Ladies and gentlemen, good day and welcome to Electronics Mart India Limited Q1 FY 2024 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 * then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bajaj, CEO, Electronics Mart India Limited. Thank you, and over to you, Mr. Bajaj. Thank you, Michelle. Good evening and a warm, very warm welcome to everybody present on the call. Along with me, I have Mr. Premchand Devarakonda, Chief Financial Officer and Strategic Growth Advisors at Investor Relations Advisors. We have uploaded our results and investor presentation for the quarter ended on the stock exchange and company's website. Hope everyone had a chance to go through the same. The future for the electronic consumer durable business in India looks very promising. The growth of this industry can be attributed to several factors, including increasing purchasing power of middle class and growing penetration of the internet and smartphones. Other aspects, like financial options and easing in available financing for purchased consumer durables is expected to support the growth of the consumer durable industry. Our company is currently associated with more than 100+ electronic brands with over 6,000+ SKUs and has a longstanding relationship of more than 15 years with two brands which operate in product categories such as large appliances, mobile phones, and smaller appliances. We started the year with a very strong performance, with a 20% growth in the top line as received INR 1,689 crores. EBITDA and PAT have grown substantially by 24% to INR 130 crores and 48% to INR 60 crores, respectively. Our margins have also grown, and EBITDA margin stands at 7.7% and PAT margin stands at 3.6%, which were higher than the previous quarters. In Q1 FY 2024, we have opened six new stores. Currently, we operate 133 stores, 119 of which are MBOs and 14 are EBOs. Out of 133 stores, 111 stores are leased by the company, 11 are fully owned, and 11 are fully owned and partially leased by the company today. As on date, we are present in 46 cities across four states. Mobile phones have been the fastest-growing segment, with rising contributions to overall revenue by around 37% in the first quarter of FY 2024. Large appliances are the highest contributing segment in terms of revenue. Large appliance contributes to around 49% of the total revenue today. We have established relationships with the large brands in this space. Our emphasis lies in delivering a unique customer experience and fostering engagement. We offer an all-inclusive shopping encounter in a pleasing environment with a practical store arrangement enhancing checkout efficiencies. We have implemented intelligent marketing to ensure our registry customers stay updated on new schemes and offers that we keep on coming up with. EMI recognizes the benefits of consumer financing as it allows it to increase the average selling price without significantly impacting volumes. To streamline the financing process, EMI has invested in integrating its systems with financing companies to reduce payment realization time. The company offers consumer financing options through credit card, debit card, paper financing, and EMI as well to select fintech companies and NBFC. By providing these options, the company aims to make its products more accessible and affordable to a broader range of customers. The company steadily focuses on planning, sourcing, vendor management, logistics, quality control, fintech control, replacement, and replacement. We have improved our working capital base to 46 days from our historic number. Moreover, the company aims to enhance its operational efficiencies and supply chain management. EMI is well positioned to leverage its favorable conditions and continue delivering innovative and quality products to customers. With this, I request Mr. Premchand Devarakonda, our CFO, to update you on the financial performance of this current quarter, Q1 of 2024. Thank you all. Thank you, Premchand. Good evening and warm welcome to all the participants. Now, I would like to present the financial overview of the first quarter ended 30th June 2023. Our revenue for Q1 FY 2024 stood at INR 1,689 crores as against INR 1,408 crores in Q1 FY 2023, with a growth of 20% year-on-year. EBITDA for the quarter stood at INR 130 crores as against INR 97 crores, with a growth of 37% year-on-year. EBITDA margin for Q1 FY 2024 stood at 7.7% as against 6.9% in Q1 FY 2023, showing an improvement of 80 basis points. PAT for the quarter stood at INR 60 crores as against INR 41 crores, with a growth of 48% year-on-year. PAT margin stood at 3.6% as against 2.9% in Q1 FY 2023, with an improvement of around 68 basis points. ROP and ROE on annualized basis for Q1 FY 2024 stood at 28.2% and 19.4%, respectively. The working capital days for Q1 FY 2024 stood at 46 days. The gross debt to equity, as on 30th June 2023, was 0.2x, and net debt to equity was 0.1x, and our net debt to EBITDA stood at 0.3x. Our cash flow from operations for the quarter stood at INR 129 crores, showing an improvement of 34% year-on-year. For Q1 FY 2024, same-store growth rate stood at 13.6%. During the quarter, around 49% of our revenue came from large appliances, 37% from mobile, and 13% from small appliances, IT, and others. On that note, I open the floor for questions and answers. Thank you. Thank you very much, Sir. We will now begin the question and answer session. Anyone who wishes to ask questions may please press * and 1 on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press * and two. Participants are requested to use only the handset while asking a question. Ladies and gentlemen, please wait for a moment while the question queue assembles. You may press * and one to ask a question at this time. We'll take the first question from the line of Manoj Gori from Equirus Securities. Please go ahead. Yeah. Many thanks