Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Jajodia, Vice President Finance, Jubilant FoodWorks Limited. Thank you, over to you, sir. Thanks. Good evening, everyone. Welcome to Jubilant FoodWorks Q3 and nine months FY23 earnings call for investor and analysts. We are joined today by senior members of the management team, including our Chairman, Mr. Shyam S Bhartia; our Co-Chairman, Mr. Hari S. Bhartia; our CEO, Mr. Sameer Khetarpal; our CFO, Mr. Ashish Goenka, and our Group CFO, Mr. Arvind Chokhany. We will commence with key thoughts from Mr. Hari S. Bhartia. We will then turn to our CEO to share his perspective. After the opening remarks from the management, the forum will be open for the question and answer session. A cautionary note, some of the statements made on today's call could be forward-looking in nature, and the actual results could vary from the statements. A detailed statement in this regard is available in Jubilant FoodWorks' earnings documents. We will share today's opening remarks along with the recording of the call on the stock exchange and on the company's website under the investor relations section. I would now like to invite Mr. Hari Bhartia to share his views with you. Thank you. Over to you, sir. Thank you, Deepak. Good evening, everyone. Welcome to our earnings call. We are operating in an uncertain macro environment. While the festive season helped us deliver record revenue in the month of October, the consumer demand momentum suddenly decelerated starting November. As a result, Domino's India reported a flat LSL growth in the quarter. Our overall revenue growth was 10.3%, low by our own standards. Our team is focused on getting the LSL growth back by focusing on providing excellent service to our customers, doubling down on our digital assets, enrolling customers in the loyalty program, and carefully planning on geographical expansion. Over the last 25 years, we have always executed with operational excellence and empowered the frontline teams of our restaurant managers while delivering high value for money quotient to consumers. In these years, our emphasis has always been on driving internal productivity and closely monitoring our cost structure. Notably, we continue to remain the most affordable national pizza brand while being the most profitable food service company in India. We are doubling down on our strengths and focusing on the core businesses. In this call, Sameer will share more details on this topic. The delivery channel has grown on a strong base of last year, and the dine-in and takeaway sales continue to present the opportunity for growth. I'm happy with our progress in driving our digital agenda, which has helped us deliver all-time record app installs and MAU of 9.54 million and 11.3 million respectively. Cumulatively, enrollments into Domino's Cheesy Rewards crossed 10.6 million mark in December, and order contribution from loyal members reached 39%. We continue to add stores at a rapid pace, stores in India, and have picked up pace in Sri Lanka and Bangladesh. We continue to be humbled by customers' love that Popeyes is receiving and have expanded to Chennai. We added a total of 73 stores in this quarter, and year to date, JFL has added 221 stores. On the cost side, dairy prices, particularly cheese, is one of the highest that we have seen in this decade, coupled with high inflation in wheat flour and hikes in minimum wages in many states. The team is focused on reducing wastages, driving productivity, and improving efficiency with full intensity. Overall, I remain confident of getting growth back into business by looking at how our company is focusing on providing best tasting food to our customers, innovating on price points, rapidly building our digital assets, and investing in long-term health of the business. Let me now turn over to Sameer to share the quarter's highlights and plan to bring JFL like-for-like growth back. Thank you, Mr. Bhartia, good evening, everyone. Firstly, a warm thank you to all of you for joining the call today. At the outset, I'm happy to announce greater disclosures for all our investors. To the extent it doesn't hurt our competitive interest, we have shared all relevant disclosures, allowing the entire investor community to understand our unique business positioning, how we are progressing, and I hope you will find this added disclosures enriching. I will first start off by sharing the quarterly highlights. I will turn to sharing a specific update on my immediate agenda to improve LFL growth for Domino's. In the end, having spent nearly five months, I will share my strategy and allied priorities with you all of you before turning into Q&A. The revenue from operations of INR 13,166 million grew by 10.3% versus the prior year. In Domino's, revenue growth was order driven. The like-for-like growth came in almost flat near 0.3%. The historic inflation in cheese and floor prices have significantly impacted the gross margins, which came in at 75.5%, lower by 213 basis points year-over-year and 77 basis points quarter-over-quarter EBITDA was INR 2,900 million, which was lower by 8.6% versus prior year. The EBITDA margin came in at 22%, lower by 457 bps year-on-year and 128 bps quarter-on-quarter. Profit after tax came in at INR 886 million, with a PAT margin at 6.7%. Let me turn on to key operational updates. Network expansion in India. First, we added 60 new Domino's stores, entered 16 new cities during the quarter. We are now serving our guests through 1,760 Domino's stores across 387 cities in India. We have added 193 net stores in the current fiscal year. I'm happy with the rigor attached with every new store proposal that we evaluate, which forms the bedrock for sustained profitable growth led by network expansion. We've added 12 new Popeyes stores in Bengaluru in the last 12 months, and as you are aware, in January, we opened our first Popeyes in Chennai. Our new state-of-the-art factory in Bengaluru, likely to be commissioned in Q1 FY24, is central to our network expansion strategy for Popeyes in South India. Notably, India is the first market for Popeyes globally and the only chicken QSR player in India to move chicken marination in preparation to centralized facility, which ensures consistent high quality, high fill rates to the store, which significantly improves the consistency of taste, visibly translating into higher repeat rates for the brand. In Hong's Kitchen, we have seen remarkable progress with further enhancement in taste, improvement in repeat rates, increase in orders, and record high NPS. During the quarter, we closed two stores to relocate them to nearby locations that will offer both dine-in and takeaway. In Dunkin', during the quarter, we unveiled a new restaurant design in India as part of Inspire Brands' global coffee forward evolution. The entire brand overhaul reflects our intent to be young at heart and a go-to coffee destination. The coffee retail is constantly expanding. Dunkin' will continue to innovate fast with a beverage first and a donut as a value proposition. On the digital front, all our Domino's app related metrics are scaling to a record high and are holding up to high levels. App installs at 9.4 million, MAU at 11.3 million with a growth of 22.8%. Our app ratings continue to be strong. Play Store and iOS at 4.5 and 4.7 respectively. Which is a testament to a series of periodic investment being done with a well-structured combination of product management technology, back-end support, and necessary investment to surpass consumer expectations. Domino's Cheesy Reward program has delivered a phenomenal early response that speaks about the strength of our engagement and the power of our brand. The program crossed 1 crore enrollments in the quarter. Internationally, international business, we see momentum in both Sri Lanka and Bangladesh. In these markets, we are deploying the emerging market playbook for Domino's with cuisine localization, best value to customers, unmatched delivery credentials, and digital channels as our four big pillars. Teams in Sri Lanka opened a record high seven new stores in a quarter, taking the network to 47. The system sales growth was 24.9%, driven by dine-in and takeaway channel growth. In Bangladesh, system sales was 44.7%, driven by growth in, again, dine-in and delivery channels. We added two new stores, taking the total store count to 13. New store expansion for Domino's is on track, adding sales growth and bringing in customers for and providing leverage to the P&L. Bringing the LFL