Ladies and gentlemen, good day and welcome to the First Quarter Earnings Conference Call of Aditya Birla Fashion and Retail Limited. The call will begin with a brief discussion by the company's management on the Q1 FY25 performance, followed by a question and answer session. We have with us today Mr. Ashish Dikshit, Managing Director; Mr. Jagdish Bajaj, CFO; Mr. Vishak Kumar, Director and CEO, Lifestyle Business; and Mrs. Sangeeta Tanwani, Director and CEO, Pantaloons. I want to thank the management team on behalf of all participants for taking valuable time to be with us. I must remind you that today's discussion may include certain forward-looking statements and must be viewed, therefore, in conjunction with the risks that the company faces. Please restrict your questions to the quarter and full yearly performance and to strategic questions only. Housekeeping questions can be dealt separately with the IR team. With this, I hand the conference over to Mr. Jagdish Bajaj. Thank you, and over to you, sir. Thank you. Good evening, and welcome to the Quarter 1 FY25 earnings call of our company. As we look back at the first quarter of this fiscal, the overall consumption environment has remained weak. The apparel market, in particular, was further impacted by a subdued wedding season, prolonged heat wave, all of which have contributed to reduced consumer activity. Despite these challenges, our focus has remained on consistently improving profitability. We have prioritized aligning our general strategies, refining our overall cost model, and improving the health of our distribution network. These efforts have enabled us to navigate through the tough demand landscape effectively and profitably. This quarter saw growth primarily driven by our newer businesses, which are built around emerging fashion segments. These new businesses are proving to be vital in sustaining our momentum while setting up multiple growth platforms for future. Before I talk about financial performance, I would like to share the status of both merger and demerger corporate actions, which we announced. The merger commission of TCNS with ABFRL is on track, as the honorable NCLT has approved the merger. We are awaiting, the court order, and then we will work towards making this scheme effective. For demerger, we have filed the application with the stock exchanges, and hopefully we'll be able to complete it within the timeline indicated earlier, that is, by end of fiscal year 25. Now, I'll talk about financial performance of our company for Q1 FY25. Our company delivered revenue of INR 3,428 crore in this quarter, reflecting a growth of 7% over last year. The demerged ABFRL grew 26% YOY this quarter. Both our ethnic and digital first portfolio together more than doubled their revenue, led by organic as well as inorganic growth. Company achieved consolidated EBITDA of INR 406 crore, with 11.8% margin. EBITDA increased 15% year-on-year in absolute terms. Both our established businesses, that is, Lifestyle and Pantaloons, witnessed margin expansion led by gross margin improvement and effective cost control measures. Our new businesses continued to see robust revenue growth with improved profitability. Company's consolidated PAT was INR -215 crore, majorly on account of continued investment in TMWR and ethnic businesses. I will now take you through the performance of individual businesses, starting with the first, the proposed ABLBL segment. The segment posted revenue of INR 1,799 crore, with EBITDA of INR 283 crore in Q1. EBITDA margin expanded 200 basis points to reach 15.7%. First, with Lifestyle brand, this quarter's growth was primarily impacted by weak wedding season. Despite the prolonged weak demand environment, the businesses continued to deliver strong profitability. Quarter revenue for the brand stood at INR 1,482 crore. EBITDA margin expanded by 50 basis points to reach 18.8%, led by sustained cost optimization and better discount control. Second, the emerging business portfolio within ABLBL, comprising of youth western wear, innerwear and Athleisure, and sportswear segment posted 5% growth at an overall level with significant margin expansion. American Eagle posted 35% YOY growth, led by strong distribution expansion. Reebok, following a successful first year with ABFRL, maintained its trajectory of profitable growth year-on-year. The brand is consistently launching newer products while expanding its distribution across channels. Now, Innerwear business. The varied performance of the Innerwear and Athleisure continued, with Innerwear posting growth, while Athleisure is still degrowing, albeit with some sign of recovery. The brand continued to drive distribution while investing well behind consumer salience and engagement collaborations on social media, other digital channels, et cetera. Currently, the brand is available at over 35,000 trade outlets and runs over more than 100 EBOs. Now, the remaining ABFRL. This segment posted revenue of INR 1,709 crore, with EBITDA of INR 118 crore in Q1 FY25. The like-to-like margin expanded by 200 basis points. However, with inclusion of TCNS into this year, at reported level, led by TCNS losses and investment into newer segments, the EBITDA for the segment stood at 6.9%. Now let me explain Pantaloons business. Pantaloons revenue grew by 5% YOY to INR 1,100 crore. Retail's like-to-like growth for the quarter was 2%. EBITDA margin expanded by 470 basis points to reach 17.6%, led by markdown management and cost control measures. Through a combination of strategic initiatives, Pantaloons has been focusing on enhancing its consumer proposition through improved product offerings and better retail experience. Initiatives around merchandise planning, product value enhancement, tight inventory management, and improved consumer outreach is helping the format grow with LTL, healthy KPIs all across, improved gross margins, better operating margins, and efficient inventory turns. Going forward, the business intends to continue building on this successful approach. Coming to our ethnic portfolio, overall portfolio posted sales of INR 550 crore with the inclusion of TCNS. As this is scaled on a run rate basis, it is not just the largest run rate ethnic portfolio in the country, but also the most diverse one, with designer-led brands on one side and premium ethnic wear on the other side. Designer-led brands include Sabyasachi, Shantanu & Nikhil, and House of Masaba. Despite a lean wedding calendar, the portfolio grew 4% YOY. Sabyasachi delivered another quarter of strong performance with 5% LTL. House of Masaba revenue was up 75% YOY, with beauty segment growing to 6 times of last year. Premium ethnic wear brands include Tasva, Jaypore, and TCNS brands. TCNS revenue stood at INR 206 crore, 84% of last year, mainly on account of network rationalization, led by a focused ongoing transformation program within the business. The business has begun to show promising results. Brands