for the opportunity, sir, and congratulations for a strong set of numbers in such an uncertain environment. So my first question would be, while we saw a comparatively higher growth coming from the mobile phones this quarter, which was roughly around 48% and roughly around 12% from large appliances, so can you throw some light on what led to margin improvement? So was it because there has been improvement in Delhi NCR store metrics or probably anything else that you can highlight? Hi, Manoj. Thank you for the question. So yes, so what happened is, on a broader level, is that there was an improvement across our existing categories like large appliances as well, especially the Q1, which had a great improvement in air conditioner sales as well. The air conditioner sales went up by 30% on Q1 FY 2023 versus Q1 FY 2024. And if you actually bifurcate the large appliances category, 30% growth came in from air conditioners, which contributes to one of the highest gross margins in the whole category. So I think that was one main reason for us that there was an improvement in the margins. Number two, most importantly, is that the fixed costs that we have that were there, they were in line with what our expectation for the certain phone number was. So whenever we add up a growth coming in from the existing stores or the threshold crosses up, so it directly adds up to the profitability of the company on a overall level. Apart from that, extended warranty insurance businesses contributed to around INR 400 crore into the bottom line. At the PBT level, it's mainly because we started doing insurance now. We started a few quarters back and then started showing us results. So there was an improvement across high-profitable categories like extended warranty, air conditioners, and definitely, there was growth coming in the mobile and IT category as well. So overall, it was a great product mix that gave us this number with a lot of control over our cashback offers, our NBFC cost, and all. We tried to renegotiate offers there as well. So it was a blend of everything, all the efforts put in to make sure that we increase our margins and our EBITDA levels. Very good. And definitely, to answer your second part of the question on the Delhi operations, Q1 last year, we just did a soft launch to one of the stores that we are, whereas this year, we were operating with 13+ stores in that region. So definitely, we saw around a 75% of top-line contribution coming in Delhi. And Delhi, I could say very confidently that it is on the path of breaking even very soon. So though there are some costs that are incurred there because we are operating at larger places there today because it's spread across Haryana, it's spread across Delhi City, and UP, in Noida and Ghaziabad. So there are many more efficiencies to come into place, a bit more productivity to get better in the coming times. So we are on the path of doing that. Once we achieve that, I'm pretty sure you'll see a much better result coming in from that region as well. Very good. So just to continue on the Delhi NCR market, you said probably we are nearing towards break-even. So probably, the initial timeline that you had set for yourself to achieve break-even, are we likely to achieve it relatively faster? So sir, I would like to stick on the initial estimates given of 18-24 months that we would be achieving that number. So definitely, the operational break-even would be coming a little more sooner than that. But when we look at break-even, we will look at everything else. So we are on track on doing that. And this is respective to the summer thing being real bad there because it was pouring throughout the summer, and we could not definitely sell air conditioner and cooling product, refrigerator, air conditioners, and air coolers, both. So once very soon, once things get better there with the numbers that we performed without contribution coming in from the cooling product, we are pretty sure that in the next coming few quarters, we'll be able to reach that goal. Very good. So lastly, on the demand front, can you throw some light on how do you read the overall demand? Obviously, South did relatively better this year as compared to the other geographies. But with normal-seen demand environment, probably any revival you are seeing in Delhi NCR based on your feedback, and probably if it normalizes, this should trigger further margin improvement at gross level. Is that understanding correct? So definitely, yes. So whenever there's an improvement in the productivity, the gross margin levels, the EBITDA levels, both go up. But there is always a threshold that we can't exceed because the market acts that way. So there are seasonality factors. There are trends in the market which influence a lot of these things together. So on a whole, we would be traveling on a similar line, and our expectation on the numbers would be very similar to what we have projected. And definitely, our efforts are going to be to make sure that we definitely cause an increase in productivity, increase EBITDA margins, negotiate better with our vendors. So it's a mix of everything. Again, as I told you, but now we see the trends being positive, especially across all categories. We don't see a downtrend towards any of the product categories that we're dealing with: LED pendant products, televisions, air conditioners, mobile phones, IT products. So I think there's a huge demand coming in. And once we establish more stores, once we grow in the cluster that we usually grow in with the pipeline store that we have in the Delhi NCR region, in the Telangana AP market, Andhra Pradesh market, once we finish that, a few more stores coming up before Diwali, a few more stores coming up before summer next year. So once we grow those stores up, I'm pretty sure that we'll definitely see better traction coming in. Got it, sir. Got