Ladies and gentlemen, good day and welcome to the Electronics Mart India Limited Q3 FY25 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 of the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participants' lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference, please signal for an operator by pressing star followed by zero on your touch-tone telephones. Please note that this conference call 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 very much. Good evening and a very warm welcome to everyone present on the call. Along with me, I have Mr. Premchand Devarakonda, our Chief Financial Officer. We have uploaded our results and investor presentations for the quarter and nine-month ended FY25 on the stock exchange and company's website. Hope everyone has had a chance to go through the same. In nine months, FY25 revenue recorded was at INR 5,246 crores, reflecting a year-on-year growth of around 10%. EBITDA stood at INR 337 crores, with EBITDA margins at 6.4% and PAT Ind AS margins at 4.7%, respectively. The challenging macroeconomic environment, driven by persistent inflationary pressures, subdued discretionary demand, and slowdown in real estate markets and urban pockets. Large appliances continue to dominate as the largest revenue contributor, accounting for 45% of the revenue in the nine months of FY25. Mobile and small appliances contributed 42% and 13%, respectively. The store network expanded significantly during this period, with 14 new stores opened in quarter three. In Telangana, two stores were added, 10 stores were opened in Andhra Pradesh, and two in the National Capital Region. Gross store opening in Q4 is expected to be between 10 to 12 stores, taking the total count beyond the 200-store milestone at the pan-India level. By December 2024, the total store count rose from 177 stores as of September 2024 to 191 stores, comprising 178 multi-brand stores and 13 exclusive brand outlets, spanning 78 cities across four states. In the NCR region, the total number of stores reached 26. The company has outperformed its full-year guidance in terms of store addition by adding 31 stores during the nine-month ended period. As of December 2024, inventory days stood at 46 days. The company continues to prioritize inventory optimization and enhancing cash flow conversion, further fortifying the balance sheet position. India's economic outlook remains optimistic, with the projected growth of 10.3%- 10.5% in the upcoming fiscal year, up from 9.7%. The anticipated growth is supported by increased government capital spending and a rebound in demand driven by premiumization. Further, the union budget of 2025 has introduced significant personal income tax relief by lifting the taxable income limit, with an estimated one lakh crore being distributed to the middle class. This move is expected to enhance disposable income, directly boosting consumer spending, particularly in the consumer durable sector. With greater purchasing power, households are likely to increase their spending to purchase or upgrade their home appliances and electronics, driving overall demand growth, benefiting both manufacturers and retailers in the consumer durable industry. EMIL's competitive strategy focuses on developing a comprehensive product portfolio and forging strong partnerships to capitalize on the regional demand. By offering a wide array of high-quality products, EMIL is positioned to meet the diverse needs of consumers, ensuring customer satisfaction and loyalty. The company's collaboration with renowned brands enhances its credibility and appeal, allowing it to capture a large market share as demand continues to rebound. To conclude, we have actively expanded our store portfolio over the last two to three years. However, as the store matures and achieves higher throughput, we expect to see a stronger recovery in the unit economics. As revenue growth stabilizes, it will lead to improved margins on the account of operating leverage. We remain cautiously optimistic on demand recovery, mainly through a strong summer season coming forward. 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. Let me begin with the Q3 FY25 financial overview. Our revenues for the quarter stood at 1,885 crores as against 1,775 crores in Q3 FY24, a growth of 6% year-on-year. EBITDA for Q3 FY25 stood at 99 crores as against 115 crores, a growth of 14% year-on-year. EBITDA margin for Q3 FY25 stood at 5.2%. Pre-indicated EBITDA for Q3 FY25 stood at 67 crores, which works out to 3.6%. PAT for Q3 FY25 stood at 32 crores as against 46 crores. SSSG for Q3 FY25 was 2.8% negative, mainly due to slowdown in the Hyderabad region. Excluding Hyderabad region, all other regions have decent SSSG. Now moving on to nine months of FY25 financial. Our revenues for nine months FY25 stood at INR 5,246 crores as against INR 4,761 crores in nine months FY24, a growth of 10% year-on-year. EBITDA for nine months FY25 stood at INR 337 crores as against INR 342 crores, a degrowth of 2% year-on-year. EBITDA margin for nine months FY25 stood at 6.4%. Pre-Ind AS EBITDA for nine months FY25 stood at INR 245 crores, with a margin of 4.5%. PAT for nine months FY25 stood at INR 129 crores as against INR 143 crores. For nine months FY25, SSG stood at 3.8%. ROCE and ROE on an annualized basis for nine months FY25 stood at 60.4% and 11.2%, respectively. The working capital today as of 31st December 2024 stood at 52 days. The gross debt and net debt to equity stood at 0.4X, and our net debt to EBITDA stood at 0.3X. Pre-Ind AS cash from operations stood at INR 453 crores. With this, now I open the floor for questions and answers. Thank you all. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter star and one on the touch-tone telephones. If you wish to remove yourself from the question queue, you may enter star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask a question, please enter star and one. The first question is from the line of Manoj Gori from Equirus Securities. Please go ahead. Mr. Manoj Gori, your line is unmuted. You may go ahead and ask your question. Yeah. Yeah. Am I audible? Yes, Manoj. Yes. Yeah. Thanks for the opportunity. So my first question is on the sales side. So when I look at the overall brand's performance, whether we talk about large appliances who are largely into refrigerators and washing machines, the categories which have been relatively under pressure. Plus, when I look at some of the ECD categories of the companies which have reported their numbers, so both in 2Q and 3Q, when I look at the sales performance, it seems to be a bit on the higher side as compared to us. So even if we look at Whirlpool or IFB, they have reported double-digit kind of growth during Q3, despite a lot of sales being done during September month, as the channel would have obviously stocked up for the festive season. So, just want to understand where is the disconnect, because when I look at our performance, that definitely seems to be a bit muted when I look at the brand's performance. So, Manoj, you're absolutely right. So if you look at the cluster division that we operate today in, whereas our mature stores are all, majority