Ladies and gentlemen, good day and welcome to Electronics Mart India Limited Q4 and 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 date of this call. These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participants' line will be in listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bajaj, CEO of Electronics Mart India Limited. Thank you and over to you, sir. Thank you. Good evening and a very warm welcome to everybody present on the call. Along with me, I have Mr. Premchand Devarakonda, our Chief Financial Officer. We have uploaded our results and investor presentation for the quarter and year-end FY 2024 on the stock exchange and company's website. Hope everyone had a chance to go through the same. In FY 2024, the segment has observed a robust surge in consumer demand for premium appliances. It includes large-screen televisions, smart inverter ACs, spacious refrigerators, and top-loading washing machines, among others. Concurrently, appliances presenting a compelling value proposition combining connectivity, convenience, comfort, and energy efficiency have sustained positive growth. Anticipating a robust performance, the consumer durables and electronics industry poised for a double-digit revenue surge in FY 2025. This optimistic outlook spans across diverse markets, emphasizing the significance of premium, value-added, and feature-rich products driving the industry's growth trajectory. To share an update on the store openings front in Q4 FY 2024, we opened 12 MBOs. Out of these, four MBOs opened in Andhra Pradesh, three opened in Telangana, and five in the Delhi NCR region. In FY 2024, we opened 33 new stores. Our store count at the end of March 2024 stands at 160 stores, 147 of which are MBOs and 13 are EBOs. Out of 160 stores, 137 stores are leased, 11 are owned, and 12 are partly owned and partly leased premises. As on date, we are present in 62 cities across four states. To give you a comparison region-wide store opening, out of 32 new MBO stores opened in FY 2024, 13 stores opened in Andhra Pradesh, Telangana, which also added 13 new stores, six stores opened in the Delhi NCR region, and one new store of EBO opened in the Delhi NCR region during FY 2024. Given the healthy cash flows from operations in FY 2024, we are optimistic on the future cash flows from operations being effective, working capital management, and hence almost all future store additions will be well-funded through internal approvals and remaining IPO proceeds. Coming to Q4, we have delivered robust growth of 15% revenue year-on-year at INR 1,524 crores and 15% year-on-year increase for FY 2024 at 6,285 crores. Our EBITDA for Q4 2024 stood at 108 crores, and for FY 2024, it stood at 449 crores. EBITDA margin stood at 7.1% for Q4 FY 2024 and 7.2% for the whole financial year of FY 2024. Our SSG for quarters stood at 7.3% for FY 2024 and stood at 8.4% for the whole year. On account of investment made to open our new stores in geographies, that is NCR, the company has increased investment in brand building, sales, and marketing for which it expected that the EBITDA margin will improve as revenue throughput from these new geographies stores will increase eventually. Also, to highlight like-for-like sales growth in FY 2024 region-wise, starting with Hyderabad City, which grew approximately at 9% for 68 stores. Telangana, excluding the Hyderabad stores, 17 stores stood at 11%. Andhra Pradesh grew by 22% for the 28 stores, and Delhi grew by 95% for the 14 stores. Our store productivity per store on per square feet is visibly comparatively a little lower due to the six MBO new stores that we opened in the month of March in Q4, aggregating to an approximate of 38,000 sq ft. So comparative numbers look flat or reducing, though practically it is not the case. Also, to highlight on the operations of a few stores in FY 2024, a few of the stores in Telangana and Delhi region were ready for operation, but due to some hindrance, we did not commence the stores during that period. We are concentrating on strengthening our position in the areas where we currently operate before exploring newer markets. This strategy has allowed us to establish a brand in markets of Telangana and Andhra Pradesh. This not only helps customers in those regions connect with our brand but also familiarize them with our range of products. It enhances our understanding of the market and preferences of our customers. We are confident that this approach will contribute to achieving a significant market share and establish dominance in our current markets. Our future plans involve future expansion in our store network in Andhra Pradesh and Telangana. Additionally, we aim to gradually extend our presence to the NCR region and deepen our roots there, following a focused expansion strategy based on defined clusters. Our proficiency in local market dynamics, efficient supply chain management, and strategic inventory control have contributed significantly to achieve high-end cost competitiveness and consistent profitability. The customization of our product assortment and maintenance of a comprehensive portfolio play a pivotal role in securing enhanced visibility, brand recognition, deeper market penetration, and expanding customer base. We provide a complete and unique shopping experience to our customers by showcasing a wide range of electronic products under one roof in our MBO model and providing a specialized brand experience with our EBO model. We work with limited brands but in huge volumes as compared to other players who have more brands on board. This gives EMI a competitive edge and better bargaining