it, sir. That's all from my end, sir. Thank you and wish you all the best. Thank you, Manoj. Thank you. Thank you. We'll take the next question from the line of Nikunj Gala from Sundaram AMC. Please go ahead. Yeah. Good evening, everyone. Sir, first question is on Delhi market. Sir, I think last year, in the month of August, when we started our operation in Delhi, I just want to understand how those stores' KPIs are working, whether your expectation in terms of consumer demand or uptake, which you have anticipated, it's going as per your estimation or some kind of a behavior which you can help us to understand that better, how's KPIs in those markets where you started one year ago are tracking? Hi, Nikunj. So yes, Delhi has been a very different market that we enter now from our historical market that we've been present in. I would treat Delhi very differently in the regions that we operate in. So North Delhi, very different as a sort of categorization, price demand, or customer preferences are very different in Delhi itself. Gurgaon, it is different than Faridabad, to North Delhi, to South Delhi, to Uttar Pradesh, to West Delhi. So we see that the learning has been really good. We were able to adapt, make some changes on the floor very immediately. So that is what is needed in detail. So you can't take up a lot more time to grasp what our customer needs, what is going on on the floor there. You need to keep on changing. You can't be stuck to one idea or ideology that you do back home. It's going to be the same idea or success mantra there in that market. It has to be localized, and that is what we are adapting to. That has been working for us. It would be too early for us to say that we have established ourselves and we've become really big. We are on a trend path to reach our break-even. We are on a path to achieve a INR 25 crore-INR 30 crore benchmark for each store that we projected for. 13 stores today operational there in that region, and also we are on par in performing that. A few of them might be a little over than 10%-15% than our expectation, but we are on track to fix that problem as well to make sure that the productivity of those stores also improves and an overall blanket average number becomes what we expect there in the coming times. So yeah, that's encouraging comments. Earlier expectation of some categories, we might have anticipated will do well, but when you actually enter the market, the scenario can be very much different, right? Yeah. Yeah. And just secondly, the kind of the consumer discretionary across the categories, we have seen the weakness in the demand. In your southern market, I understand you are slightly on the premium side of cohorts, but are you seeing some kind of a weakness in the consumer behavior in terms of downtrading or any sort of behavior you can help us with? So, I would not say that we've experienced, not us, but the market overall has not also experienced such a downtrend. Firstly, it's because if I talk about, yes, we have a little more leeway than the market because we sell a lot more of premium. But at the same time, our Tier 2, Tier 3 cities have also started performing really well. So we've seen growth coming in from those regions as well where we would anticipate that there would be a little slowdown. But in fact, the growth has been excellent in that territory as well. So overall, through affordability, through NBFCs, through the offers that we keep on running, EMI, credit card, debit card EMI, cashbacks, and all of that, I think it's worked really well. And we didn't see a downtrend demand. The only negative that we saw this quarter was a little slowdown on the cooling product category because of the rains across territories that we were operating in. But by the end of May, first week of June, it started picking up again, and that is what we could deliver a higher growth in that category during that quarter. Sure. Okay. And my second last question is on the competition. Have you observed any increase in the competitive intensity of late, both from organized and unorganized players? So competition has always been a part of the show every day. So there is something or other keeps coming up through either a mom-and-pop store or through large LFR or modern trade retailers. So it is part and parcel of the game, and you just need to counter it because at the end of the day, we're all selling the same product. You just need to differentiate how you sell it and what offers do you provide your store with to compete against them. So that is where the whole game is, that you have to be alert and make sure that you're countering every offer that comes your way. Sure. Yeah. And just lastly, the expansion plan which we had earlier for FY 2024 and 2025, they are on track as per our current estimates? Yeah, yeah, yeah. So they are on track. We've opened 6 stores in the Q1 as we talked also. We've opened a few more stores which were getting ready. So the plan of opening the sufficient number of stores, we would definitely be touching them because we've negotiated for a few of the stores in Andhra and Telangana, even in the Delhi NCR region. So today, our focus mainly is going to be to make sure that we cover the territories where they're not present and then deeply expand into the existing territories as well. Sure. Thank you, sir, for your time and comments. Wish you all the best for the future. Thank you, Nikunj. Thank you. We'll take the next question from the line of Bajrang Bafna from Sunidhi Securities. Please go ahead. Yes. Congratulations for a good set of numbers. Sir, just on the Delhi side, if you could just guide us. I think we have opened 13 stores which were up and running last quarter in Delhi. So what is the break-even point that you are looking at cumulatively put together, those 13 stores in Delhi, and what is our experience? I think Q1 is