Ladies and gentlemen, good day and welcome to TTK Prestige Limited Q3 FY 24-25 earnings conference call hosted by Ambit Capital. 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 a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Yash Jain from Ambit Capital. Thank you, and over to you, sir. Thank you, Yusuf. Hello everyone. Welcome to TTK Prestige 3Q FY 25 earnings call. From the management side, today we have Mr. Venkatesh Vijayaraghavan, the Managing Director and CEO, Mr. Shankaran, Advisor to the Board, and Mr. Sarangan, who is the full-time Director and CFO. Thank you, and over to you, sir, for your opening remarks. Good evening. Welcome everyone for the earnings call of TTK Prestige. This is Saranyan here. Before I hand over the proceedings to our Managing Director, Mr. Venkatesh, I just want to remind the participants of the safe harbor clause that discussion today may contain certain statements which are futuristic in nature. Such statements represent the intentions of the management and efforts being put in by them to raise the certain goals. The success in realizing these goals depends on various factors, both internal and external. Therefore, the investors are requested to make their own independent judgments by considering all relevant factors before taking any investment decision. Over to you, Venkatesh. Yeah, hi. Good afternoon, everybody. I think thank you for this call and for having attended this call. The quarter has been sort of a muted quarter for us. At a broad level, from an industry perspective, post a significant growth that the industry did see during the festive season, we're seeing a little bit of a muted quarter. The urban market seems to be sort of stable in the demand, while we do see that from a rural perspective, the demand is sort of a little subdued, and there are specific channels in the rural markets which have got sort of not leveraged this year, leading to a little bit more slow growth in the rural markets as well. Overall, we do see that the business is stable and a lot more robustness coming into the fold as we move forward. Specific to the quarter, there has been a sort of a lull, as I mentioned, because of a post-season demand that has not been in line with what we had sort of expected. But we do believe that as we move forward, the consumption should pick up, and that should be reasonably well placed for us as we move forward. From an overall perspective, we do see robust demand in the urban markets. The rural market challenge in terms of overall consumption, as well as in terms of some of the channels, continues to be a sort of a challenge. That would probably be a little bit of a long-term problem that we face, and we do believe that it requires a little bit of structural correction as it moves forward. With that, I would probably leave it to a couple of questions to be open. We are quite confident, and we are quite happy about the way some of our internal metrics are working, including market share gains that we have seen in our core categories, movement of some of our channel-based growth. We are seeing robust growth in e-commerce, large-format stores, also in terms of our own retail stores as well. So we do believe that as we move forward, as the demand picks up further, we should see considerable growth as we move, subject to, of course, the structural challenge that we've had with the rural market. But we do believe that as we move forward in the next couple of quarters, this should be sort of helping us grow in a robust manner. With that, I'll probably open up the conversation to a couple of questions and take it forward from there. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Sameer Gupta from India Infoline. Please go ahead. Hi sir, good evening, and thanks for taking my questions. Firstly, sir, you've called out the impact of the MFI channel, INR 32 crore in third quarter and INR 93 in nine months. Now, this is something that has impacted the previous quarters also. And overall growth for us has seen a deceleration. We were running in low single-digit growth. This quarter is a 3% decline. So MFI alone or rural alone doesn't explain this moderation, right? So can you help us explain, are there any other factors? Because again, demand slowdown was something which was continuing. MFI channel weakness was continuing. So something on this, sir. No, so like I said, I think this is specific to the quarter. It is because of a realignment in terms of the post-festive season demand. If you were to look at the full year or if you were to look at YTD, we are reasonably placed in the non-MFI channels. And we do see volume growth happening in those channels. Specific to Q3, the slow growth has been essentially on account of the demand tapering that's happened post-festive season. And that we believe is more a correction that's happening between a Q2 fulfillment and a Q3 fulfillment. We do believe the underlying demand is indeed. Sir, I'm sorry, your voice is breaking. Can you hear me now? Slightly better, sir. Okay, so as I mentioned, I think when you look at the slightly long-term. Sir, your voice is breaking. Again, it started breaking. Is that problem resolving somewhere? I'll just reconnect you to the call. Just a moment. Okay. Ladies and gentlemen, please hold while we reconnect to the. Ladies and gentlemen, thank you for patiently holding. We have the management line reconnected. Over to you, sir. Yeah, like I was specifically answering the question, Q3, the MFI channel has been a continuing factor for the last three quarters. This quarter, compared to the previous quarter, we've seen a drop in demand post the festive season. And that is the reason why you would see the Q3 numbers muted as far as the overall is concerned. Underlying concern of the MFI channel has been there for the last three quarters. Got it, sir. So if going from 1Q onwards of FY 2026, this will be in the base and our growth, at least if it doesn't come back, even then our growth should be what it is currently tracking with the non-MFI channel. Would that be a correct understanding? Yeah, that's a fair assumption. Yes. Got it. Sir, second question is on the gross margin. So you have mentioned marginal price increases