have seen an increased market share in top departmental stores and also posted a retail LTL of 5% this quarter. Tasva sales were impacted this quarter due to a reduced number of wedding dates versus last year. However, with its superior product offerings and high quality store experience, Tasva is well positioned for a strong performance in the upcoming wedding and festive season. Coming to the luxury retail segment, delivered another quarter of strong performance with YOY revenue growth of 18%. E-com channel continues organic growth, growing 31% versus last year. Finally, TMWR. TMWR portfolio grew to 2x of last year as the brands continue to benefit from operational and business model enhancements provided by the Center of Excellence. TMWR expanded its portfolio with minority investment in Wrogn. The portfolio now consists of both large prominent category leading brands, along with mid-sized emerging brands in high growth space. To conclude, despite challenging conditions this quarter, our strong portfolio of brands has demonstrated remarkable resilience. As in previous quarters, reading the situation, we have kept a sharp focus on our profitability through this period, while leveraging growth opportunities that came through. We took this time to make improvement in our model in the current context, corrected costs, improved the health of our distribution, and amped up focus on parts that face challenges. As we look ahead, we anticipate an improved demand environment during the upcoming wedding and festive seasons that will hold us in much stronger position to capture the opportunity in the market. We are open to questions now, please. Thank you, Mr. Bajaj. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. The first question is from the line of Nihal Mahesh Jham from Ambit. Please go ahead. Hi, good evening, Nihal. Are you there? Yeah. The first question is on lifestyle brands. If you could just give the ballpark SSG for this quarter, and also, what would be the approximate sales for all the wedding categories? Asking the same because I do believe we've been targeting to casualize the brands, and if that would have had any impact in terms of moderating the impact of the lower wedding day. So, Nihal, first question, low single digit negative, okay, for the quarter, primarily impacted by wedding dates, while definitely our suits and blazer business and categories, which are more impacted by weddings, had that impact more. But overall itself, consumption occasions have reduced. So we see that, you know, this time the calendar we've been dealt with is very strongly loaded towards the second half of the year. So, I think we'll have to just play it out with the calendar that way. Okay, so the related question there also was that Pantaloons has delivered a positive SSG. So the difference obviously is because of the wedding dates you're saying, and also with Pantaloons, as you're highlighting about certain initiatives, if you could mention what are those? Because despite us reducing the discounting, we've managed to, you know, see a positive LTL. So what have been the drivers to achieving that? So, Nihal, this question is regarding Pantaloons or this question is in reference of lifestyle brands? Not clear. It's regarding Pantaloons, but just, the divergence also, if you could just highlight that the performance of lifestyle is maybe because of, the wedding dates or there is something more that you may want to highlight. So I think as Vishak explained, Nihal, the largest phenomena in the market is that the premium brands are particularly bought for special occasions, wedding being a very large part of it, but all other special occasions. This quarter being particularly so slow, either on festivals or on weddings, the premium brand demand has suffered more on a like-to-like basis as well in absolute terms. ...The share is highest for categories and brands which cater to base segments, so highest for pure wedding wear brands in our portfolio slash designer brands, then relatively high for menswear brands where suits, high-end shirts, et cetera, have a large share. And to that, to that extent, slightly lower at the more regular occasions, which large part of Pantaloons caters to. Got that. And just on Pantaloons, the comment about despite reducing discounting, we manage the positive into it. Sorry, sorry, Nihal, can you ask that question again? I'll ask Sangeeta to respond to it. Nihal, sorry to interrupt, but we request you to please repeat the question. Your line sounds muffled. Sorry. I was just saying, despite reducing the discounting in Pantaloons, we managed a positive like for like. What are the initiatives which helped achieve that? Yeah. Hi, Nihal, this is Sangeeta. So I think it's a question of us staying the course in terms of our strategy that we've talked about, you know, on an, on a consistent manner in the last call as well. I think the fact that we have chosen to go the premiumization way and increase the fashion quotient and design aesthetics of our merchandise, the better planning processes that we have put in place. I think execution of that strategy as we have seen it come to life, and a very, very strong focus on ensuring in-store execution of the great merchandise that we are making. Staying the course on strategy, both on premiumization, making the stores look good, improving the product and improved planning processes, which has also, by the way, resulted in reduced markdown, helping us in optimizing the markdown and improving our sell-through as well on the merchandise. I think it's a combination of all of that that's helped us drive our growth. This is clear. Thank you so much. Thank you. Thank you. The next question is from the line of Gaurav Jogani from Axis Capital. Please go ahead. Thank you for the opportunity. And, sir, congratulations on a great set of operational performance. So my first question again is with regards to the Pantaloons margins here. You know, the Pantaloons margins have seen a sharp improvement despite, you know, not seeing a sharp improvement in the SSS, SSG or even the revenue per square feet. So, how should we look at it? Is it largely, you know, rationalizations of cost that we have seen, or is it also because of the, you know, closure of the loss-making stores that has helped in this? If you can articulate, you know, what has driven these margins and how sustainable these margins are going ahead. So, I, you know, as Sangeeta mentioned, the primary drivers are superior execution on merchandising side. See, cost rationalization gives you a little bit of base correction, which has happened over the years, and particularly some stores closed and so forth. But if I were to point out that, that's a marginal improvement. The bigger improvement in Pantaloons has happened through gross-margin enhancement, through better quality product, better intake margins, superior inventory management, leading to lower markdowns and