Ladies and gentlemen, good day, and welcome to the Q1 FY24 earnings conference call of Kalyan Jewellers India Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Agarwal. Thank you, and over to you, sir. Good evening, everyone, and thank you for joining us on the Kalyan Jewellers India Limited Q1 FY24 earnings conference call. Today on the call, we have with us Mr. Ramesh Kalyanaraman, Executive Director, Mr. Sanjay Raghuraman, CEO, Mr. Swaminathan, CFO, Mr. Sanjay Mehrotra, Head of Strategy and Corporate Affairs, and Mr. Abraham George, Head of Investor Relations and Treasury. I hope everyone got an opportunity to go through the results and investor presentation uploaded on the company's website and stock exchanges. We will begin the call with opening remarks from management, following which we will have the forum open for question and answer session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I'd now like to invite, Mr. Ramesh Kalyanaraman, Executive Director of Kalyan Jewellers India Limited, to give his opening remarks. Thank you. Over to you, sir. Hi, all. Good evening. The quarter was a fantastic quarter, and we witnessed continued robust momentum in footfalls across all our markets in India and Middle East over the last several quarters now. While our consolidated revenue growth was approximately 31%, the consolidated PAT grew by around 33%, up from INR 108 to INR 144 crore. Revenue from India operations grew by approximately 34%. Strong operating momentum has been consistent and sustained throughout the entire quarter, including during Akshaya Tritiya, underpinning the resilience of our category within the overall consumption basket and demonstrating strong execution in the market by our operating team on ground. We continue to see encouraging trends around the share of new customers, which was in excess of 36%. Our share of revenue from the Non-South market is now at 44%, up from 35 in the prior year. This year so far, we have opened 16 new showrooms, and we are on track to open 10 more showrooms during the current month. It's in line with our already announced plan to launch 52 showrooms across the Non-South market. The month of August will also witness the launch of our 200th showroom. It's in Jammu, a milestone in our showroom expansion journey. In the Middle East, we continue to see robust momentum, driven largely by the strong economic activity in the region. Revenue growth was around 22%. Eid holidays-driven sales, which was not part on the base year, in the prior year, also contributed to the same-store sales growth. We expect to launch the first franchisee showroom in the region before the end of the current quarter. Talking about our online platform, Candere, in line with our already announced omni-channel expansion strategy, we plan to launch 20+ physical showrooms of Candere during the next 6 months, starting from August. We've made meaningful progress towards the divestment of the non-core assets, which has been previously announced, and we expect to conclude the transaction around the end of the current quarter. As I look at the current quarter, we continue to be encouraged, encouraged by the underlying momentum in footfalls across all our major markets, even though there has been a slowdown in the wedding demand post 18th of July, primarily due to the ongoing Adhik Maas, which is once-in-a-3-year phenomenon. We are update, upbeat about the upcoming new showroom launches and are gearing up with fresh collections and campaigns for the upcoming festive and wedding season across the country. I'll now hand over to Sanjay. He'll take you through the highlights of the numbers. Thank you all. Thank you, Ramesh. Good afternoon, everybody. I'm really happy to be talking to you all after a very satisfying quarter. I will just highlight the major points now, so we can have enough time for questions. We reported a consolidated revenue of INR 4,376 crore, a growth of over 31% year-on-year. Consolidated profit after tax was INR 144 crore, versus INR 108 crore during the corresponding quarter of the previous year, a growth of 33%. Talking about our India numbers, revenue came in at INR 3,641 crore, a growth of 34% over the corresponding quarter in the previous year. India profit after tax came in at INR 129 crore, a growth of 35%. Our Middle East revenue for the quarter was approximately INR 700 crore, growth in excess of 21%, and the Middle East business posted a profit of INR 17 crore, a growth also in excess of 21%. Our e-commerce initiative, Candere, posted a revenue of INR 34 crore, a degrowth of 23%. Understandably so, as we are transitioning into the next phase of growth via an omni-channel strategy. The offline store rollout will accelerate from this month onwards. During this recent quarter, we opened 12 outlets all across the Non-South markets. With this, I'm now done with the summary of the financials, and we now open the floor for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assem... The first question comes from the line of Gaurav Jogani from Axis Capital. Please go ahead. Thank