of them are in the Hyderabad cluster, which is at a flat or negative growth by 1 or 2% for us, especially where the larger appliances have been a stronghold for us for a very long time, except AC, because AC, you've seen a very good growth coming from almost 40-odd%. And that is a both value and a volume growth. Whereas if you look at the breakup, when we look at a breakup of refrigerators and washing machines, unfortunately, we could not see a higher double-digit volume growth in these clusters, whereas our newer clusters like Telangana, Karnataka market, Andhra Pradesh, and Delhi NCR have outperformed and done really good. But unfortunately, what happens is that these clusters are really small on the total overall contribution that they have on the total balance sheet. So until unless our major, so this was a problem with us with the last quarter as well. So until unless Hyderabad does a good performance, until unless it is, till the time it is a bigger cluster for us, there's always going to be much lesser growth we will see for us, especially in the refrigerator, washing machine category, whereas the volume growth is around two or 3% only. Whereas if you see mobile phones or if you see air conditioners, kitchen appliances, where the growth is much higher, then you will see an in-line performance across geographies, and that would help us grow better. But saying that, we keep an eye on an everyday market share across categories and competition very closely to make sure that nothing is going wrong with us in Hyderabad, because that's the biggest cluster for us. And that is on the positive for us, where we've not lost even 0.5% of market share in across categories. So that is a good positive sign for us. And there are a lot of other reasons for the market to be a little slower in this region where we operate in Hyderabad, but we're quite optimistic that for the summer coming up, it is gearing up quite well for us. And right now, the weather is also on our side, where it is supporting us, where it's become a little hotter during the day in Hyderabad. We're quite optimistic going forward for this cluster also to outperform and deliver us better. To add up to your question, one more thing, Manoj, I would like to give out is that out of the 170-plus stores that we operate, around 75 80 stores today are the stores which have not reached the maturity level. In the drastic period of last 20 or 18 months, you might have seen a lot of store expansions that happened. Till the time these stores mature enough, that is when we see the actual true colors of the store performing and giving us a higher growth. These are all in the newer clusters in Delhi NCR, AP, and Telangana, whereas in Hyderabad, we've hardly opened two new stores. There's not a whole new count that are added up in the existing market in this region. So that is why you would see the market getting a little slower, not supporting us the way we wanted the growth to be. But we're quite optimistic and quite happy with how it is shaping up now. Correct. Sir, two subparts on this side. One, if we look at the Hyderabad business, obviously, we have a very strong presence over there. Are we confident that we are not losing any market share into this market? And probably these are the markets which are facing some issues at this moment. Absolutely. As I told you, so that is what we as a homework we do every day across team and across categories. And if you deep dive into the volume growth that is there in the market today versus what we are delivering, and at the same time, the new categories that are doing very well for built-in audio, kitchen appliances, these are the categories that actually have shaped up really well in the last quarter onwards. Then we started focusing on other products to be started selling better for us, and you would see a good growth. AC is an exception. AC will see a 40% growth, is because the penetration was lower. All the brands are very aggressive. Unfortunately, for the last few years, you might have even seen discretionary growth in pricing as well, or the ASP is also going up, especially in the large appliances, which unfortunately, this year is not that great. We're not seeing the support of price increase coming our way or the inflation going up where we would get a higher growth rate in terms of value. That has not been supporting us, whereas the volume growth has been in single-digit for the larger appliances, especially televisions at 5-6%, washing machines, refrigerators both at 2-3%. You would not see a major jump in value contribution from those categories as well. Correct. So our market share remains intact in Hyderabad. So secondly, in Delhi, if you look at even in the third quarter, our sales growth was roughly around 9%. So that's on the SSG side. Again, if I look at AP Telangana, we did saw some challenges. So did we see similar kind of challenges even in Delhi NCR? Because even there, if you look at the SSG, seems to be a bit sluggish than what we would have been expecting. So see, that number that has been given is majorly given for the stores which have been matured over 12 months. So if I actually see what is in line, so that number would be upwards of 20% for us. Or if I give you an exact number, that would be around 22.5% for the SSG for the stores which have been operating for 12 months. Stores which are over above that is around 8%-9%. So you would see that decrease. I mean, you see the change there. But overall performance of Delhi NCR is up by almost 50% if you compare the quarter-to-quarter number. And for the first nine months, it is up by 60-plus%. So we are quite happy with the performance there. And that is what we are expecting. Definitely, yes, it is a newer market. The more we fetch out of that market, the better it is for us, and the sooner it becomes matured and stabilizes for us in the coming time, because a lot of stores that have opened up are not even 12 months old. We're quite optimistic about that cluster as well. It is going as we decided that we'll touch a certain throughput for the first set of eight stores that we opened up in August 2022. Those are in line. Majorly, that SSG that you would see is for those set of eight stores that we had opened initially, and then after that, other stores, whereas the stores that we opened in the last 24 months are up by 22%. Correct, sir. So lastly, if I may ask one more question. So obviously, today, when we look at roughly 60-65% of the revenue comes from Hyderabad market, and we do understand these are matured markets, the stores are very matured, and accordingly, there will be negative drag on the overall SSG performance. Correct. Can you see this contribution changing, probably new stores getting adding up in the SSG calculation next year? And how do you see this 60%-65% moving to roughly around 50%-55%? And by when should we expect that? So there are two questions. One, what would be the new percentage, new store additions in the SSG for next year? And second, it would be probably by when should we expect Hyderabad contribution to come down to 50%-55%? So, Manoj, for the next year, so for this last quarter