discounting, and all this happening and increasing the share of private label. Got you. So the private label share is now increased to around 66%. What has led to this? And is it a conscious strategy going ahead that, you know, we would want to keep the share of the private label higher, and in fact, increase this from these current levels as well? So, Gaurav, we've consistently been working at improving our product. We used to be couple of years back at about 61%-62%, and we've continuously invested in improving our product. Obviously, we'd like to give our customers relevant assortment, where appropriate, depending on the town class that we are in. If you look at the share, as we've given you of, private label plus the ABFRL brands, that totally comes to about 76%-77%. I think we'll continue to strive to improve that further by a couple of percentage points. We offer our customers a wide range of products in private label across all categories. Equally, we have a representation of external brands to ensure that we cover all the occasions. So I think we are on this journey. We probably have a little bit more opportunity to further improve our private label shares, but that's dependent on the assortment that we have for every single store. Sure. And sir, the, second question is with regards to, you know, the overall, the consolidated losses. So if you look at it, you know, the consolidated losses actually have increased on a QOQ basis as well. However, the standalone losses have reduced down considerably. So that says, you know, that the losses, actually the subs part of the business has increased. So if you can also articulate whether the losses have increased more in the, the TCNS part of the business, or is it more the ethnics or the TMWR piece which is contributing to this incremental losses? So, the losses have increased primarily due to addition of TCNS, which was not part of the company in quarter one last year. So on a like-to-like basis, that is what is driven. That has increased, and that's a phenomenon that has happened in last two quarters. As far as TCNS is concerned, I think most of the big, big correction that we were doing in that business is mostly behind us, maybe a quarter more or something. It's a business which in the second half of the year, we'll definitely see a much profit, much better and positive bottom line, apart from an improved traction in top line. Some of the early signals of the business performance have sort of corrected, started to show that sign. There is obviously. There's another slightly increased set of losses in TMRW compared to same year, same time last year. So if you were to attribute the increased losses, it's come more from TCNS, most of it, and a small part from increasing losses in TMRW. Sir, actually, you know, if I was more referring to the quarter-on-quarter, because in Q4 also we had TCNS in the base. So from Q4 to Q1 also, the losses have actually increased by INR 60 crore or so, on a sequential basis, that is. So my question was more with regards to the sequential loss increase. There, there also, I think TCNS remains a major part of it. The losses, all, all businesses, TMRW losses are also this quarter higher compared to last, last quarter, and TCNS losses are also higher. Sure. Thank you, and that's okay. Thank you. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Hi, sir, congrats on a good margin execution in Q1. Sir, I just wanted to catch your thoughts on demand trends in ongoing quarter. As PPT mentions, there is a pickup in value retailing, and if I remember correctly, base is also supportive due to shift of Pujo Plus, but there was extended the Shravan period last time around. There are some incremental wedding days in Q2 also. So, what's your thought on the ongoing quarter? So the commentary mentions H2 should be great, but any color here? We're being very careful in stating that the H2 will be better than significant improvement. You have rightly pointed out some of the occasions for which Q2 has some factors of improvement over Q1, but most of them is happening towards the tail end of that quarter. I still believe that the greatest shift in momentum will happen towards the second half of the year. Got it. And, sir, we do have some B2B part of the business, right? So for direct retailing, I understand, the later part should help, but any initial signs you would like to highlight, from that perspective? Yeah, Devanshu, as far as B2B is concerned, you're right. So a lot of Pujo uptick and Onam uptick, et cetera, would happen in Q2. Of course, with that is vis-a-vis Q1, but you'll also have to compare it with the base of Q2 last year. But yes, there will be that impact in Q2. The general optimism is there with department stores, with various B2B partners. The optimism is there that H2 would be a good H2. So that's the broad tenet with which we are operating. Got it. Got it. And, sir, there is a comment for TCNS that over the next nine months, we should largely be EBITDA breakeven in FY25. I guess most of the losses in this ethnic segment were due to this particular entity. So overall, for next nine months at least, can we expect a positive EBITDA from ethnic? So I think there are multiple moving parts there. TCNS is one element which, obviously we are fixing as we go along. We will have continued investment, and I think this year, losses in Tasva. So while TCNS will fully turn around, but because Tasva, we have a more ambitious growth plan, I think our investment will continue there. To some extent, these will be offset by profits that we expect to make in the, the designer labels, which is the partnerships that we have. But the exact balance, we can't commit to a number right now. I think TCNS, trajectory is visible. That's why it's clear that we'll have to, invest at least for another year in this form, and a part of it will be offset by designers. Got it. Sir, one last small bookkeeping question for Jagdish. So Pantaloons, last time around when we reported, in the PPT, was about INR 1,030 crore. This time around, it is closer to that same number has gone up to INR 1,051. There is some small reclassification. So if you could call out on that 1,030, what is the comparable number this time around in Q1 FY25? That is 1,100, yeah. INR 20 crore, you know, because of this year-end adjustment, et cetera, something to do with, you know, e-commerce sales, we have to adjust it, so we have done it. Is this not because of Style Up getting included in this, Jagdish? Style Up is part of that, but, you know, we have said that we have... Style Up is now part of this number. Pantalones. I don't... Yeah, this is, we track it together, so I don't have separate number for Style Up or last time. Okay. For this particular year, any sense, as in what is the number? Out of this INR 1,100 crore, how much has Style Up contributed? There are, it's too small right now. We don't want to start separating- Uh, okay. or reporting