Q1 FY 2022 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode. 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 and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Saket Todi, Executive Director from Lux Industries Limited. Thank you, over to you, sir. Good evening and thank you everyone for joining the earnings conference call for the quarter ended June 30th 2021. Along with me, I have Mr. Udit Todi, Executive Director, our CFO, Saurabh Kumar Bhudolia, and SGA, our investor relation advisors. I hope you have received our quarterly results and investor presentation by now. For those who have not, you can view them on our website. I hope you and your family are keeping safe amid the ongoing COVID-19 wave, and I'm happy to share that despite facing a challenging environment caused by the second wave of COVID-19 pandemic, our company has delivered robust revenue growth of 32% in Q1 FY 2022. We at Lux Industries have been proactive to understand the significance of the guidelines issued by the authorities and have adhered to all the necessary COVID-19 protocols. During this challenging situation, we at Lux have extended all possible support to all our employees and have rolled out mass vaccination drive for them, their family members, as well as the people residing in the nearby areas of our manufacturing units. We always emphasized on health and well-being of our employees, including their family members, and this vaccination drive will create a safe and healthy working environment for all our stakeholders. In the current quarter of COVID-19, the curve is flattening, and we are operating at our optimum capacity and have started our regular manufacturing activities. Given the recovery of the economy in Q2 FY 2022, the resilient industry growth over the last few quarters, better availability of vaccines, and declining cases, we're optimistic of the upward trajectory to continue and expect a further revival of demand and consumption in the economy. Now, coming to our performance for the quarter ended June 30th 2021, we are pleased to report a resilient performance that was mainly driven by the increased consumption of our products in the semi-urban and the rural market, where we have a strong presence. In addition, we are witnessing a structural shift of consumer preference in the use of the innerwear products from unorganized sector to the organized sector and sustained traction for our mid-premium and premium categories. We have also been seeing the positive momentum in our online and export segments. For Q1 FY 2022, we witnessed healthy revenue growth from our economy segment, which registered a growth of 32% and stood at INR 421 crores as compared to INR 319 crores in Q1 FY 2021. This was led by approximately 9% growth in volumes, while the ASP saw a growth of 24%, which was well above the industry average. We have also been able to increase our share of pie where Lux enjoys approximately 15% of the market share in the organized men innerwear category. We at Lux have been catering to a large part of consumption basket and have product pricing ranging from INR 24 - INR 1,790. Our mid-premium segment registered a growth of 30%, and the volume growth here was at 12%, where the ASP growth was 20%. In our premium category, the growth registered is at 136%. We expect a revenue share of INR 500 crore from our premium wear category by FY 2025. For the first quarter, our advertising expense stood at INR 26 crore, which is approximately 6% of our Q1 revenue. As guided earlier, for FY 2022, we will gradually be reinstating our ad spend back to 7%-8% of our revenue. Seeing the pandemic situation of the current year, we might even revise it back to 6%-7%. Advertisements and marketing have been one of the key pillars in building our brand equity. Starting FY 2017 till quarter one FY 2022, we have invested INR 667 crores, which is approximately 8% of our revenues, and we have been able to generate INR 16.47 on every rupee ad spent. With this, I will now ask Mr. Udit Todi to share his thoughts. Hello, good afternoon, and a very warm welcome to everyone. I hope everyone is keeping safe and healthy during this situation. The results of the first quarter FY 2022 demonstrate the resilience of the company's diversified portfolio that caters to large parts of the consumption basket. We have achieved better than expected performance for the quarter ended June 30th 2021, not only from a top-line point of view, but also from the profitability point of view. Despite being present in an industry where there are a large number of unorganized and small-scale manufacturing units. We have been able to establish and leverage our parent brand, Lux, in a way that we have not only been able to gain market share from the unorganized sector, but also penetrate in the organized sector space. Today, Lux is present across various market segments, which has led to risk mitigation, higher growth, and increased penetration across various market segments. We also have plans to explore categories like women's innerwear, women's athleisure, T-shirts, pajamas, track