Ladies and gentlemen, good day, welcome to the Vedant Fashions Q3 FY 2023 results conference call, hosted by ICICI Securities Limited. 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, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Varun Singh from ICICI Securities Limited. Thank you, over to you, sir. Yeah, thank you. Thank you, Dorwin. On behalf of ICICI Securities, we welcome everyone on the call to discuss Q3 result of Vedant Fashions. We are honored and feel thankful to the top management of Vedant Fashions to have provided us the opportunity to hold this call. With this, I request the team at Vedant Fashions to please take over the call and proceed with the conference. Thank you. Thank you very much. Good afternoon and a warm welcome to all the participants. I am Vedant Modi, the Chief Marketing Officer of the company. Thank you for joining us today to discuss the Vedant Fashions Limited Q3 and nine months financial year 2023 results. I'm joined by Mr. Rahul Murarka, the Chief Financial Officer of our company. I hope everyone got an opportunity to go through our financial results and investor presentation, which have been uploaded on the stock exchange as well as the company's website. Let me take you through the quarter ended and nine-month performance. In this quarter, we increased the number of EBOs, which is the dominant channel for the company. As of December 2022, VFL's EBO area stands at 1.4 million sq ft, spanning 640 stores in 252 cities and towns globally. The national EBO footprint tally is at 626 stores spread across 242 cities and towns. In quarter three, we opened net square feet area of around 58,000 sq ft and 14 exclusive brand outlets in India. We are also happy to share that we have a strong and healthy pipeline for new rollouts planned for the remaining part of the financial year. Our overall customer sales growth stands at 29.6% over quarter three of financial year 2020. The SSSG growth has been 4.2% over quarter three of financial year 2020. Our nine-month overall customer sales growth stands at 47.6% over nine months of financial year 2020, while the nine-month SSSG growth has been 16.9% over nine months of financial year 2020, which was all pre-COVID levels. Our nine-month overall customer sales growth stands at 28.2% over nine months of financial year 2022, while the nine-month SSSG growth has been 19% over nine months of financial year 2022. An important point to note is that wedding season is spread over November to February, and dates can move in any given financial year based on astronomy. This particular quarter, we witnessed significantly lower wedding dates compared to previous year Q3. However, we also noticed that there is a sharp recovery in January, as there are relatively more wedding dates in Q4 compared to the previous year, thus resulting in a little bit of a spillover. I would also like to highlight our marketing and branding campaign with Mr. Ranveer Singh during the quarter. The Tayyar Ho Kar Aaiye campaign was built around saving the truest essence of a wedding in your favorite Indian attire. The overall idea is to drive a behavioral shift in Indian men to dress up for Indian weddings. In this quarter, we also ran a Diwali ad campaign featuring Ranveer Singh. We received a positive response from the market, and this was a good step towards reinforcing Manyavar as a celebration wear brand. Overall, we can see that the fundamentals of the business have been sound, robust, and the company has been encompassing growth. We have been witnessing very positive trends in January and with the wedding season on full swing ahead. We are very optimistic and fully prepared and geared up to capitalize upon the same. With this, I will now hand it over to Mr. Rahul Murarka to take you through the financial performance of our company. Thank you. Thank you, Vedant. Namaskar and good afternoon, everyone. I would like to highlight key financial performance for the quarter and nine months year ended December 31st, 2022, based upon the consolidated financial statements. Starting from nine months FY 2023 update, the company reported revenues from operation of INR 1,013 crore during nine months FY 2023, delivering a strong growth of 36% compared to nine months of FY 2022. The company continues to report industry leading gross margin of 67.8% during nine months of FY 2023 as compared to 67% in nine months of FY 2022. The EBITDA margin was around 50% and the EBITDA stood at around INR 507 crore during nine months of FY 2023, with growth of around 35% compared to nine months of FY 2022. The reported PBT during nine months of FY 2023 is INR 430 crore, which has significantly increased by 42% compared to nine months of FY 2022. The company continues to report best-in-class PAT margin of around 31.6% and profit after tax stood at INR 320 crore during nine months of FY 2023, with a significant growth of around 42% compared to nine months of FY 2022. With optimization in working capital, we have been able to achieve industry leading ROCE of approx 89% during 12 months period ended December 2022. The