itself, see, right now, for the first nine months of this year, we opened around 31-32 stores. And another 10-12 stores are in the pipeline that will open up. We've already opened up a few stores in January and February. And few more stores opening up in March as well, especially in the Delhi cluster. So this year, we would end up FY25 closing would end up an addition of around approximately 40 stores. Whereas for the next year, FY26, also we have 35 stores that are already getting ready for us. So in the next two to three quarters, coming two to three quarters, we'll end up opening another 25-odd stores in FY25. Whereas FY25, we should be closing the addition by around another 35-40 stores. So that we've already shortlisted in the existing clusters. I'm not even adding a new cluster to this, so to take the count up to almost 225-230 stores in the next financial year, that is the idea for the company for the addition of stores, which will majorly be in the existing clusters in NCR, Delhi, and AP and Telangana. So that is the plan, and as I told you earlier, so almost out of the 200-odd stores that will end up by FQ4, there will be 80-odd stores which would still be not matured or still under matured in the time that we would take it to get matured. So for almost, say, 24-36 months, it takes around a store to get matured. So that is the number of stores counted. Around 80-odd stores will be still yet to touch those maturity levels in the coming times. Sure. So very helpful. I have some more questions. We'll get back in the queue. Wish you all the best. Sure, Manoj. Thank you. Thank you. Participants, if you have any questions at this time, you may enter star and one on your touch-tone telephones. The next question is from the line of Yash Dharap from RSPN Ventures. Please go ahead. Hello. Am I audible? Yes, sir. So yeah, thank you for the opportunity. So first question with regards to accounting of discounts. If you can explain what leads to reduction in gross margin in the month of December, even historically, and how are discounts accounted in the books? Sir, can you repeat your question? Because you were not that clear. Please wait. Hello? Yeah. Am I audible? Yes, sir. Yeah, so my question was with regards to accounting of discounts. Historically, also, the gross margin reduces in the month of December. If you can explain how you account discounts and what leads to reduction in gross margin in the month of December? Sure . Sir, whatever the sales promotion activities or cashback offers we roll out during the festive season, so that will be adjusted against the revenue. As a result, the gross, I mean, net sale realization will come down. So that will obviously reduce the gross margin. Okay. But then what are the sales promotion number in the other expenses? If you see, there's a line item on a sales promotion. And what does that include? Sales promotion is the normally we also participate in the Dealer Buy-Down charges. I mean, that is interest subvention to be borne by the dealer is accounted under the head sales promotion. I'm sorry, I did not get it, sir. There are two things, sir. Dealer buy-down is nothing but the interest subvention to be borne by the dealer. So that is shown under the head sales promotion, whereas cashback offers will be knocked off against the sales revenue. Interest subvention? Yeah. These are two different things. Okay. And if you could give me the gross debt, I think the debt was supposed to be reduced by the financial year, but the amount of interest has increased quite a bit. So what has led to that increase? And if you would give me the amount of gross debt? Sir, to answer your question, the interest would even contribute from the Ind AS, one which is adjusting that we do. The interest and depreciation would be a little higher because we keep on adding up stores. So the rental adjustment on the lease liability is added up in interest and depreciation after EBITDA rather than the expense out on rental income, because that is the method that we follow. But in terms of the actual debt, if you want, I can give you a breakdown on that as well. Give me a second. So someone can open the thing. Down. No, no, down. Yeah. So sir, if you actually see the term loans that are there versus the borrowing, that is, so there is a decrease in the term loan working capital requirement, and there is then an increase in working capital loans. There are three different heads that we operate in, whereas the working capital has gone up significantly is majorly because we started purchasing for the Diwali season. Eventually, that will come down if you compare it to the March numbers versus 31st March numbers and the 31st December numbers. There will be a significant decrease there. If you look at last quarter versus this quarter also, there is a significant decrease there, whereas the term loan to buying properties has gone up a little bit because we end up buying a lot of properties and a lot of registrations due for us, which we completed in quarter three. That was all the advances that we had given out in the previous quarters as well. The term loan would have gone up a little bit. But whereas if you see the working capital loan and the unsecured working capital loan, both have reduced drastically. Can you please give me the amount? Yes, sir. So from the secured working capital loan, which was at INR 429 crores previously, it has come down to INR 322 crores. And the unsecured working capital loan has reduced to INR 19.82 crores. Sorry, INR 1.9 crores. I guess the total debt is around INR 330 crores, sorry, around INR 325 crores? If it's a term loan, the external term loan I mean, the working capital term loan has increased. The term loan has now gone up to all the properties all put together is around INR 200 crore, sir. Total borrowing, if you see, on the 31st December, it would be around INR 530 crore. Okay. Okay. Thank you, sir. And with regards to guidance, do we still maintain the annual guidance which was earlier given? I think it was around 15%. Do we still maintain it, or are we supposed to reiterate or revise the guidance? I think that should be in line with the numbers. So the growth is around 10.5%, 10.6% to be precise for the first nine months. And then we're looking at a decent growth coming in in the quarter four. So in line with what we were expecting, so that should be there. But the bottom line revision was already discussed in the previous quarters as well because the gross margins got diluted by 0.75%, and the expenses up by almost 0.6%, 0.7%. So we're expecting the bottom line to take a little impact in the previous quarters than the previous year. And it will be in line with what we were expecting it to be. So we don't see a drastic change there. But so we're quite optimistic in terms of what is in future for us, especially looking at the performance in January and February. And then the other clusters that we're operating, especially Delhi, Telangana, upcountry markets, Andhra. And the new stores also that we opened up are performing quite well for us. So we are in line. There are times where a company would face a situation like this, but we