pants, et cetera. The merged entity will not only provide us greater financial agility, but also help us gear for the next leg of growth. On the supply chain aspect, we have one of the largest distribution networks in this industry, having a strong presence in North, East, and western parts of the country. Our distribution network of approximately 1,170 distributors, 12 depots, and 200,000+ retail outlets across India has helped us in the last mile delivery of our products, also during this pandemic. Going ahead, it will be our effort to further invest and improve our distribution and expand presence in the South India market. We have a fill rate of 95% against the industry average of 80%. We continue to endeavor healthy profitability ratios by focusing on better product mix and rational cost optimization. Over the last few quarters, we have been able to continuously optimize our working capital cycle. Our working capital days as of June 30th 2021 stood at 165 days, which is lower by 13 days as compared to June 30th 2020. The business is very much seasonal in nature. In the near term, we expect it to be in the similar range of March 2021, which was approximately 120 days. We expect healthy growth in our revenues in FY 2022, as we are placed to capitalize on the ongoing upturn in the hosiery industry. Going forward, we will continue to provide newer products that are fashionable with the best quality and comfort. With this, I would now request Mr. Bhudolia to take you through the financial performance. Thank you, Udit Todi. Our company reported a strong performance for the quarter June 30, 2021. Our revenues for Q1 FY 2022 stood at INR 421.09 crores versus INR 319.25 crores, registering a stellar growth of 32%. Contribution from premium brands stood at INR 57 crores while mid-premium and economy category contributed a revenue of INR 195 crores and INR 165 crores respectively. Our well-thought business acumen has helped us deliver consistent profitability and margins without compromising on our growth. Our EBITDA for the quarter stood at around INR 91 crore as compared to INR 57 crore in Q1 FY 2021, a strong growth of 59%. Our EBITDA margin have shown a significant improvement of 373 basis points, which stood at 21.6%. Our PAT for the quarter stood at INR 63.72 crore versus INR 37 crore in quarter one FY 2021, which registered a growth of 73%. PAT margin for the quarter stood at 15%, showing an improvement of 360 basis point compared to 11.5% in the same period last year. Our revenue contribution from export sales is at 9%, while domestic sales contribute to 91%. We have a strong export presence in around 46+ countries. The regional revenue split is as follows: led by Northern India and Eastern India with 27% share, followed by Western India 25%, and Central India 19%. While revenue split from segment stood as follows: mid-premium 47%, economy 39%, and premium 14%. We have sufficient cash reserve, which will not only be utilized to meet the company's growth requirement, but also to reward our shareholder on a timely basis. Over the years, our prudent financial decisions have not only helped us reduce debt, but also become a net cash company. Please note the numbers highlighted in the speech and the presentation are consolidated number, post-completion of merger with our group companies. On the CSR front, for the quarter, the company has till now contributed around INR 17.2 lakhs while we are expecting a budgeted number of CSR for the complete year should be in the range of INR 4.5 crore. Out of which, company has already given a commitment to support Tata Medical Center for INR 2.5 crore for one operation theater, including infrastructure and medical equipments. With this, we will now open the floor for question -and -answer. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shalini Gupta from Ashika Securities. Please go ahead. Yeah. Good afternoon, everybody. Sir, I had a couple of questions. One is, I believe GenX is your main athleisure brand, and that is an INR 21 crore brand in the quarter. If you could just say, what has been the growth in the brand in GenX, and therefore athleisure? See, our athleisure is not only GenX. In our mass menswear category, GenX has a major part in the men's athleisure wear. In our womenswear, we supply athleisure to the brand Lyra, and in our men's premium wear, we supply athleisure in the brand ONN. There are three brands. We do not have at present the athleisure-wise breakup of all the three brands constituted together. Yes, we are seeing a very good traction in athleisure wear, and the overall growth in athleisure is above the average growth rate of the company. Okay. Sir, my second question is that in premium category, Lux Premium is at INR 38 crore, and I think that is almost entirely exported. Net of that, we have a very small premium for the brand, and like for the quarter it would be INR 30 crore. As we have been targeting the premium category, we have been saying that is going to be a focus area for us, but are you satisfied with the kind of figures that you are