you for the opportunity and congratulations on a good set of results. My first question is with regards to, you know, the Candere in the Middle East, the franchisee store openings. I missed the earlier part, you know, how much physical stores are you expecting to open in Candere in this particular year? How much would there be on a franchisee basis in the Middle East? On Candere, we expect to do about 25 stores by the time we end this financial year, most of which would be on the franchise model. On the Middle East, the first of the franchisee outlets will open this quarter by the end of September, and then we will see how many more we can do this year. We have a few in the pipe. Apart from this one store in the Middle East on the, on the franchisee, are you also looking to open more stores or only in the Middle East part? Yeah, I may share. Here, yes, Middle East, as a market, the first franchise showroom we will open before the end of this quarter, and we will wait that to get settled down. We might open one more as a pilot, we are not stopping any expansion there. We might go and open two or three own showrooms and then convert it later. We don't want to lose the opportunity, but once the first franchise settles down, only we will do the next set, or maybe one more we will try, but not more than that, because we want it to get settled down before we go and expand more on franchise in Middle East. Sure, sir. Thanks for that. Also, sir, if you can highlight, you know, we in your press release you mentioned that, you know, the new stores or franchisees would now be coming in the eastern part of India, like, you know, Jharkhand, Bihar, and these regions. If you can, you know, give us some background of how your own stores are opening, how the brand is performing in these regions, and, you know, what gives the additional confidence to open these stores on the franchisee basis in these regions? Yeah, we are already there in those markets for the past couple of years or more than that. We have a very strong brand and what we call revenue share in the market where we are in Bihar and Jharkhand or Jharkhand. We are just expanding again, wherein we will be opening more showrooms in that region. Patna already has been one of our large footfalls or larger showrooms there, and we are well settled in those regions. The demographic-wise, I mean, is it more gold oriented market or is it more studded oriented? Because, you know, we are also hearing many other competitors entering these markets and, you know, planning to take a larger pie there. How will be the competitive scenario there? How is the demographics? Any color you can give on that one? Yeah, in every market, depends upon the brand, wherein certain brands are target only staple plain gold jewelry. For example, in Tamil Nadu. Tamil Nadu, there are large players who target only plain gold, but as a brand, Kalyan there, we target on studded ratio as well. The brand is placed that way. Same as in the case of Bihar or in Jharkhand, wherein our brand will surely be not only targeting plain gold, of course, it's a good market for plain gold, but we will target plain gold as well as studded. It's the way you place your brand there. Sure. Just 1 last question from my end is on the debt part. If you can highlight what will be the debt and the net debt? ... at the end of Q1, and what would be the breakup between gold on lease and the actual, I mean, the other debt? Yes, gold, gold on lease is almost the same, wherein we are in the 1,800-1,850 range. Debt, you are talking about the end of the financial year, right? No, no, sir, end of the Q1. Yeah. It's almost the same. Gross debt are almost in the same region. Okay. Okay. sure, sir. Thank you, and that's okay. Thank you. Before we take the next question, a reminder to all participants that you may press star and one to ask a question. The next question comes from the line of Ashish Kanodia from Citi. Please go ahead. Yeah, congratulations on the good set of numbers. The first question was on the growth trend, right? Because, I mean, if I, you know, go through your PPT and maybe even your opening commentary, I think in the Middle East, there will be some impact in the current quarter because of Eid. Then again, there is some impact of Adhik Maas in India as well. You know, just trying to get some sense, if you look at the last 40 days, how has been the growth, both for India and Middle East separately? Yeah. As I told you in the opening remark, wherein July, the first two weeks, the revenue was very good, okay? It was almost as good as Q1. Post Adhik Maas, the wedding part of the revenue has been muted, especially in the Non-South markets and. Weekends are very strong. Momentum is very strong. Yes, there might be some. It's not, it's not a lost sale, you know that, okay? It, it can move partially, it can come in Q2 itself, partially it can go to Q3. It might have absorbed in Q1 itself, which we don't know. That is the present scenario. We are extremely bullish on Q2 as well, because momentum is very strong and weekends are