power with top brands versus the top players. With this, I request Mr. Premchand Devarakonda, our CFO, to update you on the financial performance. Thank you all. Thank you, Karan sir. Good evening and warm welcome to all the participants. Now, I would like to present the financial overview of the company for the fourth quarter and the financial year 2024. Our revenue from operations for Q4 FY 2024 stood at 1,524 crores as against 1,327 crores, a growth of 15% year-on-year. For FY 2024, our revenue stood at 6,285 crores as against 5,446 crores, with a growth of 15% year-on-year. EBITDA for Q4 FY 2024 stood at 108 crores as against 91 crores, as a growth of 18% year-on-year. For FY 2024, EBITDA stood at 449 crores as against 336 crores, recorded a growth of 34% year-on-year. EBITDA margins for Q4 FY 2024 stood at 7.1%, and for FY 2024 stood at 7.2%. PAT for Q4 FY 2024 stood at 41 crores as against INR 36 crores, a growth of 12% year-on-year. For FY 2024, PAT stood at 184 crores as against 123 crores, showing a growth of 50% year-on-year. ROCE, ROE on an annualized basis for FY 2024 stood at 17% and 13.4% respectively. The working capital days as on 31st March 2024 stood at 74 days, which was mainly due to stocking of inventory to meet the demand during the upcoming and ongoing summer season. Both the gross debt to equity and net debt to equity stood at 0.5x, and the net debt to EBITDA stood at 1.4x. Our cash flows from operations stands at healthy 160 crores for FY 2024. As a result, the cost of borrowings got reduced by 7% year-on-year in FY 2024 in spite of a 26% increase in the investments in inventory and receivables. For FY 2024, same-store growth rates stood at 8.4%. For FY 2024, around 45% of our revenue came from large appliances, 42% from mobiles, and 13% from small appliances, IT, and others. About 98% of our revenues comes from the retail segment, and the top five brands contributed around 60% to our revenues. With this brief presentation, I open the floor for Q&A. Thank you, everyone. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Devanshu Bansal from Emkay Global Financial Services. Please go ahead. Sir, hi. Thanks for the opportunity and congratulations on a strong margin performance in FY 2024. This time around, OEMs have reported very strong numbers for AC sales. However, the same is not reflecting into our top-line growth for this quarter. So Karan, what is the reason for this? If you can elaborate on this, please? Hi, Devanshu. Good evening. Devanshu, usually with seasonality products now, firstly, what we look at or what I would suggest personally to look at, not one month or a quarter-end period, I would say, suggest to look at on an annual basis or a half-yearly basis. They usually internally look at it from January to June. And then it depends on when the peak heat summer starts off in the region that we're operating. So I would say that March last week picked up really well for Hyderabad. April first week really picked up for Telangana up-country market. Second week was really peak for Andhra up-country market. So we would look at a blended growth number, and we're really happy with what numbers we've delivered. So probably you would see that reflection on the growth of that particular category when we would talk about Q1 FY 2025 numbers in the coming times. But then we're quite happy with what we performed. So last year, if you look at our March numbers, the base itself in March and April was very high again. And then last year, the festival period of Ugadi was in March compared to that happening in April this year. So periodically, we would look at the peak coming in different periods. So these are all localized festivals, localized periods. So all these matter a lot. [Foreign language] And then that is in line with what you would hear from the market coming through. Got it. So you're saying January to June should more or less reflect with what OEMs are reporting? Devanshu, [Foreign language] Because for them, the primary happens when they bill it to us, right? And for us, we stock up as early as January to March. So for them, that quarter number looks higher compared to what we start selling only March, April, May. That's it. Got it. Karan, one more follow-up on this. Whatever OEMs are reporting, so that should be reflected in only part of our business, which is AC, ref, etc., or that kind of a growth can be sort of reflected in overall business as well? Devanshu, again, two things. [Foreign language] certain category [Foreign language] particular category [Foreign language] demand is, for example, this quarter or this summer refrigeration quarter [Foreign language] cooling products go up. So not like a Diwali quarter where all product categories go up equally well. So this will only be focused on the cooling product category, like air cooler, air conditioners, refrigeration products. So you would only see a majorly spike or the major growth coming in these categories first compared to followed by mobile IT as a category, then audio, then home appliances. And washing machine, for example, would be a little much slower compared to other quarters in this quarter because the cooling product demand goes up. So it is not necessary that all product categories would give you a similar demand trend. Got it. Cooling in January to June, is what percentage of your business, Karan? Any ballpark? Overall blended to be around 15%. For first half of the year as well, January to June? This is for the annual. I'm talking about. Okay. Got it. You indicated that the premiumization trend is going on well, but where ticket size growth was 