growth on the back of Domino's is my top priority. At the outset, we have brought in greater focus by sunsetting two businesses, i.e. ChefBoss and MakeMyMeal. For Domino's specifically, we have laid out a detailed growth plan and are executing with rigor. In the last five months at JFL, I have noted tremendous opportunity and scope to grow even in a soft demand environment, and we are addressing these areas with urgency. To grow LFL, we believe that dine-in orders has to substantially grow at an accelerated pace. Our targeted interventions for the same are twofold. Firstly, we are swiftly executing our store reimaging program to convert tenured store as per our latest AS design. Secondly, we'll continue to bolster on our high value for money quotient with an intent to attract new customers to dine in with unmatched value offering. The launch of Everyday Value at INR 49 as a dine-in only promotion is a step forward in that direction. Helped by the store expansion, our delivery channel continues to grow on a high base and as a result of permanent habit being built across cities. To my mind, the launch of 20-minute delivery proposition in 20 zones across 14 cities is a game-changing customer-centric innovation. A series of interventions which included fortification of stores, extensive and continued training of Domino's, kitchen re-layout, automating drive time planning without compromising on rider safety, has helped us take this giant step in the direction of reducing delivery times. Elevated consumer experience through reduced delivery time is globally proven to deliver better customer satisfaction and leads to increased frequency across Domino's markets. Now, let me turn your attention to my strategy and allied priorities for the business. Over the last four months, I have met more than 500 customers, visited 200 plus stores to meet our frontline teams, copiously taken notes of our service on aggregators, and visited our food tech parks. After a deep immersion with all the facets of our expansive business, understanding the inherent strength of operating model, while being cognizant of emerging headwinds, I have further sharpened our strategy by reworking on our priorities. Our first priority relates to customers, customer and market first. The underlying objective here is to build a multi-brand, multi-cuisine food service organization. We endeavor to serve multiple occasions, innovate on format, formats that drive engagement and customize menu for local customers. This will allow Domino's to scale in India, Sri Lanka and Bangladesh, where the playbook is being tested. Grow Popeyes, address new market opportunities in coffee through Dunkin', and capture large white spaces that exist in categories like Chinese food through Hong's Kitchen. Our second set of priority relates to data and technology forward. Technology and data sciences take customer offerings to beyond immediate, beyond the immediate physical boundaries of our stores. It helps us understand our customers and deepen the relationship with programs like loyalty programs like Cheesy Rewards, and makes it easier to order a pizza on a moving train. Equally, we will move forward by embedding automation in our kitchens, commissaries and allied logistics and with enterprise-grade processes. Finally, it is about building the future-ready digital and technology ecosystem by combining captive capabilities, winning partnerships, and thoughtful investments. Our third priority is to continue driving operational excellence. We have to be better today versus yesterday and tomorrow versus today. Executing with excellence is a muscle and needs to be worked upon on a daily basis. There are no shortcuts here. From kitchen operations to supply chain and logistics, procurement to project management and last mile operations, across brands and countries, we have to have solid execution, i.e. the JFL way of execution. Secondly, with our scale and scope, we have to manage complexity at lower cost, generate leverage while bringing in continuous improvement in the backward integrated sourcing supply chain with state-of-the-art food tech parks. One critical outcome of this priority will be to continuously improve across cost lines and drive productivity. Our fourth priority is essentially a prerequisite for delivering on the first three priorities. It is a foundation, it is the foundation of people and culture. Companies that are built to last have a culture and people processes that are homegrown. To succeed, we will need to engage and have an inclusive frontline team. We have to become the employer of choice and be guided by a unique JFL culture embedded with values that last beyond us. As we work to execute on each of these priorities, my overarching goal is to deliver sustained and profitable growth that creates greater long-term shareholder value. With that, now let me turn on to the moderator to initiate the questions and answer sessions. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may enter 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. Anyone who has a question may enter star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Nihal Jham from Nuvama. Please go ahead. Yes. Thank you so much, and good evening to the management. three questions from my side. You've alluded to the slowdown in general, but are there any specific issue points or either, say, channel-wise or city-wide that maybe we feel we've seen a deeper slowdown? In your opening remarks, you've also alluded to the efforts you're taking on the dine-in channel. If, if you could just give your comments on that. Yeah, I think it's To me, I, Nihal, I see this as an opportunity in fact. I think As people are becoming more mobile, so take for example, we see robust demand now in, on moving trains. To me it presents an opportunity to double down on our dine-in channel, and that is where I see as an opportunity and not necessarily a slowdown. Because on the delivery side, right, loyalty, app, TCBs, all of these are accelerating that. I think we need to have a sharper program focused on INR 49 menu and a pleasurable and welcoming store experience that we are very rapidly reimaging. I don't see it as like a slowdown per se. I think I see more as an opportunity to be honest. Yes, sir. Coming to my second question on the margin bit. I think it's been four months where we've seen inflation specifically in the key commodities that is cheese and flour. At this juncture, do we contemplate taking a price hike to protect margins? Do we believe that we want to keep our value proposition in place and hopefully wait for, you know, the inflation in these commodities to come down? Thanks, Nihal. I think, as Sameer alluded to his, in his talk, you know, inflation remains at a decadal high. We were actually expecting a softening of cheese prices, which typically happens in the third quarter of every year. There were two rounds of milk price increase in this quarter. The softening that we were expecting has not happened, and that has seen a contraction, that has led to a contraction in our margins. At this stage, we would not like to take any further price increase. We would like to continue to drive value proposition, because the focus would be more on bringing volume and growth back to the levels that we were anticipating and not really, you know, take up prices at this moment. Sure. Final question was that in certain media interactions, there have been certain comments where we are looking at Domino's more on an absolute revenue growth rather than SSG LFL. I'm referring to the interview with Russell Weiner also. Sameer, if you could just clarify that what are the key metrics that we are looking at as a business? Is it the absolute growth or LFL value highlighted also is a key KPI? Nihal, if we heard your question right, you are saying what is that we'll be focusing more on? Is it going to be absolute growth or like for like? Is that the question? Yes, that is my question. I think I said that driving like for like growth in Domino's is my top priority. And the reason why I say that is the other part I believe is working very well. We have a completely data and insight driven way of finding out white spaces in India to expand our network. Wherever we do fortification, it is based upon rock solid signs of how many catchments we have, how the store is doing, how the customer metrics are. That piece is working well. And like I said, where would I have liked my team to double down on is the like for like growth. My priority at the moment is like for