strong, and first two, 2 and a half weeks were extremely good, and that's it about Q1. You know, the wedding season starts from August 17th. Sure, sure. That's helpful. Secondly, on the, on the gross margin side, right? I mean, definitely a very sharp improvement in the studded make. You know, you have provided that, you know, the showroom gross margins are up YOY, and we understand that, because of the franchisee model, you know, there will be a dilution in gross margin and EBITDA margin. I mean, if, if you can provide some broad numbers in terms of, you know, what the gross margin was in, for your own store as well as for the franchisee store during the current quarter, that would be very helpful. The own stores are in the range of, say, what? 16%. Franchisee store, you know, that our margin is in the range of 8. We take our margin and only then sell to them, no? Okay, sure. Thirdly, you know, on the Middle East side, you know, there are some, you know, volatility in the margins. On a, on a sustainable basis or on a normalized basis, you know, what should be the gross margin and EBITDA margin for the Middle East business? The Middle East this time, because we got that Eid sale, that was an Eid weekend, wherein it was a long weekend, and that sale was absorbed in Q1. That mostly comes with plain gold, because lot of, lot of footfalls happens during that time. It should, it should be settling in the range of what? 15%-15.5%, as usual, and EBITDA are in the range of 8%. Sure, that's helpful. Just last bit on the divestment on the non-core assets, you said units should maybe conclude by end of current quarter. Do you expect the, you know, the cash to come in by end of current quarter? Is that understanding correct? Yeah, perfect. Okay, done. Thank you so much, and all the best. Yeah, thank you. Thank you. The next question comes from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, Ramesh and team. Hi. Thanks for the opportunity, and congratulations. Thank you. I think, I'm reading a little deeper from the P&L numbers. Our revenue has increased close to about 34%. Yeah. When I look at other expenses, which has grown in tandem at 33.6%, while employee expenses have grown a little higher- Yeah. at 45%. Yeah. Is there any one-off or how, when we should look at and this is the base? I mean, one part is that, yes, we have opened a more number of franchise stores and we are since actively controlling that. Is there any one-off or is there... How we should look at it for the rest of quarters, this number? Yeah. Two things. One, of course, all of you, all of us know that there is a huge expansion plan wherein we will have to absorb employees much before the store gets opened. Okay? Employee cost will go up because of that, because they stay in our books, and it will be non-operational also. It will be in a training stage wherein they will have to go to the new showrooms, okay? We added approximately 600+ employees only in Q1. That is one. Second is that, there is of course, one, a small quotient of INR 1.5 crore-INR 2 crore. That is an ESOP, which is not a one-off, but we just started this financial year. We have given ESOP to 400 employees, which started from Q1. ... Just a little more clarity. You said that you have added 600 people in the month of June. Quarter, quarter. In the quarter. This ESOPs, what you have said, is given to how many people? ESOP, there are 2 versions. 1 is ESOP to only the senior management, which was issued pre-IPO, just after IPO, okay? Okay. Now we have issued ESOP to more than 400 employees. 400 employees. Yes. Till what level? I mean, you've gone up to the store manager level? Store manager level. Okay. This, obviously, I would believe that will be recurring, or this is going to be once in a year, or it's, I mean, as and when you will declare this. I just want you to understand, is there any policy we have around ESOP? Yeah. Policy around ESOP means, what do you mean? No, is it going to be a once in a annual phenomena, in quarter one you will deliver the ESOPs or? Yeah, as of now, we plan to do this for this year and next year. Okay. Post that, we will evaluate whether it is ESOP or some other product which we should introduce. For the next two years, it's ESOP. This INR 2 crore issued at what price? This issue will be at 140 and 150. One forty and one fifty. Yeah. Okay. Second, when I look at the ad spends, we said that from the time of IPO, we will be able to manage between 1.5%-1.8%, but this quarter it has gone up. Could you give us some on ground, what is happening, why this has gone up, or is it primarily because of something else? No, ad expenses will be always around 2%-2.2%, which is again, still continuing. Of course, store openings are coming, and we opened 12 new showrooms in Q1. You will have to at least spend for micro marketing in that area for you to go and open the stores. We were talking about 1.8%-2%, over a period, and for our existing showrooms. Because the store expansion is much more than what we had estimated a year before, we will have to do campaigns when we