relatively better because of the seasonality factor due to big summer. But going by the trend, we are already done away with half of this quarter. So what is the sense on Delhi side and your experience, if you could share, so far and the expansion plan, especially in Delhi? That will be really helpful, sir. Okay. Good evening, sir. So Sir, as initially projected, whenever we do a store predominantly in the existing geography, we would look at a much sooner break-even than the new geography like Delhi NCR that we went on. But the benchmark of every store that we calculate for break-even ranges between INR 25-30 crore. So we try to project a store at INR 25-30 crore in the first 12-14 months of operation, and then for it to set in a break-even at 18-24 months because it's being a newer geography. So we are on the path of doing that. So at a INR 25-crore average, first or the 13th store operational, we would look at a cumulative number of around INR 300+ crores for year one coming in from that region. So the 14th of August this year, we celebrate our first anniversary where last year, we opened 8 stores on the 14th of August. So the stores are performing really well. The first eight stores out of the 13 that we opened up, we signed up a few more stores that are getting ready which are yet to launch in that territory. So by Diwali, we plan to add up another three-four stores in that region. And by next summer, we plan to add up another three stores, a total of 6 stores in the pipeline for that region. The idea is to reach around a store count of 23-25 stores by the next financial year. So that is on track, sir. Definitely, yes. It is a very high-demanding market because of the pricing there in terms of real estate. So we have to make sure that we negotiate correct for a longer lease or if you're buying out a property or whatever the plan is. So we have to make sure that it fits into our budget. The area fits in. The property is really nice. A clear title property. So all of those things take up a lot of time, and we are on track on that number. So we're quite confident that once we establish ourselves by next year, further down with more number of stores because currently, we are not even present in the largest market where our competition prevails in those markets like Laxmi Nagar, Janakpuri, Pitampura, Rohini, Gurgaon Sector 29. So a lot of these markets, they're not even prevalent today. Once we establish stores in those markets which are coming up in the next six months, we know that the brand is going to definitely retropropagate to those markets and help us grow better in that market. Got it. Sir, have you achieved this INR 200 crore kind of those eight stores which you opened last year? What is the cumulative number, just a ballpark number, if you could just drive? Sir, INR 20, 22, 25 crores that I told you, that is on track for these stores, sir. Okay. Those eight stores that we opened last year. The first lot we opened on the 14th of August, 2022, are on track of delivering that number, sir. Got it. And sir, in the Delhi side, since it is a new cluster for you, what is that probably the top-line number that you are looking at which could take care of your entire logistics cost, the warehousing cost that you are building up there, just from a broader margin perspective that you're normally enjoying in the southern region? So what is that magic number that you believe that will take care of the overall fixed cost that you're going to incur? So, sir, if I look at that number, it might differ quarter to quarter because Q1 would be a little heavy on the cooling products where the margins are going to be higher versus Q2, Q3, Q4. But if I look at the total annual number, annualized number on that cluster, it would be upwards of INR 300 crore, sir, where we'd be quite comfortable on not burning too much money. What we did initially last year because we're setting up stores and all, it was a new market. We had to spend a lot of advertising and all and marketing. But INR 300 crore-INR 320 crore around that number is where we'll be quite comfortable, sir. Got it. Got it. Sir, on the southern side, since we are half the quarter, so are we still guiding that we said that 20% is something that we will be comfortable to grow with so that growth guidance remains intact and the margin you guided that will be closer to that 7% mark? So we stay by those numbers which we are getting? Yes, sir. Yes, sir. Yes, sir. Yes, sir. Yeah. Great, sir. Great. Thanks a lot, and sir, all the best for the day. Thank you. Thank you, pleasure. Thank you, sir. Thank you. We'll take the next question from the line of Nirav Vasa from Anand Rathi. Please go ahead. Hello, sir, and thank you very much for the opportunity. Would it be possible for you to share some data on the growth prospects that we have delivered across our Andhra and Telangana region? Yes, sir. So if I give you a number from 25 stores last year in Q1, we've added four stores in that cluster in Andhra region to make it a 29-store count today where the revenue has gone up by 47%. So this is a huge SSG as well because the stores were new in the Tier 2 and Tier 3 cities, as we've mentioned in previous calls. So those stores have also established and started delivering us the number of the targets that we usually have for our existing stores. So 47% was the growth coming in from the Andhra cluster. Given so, definitely, we didn't have a base last year. So the contribution was around INR 75 crore came in from Delhi stores in this quarter. And Telangana and Hyderabad city stores were up by 11%. So these are a lot of these stores, almost 95% of the stores here are the mature stores which are over 5 years. So you could see that these stores also performed really well, and we could deliver 11% growth in this existing mature store category as well. Around 75% growth came in from