Ladies and gentlemen, good day and welcome to the Metro Brands Limited Q1 FY 2025 earnings conference call hosted by Motilal Oswal Financial Services Limited. As a reminder, all participant lines will be in 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 zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Tanmay Gupta. Thank you, and over to you, sir. Thank you, Sejal. On behalf of Motilal Oswal, it is our absolute pleasure to host Metro Brands' Q earnings conference call. From the management team, we have Mr. Rafique Malik, Chairman; Farah Malik Bhanji, Managing Director; Mr. Nissan Joseph, CEO; Mr. Kaushal Parekh, CFO; Mr. Mohit Dhanjal, COO; and Ms. Alisha Malik, Head-Ecomm, Sports Division, E-Commerce and CRM. I will now hand over to Farah Malik. Over to you, Farah. Thank you, Tanmay. Good afternoon, everyone, and thank you for joining, and welcome to our Q1 FY 2025 earnings call. Q1, as you all know, had some industry headwinds and muted demand in certain segments of our business. While we listed some of these events in our earlier release, I also wanted to point out that Q1 after COVID has seen double-digit increases for us. In Q1 of FY 2023, we came out of COVID and had a 294% increase, and more importantly, last year, Q1 had a 12% growth over that performance as well. While I'm not pleased with the overall sales for the quarter, I am proud of the team for the operational discipline as we maintained our gross margins at 60% and our PAT at 16.4% for the standalone business and 15% for the consolidated numbers. Along with that, we had a standalone EBITDA of 32% for the quarter. All three metrics of PAT, gross margin, and EBITDA being well at or above the ranges that we have guided to. We believe that consumption continues to track well although there is a dispersion of the discretionary income into other consumables and travel experiences. The percent of premium products continues to perform as we achieved 54% of goods over INR 3,000 compared to 49% in Q1 of the previous year. As some of the headwinds of Q1 start to get in line, we are pleased to see that sales in this quarter are starting to trend back up once we clear the End of Season Sale period. Our FILA liquidations continue to be on track, and we will be launching some of our new offerings into the channels once the clearance sales finish in the market. We have managed to diminish the losses from our cleanup efforts in this brand as mentioned in our filings. For the quarter, we also opened a total of 17 new stores while exiting two stores, giving us a net addition of 15 new stores. We closed the year with a total of 851 stores, and given our lease agreement pipeline, we are confident of achieving approximately 100 new stores for the year and approximately 225 over the next two years combined. Further, in FY 2026, post-stabilizing our Fila operations, we will restart opening new Fila exclusive brand stores. On the BIS front, as the extension has come to an end, we are prepared to be in line with the compliances laid out for our core business units. With regards to the sports business, there is still some flux and changes that we're waiting for official confirmations on. BIS is not yet fully equipped for the production of high-end technical footwear. This is an evolution that we are hopeful to enter, we'll consider prior to their final circular. We are closely monitoring the notifications on this front. I'm also pleased to announce the addition of Mohit Dhanjal as COO to our organization. Mohit brings with him almost 30 years of domestic and international retail experience. We are excited about his addition and look to enhance operational efficiency and increase management bandwidth for growth. We also announced the signing of an exclusive distribution agreement for New Era. This world-leading headwear and accessory brand will be sold in our Foot Locker stores, on the brand website, and at key pinnacle retailers in the country. We look to opening standalone kiosks and stores over the coming quarters. I'm proud that though Q1 was muted for various reasons we mentioned, the team was able to continue to hit the numbers we have guided to in the EBITDA and PAT range. In closing, as with any retail operation, while there will be fluctuations due to holidays and special occasions, we continue to deliver EBITDA around 30% range and a PAT to deliver somewhere between 15% and 17% while adding new stores and formats such as Foot Locker to the Metro Brands organization. Along with the talent and brand additions that we continue to invest in, I'm confident that Metro Brands is well-positioned to take advantage of the immense opportunity of the Indian economy. With that, I'd like to turn it back to the operator and open it up for questions. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star then one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star then 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 Viren Ashish from Ambit Capital. Please go ahead. Hi, team. Thank you for the opportunity. My first question was on the consumption environment. 