launch the stores, right? We opened 12 new showrooms, and campaigns were around that, as well as our usual campaigns of around 1.8%-2%. Okay. my second last question on the top line growth. though we have a visibility on the franchise operation, would you give a final number? Is there a revisit on the plan, what you have targeted, 52 stores under FOCO this year, or we will expand more than that, or you stay with the number which you have told us before? As we speak, what we are planning is that we want to open maximum number of showrooms before Diwali, the 52 planned, and there will be openins in Q4 as well. We are increasing our bandwidth to do more than 52. That is what we can tell you right now, but we are trying to do most of the 52 before Diwali. I understand, just curious to know that what will come in second half? Yeah, second half cannot go... It will be anyway, not lesser than last Q4. Okay. Okay. My last question on the Middle East, though you have given some explanation, but, I mean, qualitatively, Middle East, last 4, 5 quarter, we have given a very strong commentary. Tourist, footfall is also improving. Yeah. How we should look at the entire business in full year FY24? Will it grow beyond 25, will it go beyond 30, or will it go between 20 and 25? There we are only looking at same store sales growth, basically, you know, because the number of showrooms which we are opening are not like India. We are not adding too many showrooms there. Last year also, if you see, we have added hardly, what, one or two showrooms in that space. 21% growth in this Q1 itself is actually it is better than our usual. That is because of the Studded revenue which came in. And it has been growing over the past one, one and a half, two years, it has been growing. We should not estimate more than double-digit, is what I feel on Middle East. You said, just one follow-up on to get little more deeper explanation. You said it is driven by SSG, so against 22%, what is the SSG growth? almost everything, I mean, maybe 1% lesser. Yeah. Okay, 21% is SSG growth? Yeah, yeah. What is that number for India? India's, South SSG was in the range of 15%, and very similar levels on, North South as well. Okay, that's helpful. Thank you, and all the best. Thank you. Thank you. The next question comes from the line of Nihal Jham from Nuvama. Please go ahead. Hi, good evening, and thank you so much. Thank you. Sir, I had 2 questions. First was, you did give a sense of the gross margins for the store business extra franchising. Just if I compare versus last year, and I'm talking about the India business, ballpark, our gross margins are similar, whereas the Non-South share, even if I exclude the transfer that may happen to the franchisees and the Studded share, has significantly increased. Is it a case, as you had highlighted a few quarters back, that maybe the incremental margins on the Studded are not as high as what is generally understood to be, because these are low-value Studded items? No, Non-South share has been largely from franchisees, okay? That comes with more standard, that's why you see that the standard ratio or the standard share is, has increased too much, okay? That standard also come with a lesser margin because it's a franchisee revenue. Understood. Okay. It's primarily because of all the incremental growth in Non-South, even the standard share is coming in from the franchisees, so that then won't reflect on the gross margin side, is what is happening? Yeah. Yeah. Yeah. Of course, there is growth in our own store also, okay, but mostly it is coming from the new showrooms, you know, which is again, from franchise. Sure, sir. That is helpful. The second question was that you have highlighted in detail about the plan on non-core assets and then on debt plans going forward. Assuming that you get the payout, as you said, by the end of Q2, is there a plan to use those proceeds to then pay down debt and let go of the lien on those aspects? Or any Yeah, of course. All the money received from aircraft will go directly to reduction of debt, and that's it. Net of tax, right. Sure. Maybe there's a target that maybe by Q2 or somewhere in Q3, you do plan to reduce your debt immediately. Yeah, the money will come and directly reduce the debt on the aircraft. Over and above that also, you know that we are planning to reduce around 15% of our debt in India. Got that. That was it from my side, sir. Thank you so much, and congratulations. Thank you. The next question comes from the line of Anurag Dayal from HSBC. Please go ahead. Okay, thank you for taking my question, sir. Sorry, I missed the comment of same-store sales growth for India. Could you please repeat that once? Yeah. same-store has been in the range of 15%, in South as well as Non-South. Okay, thanks. Second question is that there was some comment, the demand slowdown, you also mentioned that. I mean, what steps are taking some specific steps to improve that? For example, is there any more focus on exchange gold or something like that? No, so demand, as I told you, usually, for the first 