are quite comfortable, and we are quite optimistic on what is up in store for us. Okay, sir. Thank you. Got it. Only with regards to the first question, the interest subvention, which is something I'm not really clear about. Can I get back to you on that? If you compare the quarter three FY24 number, which was put around INR 48.3 crore, has increased to INR 51.5 crore in the FY25. This is basically the dealer buy-down because most of our sales happen through NBFC, like Bajaj Finance Limited, IDFC, L&T Finance. What happens is that when a customer walks in, especially during the Diwali period, the price becomes very competitive. Usually, no dealer charges the dealer buy-down. There are two major aspects when financing a case. One is the manufacturer buy-down, and the other one is the dealer buy-down. Manufacturers like Samsung, LG, Apple would bear their side of interest, whereas the dealer also is charged a bit. The customer gets an absolute 0% interest-free EMI. Usually, a lot of dealers would embed that pricing in the cost itself, whereas we don't do that. So, any mode of payment on our store would have the actual discounted price available for the customer. Whereas if he opts for a financing option through NBFC, then there is a dealer buy-down charge, which we take it under our head as a cost to us. So that is where that is something directly proportional to the sellout that we do through NBFCs, just like a credit card charges. Okay. Okay. Got it. Thank you. Thank you so much, sir. Thank you, sir. Thank you. Participants with questions may enter star and one on the handsets. The next question is from the line of Tanesh Shah from DAM Capital. Please go ahead. Yeah. Hi. Thank you for the opportunity. I just wanted to understand, has there been any improvement in demand across the product categories which we operate in? And given that winters have not been so harsh, have we kind of started seeing some sort of stocking for the summer-led products like the RACs and all the other smaller appliances as well? So just wanted to understand on that aspect. The second question would be in terms of water heaters, what we do, right? So how has the demand been in the previous quarter? And if you could just kind of give some flavor on that as well. Sure. So definitely, as I told you, the summer has set in a little earlier in the region. So we would see a little higher growth coming in air conditioning, air cooler for us. Usually, we would start off by September, and this has already started up right now. So we have this preponed by 15-20 days. So that is the advantage we're looking at as we talk right now. So the demand looks good, especially mobile phones that were a little sluggish for the last few quarters, especially after the iPhone 15 launch. We saw good sellout during the first week of February. But obviously, whenever a new model launches, it is there for a weekend day. So we do not attribute that to the whole quarter. But we saw good demand coming in there as well. So the premium phones are still doing good for us. So there is not a slowdown there. The built-in appliances, the kitchen appliances overall have started doing very well. And then water heaters and room heaters both did perform really well, especially in the north region during the last quarter, whereas water heaters in Hyderabad are at a single-digit growth, whereas the newer clusters again across the country because of summer here, you would see a little slowdown in the going quarters for this water heater and room heater kind of category. But saying that, now it has become more like a 365-day product. If there's a new apartment or a villa coming up, usually people put in these product categories, whereas real estate has been a little slower here in this region for the last few months. So we would definitely see that kind of an impact. But once everything stabilizes and the real estates are picking up and the new home buyers are moving in, not only room heaters, but a lot of other water heaters, but a lot of other categories also see definite improvement going forward in this region, at least. So if I got that right, you're trying to say that we've preponed our stocking for RACs and air coolers much before, like around two to three weeks, and demand is supposedly going to be good. And at the same time, we're saying that water heaters did well in the northern market. Is that right? Yes, yes. Absolutely. And what happens is that we already, irrespective of the season preponing or postponing, we usually start stocking up as early as January. So we were all ready for RAC business and air cooler business anyways. But now we've started stocking up a little more depending on the sellout that we've been doing on a daily basis right now. Understood. And another thing I wanted to know was just sort of a different kind of a question. At what percentage of our overall sales would be consumer finance? What would it be under? 65%. 65%. Yeah. Okay. Got that. Okay. Thank you. Thank you so much. Thanks. Thank you. Thank you. To ask a question, you may enter star and one. The next question is from the line of Somil Shah from Paras Investments. Please go ahead. Yeah. Hi. Thanks for the opportunity. As you mentioned to previous participants, we are in line to achieve our revenue guidance of 15%. So in terms of bottom line, can we achieve our previous year's spec? So it will be too early for me to comment on that. But yeah, definitely, obviously, if you compare it to the previous quarters that we've delivered, there has been a decline. So I can't deny that fact that there was a decline in the PAT levels. But we're trying to improve them. But obviously, we won't be able to surpass with a very big growth number in terms of the PAT margins this year. So that will be also in line with more or less what we delivered last year. But we're confident that that would happen. But I can't promise you that it will surpass those levels and grow much above that because we've already passed three quarters in this year. Okay. And in terms of guidance for the FY26, what can we expect in terms of revenue and EBITDA we can reach vis-à-vis earlier guidance? So next year, right now, it will be too early to comment on next year again. But with the new store additions that have happened and the stores that are about to get matured, there's a lot of stores that are yet to get matured. And the new store that will be opening up next year, I think a 15% Y- on- Y growth should be quite comfortable for us to achieve next year as well. And in terms of EBITDA margins? Should be in line, sir. In line with this current quarter or the previous quarters? The same number that you would do on a regular basis, the percentage-wise, it should be in line with. 15%? 