like growth. Sure. Thank you so much. Thanks. Thanks, Nihal. Thank you. Our next question is from the line of Manoj Menon from ICICI Securities. Please go ahead. Hi team. Good to see higher disclosures, but allow us to be a little more greedy, please. The first is on the loyalty, Sameer. You know, a little bit more color if you could give because it's been almost like now six months of operations and, you know, in a, in a relatively, you know, heavy user dependent category, the classic marketing textbook, you know, comment. If you could just comment about what's your observations on, let's say the frequency increases of your, let's say heavy user cohort. Also, you know, qualitatively, what sort of new consumers would have come in thanks to loyalty? Yeah. I think, to me, loyalty, we should pan out a full year to understand fully. What we've learned in six months is actually it's very, very encouraging, Manoj. Loyalty is targeted towards like repeat customers, so it's not targeted towards new customers. We have other programs that target new customers. Our high frequency and medium customer frequency base is at an all-time high and growing very rapidly. In fact, it is working quite well. Like I said, the delivery as a channel on app or-ordering, that continues to be very robust. That is something that is working well in the engine and our technology investments are therefore paying off. Absolutely that is, let me assure you it is whatever I have seen being in this industry for some nearly a decade, it is, it's working quite well. Understood, Amit. Basically, if I just to paraphrase, essentially you're saying that, there is some element of frequency increase which you are observing. Quantification probably we need to wait for another six months. Absolutely. I think frequency increase is definitely there. We are definitely seeing that. Okay, excellent. Secondly, when I try to disaggregate the growth, let's say at a product level, is it fair to say that the pain point actually is at the sub-INR 100 price point? Sorry, Manoj, if you can just repeat the question. The pain point that is the sub-INR 100 Yeah. When I, when I try to disaggregate the overall revenue growth, without really getting into LSL or new store growth, you know, just the growth. Is it fair to say when I think from a product segment or a product price segment point of view, that the pain point is actually at the INR 100 or below, you know, catchment? Yeah, I think my take on this one is, see, the focus area is dine in. Customers at this high inflationary environment, they're making choices. We do see customer come with a total bill or total amount in mind and a total quantity, and therefore they tend to gravitate towards lower price point. As we are kind of competing for new customers, we believe the... given our scale, our ability to deploy technology, our reach of stores, we can actually capture that demand if we have a very strong INR 49 price point menu. That is where we are doubling down on. It is not that the customers are, that is a challenge. Again, I'm pivoting and saying that if we are the only ones who can offer a INR 49 menu, then we should be acquiring customers at a faster rate, and that is what we are correcting in our marketing communication. Fair enough. What I was alluding to is that, it's not really any competitive, aspect, particularly at that price point. Just the everything under sub INR 100 is what I was getting at. Yeah. Okay. Just quickly, if I may push, just push the envelope on a third one. Look, you opened 265 stores in the last 12 months. You know, so, given the trajectory of revenue at this point in time, where there's not much positive operating leverage is getting accrued, you know, does it really makes or does it make sense to slow down expansion a bit, at least for the time being? Or you kind of wouldn't really want to change any of those plans? I think we debate each store or we're giving an approval, we look at each store in as an absolute versus chasing a number. That store has to make sense. It should have the right level of payback for our capital expenditure. It has clear data points and points of interest that you use to calculate what revenue it will have. If it makes sense from an EBITDA standpoint and ROI standpoint, we approve the store. There is no per se compulsion to do X number of stores. All our stores, we believe, are meeting the internal threshold and guardrail. Therefore, to me, I am not wedded to a number that we have to open X number of stores. Ashish, you want to comment? Just to add, I think we will continue to follow demand. Because we don't want to slow down this virtual cycle of growth. We will keep recalibrating and evaluating it every quarter, Manoj, in terms of, as Amit says, there's no number to chase here, but I think only thing we will be chasing is demand or following demand. I think that's the guiding philosophy or principle that we are operating with. Okay. Good luck, guys. Thank you. Thank you so much for taking my call. Thanks. Thanks, Manoj. Thank you. Next question is from the line of Arnab Mitra from Goldman Sachs. Please go ahead. Hi, thanks again for the improved disclosures. My first question actually is a follow on from what Manoj had asked in the previous question. I understand you're entering new cities and there is a threshold that is getting met. Almost one third of your store new store openings from what I understood last quarter were store splits. In this environment of nearly zero LSL, does it make sense to at least halt that process of store splits, which would increase your fixed cost for the same catchment and put increased pressure on your overall business, maybe force pricing decisions on you in this kind of an environment? You think it's not that bad and you could continue with this scenario for the time being? I think to me, and I keep on telling this to team, splitting a store probably is the easiest decision because it is a function of the mother store achieving a certain revenue. It is bursting at the seams during peak hours and customer service KPIs are beginning to deteriorate. If that is happening, we do. It's an easier decision to make, which means we are leaving demand on the table and not serving it properly. Therefore, how do we preserve our capital and make sure that we're deploying it prudently? We evaluate, do we need to open a 1,200 sq ft store? Can we manage it with a delivery and carry out store? Those debates we have. If the store is not reaching the capacity in the peak hours, then we don't split the store. The guardrails for splitting the stores are very, very clear. We do challenge, like, why can't this store do more? Why if we're reaching a certain threshold of our daily orders, what can we do to bottleneck? Does it need more oven? Does it need more bikes? We take those calls and not necessarily make it easy for the store to split. Arnab, we have also raised the threshold and become more stringent in terms of the way we're looking at splitting stores. If you see last year, almost 40%-45% of our stores were split store. This year the ratio has already come down to 30%. I think we'll be doing a great disservice to the business and taking a very short-sighted view if we were not to split stores which really we need a split, and keeping the customer in mind. Also, the financial model works pretty well. Of course, right now the demand environment is a bit slow, but I think the financial model works well for us, where the mother and child put together the investment pays back in about three years or time. We will be far more stringent in the way we look at splitting stores, but I think wherever needed we will continue to do that. No, I completely understand what you said. My question was also that, you know, this target of getting to 20-minute delivery, is that necessitating store splits in certain areas where your capacity may still be there, but because you want to get to that 20 minutes, you're getting into a store split. Is that something that you want to do in this environment? No, absolutely not. I think we've been preparing it, preparing for it for last almost three years, with the fortifications, plan. It's an outcome, natural outcome of that. Now we have the density, why will we not promise, faster speed? We'll not open stores just to meet 20-minute demand. If stores are working, I think we have the network to be, I mean, in the big cities, is what I am convinced of. I visited multiple cities. Bangalore we have the density, Gurgaon we have the density, Delhi we