40 days into the quarter, can you elaborate on how has the consumption environment or customer trends, purchase date been like when compared to the first quarter of this fiscal? You mentioned briefly in your opening comments that there are some sequential ups. When do you see trends normalizing from? Also, as a consumption side, would you see any change in consumption patterns in Footwear 160 versus Footlocker 360? That's my first question. Thank you. Thank you, Viren. To answer your first question, there are a lot of factors that go into a retail environment as it goes through ebbs and flows. One of them is that when we finish Q1, we go into a clearance quarter, which has a whole different cadence and heartbeat to that, as opposed to the Q1 quarter, right? You're not going to see an overall quick turn in there because now the EOSS takes over, and that depends on how much of an EOSS lag you're carrying. Overall, though, we are pleased to see that business has turned. It's not saying it's back to the net levels we expect it to, but it has turned. That's number one. The consumption patterns that we are seeing for categories that we expect to be unaffected by the influences, the headwinds that we had in Q1 continue to perform, whether it be the casual footwear, athletic footwear, the Crocs range, those continue to perform. We are able to discern that it is strictly the headwinds that we're facing, but you don't come out of those headwinds overnight. That's number one. From a clearing standpoint, we're not seeing anything distinctly different from a sheer standpoint. There are geographies that sometimes do a little bit better than others, but we're not seeing any difference from a clearing standpoint in performance. Nissan, just one quick clarification over there. When you said the overall business has turned, are you referring to footfalls? I'm referring to actual sales conversions that happen in stores, which is also not necessarily an increase in footfalls. Again, comparative is how we track them against the previous quarter, Viren. That's what we compare against first and foremost in retail. From there, we're seeing a definite turn in trend. Got it. Thank you. The second question was on New Era tie-up. Just because the following of American sports is pretty niche in India, and when you look at the size of portfolio at Nike, large enterprises or Adidas. What kind of opportunity size are you looking at with the New Era tie-up over the long term? I think when you look at this, these are lifestyle objects. These are lifestyle products, right? Basketball is not big in India, but Jordans are huge in India. It's not necessarily the uptake of that particular sport or that particular team. It is the lifestyle imagery that goes with it and the product that caters to it. This brand caters very much to that trendy sneaker maven that we're continuing to attract to our Foot Locker. We will be attracting to our Foot Locker stores. It fits very well. It is a niche play. It is not for everybody. It is a premium play. The caps range somewhere in the INR 3,000-INR 4,000 range, it's not cheap. It is a premium play. It's not going to have the exposure of stores, neither does it have the product assortment of a Crocs. It's not going to have that ghost kind of leg. Having said that, though, it augments our business very well, which is why we're excited about it. Thank you. Just one more last question from me. On the Walkway format, we see value retailers like Relook at the mall, successful value retailers rapidly expanding their presence, getting early entrances and other retail software. How have we set an internal threshold in terms of how many years are we ready to wait for that format of turnaround? Yeah. Also, what initiatives are we taking internally to improve the good business? That would be also my question. Thank you. That's a good question. We have been working very hard at the Walkway business, and I'm pleased to say that we are making considerable headway in it. The performance of Walkway, as I mentioned earlier on, was not as affected by the headwinds that we had, showing that it is a different customer, it's a different business proposition, which excites us because it's not cannibalistic in any way. In the near future, somewhere in late FY 2025, early FY 2026, we should be poised to take advantage of the value footwear opportunity. Thank you so much. Thank you, Viren. Thank you. The next question is from the line of Gaurav Bhalotia from Axis Capital. Please go ahead. Thank you for the opportunity. My first question is with respect to New Era. Just a clarification needed on this that because we have an exclusive distribution agreement, will we be buying out the inventory and then selling it, or it will be just a different arrangement here? Gaurav, there's minimal inventory in the country right now, which is one of the reasons we're excited about it as well. We hope to launch our first kiosk sometime in the next few months. We think the market is pretty clean. The retailers that used to sell it, the pinnacle retailers in the country that used to sell it are quite excited by it. We think it definitely is a clean start, unlike what we had to deal with on the Foot Locker. Sorry. Gaurav, just to