separately, which as the business grows, perhaps next year we'll start separating the numbers. Thank you, Mr. Dikshit. Jagdish, thanks for taking my question. Yeah. Thank you. Ladies and gentlemen, to ask a question, you may please press Star and one. The next question comes from the line of Sameer Gupta from India Infoline. Please go ahead. ... Hi, sir. Thanks for taking my question. Firstly, on Pantaloons, we, the company hasn't added any store this quarter on a net basis. So would you want to revise your guidance, if any, on store additions? What do you expect in FY25, given that, at least on the margin front, there has been a turnaround in this brand and format? Sangeeta Sangeeta Got it. And there are no more store closures which are loss-making or not working, kind of related remaining right now? I mean, part, of course, normal course of the business might continue. Normal course of the business. Yes. Yes, that's right. Great. Sir, secondly, on the innerwear business, now, American Eagle has grown 35%. Reebok, you're saying, has grown, and I'm assuming that is also a healthily growing business. So, and innerwear inside has also grown. So it means overall, 5% growth for that segment, that would mean Athleisure must have declined very drastically. So just trying to understand what exactly is happening in this part of the business. So there is Forever 21, which we are sort of consistently downsizing, so that factor is built into it, which is not visible to you, apart from everything else that you mentioned. And Athleisure yes, continues to... I think that's a more longer-term phenomena. It's a base correction happening across the industry. Post-COVID, there was a resurgence in the market, multiple brands, retail formats, from sportswear to casual brands, to department store, private labels. Almost everybody created large range around it. Consumer also created, and the demand equations were also higher. As recovery has happened, I think that base is settling down. To my mind, I think the worst is behind us, even in Athleisure. As we go forward, we'll start to see marginal increase happening on that. But, but that's been a phenomena for the last couple of quarters. You see this correcting from 2Q onwards, you are saying? No, I think, I see, I don't think it's, I mean, something we can predict with that degree of definitiveness. But the base correction has been happening almost for a year, year and a half, because there was a very sharp increase in this category, which led to increased inventory at company levels, at distribution levels, at retail level, and I would even argue at consumer level. And that's what is correcting, actually, and therefore it's taking longer time to stabilize. Got it, sir. Final, last question. Just an update on the net debt number for the company, ending Q1? Three months you want me to update? Okay. INR 3,500 crore, approximately. You expect this number for FY25 to be up? Let us work on it, because C, as we announced, that, you know, post the merger, we have a equity raise plan. Okay, got it, sir. Thanks. That, that's all from me. Thank you. The next question is from the line of Rahul Jain from PhillipCapital. Please go ahead. Good evening, sir. My first question is regarding the Bangladesh unrest. Is there any disruption in our supply chain or sourcing on that front? No, it's not material. It's between 2%-3% of our sourcing comes from there on an overall basis. So there might be a, you know, individual business, some segment, a little bit of it, but at overall level, it's not significant for us. Understood. So my second question is regarding Pantaloons EOS rate. Is there a change in how we the duration of the period? Are we shortening the span of the EOS period in Pantaloons, or is there a tactical call taken by management this quarter? This is Sangeeta. So Rahul, there is no change as far as we are concerned. Last year, of course, we as a company went much later than most other large format retailers this year. Last year and this year, there is no change in our EOS. We've stayed consistent. And there is a little bit of EOS impact towards the end of June, and large part of the EOS was in July, which was the same last year. Understood. Thank you. Thank you. The next question comes from the line of Devanshu Bansal from Emkay Global. Please go ahead. Hi, sir, thanks for the follow-up opportunity. I just wanted to ask on this negative brand publicity around Tasva for the Olympic dress that we've designed. So, and there's a lot of chatter around that in terms of comfort, et cetera. So, how do you sort of plan to deal with that? I think you, you've seen our responses which have been given out. This was a design which was created by Tasva design team, along with the Indian Olympic Association, with a specific brief given by them. The clothes were designed keeping in mind the occasion, the sensitivity of the weather, that they had to, athletes had to wear it for almost 5-6 hours during the opening ceremony, their comfort, and the brief was quite clear from IOA on that. That's what we have issued to, to press in general, and we'll stay with that. ... Got it, sir. Thanks for taking the question. Thank you. We have the next question from the line of Anshuman Mohta, an individual investor. Anshuman, before you ask your question, may I remind everyone that you may press star and one to ask a question. Please go ahead, sir. Yeah, hi, this is Anshuman Mohta here. Sir, do we expect Pantaloons division to break even post demerger, means, the entire Pantaloons, Sabyasachi, and TMRW? As, as of now, Madura is funding for the losses of this division. What will happen to the division after the, after the demerger? So there are multiple businesses. I won't have a definite number which would be an indicative of future. Pantaloons is a very profitable business. Multiple parts of the businesses are profitable. Sabyasachi, Tarun Tahiliani, all the designer businesses are profitable. I think the losses in Tasva will continue this year. TMRW will continue this year. TCNS, we are winding down the losses. I think first half of this year will perhaps still be making losses, but from second half we'll turn profitable even in TCNS. And therefore, as we go forward, the situation and overall profitability of that division will also improve. In fact, the improvement will be much sharper there, as many businesses which are in incubation phase, like Tasva or TMRW, are coming into its being as we go forward. To fund that growth, that's the reason we are raising capital, in that regard. Okay. So the second question is, so what will be the ROE of Madura division, ABBL, including Reebok, American Eagle, et cetera, other companies which are there in, ABBL? So I think, a very specific question. I'll ask Amit to reach out to you, and maybe we can share that separately outside the conference. I don't have it right away, right now. Okay. Okay, okay. And sir, I want to ask you a couple of