it is lower, maybe about 4%-5%. Price, overall, weighted average price could be lower in the market today versus what we are operating on- Yeah. or what we are using. But, don't hold me to this number. I think it's something that we can check on this and come back to you. Thank you. Ladies and gentlemen, this will be our last question for today. I now hand the conference over to Ms. Neetu Kashiramka from VIP Industries for closing comments. Thank you, and over to you, ma'am. Thank you everyone for joining the call and Happy Independence Day. Any other clarification you can call. Sorry, Republic Day. Thank you, everyone. Thank you. Thank you.