seeing? As in a premium product of INR 20 crore in the quarter versus your overall sales figure? Shalini, let's allow us to split the question in two different parts. You were right that we were having only three brands, One8, ONN and Lux Premium, which is nothing but mainly the export business what we do have. These three brands constitute put together giving me a premium category. The idea over here is like One8 and ONN, both are very much a growing brand and definitely company is looking for that in the near future, both the brands will become a three-digit number. ONN is almost reached to INR 80 crore-INR 90 crore and we are very much sure that over a period of two to three years it will become around INR 150 crore brand. Apart from this category, as this categorization has been done, this is by keeping in the mind that what kind of customer we are going to service the product. In case we bifurcate the brand, this is my margin structure, around five brands, which is a very high potential margin driver, which is One8, Lux Premium, ONN, Inferno and Lyra. This will become a kind of my margin driver brand falls under the premium category. If you'll refer my slide number nine, it will give you a realistic picture that apart from the customer servicing, if we are going with the margin structure, out of total 10 brands, five brands are coming under premium, balance five are coming mid-premium and the economy. Okay. Sir, can you just repeat the names of brands? One is Lyra. Sorry, your voice is breaking in between. Okay. It's clearly mentioned on slide number nine. You can just have a look at slide nine and it will be quite visible to you. Okay. Sir, my other question was that. Am I clear now? Hello. You're clear. Okay. My question was that we are seeing a lot of growth coming to us from the unorganized sector, and which I would assume is because of the unorganized sector facing a lot of liquidity problems due to COVID. Now, sir, how long do you expect this kind of growth to continue? Because I think probably in the next four or five months, the liquidity issues for the unorganized sector are going to ease. If you could just share your thoughts on this. There are two things. One is the demand in the rural market, and the other thing is the liquidity issue. Regarding the demand, as we are seeing, the demand is pretty much stable in the rural market, but now the production or the supply or the service from the unorganized sector due to COVID, it's not been taking place properly. Due to which the whole demand is being shifted to the organized sector who can supply the product in the pandemic time of COVID. That is why we are seeing the very good traction in the rural market where we are seeing the shift going from the unorganized sector to the organized sector. Now coming to the liquidity issue, yes, there is a liquidity issue in the rural market, and in the next four to five months it is assumed that it will ease out very well. As we are seeing, as our brand is being demanded in the rural market, the first payment from our retailers to the distributors or from the distributors to the company is coming to us. We aren't facing as much liquidity or payment issues from our dealers and distributors as it might be with our peers. Yes, there is a liquidity issue which will get solved in the next few months. Okay. sir, my last question? Sorry, Shalini. Sorry. I would request you to come back in the queue, please. Yeah. All right. Okay. Yeah. Thank you. The next question is from the line of Vaishnavi Mandhaniya from Anand Rathi. Please go ahead. Yeah, hi. Basically, can you provide us with the breakup of the gross margin expansion between I mean, the reason for why the gross margin expansion was so high in this quarter? There are multiple reasons associated to it. First thing is, definitely, there is a change in the mix. If you see my high margin portfolio, from the number perspective, has grown with a growth rate of around 136%. That is the prima facie is one of the reason which is contributing me the higher rate of the gross margin. Second is the price hike. Between last year, this year, around two to three times we have already taken the price hike. By keeping the things in mind that inventory or the raw material price is going up, we have already taken exposure quite a bit early to stock the raw material stock in our godown. We got a dual advantage that we got a raw material at a lower cost, vis-a-vis we have increased the price, so we were in a position to sell the goods at a higher price in the market. Okay, what would be the split between the impact of both of these? Like how much would you attribute the gross margin expansion to the change in mix versus the price hike? Approximately, because of the mix change, there will be an increase of around 200 basis points- 250 basis points from the mix change at the gross margin level, whereas the remaining 400 basis points would be coming from the increase in the price. Okay. Our other cost items, like the ad spends, employee expenses, other expenses, et cetera, were significantly higher this