have the density. Why will we not offer better service? Okay, makes sense. My last question actually was on this loyalty program. If you could just, I think you have explained it last quarter, but just for our benefit. Now that if the scheme is becoming large, how do you account for this additional like free pizza that goes at the end? Does it happen when the redemption happens? Or from the day the person enrolls, you kind of start accounting for something over the life of the time period? Therefore, when does the hit on the gross margin, if at all there's a hit, comes in the P&L? Arnab, of course we follow the accounting norms. It's accounted as discount and we take the impact upfront, and then not with the time of redemption. Okay, understood. Understood. Thanks. That's it from my side. All the best. Thank you. Thank you. Thank you. Before we take our next question, we'd like to request participants to please use the handset mode while asking your questions. Our next question is from the line of Amit Sachdeva from HSBC. Please go ahead. Hi. Good evening, everyone. Thank you so much for taking my question. Sir, my question is, first on the shape of gross margin, the way it is evolving. If I go to pre-COVID period, we were around ballpark 75%. As COVID happened and delivery was the main value proposition and consumer willingness to pay also expanded for a high quality, you know, food that is coming and they're willing to pay even delivery fee, et cetera. As COVID has sort of receded and, you know, multiple challenges such as input prices have also come. I see that 75% is sort of coming back for one reason or the other. But also adding to what Sameer was also saying that you want to also push dine-in and with Everyday Value with INR 49, I would assume that would also add to some amount of pressure on gross margin, if not anything else. Question is that whether 75%-ish is the new normal as a strategic construct that you put together in consumer value proposition to input prices to, you know, how you strategically price a product. To add to that, Popeyes, I would assume, would be a lower margin business. As the Popeyes stores grow larger and larger, that construct will also add to margin not being able to expand, you know, go back to where it... Is it the right thinking and we should now take 75% as the new normal? Or how would you sort of shape our thinking there? Amit, if you see, of course, during COVID we were seeing a highly deflationary commodity environment, and that had the benefit reflected in our gross margin. Of course, now what we are witnessing is decadal high inflation across the key commodities that impact our margins, namely cheese, flour and some of the others. I think gross margin by and large are currently governed by the commodity cycles. We do expect that, in the coming few quarters it should stabilize or start softening a bit. It will be largely governed by that. I do not, since, we will not have an impact, adverse impact on margin on account of, our dine-in improving or some of the new products that we're launching, because one of the guardrails that we are, you know, using in the company for launch of any new product is, should not be gross margin dilutive. I think new product addition at INR 49 or even coming back of dine-in channel, will not be margin dilutive. I think margins will largely be a play off of how the commodity, cycles were to behave. As I said earlier, I think at this stage, we are not looking at any pricing interventions because we want to remain high value for money proposition to our customers, and therefore gross margin would be directly governed by the how the commodity cycle behaves. I mean, last point on this one is, see, when customers come in for INR 49, their bill value per order is no less, right? We have an opportunity to upsell, cross-sell. I think it is a sharp call-out. We want to excel on the dimension of value to customers, of course, and therefore we have a wide range. That necessarily doesn't mean that customer only shops for INR 49. Got it. That's very helpful, Sameer. What you're alluding to is 75 and a bit is sort of a bottom kind of thing in a very adverse circumstances. If all things equal, it should sort of inch up. It may not go to 78 when commodities are very benign, but it should sequentially move up. Is that what you're trying to sort of, help us think? That's right, Amit. What about Popeyes impact? Could you also, you know, is it the right hypothesis that Popeyes structurally would be lower gross margin business, and as it become larger, it would have at least some basis points drag on growth margins? I think the category structure for a fried chicken is slightly different from that we have in pizza. In the fullness of time, of course, gross margin could be slightly lower, but we do not see EBITDA margins to be any different. However, given the fact that Popeyes is right now a very small contributor to the overall, you know, JFL numbers right now being only 12 stores, and I think it will take some time before it really scales up. It will not have any material impact, I think at least for the next few quarters on our overall margin profile. Of course, we'll come back if it starts making a more material impact. I do not foresee any material impact of Popeyes on the overall gross margin, at least for the next four to six quarters. Sure. Sure. That's very helpful. You know, again, it's a bit on the margins, but just quickly trying to think through the overall EBITDA margin and over the growth construct as well. Clearly variable cost here is employee cost, which sort of expands as, you know, the store expand and some wage hikes happen in between. You know, you have obviously managed other overheads quite reasonably well. They have grown at least in line with revenues and not expanded much. Given that construct, you know, would you sort of say that, like a 250, 240 store expansion that are happening in Domino's, can that be in a construct of 24%-25% EBITDA margin, given this is very abnormal quarter with 22% EBITDA margin? How do you think about it? Can expansion happen while maintaining 24%-25%, you know, India's margins? There are more variables and it's very difficult to sort of put together a construct to it. Where I'm coming from is there a cost of growth and which is sort of offsetting that as well? Where, you know, things can be more volatile or at least 26%, 25% is not a normal margin and it should tailor down or come down lower structurally. Two things, Amit. One, I think in current uncertain both the demand and cost environment, I think it's very difficult to give a sort of guidance. I'll refrain from that. But having said that, I would just want to give you some color on the new store opening. I think we're, the store opening that we are doing is having less impact on the post-Ind AS EBITDA margin. The impact is largely seen in our pack margins where because we are taking a slightly higher debt charge. In terms of EBITDA, the margin dilution, it's negligible in terms of opening of more stores, and I think we should be able to absorb it. Of course, the challenge remains for us is in terms of how do we step up growth more to start seeing leverage at even a pack level. That remains a challenge, but we should be able to absorb 200 to 250 store addition without any meaningful impact on post-Ind AS EBITDA margin. Okay. Okay, got it. Thanks so much. That's very helpful. All the best. Thank you so much. Thank you. Our next question is from the line of Amit Rustagi from UBS. Please go ahead. Thank you for giving me the opportunity. Building upon the last point, which we were discussing about the EBITDA margin. If we see our gross margin decline is close to 2% from Q3 FY22, and the EBITDA margin decline is close to 4.5%, 5%. Can we say that additional 1.5%-2% decline in EBITDA margin is a function of new store opening? While I know you have been maintaining this point that they're not EBITDA de-dilutive at all. No, Amit, I don't think it is attributable to increasing store. As I said, the new store impact on actually EBITDA margin is negligible. It's in the zone of 15-20 basis point and not more. What has impacted us more is I think, of course there is a flow through from gross margin, but also the fact that, you know, some of the inflation has also been impacting all the other cost lines. That's number one. Number two, we've also stepped up our marketing investments. Given the slowdown in demand, we actually want to stay relevant and therefore we have stepped up our marketing