That this conference call is being recorded. I now hand the conference over to Mr. Jay Gandhi from HDFC Securities. Thank you, and over to you, sir. Good morning, this is Jay Gandhi from HDFC Securities. Welcome to Sai Silks (Kalamandir) Limited's Q2 FY25 earnings call. From the management today, we have Mr. Bharadwaj B. R., Senior Vice President, and Mr. K. V. L. N. Sarma, Chief Financial Officer. I now hand over the call to Mr. Bharadwaj for his opening remarks. Over to you, Bharadwaj. Thank you, Jay. Good morning, ladies and gentlemen. Thank you for joining us today to discuss Sai Silks Kalamandir Limited results for 2Q FY24 and H1 FY24. I wish you and your family season's greetings and also a very happy Diwali. I presume that everybody has got a chance to review the financial results and investor presentation uploaded yesterday on the company website, as well as on the stock exchanges. To primarily start off with, let me start off giving you with what happened in the ethnic retail market scenario for 2Q. So in this quarter, we have seen market recovery happening compared to the last quarter of Q1. Despite the factors such as bad monsoon in one of our core markets and fewer wedding dates, even in the second quarter, which has caused a slight slowdown, but the overall festivity mood gained momentum and traction, largely driven by pre-festive and wedding season preparations. In this quarter, our company did a revenue of about INR 347 crore, compared to the last year of INR 326 crore, which is a growth of about 6.25%. Our gross margin in this quarter also grew by about 51 basis points to 42.17, compared to last year's 41.6. Our PBT levels for the quarter significantly grew compared to the last quarter, and our PAT levels grew by 1.7%. So in this quarter, on the operations front, we have opened about 16,000 sq ft of retail space, adding 2 new Varam ahalakshmi Silks stores, and that takes our total retail area close to 670,000 sq ft. Our retail stores are now present in about 17 cities and 4 states, and as of 2Q, we have about 63 stores, and all of these stores are company-owned, company-operated stores. We continuously strive to open more of our newer stores in the regions, carefully assessing the demand of the customers in terms of the consumption in the upcoming quarters to come. In this quarter, we have also taken a major leap towards reducing our offline advertisement activities and increasing spends on our digital advertisement. Creating quality contents to engage customers and promoting our brand through social media has been one of the key initiatives for this quarter. We will continue to focus on this strategy to perform targeted campaigns, focusing on quality reach to our customers, specific to each and every location. Also, in this quarter, we have further taken active efforts to customize our softwares even more across various modules to help analyze the data better. That is helping us derive great patterns in terms of understanding our customers better. This is something that we have been developing over the last decade, and we will continuously strive to do more in this space. Understanding consumer preferences has been one of the key portraits that we already, as a company's growth, always thrives upon, and we have made a couple of stores renovations in active forms to continuously prepare for the upcoming wedding season. As we have entered quarter three, and as per the wedding calendar, majority of the wedding dates fall in H2. We are fully prepared with our product mix to cater to the rest of the year's wedding calendar. Considering how the wedding dates are panning out, which happens to be the major impact on the growth of a company, we are very optimistic that the growth of the company in the next quarters to come will reach new milestones to become India's biggest women's ethnic wear brand retailer, which is Sai Silks Kalamandir. Now, I would like to hand it over to the operator, and we'd be open to answer any questions. Thanks. Thank you very much, sir. 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 yourselves from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question is from the line of Rochelle from PINC Wealth. Please go ahead. Hello? Hello. Hi, Rochelle. Yeah. Hi, sir. So my question is that, you know, over the past three to four quarters, if you see, we have been growing due to the new store additions, but the concern is that, you know, that we have been de-growing it in the existing stores, that is, SSG has been negative. So going forward, do we see that, you know, are we going to maintain the SSG growth or still we are struggling in that area? Okay. So Rochelle, if you see, especially in the last quarter and the previous quarter, we have had some issues with the overall market consumption, and I would like to highlight that one of the key factors that our business always depends on is the number of wedding dates. So, unfortunately, that has not been much in our favor. So that, I think, has now, with second quarter, has come to an end. From where we see third quarter onwards, which is currently from October first onwards, once after that Pitru Paksha moment is done. So the wedding, along with the festivities clubbed together, has picked up. So from there on, I don't think the wedding day calendar gives any problem to us, and that's the reason why we are very hopeful that the SSG levels will be positive moving forward. Especially if you see Q1 versus Q2 also, we have recovered majority of our loss of SSGs that we had had in Q1, and Q2, it was marginally lower in terms of negative SSGs. But, from this quarter onwards, we should be able to see a continuous period where the momentum is kicking up the notch. Sir, how is- I think, we have a close watch on overall SSGs, and, one of the initiatives in 2Q, as I did mention in terms of overall advertisement also, has been tailored and curated marketing spends. And surprisingly, this has been delivering very good insights and very good traction in the overall space. So we have done this experiment with few of our selective stores in couple of our tier two and tier three locations, and has yielded better results. So we will continuously focus on this strategy moving forward to bring up the stores that, which are lagging in terms of the SSGs. Sir, just how has been the trend like since we have already, you know, crossed October, so how are you seeing the demand momentum for the wedding season? I'm so sorry, I think your voice is breaking out. Okay. Sir, now can you hear me? Hello? Hello? You're still not audible, Rishi. Hello? Hello? Hello? Hello? Hello. Yeah. Your voice is breaking. I'm not able to clearly understand what the question is. I, I hope this is not the same for everyone, or is it the same for everyone? I don't know. Moderator, can you help us out with this? Yes, sir. Mr.