add to what Nisan said, we'll buy at a particular price, at a particular margin from them. After that, the inventory risk would be on us, and there is no royalty or anything we pay to them. Yeah. Nisan, my other question is with regards to again, Q1 performance. There are multiple between Q1 and Q3 and all. Generally, in normal scenario, we generally find certain kinds of shifts in Q2 and then fix it in Q3. Would the shifts be as we expected or because last year also had this impetus to get public mark for one time, and this time it's not there. Probably Q2 would have a different change because of it. Anything you can share with us on this front? No, we're not seeing any negative things or any headwinds that we're facing, Gaurav. Whether things turn to positive or not is a different question totally when you look to the future. We're not seeing the headwinds. Q2 is a clearance quarter for most retailers, and we battle that. I say we battle that because, as you know, Metro is not very heavy into it. That's just historically been the case. Q3 is our largest quarter by far, and I think all the indications are that because there's not the headwinds of disproportionate marriage dates this year to last year. All the assistance doesn't start till November, until we start seeing the first marriage dates this year. All the indications are that we should be right on track with our guidance and growth. Okay. I think what should be doing, given what the consumer sentiments are being up on this quarter. Do we see a check in rate or there should come even correction to that? Yeah. It's a little hard to have that perfect crystal ball, which is why I think we've always guided, Gaurav, to a CAGR of 12%-15%, we know in retail there are ups and there are downs, some of them are within our controls, a lot of them are not in our controls necessarily. Overall, a good retailer will be able to achieve those numbers over a sustained period of time, but not every single quarter. We're hopeful that if you were to look at this quarter and say, it was a tough quarter, there's some gimmies coming later on in the year as well that would offset it. It's a little hard to predict, but we're very comfortable at a CAGR rate to be between 12% and 15%. Sir, this last question is with regards to the BIS implementation. Also, we do understand that there is a period of one year that will be allowed for PGB vendors to sell their old data. In this itinerary, do you think it will be possible for you to also launch new Fila jeans? I think now since BIS is pushing on, only those who have picked up BIS also will be in profit. What's your thought process? Do you foresee because of this period of time launch? Yeah. Let me take those questions one at a time, Gaurav. The sell-off period that we have is actually two years. That's the sell-off period that we as retailers have. That's number one. Number two, as I mentioned, there's still not clarity on the sports piece of the business. This year, Fila was a repositioning year coming up, right? This was not the accelerate year. If you remember, FY 2024 was clean up, FY 2025 is reposition the brand, FY 2026 is accelerate. We're confident that we will be able to do the testing of the products and the product lines and the designs that we want to do in this coming year, positioning us for the acceleration year in FY 2026. Thanks, Gaurav. Thank you. Next question is from the line of Umang Mehta from Kotak Securities. Please go ahead. Hi. Thank you, sir, for the opportunity. Just wanted to understand the rationale behind this New Era buyer, because from whatever we understand, and what you also maintained in the past is that your expertise lies in footwear retail. Even during FILA, your first priority will always be footwear. If you could just help us understand more on rationale and thinking behind this acquisition. As you're aware, Umang, we have taken on the Footlocker license, which now in a way pushes us to explore certain categories that give the consumer a complete offering, right? When you look at a complete offering, most of the brands sell accessories. It's not like you should go out and get another brand and just for the accessories. However, we found New Era to be very unique, that it absolutely owns the headwear space. All the N.Y. caps and the L.A. caps that you see people wearing, whether it's at the country club or whether it's at the nightclub are New Era. If you're in that market, if you're in that consumer segment, you notice those things. We find that brand to be very unique, and we think when you look at our consumer, when we want to give them a head to toe as we move into Footlocker, it doesn't mean we're going to go disproportionately into apparel, it's something that we can't avoid doing. We might as well go ahead and get a brand that we feel confident we can distribute and bring to life in India very successfully. It'll differentiate us from all the other offerings that we've done or that have been in the marketplace because the supply here has not been very consistent. It creates a point of differentiation. It creates a point of completeness to the consumer. It has multiple advantages. To