investments. Third is, of course, we have prepared ourselves for much higher level of growth. We were not anticipating this sudden slowdown in demand. That also has a sort of bearing on the EBITDA margins, where we are kind of, sort of seen a slightly negative operating leverage, instead of a positive operating leverage that we were planning for. I think a combination of these factors is reflecting in the EBITDA margins. Okay. When we are talking about, you know, reversion to the some previous levels or improvement from here, I think mostly you're talking about the raw material inflation coming down. As I can see that raw material has contributed to only 2% decline in the margins in like, are we have more levers in hand to improve the margins from here? Of course. One is of course, as we get more growth, we should also be getting more operating leverage. That should help us in improving our EBITDA margins. The other is a planned organization-wide productivity drives that we are driving very, very hard to extract more efficiencies across all our lines and also reduce wastage across our cost lines. I think that is a constant endeavor, and we are also mounting a full-scale program right now to take cost out of the system and bring in more efficiency. That one should have a bearing in the quarters to come. I will refrain from giving any guidance at this stage. Okay, thank you. Thanks a lot and best of luck. Thank you. Can we have the next question, please, moderator? We'll take the next question from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi, good evening. Again, thank you for the disclosure. My first question is we have seen, you know, pickup in activity on promotion discount subsidies from platforms like Swiggy and Zomato. What is your take on this issue? You know, both Zomato and Swiggy are now going after instant gratification by, you know, giving the, let's say, free deliveries or offering more discounts. Whereas, in your case, the, you know, let's say the program that you have is, you know, the gratification is more delayed. How do you balance out in an environment where, you know, Swiggy and Zomato are so aggressive right now? Yeah, I think it's a, to me, I mean, we have all forms of levers in our hands, right? From brand marketing to promotions and also running shopper marketing call-out and event celebration. Like, you saw this in Diwali. We had a Diwali Dhamaka. I think we want to stand for value. We want to stand for great tasting pizzas and fast delivery. Together, I think the value proposition is rock solid. I am not I mean aggregators or competition will ensure they will double down on their strengths. We have to play on these core values. We are still the by far, the most valued in terms of price point, as in the category or even in the QSR. I think customers will look at what is the cost to order their meal, and I generally believe we are, like, supremely competitive over there. Just to add to what Sameer said, Vivek, we had also when we did extensive testing of our loyalty construct before launching it, and we had evaluated an instant gratification program as well. That did not find favors with the customers, and that's where we launched Cheesy Rewards, and our response has been very good. Also, I think any membership or subscription-led program which aggregators run actually brings complementarity to the program that we are running because our customers still continues to earn the points on our program while getting the benefit of the subscription-based program on the aggregator. We do not see it as conflicting. We see it as complementing. Interesting. Second, in your opening remarks, you made a comment that post-November there was a deceleration that you had witnessed in your business. Can you just talk about how the exit numbers were compared to, let's say, quarter average or where November was? I think we don't give month-wise guidance. I think let me just say this, we have tremendous opportunity to kind of, like, tap areas of demand and growth. That is not a concern for me at all. No, that I completely understand. You know, anything on how the trend-- You have given, like, the monthly numbers in the past. At least directionally, was December better than November? Certainly, Vivek. December also had the advantage of course, having the big days and the festivities. December certainly was much better than November. October was even better. I mean, we saw a much better October, we saw a bit of slowdown in November. December was better than November, but lower than our expectation. Which means Y-o-Y, again, the trends, because you know, given the seasonality over here, November-December comparison may not be fair. On a Y-o-Y basis, December was as much, let's say, good or bad as November was in a way. I would say much better. Yeah. Okay. Much better. Okay, interesting. Last one, Sameer, you mentioned, you know, about 500 customer interaction, 200 store visits. Can you just talk about, you know, let's say a couple of key, let's say, critical feedbacks that you received and/or, you know, things that require your urgent attention in a way that's what you felt after doing these visits or meetings? Yeah. No, I think good question. Firstly, as you've seen in the past, we have taken calibrated price increases. We've added delivery charges. Customers do feel impact and our value propos-- or the, in their mind are the intensity that we are offering the value that perception had come down. That was a learning where we quickly introduced Everyday Value or pizzas at 49. That was one learning. Second is they gave us lot of credit for our delivery credentials. When we realized when they're dining out, we are not the first choice, especially in tier one and tier two cities. While tier three, tier four cities, we are probably the destination when it comes to tier three. When I looked at the root causes, it goes back to doing appropriate and timely re-imaging and upkeep and sprucing up the stores with the current times. With competition coming in, opening newer stores, we were kind of saddled with older stores, and that is what we are correcting at a rapid pace. Two things. One is, we stand for value when they want constantly look for value. Double down on delivery. They expect us to deliver faster. Third is, they do want to celebrate their precious moments or joyous moments in their life in our stores, like birthday or eating out with friends, and therefore the feedback was very clear. Take it couple of notches up. Got it. Thank you, Sameer and team. Wish you all the best. Thank you. Thank you so much. Thank you. Our next question is from the line of Latika Chopra from JP Morgan. Please go ahead. Yeah, hi. Thanks for the opportunity. You know, a few follow-ups on your earlier comments. You know, the first one was, you know, clearly you are targeting to tap into the more value segment, and you just alluded to the fact that you want to improve the value proposition to the consumer. Could you help me understand, you know, how the... You know, you mentioned earlier that at, even at a gross margin level, the INR 49 pizzas are more accretive, but I thought, you know, you have brought down the price points, you know, from INR 59 or INR 69 to INR 49. Are we changing the, you know, any kind of, you know, the way the pizza is made or anything in terms of ingredients as well, where you say that this will not be margin dilutive? That's one aspect. The second bit related is, you know, the spends that you're doing on reimagining these stores. Today you have about 1,760 odd Domino's stores. How many, you know, are in new format and what is the kind of cost that you can incur, you know, to turn them into, you know, these new reimagined stores? Yeah, I think the INR 49 price point is not dilutive. I think that is the point that Ashish was making because we do want to keep, we have a hurdle rate on terms of gross margin. How we are handling it is, and if you see the mix and match value it is you can get, you have to buy two items and that's why you get INR 49. Number one. Second is, I think again, there is in terms of first, firstly, we do have the sourcing capabilities and the back-end capabilities, right? Which others don't have. That allows us lower cost structures. More importantly, when we are designing the menu and the recipes, we are innovating so that the margin is not dilutive. It is not. For sure it is not price, only just discounting, discount led. It is value engineering and it is in leveraging our scale to bring costs lower, and