Ladies and gentlemen, good day and welcome to the Electronics Mart India Limited Q1 FY 2026 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bajaj, CEO and promoter 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 end, 30th July 2025, on both the stock exchanges and the company's website. Hope everyone had a chance to go through the same. During Q1 FY 2026, our revenues stood at INR 1,739 crores, EBITDA stood at INR 110 crores, with EBITDA margin of 6.3%, pre-Ind AS margin stood at 4.4%. Q1 FY 2026 turned out to be one of the coolest summer quarters in the recent years, driven by unseasonal and widespread rainfall across April and May. This unusual weather pattern significantly impacted summer appliances demand, particularly in the air conditioners and air cooler category, which rely heavily on peak summer temperatures to drive sales. To put this in perspective, in April and May, our key months for AC sales saw nearly 50% higher rainfall than normal in Telangana. Over the full quarter, the state received 235 mm of rainfall versus a normalized average of 211 mm of rainfall, reflecting an 11% deviation. In Andhra Pradesh, May alone recorded a sharp 148% increase in rainfall compared to the long-term average. While June was relatively drier, the overall weather conditions during Q1 subdued typical seasonal demand. Despite the softer summer season, we adapted swiftly to the evolving environment and remained profitable at the company level, leveraging our diversified product portfolio and strong on-ground execution. We were able to pivot focus towards other categories. Our agile inventory management targeted promotions and customer-centric approach enabled us to particularly offset the impact of cooling product sales. While our EBITDA margins for the quarter appear softer on a year-on-year basis, it is important to recognize the Q1 FY 2025 was an unusually stronger quarter, driven by multiple heat waves across northern and southern parts of the country, which have significantly boosted cooling product sales and overall margins. Additionally, over the last 12 months, we have expanded our retail footprint by adding 44 new stores, including 8 stores during the quarter one of FY 2026 alone. This addition of 44 stores represents nearly 20% of our current network. These additions have been primarily in the MBO format. As with any rapid expansion, there is an initial impact on margins due to the fixed cost absorption lag. As newer stores typically operate at lower throughput compared to more mature stores, currently, many of our stores are less than three years old. We believe that as these stores gain traction and build a stronger presence, their unit economics will improve, which will eventually boost margins going forward. As of June 25, our total store count stood at 208, comprising 197 MBOs and 11 EBO stores. A significant portion of our store expansion this quarter was focused on Andhra Pradesh and Telangana, with 7 out of 8 new stores opened up in these states. Unfortunately, this region also experienced a particular cool summer coupled with highly unseasonal rainfall, which impacted demand for seasonal products. As a result, EBITDA margins for our south cluster stood at 6.7% primarily due to a lower contribution from air conditioners and lower fixed cost absorption driven by the early stage performance of new stores. On the other hand, our performance in the NCR region remained strong. MBO sales in the north stood at INR 159 crores, reflecting a robust 21% year-on-year growth. EBITDA margins for the north cluster improved 3.6%, up from 2.6% in the same quarter last year. Moving to category-specific performance for the quarter, large appliances contributed 48% to our total sales in Q1 FY 2026. While this quarter has been an exception in terms of growth due to external weather-related factors, our continued focus on driving sales in the premium segment, featuring significantly high ASPs, has helped us stay ahead of the curve. Our strong partnership with Apple brands continues to differentiate us and reinforce our position in the premium end of the market. Our second-largest category, mobile phones, contributed to around 40% of our total revenue in Q1 FY 2026. We believe the category is poised for a new wave of demand driven by upcoming technology upgrades and feature enhancements. Many OEMs are actively working on next-generation AI-enabled devices, which we expect will not only enhance consumer interest but also lead to an increase in both ASPs and volume going forward. This positions us well to capture growth as the upgrade cycle begins to accelerate. India's economy outlook remains optimistic, with projected GDP growth in the range of approximately 6.2% to 6.8% for the upcoming fiscal year, according to various reputable government and international bodies. This anticipated growth is supported by increased government capital spending and a rebound in demand driven by premiumization alongside favorable demographic trends and expanding consumer financing. Despite global uncertainty, these factors