net working capital days is at 89 days in December 2022, based upon trailing 12 months revenue. The sales of our customer were around INR 1,378 crore during nine months of FY 2023, with a significant growth of around 28% over nine months of FY 2022, along with a strong SSSG growth of around 19%. On comparing our performance with pre-COVID level figures of FY 2020, this is internal management MIS. Our revenue from operations significantly grew by approx 55%, and we witnessed significant growth in PAT by approx 94% in nine months of FY 2023 over nine months of FY 2020. Sale of our customers also significantly grew by approx 48%, along with SSSG growth of around 17% over nine months of FY 2020. Coming to Q3 of FY 2023 performance update. The company has reported revenue from operation of INR 441 crore in Q3 of FY 2023, delivering a strong growth of around 15% compared to Q3 of FY 2022. The company continues to report industry-leading gross margin of around 67.8% during Q3 of FY 2023. The EBITDA margins were around 51.2%, and the EBITDA stood at INR 226 crore during Q3 of FY 2023, with a growth of around 14% compared to Q3 of FY 2022. The reported PBT during Q3 of FY 2023 is INR 202 crore, which has increased by around 18% compared to Q3 of FY 2022. The company reported best-in-class PAT margin of 34.1%, and the profit after tax stood at INR 150 crore during Q3 of FY 2023, with a growth of 18% compared to Q3 of FY 2022. The company has a track record of generating significant cash, driven by a healthy cash conversion ratio. The company continued to generate high cash conversion ratio of more than 100% in Q3 of FY 2023, which has been computed based upon operating cash flow over PAT during the period. The sale of our customer was around INR 585 crore during Q3 of FY 2023, which was impacted due to significantly lower number of wedding dates in Q3 of FY 2023. Company has witnessed very sharp recovery since January, and the business is progressing in line with the expectations of the management. On comparing our performance of Q3 FY 2023 over pre-COVID levels of Q3 of FY 2020, whose figures have been considered based on internal management MIS. Our revenue from operations significantly grew by approx 38%. We witnessed significant growth in PAT by approx 59% over Q3 of FY 2020. Sale of our customers significantly grew by approx 30% over Q3 of FY 2020. Thank you and namaskar everyone. We can now move to the Q&A session. Thank you. 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 remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Percy Panthaki from IIFL. Please go ahead. Yeah. Hi, everyone. I have a couple of questions. My first question is on competition. Customer has opened up, I think, around 20 stores across India. Just wanted to understand from you where you have a store in the same micro market, say, within two, three kilometers of that store, what has been the impact on your sales per store for those stores which are in the same micro market? Thank you for the question, Percy. The way we track this internally is that we very closely monitor wherever any organized competition is opening up stores. What we do is we compare the performance of that particular store with the city average in terms of same-store sales growth, to give us an idea of what is happening. Now, what we've witnessed over this quarter, and also previously, is that actually these stores have a pretty good alpha when it comes to the city average and state average. Even in the locations where we continuously see organized retail competition entering, our stores continue to perform well in adherence and in relation to the city average of our company. Vedant, are you saying that basically what happens is that there is no impact on your store, and whatever sales that the organized competition is generating is coming completely at the cost of either other organized players or at the cost of unorganized. Is that understanding correct? I won't be able to answer that exactly. However, I only have access to our own numbers, which shows a positive trend. That is all I can see at this moment. That in terms of our own financial numbers of those stores, we continue to grow in those particular markets in relation to the city average and state average. Okay, those particular stores are growing at the same rate as compared to the city average growth. Slightly higher, actually. There's a delta which is higher than the city average. Why do you think it's actually higher? Any theories behind that? I mean, again, these are strong markets where there is good footfall, and that is the reason I think, we continue to see a positive trend. Along with a lot of work being done on different metrics, such as average bill value and different metrics that we, sort of witness at the store level, which are improving in these particular stores. Understood. second question is on wedding dates. Would it be possible to give me the exact number of wedding dates in second half of this year versus second half of last year? Sure. I can give you an approximate. Wedding dates changes basis