due to commodity price inflation. And despite that, we have seen a 150 basis points gross margin expansion this quarter. Last quarter was flattish. So again, just trying to understand the major driver here. See, so this is on account of a delayed price impact that we do believe will start hitting the market as we move into the next quarter. Some of the price corrections taken by the industry by us over the last few months will sort of move in depending on the inventory movement. The margin is a reflection of our subsequent cost management that we've been able to do both at a raw material level as well as in terms of our overall costing. So therefore, you would look at better margins for the quarter. Got it. So this thing is sustainable going forward. Yeah, this is sustainable going forward. Having said that, I would like to bring to the notice that we see pressures of swing in prices happening with aluminum prices. It's still there. The pressure is still there. We've been able to manage it a little more better with the forward planning. But overall, there is a little bit of pressure on the raw material pricing that continues to be existing. Do you anticipate more price hikes? As we speak the price, no. Price hikes is something that, given that we've already taken one price hike last quarter, the impact will be felt as we move forward. Depending on the requirement, we'll take that call as we move forward. Got it, sir. Last question, if I may squeeze in. This INR 13.5 crore other expenses towards consultancy. I think I recall this that this was for six months. So this is the last quarter of these expenses, or do we expect some of this to recur going forward also? Right now, this is a one-time arrangement. We will come back if there are specific arrangements around that. This is pertaining to the six-month window that you had mentioned. Got it. So we don't expect anything for fourth quarter onwards till now. I mean, things can change, but till now, there is nothing. Got it, sir. I'll come back in the queue for any follow-ups. Thank you. Thank you. Before we move to the next question, a reminder to the participants to ask a question. You may press star and one. Next question is from the line of Priyank Chheda from Vallum Capital. Please go ahead. Yeah, hi sir. So in last quarter, a few quarters ago, we had laid down clear priorities with respect to market penetration. So if you can highlight what has been the growth in the Non-South market, that is our first priority. Second, on new product development, if you can further highlight what has been the growth contribution from NPD. And third was digitization. So we were planning across various sales channels to be digitized. So where are we on these three priorities? On the digitization front, we have moved very aggressively on the sales front. Two fronts. One in terms of digitizing the complete finance-related transactions between our distributors and the primary company. Second is also in terms of enabling our sales force at the ground level to be able to service the orders as well. So I think we've very aggressively moved on that, and that's giving us benefits of complete visibility of the reach that we have today in the general trade channel. And also in terms of being able to understand consumer trends as well. So I think the digitization process, I'm quite happy with the progress being made. We do believe it will help us in terms of our productivity as we move forward. On the NPDs, as we said, the new product that we said, price hikes. Sir, your voice is breaking. It is not coming clear, sir. I think that's fine. Then some problem is there with the line. Can you hear me now? Hello? It is still breaking, sir. You may have to connect to some in there. You're trying to hold the phone? Okay, sir. We are able to hear you clearly. No issues at all. Okay. So you can go ahead. I'll just check the audio. You can go ahead. Okay. Sorry for the disturbance. So, like we had mentioned in the previous query as well, I think our overall growth outside of the MFI channels is reasonably strong enough. And one of the reasons for that is the NPD launches that we've done. We've introduced around 53 SKUs during the quarter. We've also sort of rejigged our portfolio product in cookware and in appliances. We have plugged all the gaps that we had in cookware earlier. So, combination of all of this is actually helping us grow faster overall in the general trade as well as in the e-commerce store, large-format stores channel. So, I think that strategy in my mind is a work in progress, but it is getting executed very rapidly. We've been able to, therefore, expand the new product portfolio significantly as well. As far as the Non-South is concerned, while I don't want to come back with specific numbers, I'm quite happy, and we are confident that some of the initiatives that are being unleashed in the market are yielding initial results seems to be good. This is one initiative that probably will take some more time before we have to really sort of come back with concrete numbers. But I do believe that some of the initiatives that we have launched, we are confident that we are able to get back strong in these markets. At an overall level, we are also happy that some of our categories we've been able to sustain to increase our market shares as well. So I think overall, moving in the right direction would be the point of view that I would place it. Sorry, would you be able to call out which categories where you have gained market share in traditional channel? Both in cookers and cookware, we are sort of gaining. While these numbers are not through syndicated research, it is common. We do believe that we've sort of improved our market share in cookers and cookware. Got it. And this includes a subsegment question that I have, which is the Judge brand. Clearly, the strategy that company is laying down is reflecting in double-digit growth even in Q3. So now the question is that, is this a market compulsion, or is this a strategic thought that TTK has thought to play in this mass market? Because it's kind of we have a larger portfolio in the mass premium, and now we are getting full we're putting down double energy into mass market. So