2% for full year. Just wanted to check, as in, is this a reasonable level to bake in, or this was an aberration and trend should improve from here on? So see, it all depends now. [Foreign language] televisions, especially [Foreign language] category [Foreign language] growth [Foreign language] Air conditioner pricing, [Foreign language] growth [Foreign language] AC pricing [Foreign language] premiumization [Foreign language] in terms of features [Foreign language], but not necessarily that it would reflect in the ASPs going up as well drastically. Got it. And last question from my end, Karan. This working capital has increased by about 230-odd crore in FY 2024, and we have opened about 33 stores. So this implies about 7 crore per store. So is this the optimum level of inventory that we stock in a new store, or there was some comment around stocking up, etc., as well? So your thoughts on that, please. This was— So Devanshu, two periods that you actually have to look at in our business or especially with us is that summer quarter now, before that we start picking up inventories. So [Foreign language] 31st March [Foreign language] number [Foreign language] our inventory levels are around 900 crores plus. That is majorly because [Foreign language] INR 400 crore [Foreign language] cooling product [Foreign language], number one. Number two, the second period that you will look at is during [Foreign language], Diwali. So that is the period when we again start picking up a lot of inventory across categories. So these are two periods where you will see a higher inventory count. And the Diwali [Foreign language] quarter usually ends up by 31st of December. So you would see a lower inventory number there. But the peak of the seasons would come in October, November, and summer period. That is March, April. These two quarters, you would see higher inventory levels on the books. So is the working capital requirement higher as well. Typically, for a new store, what is the inventory that you sort of— The display, there are two things there. Again, if it is only display per se, it would be around 2 crore-2.5 crore. Usually, the over-the-counter products like mobile phones, kitchen appliances, accessories, laptops would have the backup in the store. That would be another 50 lakh- 70 lakh of stock. That would be around 3 crore of stocks in the store offer new opening. Got it. Understood. Thank you. Thanks for taking my question. Thank you, Devanshu. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Percy from IIFL. Please go ahead. Hi, sir. Looking at your North Cluster sales, last year Q4, it was 53 crore. Now it is 69 crore, which is about a 30% kind of growth. Correct me if I'm wrong. The number of stores itself, YoY, would have gone up by more than 30%. So why is it that we are not seeing a ramp-up in the sales per store? Hi. So very rightly said that you look at a 52 crore to 69 crore jump in Q4, that would add up to around 30% approximately in growth. But the new stores that we added up in Q4 versus Q4 on that financial period was on the 30th of March 2024. So we launched six new stores during that period itself, on the last two days of the quarter end. So it is not that so the sale that you actually see or the growth that you see is from the like-to-like stores only, whereas the new stores were all opened on the 30th of March itself, two days prior to the year end. Sir, what would be the, if I take a quarter average, weighted average for the number of days, how many stores were open in Q4 FY 2024 in North Cluster? Six stores. No, no, no. I am saying total number of stores which are open in Q4, weighted for the number of days they were open, there would be what, 14, 15 stores, right? Yeah. So we were operating 14 stores totally in that region before. And we've added up six more stores during that period with plus one MBO as well, one EBO as well, so out of which the opening of the stores, they're only there for two days for that quarter in Q4, for six stores. Similarly, sir, can you tell me the average number of stores which were operational in North Cluster in Q4 last year? 14 stores. Sorry? 14, 1-4, 14 stores. No, no. In Q4 last year, how many stores did we have in North Cluster? In Q4 last year, only 14 stores were operational. 14. And versus this year, in Q4, it was 21 stores. Oh, okay. So basically, there has been no store addition in Q1, Q2, Q3? There's no addition of the store. So [Foreign language] growth [Foreign language] like-to-like store [Foreign language]. Understood. So the SSG growth in the North region is like 25%, 30%? [Foreign language] Understood. So how does this work out in terms of store economics? So supposing if we have to get to, let's say, a pre-Ind AS EBITDA margin of, let's say, 5%-6% in North Cluster, what kind of sales per store do we need given the economics there, given the rental would be maybe a little higher or whatever else? What kind of sales per store will give us a 5%-6% pre-Ind AS EBITDA margin in North Cluster? North Cluster will give us that number upward of 35 crore average per store. 