- Hello? Yes, sir, if you can, go ahead with the question. Hello. Yeah. Yeah. Yes, sir, my question is that, how has been the demand trend in October, since we have already crossed October, so how are you seeing the demand in October and going forward? Okay. So I'm still, your voice is not clear, but I'll try to understand your question. Your question is about demand in October. So October has been good, especially, if you see the calendar compared to last year and this year, Pitru Paksha calendar, which is supposed to be the inauspicious period, last year started from September twenty-ninth, went until October fifteenth or so. But this year, if you see, ended by September itself. So October onwards, both Dussehra festivity mood, Diwali festivity mood has kicked off. So this is definitely. We are very happy with the kind of results that we've got in October. And November onwards, we have the wedding calendar kicking in, so we are very optimistic that if this trend continues, we'll continue to do better than how we did in terms of October. So as of now, October was a very good, positive trade that we have. All our stores, SSGs, have been positive, much, much, higher than what we anticipated, as a matter of fact. Thank you, sir. Thank you. Our next question is from the line of Dhairya Trivedi, from VJT Investments. Please go ahead. Good morning, sir. Thanks for taking my question. Am I audible? Yes, sir, please tell me. Yeah. So, sir, what is the sales per square feet across formats, and how is it trending, compared to last year? Sarma here, see, the H1 is not indicative because we had a bad quarter this year, a bad Q1 this year. But sales per sq ft in the formats that on an annualized basis we are expecting would be in the range of, in respect of Varmahal akshmi, it should be in the range of anywhere between INR 42,000-INR 45,000. And KLM would be in the range of about INR 12,000 or so, and KMR should be in the range of about INR 19,000-INR 20,000. Okay. Is this for Q2, sir? Yeah, Q2, and we are annualizing that. But expecting that second half would be, I mean, obviously, in a normal course also, second half will be better than first half. So taking that on an annualized basis, these are the figures. Okay. And, sir, how is it trending, compared to last year, in terms of, you know, the growth? Growth in respect of Varma Lakshmi, it would be because the premiumization is coming in and one or two A-grade stores are coming up, like Madurai, etc., the... It will be improved. Varma, KLM and Kalamandir will continue to be at, in the last year. Okay. Sir, what will be the store-level EBITDA margins for Vara Mahalakshmi? Store-level EBITDAs for Vara Mahalakshmi will be in the range of about 32%-34%. Okay, this is EBITDA margin, right? Store level mar- Yeah. Store level margins, right? Store level margins, yes. Okay, and how would they compare to other formats? Other formats, I mean, the KLM would be the least perhaps. KLM would be in the range of about 23%-24%. So the range between KLM and Vara Mahalakshmi would be, would range between 24%-33%. Okay. And sir, what is the square feet addition that you're looking at, you know, for the rest of the year? ... Rest of the year, we are planning at the rate of 25,000 sq ft per quarter. So during second half, the plan is, as you are aware, in H1, we have added 24,000-23,000 in already. And for Q3 and Q4, we are planning at the rate of 25,000 ± each. That should be in the range of 45,000-50,000 sq ft, henceforth. Okay. All these stores will be in the Vara Mahalakshmi format, right? Correct. Okay. So which means that we are looking to add about 6 new stores at an average of 8,000 sq ft per store for the rest of the year, which- Yeah, you can take 6, 6 to anywhere between 6 to 8 stores, that's it. Right. So which makes it roughly 69 stores for the year, I mean, FY 25 closing. And if I remember correctly, you've given a guidance of 100 stores, you know, for FY 26 closing. See, that is on an average of 5,000 sq ft per store that we have worked out. But in Tamil Nadu, when we are going into B, B towns, C towns, et cetera, where we will be having only one store, and that store cannot be smaller one. So the average has picked up to approximately ±7,000 sq ft. So that's how the number of stores may be slightly varying, but you can take, as we have stated, that 25-30 stores of Vara Mahalakshmi at an average of 5,000 sq ft per store. That is, we were to add 125,000 sq ft on Vara Mahalakshmi, which will be delivered. So a quick point to add here, sir. So though we started talking about the number of stores, the square feet average is now changing because Tier One, Tier Two, Tier Three has a different product mix. And when we did this analysis with respect to the core markets and the Tamil Nadu market, in some of the markets, it makes sense for us to open a little bit higher square feet of stores, around 1,000-1,500 sq ft of the store, and the product mix also is much different compared to what we have in our core markets of AP and Telangana. So with that in mind, now we have changed, I mean, the sq ft addition per store to a little bit higher. So that's, that's the math behind it. Otherwise, our guidance has always been in terms of looking at in terms of sq ft addition rather than in number of stores. If you see our last H1, I mean, the current H1 of what we have completed, we have opened around 23,000 sq ft. There has been a little bit of delay in terms of opening the stores. Majority of this delay is coming on account of that H1 being a slow H, a slow half of the year, not having much of a wedding calendar. We believe that Q3, Q4 is where the peak momentum will kick in, and we have provisioned our stores in that, in that manner only. One other interesting thing that we don't want it to go around is open up any... We, as a company, believe that the customer experience at the stores stands at the top of what we offer. So if you see our stores, the entire Vara Mahalakshmi stores has a completely different ambiance, different vibe. Replicating that in each and every store is of our prime importance, because nowadays the generation is looking for more than just a product. They're trying to look at more of an experience buying rather than just a product buying. So though it looks a little bit on the slower side, I think we are carefully estimating and not trying to cut corners in terms of the kind of customer experience we want to give in these stores. Okay. So are we looking to add any other stores in, you know, different formats in FY26? Because