2, 2 and a half weeks, it's not that we have a panic on demand, okay. Demand on the wedding segment has taken a pause. That is because of this Adhik Maas, whatever you do, those customers will not come before the Adhik Maas gets over. We are sure that they are going to come back after August 17th. The only thing is that all the revenue might not come in Q2, it can go to Q3 as well, and a few would have been observed in Q1. That's it. Otherwise, old gold as an instrument, our old gold policy, old gold exchange program, has always been very customer-friendly, and it is effective customer acquisition tool as well, okay. In the past, we have done old gold activation only during periods where there is a slack in demand, especially due to volatility in gold prices. Okay. Okay. In the recent past, including Q1, fortunately, we had not. Meaning, we did not do anything of that sort because momentum was extremely strong. Even now, as we speak, momentum is strong during weekends, and the first two, two and a half weeks were good, very good, comparable to Q1. We think that this demand is not going to go away. It's an, it's a Adhik Maas related, wedding demand revenue loss, which is not a loss, it is only a timing issue. Mm-hmm. Got it, sir. Very clear. Basically, this old gold will be around 1/3 of total sales, or? Yeah, it's almost 1/3. Yes, it's in the range of, what, 30%. Okay, sir. One, one little bit question I have is on the, you know, gold import, which is being done from UAE, under that Comprehensive Economic Partnership Agreement. Are you guys also looking at that, or it's already started doing that? Yeah. We have done work on that, and we will do this, and we plan to do it in this financial year. Okay. Thank you so much, sir, congratulations for a good year. Thank you. Thank you. The next question comes from the line of Manoj Menon from ICICI Securities. Please go ahead. Hi, team. You know, congratulations on a very good performance. I'm wishing you good luck, you know, into the medium term. Yeah. First is on some qualitative region, you know, color on the same-store growth trends, you know, region-wise, broadly, because while, while I heard you commenting a couple of times about South 15 and non-South 15, are there any, you know, further color you'll be able to provide on non-South? Yeah. South 15 is there, and Non-South also, it is almost in that range. It's not exactly 15 Non-South, and it's in that, in that range of slightly higher than, what do you call, South. Maybe in the range of 16, in Non-South. you know, what I'm trying to understand is there is no standard deviation, you know, high standard deviation on the rest of Non-South, right? West and North and East. No, no, no, no. It's almost, yeah, region-wise, it's almost the same. Interesting. Interesting. Secondly, this comment on Adhik Maas, you know, just help me understand this, please. I mean, this happens every year, right? It's not a this year phenomenon. This must be there in the base also, right? No, no, no. Adhik Maas is once in 3 years, so- Okay. You are confused with Adhik Maas or what? Okay. Karkidakam and all, no? Yeah. That's not this. Yeah. Adhik Maas is coming only once in three years. Understood. Understood. And understood. That's why we're calling it out. Then couple of clarifications. FY 2025, let's say, you know, what is the thought process, maybe the early thought process on the franchise expansion? Because you would have added these 52 stores in FY 2024, you know, and you would have got those primary revenues, you know, in FY 2024 itself, right? Mm. What is the broad thought process? Is there a, what is the thought process of, let's say, will it be again another 52 in FY 2024, sorry, FY 2025, or a, or a different number which you are thinking currently? Yeah. Whatever we do in this financial year, we will better it for the next financial year. Okay, fair enough. Lastly, the 52 stores number, this is excluding Candere, right? Yeah. It is excluding Candere, it is excluding Middle East, it is excluding any conversion from South India. Far. Thank you, and good luck. Thank you. Thank you. The next question comes from the line of Naresh from Sameeksha Capital. Please go ahead. Yeah. Am I audible, sir? Yes, yes, very clear. Yeah. Firstly, congratulations on very good set of numbers. Thank you. The first question on the other expenses, it has remained around 4.5% of your revenue. Now, as your, this FOCO store scale up, while you explained that, gross and EBITDA margin will go down slightly, these other expenses should also, as a percentage, come down, right? Because these expenses will be borne by the partner. If you can throw some color on that, and going ahead, what should be the range which we should expect? Yeah. You are right. As a%, the OpEx% on our revenue will surely come down. On an amount, it's not going to come down, because our own store is remaining as our own store only, no? Right. Right. No, I am asking as a% only. This quarter, while we have seen some compression in margins due to this, higher revenue from FOCO stores, but in