provide a strong foundation for sustained economic momentum. Further, the Union Budget 2025 has provided significant personal income tax relief by raising the taxable income threshold, effectively putting an estimated 1 lakh crore back into the hands of the middle class. This increase in disposable income is expected to boost consumer spending, especially in the consumer durable sector. With greater purchasing power, households are likely to upgrade and purchase new home appliances and electronics, driving overall demand growth and benefiting both manufacturers and retailers in the industry. Despite the challenges faced during the summer season, we remain optimistic about the upcoming quarters. As our newly added stores begin to ramp up, our focus will be on improving per-store unit economics and driving higher throughput. This is expected to support margin improvement through better fixed cost absorption and operating leverages. We also anticipate a strong festive season this year, which should further aid overall momentum. Looking ahead, we plan to open 25-30 new stores in FY 2026 while continuing to optimize the supply chain, enhancing inventory efficiencies and strengthening our footprint in both existing and emerging markets. With this, I request Mr. Premchand Devarakonda, our CFO, to update you on the financial performance. Thank you. Thank you, Karan sir. Good evening and warm welcome to all the participants. Firstly, I would like to share a few updates pertaining to the fire incident that occurred on 29th May 2025. One of our warehouses located in Guntur met with a massive fire accident, resulting in damage to the inventory to the tune of INR 8 crores. These stocks are adequately covered under the insurance, and we lodged the insurance claim well in time, which is under the final stage of assessment by the insurer. As the claim is pending for settlement as of date, our management has decided to create a provision and disclose it as an extraordinary item in the statement of profit and loss for the quarter. Secondly, we have reclassified sellout incentives under various schemes of the suppliers, from revenue from operations to reduction from purchase of stock in trade in the financial statements of the current quarter, which is in line with the applicable accounting standards. As these incentives and discounts are directly associated with inventory purchases and not in exchange for any distinct goods or services by the company to the supplier, the consequent adjustments made to the comprehensive financial statements are not considered material to the financial results. Now, moving on to the financial performance for the quarter, our revenue stood at INR 1739 crores. EBITDA per Q1 FY 2026 stood at INR 110 crores. EBITDA margin per Q1 FY 2026 stood at 6.3%. Pre Ind AS EBITDA per Q1 FY 2026 stood at INR 75 crores, with a margin of 4.4%. PAT per Q1 FY 2026 stood at INR 22 crores. PAT per Q1 FY 2026, excluding exceptional items, stood at INR 30 crores. Like-for-like sales growth for the quarter was negative 18%. Annualized ROC and ROE per Q1 FY 2026 stood at 13.4% and 7.7%, respectively. The working capital days as of 30th June 2025 stood at 60 days, and pre-Ind AS cash flow from operations stood at INR 393 crores. With this, we can now open the floor for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 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 [Shubhanu] from [Treehead Capital]. Please go ahead. Hello, sir. Am I audible? Yes. Sir, why is your north cluster EBITDA margin for you are very low than south cluster? Sir, north as a cluster is a very new cluster that we started off three years back. So if you look at the total number there, the productivity of store, throughput per store is divided between all the new stores that we open up. So we are expanding in that periphery. We opened up, say, stores which are almost, say, out of the 30-odd stores that are operating in that region, 20-odd stores are less than 24 months in that region. So usually, we take around three years plus for a store to get matured, and that is where you will see the productivity of the store. So if you're adding up stores in an existing cluster like Hyderabad, where you already have matured stores, so you will not see an impact on the EBITDA there. But because of the new store addition in a newer cluster, the number of stores are much higher. You will see this kind of a number, which is improving. And once the stores reach a certain maturity level, you will see the similar number of EBITDA margin that you would see down south as well. Mainly high operational cost. Sorry? Can you repeat your question, please? My understanding is mainly high operational cost. Exactly. So you can attribute to high operational cost because the throughput per store today is much lesser than what the existing markets would do for us in South. So that automatically would say your rental, your manpower, your electricity, marketing, all expenses would be definitely much higher in terms of the percentage cost there. But once the productivity of