15%, more or less, yeah. I'm talking about EBITDA margins around 78%? Yeah, yeah. So EBITDA margins are at Ind AS levels are at 7%, sir. So reported Ind AS level are 7%, which we look at a 1.2%, 1.3% lower post-adjustment of rentals there. So I think that should be the number that we are looking at, sir, around 7%, 6.8%-7% comfortably. Okay. And so my final question, sir, in terms of debt, where can we see by the end of this year? Net debt? The debt levels again by the end of this year would again be in line only what you've seen on 31st March is because the summer purchase [Foreign Language]. So a lot of advances go out, a lot of inventory is carried. So the debt levels will be basically for working capital only for the inventory. And once the cycle will go down to summer end, so you would see the decrease in quarter one numbers. Because we exit the season by June, so the inventory and cooling products reduces drastically now, sir. Okay. Okay. So by March end, we can see around INR 500 crores of net debt? Less than that, sir. And then there will be two cycles now, sir, because after summer, Diwali [Foreign Language]. So that is when you see an increase in working capital for these two quarters. And then reduce the way it is reduced on 31st December, it is drastically reduced from what it was in previous quarter. Okay. Okay. That's it from my side. Thank you and all the best for the future quarters. Thank you, sir. Thank you. Thank you. Participants with questions may enter star followed by one on the handsets. The next question is from the line of Dhruv Modi from DSM Securities. Please go ahead. Hello. I'm audible? Yes, sir. Yes, sir. Yeah. So I have a few questions. First question is, which brands and specific categories witnessed sluggishness during quarter three of FY25? So, the categories majorly that you see, there was not a decline in volume. So I would not attribute it to a decline in volume growth, whereas the volume growth was a single-digit growth across television, washing machines, refrigerator, the larger appliance category. But, sir, unfortunately, what has happened, the price has increased in those categories. In fact, for the premium products in television, the price reduced a little bit. So you will not see a major. I would not see a major degrowth there because of volume, but in terms of value. But, categories that outperformed really well were air conditioners, mobile phone division. Small appliances did very well. So these categories initially can't contribute to the growth coming in. Other televisions or Air Conditioners, Washing Machines, Refrigerators, other contribute in line with what the other categories did, then overall Large Appliances would have seen a much better number. Okay. Okay. Got it. And the other question is, why has our employee cost increased by 29% on year-on-year basis? So the employee cost majorly for the new clusters that are there because the teams across AP, Telangana, Andhra, and Delhi have also been increased. So you would see a little higher expense going up there compared to the previous quarters because the team expanded. Now we've got a lot more people in these clusters, especially Andhra also divided to a newer cluster because the number of stores there are increasing. There are other 15 stores that are in pipeline for the coming year. So definitely, we need to increase the team there as well. So the costs are all under control in terms of what expenses overall we are looking at, legacy manpower cost, marketing cost, or any other cost. Costs which are variable in terms of major sales promotion or finance costs that are directly like credit card charges or NBFC charges, which are directly proportional to the revenue that we generate on those businesses. But apart from that, all other expenses are out of our control in terms of what we expected it to be. So nothing is in red where we see that it has gone over our expectation. But building a team takes a little time, especially for the newer clusters and all. So that is the major reason for the cost of employees going up. Okay. And the last question I have is, what is our store opening guidance for FY26? So, FY26, sir. Another, I'll give you the Q4 number also. Q4 number will add up another 10 stores this year by the end. And then another 35 stores are in the pipeline for the next year, sir, out of which we might start opening up stores by the first quarter itself. So 35 stores have already been signed up for the next financial year. Okay. Thank you very much and all the rest. Thank you. Thank you. The next question is from the line of Prateek Poddar from Bandhan AMC. Please go ahead. Sorry, Karan, just one small question. The 35 stores which will open next year, what's the split between Delhi, Telangana, Upcountry, and AP? So, sir, around six stores in the Delhi-NCR region, and the rest of them are in the south region, sir. How much is the split of the 29 between, let's say, AP and Upcountry? Hyderabad would be three stores, 15 stores in Telangana, 15 stores in the Andhra Upcountry market, and the rest of them are in Telangana, Upcountry market, sir. Hyderabad, you said was three, right? Yes. Around 11 stores in Telangana, upcountry? Yes, sir. Okay. Okay. And what is the split this year out of the 40 stores? Sorry, just before that, you said gross stores will add 10-12. Does that mean that you'll be cutting or, I mean, closing some of the stores, or this is the net store add for quarter four? Sorry, no, no. 10 stores will add up in this quarter, Jan-Mar, quarter four. That's gross, you said. So I just wanted to confirm. Gross or net? No, net, net, net. Not gross. Gross totally we opened around 32 stores this first nine months, na? Got it. Fair, fair. [crosstalk] We're not cutting stock, sir. We're not. We're just about time we are. We were time ahead of the time. I got to, I got to, I'll call you back. We are good, doing good. Don't worry. Surely. So just the 40 stores which you add, maybe can you just help me with the breakup between, again, same NCR, Hyderabad, Telangana? Yeah, yeah, yeah. So till now, what we've opened up is around 6 stores in Delhi, 5 stores in Hyderabad, Telangana. Upcountry market would be 7 stores, and 40 more stores in Andhra Pradesh. This is what we opened up this year in the nine months. We've already opened up two stores between January and last 45 days. We've already opened up two stores in Delhi, which we have now to the 10 stores I'm borrowing on additions. Got it. So that means usually in Delhi we may totally roll out at least five stores all told in Delhi, which Janakpuri will open up this week. So Janakpuri already, the soft launch is done. So because of the smog there, I mean, because of the pollution being higher there, the construction was stopped for the last few months. That is why it's delayed. Same thing what happened last year where we opened six stores on the 30th of March last year as well. Understood. So this will be a similar number this year as well. We will end up opening up the majority of the stores by this week, next week, and the last month of this year. So that is the idea for Delhi-NCR. And then a few more stores opening up in Telangana, Upcountry market, and Andhra as we talk. So the total stores at least. How many stores in out of 40? We will be around 40 stores. We will take the total store above 200 stores for the group, and next year, again, 35 stores, what we've already signed up for FY26, where the handover of the property or the construction is underway, where we start opening up by the first quarter of next year. Okay. Sorry, just