as in FY25 is all the Vara Mahalakshmi, the expansion. But in FY26, are we looking at, say, Kalamandir also in terms of store expansion? So as of now, we don't have any provision for Kalamandir stores, but majority of it will come from Vara Mahalakshmi. Maybe one or two stores in the provision we are looking at in two active areas. So majority, majority right now is driven by Vara Mahalakshmi, but I would still say two stores around will be from Kalamandir format as well. Okay. This is for next year, right? FY26. Correct. Okay. Any qualitative guidance for full year FY25 in terms of, you know, revenues and overall EBITDA, the absolute EBITDA number? So, I think we thought, like, let's proceed with quarter three, so we don't want to give a guidance per se right now. As of now, looking at how H1 has panned out and how H2 is there, we are very optimistic. And, it's happened to be where one of H1 completely had negligible wedding dates, and everything is falling into H2. It would be a little bit of inaccuracy for me to put this number out there. Probably by end of Q3, we'll have a much more meaningful sense, and probably that will be the right time for me to give you a better guidance. Okay. So last couple of questions. You know, I mean, taking on the point of negligible wedding dates. So I remember you saying that, you know, in Q2 of this year, we had 10 wedding dates compared to Q2 of last year. But, you know, I mean, those, that is not reflected in the additional sales. I mean, we've just probably done about 5-6% additional sales compared to Q2 of last year. So what would you attribute that to this—I mean, despite having 10 wedding dates, our sales growth was quite negligible. Okay. So if you see the wedding dates, how they have panned out in the, in the entire quarter, majority of these dates, around eight dates were there, and most of them, I think almost everything was in the month of July. So generally, as per how the pattern of sale happens. People generally come and buy at least two to three weeks in prior. So that's how the, the spending and the wedding purchase actually happens. So if you see that the month of July, we still did better, but in the month of August and September, there was a little bit of slowdown because there has not been any wedding dates. And on top of it, if you see Pitru Paksha compared to last year and this year, Pitru Paksha is that Shradh period. So last year it was in Q3. This time it came in Q2 only. There has been a small, slight delay because of that as well, because people tend to believe that this is an inauspicious period time to buy. However, there has been some momentum because of the wedding, I mean, the festivity calendar kicking in; we were able to recover that. Okay. And sir, what would be the wedding dates number, wedding dates in Q3 of this year compared to last year, the additional wedding dates, if you can- The additional wedding dates, compared to last year, will be around 7 wedding dates in Q3, and in Q4 we have about 9 wedding dates. So total 16 extra date is what we are expecting in Q3 and Q4. Okay, okay. Perfect. One last question. Sure. So FY 2026, roughly, we'll be looking to close at 800,000-odd sq ft, right? Is this my assessment correct? So 6.7, 6, 7.3. Yes, the target is that we'd be adding close to 50,000 right now, so it will be around 7.3. Yes, I think close to 800,000 will be the overall guidance that we would ideally want to add. Okay. All right. Perfect. Thank you so much. Thank you. Thank you. Our next question is from line of Ashish from InvestQ. Please go ahead. Yeah, just a couple of things. Sir, if you could give the number of SSG for H1 and FY 2024, that would be helpful overall basis. Sorry, you're not audible. Could you repeat the question once again? Yeah. What I wanted is SSG numbers for the company as a whole for H1 and for FY 2024. FY24. H1, as you are aware, the first quarter we had a negative of 20, minus 20 was there in SSGs for Q1. Q2, we have improved, and overall, if you take for H1, it was approximately minus 6.5. H2, we are expected to recover the SSGs. In fact, recover from the negative of the H1 also, and hoping that, for the year end, we should be at least 1%-2% positive on SSGs. Okay. And sir, is it possible to include these figures which are just anecdotal for us to track in the presentations that you generally publish? It will be helpful, actually. So- Presentation? Yeah. We will, we will try to include from this quarter. We have some basic numbers. We'll do add numbers in detail, but still, it will be helpful on our... Definitely. Secondly, on the tax rate looks higher for this quarter, so what's the reason? Secondly, is it going to be... What's it going to be for the full year, this year? It's not the tax rate. If you have seen, there was a raid, tax raid on the company in May 2023. Though there was no major issues pointed out, since as a practice, they went through the whole reassessments, et cetera, and for a period of 3 assessments. In fact, they will do a reassessment for 6 years. So out of that, for the 3 years reassessment, we had accepted an additional tax liability of INR 4.8 crores, which was taken into this quarter's books. So the tax rate that is appearing or the tax component that is appearing there includes this tax that is agreed. And perhaps we would be liable for another similar amount going ahead when the other 3 years' assessments are also taken up. So it's all. Otherwise, the tax rate- is included. Okay. That is for three years' assessments. Okay. Okay- We have given it as a note in our- Yeah declaration of results also. Okay. Thank you. Yeah. Thank you. Our next question is from line of Manas, who's an individual investor. Please go ahead. Hello. Thanks for the opportunity. My question is regarding what are the peak margins we can do in this wedding? Sorry to interrupt, Mr. Manas. There's a lot of background noise from your line. If you can, please be a bit louder. Hello, can you hear me now? Yes, Manas, please go ahead. So my question is regarding what are the peak margins we can do in this wedding season? Thanks for the opportunity. So my question is, what are the peak margins we can do in this wedding season? Sorry, Manas, what was the peak? Peak margins. So in terms of the overall margins, I think, we will continuously keep the same margin levels. There's a scope of margin improvement by about at least one basis point from here on, all the way till the next half. Awesome. We will try to continue the... Sorry, 1% or 100 basis points. So, this is what we are operating on. Considering that wedding season is kicking in, I think we should be able to deliver that. ... Oh, thank you. That's all from my