Ladies and gentlemen, good day, and welcome to the Q3 FY24 earnings conference call of Go Fashion India Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gautam Saraogi. Thank you, and over to you, sir. Thank you. Good evening, and warm welcome to everyone present on the call. Along with me, I have Mr. R Mohan, our Chief Financial Officer, and SGA, our Investor Relations advisor. I hope you all have, all have received the investor deck by now. For those who have not, you can view them on the stock exchange and the company website. The retail sector in India continued to witness weak demand during the third quarter of FY 2024. This demand sluggishness also moved into the festive season. Despite the ongoing industry-level challenges, the company maintained its growth trajectory and had strong focus on operational efficiency. Revenue for nine months, FY 2024, grew by 15% on a YOY basis. Our SSG was flat during Q3 FY 2024 and nine months FY 2024, whereas our SCSG and SCSG stood at 12% and 13% respectively. During the last quarter, our SSG volume have actually improved from being negative in Q2 to being flat in Q3. While individual store performance may have remained flat, our ability to drive across cluster reflects our resilience and agility in navigating dynamic market conditions. We maintain confidence in the company's capacity to handle such short-term fluctuations and achieve sustainable and consistent growth in the future. Moving on to operational metrics, the company has demonstrated consistent success in maintaining high amount of full price sales, which is 96% for nine months, FY24, alongside an increase in ASP, which stood at INR 752, compared to INR 723 for the same period last year. The highlights of the uniqueness of the business showcased by strong brand recognition and customer loyalty. For nine months, FY 2024, the company added a total of 74 net stores, bringing our grand total store count to 704 stores, in line with our commitment to increasing accessibility and convenience for our customers. We aim to add 100-110 stores on a net basis for the full year of FY 2024. To elevate customer satisfaction, we're exploring omni-channel approaches that merge technology with physical and online shopping, widening our customer base across various cities. We've expanded our EBO to 14 more cities in the nine months ended in FY 2024, strengthening our presence and reaching more customers. Coming to our working capital and cash flows, the company has achieved a strong positive cash, operating cash flow of INR 104 crore pre-Ind AS 116, which was 0.5 crore for the same period last year. This is on account of strong inventory management system, combined with continuous inventory rationalization where required. This further aligns the company's commitment to sustainable growth driven by cash flow generation. We are fully committed to improving our operational efficiency and have seen significant progress in managing our working capital. Our working capital cycle has been reduced to 125 days as on December 2023. Specifically, we have reduced our inventory by 29 days from March 2023 to December 2023, and now it stands at 97 days, which is reflecting the positive operating cash flows generated by the company for the period. Given the current weak demand scenario in the retail industry, the short-term outlook may appear challenging. However, when viewed from a broader long-term perspective, there are encouraging signs and opportunities for growth. While immediate consumer spending might be subdued due to various factors impacting demand, such as changing consumer behavior or slowing discretionary spend, the underlying fundamentals of the retail sector stay strong. The industry resilience and our ability to adapt to evolving market conditions, coupled with investments in technology, product innovation, and positions us well to achieve sustainable growth going forward. With this, I would like to hand over the call to our CFO, Mr. R Mohan, for an update on the Q3 and nine-month FY24 results and financials. Thank you. Thank you, Gautam, and good evening, everyone. The company continues to maintain a strong operating performance despite the challenging business environment. First, I would like to give you all financial highlights for Q3 FY 2024. Our revenues for the quarter stood at INR 302 crores, as against INR 176 crores in Q3 FY 2023, a growth of 15% YOY. Gross profits stood at INR 124 crores, a growth of 19% YOY, with a GP margin of 61.5% for the quarter. Our EBITDA for the quarter stood at INR 68 crores, as compared to INR 60 crores in Q3 FY 2023, a growth of 13% YOY. Our EBITDA margins stood at 33.4%. Profit after tax for the quarter stood at INR 23 crores, a degrowth of 4% YOY, PAT margins stood at 11.6%. Coming to the nine-month FY24 performance... Revenue stood at INR 581 crore in nine months FY 2024, as against INR 504 crore in nine months FY 2023, a growth of 15% YOY. Gross profit stood at INR 355 crore, a growth of 17% year on year, with a GP margin of 61.2% for the nine months ended. EBITDA for nine months, FY 2024, stood at INR 189 crore, as compared to INR 163 crore in nine months FY 2023, a growth of 16% year on year. Our EBITDA margin stood at 32.4%. Tax for nine months, FY 2024, stood at INR 70 crore as compared to INR 68 crore in nine months FY 2023, a growth of 3% YOY. Tax margin stood at 12%. Our advertisement spends during nine months FY24 stands at 1.94% of the revenue. ROCE and ROE on an annualized basis stand at 15.5% and 16.7% respectively. Cash and cash equivalents stood at INR 197.8 crores as on December 31, 2023. With this, we will now open the floor for the question and answer. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. We have our first question from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes, sir. Hi, thanks for the opportunity and, congratulations on a very good working capital optimization. Sir, first question is on ASP. For H1, we see, did see very good ASP growth, but Q3, ASP sort of indicates that it is largely flat. So what is the reason for this? And, are we also sort of seeing lower items per bill, in case this is a down-trading phenomenon because of the consumer sentiment? Yeah. Hi, Devanshu. Thanks for the question. See, this ASP, being flat, compared to Q3 last year is largely because of two reasons. One is product mix. This time, the slightly, lower value products have sold a lot more in terms from a product mix perspective. And the second smaller reason is that, this time we have run some festive EBO level promotions in November and December, in half of November and few weeks of December. So these are the two main reasons why the ASP has remained flat. The larger reason is that the product mix, has, because of the product mix, this time slightly the lower ASP product is sold little more than the higher ASP. That's why the ASP on a YOY basis for quarter three has remained flat. Got it. And any comment on items per bill, sir? As in, what is the trend there? Fairly similar. No change on that. Fairly similar. Okay. Second question is on this 12%-13% SSG that we have reported for Q3 and nine months. So how should we see this growth number? Is this like indicative of market share gains in those particular clusters, or the market itself is growing at 12%-13% as per your assessment? No, I mean, look, it's very difficult to know at what speed the market is growing. It's because we've always had the cluster-based expansion model in our business development. This is just attribute to we adding more stores in our existing clusters and strengthening our business. So it's very difficult to compare with what those clusters market rate is growing at. We don't have that data. But this is just strengthening to our, this basically attributes to our expansion, strengthening and cluster. Got it, sir. On gross margin front, Gautam, last year there was some higher sharing of discounts also with LFS partners, which Go Fashion sort of called out. In my view, that should also have resulted in about 200 basis points of benefit on that account itself. Can you explain as in whether we have started to realize the benefit of low-cost inventory, or that is still yet to come in our...? No. So very, very rightly you pointed out, Devanshu. In quarter three, we had such provisions in our LFS revenue, which you rightly pointed out, last year, same quarter. So this year, I would attribute 1%, 100 basis points increase because of cotton price. Okay. I think we've reported 170 basis points increase in gross margin, if I'm not wrong. [crosstalk] Hundred bits. Sorry? 200, 200. Yeah. So out of the 200 basis points, about 1% would be pertaining to cotton price. Got it. Lastly, if you could also explain the seasonality of gross margin for your EBOs, not for the entire business. Just for your EBOs, as in between quarters, how the trend pans out between Q1, Q2, Q3, Q4? Usually, Q1, Q3 and Q4 will be similar. Okay. Q2 is the highest because Q2 is usually when the new EOSS period happens. So I would say Q1, Q3, Q4 would be similar. Q2 is when slight dip in gross margin happens. Slight dip in gross margin. Got it. Slight dip in gross margin, because that is the new EOSS window. Yes, sir. Got it. Thank you, Gautam. Thanks for taking my questions. Thank you. Thank you very much. Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question... The next question is from the line of Sameer Gupta from India Infoline. Please go ahead. Hi, good evening, and thanks for taking my question. I have two. So firstly, I noticed that in the opening remarks you mentioned that store opening guidance for this year is 100-110 stores, and we have always mentioned this to be 120-130. So there is a dip there. Going forward, also, you had earlier guided for a 150-160 store additions. So is there any recalibration there, or there it is still the same? And just a clarification, if this number pertains to gross additions or net additions, that would be helpful. Sure. Thank you, Sameer. So, Sameer, all our guidance as far as new stores are always net additions. That's what we guide. So we usually guide, very rightly pointed, we guide between 120- 130. Actually, what has happened this year, we've had 13 closures, and because we've had 13 store closures, our net additions have fallen. So that's why, instead of achieving 120 stores, we will be slightly lower is because of store closures. Now, these 13 closures, what these 13 closures are, these 13 stores were our historical stores, which did not recover post-COVID, and they were breaking even for the longest time. Last couple of quarters, we noticed that these stores have become negative, and that's why we have taken a call. So this is more like a one-off item which has happened, so that's why our net additions are little lower, because of the 13 store closures. As far as next year is concerned, we are looking to adding about 150 stores net addition. We're keeping that guidance good because we feel from next year onwards demand should pick up, and we would be keeping that expectation of adding 150 net additions. Great. That is helpful. Secondly, just a ballpark calculation on Pre-Ind AS EBITDA suggests that you've largely maintained it around 19.5% this quarter versus similar last year. And with the flat-ish SSSG and, the gross margin benefit being taken away by increase in ad spend, I'm just wondering why there is no negative operating leverage coming in. In fact, if I do a ballpark calculation on the fixed rental per store, it has actually declined by 5%. Uh- So, I mean, these are ballpark numbers, so, I mean, but still you get the point, right? So just- Yeah, Sameer, but actually, there is a fall in pre-Ind AS EBITDA. Mm. Last year, in Q3, we had a Pre-Ind AS EBITDA of 22%, and this year we have a Pre-Ind AS EBITDA of 19.7%. Okay. Okay, okay. Maybe my calculation on that last year is wrong. There is a fall. There is a fall. Okay. Basically, this fall is largely because of the higher salary and rent cost, because of flat SSSG. Higher, sorry, higher. Is this fall in operating margin from 22%- 19%, 19.7%, because of higher salaries and rent costs? Oh, okay, okay. Got it. Got it, sir. That's all, that's all from me. Thanks. I'll come back in the queue if I have any follow-up. Thank you. Thank you. A reminder to all the participants, you may press star and One to ask a question. The next question is from the line of Ankit Kedia from PhillipCapital. Please go ahead. Sir, first question is on the inventory. Commendable job on inventory in the peak season. Just want to know, is this sub-hundred days now sustainable going ahead or the, you know, given the festive, you know, the buying was low, and as we enter Q4, we will see some increase of inventory build up there? Ankit, this is pretty much sustainable. Right now, currently we are on 97 days based on nine month average sale. On the March number also, I think we will be similar. I think