therefore it is not dilutive. Also, Latika, we were. Yeah. Sorry. Just to add, we were already learning EDB for INR 99, and now we are saying EDB INR 49 with you buy two products. Effectively the put down is the same and therefore, we are not compromising at all on the product quality and that is always sacrosanct for us. There is no way we'll ever compromise on product quality. We are able to manage through the same EDB proposition, just that the value proposition at INR 49 becomes far more attractive to the customer than an EDB INR 99 proposition. What I wanted to understand is what is the hurdle rate of gross margin in your mind? Do we say that, you know, 75%-76% is the new band of gross margins you are comfortable as a company? Even if, you know, cheese prices have to moderate, this is what we should look for considering, you know, the initiatives that you have on the dine-in side. As I said earlier, Latika, as well on gross margin would likely be largely governed by the commodity cycle. If cheese prices were to soften, we should see improvement in gross margin. The hurdle rate that we look at internally is that any product that we launch or any proposition that we launch should not be diluted to the existing gross margins. If there is a benefit of commodity it will flow across all product class. Sure. You know, I know you don't want to give guidance on growth per se, but, you know, the operating margins in this quarter of course are a reflection of operating deleverage as well. Right. Do you anticipate that we have seen the bottom of operating margins in this quarter, or do you think there is more downside to go till some of these new initiatives, you know, on propping up, LSL, really fructify? Assuming the external environment remains, you know, same. Yeah. Latika, I think again, it will be difficult to give any guidance at this stage given the uncertainty in cost and demand. I would reckon that we would have pretty much hit the bottom. All right. The last bit is a little long term, you know. What is the, you know, target LSL that you have in mind? Because that's your immediate priority, that you think this business can sustain over the medium term. The second bit was, you know, from your assessment so far, do you see that the Domino's format in any way allow you to tap into more consumption occasions, you know, in terms of either the format or in terms of menu that could, you know, be accretive to the growth, going ahead? Yeah. I think the target LSL is in the range of 6%-8%. That's what we, I think we do see that opportunity. From your second question standpoint, like I said, there is huge opportunity for lunch menu, for day part, for evening snacking. We have a, like a terrific chef team. Like I said, we on one hand we are launching INR 49 menu, on the other we are also launching gourmet pizzas. The opportunity to tap into many India multiple price points, multiple customer cohorts, that to me gives me the confidence that this is indeed possible. It is just not an aspiration. Sure. Thank you so much. Thanks, Latika. Thank you. Our next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Thanks for taking my questions and, thank you for improving the disclosures here. My first question was and obviously Sorry to interrupt. Ms. Rathi, if you're not on our handset mode, please switch it to handset. We can't hear you very clearly. Is this better now? Yes. Thank you. Yeah. Thanks for taking my questions. For my first question was with respect to the demand. Yes, the demand has been slower. You, Sameer, you have also mentioned the key reasons why the demand could have been slower. Just wanted to understand that, you know, the focus on value proposition, focus on double downing, double down on dining channels. Is it that there is much higher competitive intensity which is coming back especially from local and regional players, and that's the reason why we are focusing more on the dining side? Or is there any other reason? No, I will not. I think the reason to double down on dine-in I think is one, after pandemic we see the opportunity, right? I mean, the customer habits have shifted to delivery, and we want to use TCBs and capitalize and fortify that. Now, we have great set of stores. We've invested in new ACE design. These are inviting. Why will we not get the growth when I am a neighborhood store? So whether it's a delivery or a takeaway. When we spoke to consumers, it was very clear at this high inflationary environment they're looking for value. Therefore it becomes easy to marry the two. If I have a store which is next door on my way going to the home or office, if I have great value proposition, I will go and either eat or carry it out. Stores that are not inviting, which are older, more than seven, eight years old, then they do need a refresh look. I think that's what. More I would say, looking at our internal measures and what customers are telling us, less about competition. Understood. Just a follow-up on this is, you know, currently as you've highlighted in the presentation, the share of delivery is about 2/3 and dining is 1/3. Is there an ideal ratio you have in mind, which you would like to keep, you know, over the long run, whether it's 50/50 or is there something else here? Yeah. In the short run, I would want the dine-in to get to 40%, right? I mean, then take a stock from there. It also helps by the way, I think of some of the earlier questions, it reduces the burden on splitting the store, right? Because delivery does become a bottleneck at many stores because this you can, you can't add number of bikes or the right times start increasing. I think it's a, I mean, in the near term we do want to get to 40%. Understood. My final question would be, are we seeing some improvement in the demand trends? Because we have already done with the month of January. I'm not looking for any number, but just qualitatively are we seeing any improvement with the efforts we have made and, you know, the new innovations we have done? I think the uncertainty continues and where I think what I'm seeing definitely seeing wherever we are focusing on whichever cities we are focusing on, those are seeing the lift. It is about deploying this, deploying our internal strategy. That is the only bottleneck. It is not at the moment, like I said, there is so much of untapped opportunity we need to focus on that versus like only talking about the demand scenario. The demand trends still continues to be weak. Is that what I hear correctly? Yeah. Yeah. It continues to be uncertain. I think it's not between like December and January there is not a material change. Versus November? It would be much better. Yeah. No, I think like Ashish said, December was better than November and at least it is definitely better. November was seemed like an aberration in the whole when I look at the entire last 24 odd months, November just seemed to be an aberration. Mm-hmm. All right. Thank you. Thank you very much. Thanks, Sheela. Thank you. Our next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, good evening, Sameer. Thanks for the opportunity. Just a quick observation, rather two observations. When I look at last two, three years, we built a very solid digital asset and then we saw the traffic is humongous and then COVID is behind. What we've seen over the last five, six months, we are now maintaining the traffic and we are building how we can get the depth of the customers. We started Cheesy Rewards. Now we are saying we will deliver in 20 minutes. One observation is that we have built a strong traffic, but the retention of the customer is not visible or rather that is declining. This is just purely an observation while interacting to few stores and on ground. You build, saying that we are now offering that instead of INR 99, we are giving single serving at INR 49. To my mind, I think, the second observation which is there and having spoken to customers, rather in my house also, the price value summation somewhere is waning out and the retention of customers is one of the big challenge or pain point for us. If this observation is correct, and that's why I'm saying that 0.3% LFL growth is going to be very weak, and you're saying confidently 6%-8%. These Cheesy Rewards, and maybe you can say, the 20 minutes delivery and now INR 49 is short-term fixes. In the long or medium term, do you think really we need to do something better or extra to get that 6-8% target? Let me firstly say that if we deliver vast majority of our pizzas under 20 minutes, that is a structural