the stores, let's say, crosses 40-odd crores, then you will see a similar number back from that view too. Okay. How many stores you are expecting going forward in north cluster? Sir, right now in the pipeline, there are eight more stores. So that will add up. So we are opening up two more stores this month in Delhi and probably two in the next month. So you'll see around six more stores coming up at least before Diwali in that cluster. Okay. Okay. Understood. Thank you. Thank you. Thank you. A reminder to the participants, please press star and one to ask a question. The next question is from the line of Yash Sonthalia from Edelweiss Public Alternatives. Please go ahead. Hi team. Thank you for taking my question. So I have two questions. I hope I'm audible. Yes, you're audible. Yash? Yeah. So my first question is on why our gross margin has declined by 1%. So I wanted to understand it better, but how can we break it up between the change in product mix and the part contributed by the discounts we provided in the quarter? Yash, it was mainly because of the reduced throughput coming in from the cooling products, mainly air conditioners and coolers. In the last year, in the first quarter, these air conditioners and coolers contributed almost 40% to the top line. This time, the same thing has dropped down by almost 40%. So as a result, because these cooling products will give us the highest gross margin. So because of this drop in the contribution from these cooling products, this year, the gross margins got impacted. So that was the main reason. Any impact or any discounts we provided and loss we take on our books to liquidate the inventory? No, not yet. See, those things, that situation has not yet arrived. So it will take, I mean, we'll see the trend in the upcoming festive season, then we'll take a call. As of now, there was no total demand slowdown for these products because of the unfavorable weather. That means it was favorable to the farmers but unfavorable to us. So that was the reason. As of now, we didn't liquidate any inventories by offering additional discounts. Understood. And sir, on the inventory part, can you help me understand what was our inventory at Q1 and FY 2025, and what is the inventory as of now? Just wanted to understand how much of extra inventory we are carrying because of this additional rain in the quarter. Q1 of FY? On why our basis, how the inventory has increased? In Q1 FY 2025, what was our total inventory, and in Q1 FY 2026, what is our inventory, where we are standing? So yes, it would be mainly the cooling product category where the inventory would be a little higher, higher by around 250-odd crores for air conditioners, mainly. Air coolers, we don't carry much stocks with us anyways. So almost 250 crores of AC inventory is a little higher, which we plan to liquidate up till December this year. Understood. Understood. Very clear, sir. And one last question, what the sales mix you give on YoY basis, not only large appliances, I can see small appliances and mobile sales are also down or flat. So are the reasons similar because of rains, people are not coming, the footfall is lower, or is there anything else we are also facing in the quarter? Small appliances would even contribute the category from air coolers. Air coolers were practically flat this year. I mean, they were practically zero this year. They were very low in terms of sellout. So that category would have. Okay. I thought you have a very minuscule part of air coolers, so that won't impact a lot on small appliances. But very clear. And mobiles? Quarter one, if you see last year, also the number is quite big, significant number. Okay. Okay. Got it. Got it, sir. Thanks a lot for answering my question. Thank you, Yash. Thank you. Thank you. Before we take the next question, we would like to remind participants that you can press star and one to ask a question. The next question is from the line of Mehul Desai from JM Financial. Please go ahead. Hi, sir. Good evening. My first question is on the top line. Can you just give some flavor on how the exit trends have been in July so far, and how do you look now at the balance nine months of FY 2026? Do you still think that low double-digit kind of revenue growth is possible this year? Hi, Mehul. How are you? All good from our end. Things look very good. July has been an exceptionally great month, especially for AC and other categories. We were expecting that to happen anyways because organically, last quarter didn't do that well for cooling products. So ACs have seen the major jump this quarter as well. Whereas mobiles, televisions, and refrigerators, all categories have seen a higher double-digit growth this year, the month of July. August, definitely, we are quite optimistic because a couple of big festival periods there, and especially 15th August comes over a weekend this year. So we're quite optimistic on that sellout. Mobile phones are started doing very well, especially the new Z Fold7 that we launched recently. That has almost seen a 50% jump from last year what it was. We are anticipating Apple to launch their new product by September last week, third to last week. We are going to see good sales coming in from the iPhone 17 as well. Then around 20th of September, we start off our festival period. 