over a period of time, this 97 days should stabilize, at around maybe about 88 or 89, about 90 days. In March ending, we might hold some higher inventory because for summer season we introduce some styles, so we might hold slightly higher inventory, but it shouldn't make the inventory days go up dramatically. This reduction in inventory, you know, if I look at the storefront, we have not seen reduction at the store level inventory. This is purely from the warehouse inventory where the reduction has come in. So from a cover perspective, you know, what else being done at the warehouse level by you in terms of pure RM and finished goods inventory? No, see, we were, if I, if you look at my March numbers, we were actually having a lot of high inventory at the warehouse level as far as finished goods and RM is concerned. So we have reduced, you know, our FG at the warehouse in March was around INR 99.9 crores, which we reduced to INR 71.7 crores in December. Our RM inventory also is slightly come down from INR 43.5 crores- INR 35 crores. We basically fine-tune the base stock or the appropriate stock levels in our ERP, and once we do that, once we change the ratios in our stock management ERP, it automatically starts showing in the numbers. So it's just a result of we bringing down the stock levels. We felt that we don't have to have that kind of high inventory, so over a period of, gradually over a period of two, three quarters, it has, shown us result and taken time. Sure. My second question is on the rental part. You know, we are opening bigger stores, and the revenue per store or, or the throughput continues to be the same or slightly lower, given the subdued environment we are in. Are you looking at opening smaller sizes, or you think that 500 sq ft size is the base and incrementally throughput, you know, might remain at that 19,000-20,000 sales per sq ft, or we might see an increase there as well, as the bigger store inventory is more better at the store level? Sure, sure. So, Ankit, so, yeah, this is a good question. I'll, I'll just take a minute to explain it. See, Ankit, whenever we are opening any type of store, for us, size is an important ratio, but what we really budget is what is our rent-to-revenue ratio? If I get the perfect location in the market, even, and if the rent is in my budget of, say, 13% or 15% to revenue ratio, then I might even take a bigger store or even a smaller store. For me, my prime of focus selection of our outlet is based on the location itself rather than the size. So moving forward, if we get the right location, we might even open a 600 sq ft-700 sq ft. We might even open a 200 sq ft-300 sq ft. It is all on the basis of location selection. Now, what happens is, between 600 sq ft-700 sq ft and 200sq ft-300 sq ft, rental is anyways budgeted. The CapEx is not very different between the two formats, and even your operating costs, like your employee costs also, you might have only those three to four people in a 600 sq ft-700 sq ft versus the 200 sq ft-300 sq ft. So your dynamics between a slightly larger store or smaller store does not change unless your rental changes. Now, coming to sales per sq ft, I've also guided in the past that we actually as a company don't look at sales per sq ft because of this very reason. Because we go by rent to sales ratio and not by square feet, we always look at absolute averages of a store and what kind of EBITDA percentage it throws rather than looking at sq ft. Fair point. Fair point. Now, my third question is on the promotion in the quarter. I noticed for the first time, since listing, you know, higher bill sizes, we are offering some vouchers to the consumers, for the next purchases, and that's indirect discounting, right? So from that perspective, are you really seeing that kind of a slowdown in the market, you have to roll out these offers to the consumer, or this is a regular affair in the past as well? This is, this is what we've done it for almost four to five years. See, what happens basically is during such a season to increase the ATV and the bill basket, we give out certain redeemable vouchers on a particular bill value. Now, what happens is, suppose you are giving out, say, 1,000 vouchers or say 100 vouchers, your conversion of these vouchers in terms of redemption are lesser sustainable. So because the redemption has always been low, we've always carried this, process of giving vouchers and making the primary bill a higher value bill. And this we've always done as a, for the last four to five years. In fact, we've been doing it since pre-COVID. This is a very festive, this is a very festive arrangement we do. This is not from an inventory liquidation perspective. This is purely just to uptick the bill value. Sure. Lastly, on the pledges, we are less than one month away from your guidance on March end. Is there any update for the pledges reversal? Yeah, I'll give an update. See, we had planned for March, but, you know, unfortunately, you know, it will get delayed by a few more months. I would like to reassure everyone that the pledge is absolutely safe, and things are going in the right, positive direction. We are just delayed by a few more months, but it will close soon. It is working in the positive direction. And as far as promoters are concerned, it is on top of our priority list, and this will close for sure. And I would like to reassure everyone this is absolutely safe. There's no problem with that. Gautam, on the pledges part, can we see any directional improvement, like small pledges getting reversed and then, you know, we see all you think is going to be a bullet reversal where 100% reversal will happen at once? No, no. When the clearance will start, Ankit, it'll be clear in that way. So, initially one part of the pledge will get over, then the second part. So within that few months, most of the pledge will get over. That's how it... What you said is absolutely right. It will get in, one certain percentage will get released first, then the second. It goes in a, it goes in that manner. Understood. Understood. Thank you so much, Gautam. Thank you, Ankit. Thank you. The next question is from the line of Sabyasachi Mukherjee from Bajaj Finserv AMC. Please go ahead. Yeah, hi. Thanks for the opportunity. My first question is, you know, on the SSG volume, my calculations suggest that, since ASP has been relatively flat and we reported a SSG value of, you know, flattish, the volume decline has been