broadly, what would be the strategic thoughts in that? And is the market share gains coming out because of this? It is very clearly a structured call that we are taking to address some of these opportunities that we believe can be addressed through the mass brand without cannibalizing the mother brand, and that, I think, is a strategy that works in multiple categories, and we do believe we would be able to sort of execute it in this category as well, so far, we've been able to see reasonable success. I think there's a lot more work needs to be done on that. From a market share perspective, this is a little too small in nature right now to impact the overall market share, but it's in the right direction, so the market share gains are a combination of both Prestige as a brand as well as the sub-brand strategy that we have played around. The overall thrust on the mass brand will continue to be there as we focus. We are working on sharpshooting some of the efforts in some geographies so that we are able to scale it up faster. Judge has now reached to what percentage of TTK distribution channel, sir? No, like I said, I would say it is still in very rudimentary stages. It has been, in select geographies, doing well. It has been on a pilot mode in our view. I think it will take us a couple of quarters before we come back with specific numbers on that. But suffice to say that we're quite happy with the progress and the response that we've seen. Perfect, and just last question from my side on the cooker segment. Seems that even nine months, the category growth itself is a problem, or is it a problem of a certain new launches needs to be focused? What's the core rectification that are required in this category or in this segment for TTK or for industry would be helpful? Thank you. For cooker category, our belief is that it runs on the twin engine of premiumization in the urban market and a little bit of push that is required in the mass market beyond the Tier 2, Tier 3 towns. So we do believe that the cooker category is under stress also for the fact that the category is well penetrated today. So I think the cooker category is something that we would lead the industry. And we do believe that there are opportunities both around the premiumization as well as in terms of some of the market-specific introductions that we need to do further down the strata in terms of Tier 2, Tier 3 towns as well. Compared to the other categories, cooker category has definitely needs a little bit of a slightly different approach when compared to what is happening today. So there are very interesting innovations that are happening. Sir, we please request you to rejoin the queue for the follow-up questions, sir. Sure. Thank you. Next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah, thanks for the opportunity. So just wanted to understand how does the MFI channel essentially works for us? Means, in a way, it's a very small product, be it a cooker or a cookware, etc. So how does the channel work? Means, whether the company sells in a way rural channels and then consumers use the MFI funding or in a way buying the product? Or means, how does the channel work? That is question number one. And then question number two, if you can give more color on the, in a way, the impact that we are seeing in a way, East, West, North, South, which segment is doing? Which region is in a way performing a bit poorly? Or in a way, in terms of metros and rural markets and then urban sorry, and rural markets, which are the regions that are again doing good and relatively poorly? Yeah, that's my question. Yeah, so MFI channels sort of a channel partnership where they reach the consumers. They deliver loans to consumers and they reach the consumers through the MFI channel. It's a sort of channel. It's a distribution channel that we've used. Sir, your voice is breaking. Sorry, sir. Okay. Can you hear us again? Hello? Yeah, yeah. This is better now. Okay. I think the MFI channel is a distribution partnership that we have sort of looked at where they specifically address reaching the consumer. The challenge of reaching the consumer is what is addressed by the channel, and then from there, it gets distributed to the consumers. In a way, it's a B2B channel that sort of helps us reach out to the rural market or the deep rural market. They facilitate the reach combined with the financial loans that they give. Sorry, sir. Sir, your voice is really breaking. I'll just reconnect you again because. Okay. Ladies and gentlemen, please hold while we reconnect with the management. Ladies and gentlemen, thank you for patiently holding. We have the line for the management reconnect. Over to you, sir. Sorry. So really sorry for the disturbance. With regards to the question on the MFI channel, they act as a distribution channel for us, helping us reach to the rural consumers. I think that's an arrangement that we have with them. It's a pure distribution arrangement that we have with them. They facilitate our reach. In terms of region. In terms of we sell to these MFI agents, and then they in a way sell it to the consumers. Is that, that is, correct understanding? Yes, yes. They facilitate distribution for it, yes. Okay. So means, if the MFI channel, the MFI funding route is in a way impacted right now, so that impact would be largely at this agent level or in a way at the consumer level also? So as far as we are concerned, we are not looking at it from consumer perspective. The MFI channels were working with us in a partnership due to reasons of their own internal constraints today. They are not working with us. So that is impacting us as a channel. So it is in no way a reflection of the rural market or anything. It is more to do with a choice that the channels have made not to work with us due to their internal constraints. Okay. So, sir, is this a structural issue, or do you see the agents again coming back in, let's say, quite well? We see this as a structural issue. It was an opportunity that sort of got utilized, but we do believe that this is a current scenario. This is a structural issue and may or may not be scalable as we move into it. Oh, okay. Sure, sir. Understood. Yeah. Sorry, on the next question, we