OpEx we have not seen that. I just wanted to understand that better. Yeah. That impact is fully taken by the salary costs. Can you, can you guide, like, I mean, this 4.5% should go down to what percentage of sales in next 2, 3, 4 quarters? No. Here, the same-store sales growth is coming more majorly in our own store only. Mm. I always conservatively tell everyone that even though there was a 15% same-store sales growth in Q1, we cannot estimate a 15% throughout the year, right? Mm. The percentage growth of SSG, usually we keep in the range of what? 5% to 7%, and operating leverage will come only to that extent on your expenses as well. Okay, what was the contribution- I am here on the franchisee showroom, just to explain it. See, we will get, we will get only a portion of the overall gross margin as our share of the that. That is the impact that we have taken at the gross margin level for the current quarter. So if you, if you compare FY from 15.46%, it has come down to 15.07% in India. That impact is because we have, we have shared a part of our gross margin with the franchise owner, and the expenses, most of the expenses are shared with the franchise partner. We take care of only the employee expenses at the showroom. All right. In that, in that context only, your growth in other expenses, other expenses going ahead should be lower than your top line growth, right? Yeah, that is where he, Ramesh mentioned that as a percentage, it will come down. Okay, sure. What was the contribution of this franchisee stores to your revenue, if you can give that number for Q1? Yeah, it'll be in the range of I do not want to give an exact number there, but you can, you can easily keep it as 15%, one five. Okay. Last question, any update on the payout policy? Last quarter, you had said that you'll come out with a, a policy, so any update on that? For dividend policy, we are yet to. We will surely come back to you. Okay, sure. Okay, thank you and all the best. Thank you. Thank you. The next question comes on the line of Manish Poddar from Motilal Oswal Asset Management. Please go ahead. Yeah, hi. Thanks for giving me the opportunity. Just if you can call out how many stores did you open from last quarter, and how many of them were franchisee? Last quarter, we opened 12, out of which, 11 was franchise. 11 was franchisee? Yeah. If, if you can share with me the number, how, how much was the cash flow from operations during this quarter? Yeah, one second. Let me double check. One second. Okay. ... Hello? Yeah. Yeah. The total cash flow from operation is INR 426 crore. INR 426 crore. How much is the CapEx done in this quarter? INR 78 crores. You would have got a, let's say, INR 350 odd crore release, right? Where is this, so this is just cash on books right now? Because earlier you mentioned there has been no change in, debt or let's say, in terms of, you know, gold on these, limits. I'm just trying to understand, let's say, the incremental cash flow generated after CapEx was roughly INR 350 crore, right? Just a minute. Incremental cash flow will not be INR 350 because, it's the total cash flow which Swaminathan was telling. The cash flow is now sitting as cash in hand, which, I told you about gross debt. Net debt is, of course, lesser than March 31st. How, how much is the number? Maybe around INR 150 crore lesser than March 31st. You've already paid INR 150 crores of the INR 300 crores? That's the difference. We will not pay back because- You've not paid it, but you have the ability- We have only kept it there because we don't know, all this expansion is coming. We are planning to do it before Diwali. A lot of CapEx is required. There can be some contingency. We don't want to go and pay back right now, but we will go as per the plan, and intention is to go and reduce the CC limit by INR 300 crore before the end of the year. just 1, 1 more data point, if, if you can help me. Let's say, so INR 150 crore is the additional cash which is generated. Yeah. Or let's say, which is gross and net debt. Where is the remaining INR 200 odd crore? Is it, is it in inventory right now? No. The total cash flow is what Swaminathan was telling, so out of which interest would have been paid and rent would have been paid. The net cash in hand surplus is only in the range of INR 150 crore. Okay, got it. Great. Thanks. Thank you. The next question comes from the line of Shantanu Kantak from iWealth. Please go ahead. Good evening, sir. Congratulations on a good set of numbers. I had two questions, one of them being regarding the ROE. In the PPT, we had given that we have done around 13.5 for FY23. Say by FY25, what would be our ROE%? The second question would be, I'm going to start on the ESOP. How many ESOPs are we planning to give out on a yearly basis? Yeah. regarding return on equity, it will surely go up because, all the franchisee stores which we are opening, the ROEs are in the range of 95%. Okay? That's how we are also meaning the expansion is completely taken care by them. you want to give more color on the. Yeah. Yes, I agree with Ramesh. Return