arrested. Is that a fair understanding? Yes. Yes, Sabyasachi. The understanding is clear. The volume SSG in quarter three, it has, it’s flat. It is at zero. So it was about negative 5 or 6% in Q2, and it has improved to 0% in Q3. Right. So going forward, and how do you kind of look at it, in terms of footfalls or let's say, you know, are we, you know, confident enough to say, let's say this is the bottom or, or Q4, maybe there might be again a decline in the volume front? See, right now it's even hard to say. We will get an understanding of Q4 probably after February fifteenth. Usually midway point is when we have a full understanding of how the quarter went. So it's really difficult to suggest, but I'm expecting at a value level, at a company overall value level, a mid-teen type of growth in Q4. Sorry, this mid-teens level of growth you are saying on the revenue? At the overall level. On the revenue overall level. Okay. Okay. This part is still too early to comment, because we probably will get a better idea of SSG for Q4 when, probably when we are at the halfway stage, after fifteenth February is when we'll get a better clarity. Got it. Got it. Follow-up to that is on the FY24 revenue guidance of INR 800 crore, still intact or are we kind of revising that? No, it is. We won't be able to achieve INR 800 crore, for sure, because our for the first nine months, we have done INR 581 crore number- Right. We are expecting a mid-teen type of number in Q4. So unfortunately, we've not been able to hit INR 800 crore this year. ... Okay, okay. Got it. Next question is on the inventory. Can you please provide the break-up between the RM and FG, and you know, in FG, between warehouse and store? Sure. Our RM inventory as on December 31st is INR 35.68 crores. Our FG at warehouse is at about INR 71.7 crores, and our FG at stores is at about INR 98.44 crores. So our total inventory is INR 205.84 crores versus INR 230 crores in March. Got it. And follow-up to this is the kind of inventory reduction that we saw in the warehouse level since March 2023, is it purely because of the lower cotton cost and hence the total inventory gets revalued at a lower cost, or there is also an element of, you know, a lower number of items in sitting in the warehouse as well? No, no, this is not because of cotton prices. See, we've actually not been purchasing literally anything. That's why in our gross margin, we have not seen that kind of uptick in our GM. This inventory reduction is purely on the basis of optimizing sourcing and buying. Okay, okay. Got it. Lastly, on the A&P expenses, I believe this quarter you have spent little higher than I think probably what you have guided in last call. What would be the target for full year? One point five percent I think was the last communication from your side. This quarter we have spent little higher, if I- So for the nine months, we are at about 1.9% of the revenue, so it will be in similar lines by March. It will be around 1.9%. It will be under 2%. Any, any guidance for next year? You're looking at similar 2%, 2% number? Right now, we haven't budgeted for next year. Maybe closer to March is when we're going to be budgeting the ad spends for next year. Got it. Got it. Thank you. But more or less it will be in the similar range only. I don't see it changing too much, frankly. It will be in the range of 2% only. Sure, sure. Thanks. Thanks, Gautam. Yeah, sure. Most welcome. Yeah. Thank you. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Prerna Jhunjhunwala from Elara Capital. Please go ahead. Thank you for the opportunity. Just wanted to understand your opening remark statement, where you mentioned that you are exploring Omni-channel opportunities. If you could just help us, elaborate on that? Yeah. See, what we've been doing for the last year or two, a little longer, is that how we are able to convert an online customer- an offline customer to online sales. Because in retail, what happens is, when you're running such a compact type store, sometimes on a weekend it become very difficult for the customer to get the entire set of colors or sizes. So there we are trying to see if we are able to convert that offline customer to online and then immediately, you know, by using an online tab at the store to place the order for the customer and get it home delivered. So in certain stores we implemented it, and we are seeing some success. It's taking some time for us to scale it, but this kind of omni-channel approach is seeing us, you know, not lose weekend sales in certain stores. Okay, okay. And, how does this help you in terms of, you know, I mean, I'm just trying to understand the impact of this in the stores that you have implemented already? See, we have seen in some stores where this is a success, we have seen an increase of 1% or 1% or 1.5% in sales of that particular store. We feel that, you know, if the trend of omni picks up, then maybe over a longer period of time, this can be a good addition or contributor to the store's revenue. Because at the end of the day, no store can boast saying that there are no lost sales, because on a weekend, all colors and sizes might not be available. So if we are able to convert some into online, it can be a contributor to the revenue. Very difficult to say how much. I think once we implement on a more larger sample size of stores, we'll know how much it can contribute as a percentage. Okay. Second question is on LFS strategy. Going forward also, do we see the same kind of expansion in LFS of around 250-300 stores across the Tier 1, Tier 3, Tier 1 cities? And also, if you could help us understand the demand in the various type of cities, which could help us understand the demand scenario in a better manner. Sure, Prerna. So Prerna, see, usually on a steady state basis, we always guide that, the number of LFS stores we are going to be adding will be around 100-150 LFS stores. So I think for next year also we are guiding about 100-150 stores. As far as demand is concerned, we are, see, our presence is largely in the metro cities, and like 60-65% of our entire network is in the top 8 or top 10 cities. So from that perspective, demand in the metro cities has been weak, and the same trend has been seen in the Tier 2 cities as well. We've not seen either as being an outlier. Okay. Okay. Thank you. Thank you so much. Sure. Thank you very much. Yeah. Thank you. The next question is from the line of Priyank Chheda from Vallum Capital. Please go