35 crore. Yes. Understood. Because you see, the reason why I'm a little confused on this is that if we look one or two years ago where North was not there at all, we were making maybe around a 5.5% pre-Ind AS margin on the entire company. And at that time, our sales per store was about 45 crore. Yes. So why is it that we will make the same margin in North India at 35 crore instead of INR 45 crore? I thought it would be more than 45 crore given that the rental, etc., would be a little higher. Yeah. So see, the Delhi, so the numbers that we were discussing right now, see, that pertains to most of those stores that we bought out there, especially the higher rental stores. So we've invested a lot in buying our properties. The actual rent would not be there in terms of that calculation. Okay. So rental expense is not there, and that's why. Exactly. Understood. Secondly, can you give us some idea on what kind of SSG you are targeting for FY 2025 at an overall company level? So sir, without including the new stores, SSG, [Foreign language], we look at stores which we opened, which are operational for a whole financial year. So for those stores, we would look at a comfortable number of 9%-10%. And including the newer store opening, we would look at because depending on which quarter we open the store, so we would look at a blended growth of around 15%+ comfortably. Understood. Last question. In FY 2025, on a full-year basis versus full-year FY 2024, do you see any levers for margin expansion, EBITDA margin expansion, or would it be roughly at the same level as FY 2024? So sir, if you see, there's already an improvement that has come in place. So we would see a similar line of EBITDA margins coming up because in our industry, it's become very difficult to actually extract higher margins because of the cost of rental, manpower, advertising. So a lot of things involved, especially now with digitalized payments, credit card penetration going up, NBFC costs going up. So these are all costs that we actually can't control because they're directly linked to the mode of payments and all. So I think we would look at a similar number also going forward. Right. Final question. If I look at mobiles category, we all know it is a low-margin category, but it is also a high-throughput category. So at a gross profit per square feet, the absolute rupees gross profit per square feet, is it inferior to other products, or it would be in line with other products? If you look at that absolute number in terms of percentage, it definitely would be lower than the large appliances category. Then if you look at the churn, so what we look at mobile as a category, we would rather look at the number of rotations of the churn that we would do for that category. In that sense, it would boil out to a similar percentage. Okay. Yeah, that's all from me, sir. Thanks and all the best. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Manoj Gori from Equirus Securities. Please go ahead. Yeah. Thanks for the opportunity, sir. I have one question. When I look at the— Sorry to interrupt you, sir. May I request you to please use your handset? Is it better now? Much better, sir. Please continue. Thank you. So I have one question. If I look at the overall breakup, probably if I derive the revenues for small appliances, mobile phones, and large appliances, there seems to be some impact on the small domestic appliances during the fourth quarter and by some margin. So probably, as per my calculation, it should be more than 30% decline. Is that understanding correct? And if yes, probably, how do you look at the world of domestic appliances going forward? Any outlook on it? Okay. Good evening. So actually, if you look at the kitchen appliances and other categories that we've demonstrated, when we say other categories, they majorly pertain to accessories and other product categories which we were in the midst of revamping at the store level. And we wanted to introduce newer brands and streamline that process because that product category is screen guards, cases, headphones. There is a lot of change of models or attrition there in terms of lots of unsold products. So we had to take a strong step where we had to revamp that whole category again and start off from scratch, create a model where we've tied up with brands where they take the stocks back after every quarter, whatever stocks are left with us, so that we don't have the loss of inventory at the end of the year or dead stock with us. So that is why we have stopped the sales for that particular category in a way. Now we see that growth coming back again on track for those categories as well. To an extent, like ultra wet grinders or mixies or rice cookers, in the kitchen appliance category, where we see a steep degrowth is because of the utilization of the product because now everything is ready- to- make idli maker. So people are now actually picking up ready- to- make rather than cooking or making that dough at home. So that category is where we see a major degrowth. Whereas categories like fans, water heaters, water purifiers, vacuum cleaners, we see a decent growth coming in. Right. So probably the growth rate might differ at least in the near term for this category. Absolutely. You're absolutely right. It should be back on track somewhere around on the expected line somewhere around from second half of FY 2025? Hopefully, because we've added up new categories as well. So right now, we're focusing on built-in category as well. So hob chimneys along with microwaves, built-in appliances, built-in ovens. So that is a category that we're expanding because the ASPs are quite higher there compared to the traditional microwaves, hob, and chimneys. So in the coming times, we are experimenting with a few of the stores, like seven, eight stores right now in this quarter. So probably in the coming quarter, if we see good results coming in, that will add up to a higher value coming forward. Right, sir. So my second question would be on the North market. So probably this is the first full summer, a probably undisrupted summer that we are witnessing in the North market. How has the overall experience