side. Thank you. Thank you. Our next question is from line of Akshat Bharati from RSPN Ventures. Please go ahead. Hi, sir. Thank you for taking my question. I just have one question. So, we have opened two new stores in this quarter, and in spite of that, our other expenses have decreased quarter-on-quarter. So, my understanding is that when we open new stores, there is additional expenses that we have to do for inauguration and all. So can you give a color on this? Why have the other expenses decreased? And, also the renovation that you have done in some of the stores, what would be the expense of that? Other expenses, one of the major categories that we have reduced is on account of advertisement. As I did mention, generally, compared to last year, quarter two and this year, quarter two, our advertisements, A&P spend, have considerably come down, and that's a cautious decision that we have taken. And even in that spend, we have taken a major leap towards moving from the traditional newspaper to digital advertisements. So that has taken up a majority of our plan of action as we move forward. So that's pretty much the account of how the other expenses have come down. Otherwise, the other expenses pretty much are on the same line. Got it, sir. And, sir, on the renovation side, what can we expect? What are the expenses for the same? Broadly, we are budgeting about INR 4 crore on renovation of approximately 3 stores. All right. That will be met out of the internal generations of the company. Okay. And any further guidance on this other expense side, outlook or guidance? Broadly, on a percentage basis, it should come down because as we are expanding our Varamahalakshmi format, other than the initial launching expenses, the recurring advertising expenses are substantially lower in this format. So going ahead, at least we will be able to maintain these levels of other expenses, despite increase in the square footage area. One other interesting point is majority of our advertisement also is driven by our KLM format, and Varamahalakshmi comparatively has minimal advertisement when it comes to business as usual, kind of a mode. So as we expand more of Varamahalakshmi Silks in terms of absolute value, the overall advertisement spend should relatively be lesser compared to how it has been happening in the last couple of years, on account of KLM taking majority of the heavy lifting on the advertisement side. Okay, sir. Got it. Thank you so much, and all the best. Thank you. Thank you. Our next question is on the line of Sumeet Jain from Nirmal Bang Securities. Please go ahead. Yeah, thank you for taking my questions, and season's greeting. Sir, my question relate to since October has already gone, and we are targeting 25,000 sq ft addition in next two months. So are they on track or there could be some delay? Which- For the next two stores for quarter three, I think they are on track. I think we should be able to open up the stores majorly by end of November and December. These stores will be up and running. So we're still on track to get these three stores open. Okay. So they are on the way? Yes, they are on the way. Yes. So, second thing about, there was some heavy rains in Chennai and all that area, so in October month. So had they had any impact on our sales performance in those areas? One or two places like, Madurai particularly. Vijayawada. No, Tamil Nadu. In Tamil Nadu, Madurai is one store which was doing very well and was hampered by the rains and waterlogging for about 3-4 days. And with the other place is Andhra, Vijayawada. So there was a slight. Yes ... reduction in turnover or affected due to the rains, but it was for about 2-3 days only. Okay. And sir, qualitatively, if you can indicate that, season to season, like, whatever, after Pitru Paksha to Diwali, as compared to last year, how we had performed it this year? On an SSG basis, I do not know whether we can roll out the figures, but the performance on SSG front and overall was also better. Okay. Okay, and last word about this KLM. Since we were struggling in the performance of KLM stores, so how we are seeing this in the last quarter and in the current quarter? So, if you talk about KLM as a format, majority of the stores happen to be in Telangana area, and the Dussehra season panned out very well for the KLM format as such. That's believed to be the biggest season where people celebrate in the core markets of Telangana. Otherwise, KLM is seeing a good transformation. I think the overall margin profile, we are continuously trying to change the product mix and improvise our margin profile. Adding of newer categories in an SIS format has been one of the things that we have set targets. By the end of this year, we should be able to start off with a little, and move towards achieving that. We have already started off with innerwear as a category, and that category has been doing well. We will continuously try to see if we can add more categories in the entire value chain ecosystem to help the KLM as a one-stop family destination store. With respect to adding of the new KLMs, at this point of time, we are not anticipating to add any of our KLM stores. The whole and sole point of activity that we would want to drive is to add only Vara Mahalakshmi stores and improvise the KLM format margins as well as product portfolio. So that that's been our primary focus. As we believe, Q3, Q4, considering wedding seasons, everything's gonna kick in. KLM also is poised to do better than how we did in H1. Okay, sir. Thank you very much. Thank you. Thank you, sir. Our next question is from line of Chetan Shah from Jeet Capital. Please go ahead. Yeah, hi. Hi, thanks for an opportunity. Just two question. In our, in our discussion, we were talking about relatively a better second half and in terms of addition of square feet, which we already done in the first half, and another fifty or thousand sq ft, if I've heard it correctly, 25,000 each in each quarter, which you're adding in the, in the second half. So total for the full year will be adding close to what? 80,000-90,000 sq ft, Bharat? So yes, sir. So totally, I think, close to 75,000 sq ft we will be able to add in this financial year. As we initially planned, we have rolled over around 15,000-20,000 sq ft for Q1 of next year. But, you'll be able to see this entire 75,000 sq ft in terms of full level of operations for FY26. You'll see all of the 75,000 coming into action, and the good part is, all of this is coming with the Vara Mahalakshmi format. Understood. And, and second point, when, CFO sir was explaining that our Vara Mahalakshmi margins are close to 34%-35% at a, at a store level EBITDA. So is it, our, our gross margin