ahead. Yeah, hi. So my question is, so if I have to refer to nine-month trend, SSG is zero, and cluster growth is 13%.... What does this imply? These three data points, if I have to put it together, is that the new stores that have been added into the cluster have not added meaningfully to the sales, while customers in that same cluster are buying, and hence your cluster growth is 13%. So then why should we, you know, add new stores into the same cluster, lower the cost in the cluster, and rather go on a national expansion? So just a thought around it, would be helpful. See, so, Priyank, see what happens, why do we expand in clusters? Because shopping in a city happens in clusters. You understand, like for example, now in Chennai, there is an area called Pondy Bazaar, which is in T. Nagar. Now, Pondy Bazaar as a market caters to different, different parts of Chennai. Now, for example, if there's Jayanagar in Bengaluru, Jayanagar as a, as an area will cater to different, different parts of Bengaluru. If I don't grow in the same cluster, I won't be able to grow my revenue, because shopping does not happen by residential locality, it happens by shopping cluster. So in general, in retail, if you have to continue growing your size and footprint, you have to keep growing in cluster. Now, coming to the point on operational efficiency, because SSG has been flat and the new stores what we've added in this particular nine months, when SSG is flat, even your newer stores, what you add, will tend to underperform than the regular new store average. Because of that, we've had an operational reduction in margins. No. So what I'm trying to understand is a new store in Pondy Bazaar should also grow if that cluster is growing, is what I'm not able to understand. Because if that new store is going to add a shopping experience or is going to save the logistics cost for a customer to travel two kilometers to buy a 700 article. So it means that new store should meaningfully also grow in that cluster, is what I'm trying to understand. Yeah. So that one store, obviously, the addition has happened. The one store sales, sales have been added to the overall revenue, but whereas the other stores have not grown in this weak environment. So the question is, if I would not have added the store, would my SSG be positive? The answer is no. Because when we are adding another store in the same cluster, we are mindful of the cannibalization part. Wherever we feel the stores are going to get deeply cannibalized, we don't add another store in that cluster. So it's basically trying to attract higher market share of that particular cluster by opening another store. Got it. Got it. And on the inventory side, so our key moat is to keep the number of colors, sizes available, so that whenever customer comes, customer doesn't get the articles are available in our store. So when we are rationalizing the inventory at the store, are we not compromising on the sizes, colors that Go Colors is known for it? No. So, Priyank, see, earlier I had actually answered this question. See, when we had got into the optimization mode for inventory, we were very, we were very clear that we wanted to optimize inventory at the warehouse front. So what has changed from March till now is inventory is not optimized only at the warehouse. The store front, the same inventory carry forward. Yeah, I understand. So what I'm trying to ask is, the article may be available at the warehouse, so a green color for a L size would be sold. So once that is sold at the store, would get easily replenished from the warehouse. In that case, in case the green color is not available at the warehouse, wouldn't it affect the sales for that particular article? No, I understand what you're saying. So basically, we have not optimized it to that extent that there is loss of dispatch from the warehouse to the store. See, when we have optimized it, we had kept in mind what is going to be our throughput in our stores and how much is going to be needed for us to dispatch from the warehouse to store. Keeping in that mind, keeping that in mind, we had optimized it, so we have not over-optimized it as well, see, where we have loss of sales or loss of dispatch. Got it. And what would be the number of stores that would be falling into the cluster SSG calculations, now in Q3? It will be around 425, about 430, 432 stores. Last quarter it was around 450, so would it remain same? That might be. Then maybe what number I'm giving right now is wrong. I'll have to just check and come back to you on this. On average, in case we are adding 25 stores, in the similar way, 25 stores would also get added to the cluster with whatever the base number that we have. Not necessary. Not necessary, because when we are adding X number of stores a year, some might be in new cities as well, and some might not be in clusters as well. It's not that our entire store count, what we are adding are in clusters. That's not true. But anyway, this of how many stores across how many clusters, I'm not having it handy. I'll share it offline through email. No problem. All right. Thank you. Thank you, Priyank. Thank you. The next question is from the line of Nilesh Saha from Julius Baer. Please go ahead. Yes, hi. Hi. Are, are you, are you able to hear me? Yes, Mr. Nilesh, please go ahead. Hi. Hi. Yes. So just a qualitative comment, right? I would like to understand from the management team, right, you know, based the numbers that you have put out thus far. You know, what is giving you confidence that you are not losing market share, right? And I'm asking this specifically because, you know, there are multi-product companies, right? Some retailers, some brands, right? Where, you know, at least there is some indication that they are able to succeed both on their, you know, offline stores and also online to an extent, right? So I am, yeah, and I understand data is hard to get, right, but I do recall in the past that you used to maintain some information by capturing, you know, the mobile number of your customers. And so have you seen any drop in frequency of your loyal customers, right? And that's something perhaps you can quantitatively answer. But qualitatively, if you can also give further color, what is giving you confidence that you're not losing market share? Thank you. In the bottomwear category itself. Thanks. You can go on. Yeah. So, so let's see. One of the biggest confidence points is that even in a tough