quarter on a YoY basis, right? Should we expect a similar run rate going forward for the rest of the year as well? Yeah, definitely. This quarter, my ad expenditure is standing at around 6%, which we are expecting to continue. If you see my last few quarters and the year's performance, generally, we carry our ad expenditure at a rate of 7%-8%, but this year we are expecting it should continue at a 6%. Everything has been factored and the company is very much expecting that this is the best possible cost at which company should run. Oh, okay. EBITDA margin at 20%-21% is sustainable going forward? Definitely it is very much sustainable. Even if you see my EBITDA margin of March 2021, it is in the similar line. Since last two quarters, I think we are very much delivering the number in the similar range, and we do expect that for coming few quarters, this number should continue in the similar range. If the price hikes come into the base, if we took the price hikes last year, then it's only premiumization that will drive the margin as well, right? No. See, the actual effect of the price hike was from the quarter four of the last financial year. For the first three quarters, there will be a high ASP growth in comparison to the first three quarters of the last financial year. If the cost of the product has increased by, for example, if the cost of the product has increased by 10%, then we have tried to increase the price by 11%-12%. There has been an incremental increase in price above the cost of a product. That is the gain which we are gaining in our gross margin, plus there's a mix change. Okay. 20%-21% EBITDA margin is sustainable? Yes, very much. Okay. Got it. Thank you. Thank you. Thank you. The next question is from the line of Himanshu Nayyar from YES SECURITIES. Please go ahead. Yeah. Hi, team. Congratulations on a great performance. Firstly, just a clarification. This 20%-24% pricing growth that you're talking about, are these actual increase in realizations or price hikes that you have taken, or is there some mix impact here as well that within the mid premium you have sold the higher realization products more? Himanshu, as you see the products, maybe you have already stated this previously also, that the mix has changed. When the mix changes, for example, last year this time, say ONN as a premium wear brand or Lyra as a ladies wear brand, was not selling much because of the lockdown scenario. The urban areas was not much open, which in this current lockdown, we saw that as soon as the lockdown was lifted, ladies wear, men's premium wear, everything started to sell. Obviously, the product mix changed. Earlier, outer wear was not selling much, whereas this year, outer wear is also selling much. Yes, when the product changes, there is a change in ASP as well. At the same time, there has also been an increase throughout the range of products because of the increase in raw material prices. Okay. If you can give a number as to what would be the price hike, say, versus last year on the same product. It is difficult to put an exact number to it, but just to give you a sense, in the 24%, I'm believing about 15% should have been due to the price hike, whereas about 10% should be due to change in products. Understood. Got it. Second question would be to understand your philosophy with regards to gross margin. Like in the current environment, we've grown well. Gross margins, over the last couple of years, we've seen a significant expansion. Do you think we are at the risk of losing out on some growth prospects or market share going forward, given that we are running at a much higher gross margin level now? Do you think you could have taken a slightly lesser price hike and maybe driven growth. Just wanted to understand whether your aggressive price hikes, in your view, are impacting growth in any way or not. Himanshu, if you see, even if you look at the growth figure this quarter, we've achieved about 32% top-line growth. Even if you look at the overall industry growth, we are pretty sure that the industry will not be growing at this higher rate. We are definitely gaining market share. There is no two ways about that. Even despite the price hike, we've always kept this at the back of our head that, at no point of time are we willing to lose out on market share. Whatever price hikes are taken, are always taken, keeping in mind that market share is something which you have to gain, not lose. We have consistently done that over the past few quarters. We can be rest assured from that point of view, that all the price hikes which are taken, the decisions are taken after seeing the market situation and keeping in mind the fact that we should not lose out on our growth. Overall, if you even look at the current quarter, the growth has come in quite well only. Understood. Just a follow-up on that growth that you're talking about for the current quarter. We've seen a lot of companies talking about the stress especially in the month of May, where semi-urban and rural markets also were impacted by the pandemic. What explains this strong