22nd is the first Navratri. We see that 10, 12 days of festival sales dropping in the second quarter as well. We are quite optimistic on how things are shaping up in quarter two. We're going to look at least a higher double-digit growth this quarter. High double-digit. And for the full year, sir, because second half, also the base is quite weak for you. So from that perspective, I think overall, while we used to guide 15% kind of revenue growth. Yeah. So that means we'll be in line with that only. Yeah, definitely. We'll be in line with that only. We're expecting that to be probably a little better than what the expectation should be. Okay. Understood. And on the margin front, the 6% kind of EBITDA margins are sustainable for, I mean, you think that should sustain, right? Given that the growth will improve. If in a weak quarter, you have sustained 6%, do you see that in the balance nine months also? Absolutely. That's how we're hoping it to pan out in the coming quarters as well. So we are quite optimistic on that as well. Understood. Got it. Got it. And from the inventory perspective, from a full, obviously, as you said, this 50 crore inventory is there. So from a full year perspective, will the inventory days or the overall inventory will be higher at the end of FY 2026, or you think that should not be a major impact and you will be able to liquidate? So by the end of quarter two and probably the mid of quarter three, we should be liquidating these stocks, especially the ones that are holding up our numbers quite high. So that number of inventory days anyways, organically by 31st December, it will come down to an organic number less than 60 days. Understood. Got it. And sir, other expenses have been lower this quarter. Is it due to lower ANPs or, I mean, what has led to this 1% decline in other expenses this quarter? Sir, [Foreign language] downfall [Foreign language], our major marketing expense that we would do. So [Foreign language] marketing expenses in quarter one versus quarter one compare [Foreign language] there was no point of spending money on marketing in a big way like we usually would do because summer [Foreign language]. Understood. Okay. Got it, sir. Thank you. Thank you so much for this. Thank you, Mehul. Thank you. Thank you. A reminder to the participants, please press star and one to ask a question. The next question is from the line of Umang Mehta from Kotak Securities. Please go ahead. Yeah. Thank you for the opportunity. Currently, just a follow-up to Mehul's question. So you mentioned that July has seen a decent pickup in ACs and other appliances. Could you comment on the trends on a same-store basis? Is it that ACs and other appliances on a same-store basis has also seen a decent? In fact, all clusters, not only same-store in a certain cluster, but across, so Hyderabad as a major cluster has definitely seen the highest among the older clusters between Telangana and Andhra. Understood. And the concern on real estate sales, which you had highlighted last quarter, has anything changed on that front? Just, I mean, from a slightly maybe medium-term perspective. Sorry, I didn't get your question. Umang, real estate? You had highlighted some issues in Hyderabad real estate-related market, which. Yeah, yeah, yeah. So yeah, definitely there is a slowdown in the real estate trends across the country. In fact, I was talking to somebody in Karnataka also very recently. So Bangalore is also seeing a similar trend. But that is going to pick up, and it is seeing again a positive sell-through coming through in the real estate as well. But usually, if it starts off now, that impact or the benefit to us comes a little later because in the time, the positions are given, handovers are done, customers start moving into the newer apartments or houses. So that would be a three-to-six-month trend, which we'll start seeing that number coming for us as well. Okay. Great. Thank you and all the best for the rest of the year. Thank you, Umang. Thank you. Thank you. Participants, to ask a question, please press star and one. The next question is from the line of Akhil Parekh from B&K Securities. Please go ahead. Yeah. Hi. Thanks for the opportunity. Currently, my first question is on the margins in the north cluster. We have seen a 100 basis points of improvement on a YoY basis, probably because of operating leverage kicking in. So do you see that 100 basis points of improvement to continue for at least next three to four quarters in FY 2026? So yeah. Quarter two, quarter three, it will definitely go up from here on, but I would not be able to attribute exactly how much will it grow from here on every quarter to quarter. But eventually, by, say, next year, we should be looking at least a 5% plus EBITDA margin in that cluster. Okay. So end of FY27, you are saying we should be doing 5% in the north cluster, basically? Yes. Yes. And any concern in terms of what kind of sales level the north cluster needs to reach to clock the margins which are in line to the south cluster? Sir, I'm estimating approximately INR 750 crore for FY 2026 plus. 7? 