the Telangana up-country market, sir, where we added up three stores from 17 in Q1 2023 to 20 stores in Q1 2024 where the revenue was up by 25%. So these are, again, clusters where we had a lot of mature stores which are about 3-5 years old. So we saw a good demand coming in from the existing markets. We were able to increase the productivity for salesroom there. We were improving our bill prices, and ASPs went up across categories. So I think it was a good sign that Tier 2 and Tier 3 cities also started adopting to high-end products, higher ASPs for categories like mobile phone, televisions, air conditioners, refrigerators, all put together. Sir, the other question is specifically pertaining to panels. So as we are as much the hour that World Cup is expected to be hosted in India in the forthcoming months. So just wanted to check, are you foreseeing an exponential demand for high-end panels considering these kind of sporting events? And historically, whenever there was a cricket World Cup, was there any statistical evidence wherein we reported an exponential increase in demand for panels? Yes, sir. Actually, it's a good point that you raised. I think cricket is a religion in India. So whenever there's an event like this, especially at that scale, we would definitely see an increase in not only high-end televisions but also the soundbars and a little bit of audio categories. The whole of home entertainment as a whole gets a rise. So we've already seen trends post-COVID where big screen or big-size televisions have increased a lot. So today, if I give you a breakup, only 6% of our contribution comes in from 40B and below categories. The rest of it is all 55 and above category only for us, so 55 and above categories. So today, we strongly believe that that is growing. With the new technology coming in with OLED and 8K and all, I think the viewing experience is enhanced, and people want to experience that in the big screen in their houses. Another question that I would like to ask is pertaining to the premium inbuilt appliances. So what we are seeing right now is that all the leading brands which are there in the kitchen industry as well as in the FMH industry, they are all rushing to get into the premium inbuilt category. So I believe we also have one store format which is catering to the high premium appliances. So I just wanted to understand, what's the kind of growth prospects that we see in this category, and how can we add? Are we in the process of adding new channel partners among this? So sir, built-in as a category is very new to us as well as to the market. On the whole, we have a specialized store format called Kitchen Story. So what we do is we've learned a lot of input because kitchen appliance built-in category is not like an off-the-shelf product category where customers come and pick up something and go. It has to do with back-and-forth with drawings, what the kitchen sizes are, what the cavities are made in kitchen because everything goes built-in. So the cut of the product has to be fitting in properly in the kitchen wardrobe or the kitchen design. So there's a lot of back-and-forth in this category. Definitely, yes, it is a growing and an accepted category. So people are ready to spend money when they're making a built-in appliance category. They are ready to spend money to put in a microwave, to put in a built-in hot chimney, and an oven. So we have experimented, and we've got good results on that. But the brands that we deal with are the same brands that we continue want to deal with at Bosch, Siemens, Gaggenau, Asko, Bora, Miele. So they're the top brands that we deal with. We're a few brands that we deal with, and we want to continue dealing with these brands only because they are masters in their product category. And these product categories need very specialized technology that customers want. So that is where we see demand growing for these categories. At the same time, it is not going to be at the quantum of what we would do for a freestanding appliance category. My final question will be pertaining to our Delhi foray. So as I understand, our Delhi foray seems to be quite on track. So would it be possible for you to tell me, what are the final count of stores that we intend to have across Delhi cluster maybe by the end of FY 2025, and after which we would be looking at a newer cluster? Any finalization on the newer growth cluster or something like that would be really helpful. So sir, as we had initially projected, we would be crossing our count very comfortably of 25 stores in that cluster. So the biggest advantage with Delhi NCR is that we're not catering to one single location. So we will be catering to the extension from the Haryana side of Gurgaon, Faridabad, Greater Gurgaon, Manesar, that belt up till the whole of Karnal, Ambala belt, up till UP Karnal Road to Chandigarh. So that is a huge opportunity available for us. On the other side, it is Noida, Greater Noida extension, Meerut. On the UP side, we have that belt also available with you. And then Delhi, Central Delhi, North Delhi, South Delhi, East Delhi, West Delhi, where we had marked down 20, 24 locations, out of which we are still only operating at 10, 12 locations where we need to expand with the newer stores that are already getting made like Daryaganj, Janakpuri, Pitampura, Rohini, Lajpatnagar. So we have a few pockets left in the existing market in Delhi. So once we cover up all these areas in and around Delhi, I think there's huge potential for us to grow to at least a 30, 35 store count in the next couple of years. Many thanks, sir, and all the best for all your input. Thank you. Pleasure. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. We'll take the next question from the line of Krisha Kansara from Molecule Ventures. Please go ahead. Hello? Yes, ma'am. Please go ahead. Yeah. Sir, congratulations on a very good set of numbers. Sir, I actually missed that number which you gave for the contribution which came from Delhi NCR stores. So could you just repeat that? I did, sir. So the number is INR 74.4 crore for the Q1 came in from Delhi stores, 13 stores operating that region. Okay. Okay. So none of these stores is currently at the break-even level, correct? Not at this quarter. But by the end of this financial year, we'll definitely be crossing the break-even number. Okay. Okay. And so what would be the advertisement cost for this quarter? The advertising cost for this quarter will stand around INR 12.5 crores approximately. Okay. But is it including the sales promotion expense? Sales promotion is something else. Sales promotion is non-marketing, but it is directly linked to your NBFC costs and all the other costs that we incur while selling on the floor. Okay. So what would be that number? That is INR 43.8 crores compared to INR 35.3 crores in Q1 FY 2023. Okay. Okay. How much of this would be for Delhi NCR? Approximately, if I give you a calculation, it would be around approximately INR 2.8 crore for that region in Delhi NCR. Okay. Okay. Inclusive of the sales promotion expense? I'm talking about sales promotion. Advertising and promotion together for that region would be around INR 3.7 crore approximately for Delhi NCR. Okay. Okay. Got it. Got it. And so you mentioned the growth rate which came from the AP segment. So was it 30%? 30%. So the overall growth that came in from the large appliance category, the large appliance contributes to televisions, refrigerators, washing machines, and air conditioners as a whole. So the whole category went up by 11.59%. Whereas if you actually break it down to each category, air conditioners contribute to air conditioning grew by 30% in that category. So if I give you an absolute number, the total is 11.59% in the large appliance category. But if I break it down to individual numbers, 30% was the growth that we saw in the air conditioners business during that quarter. Okay. 20 or 30? I just. 20, 30. Okay. Okay. This is after the slowdown where April, May was pouring, and Delhi didn't perform that well because Delhi was raining throughout the quarter. June month, the turnbook came around where it started performing really well. Correct. So that was my follow-up question also. So because in the last con call, you had mentioned about this slowdown, and it was especially related to the south geography. So how was the situation in Q1? And also, if you could guide us about the current situation, that would be helpful. Sure. So when we had a call after the March quarter, we were discussing that the weather was not supporting it. We were seeing a little slowdown because of the weather across the region that we were operating in. But June outperformed our expectation. June did really well, especially on air conditioners, whereas we could see a little slowdown on the air cooler business because it didn't pick up that well. So there is always a seasonality that changes a lot during that summer quarter. But by the end of June, we saw a huge growth coming in. Especially if I just compare June to June, month on the whole, the growth was very high. It was almost as high as 80%-85% for air conditioner business in June- on-June, so on a single month. So overall, business grew up by 30%, and that was a great help. And also, if you see, the trends are in part with what we would expect for this quarter also going forward, especially in that category. Definitely, this is not the quarter for summer, but we would see a little reflection of spillover coming in from that quarter into this quarter. Okay. Understood. Sir, my last question is regarding the gross margin. We saw an improvement in our gross margins in this quarter. Can we take this level of gross margin as a sustainable level? Yeah. So it can be a sustainable level going forward as well. But there will definitely be an improvement in gross margins because there would be a product differentiation where a quarter might be heavy on higher gross margin product categories like appliances, refrigerators, or air conditioners versus another quarter where summer is not equal to the Q1. So there would be different gross margin levels coming through. But it will be in line with what we delivered in the past. It will be in line with what we delivered in Q1. So there will not be a drastic change coming in the business until unless there is a seasonality or a special occasion like a Diwali Dussehra period where you would see improvement or growth in the large appliances or a television business where they contribute to higher gross margin. Okay. So leaving QOQ gross margin aside, but I'm talking about the yearly run rate. So can we maintain the 15% kind of gross margins on an annual basis? Yeah. So I could just suggest to you that it would be in line with what we are doing right now. At the same time, it could definitely probably there might be a change of a few basis points ±, but not much on that. It would be in line with what we are performing right now because we're trying to negotiate better with our vendors because the scale is going up or operations are getting more efficient. Our NDFC costs are coming down at the other side where we are negotiating with NDFC, which is the biggest cost to us. Those kinds of things. We are trying to improve productivity also per source. All of this put together would give you that number. We're definitely in line with going forward also on the same track. Okay. Okay, Sir. Thank you, Sir. That's all from us. Thank you, Krisha. Thank you. We'll take the next question from the line of Drashti from Thinqwise. Please go ahead. Thanks for the opportunity, sir. I wanted to know if it's okay to share. What's the consumer product on finance for this quarter versus last quarter? What's the proportion of sales