growth? Do you think that we could have done even better than this if not for this pandemic? Your numbers don't seem to be impacted by this to a large extent. See, there are two ways to look at that. A, definitely had the pandemic not been there, the top line would have been considerably higher. We have lost out on a good number of working days. B, if you also look at that fact that last year, again, during the lockdown, the flavor of the lockdown was very different. Last year in the lockdown, urban cities were not quite open. Whereas, in the current lockdown scenario, we have seen demand coming in from the urban side as well. Due to a low base effect also in the premium wear category, if you see, there has been a kind of a low base effect due to which you can see significant amount of growth coming in on the premium side. Understood. Just my final question would be on the working capital front. Again, we have seen a very strong improvement out there. Just wanted to understand, are there any structural changes that you have done in the way you work with your dealers, et cetera, in terms of receivables? Are you working with a much lesser level of inventory? Just wanted to understand how much improvement over the long term we can see. What's a steady state number for you on this side? Himanshu, as you will see, like in the market itself, we have achieved a working capital day of around 122 days, and still, we are very much expecting that similar kind of number we to deliver in the current year. Yeah, definitely there is some level of the scope to improve the working capital further, but it will take its own time. Immediately, if you'll ask me between 12-15 months, any kind of working capital further improvement, it's very difficult or it's challenging. Understood. All right, sir. That's it from me. Thanks. All the best to you guys. Thank you. The next question is from the line of Ankit Kedia from Phillip Capital. Please go ahead. Sir, I have two questions. First is on the inventory. You mentioned you're sitting on the low-cost inventory, which would have helped in margin expansion. How much more inventory do we have in the system, and have you started to buy the high-cost inventory now? Still, Ankit, see, still we have a similar level of inventory which we are carrying. It is a kind of vicious cycle. We are always buying the inventory at the lower price, whereas we are increasing the price of our products. Once we buy the inventory, this is that we decide how much is the price hike we are going to do for the future. Right? On a continuous basis, my consumption will be at a lower cost as compared to the price at which I am selling the product in the market. Sure. I just wanted to understand, yarn prices are up by 20%-30% in last six months. Currently, what is the old cost say December or January inventory still there in the system? We have taken a price hike in the month of March, and incrementally now, as you alluded already, the price hike is much more than the raw material price increase we are taking. I believe the next price hike will come after five to six months, and not immediately the raw material price will stabilize from here on. Hence, I just wanted to know what the low-cost inventory in the system is. Just to add on to it, for the next two quarters, majority of our sales comes from the winter wear products. In the winter wear, we started manufacturing from December last year. Whatever yarn which we have procured for manufacturing in December was at low cost. January, the cost increased more, sequentially it has increased more over the next six months from December. The winter wear product which we are selling right now is at the price which is currently prevailing in the market. We'll get that advantage over the next two quarters in the winter wear segment at least, that our cost of production will be very low and in comparison, to that, our gross margins would increase. Similarly, now coming to the innerwear segment, yes, innerwear segment for the next two to three months, we would easily assume that we will be able to consume all our yarns at the lower price and the pricing in the market is being done according to the current market price. Sure. That's helpful. My second question is on the premium products. What is the strategy there? We are setting up a distributor network instead of a wholesale channel for the premium portfolio. Which markets are we targeting? Are the counters similar to our entry-level product counters or in next three years from the South market or from the other markets, how are we looking to penetrate the stronghold of some of the other competitors who are there in the distribution network? Yes. Our premium wear product is majorly sold in a distribution-led channel rather than a wholesale-led channel. The sales team of the company is responsible for selling the goods in the market rather than the wholesalers wholesaling it. That is a structural difference in selling the products, number one, and secondly, we are planning to enter into the South Indian market on a very organized basis. It is