advantage. It is not a short-term. It takes years of preparation to build a store network and automate the store processes, have the right training and manpower tools to actually deliver on a 20-minute promise. First is that it is not a short-term piece. One can argue about INR 49 because one, competition can drop prices and create it, but at INR 49 to maintain the gross margin is again structural. I wouldn't say it is a short-term gimmicky kind of a thing. Specifically to your question that there are consumers maybe like yourself who are not driven by INR 49 price point. They are driven by better experiences of either a wider range, looking for a gourmet pizza or looking for local flavors or something unique. That is the menu innovation that we, I mean, we continuously want to do. To, to kind of remind you, we launched Parantha Pizza, then it was the East range with Kasundi Kosha Malai gourmet pizzas. We are also constantly innovating for customers who are more upwardly mobile and looking for a better experience versus value. I think the beauty of our stores being neighborhood and our digital assets and CRM, we can customize our communication to the cohort that we are presenting or we are targeting. I think that's exactly my follow-up question is that we have done the product intervention. Will you be able to share these innovations, what has come after COVID period and specifically over 17, 18 months? Is that new innovation is driving the growth? Because I'm not sure the product intervention, what we have done actually is justifying that 0.3% LFL growth. Of course, there are other factors too, right? I mean, I think you see that growth in delivery, right? If you tease out dine-in, right, and therefore you have to fix dine-in. Would product alone satisfy? I mean, the answer is no. You have to have the better experience inside the store. Your stores need to be modern and relevant, competing with the competition. Again, the strategic pillars are very simple. Look at customers, what they are demanding. In cohorts, they are demanding value. Give them the value in cohorts. There are many Indias which are looking for different cuisine, different flavors, gourmet. Innovate on that dimension, engage them with technology, and when the service is being delivered, give a very consistent high quality service. If you do all these three, Ashish, we will be able to, I think tap that growth. I don't know whether I've answered your question or not. It's not one silver bullet is what I'm trying to say. All three have to come together. No, I understand, Sameer, and you justified saying. I completely think with, but my industry experience tells me that, and that's the last question which I'm asking you. That rather than giving discount and do the customer engagement, and if there is a price relevance or price summation in the consumer mind, which is where the customer retention is a big challenge, why not instead of drop the delivery charge or give the straight discount or drop the prices and get the traffic back? Sure. I take that as a suggestion. I think at the moment, like I said, we've done extensive consumer research. They look at the landed cost to them, right, for a similar size of a meal or a pizza. If we have to, if we are learning that, we will take those calls. At the moment, at least this delivery charge I think has during the pandemic, I think has become a norm and acceptance. Why disturb your put pressures on your margin, right, and not innovate on the menu? That is our going approach. If we learn something new, we obviously will look at it. At the moment, no plans to take out delivery charges. Wonderful. Thank you, Sameer, and all the best to you and the team. Thank you so much. Thank you. Thank you. Our next question is from the line of Akshen Thakkar from Fidelity. Please go ahead. Yeah, hi guys. one slightly strategic question, apologies it's gonna be repetitive to what you guys answered, but just help us set the context of what guardrails to gross margins on your business are. You had a period where it went up quite a bit with the introduction of delivery charges, et cetera, and obviously you're facing the pressure. You're doing the right thing by not taking up prices, so putting pressure in near term. just suddenly when you're thinking about this business three-five years out, maybe on EBITDA margins or on gross margins, whichever way you're comfortable with, just help us understand what guardrails are. What is the lower bound and upper bound? That's sort of the long-term question. The short-term question really is, you know, how do we look at the increase in depreciation for the quarter? You know, it's significantly more than the increase in the store count. Even if I adjust, you know, whatever, do some calculation on Pre-Ind AS depreciation as well, that number seems to have gone up quite a bit over here. Just wanted to understand if there is any one-time items in depreciation or that's a recurring number that we should be looking at. Thank you. Thanks, Akshen. On gross margin, as I alluded earlier, it will be difficult to give near-term guidance. In the medium term, our target would be to be at a range of 23%-25% on the Post-Ind AS EBITDA margin. That's our endeavor. If all the things fall in place as Sameer was highlighting earlier, there's no reason we should not get to that. Your next second question was on the depreciation. Our depreciation has largely three components. Almost 70% plus increase is attributable to new stores, a combination of both the CapEx and the lease increases. This quarter, I think 20% of the increase is also abnormal because we had a one-time charge accelerated depreciation for some two businesses that we have taken a call to unwind this quarter, namely ChefBoss and Ekdum!. There was an artificial impact also this quarter. Almost 70% of the increase is attributable to new stores, around 10% attributable to the investments that we're making in supply chain, and about 20% was a one-off charge that we had taken on account of accelerated depreciation. Thank you, guys. Thank you. Our next question is from the line of Chirag Shah from CLSA. Please go ahead. Yeah, hi. Thanks, Sameer and team for laying out your plan on the business ahead. I have just a couple of questions left. First on, the city penetration. On the store expansion, if I look at, we have practically added 100+ cities in the last two years. Now, if I just try to see, in context of what the food aggregators are saying, they effectively 99% of their business is coming from the top 300 cities, and then there is a long tail. Given that context, is there much upside left for us in terms of, the geographical expansion into newer cities? You already mentioned about the ROIs and the guardrails that you have, but are the ROIs and payback period in these tail cities now comparable to what we have right now? Is there a consumer resistance to pay for higher delivery charges? On the second one, I think the, I'll let maybe Ashish answer the first part. The second part on the consumer propensity, like in Tier 3, Tier 4. In Tier 3, Tier 4, the dine-in ratios are far stronger than Tier 1 and Tier 2. Naturally we, in many cities, if you take Daltonganj or Karad or Latur, we will probably be the only organized QSR player. We become a natural destination for consumers in those city to come and grab a meal or hang out. The dine-in portion is lesser. We've not seen, we at least from a consumer survey or feedback perspective, we have not seen that consumers are not willing to pay for delivery charges. That has not come out. I think over a period of time, we've also seen as consumer get used to Domino's service, they do order. In fact, their frequency also goes up. That's our answer on tier three, tier four cities. Ashish, you can answer the first. Just to add to what Sameer said, if you look at the growth profile, at least in our experience, we do not see a significant differential between Tier 3, Tier 4 versus Tier 1 and Tier 2. In terms of new stores, Chirag, in fact the paybacks on return on investment are slightly better in Tier 3, Tier 4, simply for the reason that the operating costs tend to be much lower. While the ADS in these towns tend to be a little lower than Tier 1, because the operating costs are low, we are able to recover our CapEx in under two years. The paybacks are less than two years. The economics work very well for us, and therefore we do see an opportunity in these towns as we expand. sure. To my point that we have already crossed the benchmark that the