location and changes the also along with the way you're calculating them. Approximately, according to the Hindu wedding calendar, there are eight to 10 dates in Q3 that we saw, compared to last year there being about 20 odd wedding dates in Q3. In Q4, we are going to see approximately 26-30 wedding dates, and I will also share with you how many wedding dates there were in Q4 last year, which is about 40%-50% lower than this number of what we have this year. Okay. Okay. You're saying, this year it is 8 + 26, which is about 34. Last year it was, sorry, how much? I can share the numbers with you. 20 + 13, about 33. On an overall basis, the major spillover is Q3 to Q4. The dates have simply moved more towards January and February. basically you're saying in Q4 this year, the number of wedding dates are actually 3x that of 3Q? More or less, yes. That's correct. In the past, have you seen that your sales is proportional to the number of wedding dates? It's not an exact proportion, Percy. Let me explain it in a different way. People, what we understand, tend to prefer getting married in the November-December period. Right? Right. What happens is that even a wedding dates like 16, 17, 18 dates are enough number of dates to cater to those marriages. However, when this number falls short to eight to 10 dates, then the infrastructure of the country is just simply not able to serve to that many number of weddings. That is when it gets spilled over to Q4. It is not in direct proportion, however, there's a limit that the wedding infrastructure of the country can support in a given number of wedding dates. There will definitely be spillover, but definitely also not in the same proportion than the dates are in. In the past, whenever you have seen Q4 having so many more dates than Q3, historically, what has been the sort of secondary sales performance of your company, relative in these two quarters? Like in the past, you would have seen maybe three or four or five years ago that Q4 has double or triple the wedding dates of Q3. In that year, did you actually see that Q4 secondary sales was in fact higher than Q3 or something like that? Typically what we've seen is it's not higher, but it reaches closer to the levels of Q3, and it's higher than the typical 27% that we see. Typically, like we've been mentioning, it's 35% approx in Q3 and about 27%-28% in Q4. That number comes closer to each other. Typically, that is what happens, but we don't see Q4 increasing higher than Q3. Let me give you another sort of data point, you know, that will help you understand this whole phenomenon better. The kind of numbers we've already witnessed in January. From October up until 28th of January, based on our internal MIS reporting, our SSSG team has already become flat from the -8.7% reported in the numbers compared to FY 2022 Q3. Understood. Last question on the general macro environment. Are you seeing any kind of sort of slowdown in terms of, discretionary spending in, urban, semi-urban India or not? From our perspective, we feel the major shift in terms of our business has been predominantly because of wedding dates. Every other metric that we track on the front end, be it average selling price, be it average bill value or conversion rates, all of them have been in a positive direction. From our perspective, we don't see anything on those lines. However, it's just a matter of wedding date shifting from one quarter to another. Got it. All the best. Thanks. That's all from my side. Thank you very much. Thank you. We have the next question from Nihal Mahesh Jham from Nuvama. Please go ahead. Yes. Thank you so much. Good evening. Vedant, the first question was you alluded to the fact that the buyer growth, this quarter was around 29% versus pre-COVID. Is it fair to assume that as you rightly said about, the number of wedding dates being lower, that most of these buyer growth was more in the non-wedding related segment? Is that a right understanding? Nihal, in terms of wedding dates as well, what I will kind of explain this is that we feel that the kind of category growth we witnessed in this quarter was a lot to do with a mix of wedding and non-wedding. Even within wedding, I would say we grew faster when it comes to the non-groom segment through led by our behavioral shift through Tayyar Ho Kar Aaiye campaign. It's not that there weren't weddings in this quarter, it was just less number of weddings, and while people wanted to get married, More number of people wanted to get married in Q3. They just had to spill over in Q4 because of the infrastructural boundaries that we have. Overall business grew across the segments, it was not that wedding was slow or anything as such. Understood. The second question was on the accounting bit. If I look at our primary to secondary conversion for this quarter, it is at around 75%. Would it be right to understand, as you mentioned about the Jan number also, that in the expectation of a strong season, given how the wedding the wedding dates are shifted, there was a significant placement of inventory that has happened at