a long-term program, and I think so you can see South India getting compared to the other parts of the country in the next four to five years. Just to take the point ahead, what is the current distributors strength we have? Also, from the EBO channel, the strategy which we have, how will that club in with the premiumization? Just in three years' time, what could be the share of premium products we are looking at predominantly because that mix change will also help in the margin expansion. Ankit, currently we have around 1,170 + distributor, close to 1,200. Over a period of two to three years, we are expecting that our premium segment should give us a revenue in the range of around INR 500 crores. Sure. That's helpful. Thank you so much, and all the best. Thank you. Participants, to ask a question, please enter star and one on your touch-tone telephone. The next question is from the line of Dhruv Bhatia from BOI AXA. Please go ahead. Good evening, sir. First question is, I want to take you to the slide nine of your presentation. This presentation where PBT margin we have broken down between certain of the brands. Versus the last presentation, it seems to suggest that the PBT margin band which you have given for brands like One8 Lux Premium ONN is now 22%-26% versus the last quarter where you had mentioned the band to be 18%-21%. Same was 15%-21% for GenX and Lux Cozi versus last quarter. All the three brand segmentations you have inched up the margin band. Could you just talk about why that has been so, and why you're not then guiding for better EBITDA margins as well for the company? No, this basket has been changed mainly because of the incremental margin. Earlier the product which was delivering, say, 12%, 13%, 14%, now it is coming under the 15% basket. Similarly, above the different other basket from 15%-21% and 20%-26%. It is mainly because of the price hike. My price hike as just few minutes back we have explained, it is incremental as compared to my increase in the cost. Does that mean that the price hike that you have taken is more than the raw material cost increase? Yeah, definitely. This is what we are saying, the price hike taken as compared to my cost is quite incremental in the nature. Does that mean that the EBITDA margin guidance which you are giving that will be at similar 25.1% band is still a very conservative number that you're working with? No, we think this is the best possible number at which we are running the business because the price hike what we are taking versus the goods at which we are buying our raw material, both has a difference of around 2% - 3%. This difference we will continue for further few quarters and the similar level of the EBITDA margin we can deliver. Okay. The second and last question is, if I look at your mid-premium segment, last quarter the revenue was about INR 313 crores, this quarter INR 195 crores. That's a dip of almost about 38%. Could you break up which brand has actually de-grown significantly, because even Lux Inferno was a part of last quarter's number, and obviously this quarter showing zero, and hence the much the high decline on a sequential basis is in the mid-premium? Inferno as a product is a winter wear product, the sales will come in quarter second and quarter third. That is why Lux Inferno right now is standing at zero, and if I talk about the growth of each individual brand in the mid-premium category, just to give you a flavor that, as I said, because of the low base effect, you could see astounding figures. For example, Lyra would have grown by about 180%, and GenX has been fairly flattish because last season also we did quite a good amount of sales. Lyra has grown quite fast, and talking about Cozi has grown by about 17%-18%. Inferno, as because it is not the season for Inferno, we do not see any figure for that. I was actually asking from a sequential point of view, what has led to a 38% dip in mid-premium segment? I'm sorry, what has led to? The mid-premium segment. If I see the sequential decline in revenue is about 38%. Which brand has actually led to such a sharp decline in sequential numbers? I believe you're comparing it with the March quarter numbers. That's right. Yeah. You also have to take into account two factors. One is the seasonality of the business, and second of all, the March quarter was a complete quarter where we got full 90 days of working. Whereas, if you look at the current quarter, the number of days of working due to the lockdown scenario was about 60- 70 days. Okay, got it. All right. Thank you. Sure. Thank you. Participants, if you have any questions, please enter star and one on your touch-tone telephone. The next question is from the line of Faisal Hawa from H.G. Hawa & Company. Please go ahead. Sir, do you have a coherent strategy for selling through our own website or through selling through e-commerce channels? Even, how are we doing with the modern trade? Are we employing any influencers on the social media channels like Instagram and all to promote our products? We have just recently, of late, we have created a separate