food aggregators are talking about in terms of the revenue contribution from the cities. Is there a long headroom for us to grow geographically? As we have said earlier, Chirag, there are clearly 500 towns that we can go to, 500-600 towns which have more than 1 lakh population. To create a profitable Domino's store, we need a catchment of about 10,000 households. In terms of macro opportunity, if you ask me, there is clearly close to 600 towns in India that we can go to. Of course, we will be very calibrated in our expansion, and we have to make sure that we are getting the paybacks. We will keep going to these towns as long as we are able to get our paybacks within two years, and therefore I do see significant headroom. In terms of contribution to business, of course, Tier 1 and Tier 2 will contribute, bulk of the business given the density of stores that we have in Tier 1. For example, our top 10 cities alone, would contribute to bulk of our stores. In terms of penetration and presence, I do see an opportunity to keep expanding into Tier 3, Tier 4. You know, most of these cities are single cities. Single stores. Single stores cities. Even I would say, even some of the larger towns, We've seen many towns where the store does exceedingly well, and third year, fourth year, there is a pressure to add another store. Again, we are guided by the economics of that individual unit that is being put in, and the only reason to expand should be that we have strong demand signals. Got it. When I look at the CapEx numbers that we are talking about now for the next two years, there has been a significant increase. Now, of course, you're also speaking about or talking about improving in-store experience. Is there a, is there a large component that we are now placing in terms of CapEx for improving the in-store experience? Then there is an INR 500 crore-INR 600 crore number that we have put for the digital initiatives. You know, can you just explain where this amount would be going in? Chirag, bulk of the CapEx would still go in our store expansion because as you look to expand Domino's and Popeyes. Bulk of our CapEx will still go into store expansion. A relatively smaller contribution, of course, will go into reimaging. We have been reimaging our stores in the last few years, but of course, we'll step up the pace of that reimaging. Also a sizable chunk will also go into creation of some of our new commissaries because as I said in the past, the last commissary we opened was in Greater Noida, and that was in 2018. Since then, we have significantly expanded our network, and therefore, we will need to keep creating back-end capacities as we expand our store network. The first commissary, which is going live next, is Bangalore. That itself will entail an investment of about INR 250 crores. We would look to, you know, expand footprint or make further investment in some of our other commissaries like Mumbai, which may come in next year. There is a full roadmap that we have of expansion that we have planned out for the next two-three years. We will see a slightly levelated level of CapEx as we invest in creating these back-end capacities. These are typically step investments because once you invest, then you don't need investment for the next three-four years. These will not be like recurring investment every year. This will be like more like step investment, where we will see a slightly higher CapEx cycle over the next two to three years before it normalizes. Also on reimaging. See, you are reimaging the customer area, right? You're not reimaging the kitchen because the oven, the make lines, the refrigeration, the chillers, those are reused. It is only the front of the house which is typically being reimagined or imaged. In many cases also, it is not the entire front of the house. I think we look at the store and then design. It is not as capital intensive as opening a new store. Got it. Very clear. Just one last question on the Cheesy Rewards program. Can you just help me explain, I mean, the cumulative membership that we now have on the Cheesy Rewards program is 10.6, practically touching the MAU numbers that we have. How much more can we extract from the Cheesy Rewards membership program? That's number one. Number two, when we launched this, you know, we were very clear that it would not lead to margin dilution. Given that we are now two to three quarters into this, what is... I mean, is there a margin impact? If not, is it because of the higher frequency that is now driving it? Or is it because we are replacing other discounts with the Cheesy Rewards spend that we have? I think on the I will not compare 10.6 to 11 million MAU for the very simple reason that customers come back and shop multiple times in a year. The total customer base, I should compare it to total customer base, which we don't disclose, but that number is materially higher than the MAU. Therefore, to kind of We are acquiring customers, right, at a fair clip. I think there's huge headroom. What I'm delighted is the engagement of loyal members, that they find this enticing enough to come back and give their share of wallet to Domino's. That bit is exciting, and the headroom is huge. I will not compare this to MAU at all. Just to answer your question on margin. A, I think, this program is more cost effective, because you give a product free, and that is also on a redemption-based gratification, which comes in after almost six orders. If you see the overall discount that we are actually putting down in this scheme is not very high. That's number one. Number two, we are substituting it with other discounts, and therefore it does not have a negative impact on margin. Third is that. We have also been able to calibrate and make it more targeted, therefore keeping our overall, you know, impact on margin minimal. It also pays back because we get higher frequency. Got it. Thank you very much and all the best. Thanks. Thank you. Ladies and gentlemen, please note we'll be taking our last question now. That's from the line of Avi Mehta from Macquarie. Please go ahead. Hi, sir. Thanks for the opportunity. I just wanted to clarify on the CapEx bit. You had indicated last time that you're doing about INR 650-700 crores in the next 12 months. There was subsequent release about INR 900 crores in next 12-18 months. Could you just elaborate, what is the CapEx plan and help us understand that more? Thank you. We are, I think, in line with what we said. I think for this year, this fiscal, we will be in that zone of INR 650-700 crores. As I just explained, we will have probably a similar level of CapEx in the next financial year as well. If you put the two together in the next 12-18 months, we are looking at that number of INR 900 crores. As I explained earlier, I think bulk of the CapEx would be attributed to higher store openings, followed by investment in our commissaries, followed by investment in digital and followed by some of the store reimaging that we will be doing. Perfect, sir. That's clarity. The second bit, sir, I wanted to kind of just understand the comment that you made about increasing marketing intensity to drive demand. Just wanted to understand if this is something that you are also seeing across the industry, say from aggregators or other brands, or is this something that is just that you have done? If you could help us understand that part from an industry perspective. Thank you. Yeah, I can't comment about the, I can't comment about the aggregators or competition because I'll be, it will be very anecdotal. At least for us, from a communication standpoint towards dine-in, we have not done that for the right reasons because of the pandemic. Now taking that as a communication targeting towards dine-in, I think it's more channeling more marketing dollars towards that particular format. Over a overall level where We had cut back on few expenses. We will make sure that we do, we remain relevant as Customers are mobile, they order everywhere, so we will invest in. It's not something that is going to be materially that we were not doing a quarter or two ago. It's more channeling and slight uptake in that. Okay. It's not promotion, it's more marketing that is what is. That's right. That's correct. That's correct. Perfect, sir. That's all from my side. Thank you very much, sir. Thank you. Thank you, Avi. Thanks. Thank you. Ladies and gentlemen, that brings us to the end of today's call. On behalf of Jubilant FoodWorks Limited, we thank you for your participation. You may now disconnect your lines.