the franchisee. Potentially this number could normalize in next quarter, that there is a strong secondary sales, but the primary may not apply, given we've already placed a big portion of the inventory requirement for the Jan to March quarter. Yeah, considering the nature of our business, it would be more appropriate to compare, you know, the primary and secondary revenue at a YTD level instead of a quarterly level. Quarterly it may vary. At a YTD level, if you will see, our primary revenue has grown by 36% and our secondary revenue has grown by 28%. The difference is mainly on account of the new stores we have opened. The right way of looking at it at a YTD level instead of quarter, we would suggest. Okay. as per you, what is the long term average that you think is the right number to believe, for this? The primary-secondary ratio, you are saying? Yes. It would be in the range of 70-71. That is the range it should be there. Understood that. Just one last question from my side. You did allude to SSV becoming flat if you consider the month of January also from October. In your expectation, what are the kind of SSVs that you would target longer term? There maybe you may want to build in the expectations from Mohey also, which is a growing part of the business inside the store itself. Sure, Nihal. The way we look at it is that as a company we aim for good single digit SSSG growth in all of our stores. That is the kind of aim we try to achieve. There is also another caveat to this whole piece, which is where if any store is actually witnessing very, very good growth, then the idea is to quickly either add another store in that particular market itself or look for a much bigger store if there is infrastructure for that in that market. There is both of these strategies that we play. The idea is good single digit growth overall at a company level. Wherever we see higher SSSG growth or a very high productivity level in a store, we tend to open larger stores. If I may just slip in one last question would be that Mohey, would you look at it as a part of a store or that's a separate business that you will try, bifurcating? The way we look at it is we look at the stores business where we have to encapsulate Mohey, and that is accounted for in any SSSG number that we give out. On the other hand, when we are doing any other studies, we do it at a brand level internally. At a store level, we count it, we count Mohey as part of the store itself. Understood. That's it. Thank you so much. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1 on your touchtone phone. We also request each participant asking a question to limit your questions to two per participant so that the management is able to address questions from all. The next question is from the line of Sandeep Agarwal from Naredi Investments. Please go ahead. Hello. Hi. My question is regarding the square feet area of our EBO. Our average square feet is approximately 2,200 sq ft per store. Now in Q3, we opened 14 store, so the average square feet area is approx 4,100 sq ft. We have changed any average size of our EBO and any Our strategy actually is to open larger stores as we move forward, and we've been seeing significant traction towards our flagship concept. That has been the strategy, and we've discussed with investors before as well, that we would ideally like to move towards opening more flagship stores and more super flagship stores. In some certain quarters, what can also happen is that we open a high number of EBO, sorry, SIS, and when we open a high number of SIS in a given quarter, then that average square feet per store can start to look bleak. The idea is to open larger stores as we move forward. Okay. Thank you. Thank you. Thank you very much. The next question is from the line of Rushabh Doshi from Nirmiti Investment Advisors LLP. Please go ahead. Yeah. Hi, Vedant. In the first question you said that, the ratio is 35% in Q3 and 27% in Q4. This is for primary sales or secondary sales? Sir, I'm sorry, your voice was echoing a little. Can you please repeat that question? Can you hear me clearly now? It's still slightly abrupt. Maybe if you can repeat your question. Is this better? Yeah. In the first question you mentioned that, the ratio for Q3, Q4 was 35% and 27%. Is this for our reported sales or retail sales? What I was actually referring to is that has been the long term historic average of Q3 versus Q4. Like in this financial year, we're noticing sometimes wedding dates can spill over from one quarter to another. Yeah. The typical wedding calendar in India is November to February. Yeah, I got that point. Secondary sales only. Yeah, I was referring to that in terms of secondary sales, not in terms of primary sales based on historic average. Yeah. last year, like, did we experience some pent-up demand or was it like a normal quarter? Yeah, last year, FY 2022, as you are aware that Q1 was significantly affected because of COVID. Of course, you know, FY 2022 was a distorted year as far as because of the COVID. The numbers would be, you know, to some extent affected