things, a little different. Sir, what is the, the, the stores which we are open or already opened, sir, how far, like, for Pantaloons, sir, it's specifically, I've seen, sir, in some parts, in 100 meters very close by there are two stores of Pantaloons. Sir, how do we, like, manage the two stores closer by in Chennapatna, for example, there's a Pantaloons store at the mall and at the road also. This is just one example, not like that. But how do we operate these two stores so close by? I think your question is very specific to perhaps one location or something. That's not how we operate. No, no, sir. I'm just giving an example. This is, I've seen in multiple places that we have two similar stores very close by. What is the plan behind, what is the plan behind such execution of these stores? So the plan behind... No, let me, let me explain to you. So Indian consumption markets have evolved over a period of time, with over a period of time, where different markets become more prominent. We look at the potential of that market at that point of time and take a call, and that's been consistent strategy. If it means there are times that stores, old stores have to be replaced by more vibrant market in the same locality, sometimes it's the transfer of the business happens, which don't shut the new, old store simply because new store has come in, because they're both stores, as long as they're making commercial sense, we continue to keep them. So there will be few cases, but essentially stores are open with an eye on potential of, of incremental sales and revenue, and that's really how we look at our store expansion. Sir, just have a look, sir, might as well- Sorry to interrupt. We request you to please rejoin the queue. We have participants waiting there. Sir, just one- Thank you. The next question is from the line of Gopal Nawandhar from SBI Life Insurance. Please go ahead. Hi, sir, thanks for the opportunity. My question is on TCNS. Basically, post our acquisition, we have seen, you know, EBITDA losses. And, company, pre-COVID used to do 17%-18% margin. Before we acquired, it used to be at 12%-13%. What exactly went wrong? And, are we through with the, you know, inventory writedowns, or we'll see more writedowns? So, Gopal, as I explained, there are three things that we've done in the company to... after we have come into the operation. One is clearly to look at the entire sales channel mix and prune the unprofitable parts of the business, whether they're categories, stores or channels, which didn't make commercial economic sense and were not very profitable. The second thing, we looked at the overall cost of the operations and looked at where were the cost opportunities and worked on that. That's a project which is undergoing, but significant opportunities we are seeing there. But the most important thing which was leading to the losses in the business was the high inventory business found itself, particularly with 2021 to 2022 era in the COVID, when I think there was excessive buildup of inventory of poor quality. We have, over last three quarters, taken deep corrections on all these fronts, which means made network, channel, product choices which are more profitable and therefore let go of some part of the revenue. We have looked at substantial parts of costs and look at where the costs, either through synergy operations between the other parts of the business or simply by looking at costs more closely. And third, and the most significantly, we have looked at old inventory, found ways of liquidating them, created more accelerated depreciation, where we felt that inventory was not truly valued at the realizable prices that we think was possible, which is the step that we have taken over the last three quarters. And Gopal, I can assure you that journey is more or less over as far as the inventory corrections go. Our organic performance has already started to show improvement. For the first time after multiple quarters, TCNS as a network, which is W Plus or earlier, across 500 stores, delivered 5%+ like to like in a very tough market environment. Its position in department store has started to improve, and most of old inventory problems are behind us. So which is the reason we have gone out and talked about improved performance in second half of this year. Sir, in terms of EBO count, what is the count now? It used to be 670, 680 types. Yeah, I think, the number is in the range of INR 550 or something, just around that, INR 600. Closer to 600? Closer to 600, yeah. Okay. And this rationalization is also over, and inventory, the old inventory is also over. Yeah. So, is it right to assume, like, you know, obviously you guided, H2 will be far better than H1. But if I may ask, like, you know, FY 2026, should one assume the normalized performance of TCNS, having a 65%-67% gross margin and far better EBITDA margins? So I think the gross margin, you're right, Gopal. We would get to that because old inventory is behind us, new inventory is working well, the pricing power stays with the brand. So we expect the gross margins to the range that we had mentioned. I think EBITDA margin will be a function of retail productivity, and that's a project that is currently on way, because a lot of selling expense need to be leveraged with higher throughput and productivity. And that's the work that we are currently happening. Hopefully by 2026, that would be the next lever of growth, because from the base that we have, we need significant improvement in retail productivity in this business to get back to the level of profitability that the business was before COVID. Sure, sir. And sir, TMWR, how should one, you know, assess the performance? Is there any way to, you know, compare, get a sense on like-to-like performance? Because, you've been, you know, on the inorganic mode, so it's difficult to assess the like-to-like performance, how the older brands are doing. So, first, I think it's a fair observation, Gopal. We now have a portfolio of about seven brands through acquisitions and investment. While some of them are a year and a half old, some are as new as one month old, which is USPL, the Wrogn business. We acquired one large business, which is The Indian Garage Co., towards the end of last year. We are completing a year. I think as we go forward, two parts I would... two points I would make. At, at this point in time, our acquisition engine is going to stop and take a pause for a while because the, the trajectory and the portfolio that we have built up is significant enough for us to build an INR 1,000 crore business with this portfolio. Just three of the big brands, which is the Indian Garage, Bewakoof, and the USPL, which is currently a minority investment, just those three will be close to INR 800-900 crores, and the rest of the business will be close to INR 200 crores. So that's the potential of just this portfolio. So our focus right now will be to improve both the revenue growth as well