going back, 40 stores, 10 stores are in NCR. How much would be out of this 14 AP and Telangana? How much is AP? I mean, ex-Hyderabad, I'm saying. Ex-Hyderabad would be around 15 each, sir. So basically, this year you have not opened any store in Hyderabad. That's a fair understanding? Yes. Okay, and what's the store count of Hyderabad? Last question. Hyderabad store count would stand at 69 stores. That includes all EBOs put together. That's fair. That's fair. Okay. Thank you. This is very helpful, Karan. Best wishes for you. Thank you, sir. Thank you. Thank you. Participants, if you have any questions at this time, you may enter star followed by one on your handsets. The next question is from the line of Ankit Kedia from PhillipCapital. Please go ahead. Now, sir, questions from my side. We are given the store level breakup across regions. If I look at profitability, so next year, what are you modeling in terms of margins for NCR region? Given the nine months, we are pretty much flat today. So if the growth trajectory is similar to what we have done this year, will we be able to do 6%-7% margins for the first 10-12 stores which were there in NCR? Ankit, those stores definitely yes, so if you look at store-wise EBITDA or store-wise profitability, gross margin levels, those stores will be at that count, but if you look at the new stores, that will definitely drag down the overall number for NCR, but the mature stores will be all in line. Probably not 6%-7% the way it is back home in Hyderabad or AP and Telangana. It will be down by 1% or 2% because the expenses there initially would be a little higher. Say the cost of manpower, rental, marketing, and all in terms of the revenue that we generate per store because the productivity per store is much lower compared to the existing market. You will look at those numbers being a little higher, and the gross margins or the EBITDA numbers at the store level would be down by 1% or 2% compared to the existing market. But seeing that overall number in Delhi, which we have guided that we will touch a certain throughput, it is on par with that. And we're quite optimistic on that region going forward. The new big stores that are opening up, six of them are all the big clusters like Kalkaji, Janakpuri, Pitampura that we opened up recently. So all our bigger cluster stores, and going forward, we feel that Delhi should be shaping up quite well for us in FY26 as well. Sure. And if I have to look at new state entry next year, are we planning any, say, getting into Lucknow side of the market, or it will still be purely NCR next year? So sir, definitely the existing clusters need more stores. That is why the addition of 35, 40 stores in the coming year would definitely be there. But saying that, we even have to look at a balancing act between the existing clusters and newer clusters that we would approach. So there are newer clusters like Odisha, Western UP, probably Lucknow, a part of Haryana expansion that we are doing up from Gurugram and Manesar and Bhiwadi and those places. So definitely the new market that we're looking into. But I'm not sure that how soon we'll be able to start those operations in those areas because more than that, we want to fortify our existing clusters. And Delhi is a very big market today. Delhi, we would be ending up at 30, 32 stores by next year. So we want by opening of next financial year. So we want to be more stronger in that region. So if it demands for us to open more stores in Delhi, NCR, or periphery of Western UP, we'll start that immediately. So right now, we'll end up the year first and concentrate on increasing the productivity in the existing stores and growing in the existing market, and then take a step forward in the newer clusters. Sir, my last question is on commission and incentives. Given that your growth this year has been a little muted around just double-digit, do you think brands will give you the similar incentive and commission what you were getting before? Given that in South market, predominantly Hyderabad, our core market, we have in Corona actually declined. Yeah, yeah. So that is in line. So that would not change per se because you're not looking at a degrowth by 50%, 70%, 100%. You're looking at a big number change there. You're talking about few digits here and there. So brands don't take it for a ride for such a growth or a degrowth because the growth is coming in the newer market. So overall contribution that we give out to the brands in line with what our contracts are or what we promise. So that doesn't change per se. But if you keep on degrowing quarter on quarter with a much higher number or you stop doing a brand or stop catering to their product range or anything of that sort or a major decision like that, then that will impact your margin. Not the smaller changes here and there. Because they also understand, right? They understand the market, how it is behaving. And it is not a temporary relation that you create with the manufacturer. That is why we deal with the bigger brands where relations are much stronger than a quarter. Fair point. And the last question is on the mobile handset sales. We are seeing disproportionate increase in mobile handsets, which comes at a lower margin. Are you comfortable at this 43%-44%, and obviously nine months the number is lower, or it's just that the demand in mobile handset continues to be so strong that the margin trajectory will be forced to be lower because of that? Sir, I can understand your question well. You mean to say that the margins in mobile are going to be lower than other categories? That's what you mean to say? They are lower. We know that. But do you have a conscious choice to keep a mobile revenue mix at a certain percentage because it's impacting your margins? So sir, that is beyond our control. So usually, I mean, the healthiest position would be like any category which makes more money sells better, right? So that is an ideal situation for any retailer. But you can't demand what sells on the floor. So if there is a good demand for us on mobile front, we definitely would like to cater to that. And it is not only a short-term product margin that you look at. Mobile on the whole is a bigger category, a much bigger ocean than what it looks like. So why don't we cater to that audience as well? So there is nothing stops us from catering to that audience irrespective of the margin profile between larger appliances and mobile phones. So we'll be glad to grow in any of the categories that come our way. Mobile phone is a very big market to grow in. Then eventually, a customer walking into your store, whether it be audio, built-in, kitchen appliances, small appliances, any category, because then you can't shy away from selling it. Because the cycle of a customer is not necessarily only for one product category that keeps on coming to your store, right? You're looking at an array of products. You got to, as a retailer, focus everything and make sure the customer gets a one-stop solution for everything that he wants. Sure. That's helpful, sir. Thank you so much, Karan. Thank you, Ankit. Thank you. Participants with questions may enter star followed by one on the touchtone telephones. The next question is from the line of Rohan Gupta from Nuvama. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. Most of the questions are being answered. My only data-related question is, when do we expect the Hyderabad cluster SSHG to normalize? So Hyderabad SSHG, because of stores being all matured and the productivity costs are very high, so obviously, this needs to get positive. It doesn't necessarily mean that Hyderabad will become like a 5%-7% kind of an SSHG. So even if it comes down to 2%-3% kind of a level, it is good enough for us. This is in line which we see that it's going to happen going forward, and we're quite optimistic on that. So there is no worry on that. Definitely, yes, that is being the largest cluster. The whole balance sheet turns around if that cluster doesn't perform well. But looking at the big days like 26th January that went past by us right now or the coming times now, I think it looks positive. Okay. That is helpful. Thank you. Thank you. Thank you. The next question is from the line of Mehul Desai from JM Financial. Please go ahead. Hi, sir. I hope you did look for store additions. Sorry, we're not able to hear you very clearly. Can you hear me now? Yes. This seems better. Thank you. Yeah. Just for store additions, I missed that part. Can you just reiterate your total store additions that you are looking at in FY25 on an excel basis and on FY26 also? And also, can you split in FY25 whatever store addition I mean, stores you end up? How much would be in core South market and in NCR region? Okay. So sir, the addition of stores was around 32 this, for the first three quarters of this year, the first nine months, out of which six stores were in Delhi-NCR, around 14 stores in the Andhra market, and Telangana, including Hyderabad, were around 12 stores. So that was the breakup for these 32 odd stores that we opened up this year. And then another 10 stores will add up in this last quarter, the end of March, which will take the store count of new addition in FY25 to around 42-43 stores. So that is the total number, out of which Delhi-NCR this whole year would end up around 32 stores, more or less. And the addition for the next year would be around 35 stores which we've already signed up. Definitely, yes, once we have more stores coming up because we have a whole year left for us, so they will keep on adding up more stores in the existing cluster. And out of the 35 stores, again, you would see around five to six stores coming up in the Delhi-NCR region. And then the rest of the stores will equally split between Andhra and Telangana, sir. Okay. So next in FY26, you said 35, only five to six stores are in Delhi-NCR, you said, right? That is what we signed up now. But definitely, yes, because we are already searching for new stores in the peripheries as well. So as we progress, because we have almost four quarters in the whole year left with us, right? So as we keep on progressing, we'll add up stores. And Delhi is going to be the major market that we'll be looking into. But it's not easy to find a property in Delhi-NCR, right? So because the major markets have already been covered, and it takes a little more longer time to secure a property up there compared to down south because down south, it is more like a newer market that we're opening stores in tier three, four towns. So it's much easier to get a property at your price or your rental cost for a longer lease, whereas compared to Delhi-NCR. Right now, at 32 plus another six, seven stores getting ready. We would look at Delhi-NCR shaping up at least 50 stores by FY27. That is the plan. Okay. And in this FY25, how many store additions were done in Hyderabad? So I mean, when you are saying this 42, 43 stores will get added overall, how many stores would have been added in Hyderabad market? Sir, exclusive brand outlets, multi-brand outlets, all formats put together, and the five stores is what we added up in Hyderabad city, sir. In nine months. Yeah. Any plans to add any more in Q4? Sir, Q4 [Foreign Language] three stores that are getting ready, especially all the periphery markets of Hyderabad city, which are like 30-40 km away from the city center, where now population increase, so we are planning to open stores in those geographies also. Okay. So broadly from this 42, 43 stores, you are saying seven, eight would be in Hyderabad in FY25? No, no. Around five. Or FY25? Okay. Five. For 26. No, no. I'm talking about FY25. You said in FY25. FI plus another two, yes, around seven stores. Correct. Seven stores. Okay. And lastly, can you give some light on how Q4 demand trends have shaped up so far? Is there an acceleration in revenue growth versus what you have seen in Q3? I mean, are we in double digits in Jan and Feb so far, or? So that will be too early for me to comment on that. But I can tell you one thing that summer has set in a little early, so it is looking great for us as a season to start off with. So nothing disappointing right now. But having said that, it is only the Hyderabad city that has become a little warmer during the day, whereas other clusters for us, especially north and other clusters upcountry, the weather has not changed drastically. So we did not see a great jump in numbers right now. But the revenue, daily revenue that we look at, what was a little sluggish for the last few quarters, is being a little more on the positive side, I would say that. Okay. Got it. That's all from my side. Thank you. Thank you. Thank you, Mehul. Thank you. The next question is from the line of Shri narayan Mishra from Baroda BNP Paribas. Please go ahead. Thank you for the opportunity. Am I audible? Yes, sir. Yes, sir. So sir. So we are already halfway through the quarter, and I wanted to know the level of discounts and interest subventions which you are giving. Is it similar to 4Q, or has it improved? So that's the discount structure. More or less, remains the same. There's not much of a difference there. So that would remain the same. But in terms of the productivity that we see across categories, that has been positive. So what was a little sluggish the last few quarters, I would just like to comment on that. That has been seen a positive sign there. So I would not say that it jumped drastically, but yes, it is much better than what was happening in the previous quarters. So the gross margins, we should expect for 4Q to be not that great? Sorry, sorry? I didn't get your question. Gross margins, gross margins for 4Q, will it be impacted because of business promotion and discounts? Not really, sir. So that is in line. So that is always in line and that is accounted for. So gross margins are always accounted for the sales promotion and the cost of credit card or NBFC that we pay. So there is not much of a change there. And that is additionally. So So the overall value might look higher or lower depending on the revenue that we generate because it directly proportional to the revenue that we generate. But in terms of percentage, it is in line with what we have been doing in the previous quarters as well. Okay. And much of these will be in