because of that. Okay. Like, in terms of inventory with our franchisee, like let's say last year Q3 had 100, let's say the base was 100. Like in this time Q3, was it, like could you just tell us, like how much was it? Like is it historically higher, the inventory with our EBOs? We record in our balance sheet the inventory line, whatever inventory is lying at our warehouse, that is what appears in our balance sheet. As on 31st of December, around INR 179 crores of inventory was lying at our warehouse as per the balance sheet. No, I'm just talking like the one which we've already built to our franchisee. The reason I'm asking is because this time, of course because of the wedding dates, but the delta between the primary and secondary revenue is quite large. I just wanted to understand, like in terms of the inventory with our EBOs, like, is the does that also have a delta of around, let's say 18%? I mean, the right way to read it is there are two things. One is that, as we discussed over this call, the right way to compare the primary, secondary would be that we compare it at YTD level instead of quarterly level. When we compare YTD level, there's only difference in growth is around 8%, which is also primarily on account of new stores we have opened. Coming to the inventory lying at the franchisee store, what we can refer is the receivable date. If you see the receivable date is same, around 50 days of receivable date we have in December, which is similar to what we had earlier also. receivable date is something which is more relevant metric when you compare, you know, the inventory which is lying at our franchisee store. Okay. lastly, like, for Mohey, like how is this wedding season from a more qualitative standpoint? Yes. Mohey has been doing very well in terms of overall numbers. If I could talk about Mohey, the SSSG growth of Mohey was again higher than the company average, comparing quarter three of this year versus last year. All of those numbers are very positive for us. The main reason being the kind of work that has happened on the backend side of the whole process, where we significantly understand how does the lehenga and sari market work, given the kind of data we've collected over operating the women's business over the past five, six years. That is why our merchandising mix has continuously evolved, resulting in better conversion rates at the frontend and a better inventory turnover ratio and a better productivity at the store. Overall, the numbers were pretty good and qualitatively we've been getting very good feedback from the consumers as well. Yeah. That's all from my side. Thanks, Vedant and Rahul. Thank you. Thank you. Thank you. The next question is from the line of Ankit Kedia from Phillip Capital. Please go ahead. Just wanted an update on the standalone stores for Mohey and Twamev, end of, you know, quarter four we were expecting to launch. Is that on track? For Twamev we will absolutely, we are in on track to launch one EBO in quarter four, while there are three more already signed and in the build phase. We will see them coming up probably in early Q1 or by late Q1, the remaining 20 stores. With Mohey as well, we've already signed a few standalone Mohey stores. However, given that it's a completely new design that we are trying to cater with a new Mohey store, it might be early Q 1 or late Q4. That's about as late as it can get. About early Q 1 is, I think what we'll be comfortable saying for the Mohey flagship EBOs that we're coming up with. You know, when you mentioned on the last question, the merchandising is getting evolved in Mohey, can you know, explain it a bit better in terms how is the mix changing? What changes have you brought on the table? Are the numbers of SKUs higher? Pricing is changed? What is it that's getting evolved in Mohey now? Sure. The way we've actually built our supply chain, it's completely data backed. What we do is when there is any product that our designers design and then our merchandisers believe it's strong enough to go to the store, we make a note of all the attributes and dimensions that a product has to offer. This is the kind of fabric used, the kind of embroidery done, the kind of stitching done on that particular piece of fabric. We account for all of these things, the color and so on. What we do is we use our data models to understand which attributes are working in which markets. Our merchandising team over the years has understood the attributes which are working in certain markets, and then we use this when we are designing newer products. That is what I meant, that our data-backed supply chain is now able to understand the merchandising of women's wear a lot better. Simply because with women's we have about six years of data now. Compared to Manyavar, where we've actually gained data over two decades. That will always be a difference. With scale and size of Mohey increasing, we're able to get much more data and thereby being able to improve our merchandising. Is it fair to assume that slippages of provisioning which we do in Manyavar were around 3%, this number