as the profitability trajectory of this business. We will continue to report quarter on quarter, and you'll start to see that. I think individually, each brand is such a different level of trajectory, and the time spent by our management has been very differential that, it'll be hard to give one number to look at. I, I would, say we should look at the overall picture and see how we are performing. Currently, it's about 100% growth rate, with revenues run rate, as I said, which is closer to INR 800 crore in NSV terms. In GMV terms, it's north of INR 1,000 crore. But once it gets to a substantial period of time with us, which perhaps by the end of this year, we may be able to find out common matrices which work across brands and reflect the health of the business. Sure, sir. And, now that the TCNS approval are through, by when we should expect this demerger process to get complete? Merger process or demerger? Demerger. Demerger for brand business and EBO. So, Gopal, you know, I'm awaiting the court order, as you know, I spoke when I was speaking. Yeah. After this, you know, we'll go back again with the regulators and stock exchanges. Hopefully, once they approve, then it is a court procedure, which takes generally 90-100 days. Okay. We have filed for demerger also with the stock exchanges. Yeah. We are waiting for the merger process, which is a precondition for- Right. - the process. So now that it's five to seven days away for the court order to come, and after that, maybe four months. Yeah. And, last bit, sir, on TMRW, we had a plan to raise capital in that business. How should one look at the timelines? Anything you want to share? So Gopal, again, I think, as we said, we would like to raise capital in TMRW, sooner than later. We had kept this year as the timeline for it. Having said that, we also wanted to make sure that TMRW gets to a reasonable size and a portfolio which is meaningful enough for investor to come in and for it to get the right kind of value, and which is what we will wait for, whatever it takes, 12 months to 18 months for that to happen. Ideally, would be end of this year, but if first half of next year is also fine for us. Till then, therefore, our acquisitions as far as TMRW is concerned, will have to wait till the fundraising actually comes through. Okay. Sure, sir. Thanks a lot, sir. Thanks a lot. Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. The next question is from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Hi, team. Thanks for the opportunity. An apology if I'm repeating the question because I have a patchy network, so I did not hear all the questions properly. So this first question is on there has been some kind of pause in store addition in lifestyle segment over last 12 months. Is there a focus more on SSG driven growth, or there is some revisit on the franchise strategy with this? Hi, Tejas. Hi, Vishal. Not having the first question coming from you. Tejas, yes, this quarter has been combination of both, expansion and some consolidation, particularly in some small town markets. So, there were some expiring leases where the new stores which opened were in different, not exactly same location, so we treat that as closure and opening. And we've also been able to open slightly larger stores as we've done that. But yes, this was a quarter of consolidation, especially in smaller town markets. Bigger cities, urban, mall expansion, et cetera, continues aggressively. In some small town markets, we've had to take some consolidation. Sure. Vishak, just wanted to understand, see, five years or seven years back, we used to be the pioneer in mastering this franchise model, leveraging entrepreneurial capital that this country has. Now, across sector and retail, we are seeing, be it jewelry or be it, be it, large big box retailing and many other subcategories that people are going franchisee route. So just wanted to understand, are we finding it difficult to kind of attract more entrepreneurial capital, or is it just a, is, is it just a choice that we have to kind of, consolidate right now and then perhaps expand later? Yeah, yeah. See, look, we have a fairly strong franchisee base, and they have been quite bullish about further expansion as well. So for us, it's a joint effort, along with our franchise partners, of whom we have about 800, to be able to find the right locations, the right opportunities to put up stores. So that, you know, is something we've been working over many, many years working with franchise partners. We make joint business plans with them, identify markets where we have to put up stores and so on. So it's an effort that we do together along with our franchisee partners. So I don't think that has changed at all. In fact, if anything, we continue to be very strongly franchisee driven. For us, franchisees bring a lot of local enterprise as well, market knowledge, understanding, nuances of merchandise, et cetera. So franchisee bring a lot of additional things to the table as far as our brand stores are concerned. Yeah. Vishak, my question was... Let, let me rephrase it. I was, I was just trying to understand, is it now more competition to attract new franchisee into our fold, or is it the same? No, no. Tejas, Ashish here, if I have to come in. I think, I would separate the two parts of it. One is a right situation in the market for us to grow and expand, versus attract, ability to attract franchisees. I think ability to attract franchisees remains completely strong because this is a proven model over 25 years. There are multi-generation relationships which we have with many of the franchisees, et cetera, so that has not changed at all. What has changed is, as you rightly mentioned, the pace of expansion, because after FY 2023 and little bit of first part of 2024, we haven't expanded our stores. Because one of the necessary long-term parts of franchisee strategy is to ensure that we expand in a manner that it's viable and profitable to franchisees. So we don't push it at times when we don't think markets are not ready for it. We don't add stores simply because franchisees exist. We add stores where we think franchisees will make money, the returns will be good, the market conditions. So I think it's more a reflection of a state of business in last 12 months versus, change in any, any manner about our ability to attract franchisees. That remains true and strong, because that is proven and established over multiple years, and that, that, those relationships are very strong. Perfect. The last one, in terms of channel saliency, we are seeing that, in lifestyle segment, wholesale channel is getting replaced by e-com in terms of saliency, at least. So is this by design or is it by, by, some market, demand forces we are seeing that? No, Tejas, first of all, wholesale, go through this impact of primary versus secondary sales, so there is always a lag effect of primary to secondary. So that's, that's fine. The, it's not really