been into this market? Probably if you can throw some light on the learnings, then how do we see this market moving, ramping up for us in the years time frame? So if you can share your thoughts over here, that would be helpful. Right. So definitely, no complaints on North as a market in terms of the heat wave going on there. Definitely supporting us with a sellout. Productivity per store is what we look at. That is also on track. But then when we look at the market size, that is also the reason that we entered that market, right? So when we look at the market size, we would rather now start looking in the future at how do we capitalize on that growth story there, how do we grow more, how do we deepen our store, increase our productivity per store like the way we do back home in Hyderabad, Andhra, and Telangana. So that is a future goal for us now. We would not— I mean, the numbers are good, but then there's nothing that in terms of to be happy in what numbers we're delivering. There's a long story for us to grow there. It will take a long more time for us to establish ourselves there. But we're quite happy with what is happening in that market today. Right, sir. So last year, you targeted to achieve that break-even by fourth quarter of FY 2024, and you were almost earning back. Where do you see yourself by end of FY 2025 in terms of market trajectory into North market? So in terms of growth rate, it will be in line with what you've seen. So we'll see that kind of number coming in, especially now. So right now, we are in good summer there. I don't know how long the summer is going to last. Probably might last for a couple of weeks, probably a month. So we are ready with the stocks. We're ready with the stores. So it all depends on seasonality products doing quite well there, number one. Number two, in everything, if you look at the average during the other months and during the upcoming Diwali season this year, I think if things are on track, we should be doing a decently good growth there in that region. On the margin front, should we see—? Margin will all remain the same, more or less, because they'll be adding up of new stores as well for this coming year as well. So expansion in Delhi is going to or that region is going to be heavier than other regions. So our focus is going to be on that region right now. So definitely, you would see a similar margin throughput only until unless the stores get matured in the next couple of years and start delivering a higher throughput. That is when we would see all the costs coming under control because right now, we're spending a lot more on marketing. So once those things come under control or in line with what we do back home, then you would see a higher EBITDA margin coming through from those stores. Sure, sir. Thanks for this, and wish you all the best. Thank you very much. Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Ankit Kedia from Phillip Capital. Please go ahead. Sir, two questions from my side. If you see one of your competitors, Croma, over the last one year has expanded that EBO format aggressively, which is predominantly a reseller for iPhones. And we have other players also expanding that. Are you seeing a lot of your premium customers move out of your store and buy from those type of reseller stores of iPhone in the market? Is that business model very different? And in your core Hyderabad market, you could contemplate such a store format yourself and retain those customers and expand in that iPhone category? Good evening, Ankit i. So Ankit, we also do have some exclusive stores for Apple, especially in our tier two, three towns. And if given the right opportunity, the right chance, we would like to expand that exclusive brand outlet format as well. But always running an exclusive brand format store is limited to a particular product range or a brand, right? And the limitation in terms of how much you can deliver out of the store. So there is an advantage that your brand exclusive is a disadvantage that the store sizes are smaller, the throughputs are lesser. You're limited to a certain category of product. Whereas a multi-brand store gives you a leeway of selling multiple range of products and a higher range of products with a larger store format. So exploring an opportunity is always open with us. We already have that format with us, and that's going quite well for us. So given that is all decided by the brand, especially with Apple. So they tell us where to open, or they tell us which market to look at next. And then definitely, initially, for those stores, the cost is a little higher because the investment goes from the retailer first, and then Apple has a contract of reimbursing it over a few quarters. So the business for Apple anyways with us in our multi-brand store is also increasing. At the same time, what we've proposed is to renovate a few of the zones of Apple in our existing stores and make the display area larger so that customers can experience a wider product range from Apple and at more ease with the similar concept of what an exclusive Apple store would have. So that, again, is in pipeline. So given an opportunity with any brand or any product category, we would like to expand with them in either of the formats, either give them a higher space area as per the throughput in our multi-brand stores or come out with an exclusive brand outlet opportunity. But then exclusive brand opportunity would be more through the manufacturer or the OEM to decide and then move forward rather than the retailer himself. So when you say in tier two, tier three markets, you have already done