for Mohey historically would have been slightly higher and now over, you know, over the next couple of years, it will move to the Manyavar average of around 3% or it's still going to be higher? Again, this is a little tricky to answer at this point of time, because what Manyavar is being able to do is a worldwide success in terms of desktop management with no discount ever given. It will be hard to comment if Mohey will be able to reach that stage of three or less than 3% with no discounts ever given in a brand. But the idea is we will still be able to beat market estimates by a lot when it comes to desktop management and what the current industry average is even in terms of Mohey, and we are already doing that. The idea is to build on efficiency from this point onwards. That will always be the kind of goal that we have in mind to bring it to Manyavar levels over a long-term period. That would also mean that inventory per store in Mohey, assuming both the store sizes are same, Manyavar and Mohey, you will have more inventory in a Mohey store. Currently, again, inventory turnover ratio of Mohey is slower than Manyavar. That is there today, but the idea is to work on it and make it as efficient as Manyavar in a long-term period of time. Sure. My next question is on the A&P spend. Can you just say what was the quarterly A&P spend and, you know, over this year, next year, if you have done the budgeting, what are you guiding for A&P? This year, what we've been referring to is about 5%-6% A&P spend overall on a financial year basis. This quarter again was about 5.96%, which is the kind of A&P we've done. For next year, we've still not concluded what we would like to do or kind of talk about it right now. I think we'll be doing that in the next quarter. That's all I can tell you right now. Lastly, on the digital transformation, you know, which was expected to come in quarter four, can you talk of that? Is that also on track or has it already been completed? There are two phases with our digital transformation, and the first phase is currently in testing. We are hoping to launch it sometime in quarter four. It would be late quarter four, we launch the first version of the overall digital transformation, and about two months from that, we launch the second phase of it, which is the phygital transformation, where the digital world starts to interact with the physical world. Everything is on track, and we're already witnessing great feedback from our employees who have it for testing already. Can you just share what are the changes? Sorry to interrupt, sir. Sir, if you do have any further questions, we request you to kindly rejoin the queue. Sure, I'll do that. Thank you. Thank you very much. The next question is from the line of Gaurav Jogani from Axis Capital. Please go ahead. Thank you for the opportunity. My first question is, Vedant, with regards to the October to January number that you mentioned, you know, that the SSSG has now become flat. Just wanted to get your thoughts, you know, because last year also January had was impacted by Omicron. Do you think there is any base effect or it's purely the business, the kind of sales growth that you're seeing in January is driving this growth? Sure, Gaurav. There was impact of COVID in terms of January. However, it's difficult to say what was the level of impact, because what we recall from our business point of view that January last year was still going as per our business plan. Even though there was the wave that was there, yet people were still going out for weddings and the weddings were happening as per the trends. There was lockdown in very, very few markets as far as we remember. Overall, the gatherings were happening and the business was continuing even in January last year. Therefore, we were comfortable in saying that, you know, overall at an October to January level, SSSG has now become flat. Okay. Okay. Sure. My, my second question, you know, is with regards to the transformation that you're driving in terms of this Twamev and Mohey, wherein you're trying to get the merchandise right, and you're trying to get the Mohey piece also correct. If you can help us and provide some of your key learnings there, you know, that what is helping you and how confident you are versus one year back, maybe, you know, when we're usually doing this. Anything on this front will be really helpful. In terms of Twamev, I mean, the biggest advantage that we had is that we were able to use the same data models that we had created for Manyavar. The only major change that we had to do was change the kinds of fabrics and the kind of styles we used on top of those data models. That is how we were able to come out with a very strong premium product from the very early on stages that has been successful at the floor level and seeing very good trends from a supply chain perspective as well when it comes to inventory turnover ratio or productivity that we see on the front end. With Twamev, all of those was pretty great, and we continue to see a phenomenal performance. In terms of Mohey, as we've gained