replaced by e-commerce, something like that. The, what you see as others includes a very strong exports performance also.... Okay, there is an outlet business that we have, there's an exports business, and there is an e-com business. So it's not only by e-com that it has been, you know, you see that growth number. Right? Got. And wholesale has the primarily, the, the like for likes are similar to our EBO like for like, so it's a primary to secondary impact that you would see in the numbers. So it is yeah. That's right. Exactly. Cool. Very clear. Yeah. Yeah. Yeah. Thanks. That's all from my side. Thanks, and all the best for coming quarters. Thanks, Vijay. Thank you. The next question comes from the line of Vaishnavi Mandhaniya from Anand Rathi. Please go ahead. Yeah, hi. Thanks for taking my question. So I have two questions. One is on how should we see, TCNS in terms of its margin trajectory? Because there's been a very big difference in terms of what the company used to do historically and what it has done in the last couple of years. So actually, as I explained to an earlier question, that historically, in a post Ind AS terms, the company used to operate in teens, high teens, which is 16, 17, 18, 19% kind of margin at its peak, but I would say 15, 16%, very, very comfortably, and most of the time higher than that. Post 2019, the margin had started to sort of drop a little bit, and for much of the COVID period, it fell quite steeply. What we have done in the last three quarters is taken a hard look at what's the long-term sustainable parts of the businesses, which business which needs to be sustained, what are the corrections that are required, and how do we address that, and which is the process that's going on. So some of what you're seeing is, I would call it one time, although it's happening over multiple quarters. Deep correction in the business model of the company, improving the planning processes, getting rid of the old inventory, ensuring that the inventory and planning process doesn't recreate that. The team also is working on some of the sort of opportunities that they had identified in terms of product correction. And we expect this business to come closer to where lifestyle brand margins are on an overall level in 12-18 months. Now, if it takes a couple of quarters, more or less, that's something that we have to see. But that's really where it would come back to, which is high teens in terms of EBITDA margins. Okay, thank you. That was very helpful. My second question is to Vishak. In terms of the lifestyle brands, right, in for the next few years going forward, what kind of growth trajectory should we build for this? And what would be the sources of growth in terms of, like, the brand extensions and new store openings, et cetera? How should we see that happening? Okay. Hi, Vaishnavi. First things first, if you look at even our last five-year trajectory, we've been at a double-digit CAGR, okay? And there's, there is enough juice in this country for at least another five years for double-digit CAGR to continue. So we should continue aggressively on growth, on expansion. There are enough markets, enough products, categories, opportunities. Each of our brands has its own opportunities. So in the Louis Philippe, Van Heusen, Allen Solly, Peter England segments, there are growth opportunities. In Reebok, where still our base is, still lower, there is exponential growth opportunity. American Eagle, we've already... This quarter itself when, most of our, rest of our businesses were, going through a lot of, you know, impact of weddings, et cetera, American Eagle grew at 35%. In each of our—even Forever 21, we're trying to find greater online, strong. We are trying to reinvent that brand and see how that can grow. So there is across various formats, various brands, lot of growth opportunities. So, specifically in each brand, there would be, of course, different levers for growth, different usage occasions that we will build stronger and stronger. All right. This is helpful. Thank you. Thank you. The next question is from the line of Ashish Kanodia from Citi. Please go ahead. Yeah, hi, team. Thank you. So the first question is, you know, when you look at the industry, and this is, you know, applicable both for whether you look at the lifestyle business or the Pantaloons business, first, did you saw other participants being more aggressive on end of season sale vis-a-vis how, you know, ABFRL across the portfolio did? And the second related question is, if you have to really look at the freshness of the inventory, given that, you know, demand has been kind of subdued for almost 12-18 quarters now, I think you alluded that, pantaloons definitely have much better inventory management. So, but if you compare it with the, you know, overall industry, do you see that, industry has much, you know, older inventory, kind of a situation? So, Ashish, I would, you know, we won't know the details of all the players. But broadly speaking, through our various businesses, now we have presence across multiple business categories, whether it's e-commerce, B2C brands, retail formats like Pantaloons, lifestyle brands, some of the ethnic wear businesses. We have realized that one of the big problems, and which takes a long time to correct, and many of the businesses have gone through that, is being left with large inventory at times when markets are tough. So our approach in last 12 months, and I think at different points of time, you've heard it from, different leaders, including, from me. Our approach in last 12 months has been around improving the quality of business, enhancing the gross margin, which fundamentally means that you have to keep the inventory as low, as lean as possible.... To have lesser risk of obsolescence and lower markdown, and fortunately, it's working well for us. Across all businesses, our inventory is lower. In fact, wherever we are fixing the business also, a large part of that fix involves not just correcting for the inventory that is excess, but also ensuring and putting in systems that you don't fall into that again. And that's resulted in a situation where we are able to operate even in times like this, where the organic health of the market is not very good. We are able to operate with cleaner inventory, lower inventory, and therefore, the need for markdown is lower. It's visibly seen in Pantaloons performance that we mentioned earlier in the quarter. Brands also, despite absence of growth in last couple of quarters, have managed to withhold their margins, primarily because the quality of inventory is superior and the level of markdown is lesser. We could, and we consciously did exercise, operating with, lesser. At the same time, we are also making sure that the freshness remains, and therefore, a number of drops have increased the frequency with which we bring product in. So all that is a cycle that different parts of businesses have sort of improved