in that business is close to 45%-50%? Because our company-level gross margin, as per your previously, is close to about 41%-42% in the first half of the current financial year. Yeah, correct, sir. Gross margin levels for Vara Mahalakshmi format will be in the range of 43%-45%. And also, store-level expenses for Vara Mahalakshmi are slightly on the lower side compared to other formats, sir. So both put together, it, broadly, we can say for the company's level, store-level expenses are in the range of about 15%-16% there. Its store-level expenses for Vara Mahalakshmi format will be in the range of about ±11%. So that's how the, so there is a slight improvement in the gross margin level is how we... Store-level expenses being lower for this format, store-level EBITDA also will be better than other formats for Vara Mahalakshmi. Understood. My last question, when we talk about sq ft addition, so currently we do about 75. So next year also can be close to similar number, Bharat, or will be little ±1,000 sq ft? Just wanted to get a sense how next two years and which is the format which we are adding, so, and how the FY 2027 total area square footage will look like? Sir, on average, we should be able to add around 10%-12% of retail sq ft addition year-on-year. And there's a spillover in from this financial year to next financial year, we might do 1 or 2 stores more. But the company's policy, as per the company's policy, we continuously want to add 10%-12% of retail sq ft addition every year. So taking that, I think by FY26, we should be able to look at 800,000 sq ft of total retail sq ft presence. 800,000 total retail sq ft present. Okay. And this will be more or less, split in the similar fashion in terms of the geography, like statewise? So right now, if I see, Telangana is highest, with close to 300,000 sq ft, and Tamil Nadu is lowest, with about 85,000 sq ft. So how does the geograph... And the reason to understand this question, Bharat, is, is there any changes in terms of the margin or a, or a footfall or a, or a, or a revenue per sq ft if, if we look at, Karnataka, Tamil Nadu versus Telangana, Andhra Pradesh, or, or overall, let's say? Okay. Sir, so, nice question. So, as of now, whatever new stores that we have added, majority, everything was in Tamil Nadu. And the Tamil Nadu, if you see, compared to the core markets of AP, Telangana, Tamil Nadu, Vara Mahalakshmi Silks' average is higher than the other markets. And the newer stores that we have added also is doing as per the same averages only, irrespective of the fact that it's in Tier one, Tier two, Tier three. So, sir, we are very optimistic about our expansion into Tamil Nadu, because Tamil Nadu is one state that we believe, even in Tier two and Tier three markets, it is a very good economy. The kind of purchasing power is much higher in these locations as well. That's the result of our stores that we have recently opened up, two stores, one being Salem and one being Madurai. As we speak, the current newer stores that are currently in the pipeline, Trichy, Tirunelveli, Pondicherry, these are also stores that have high potential. So in these areas, the margin profile is also same compared to what we are offering in the core markets of AP and Telangana. Tamil Nadu, as a matter of fact, is delivering the same margins at the same point of time. The revenue is also doing much higher than the core markets. And in the next two, three years, as you rightly said, majority of the stores, though, being in Tamil Nadu, we are looking at opening about selective stores in other parts of Karnataka. So a quick insight, if you see our current store presence, though we have about 17 stores in Karnataka, apart from Bangalore, we don't have any stores. And in Telangana, apart from Hyderabad and just 1 or 2 stores in Khammam, we don't have much store presence. At this point of time, we are also looking at expanding into Karnataka markets. Understood. Understood, understood. And sorry, can I ask one more last question, please? Yes, sir, please. Yeah, yeah. So in terms of this, you know, we've learned that our current year's first quarter was abnormally dismal, partly due to external environment, and also we didn't anticipated such a low SSG growth and all. So if one wants to foresee the number for next 8-12 quarters going forward, how are we preparing ourselves for any kind of such external shock, so that our numbers don't get impact or our margin or our inventory don't get impacted? Any thought, any strategy which has been changed from management side or that side? Sir, if you see the current wedding calendar, which stands to be the single most important factor for our business, in H1, there are negligible dates, and that's the reason why our SSG levels have been negative. But if you see right now in Q3, Q4, historically also and even right now, most of the festivities, most important festivities, right from Dussehra, Diwali, Pongal, Sankranti, all of these festivals fall in H2 of a year. Along with that, we also have a fair visibility in terms of how many wedding dates are there in second half of the year. So taking these both con- activities into consideration, we believe that second half is gonna be much better. Second half is gonna be much better, and that's how October as a month also is doing good. So if things go on the same lines, November, December, January, March also, because on account of wedding dates being there, we should be able to see good traction in these stores. And as a matter of fact, the current way these things are, Karnataka and Tamil Nadu as two markets has done outperform compared to Andhra and Telangana as markets. And October onwards, all these markets started doing good. So it's just that we, we are very, very well prepared in terms of getting our product mix ready, I mean, getting our products ready in the store. And not to mention, I wanted to highlight the importance of software that we have. We have been developing these tools and modules over the course of last decade, and we continuously strive to implement and build more technology to help us during movement of the stock from one store to understand the customer patterns better. So today, understanding and looking at the consumer preferences with respect to their purchase patterns, we are able to derive a lot of data. We will continuously use this data to carefully curate and customize the stock in respect to each and every store. And that's something that is a continuous process, and we are all very actively geared up to make sure that this wedding season goes as per our expectations. Got it, sir. Thank you so much, and wish you all the best for the same, please. Thank you, sir. Thank you. Our