the fact that when you take on a distributor brand, it typically tends not to be margin dilutive. Those are some advantages that we saw with it. Understand. The second question was on the guidance range which you mentioned. In the past, Nissan, you all have mentioned about 14%-18% kind of CAGRs. I heard you mention 12%-15% today. Is there some kind of moderation in terms of acceleration going forward or just it was the guidance you wanted to send some time? Umang, let me take that question. The 12%-14%, 10%-15% that Nissan mentioned was factoring Q1 that we already had for the year. However, if you look at our long-term horizon, we stick to the number that we have mentioned earlier, which should be somewhere in that range of 15%-18%, plus or minus 3 percentage points. Perfect. Understood. Thanks a lot for the clarification, good luck with the rest. Thank you. Next question is from the line of Navneet Nadidi from Naredi Investment Pvt Ltd. Please go ahead. Hello. Thanks for the opportunity. Sorry to interrupt you, ma'am. May I request you to please use your handset? Oh. Hello. Yes, ma'am. Please go ahead. Yeah. Thanks for the opportunity. My first question, is regarding in the last quarter, your account took the loss of that crore from Fila business. Since you mentioned that you have managed to reduce the loss from Fila, can you please state how much loss you have booked on account of Fila business in this quarter? We have been able to reduce the loss by approximately 55%. If you see for this quarter, loss is somewhere in the range of six crores. All right. My second question is, also in the last one call, you mentioned about the two laboratories of Segra to test the response of the customers for Segra apparels. Can you please guide us if you are able to keep on tracking for apparels in footwear and future strategy moving forward? Yeah. We have kept those two stores alive, Navneet, to ensure that we have a test module to do it. Right now, as I mentioned, we're still in the U.S. test clearance phase, we don't want to launch it yet, simply because the consumer that's coming to malls right now is inundated with deals and there's a lot of noise regarding that. We want to launch when there's some clarity on it. We are going to launch it probably in late August, early September, and we do have those two options still with us. All right. My last question is about how much cash flow is being spent in the making of OAN discarded footwear, and how much it will affect on EBITDA margin. Oh. Our target, Navneet, is to get to 100% recycling of all footwear, number one. Number two, the way we do it is we use our CSR funds to drive that business. While it is cost us money, it's part of our CSR program that we have to do. It's negligible as far as the impact goes, and don't forget, we're required by law to do it as well, right? By the way, this quarter, we hope to achieve the 100% mark that we set out to do. We're right on track and excited about that. All right. Thank you and all the best for future. Thank you, Navneet. Thank you. The next question is from the line of Shirish Patesi from Saxon Broking Limited. Please go ahead. Hi. Good afternoon, Nissan and team. Thanks for- Sorry to interrupt you, sir. May I request you to please use your handset? I am indeed using handset. Am I loud and clear now? Can you come near to the mic and speak, please? Yeah. Is this better now? Yes, sir. Okay. Hi, Nissan. Good afternoon. Thanks for the opportunity. I have three questions. Starting from the per square feet, we have come down to 4,500. I understand this quarter is weak. On an average, we were doing around 5,000. What are the levers and what are the areas or what are the measures we are trying to take to improve this? Maybe if you can help me with the number of pieces we have sold in this quarter, maybe some indication on the same-store sales growth. Shirish, obviously this quarter has been tough in terms of SSGs. Over the period, if you see, if I'm taking a slightly longer-term horizon, our SSGs, generally that we target and our actual SSGs have been in the range of around mid to high single digits. That is in SSGs covering the inflation. If we are able to maintain that, you will see this same-store square feet are raising. Having said that, it is also impacted with the number of new store addition. The sales doesn't come in, the denominator would have the new store that comes in. One other thing, don't forget we have to close all our stores in the entire country, not on the same day, but on the days that we have to close it for the election. That also impacts it. There's a number of factors that impact this. As Nissan mentioned, we expect H2 to be relatively stronger as compared to H1, and hence we are saying that we expect the overall sales growth for the year to be in the range of 12%-15%. If that happens, obviously we will see this number reaching that 18,000, 19,000 marks for the year. That's helpful, Prashant. I was just curious because in the initial comment you said that INR 3,000 plus is 54%. Maybe in the volume terms, if you can tell me, spread it out, what is the total volume we have done, and if the 50% value