environment, like we are in for current retail, we've, our overall company growth has been about 15%. We have seen volume growth at an overall company level. We've not seen volume decline in Quarter Three. So where the industry has been going through a struggle, we have done performed decently well, especially in our vintage markets. So that—So keeping these points in mind, and look, we interact, we keep interacting with our customers. Our most vintage customers also keep coming back to the store to understand what's new, what new color has come out, what new products are doing. So from a bottom wear perspective, we are very much relevant because from a product portfolio, we're really involved. Now, in quarter one, we had also come out with a jeans product. Over a period of time, we'll introduce new colors in the other bottom wear products as well. So from a product perspective, we are very fresh with the customers we are dealing with. So these few things gives us confidence that we are heading in the right direction and not losing market share. Okay. Voice is breaking a bit. Hello? Hello. Yes, yes, now you're audible. You know, I think the only sort of area that where I would probe further is to ask that essentially for your customer, right? You know, if we believe that they are buying a bottom wear after having purchased a, you know, a top wear, you know, product elsewhere, like, then for that transaction, like, you have to, you know, basically believe that you will, you know, you will do... You know, you know, for you to gain your market share and position in the minds of your customers, right? Are you seeing that in micro markets where you operate, do you believe that your revenue growth in those clusters, right, are keeping pace with the revenue growths of, say, the larger peers who operate there, right? Yeah, you know, because also bear in mind, you know, a number of them players have also become very large on the online segment, right? Which you may not be able to capture in your local intelligence. So, Nilesh, see, I, I understand where you're coming from. See, largely, bottom wear category is more of an offline category because colors need to be matched. On an online platform for you to match so many colors becomes physically very difficult. It's not possible. So this, this is more of an offline category. Secondly, why we feel we are currently relevant in today's times, as we are evolving also as retail, is because the lady's buying behavior is that she wants to buy the top separately and the bottom separately. Yeah. See, what happens in a topwear store, because their focus area is topwear, they're unable to keep the range of bottoms what a dedicated bottomwear store would be able to keep. And that is why today a lady is choosing to buy the top from the topwear store and the bottom from the bottomwear store. And one of the reasons why we feel we are not losing market share right now is because in terms of competition, we don't see too much of competition elsewhere, everywhere. We are seeing competition coming up, but right now it's not made a very big dent or it's not made a dent at all in our market share. So, so, so that is where I am challenging your lens, right? I think perhaps one of the lens that you're using is, are there other bottom wear brands like Eleven or something, and are they doing better than you? But what I am asking is, let's say a company, you know, an in-house brand of, say, textile, right? If they are selling a consolidated product, a top wear plus bottom wear, are you losing market share to that? That's the question. Yeah. I know that you are doing very well versus an Eleven and all that, but are you losing shares to a consolidated product that a customer is choosing to pick up? So, so, Nilesh, yeah, I'll explain. It's a very good question. So, Nilesh, what happens is an LFS competes with another LFS. A private label of an LFS, like a Westside you mentioned, they will compete with another private label of another LFS. Understood, exactly. A vanilla brand like us will compete with another vanilla brand. That's why in the mall today, from the variety of retail, you have a large format stores and you have multiple vanilla stores. A vanilla store and then a vanilla brand will never compete with an LFS, and I'll tell you why. Conceptually, an LFS is a type of retail store where they have multiple different categories without going deep into any one category. So a customer who's entering an LFS is entering in a very different mindset. Whereas a vanilla brand like us or a software brand, will go deep in that one category and keep more options. So a lady who's buying at a Go Colors is also buying at an LFS, it's just that her buying behavior is different between two. So it's an apples... So I would say, to put it in better words, it's an apples to oranges comparison between an LFS and a vanilla brand. I see. Okay. Okay. Okay, great. No, no, I think, you know, thanks for that. We will get in touch with you. I'll connect with you offline. Yeah. Thank you, thank you. Bye. Thank you, Nilesh. Yeah. Thank you. The next question is from the line of Vaishnavi Mandhaniya from Anand Rathi. Please go ahead. Yeah, hi. Thanks for taking my question. I'm sorry if I missed this, but there's been a very sharp absolute increase in our employee expenses and other expenses line items this quarter. And the ad expenses don't seem to be much, like, significantly higher, and it's the increases are higher than the network addition also that we've seen in the EBO store storage. So what is the reason for the same? So, Vaishnavi, on the employee cost front, the employee cost sharp increase is because we've added new stores, so this is largely front-end employees. If I take our back-end head office and warehousing employee cost, there's no much change in that. Apart from the increments we have given, but there's no much change in that. So this is largely increased from a front-end perspective, which is EBO and LFS. On the other expenses line item, I think if I'm not wrong, there is a INR 4.7 crore increase in other expenses, between quarter three this year and quarter three last year. So this is largely, advertising spend of about INR 2 crore, and another INR 50-60 lakh was pertaining to stores which we had closed and taking or taken a write-off on in the period. Okay. Got it. Roughly, out of the INR 4.7 crores, 3 crores would be pertaining to ad spends and the few stores which we have