over the last couple of years. Sure, that's helpful. The second one was on the comment on the value retail, you know, kind of beginning to witness green shoots. So, I mean, is that comment more, you know, targeted toward Style Up or, you know, Peter England? I mean, just wanted to get some sense that- This is not a comment internally, if you've seen this thing. This is a market update. This is when we, so when we look at performance of competitors who report the results, categories which report the results, this is more a market overview, less to do with our own business. But if I just, you know, kind of dig deeper into this, because, you know, you have presence across the pricing pyramid. So, you know, whether under retailing you have Style Up and Pantaloons, and then maybe on the brand side, between from Peter England to Allen Solly, Louis Philippe, et cetera. So, you know, when you look at within, you know, under your categories, do you see that the lower price points are doing much better? Yes, yes, absolutely. And it's reflected in the numbers that you've seen and reported also. Style Up is still too small, but we are very excited by the traction that it's got. Pantaloons, you have seen on a large scale, is organic performance is looking much stronger. So to that extent, yes, it is equally represented, although the comment there was more about the market. Sure, Ashish. Just the last one, you know, I think across most of the retail categories, whether it's apparel, footwear, et cetera, you know, slowdown has been persisting for quite some time. So, from a, you know, real estate talent perspective, is it becoming much better where, you know, either the, you know, real estate deals are at a better rate or maybe at least site availabilities are better? Do you see these things being a advantage, given, you know, how the demand has trended out? So are you seeing any advantage on the real estate or talent side? Ashish, hard to answer directly, but, simple answer is, yes, real estate does become slightly easier. I wouldn't say it's become dramatically easier, but yes, there are opportunities in real estate. But then you have to assess it against market realities. So, talent, I think is a different ballgame altogether. But I would say, especially in some of the markets, relatively from a peak two years back, some softening is there in real estate. Sure. That would be all. Thank you. Thank you. The next question comes from the line of Tanmay Gupta from Motilal Oswal. Please go ahead. Yeah, hi. Thank you for the opportunity. Sir, I have two questions. One on Pantaloons, that despite we are seeing improvement in SSG, our store addition target is little lower than what we used to do before. So are we, you know, improve. We increase the store addition in Pantaloons? And secondly, on the store productivity, what are the measures we are taking to improve the store productivity? As we can see that, you know, if you compare it with Westside or somewhere else, productivity is lower. So how should we address that? And another is on the Reebok. Currently, I think it's around INR 400 crore of revenue business. Sir, what kind of scale we should see the business, you know, in next two to three years? Tanmay, this is Sangeeta. I'll first answer your question on store expansion. I think there is no shift as such in terms of the Pantaloons store expansion strategy. We had called out 25 stores. We maintain that. I think the one small change that we had called out last time in the call was the fact that, yes, Pantaloons will focus more in terms of metro, tier one, tier two towns. We have a second format in Style Up as well, and with both these formats, we'll address two very discrete consumer segments. So, there is no change in our store expansion strategy. As I answered another question before, yeah, in the first quarter, we've not opened too many stores. Our expansion plan is a little bit backended this year, and we will continue to pursue that. As far as store productivity is concerned, I think all the actions that we talked about, and we are seeing that reflect in the results. Whether it is the bit in terms of improving our product design aesthetics, whether it's improving the look of our stores in terms of our retail identity, overall premiumizing. Very strong focus on execution by way of improved planning, which has resulted both in terms of improved markdown management and increase in our private label share. I think all of these actions are directed towards improving our productivity, and I think we are on a journey. We feel very confident of this direction, and we are seeing directional improvement, and we'll continue to pursue this path. Got you. Hi, Tanmay. On your question on Reebok, as you know, on Reebok, we have catching up to do. So there is a lot of headroom for growth. You know, there are at least three brands in the business which are INR 1,500 crore plus in the segment. So we have catching up to do, and we are doing that. We've built a strong team. We've got a lot of product creation capabilities, which we have established, sourcing capabilities, retail network. There's still only about 170 stores. Big opportunity for even if we are to bring them to the level of our other power brands to be able to get to that kind of network. So I think heady growth times, hopefully, on Reebok in the years ahead, Tanmay. So, in Reebok, most of the expense growth will be coming from the retail expansion or through the distribution or MBO? Y es, there is a lot of retail expansion, but we also have a lot of partnered multi-brand expansion as well. So I think there is room for growth across the board, including on e-commerce, Tanmay. Yeah. Okay. And, sir, if you can clarify one thing in Reebok, out of 170 stores, what is the average productivity per store, if you can answer that? Hard to say that, Tanmay, because we have different size store formats, et cetera, partnered, et cetera. So maybe we can deal with that separately with you. Okay. - but all I want to tell you here is that there is a lot of space for growth here in this, and we have catching up to do. Understood. And, Sangeeta, in the store expansion, you said 20-25 stores. My question was that if the productivity is improving, we are seeing a uptick in the value segment. Earlier, we used to add 40-45 stores, I think, in Pantaloons. Should we target the same going forward? Yeah. So as I mentioned earlier, I think for this year, our target is 20-25 stores, and that's in line with where we see the potential for expansion. Every year, we continue to reassess that and open in line with the potential that we see for the brand. Understood. Thank you. Thank you very much. We will take that as our last question for today, ladies and gentlemen. On behalf of the management, we thank all participants for joining us. In case of any further queries, you may please get in touch with Mr. Amit Dwivedi. You may now disconnect your lines. Thank you.