next question is from the line of Aniket Nicholson from AFL Capital. Please go ahead. Am I audible? Yes, Aniket, you're audible. Yes. So thanks for the opportunity. I had two questions. I think the first question is, so wanted some sense from what is the EBITDA margin level like for mature stores, maybe who are, you know, one or two years old versus newer stores? Because obviously we are adding a lot of square footage area. So if you can give some sense on that, it'll be helpful. On an overall thing, our Vara Mahalakshmi format. Vara Mahalakshmi format, yeah, as I told, it's, it's in the range of 33% only at the store level, our EBITDA margins. In the new stores, since there will be some launching expenses on there, you know. Since there will be some launching expenses, initially, the margin for the first 6-8 months will be slightly lower, and then it coincides with the company's average of Vara Mahalakshmi format. If I understood correctly, sir, you are saying in one year, the store matures in terms of catchment and all of that? One full financial year. That means we are leaving out the year in which it has come into operation. We will assess one full year of operations of the company store. That is, it would have seen two seasons. Normally, seasons will be somewhere in May, June once, and then October to February once. So if, when the store sees these two seasons, then it will get mature. So you can take it as one full year of operations, and then the store is considered as mature. ... Got it. Helpful. Sir, a related question to that is: how are our leases typically structured? So what's the typical tenure, and what's the typical escalation? Yeah. So the lease tenure anywhere goes from 9-15 years onwards. But average lease, if you look at, 11-12 years will be the average lease life that we currently have in the company. Okay, helpful. Sir, last question from my side is, you alluded a little bit to the impact of rains in South India in this quarter. Would you have some rough quantification around how much revenue would have been impacted because of this? Would it be like 2% or like 2-3% or something? Broadly, about INR 15 crore. Oh, okay. Generally, about INR 10-15 crore, maybe. Okay, yeah. That's substantial. That's like 2 quarters. No, helpful, sir. Thanks a lot, and all the best for HDFC. Thank you. Thank you. Next question is from line of Naitik from NV Alpha. Please go ahead. Hi, sir. My first question is, if you could give me the average rent that you pay per square feet? Okay. So currently, if you see the average rent, I'll let me give you an idea on how we have opened in Tamil Nadu. Our overall, in terms of when you take an average of tier one, tier two, tier three put together, it ranges anywhere between INR 60 per sq ft. It went all the way to about INR 140 to INR 135 per sq ft. So average, we have about 80-85 rupees is our average currently in the stores that we have opened. But if you take as a company's average of rent-to-revenue ratios, it's still the same thing. I think last year, I think it was around 4.5%. It's gonna, it's, even though these new stores have added, it is well within that range of keeping it well under 4-4.5%. Right. Got it. 4, 4.5%. My second question is, you've mentioned, you know, for Mahalakshmi, the store-level margins of 33, 34%. So this is excluding the rent, or this does not exclude the rent, the store-level margins? Including the rent. Rent, personnel costs, electricity for the store and some miscellaneous expenses at the store. These four are included. Included. Okay, got it. Another question is, so you mentioned, you know, Innerwear in KLM format. So just want to know, it is for all, all categories like male, female, or is it anything specific? No, it's for both the categories, male and female. Majority of it is coming from female. And as of now, it's giving a good traction, all of our stores. It's a very small SIS positioning that we have done and has been yielding one of the best results that we have. So we will continuously see if we can add more categories in this particular space to gain better revenue per square feet. Right. Right. So my next question is, you mentioned that, advertisement now you have moved from paper or the traditional one to, digital. So the traditional advertisements were more expensive than, the digital ones? Is that understanding correct? Yeah. See, more or less, yes, because, a newspaper ad today is anywhere, if you want to get a first page, can cost you anywhere between 20-25 lakhs. And that same amount spent on a digital marketing, I'm able to do curated, targeted campaigns to the right audience that I need. And we, as a company, since we capture a lot of data, we try to understand what the patterns are. It becomes relatively tailored and custom-made kind of advertisement that spends that we do. And, and nowadays, things have been aggressively moving towards kind of content generation. So in the last quarter, we have also made significant efforts in all of our formats to generate quality content, and, that has been one of the major reasons why we were able to push the content to the customers with respect, with, with respect to both Meta as well as Google Ads. We have significantly spent compared to last quarter and last year. Almost, we have doubled our digital advertisement spends. And, considering where the kind of results it's giving, it's giving us, we will continuously do this in the quarter three and quarter four as well. Can you call out the amount that you have spent on digital advertisement for the quarter? On an average, I think this quarter we spent about INR 2.2 crore. INR 2.2 crore. Around INR 2 crore. INR 2 crore, got it. So your employee cost is slightly up this year compared to, say, Q2 also. So is largely because of the new stores that you have opened or is there any other element in that? Majority of what you see in terms of employee cost is based on new stores. As you know, we have a roadmap of stores that we want to add in the near future. So we are already preparing for the new stores to come. We are already bringing them on board and training them in our existing store network. So the moment when a new store opens, we don't have to look forward for our new stores. So we are already planning much in advance of our stores, so that's the reason why the employee costs are high. Got it. And so last question: So, I just need a clarification. You mentioned you were going to open six formats of Vara Mahalakshmi format stores in H2, right? Yeah. Keep it at 6-8 stores in terms of absolute number, but in terms of square feet, around 50,000 sq ft is what we're talking about. Okay. Got it. Thank you. Thank you. That's it from