750 crore plus. So INR 770 crore is what north cluster needs to clock to reach 6%-6.5% of EBITDA margins. Is that correct? 5% plus. 5% plus. So 5% plus. Okay. No, I was asking for to reach to in line of south cluster. [Foreign language], then it reaches INR 1,000 crores by next year. So that is when this number will be in line with what we do in Hyderabad. Okay. Okay. Good to hear that. Second, on AP and Telangana as a market, right? Last year, last two quarters, we had highlighted that there were challenges overall in terms of the growth in these two geographies. So has the situation normalized now? Obviously, one Q was an aberration because of the early monsoon. But barring that, do you think now the things would have normalized? Yes. Yes. We've seen a positive uptrend in all categories, especially mobile phones, panels. Yeah. So we've definitely seen that for the last two months. So even if June, July, both the months did well there, and we're looking at a positive trend going forward as well in the Hyderabad cluster. Okay. And sir, third and last question on the growth front, right? You are saying that we are still confident of achieving 15% plus top-line growth for FY 2026, while we had a decline of 10% in one Q. So it means that we should be doing 20% plus for remaining three quarters of FY 2026, basically. So do you think that is achievable? 100%. Because the stores that were in pipeline, especially in the clusters in AP and Telangana, are moving towards the matured store trend. So they are delivering. All categories are performing well. We are quite optimistic with new technologies coming in. Like we're seeing now more or higher AC products selling much sooner than the entry-level ones. The focus on the premium is definitely helping us out there. iPhone 17 sales are going to iPhone 17 sales, in fact, for the first quarter also was very positive, even after no new launches. So 17 is going to get launched by the second, third week of September. So that is definitely going to bring in a big change this year. So the value addition is going to be much higher. So premium products like Samsung Z Fold did very well. So it's still continuing doing very well after the launch as well. Audio devices, built-in devices, both categories are picking up really well. So I think overall, we're going to see a positive trend this year. We're quite optimistic on that. And then definitely, AC so definitely was not under our control when the weather went bad. But definitely, there is going to be an upsell coming through in the second quarter or third quarter because there's going to be a change from January as well. So the pricing expected to grow to increase on the AC as a category because there's going to be revision on the star rating. So we are quite optimistic that we'll be able to sell out ACs, what we couldn't do in the summer quarter versus in the festive period. Definitely it's going to be much higher than last year. Sure. Sure. That's really good to hear. If I can squeeze in just one more question on the NCR store expansion front, going forward, will we continue to kind of lease out the stores, right? I mean, we are not looking to buy out the stores, basically. Sir, not really. Most of the acquisitions that we have done in the recent past also are going to the properties that we have bought out in the recent past are yet to open up stores, yet to start up operations in the next, say, a month or so. [Foreign language]. But yeah, so that's what my question is. We are not looking forward to buy out the properties going forward. Yeah. So most of the prime locations that we planned to initially buy properties, we bought out those properties. So now it is majorly the peripheries and the smaller markets where we usually end up leasing out stores, even down south. So that is the strategy that we had planned for Delhi region now. Okay. Okay. Great. That's all from my side. And best luck for coming forward. Thank you. Thank you. The next question is from the line of Jitaksh Gupta from Tikri Investments. Please go ahead. Hello. Hi there. Am I audible? Hi. Yeah. Yes, sir. Sir, I just wanted to understand the competitive landscape, the market of the Andhra Pradesh and Telangana because we see a revenue drop is in double digits. So I just wanted to understand the market scenario. Okay. So majorly, any bad quarter in terms of numbers going down, you have to make sure that your market share is intact. So growing. So that is one thing that is positive. Clusters where we are new or cities where we are new in AP and Telangana also, we are still capturing the market there, and our market share is increasing definitely there. We are sustaining our previous market share numbers for the matured markets like Hyderabad, Warangal, Vijayawada, and Visakhapatnam. So those