closed. We have taken a write-off in the other expenses cost. Okay, understood. Okay, thank you so much. Thank you, Vaishnavi. Thank you. The next question is from the line of Binoy from Sunidhi Securities and Finance Limited. Please go ahead. Yeah, hi, Gautam. Thank you for the opportunity to ask questions. A few data points. I couldn't get the—you said EBITDA in there—the EBITDA margin for Q3 FY24 was 19.7%. Am I correct? Correct. Yes, correct. Versus, versus 22% in Q3 FY 2023. Last year Q3, correct. Understood. Okay. Now, and also, could you help me with the rental expense for Q3 FY 2024? Sure. The rental cost, before Ind AS, our rental cost is for Q3 is INR 30.1 crore. Thirty point. Okay. Okay. Sure. This is, Gautam. Rent paid. Pre-Ind AS, total rent, right? Yeah, total rent paid pre-Ind AS there is INR 30.1 crore. Understood. Understood. Fair enough. Gautam, you said earlier in your remarks, you said that the gross margin season-wide, so Q1, Q3, and Q4, is somewhat similar, while Q2, the gross, gross margin is slightly lower due to EOSS, right? Correct. I was just wondering that, even Q4 gross margin should be somewhat similar to Q2 because of the EOSS? Maybe, yeah, maybe, but it will be somewhere in between Q2 and Q, a regular quarter. The highest impact on the gross margin usually comes in Q2. It comes in Q4 as well, very rightly you pointed, but the impact from a trajectory perspective is more in Q2. Understood. Okay. Okay. Another question was on the SSG growth that we've got, you know, somewhere flattish range for the nine months, right? And margins are slightly negative. I understand that there has been, you know, a consumer spending slowdown and, there has been a little weak macros. However, if you look at your company's trajectory pre, pre-COVID, right? You used to do SSGs well above 10%. So I was just wondering, in this, in this four years, also what has happened is that there has been a proliferation of national players. So, would you, would you say that the softness in the SSG is also because of, hidden competition from national players? No, I wouldn't say competition from national players. See, our pre-COVID SSG was in high double digits. Mm-hmm. I had- Right. In fact, we were guiding and estimating an SSG at a value level of about 8%-10%. From that high double-digit, I came down to 8%-10% because we've also added more number of our own stores in our own cluster. So sometimes we become our biggest competition to our existing stores. Having said that, when we are adding stores in a cluster, we do it from a mindset of non-cannibalization. So this 8%-10% SSG is what usually we guide, but unfortunately, the overall retail scenario has been a little muted, so the SSG has been affected like it. Got it. Okay. Another question I wanted to understand on your price architecture, right, that you have, and you've maintained that. Obviously, you've taken a little bit of pricing to offset the commodity inflation, but by and large, you've maintained the price architecture roughly about INR 250-INR 1,600, and 80%+ of your, of your products are below INR 1,050, if I'm not mistaken. Correct. Yeah. So, do you feel that, you know, having said this, most of your products are actually upwards of INR 500-INR 600, priced upwards of INR 500-INR 600, right? So having said this, do you feel there is a need to maybe introduce certain products at a very low price points, which can recruit additional customers into your fold? Well, I don't think that's needed, because the kind of customer segment we are targeting... Hello, am I audible? Yes, yes, yes. Yeah, sorry. So I think the kind of customer segment we are targeting, an ASP of INR 700-INR 800 is very, very, very competitively priced. So I don't think we have to lower our pricing to lure more customers. It's not needed. In fact, we are looking to increase our ASP and take it as closest to 1,000 as possible. We feel that the mid-level customer and the premium customer, ASP, it will be, that ASP will be well suited for those two components without a problem. Understood. Okay. Could you help me with the volume growth for Q3? The overall volume growth, not the same-store sales volume growth. Sure. Sure. I'll just tell it in a minute. Just give me a second. It would be, I think it would be around 10%. One second, I get it. Overall volume will be about 6%. Sorry, 6%? 6% for nine month overall volume. No. Could you help me for Q3? For Q3, just give me a second. It's 7.6%. 7.6. Okay. My last question, Gautam, just a small clarification. So when giving inventory breakup, you said the RM inventory was INR 35.6 crores, warehouse FG inventory was INR 71.7 crores, and store FG inventory was how much? INR 98.44 crore. INR 98.44 crore. Okay. So are you actually kind of reducing the inventory at the store level actually? No, not at the store level. The optimization, what has happened is actually happened at the warehouse and at the warehouse level, at a FG and RM level, not at the store. Okay. Okay, that's all from my side. Thank you so much. Sure. Thank you. Thank you. The next question is from the line of Gautam Rathi, from CWC. Please go ahead. Hi, Gautam. Thanks for taking my question. Just two questions, one, a clarification. So in one of the earlier questions, you said that, due to store closures, you had an impact of about INR 3 crores. Is that number right, what I heard? INR 3 crore or it was, is it- No, no. The INR 3 crores, in the INR 3 crores, INR 2 crores is relating to ad spend. Okay, INR 2 crore. So INR 1 crore is the net-net one-time impact- Actually lower than INR 1 crore. Exact number I'm not having handy. My understanding is INR 60 lakhs-INR70 lakhs would be regarding to store closures. Okay, got it. And the second thing, so we have been... So you know, the floods in Chennai and all, did we see an impact since we have a larger presence there, like, some kind of impact, which is? Yeah, when it happened, one weekend got spoiled for, for Tamil Nadu as retail. Because, see, the flood situation in Chennai was bad, but even, the other parts of Tamil Nadu, retail got impacted. So I think in the overall scheme of things, I think we lost a weekend of- weekend sales. One weekend sale in Tamil Nadu. Tamil Nadu would be what proportion of your revenue, roughly? Would be about 20%-25% or 20% of my revenue. 