us. Thank you. Thank you. Our next question is from line of Kabir, who's an individual investor. Please go ahead. Hi, good morning. My question is regarding, like, what is the long-term plan? You know, looking at the image presentation, I can see that the CAGR is 22%. ... Like, going forward for 3-5 years, do we see Kalamandir expanding to rest of the India, or what's the plan going forward? I think, could you repeat your first part of the question? Are you talking about Kalamandir as a brand or as an overall presence, Kabir? The entirety of the company, like, you know, we are in the industry of the Indian wear, right? Women, women Indian wear. The thing is, in the presentation, we've clearly seen that the CAGR of our industry is quite high. My question is, like, compared to the industry's CAGR, how are we going forward? Okay. Yeah, so, so as a matter of fact, in terms of our retail expansion, we should be able to target about 10%-12% of our retail sq ft addition. At this point of time, as of today, we are only present in four states of South India. In these four states also, there's a lot of explored and unexplored areas that we wanted to go ahead and put our stores at. So considering all of this, I think, a yearly 10%-12% of sq ft addition is possible. And, we will start doing this in a cluster format. If you see our current stores also, we try to open in a cluster format, therefore, it always has been the methodology that we have been operating at. It helps us gain advantage over administrative costs, warehousing costs, et cetera. We will do the same thing, moving forward as well. One market at a time, one region at a time, we will continuously strive forward. In terms of our product offering, currently, majority of our products are sarees. So 72% of what we currently sell is sarees. But also there's a considerable amount of revenue contribution with respect to other categories, such as women's kurtas, salwars, lehengas, menswear, kidswear. At this point of time, though we do have a good amount of network with our vendor management dealer relationships, as we move our stores to newer locations, we will definitely look at customizing our product offering necessity to that particular region. So we have already done this, based on micro-market level analysis in terms of what the customers are preferring. Moving forward also, we, as we add new stores, the product mix will therefore change. At this point of time, if you want us to talk about the next two to three quarters, majority of the growth will be driven by Vara Mahalakshmi Silks. Since Vara Mahalakshmi Silks, as a format, majority of its offering is in sarees, saree will continue to be the main flagship, torchbearer for our growth in the near future. Okay, is there any plan to expand towards the northern part of India? And down the line, I'm seeing this, like, this for the question, like, ten years after, where do you see Kalamandir Silks as a company? What is it like after ten years? So, if you want us to talk about 10 years down the line, definitely, yes, our retail store presence will go much beyond South India. We actively wanted to move towards other regions of, North, East, and West as well. But as I did tell you, we wanted to take a slow approach. We wanted to consolidate every store. If you see our history as well, even before the IPOs happened, we organically only grew. Though we had an opportunity to grow much beyond South India presence, we wanted to carefully curate and select the stores, very customized stores. And all of our stores, if you see, are company-owned, company-operated stores. So, we believe in quality over quantity. We absolutely believe in profitability rather than revenues. So all of these things are something that we take into serious consideration. Yes, I think, by year-over-year, we should be able to expand our retail presence to not just in South India, but the rest of the country as well. That's excellent to hear. Thank you, Kabir. Mm-hmm. Thank you. Our next question is from the line of Yash Kedia from Maximal Capital. Please go ahead. Mm-hmm. Hello. Hi, sir, I'm from the part of India. Am I audible? Yes, please go ahead. Yeah. Sir, I just wanted to know that, very basic question, that if, say, for example, the shopping for the wedding days start, 2-3 weeks prior to the, those dates. But won't the customer actually visit the store before that and finalize their products or what they want to buy, say, 2-3 weeks prior to the date? So the initiation from the customer end, is it 2-3 weeks prior to wedding date or, or is it before that as well? Okay. So if you talk about, there are two kinds of customers that we get. Some people is for their own consumption, and there's a gifting element as well. See, if you look at people like brides, majority of the customers who walk into our Kalamandir store are, majority of them are brides themselves, who want to shop for their weddings. There's a lot of customization that goes on once the saree is picked up, with respect to stitching of a blouse and, et cetera, embroidery work or additional cat- I mean, additional customizations, whatever they want. For them to execute this, they require at least 2-3 weeks. Because generally, what happens is, like, women, when they wanted to make a customized blouse, they have a lot of embroidery work, and that pretty much takes about 2 weeks. So people go plan this entire shopping much in ahead and try to buy. But on the other side, there are also the gifting kind of customers that generally want to go ahead and gift the customer. I mean, gift their relatives, friends, in terms of sarees. That generally don't take much of a 2-3 weeks of lead time. That happens much closer to the weddings. Okay, understood. And what will be the proportion for us, approximate? Our focus more will be on the bride side or on the gifting side, in terms of being our focus? ...Our focus definitely is more on the bride side. If you take the entire, the way we look at the data, the way we analyze it, if you have to take between wedding and non-wedding wear. Non-wedding, meaning, your festivity or any other occasions. Wedding stands to be at least 60% of the entire business comes from weddings. And in terms of festivities, rest of the 40% comes in. I'm only talking about sari as a category. So this is how we try to differentiate. For VML? VML is also same thing. More or less, it's 65% of what we offer is coming from weddings, and 30-35% is coming from the festivity and other occasions wear. So if you see in the month of October, majorly it's driven by festivities, but November onwards, weddings kicks, I mean, takes place. So, at this point of time, majority of our revenue comes from