more and more data, we are starting to understand what products sell well on the front end. In terms of lehengas, we've identified what is the kind of core price point which we'll operate in, which is the INR 20,000-INR 40,000 kind of, INR 15,000-INR 40,000 kind of a lehenga price point. In terms of sarees as well, we found a sweet spot which works for gifting and the kinds of sarees that work in terms of wearing it for the wedding itself. We've been able to identify what is working for our brand, and we continuously are improving depth in it, while we're also identifying categories within the larger categories of sarees and lehengas, where we want to increase our width and further go into those particular categories. Just one, just follow up on the Mohey part. If you can help us, what kind of positioning, you know, you are looking at Mohey, you know, because Manyavar being, you know, an affordable fashion kind of a brand, while Twamev is a bit more premium in that sense. What kind of positioning are you targeting for Mohey? Mohey will be positioned very similar to Manyavar, which is an aspirational yet value for money brand, and that is the idea that we want to kind of bring to Mohey. The idea is in India, there are high-end fashion designers that women aspire to wear. However, majority of the women can't afford to spend INR few lakhs on a lehenga. While the other alternative you have is just a local market that does not give you the aspiration or fulfill your ego in terms of the kind of wedding purchase you want to make. That is where Mohey steps in, where we bring in a store in a very aspirational area like a South Ex in Delhi or a Lower Parel in Mumbai. We have flagship brand ambassadors like Alia Bhatt and Kiara Advani as the face of the brand, adding to the aspirational value. The pricing is very tight, and our average selling price for a lehenga, for example, is about INR 22,000. All of this adds up as a combination of providing an aspirational yet value for money experience for our consumers. Sure. Thank you, and that's all from me. Thank you very much. Thank you. The next question is from the line of Varun Singh from ICICI Securities Limited. Please go ahead, sir. Mr. Varun Singh, the line for you has been unmuted. You may go ahead with your question. Yes, sorry. Thank you. Vedant, just wanted to understand that how are you thinking about retail expansion when we are adding EBO stores? I mean, if you can give some kind of a longer term guidance with regards to, for example, some X percentage on existing base or how should we think about the video expansion plans? Sure. In the past, we've grown at about 16% retail footprint CAGR. The idea is to continue on a similar trend for the coming two to three years, and that's what we aim to achieve from a retail footprint perspective. Like we've also advised before that as a company, we've moved to look at square feet and not number of stores because we are continuing to open larger stores and we are also consolidating smaller stores into larger stores, which is also increasing our overall business and hence the right way to look at it is in terms of square footage. If I also have to discuss in terms of strategy, there are three strategies. The first strategy being entering new cities that we're currently not present in. This quarter we entered sevem new cities, all tier three cities, where we entered. The second strategy is to enter newer markets in existing cities where we are currently not present in. We had a few examples this quarter as well of the new markets being entered in existing cities. The third example is of a very different kind of a model that Manyavar follows, which is any area where we have very good productivity and SSSG, we tend to open a much larger store or a newer store. This again, the penetration model which we follow has been a very good success for us, and we continue to follow this model as well. Understood. Understood. Okay. Second question is on operating leverage benefits. I mean, despite 8%-9% negative year-on-year asset SSSG, we see that our operating margins have been kind of highest ever. I mean, what drives this meaningful improvement in margin, and how should we look at this number for, I mean, two-three-year time frame? Yeah. In Q3 FY 2023, the PAT margin was 34.1%, right? Typically, when we look at a financial year, because Q3 generates the highest revenue, we get the highest operating leverage in this quarter. As a result, you know, we have got a PAT margin of 34.1%. Last year in Q3 of FY 2022, we were at 33.2%. This improvement in margin is because of, again, improvement in operating leverage on the fixed overhead expenses. Historically at an annual level, you know, this 34% is because of the higher revenue which we generate in this Q3. At an annual level, historically, we have been able to generate around 30% of PAT margin. You know, I don't want to give any particular guidance on what can be the numbers in future, but our objective is to always improve our efficiency by some basis point every year. Okay. Okay. Right, sir. Understood. Sir, thank