markets are already intact. What happened was for the summer quarter was definitely not expected. The rainfall spoiled the whole season for us. But as we talk now also, we are gaining share in the newer markets that we are opening stores in this region. Our biggest competitors in Andhra are Sonovision, and that is spread across the whole of Andhra Pradesh state. The biggest challenge there is that every city would have a regional mom-and-pop chain with 10 or five stores in cities like Guntur, Vijayawada, Nellore, Bhimavaram, Rajahmundry. When you're competing with them, it's a different play altogether. It is not as simple as what you're doing with the organized play. You know the structure, you know what they are playing on the products or the brands. With mom-and-pop stores, the play is very different. It is more like a local approach that has to be in place. Our teams on a daily basis look into that to make sure that we don't lose out our customer or how do we improve our shares in those markets. Understood, sir. Thank you. Thank you. Thank you. A reminder to the participants, please press star and one to ask a question. The next question is from the line of Rupesh Tatiya from Shree Rama Managers, PMS. Please go ahead. Yeah. Thank you. Thank you for the opportunity, and it's nice to connect with you, Karan. My first questions are a little bit follow-ups on NCR. So NCR buying out of properties phase is now over. I mean, there are some pending properties where we have to open stores, but the buying out of properties phase is now over. Correct. Is that correct? Okay. And then maybe the CFO, sir, can give, because of this buying out of properties, there was a significant jump in the depreciation. I mean, if I'm looking at the numbers, FY 2023 was INR 85 crore, it went to INR 130 crore roughly. So where will this number? I mean, the rate of growth of this number should slow down now, right? Is that a fair assumption to make? Or maybe if you can give some number for where would the depreciation be in FY 2026? Sir, here, when you look at depreciation, you have to look at the depreciation on the assets, tangible assets, which are in use, and the depreciation on account of leasehold, what is the Ind AS 116 adjustment, so that will keep on increasing. See, as a you please consider the depreciation would be in line with the top-line growth. That means it will remain as a if you take a percentage, so it will remain more or less same like earlier years. Because it is not only because of purchase of assets or investment in assets. It is on account of the Ind AS 116 adjustment, so when we make that Ind AS 116 adjustment, we will create leasehold asset on that leasehold asset, which has depreciation, and our expansion plan is in line. I mean, if you look at our expansion plan, year on year, we'll be adding at least 30 stores. So those stores may be leasehold properties, but we have to create a leasehold asset in the books and charge depreciation. That's why please consider depreciation will remain more or less in the same ratio as the current quarters or earlier years. So I understand how the leasehold assets are created, sir. My question was, from FY 2023 to FY 2025, our depreciation grew by 50%, whereas our sales grew by 24%. And this variance occurred because we bought a large number of properties in Delhi because of nuances of that market, right? But now what you are saying is from here on, depreciation will go in line with sales. That is a correct summary? Yes. Yes. Yes. Okay. You have to consider the leasehold depreciation on leasehold assets also. So that's why I'm saying. Yeah. That I understand, sir. That I understand. Leasehold assets also get counted in depreciation. That I understand. But because of the property, there was this divergence that was created because we had to buy properties. Yes. Because the last two financials, if you see, we've added up the majority of the properties in NCR at a very big cost. So that definitely is going to impact. But going forward, if you see, as you correctly said, the major addition from depreciation going up would be from the Ind AS adjustment and not from buying properties. Correct. That is the clarification I was looking at. And then, Karan, what is the peak number of stores we are looking at in NCR? I mean, 50? 50 is the number we should look at? [Foreign language]. That is the plan. Okay. Okay. So NCR will still continue to grow. Okay. And then have you identified a new region, new state other than NCR? Or where are we? NCR's homework is on. So our homework is on, I think, on the previous few calls also we had discussed, Orissa [Foreign language], and peripheries of NCR. So those are the markets [Foreign language]. So that is the main markets that we are looking at right now. Okay. NCR expansion, Odisha, and then a little bit of Western UP. These are the next areas we'll be looking at. UP Delhi definitely, sir. [Foreign language] Tier 3, 4 towns [Foreign language] penetration [Foreign language]. Okay. Okay. Perfect. And I mean, what is the debt position at the end