20% of your revenue, lost a weekend, that's how it is? Yeah, one weekend. Yeah, yeah, absolutely. Gautam, just one more question. Just wanted to understand, you know, you also mentioned that you are at an ASP of INR 750, and you are, aspiring to eventually move towards the INR 1,000 ASP mark, right? Growing with your customers. So, you know, just also wanted to understand, do you also have a plan, to go, you know, at the lower... You don't want to target the, the entry-level customer, or you think, for you, this, this is the best way to scale, right? I'm just trying to understand, you know, for your 20% growth, is this the way you're thinking about it, or could your growth be faster if you, if you also look at it, differently, right? No, no. See, I think look, lowering the pricing will definitely not help, because the kind of customers we are dealing with, we have, for example, our leggings is a INR 599 product. And, if an entry-level product of a much lower quality garment would be INR 399. The customer who's buying the INR 399 entry leggings of a low quality also will also buy my INR 599 leggings. So I don't have to really decrease my prices to generate more volume. It's not going to increase the volume in any way. So for us, we see the kind of customers we are dealing between the mid-level and the premium, the INR 1,050-INR 1,000 is a very good ASP to be part of. See, anywhere when we are crossing INR 1,000, then we are moving away from the mid-level, where that carries a risk, which you rightly pointed out. Okay. So between INR 900 and INR 1,000 is a very good sweet spot. Perfect. Actually, sir, I have. I just wanted to refine my question better so that I am able to kind of put it across properly. No, no, the idea is very clear, that we want to increase our ASP slowly up to INR 1,000, not cross INR 1,000, though, but take it up to INR 1,000. Well, perfect. The question I have is: You have a INR 599 entry product today, which is your entry point, right? And I'm not saying go down on the quality strata or whatever, but is it possible or in your mind, you are not looking at, let's say, another four, giving the INR 399 customer for better option at all? No, no, we will not be looking at that. So, so we are looking at INR 599, and we are waiting for the customer to come up to that strata. That is, that is our, our approach right now today, right? Is that- Exactly. Okay, perfect. That, that is very helpful. Thank you so much. Portfolio for product. I'm saying, yes. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Varun Singh from ICICI Securities. Please go ahead. Yeah, thanks for taking my question. So my first question is, on, like, when we look at the other discretionary, consumption, companies or players or peer groups, we, I mean, the general observation is premium price points are outperforming the value price points. Yeah, so in our case, volume growth appears to be healthy, but, given this, context of value price point, underperforming for many players, Gautam sir, I mean, if you, if you could, share some color with regards to, our company, that how are we... I mean, how our numbers are, stacking up? No, I think you see, we are, we are very, see, I, I'll tell you, we are having the best of both worlds. We are somewhere in value premium. We are not so value, which is struggling in the market, and we are not extremely premium that become too expensive for a customer. We are in the sweet spot of being a value premium product. So I think from that perspective, I think our strategy holds good, moving forward also. We are not going to do, do premiumization because the premium category is in other, in retail and wholesale. We're not going to do that just for the sake of doing that. We are going to continue in the value premium, and I think the very good, it's the best of both worlds, I would rather put it that way. Understood. I mean, if you would have done some analysis on price point related, given the premium portfolio jeans, leggings, et cetera. So, I mean, I just wanted to understand, I mean, in case this segment is outperforming from growth point of view- Varun, if I think from a bottom-wear perspective, how, in a bottom-wear perspective, when we are going to be charging INR 1,100 for a pant or INR 1,200 pant, that's already, those are already premium price points. Those are not very cheap to begin with. Though they are not very expensive, they are not very cheap to begin with. If today, if I try making a pants pricing at INR 1,800 or INR 1,900, that is when my price disparity to the customer looks bad. Got it. Understood. And sir, my second question is- That's why I call ourselves value premium. That's why I call it premium ourselves a value premium segment. Rather than calling ourselves just value or just premium, we are more of a value premium segment. Yes. Sure, understood. Sir, my second question is on same store sales growth. So, like, how are we thinking about this number going forward? Whether the bulk of it is going to come from higher volume or better sales mix, or price pricing driven growth? So I mean, how should we be judging or how are you thinking about the growth numbers, given the base would already incorporate whatever subdued performance, maybe from Q1 onwards? Currently, currently, because we have a flat volume SSG, our first objective and aim is to make this go positive. So very difficult to give a guidance right now, because we are right now in the mid- we are just in the starting of Q1 or Q4, so probably by the middle of February, we'll have a better idea. But our first target is to make this positive. Earlier, we had guided saying that we will do a 5% volume SSG and a 10% value SSG, but currently, because we are far behind having flattish, our first target is to make the volume as positive. Sure. I mean, the reason I was asking this question is to understand that incrementally, if we are doing more or are we expecting market forces to, market forces-led SSG improvements? No, I think, look, it's a combination of both. I think, but likely it's going to be market-driven. The minute the consumer trends slightly start ticking up, the SSG numbers should start showing, start looking healthy. Okay, got it. Thank you, sir. That's it from my side. I wish you all the best. Thank you. Thank you, Varun. Thank you. That was the last question for today. I would now like to hand the conference over to Mr. Gautam Saraogi for closing comments. Over to you, sir. I would like to thank everyone for being part of this call. We hope we've answered all your questions. 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