were speaking. No, specific to regions, I think we're uniformly seeing it across. We would probably call out a little bit of East. East is a little bit lower on the growth rate when compared to the rest of the country. Okay. Sir, in terms of metros, urban markets, rural markets, which regions are doing relatively better and relatively poorer? No, which is what I said. If I were to look at it from a region perspective, we have seen quite a spread of growth across the markets in the Tier 1 and the metro towns. It is uniformly across South, West, and North. East is one area that we can probably call out from a geography perspective. Overall, from Tier 2, Tier 3 towns, we are seeing robust growth now happening, which is reflecting also with the sub-brand growth, also facilitated by e-commerce. So we do see growth in the Tier 2, Tier 3 towns. Okay. So, sir, understood. Lastly, what is MFI contribution, let's say, in FY 24 and Judge revenue contribution in this quarter or nine months, if you can indicate? Percent of total sales. Yeah. That is how I said. Thank you. Okay. We'll probably come back on that as we finish the wrap of the calls. Yeah. Okay. Sure, sir. Sure. Thank you. Thank you. Next question is from the line of Rishabh Mehta from GreenEdge Wealth. Please go ahead. Yeah. Thank you. So just wanted to understand your non-traditional channels a little bit better. So if we look at the CSD channel, so even that has had a structural issue since the last two odd years. So in terms of revenues, if we were to look at it from a nine-month standpoint, are we back to the nine-month FY 23 revenue numbers? No. Not yet. We are closer to that. Okay. So because in FY 24, if I'm not wrong, the revenues from CSD channel had almost become half versus FY 23. So in FY 25, you're saying that we would be closer to the FY 23 revenues. Is that correct? Sorry, Cani, your question is on specific channel or overall number? CSD. Specifically on CSD channel. We will not be there. Sorry? I didn't understand. We have not seen demand pickup with specific reference to the CSD channel in this financial year. Okay, so the CSD revenues for nine months of this financial year, would it be closer to the nine months of FY 2024 revenues, or would it be closer to the nine months of FY 2023 revenues? It will be closer. It will be sort of closer, slightly lower to FY 2024. Okay. So it has declined further, right? And in terms of rural, so while, yes, a lot has been spoken about the MFI part of the rural channel. So just wanted to understand, so if, let's say, we are doing around 4%, 5% revenues from the rural channel, how much of that comes via the MFI route and how much via the non-MFI route? So we do not measure our rural outside of the MFI channels. We don't have that at this point of time. Whatever we used to call as rural or whatever we're mentioning right now is entirely the MFI channel. Okay. Okay. And the corporate sales channel, right, the institutional sales channel. So here, typically, the revenues that we would be seeing from this channel would be in the festive Q3 quarter. Is that understanding right? Yeah. It is part of it. It varies on a yearly basis, but yes, the festive season plays a good role in terms of the institutional sales, yes. What would be the kind of decline that we would have seen in this channel from a nine-month perspective? There has been a decline, not as sharp as in the other channels. There has been a decline in this channel as well. So would that be a low single digit, high single digit, double digit, if you could just give some flavor there? I think we'll probably reach back to you on that specific question. But suffice to say, directionally, the institutional channel is also under pressure for growth. Got it. And exports, if I'm not wrong, after a long time, we've mentioned that we've had robust orders. However, the delay in shipments is what caused the revenue decline. So if we can just talk about the export channel, are we seeing that picking up or reviving or at least being at par with last year's revenues, or is there any reversal there? The first half of the year, we did have supply chain-related problems, and that has sort of led to delays in the orders, which is reflecting a bit in the Q3 numbers as well. Our belief and what we have seen is that we are definitely seeing a lot more inquiries coming in in the second half of the year. We do believe that we'll be able to pick up steam as we move forward. A couple of quarters, we will look at significant steam getting picked up in the exports journey as well. The first half of the year, we had supply constraints. These exports are largely to which countries? The exports would be to a large part of the exports from our perspective is to Europe. Okay. And would it be possible to just give some qualitative sense on the initiatives that we would have taken post-hiring the consultant? It's too early for us to come back on this. We definitely would brief you as we move forward. I think right now, what we have done is to do a very deep dive in terms of the opportunities and in terms of the future strategies that we need to look at. Some of them getting rolled out. Some of them will get rolled out. But I would request that probably a couple of quarters down the line is when we'd be in a position to specifically answer that question. All right. Thank you so much and all the best. Thank you. Thank you. Participants, to ask a question, you may press star and one. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on the touch-tone telephone. Participants, if you wish to ask a question, you may press star and one. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand the conference over to the management for the closing comments. Thank you. Thank you for asking us the right set of questions, and I think we are quite energized in terms of as we move forward. There are challenges around demand and challenges around specific issues that need to be sorted out, but we do believe that as we move forward, we are better poised, and the industry in general would move in the right direction, and looking forward to good quarters as we move forward. Thank you. Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.