that happen on finance? So ma'am, on average, we do around 55% through NBFC. So it might differ from NBFC to NBFC. We deal with a lot of NBFC like Bajaj, Shriram, IDFC, TVS, FinanceNow, ICICI, SBI. Then you have credit card, debit card penetration as well to SBI cards, ICICI cards. So that mix more or less remains at 55% on the total business. But internally, it might go 5% year-on-year with different NBFCs and cards. But the overall business contribution to us comes at 55% from NBFCs now or credit card, debit card, EMI. Yes. Specifically, I asked this question because you mentioned that you are seeing a Tier 2, Tier 3 city growth also doing very well. It's also because of consumer finance penetrating in those cities, etc. I just wanted to understand whether that has increased or it remains stable at 55%. So if I give you a breakup there, initially, if I compare it to 5 years back or 3 years back, definitely, yes, we had a net number of stores at the same time. They were only Bajaj, SilkRave, or one or two other players there operating out of the region. Definitely, if I give you a split of the metros like Delhi, Hyderabad, which contribute to a much higher number on debit card or credit card EMI versus paper financing, is much stronger there. So if I give you a split on that, it would be 75% of paper financing in my Hyderabad store versus 25% of EMI through credit card and debit card, whereas it would be 95% in the Tier 2 and Tier 3 cities with paper financing and 5% only through credit card and debit card EMIs on the machines over there. Okay. Okay. This is helpful. And my second question would be, what impact do you see because of the buy-in on imports of the IT products for your kind of products? So anyways, we usually have run rate stock lying with us. That is no problem. The brands, manufacturers, vendors also have a lot of stock available with them. It was definitely a temporary arrangement that was like a temporary scare that was out there in the market that we would be sorting the stocks and all. But then the bigger brands, they all align themselves, and everything is compliant. So for them, it is going to be no problem on securing stocks. And same thing with us. We will not have any issues in securing stocks going forward as well. Okay. So you don't see any impact now? Not really. Not really. Okay. My last question would be, have we resulted in any discounts in the June quarter for AP specifically? Because suddenly, we saw growth well set in AP. To clear up. So in our business, if there is a discount, you would see that in the reduction in the profits as well. But now the numbers are out there for you to compare it to other previous quarters and get your understanding on. So the discount was not done, if I tell you there. So because June anyways is a part of the summer period that we operate in. So we didn't see any. We didn't see any degrowth or any desperate measures to be taken in any of the quarters. Not now, but even the previous even the COVID year, for that matter, we were heavy on stocks, and the air conditioner never discounted drastically to liquidate our stocks because these are all stocks that are negotiated well with vendors. They all make sure that they protect you. So if you're never discounting, that helps us growth of business. It's always temporary. We don't usually want to get into that practice because it is not a healthy practice for us and even for the staff on the floor to get into the whole discounting process. Excellent. Thank you so much, sir. Thank you. Thank you. The next question is from the line of Naitik Mota from Sequent Investments. Please go ahead. Thank you for the opportunity, and congratulations on this good set of numbers, sir. So most of my questions have been answered. Just one question regarding the inventory days. So I think that inventory days have gone down by 20 from 60 days to 40 days during the quarter. So if you could just throw some light on what has facilitated that, and do we see this number being sustainable in the future? Yeah. Hi. So great question. So if I just compare the number of days, definitely, they've gone down. This is majorly a comparison from the March, sorry, the last quarter, if I look at the last year quarter, majorly because of the summer cooling product categories. This is really the decrease in inventory majorly happened in the cooling product categories, which was refrigerator, air conditioners, air coolers. So because it was pouring out here, we made sure that we don't carry that many air conditioners and air coolers that we usually would do during the summer period because the peak sales of summer actually didn't set in through the March, April, and May period. So that is why you would see a reduction in inventory. And the only other quarter that inventory goes up in our calendar is during the Diwali Dussehra quarter, that is Q3. So again, you would see a higher number coming and setting in during that quarter and then eventually reducing by the end of Q3 and then entering of Q4. So two quarters, we have to maintain inventory at a high level. And then this year, because it was strictly because of the weather that we had to control costs and make sure sorry, control inventory and make sure that it is in line with the sellout that we do. Because the sellouts were lower during that initial period of the quarter beginning, we had to reduce inventory. And that is how it spread out by the end of June. Okay, sir. Thank you. Thank you. Thank you. The next question is from the line of Rishad Fatta from Athena Investments. Please go ahead. Yes. Thank you. I have two questions. They're related. I just wanted to understand your margin because I thought the Delhi store opening would have dragged the margins a bit. So if you can give details on the operating expenses at Delhi, salary and the fixed costs. Is there a drag on the