on equity will definitely go up, because... The point, we would not want to give a target for FY25. Okay, sir. Regarding the ESOPs, how many ESOPs do we plan on giving? We have already created pool of about 30 lakh shares. Right now we are giving out of that pool to the employees. Okay, sir. Thank you so much. Thank you. The next question comes from the line of Pulkit Singhal from Dalmus Capital Management. Please go much. Thank you for the opportunity, and congrats on the great set of numbers. First, question is on the franchisee model itself. Obviously, this is the first full quarter of the impact. Just if you could, you know, give some comments as to how has the experience been, whether the assumptions that you made initially are playing out, is it working out better or some areas you might have to go back? That would be a great start for that. Yeah. Sanjay, you want to take it? I think after we started, you know, we did the pilot, and we got some learnings from them and, you know, did some calibration to kind of make sure us as well as the franchisees got what we wanted out of this, you know, rollout. Broadly speaking, you know, our expectations have been met, franchisee expectations have been met, and I think we are in a good place as far as being confident about being able to roll this out on schedule. Understood. You believe that this can be much more scalable now, or would you think it would take some time to reach that conclusion? No, no, absolutely not. We are very confident of the scalability and I think this is on the roll now. Okay. Secondly, in terms of the margins, the PBT margins are at around 4.3% at a company level. I presume that is what one should focus on now with the newer models. Two questions out there. Firstly, is franchisee, broadly tracking similar numbers or, are below or, or above? Secondly, I thought that with the growth, you would have seen some, discussing some kind of leverage on a YOY basis on this PBT margin. Any comments on that? Yeah. Pulkit, hi, Abraham here. The PBT, now if you split that between India, Middle East, and Candere, that's how one should look at. India PBT was about 4.7% YOY, which has gone to about 4.77%, close to 4.8% now. It's improved. For the franchisee showrooms, the PBTs are in the region of close to 5%. That's why it, it's showing an improvement at the PBT level. There is some amount of loss in Candere. We've done about INR 2.2 crore of loss in Candere, and that has also affected the consolidated PBT. Understood. Last question, I thought, from a return on capital perspective, I mean, what is really the capital employed in the franchising model? Has that changed? I thought it was just 2 weeks of inventory or something like that. Yeah, it's about, about 15, 20 days of inventory. Correct. The CapEx for the for the showrooms in the current financial year, we are taking care of the CapEx. Understood. Thank you, and all the best. Thank you. The next question comes from the line of Ashish Kanodia from Citi. Please go ahead. Yeah, thank you for the opportunity. First is on the wedding share. What would be the, you know, rough mix of wedding in the overall India revenue, and if you can split that between South and North? Usually, the wedding share for the brand is around 55%-60%, and it's very similar, south and north south. Meaning south can be 60, and north south can be in the range of what? 55. Sure. Secondly, you know, in terms of employee cost and the number of employees, right? When I look at 1 to 2023 versus 1 to 2024, we have added around, you know, 2,500 employees. You know, even the employee cost has gone up by almost, say, from INR 100 crore to almost INR 140 crore. You know, when you're talking about, you know, maybe similar or higher store expansion in FY 2025 as well, is it fair to say that, you know, the, the momentum in terms of new, employee addition as well as, you know, the employee cost will be very similar to what we have seen in the last 1 year? Yeah, it should. Meaning the employee cost is going to grow at the same pace for the next year as well. Okay. Lastly, you know, I understand there has been, you know, some conversion of stores, maybe, from, you know, company-owned to franchisee. So just at, at the end of 1 to 24, can you just give the number of, franchisee stores and, COCO stores in India? It's not about conversion there. What will happen is that, for example, in this quarter itself, meaning the Q1, out of 12, 11 were franchise and one was owned, right? That one owned store, the intention is not to keep it as owned. Due to some technical issue, the franchisee could not take it there because of some GST related or something like that. Okay. Already as we speak, we have converted that. Conversion is more related to that rather than converting owned store. The original conversion of owned store will happen only in South, wherein we will specifically tell you about it. Okay. Okay, this, this is very helpful. Thank you. Thank you. Thank you. Before we take the next question, a reminder to all participants that you may press star and one