South cluster, right? North, we won't be giving much of the discount. So the discount structure across the country more or less remains the same. So depending on what product category or what is the demand in the market for that particular season, is what is discounted or increased or decreased. But across the country, it remains the same. So not much of a difference there. And definitely, yes, because South cluster is the largest cluster. So whatever small change, positive or negative, you see in the South cluster will impact the whole balance sheet because the contribution from the North cluster is highly negligible. And lastly, second question. So do you see some behavioral? I mean, are the NBFCs willing to lend now, or they are still taking a backseat and we see pressure in lending? So sir, actually, if you see, the lending in our industry has always been very mature compared to a lot of other lending assets, asset classes that they have across the industry. Whereas here, the CIBIL scores have to be higher. The documentation is much more stringent. Though the ticket value is much smaller than a lot of other loans that they disburse. But we've never seen a direct impact on lending, per se. And then because we have almost four to five major NBFCs that we play around with, so the only thing that you would see is that earlier, I think that would impact the minority of the approvals that come our way. But the majority of them should not have a problem because we definitely have a huge cluster base in Hyderabad. But whereas in Telangana upcountry market or Andhra upcountry market, you would see a little impact due to the credit scores or the credit approval rate being a little different there. Okay. That answers my question. Thanks. Thank you. The next question is from the line of Rajiv Bharti from Nuvama. Please go ahead. Yeah. Good afternoon, sir. Thanks for the opportunity. So with regard to your Hyderabad market, can you just specify the number you clocked in Hyderabad and also the three-year EBITDA? Sorry? The EBITDA number for Hyderabad city? Yeah. Yeah, and the revenue number also for the quarter. Okay. So the revenue number for the quarter stood at so the EBITDA number. I think the EBITDA number is right open in front of me. The EBITDA margin go down. Yeah. So sir, the revenue number from Hyderabad city was INR 1,079 crores for FY23 Q3 versus INR 1,095 crores last year. And Telangana upcountry market was INR 272 crores. Andhra was INR 247 crores. And Delhi-NCR was around INR 128 crores. Okay. And. For the last quarter. Yeah. Can you specify the EBITDA pre-INDS for the Hyderabad? So sir, EBITDA pre-Ind AS, one second. I'll tell you that number as well. So the EBITDA number, just go up one second. Yeah. So the EBITDA number would be around 7%, 7.4% for the cluster down here. And Delhi would be around 0.15%, 0.2%. That kind of a number. And the 7.4%, I mean, is there an expansion on YoY basis or not? Hyderabad, if you again break that down into Hyderabad, you would see a little decline there, to be frank. Whereas Telangana upcountry market and Andhra would be on the higher side compared to the last quarter, last year, sorry. The highest EBITDA that we would generate would be in the Telangana upcountry market, which would be around 8%, 8.2% approximately. Whereas it will be a little lower in the Andhra and then the lowest in the Hyderabad city market. So let's say a year back, this raised the 7.4% number you specified. It would be up by 0.2, 0.3 basis points. In Hyderabad, it will be down by 0.2%, is it? Yes. Yes. Yes. Yeah. And just one question was asked regarding this incentive income. So last year, for the full year basis, you clocked INR 250 crores incentive income, right? So what is the number, for example, for the nine month, and how has it grown on a nine month? For nine months, you would see a little lower number this year because from the last couple of years, incentive income now, most of them, so incentive is basically your sell-in and sell-out support, your marketing support, or other heads that you get around 13 heads that you would receive this money in. So that number from last, say, last year, it would be for the first nine months, it would be INR 199 crores has reduced by, say, INR 5-6 crores because that number has now been embedded in the invoice itself. So a lot of companies like cash discounts or wherever they can, they're trying to embed that in the invoice itself rather than the over and above sell-out support that they used to give out earlier. So though the margins, overall number remains the same, but the accountability part of it, which was supposed to come in the incentive, now has been embedded in the invoice itself. Yeah. But then the percentage margin should increase, right? Technically, it should, but it's not. It's a difference of INR 5 crore. So it's not much of a difference there. Okay. Fair point. Matlab 5-6 crores pe 5 crores [Foreign Language]. Great. Great. Okay. That's all from my side. Thanks a lot. Thank you, sir. Thank you. The next question is from the line of Deep Shah from Equirus Securities. Please go ahead. Hi sir. Thanks for the opportunity. Sir, just wanted some clarification. So you mentioned that you maintain 15% top-line guidance for FY25. So it means that you will be growing by roughly 25-odd% in the fourth quarter. Am I right, or am I missing something over here? Should be, yeah. So you're absolutely right. So we are optimistic on that number. But see, end of the day, it all matters. Depends on the summer setting up a little early or the supporting. So if March 2nd, we start pouring in Hyderabad, I can't have a control over it. But to what it is going on right now, we are looking at a trajectory of at least 21%-22% right now of growth coming in with that category at least. So that is the number that we are looking at for February coming forward. So I think we're quite optimistic on that. And then depending on how the summer sets in, it becomes a little hotter during March 2nd week, 3rd week, or start pouring, that is when we'll have to look into that number because summer product category majorly drives through the weather as well. But right now, things look good. So definitely, it has to be on a higher average than what we've done in the fourth quarter and last year so that we achieve that overall number of 15% YoY. Okay. And secondly, sir, you mentioned about 10 to 12-odd stores in fourth quarter, store opening in fourth quarter and roughly 35 stores in FY26. So all the stores will be MBO, or should we expect any EBOs also opening up? All MBOs. All MBOs. Okay, sir. Got it. Thank you. Yeah. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the floor over to the management for closing comments. Thank you, everyone, for joining the call. I hope that you were able to answer all your questions. For any other further queries, you may get in touch with Mr. Deven Dhruva from SGA. We'll be happy to address all your queries. Thank you once again. Thank you very much. On behalf of Electronics Mart India Limited, that concludes this conference call. Thank you all for joining us. And you may now disconnect your lines. Thank you.