margins because of the Delhi stores? Because they would have just probably reached about below break-even level. Yeah. So Prishad sir, so Delhi as a whole, it has contributed to INR 74.4 crores or INR 75 crores or roughly in that total quarter of INR 1,500+ crores. So if I just give you a breakup, definitely, yes, there were other costs involved. The break-even level was a little higher number for that region. But then there were not significant impacts. If I say that even if they would have improved to INR 100 crores-INR 125 crores sellouts, as AP would have performed there if the rain would not come into play, there was a very nominal number of change that would have happened or dragged the margins down by INR 2 crores here and there. But not much of a major impact because the contribution itself is quite low. So once we reach a level where but the margins are in line because we performed whatever we sold there were in line with what we were selling in our existing market. So there were never discounting done or never a difference in the vendor margins that we got from our OEM. So that way, it was. That I understand. Therefore, your gross margins would be lower because your sales are lower. But the fixed expenses, you are already incurring, right, because you opened the store. So you are paying the rent. You are paying the salary. Give me the exact numbers, Prishad sir. If I give you the exact numbers. So on the overall operational cost there, there was an approximate burn-off around INR 3.5 crores in that region, sir. That's it. You have 13 stores, right? one to four. 13 stores and one store. That is operational. It's the 14 stores, sir, which is the LG Exclusive store in Gurdwara. Only INR 3.5 crores for 13 stores per quarter? Yes, sir. Yes, sir. Yes, sir. Yes, sir. Okay. Okay. Thank you. Thank you, sir. Thank you. We'll take the next question from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Hello? Yes, sir. Yeah. Thank you very much, sir, for the opportunity. I mean, many congratulations on the great set of numbers. I have only one question around your EBITDA margin. I think in the previous call as well, we were of the view that 6.5%-7% would be a benchmark EBITDA margin that we generally look at in our business. But now, with this better product mix and higher AC sales this quarter, our EBITDA margin has gone up to 7.7%. We just wanted to understand our benchmark margin. Are we moving it to 7%-8%, or 6.5%-7% would be the benchmark margin we would look at? No, no, no. I mean, I would like to stick to the older number only. So it will be in line with that. Definitely, yes, enhancement is going on. As I told you, we've added up excellent warranty, insurance business that has started doing very well. Audio business built up. AP did quite well. Mobile productivity increased. We started negotiating better with our vendors with bigger brands like Xiaomi, Vivo, Oppo. So there also will be small little improvements coming in. So all quarters put together all corners put together from NDFC to credit cards to Amazon Pay. So we renegotiated better with them, better terms. So all at an overall level, if I look at that number, we would stick to that 6.7%-7% kind of a range. So that we are quite comfortable delivering. I don't want to overcommit on that. Definitely, yes, this quarter outperformed the previous quarters for us also. No, no. I missed the last line, sir. What will outperform? Yeah. I said definitely, yes. It definitely crossed our expectations also because there was an improvement everywhere, especially straight-away contribution coming from the EW business, which was around INR 4 crore to the bottom line. So I think overall put together, there was an improvement in the EBITDA margin for Q1. But to be fair, we would stick to the 6.7%-7% EBITDA in the coming quarters as well. Understood. Fair enough. That's very clear. And I missed that INR 4 crore thing. So what was that contribution I missed as far as? Excellent warranty. So we started an insurance business, right, with Onsite, Go1, Access, EW warranties with the banks and all that we started giving out on our secondary products like mobile phones, televisions, large appliances. So that product category also grew for us. We did around 12-odd crores in the first quarter as revenue from that business, which contributed to around INR 4 crores in the PBT level. This, I mean, do we capitalize or amortize over the years, or we just book as a revenue in this year itself? This is done through third-party vendors. What we realize is our profit only. We don't realize, so we don't take care of the insurance from our end. We only facilitate the product on our floor. We only book their percentage revenue to it. We don't capitalize on it like an insurance company because we are only selling and servicing the product from their end on the floor. The liabilities are insurance companies like Onsite, One Assist, and all. Okay. Understood. Understood. Fair enough. Okay. That's it from my side. All the very best. Thank you so much. Thank you, sir. Thank you. Ladies and gentlemen, this will be the last question for today, which is from the line of Ashwini Shah and Individual Investor. Please go ahead. Mr. Shah, I have unmuted your line. Kindly proceed. Ladies and gentlemen, as that was the last question, I would now like to hand the conference over to the management for closing comments. Over to you. I would like to thank you all for joining into the call. I hope that we are able to answer all your questions. For any further queries, you may get in touch with us or SGA, and we'll be happy to address all your questions and queries. Thank you once again for having faith and confidence in us. Thank you very much. Thank you, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of Electronics Mart India Ltd., that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.