to ask a question. The next question comes on the line of Harshal Setia from AUM Fund Advisors LLP. Please go ahead. Harshal, your line has been unmuted. Please go ahead with your question. Harshal, your line has been unmuted. Please go ahead with your question. We shall move to the next question now. The next question comes from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Yeah, thanks for the follow-up opportunity. Hi. Sir, just wanted to check, you said, aircraft sale will happen. To just understand, wanted to understand what is the ballpark number which we are getting? You said there is a tax also. That's the first part, and second, you said that there is also non-core asset. If those non-core asset will get divested in the financial FY24 or it will get, next year? The aircraft amount is around INR 134 crore. Net of tax will be in the range of INR 100 crore. Again, real estate, we will not be able to commit anything for this financial year, because we'll have to go and repay the bank loans and then take out that asset, then put it for sale. It's going to take time. The other non-core assets, we should look at it as a medium-term, where in 2-3 years mission, we should look at in that way. Okay? We will start the process, of course, but not commit anything for this financial year. Okay. My second question on how much spot buying we have done for gold in Q1? You said exchange is 30%. Yeah. Yeah. Shirish, exchange is about 30%, Gold Metal Loan levels have remained at similar levels. at about late 40s. The remaining we've bought from spot. Say about 30%? Correct. Okay. my last question, while hearing from the market leader, we have heard that there is a local competition, there's a regional competition, and especially the competition took a route for dropping the price. Not dropping the prices, I mean, giving the similar value to the gold exchange. Even, the, the market leaders can aggressively push with these promotions. In your lens, have you seen this is specifically hitting any particular pockets? Or maybe at this time, what is the competition angle, or do you recognize there is a competition? Yeah, competition has been very strong always in the industry. For the past one, 1.5 years, it has been even strong because of the Customs Duty increase. Now it is actually a part of life, meaning, it's a new normal today for us. We have adapted to it, and the margins are steady, which you can see. Yeah. The, the reason why I'm actually asking... Yeah. if, if I look at the history, normally the making charges, we used to have a standardized of about 25%-30%, but now it is the, the incremental quantum has gone up. I, I don't know to name any particular player, but I see that the making charges, there is a lot of discounting which is happening. I just wanted to understand this, this quantum, which used to be a phenomenon somewhere in the wedding season, but this has become a normalized. Is it the industry is now normalizing and these expenses are given expenses, or still the novelty is going to be there? Yeah. We have not been given, meaning making charges are always according to the market and according to the product, and we have not given any extraordinary discount, on making charge, even for Q1. Old gold, as I told you before, our exchange policy is actually very customer friendly, we don't have to do any further promotion on old gold unless and until we have a very strong reason, like very high volatility in gold prices, very low momentum at the store, et cetera. Fortunately, in Q1, the momentum has been extremely strong right from day one, and Akshaya Tritiya was also strong. We did not do any activation on old gold as well. Competition, now it is like 1 and a half, 2 years now, wherein we have adapted to the new normal today. Okay. The gold rate is also same across the country today, making charges are almost stabilized to where we want. Margins are getting steady. Standard ratio is always there. We don't see any major deviation in the competition between what, the last 2 or 3 quarters now. Okay. Just last 1 question. In your market intelligence or, from the procurement level, do you think, during Diwali, the gold prices will remain stable or will also see the volatility? If you look at the macroeconomic conditions are still very, very volatile. Yeah, that is very hard, very hard to predict all that, because it's a global, what you call, environment, which again, takes care of the gold price. Extremely hard for us to predict that. Okay. No, I, I was just asking, whether we see in a quarter three some inventory gain, because we are seeing the gold exchanges still sitting at 30%? Yeah, but we would not get any, no, because we are, we don't take any risk or gain in metal. Okay. All right. Yeah. Thank you, and all the best. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Ramesh Kalyanaraman for closing comments. I thank you very much for attending the call. Hope to see you again in the next quarter. Thank you very much. On behalf of Kalyan Jewellers India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.