you very, very much. Thank you. Thank you. The next question is from the line of Manish Poddar from Motilal Oswal Asset Management Company. Please go ahead. Yeah. Hi, hi. I have two, kindly three questions. One is, if you can highlight, you know, what is the share of kids in your total revenues, and let's say this share of kids, or let's say inventory share in the total, if there is a way to do this. Kids currently stands at about 3% of our overall revenue, and inventory levels would also be at a similar percentage. When do you guys foray into kids product? Sorry, I couldn't get that question. When did you foray into kids? Let's say, is it a three-year-old phenomena or this was this from day one? I'm just trying to pinpoint it. We've actually been in kids for a long time. The idea was that, you know, we started opening flagship stores back in 2010. A few years here and there is when we actually launched kids as a small piece. However, that renewed focus and attention on kids began sometime in 2019, 2020, which is when we started to build a vertical for kids internally, and also started working on the merchandising that we want to do for kids as a separate function. All of those have positively impacted our overall kids business, which has been growing pretty rapidly. Kids would be available across the higher traction markets? Is that how it is? Approximately. It would be ±10% of that. Okay. Okay. Just a second question, if you can, you know, probably from common knowledge, can you probably highlight, because a lot of data is collected, in my understanding. Will you be able to highlight, let's say, wedding growth versus non-wedding growth, let's say, on clear basis? Because, you know, one can have the sense because y'all are becoming the ad where you show that, you know, it's a destination store for, you know. Is there a way, you know, y'all can, like, I understand there is some restraint on that, is there a way to figure out wedding versus non-wedding growth? Let's say groom versus non-groom growth? There are two versions to it. One is when we talk about the overall number of people walking into the store, we've seen a growth in non-grooms and non-brides walking into our stores as a result of to some extent. However, I would still get back to the point that is a longer term play and a behavioral shift is something which takes time to bring in. A behavioral shift will obviously take a little longer. On the other hand, what we've witnessed is a higher number of non-grooms walking into the store, and therefore the kind of purchases linked to non-groom aspect have also increased. However, in proportion, what we've witnessed is that the groom's basket size has increased proportionally, which is where a lot of training effort is focused on. It's a mix of both. While more non-grooms are walking in, we are trying to increase the basket size of grooms. The overall increase in our business has come from all sides of verticals. All right. One last data point, if you can share, for Mohey, this number which is 3% for Manyavar, what is that number stand now? In terms of you're referring to kids? In terms of dead stock. Let's say Manyavar is about 3%. What is that number now? We don't give that number specifically out, but it's larger than Manyavar. It's higher than Manyavar, however, we don't give this particular number out right now. Okay. Okay. Fair, fair enough. Thanks so much. It's important to note is that it's improved by a few basis points every single year. When we started off, it was in a, it was in double digits, and now we've come down to single digits, and it's continuously improving. Should this number be in line with Manyavar over the medium term or this will be at least 2% higher than Manyavar because of the [audio distortion] which is there? Like I discussed this piece in the previous question. What Manyavar is doing is a global success in terms of dead stock management. It is very difficult to say if a newer brand will be able to come to the scale of Manyavar in terms of the overall dead stock percentage. However, that is what we aim to do over the long term, and we're already at a very good position compared to the industry average, even with Mohey. The idea is to grow from here on and bring it to a very, very decent dead stock number. Of course, the aim and endeavor is to bring it to what is the company average today. Okay. Thank you so much. Thank you. Thank you. Ladies and gentlemen, that was our last question for today. I would now like to hand the conference over to the management for closing comments. Over to you, sir. Thank you very much to all of you for attending the quarter three earnings call. I would like to finish off by saying that, you know, we've had a good quarter three, and while we saw some wedding dates spilling over to quarter four, we saw a sharp recovery in January, and we're really optimistic. And business is moving as per management's expectations. Thank you very much for attending the call. See you all next quarter. Thank you. Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.