that. So these are like the EBOs what we have, or these are also MBOs with a larger share given to Apple for you in those markets? Because I'm talking from a Telangana perspective, to maintain your market share, right, in that state, wouldn't that be important for you to not let other players get that real estate also in the mall or next to you, selling the same product and accessories around you? Very, very truly said. So a few of the key areas are markets where we already have our MBO stores where we feel that the productivity of this particular category is going up. If Apple or any of the brands feel that there's a requirement of an exclusive brand outlet, then obviously, we would be the preferred partner. Or if we get an opportunity, we don't leave it. So we have stores beside our multi-brand stores also or stores on a standalone area where we don't have a multi-brand store but an exclusive store for a few of the brands. So it works both ways. And as you correctly said, the emphasis is not to open an exclusive brand outlet to retain our share. But at the same time, we have an opportunity to grow in our multi-brand outlets as well, especially for mobile phones because it is a very dynamic category and a very big category. So I would compare it to an ocean compared to other categories, which would be much smaller in size. So there, the demand and supply makes a lot of difference. So we've got to keep a lot of other things under check for selling mobile phone than just having a presence there. Sure. My second question is on your FY 2025 stores opening. Do you see in Telangana and Andhra market, there are enough spaces in tier two, tier three cities for you to continue to expand? And do you think there's a smaller store format between two cities can also be worked out like a hub-and-spoke model where you can open up 4,000 sq ft-5,000 sq ft store if a customer wants to give a two-day delivery kind of a thing while you cherish giving a same-day delivery for ACs than others, but predominantly in a smaller city while you can have a store but a smaller store with a two-day fulfillment kind of a thing? Absolutely right again. So given an opportunity there, if the market size demands a little smaller size store, we would do that. Obviously, we would not open a really big store. But if you look at our tier three, four town stores that we opened lately or we are opening right now and expanding because the market is still untouched in a few of the areas in Andhra and Telangana both, so there, we limit ourselves to something between 6,000-7,000 also. So not necessary, but 4,000-5,000, a little smaller would be a little smaller for us. But 6,000-7,000 is what we would look at rather than doing a 10,000 sq ft-15,000 sq ft store. So let me put it the other way. If I look at three years out, right, where you are opening around high-teen stores in these two states, do you think that growth can continue for three years for you to open these stores and you can pilot with that 6,000 sq ft-7,000 sq ft store format, see the experience today, and then probably expand three years out? That can be done. Suppose we say, again, we don't want to lock ourselves into a certain format of stores. If given an opportunity, market grows, that store particularly delivers a higher number, probably we might do a second store in the same city. For example, after five years of operation in Guntur city in Andhra Pradesh, we opened two more stores at the same time in that city. Now, we have three stores. Our competition has eight stores in that region, the same city periphery. So when I look at my overall number, especially coming in from Andhra, today, my Andhra stores have delivered approximately 800 crore plus of business, right? But if I look at my direct competitor there, which is Sonovision, Vijay Digital, these are all guys which are upwards of 700 crore, 800 crore, 1,000 crore, 1,500 crore business. So we see a great opportunity. Our store count is less than half in terms of bigger partners like Reliance also. Sonovision has 60+ stores. We are still operating with 38, 39 stores in that region. So we still see that there is a huge opportunity for us to go, especially with the under-penetrated mobile phone as a category there. So today, if we look at our product mix in that region, especially on mobile phones, it is still a little under-penetrated compared to our other city stores. So we feel that there is a huge opportunity for mobile outlet category to grow in our store, for large appliances to grow in our store, for air conditioners to grow in our store, especially with the new store opening that we're doing there right now. Sure. And the last question is on the warehousing in Delhi. When you started Delhi, the idea was initially, you need to keep a lot of inventory in Delhi because we have lesser numbers of stores. And as the number of stores, we get that leverage out. So today, where you have mid-teen stores in Delhi-NCR region, how does that throughput play out? And are you happy with that warehouse capacity? And has the inventory remained the same or only the store-level inventory happening in the Delhi market? And is that playing out according to the plan? Yes, that is on track. So whenever required, so we already have 14 stores in the pipeline today in Delhi NCR region, for the next 12 months, right? So we opened six on the 30th of March in Q4, FY 2024. And then we've got another 14 stores in the pipeline we'll open in the next eight to 12 months, right? So when we know that something is opening up and something is going to come up in the next couple of months, we would rather look at our warehousing to be ready to take up those stores as well in the future. So that's how we planned. And we've got three warehouses now. So now, once we expand further down more in Haryana or towards Gurgaon, we'll probably come up with one more warehouse in that region because right now, we would be doing Delhi city, UP, and then Haryana, and then penetrate further down in these regions. So then we would eventually need more warehouses, a bigger warehouse in that region. So as per time, we would definitely expand and grow. Right now, it is in sync with what we would need. And this being summer season, anyways, it's stocked up more, and we've filled up stocks in the warehousing required for the summer period. Sure. Thank you so much, and all the best. Thank you, Ankit. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Miyush Gandhi from Cognizant Capital. Please go ahead. Hi. Am I audible? Yes. Yes. Hi. Hi, Karan. I just wanted to know what are our plans in terms of new store opening for the year? You mentioned 14 in NCR. How many are we planning overall? So we would be doing around 30+ stores in this financial year. Out of which, we've already opened six in the first quarter itself. And then another five are getting ready, which are due opening in the next 30 to40 days. So probably this quarter, the first quarter itself, we will see opening of first 10 stores out of the 30-store count that we planned for this financial year. Okay. Fair enough. And I just wanted to maybe get a sense from you, as the density of our own stores in South region increases, are you seeing any signs of cannibalizing? Oh, yes. Yes, definitely. In fact, we try to cannibalize our own stores because what happens, especially for the peak days or the bigger days, because our competition works in clusters. So usually, you don't want to lose out a lot of sales from your top-performing stores or growing stores, right? So you then try to cannibalize your own stores a little bit because then you tap into a new geography, a new market in that same territory, and try to create a new customer base along with cannibalizing your own customer base from your existing stores nearby. But then within— yeah, I understand that overall throughput increases. But what it also causes is that per-store sales goes down, and also the return on capital employed also starts reducing. So any sense on how do you how do you plan to—? So this is a calculation on how and when we do it. It is not necessary that we start doing it, try to cannibalize the store, which is at 30 crores, 40 crores on an average. So whenever we try to do it, these are for all the stores which are 100 crore plus for us, for example, that way. Okay. And any sense on how is the return profile for our tier two, tier three stores, the experience of new stores that we've opened in the last two, three years? How has it been? Are they at par with the company average, or are we diluting a little bit there? Any sense on those? So definitely, yes. The throughput would be a little lower than your metro cities because of your premium product selling there or your high-end not selling in the larger number there in terms of the volumes are there. But the value of ACs would be a little lower comparatively, right, nuumber one. Number two, so in line with what growth we would look at for those stores coming in year one, year two, year three, whereas the base for that particular so if I open a store in Hyderabad, I would look at 30 crore, 35 crore in year one, then eventually go to 45 crore, 50 crore year two, and then averaging around 60 crore in year three onwards, right, for a Hyderabad metro store. But if I look at a store in a tier two or a tier three town, I would start looking at 25 crore, 30 crore in year one, then 35 crore in year two, then stabilizing by 40 crore in year three onwards. So that is the throughput that I would look at there because the incremental growth coming in would not be higher than 15%, 20% for the first few years, and then eventually stabilizing at around 35 crores, 40 crores on average once you start maturing from there on. Okay. Fair enough. That's it from my side. Thanks. Thank you. Thank you. The next question is from the line of Gautam Goyal from HCMR Private Limited. Please go ahead. Hi. Hi, am I audible? Hi. Yeah. So my question is basically, could you please explain us more on the store unit economics? So what is the Capex investment? Working capital, you've already mentioned that you probably will do around 2.5 crores- 3 crores. But what's the CapEx investment, and what is the payback period and a break even for us, for in the store? Sure. So how we would do the math is we'll say approximately, if you're taking a 10,000 sq ft store, we will look at a CapEx investment of around INR 2,500 sq ft. So that would be around INR 2.5 crores for making up the store, and then another INR 2.5 crores of inventory. And this inventory would be majorly for the displays of stock and then a little bit towards the backup stock for the over-the-counter product delivery from the same store. And then during seasons, then different seasons, that is, two big seasons in a year, then we would look at this number going up a little higher for the backup inventory, especially for summer if it's cooling products and for all the product mix during the Dussehra Diwali period in October, November cut-off. That is how we would look at it. So around INR 3 crores, INR 2.5 crores of inventory, and INR 2.5 crores of CapEx, around INR 5 crores is what we look at as a store cost initially when we set up a new store of a 10,000 sq ft area. All right. So what is the break even for that? Any break even or payback periods that we calculate? Oh, yeah, yeah. So for existing market, we have the brand we already know. And if you're opening a store in AP, Telangana, Hyderabad, so what we would look at is the break even would be around 12 to 14 months because we are as much established here. There are no additional costs here or stuff like that. Whereas if I look at our Delhi NCR market, which is quite new to us, which is a year and a half, two years approximately, so that region would give us that turnaround in 20 to 24 months. 