of the Q1, short term, long term, and lease liabilities, if you have those numbers available? Sure, sir. So sir, [Foreign language] 31st March [Foreign language] total borrowing was around 983 crores, which has come down to 689 crores, [Foreign language] for land and building, and the rest of it is for the working capital requirements. Hello? The other thing, Karan, is because we are doing such a significant expansion, almost 30-40 stores, and then this expansion will continue for another two, three years. My at least humble suggestion is that you I mean, can you figure out a way to present the data as mature stores in maybe two to three-year store, newer stores, and give some indication of profitability? Definitely, sir. Definitely. So we will break down stores which are matured, which are in the process of getting matured, and the newly opened stores. So you'll have a fair idea that how much percentage of stores that we are operating out of 208, nearly almost 50% are less than three years, 20% are less than 12 months. So you'll get a fair idea. And then from there, you can understand the numbers better. Because there are significant front-loading of the cost, but the revenue is a little bit back end. So out of this 208. Point taken, sir. Point taken. Definitely, sir. [Foreign language]. Yeah. Of [Foreign language] mature [Foreign language] maybe two, three-year-old, if you can? [Foreign language] 45 stores last [Foreign language]. Correct. [Foreign language]. So almost out of the 208, so 85- 90 stores are less than 24 months. Correct. So almost 40% of the stores are probably not even break-even. [Foreign language], break-even, operational break-even to [Foreign language], sir. But the maturity [Foreign language] consider [Foreign language] 25-30 crores [Foreign language] 40 crores [Foreign language] maturity point [Foreign language]. Okay. That is perfect. And then the final is a little bit non-numbers related question. Hang on, sir. NCR is a different market than Andhra Pradesh, Telangana. I think when a customer walks into NCR, he's probably not looking to buy one AC. He's probably looking to buy two, three ACs. The brands probably are different. Brands don't travel. There are regional nuances. So I mean, I did go and visit some of your stores, and in general, the feedback is that the employee training probably needs to be picked up a little bit is what my feeling was. I may be wrong or it might be a sampling error. So maybe you can give some color on that. We will definitely improve. We will definitely improve on that. Yes, sir. Ha. But you can give some color on that. I mean, what are you doing to make sure that NCR, we are best in class in terms of sales and marketing? Okay. So sir, as you said, first one year of us operating in NCR was the learning where we stood more premium down south, and we were emphasizing with limited brands. So that's why we added up brands like Lloyd, Blue Star, Haier, in those categories where it was needed, especially the entry-level product category for NCR market. So that was actually a major change that we did, number one. Number two, sir, most of our employees, except one category head, the rest of the employees on the floor are from the brands, the respective brands. So the point taken because down south, definitely the throughput is higher. They definitely have better training standards or more matured staff or well-trained staff down south in our stores because the productivity is higher. Whereas not because we just started off right now, the brands give us all the employees, all the sales team coming from the respective brand. But we will talk to them and try to fix up. That is a daily engagement that we have with them, with the manufacturers, to make sure that the training and the quality of manpower is improved in our stores up north as well. So that point taken, I think I'll go back to them again, have a discussion before Diwali to have that improved as well, sir. Okay. Thank you. Thank you for answering all my questions. Thank you, sir. Thank you. Thank you. Thank you for your feedback. Yeah. Thank you. Participants to ask a question, please press star and one. The next question is from the line of Rajiv Bharti from Nuvama. Please go ahead. Yeah. Good afternoon, sir. Thanks for the opportunity. So [prem sir], to start with on North Cluster, can you tell the gross margin last year in North Cluster and this quarter also, Q1 versus Q1? Gross margin? Just hold on. So gross margins will be in line with what we do in Hyderabad. So that is we will be like 1%, 0.5%-1% lesser than what we are doing right now in Hyderabad. So it would be in the range of around 13.2%-13.3%. I was just wondering whether the increase in EBITDA margin in ACs has there been anything to do with gross margin as well, or this is purely operating leverage because very highly competitive and? It was mainly because of the improved throughput. Okay. Sure. So I was wondering because of product mix, it should have deteriorated actually, the gross margin, and that's why that EBITDA margin improvement