wedding and the bride side of it. The gifting component, as well as the festivity component, is much less. Okay. And so, Q3 would be having sufficient wedding dates and then Q4 as well? Correct. So Q3 and Q4 has a much higher wedding dates compared to last year, H2. Okay. If I sum this discussion up, this particular discussion, won't our stores addition in H1 will help drive those wedding date purchase better than store addition getting in November and/or December? Just a basic question. Yeah. So, generally, if you look at a store addition, there's a lot of euphoria around a store when it gets opened. So if you try... I mean, historically also, that's how we open. We always opened our stores before festivities and before wedding calendars. What happens is, like, a new store in town, and when you do the kind of marketing and advertisement that we do, it attracts a lot of people to come and at least try out. If we try to open it in an inauspicious period, the conversions don't happen as much as how it could have ideally happened before opening in the festive and wedding period. So, that's the way and that's the strategy that we have been following, and that's the reason why we had to provision most of our stores in H2. But otherwise said, our initial targets in the beginning of the year was around adding a close to around 90,000 sq ft. And that's the reason why we have actually provisioned more number of stores in H1, which is in contrast to what we traditionally do. Yeah. Yeah. So, but again, if we are opening stores in November, December, then ideally, the demand which was there for Q3 wedding dates would have already been met, at least from the bride side. Correct. So, so as we speak, as I said, I think, we, we strive to open our stores much in ahead. We would, we would want to allow our store... We would want to allow our customers come to our stores much before the wedding season. But again, the stores do take some time and some momentum to spur right from the beginning till the end. But again, with that being said, that's not the end. Even in November, December, if you see, our stores are now that are getting added is in Tamil Nadu as a region. So one single festival that is very big in Tamil Nadu is your, Sankranti or Pongal, Lohri, all of this. So that happens in the second week of January. So we are still positioned towards opening these stores much before the Sankranti season and the Sankranti festivity mood kicks in. On top of it, not only that, I think in Q4 also, there are weddings and wedding dates coming in in Q4 as well. So all of that put together, I think it's still a good time for us to open it in this time. Understood. Sir, another just basic question. Say, for example, this year the wedding dates are less, just for a hypothetical example for me to understand. For example, this year, wedding dates are less by, say, 10%-15% than what was there in the first five year. Then in that case, I have heard many less examples of wedding getting shifted to the whole next year. So there are, brides and grooms who actually, do the wedding in that same period, though the wedding dates are less, but the wedding happens, are not reduced by 10%-15%. They may be reduced by, say, 5%-6%. So, is this understanding correct, or in South, something else happens because of this? So, the way we look at wedding dates, if you see, there is no such one unified way of looking at the wedding dates. Every state has its own way of looking at the number of wedding dates, and that's the reason why you cannot look at, at this point of time, I cannot anticipate to look at how many wedding dates I have in FY2026, 2027 and 2028. Generally, the way we look at wedding dates is at the beginning of the year, we get a calendar, and based on that calendar, we try to analyze how many wedding dates are there quarter on quarter. On top of this initial traction, we also cross-verify it with, like, you know, function halls, wedding halls, to see if the data that we have is right. By doing this, we have a fair estimate about this quarterly plan of how much is the number of wedding dates that I have and what's the impact on the overall business. So that's the first point I'd like to mention. The second point is, generally what happens, especially in this year and last year, is last year, that Pitru Paksha period, we had one extra month. So that's generally that doesn't happen every year. It happens once in a while on a span of about four to five years, and that's been the major impact why the wedding dates have been less. Otherwise, the wedding dates generally get shifted between one month to the other month, and the calendar dates shift. So in that instance, what happens is that we see huge amounts of traffic in terms of customers coming into our store, everybody at once. So that's the kind of momentum we see. Though the number of weddings happened in a given year, the number of people who get, number of wedding dates have a decent amount of positive or negative. The number of people who get married also depends, and sometimes the store infrastructure will not be able to be in a way where it can accommodate everybody and anybody when it has a distributed calendar rather than a concentrated calendar. Okay, understood. And, in terms of, marriages, so wedding dates, the proportion of the wedding dates, besides the marriages in the same proportion, it is, I mean, say, point high correlation, is there? Not the full correlation. More or less be on the same lines. It's all about, like, the number of wedding dates are all concentrated on the number of people who wanna get married, the availability of... See, from our side, we can, we can go ahead and deliver the products as much as possible with respect to our storage capacity, but there are other elements with respect to having availability of the event planners, wedding function halls. Even that infrastructure and ecosystem should also be able to support this. Otherwise, people, there are many instances where people I have known have changed their weddings just because of non-availability of these venues. Understood. But in terms of correlation factor, more or less, the number of wedding dates and the number of weddings that are getting happened will be proportionate. Okay. Yes, sir. Thank you, sir. Thanks for the opportunity. Thank you. Thank you. Yes, sir. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you all for taking time to participate in the conference today. We are very excited for the Quarter Three and Quarter Four to come. Looking forward to meeting you all in the next quarter earnings call. Thank you so much. Thanks for hosting. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.