20 months, 24 months. All right. And certain questions are like, what would be our growth expansion for the next years? So are we exploring new spaces, new [geographies], new cities, and all, new states, or we are contented by the fact we will just grow more in Hyderabad, Telangana, Andhra Pradesh, and Delhi NCR region? So right now, say, for example, we are quite new in Delhi NCR. And then there are a lot of huge periphery available in Delhi NCR, right? So we're talking about the whole of GT Karnal Road, up till Chandigarh, Panchkula, and then eventually Punjab. We're talking about western UP right now where we already have stores in, say, Ghaziabad and Noida. Then we expand it to Greater Noida in the coming times. And from there up to the whole of UP is available for you. Then you're talking about AP, Telangana as a periphery. You're talking about borders of AP, Telangana that are available, probably Odisha in the next coming years. So that way, the geography that we're present in, we would like to explore a few of these regions nearby, especially centering ourselves more up north because that is more of a bigger market size than what we would do down south here in the neighboring states like Odisha for us. So basically, we are saturated in states like Andhra Pradesh and Telangana. So you're not majorly focusing on expanding there. We are focusing on the north market right now. Am I correct? So right now, it will be more of a 50/50 mix up north and down south because there are a lot of markets that we don't even have a store here. So AP, Telangana expansion will go on. And then with that, what happens is that organically, every year, whichever city you've already entered in the past, you would see a new market developing in the same city. So organically, also, you need to expand in those territories because then you start losing out to your competition, or you don't get the benefit of inventories, marketing, and all. So there's no point of you opening a new territory when you've not captured our own territory completely first. Okay. Got it. And just last question from my side. So from the revenue point of view, what is the split between the financing and direct purchases in the urban metro cities and in the tier two, tier three towns? So the total blended would be around 65/35, 65 being through credit card, paper financing, other financing activities on the floor versus 35% through UPI, direct payments, and cash payments. So that is the major split across metro as well as up-country market. It will be a difference of 1% or 2% here or there. Okay. And this is for tier two? The number for financing, I guess, would increase a bit for the tier two or tier three stores? Yeah. Similar line only. So there, what happens is that, in fact, south and west in India, anyways, tier two, three towns are also quite strong with NBFCs. Whereas you talk about the east or pure pockets up north, then the transactions on NBFCs would be a little lower because the penetration there on debit card, credit card, or other financing activities would be higher there. Okay. Got it. Thank you very much from my side, and all the best for the future. Thank you, Gautam. Thank you. The next question is from the line of Arnav Shah, who is a retail investor. Please go ahead. Hi, sir. Thank you for taking my question. So I noticed that the company's product mix is the revenue from mobile phones has increased from 37%, 38% to 43%. So could you give guidance on the future product mix? So Arnav, the product mix for mobiles or these other categories will more or less remain in the same tune. So we would not see a drastic jump here. But then as I told you earlier on the call also, a few of our markets in Andhra also, if you look at the penetration there for mobile phone, is still a little lower. I would look at that going up by one or two more percentage in the coming times, but it will not drastically change from here on going forward. Okay, sir. Thank you. And in extension to that question, could you guide us on the gross margins that you enjoy in each of the segments between mobile phones and larger appliances and smaller appliances? So Arnav, I will give you a broader number. So for blended number, it would be what you will see on a balance sheet around 15%. And the lowest, I would tell you, would be around 7%-8% for IT mobile as a category. And the larger appliances would be upwards of, say, 17%, 18%. So that would be the average out for the blended would be around 15% for all product categories. Okay. Thank you, sir. That answers all my questions. Thank you, Arnav. Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to the management for closing comments. I would like to thank all of you for joining into the call. I hope that we were able to answer all your questions. And for any further inquiries, you may get in touch with us or our IR partners, SGA. We will be happy to address your queries. Thank you once again, everybody. On behalf of Electronics Mart India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.