is kind of getting canned because of that? Say it again, sir. Hello? Yeah. Sir, can you please repeat that? Yes. So I was under the impression because of weak demand, your AC sales were weak, so gross margin should have taken a hit. And that's why the EBITDA margin improvement is actually depleted on its own. Could have been higher. If you get a feel of what is the gross margin swing between the quarters. Not every category done well. So would have been in a better position. Like would have been the EBITDA margins would have been better by at least 1%. Yeah. So the point is you said that let's say we'll get to this 5% margin profile. We are already, I mean, nearly there on the 5% mark. Exactly. Exactly. Had it been? Sir, [Foreign language] quarter, [Foreign language] quarter [Foreign language] you know [Foreign language] you know [Foreign language] overall number [Foreign language] divide [Foreign language] number base [Foreign language]. I was also saying because on an ASP, as we move through the year the gross margin should actually improve from here onward if given a normal condition like we have seen. [Foreign language]. Correct. [Foreign language], EBITDA margin [Foreign language]. Got it. So you said AC inventory is close to INR 250 crores, that is what, 65,000 units left? Is it in the system? AC inventory is [Foreign language] usually sir se last year se this year [Foreign language] last year [Foreign language] 70-odd crore stock [Foreign language] organically [Foreign language] inventory [Foreign language] display stocks [Foreign language] backup stock [Foreign langauge] Tier 3, 4 towns [Foreign language] changes [Foreign language] which is INR 250 crore higher than last year number that way. So what 90,000 units is it? Is that the number? Yeah. 89,000 to be precise. Yeah, so from let's say Q2 to Q4 put together, how many units did we sell last year? AC. Sir, from Q2 to Q4 last year, the number was around, say, 70,000-73,000 units, but that was after a bumper summer. So this year, we are attributing [Foreign language]. Okay. And can you talk about let's say OEM support what are we getting in this case for AC merchandise in particular? Sir, not much, not much. [Foreign language] desperation scene [Foreign language] organically [Foreign language] July [Foreign language] AC [Foreign language] July [Foreign language] desperate scene [Foreign language] manufacturers will support you. But one good positive at the end of this is that the rating changes from December. So from October no manufacturer will have supplies for the older stocks which we will be carrying during the Akshaya and Diwali period, right. [Foreign language] stocks [Foreign language] rating [Foreign language] from first January [Foreign language]. To the price will be much higher than what the rating saving would be on the AC. Lastly on the SSGs, so AP in particular has seen very sharp decline, right? So can you comment? Is there competitive intensity there which is hurting us or any other factor which is, you know, one of. In fact, market share to grow [Foreign language]. Number of stores also adding up there, sir. Major [Foreign language] decline [Foreign language] AC as a category [Foreign language], sir. Okay. What is like the Hyderabad also and my point was that. Hyderabad? So let's say Hyderabad, then Telangana upcountry. There the decline, I mean, AP in general, has an even bigger decline than those two. So, Hyderabad and Telangana, correct? Correct. Yeah. So I was wondering is it specifically something in AP which is hurting us? No, no, not really. In fact, AP is also doing very well for us. If you also see the daily transactions, then our AP is also performing. We are opening more stores there. So, sir, AC was the major contributor for that reason. If you ask me, you know, the range were much heavier. The throughput on other categories also got a little impacted, but it is not that we are losing market share. In fact, we are gaining market share, and the penetration in, you know, Tier 3, 4 towns is increasing. We open new more stores in Vijayawada, Visakhapatnam, Guntur, Nellore, Rajahmundry, the existing markets also. So, I think that is working towards our favor to grow in that category, to grow in that market, sir. Sure. So lastly what are the capex we did this quarter? Capex this quarter, one second. I'll just tell you I don't have the number off the top of my head right now, one second. Around INR 56 crore. Thanks a lot and all the best. Thank you, Rajiv. Thank you. Ladies and gentlemen, we will take that as the last question. I now hand the conference over to management for closing comments. I would like to thank all of you for joining the call. I hope that we were able to answer all your questions and for any further inquiries you may get in touch with our team or Mr. Deven Dhruva from SGA. We will be happy to address all your queries. Thank you once again. Thank you. Ladies and gentlemen, on behalf of Electronics Mart India Limited, that concludes this conference. 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