vertical for our e-commerce sales and a separate vertical for our EBO sales. These are two separate verticals which the company has created with a separate team and our dedicated effort in that direction. The team is already working both in the EBO direction as well as the e-com direction. E-com, we have set an internal target that in the next three years we'll reach a revenue of INR 100 crores per year ex-factory sales. I'm not talking about GMV sales. Given the effort and what the team is already doing, we are pretty sure we should be able to achieve that in the next three years. That will be on account of both third-party websites such as Flipkart, Myntra, and at the same time, our own website. That is a strategy which we are doing on that front. Modern trade, as a channel for us, is a very important channel and we are already present in the modern trade vertical as well. That is one area which we need to scale up, which we are looking at. Have you done any special hiring? This would require a totally different skill set from the traditional management cadre. A lot of other brands like Bewakoof.com and all are now planning to go into extensions in innerwear and stuff. They could capture a lot of space there. As we are speaking, we have already created a separate dedicated team, including a lot of new hirings as well as the combination of the old team member for the purpose of online and the EBO. A complete team of around 12 -1 5 members has been deployed or this vertical has been created just to focus on the online and the brand outlets business for Lux. Okay. Thank you very much, sir. Thank you. Participants, if you have any questions, please enter star and one. The next question is from the line of [Saktheesh Devan] from, he's an individual investor. Please go ahead. Sir, when can we expect dividend to be declared, as you have reserved declaration in the March quarter? Hello? In our next board meeting, we are planning to go with the board and we'll give our proposal. This is the board direction we will take the decision for the purpose of dividend. Thank you. Thank you. The next question is from the line of Ankit Kedia from Phillip Capital. Please go ahead. Sir, on the cost saving, for the two companies we have merged of the promoter group. How much of that synergy benefits are already there in this quarter? Over the next two-three quarters, how much more synergy benefits could come in the system? Ankit, around 100 basis points -100 basis points of the cost saving have already been factored in the P&L, and we believe that this is the range which will continue for the few quarters. Already this quarter, we have seen that benefit of 100 basis points in our margin. Yeah, right. Understood. Thank you so much. Thank you. The next question is from the line of Indrajeet Yadav, individual investor. Please go ahead. Indrajeet Yadav, your line has been unmuted. You may proceed with your question, please. Indrajeet Yadav, please unmute your line and proceed your question. As there is no response, we would request participants to enter star and one to ask their questions. I have a question from the line of Arpit Shah from Stallion Asset. Please proceed. Hi. Congratulations for a good set of numbers. I have just one question. What would be your sales mix from the wholesale channel versus the distribution channel currently? Can you come again with the question? How much would be the sales coming from distribution channel versus the wholesale side for the company? All our premium wear products are majorly sold in the distribution-led channel, and the semi-premium and the economy products are being sold from the wholesale-led channel. Do you have any plans to be moving your economy products to the distribution channel? That will actually unlock a lot of working capital for the company. No, actually, all these three categories are being very specific to their selling channels, and there is no thoughts of changing the selling channel as of now. Around 120 days that should be working capital by FY 2022 end as well. Hello? 120. Yes. The working capital was at 120 days, and we will try to improve it as much as possible. As one of the earlier participants was commenting, margins will be a lot higher than what we are too high in 2021. It could be a lot higher than what you have shown in your slide nine. Sorry, you are not audible. There is a lot of disturbance from your side. Hello? Yeah, your voice is like it's not aud- Right. Mr. Shah, your voice is muffled. Would request you to connect back. Okay. Participants, if you have any questions, please enter star and one. As there are no further questions, I would now like to hand the conference over to management for their closing comments. I take this opportunity to thank everyone for joining on the call. I hope we have been able to address all your queries. For any further information, kindly get in touch with us or Strategic Growth Advisors, our IR advisors. Thank you once again. Thank you very much. On behalf of Lux Industries Limited, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.