is there, INR 3,000 plus, what is the volume share for INR 3,000 plus points? Unfortunately, no. We are not sharing the volume numbers, but the numbers that you see is based on the sales. That is what is reflective in the increase in percentage from 39% to 54% this year. Having said that, our overall ASPs have remained flat, which is predominantly on account of higher sales of accessories which is one of the examples are Jibbitz in Crocs. These are items which are sold at around INR 300 average ASPs. Okay. My second question on the omnichannel slide, the e-commerce business is now contributing about 10%, which has come down when I look at over three, four years. Two sub-questions here. What is the average you would be happy, I mean, what average you should be okay? Because to my understanding, if you can do more volumes, but there is an accounting. Maybe if you can highlight something over next few years where you want to settle down this business. Shirish, just to level set the numbers, right? FY 2022 Q1 was INR 18 crore, then they went up INR 38 crore. After was INR 61 crore and this quarter was INR 58 crore. It's really been growing quite steadily over the few years. What you're referring to probably is the% of business, of course, when we had the COVID hit, and brick-and-mortar was not open, it played a much larger role. If you looked in FY 2023, it was 7.9% of our business. FY 2024 was 9.5%, and this year we're trending at 10.4%. There's been a constant steady uptick, just at the same time, while Metro has been growing its business as well in its brick-and-mortar. It's definitely keeping pace, and it's actually going a little bit faster. You're 100% right. We want to control this. We want to control this to where we're taking care of the consumer that wants to shop our full-price sales, wants to be able to have access to our product in ZIP codes we don't serve. I would rather let the customer dictate to me what that number should be, because if I come up with a 20% number, I can achieve it tomorrow, and then three years later, we don't have a brand because we discounted it. We're going to grow that business as long as the consumer finds it meaningful. Don't forget, shoes are not a great E-Commerce friendly item because of fit. You can wear a shirt a little bit loose, a little bit tight. You cannot wear a shoe a little bit loose, a little bit tight. Also, the quality of a shoe often only comes through when you actually see it, touch it, and wear it, right? Consumers are smart, they're savvy, they know this, which is why the footwear business also runs one of the highest return rates in the industry of all consumer goods out there. There are multiple reasons that create friction to this space. Having said that, we understand that the consumer today, more and more, is starting the journey of shoe exploration digitally, and then moving that on to an offline environment. We will continue to invest heavily in the E-Commerce digital space, and we will take whatever sales come that are meaningful and correct for the business, but we're not going to try and push to a number. If you look at it globally, I don't know anywhere in the world, a mature market or not, E-Commerce does not dominate a retailer's sales. We are not too far off the range. I think that the max I've seen with retailers is about 20%, but that's the max I've seen in retailers. Don't confuse brands versus retailers, right? Metro is unique because we're both a retailer and a brand. We are predominantly, first and foremost, a retailer. That's really helpful. My last question on the margin side. I understand that things are very volatile, yes, will happen at some point of time. Maybe, if Kaushal, you can highlight what are the cost parameters you are looking at this time? Is there any inflation which you have built in for next 2 to 3 quarters? I am also guiding, what are the levers more importantly, this 50% are you happy with that or this 51% contribution can look more than 2% addition in next quarters? In terms of margin guidance, Shirish, we are still maintaining the overall guidance that we have given. For gross margin, I am talking not about immediate year or a quarter, but slightly longer term, just to set things right. In terms of gross margins, our long-term range is around 55%-57%. We are 100% confident of achieving that. Our EBITDA range that we have guided is 13%-33%. PAT around 16%-17%. These are numbers that we sort of track. We feel extremely confident that we should be able to achieve these numbers over a longer-term period. I heard you mentioning BIS in your conversation. We expect maybe slight increase in cost. Over the period, we have been able to pass on any inflation-driven or any cost that comes into our product to the customers over a period of time. This is covered in 2%-3% to 5% ASP increase that we see on an average year-on-year. We do not see any significant concerns with respect to product inflation as such. We feel the gross margin range that we have guided, we should be able to achieve. The reason, Kaushal, why I am asking, our revenue is flat. Our employee cost has gone up by 11.5%. I understand there is a store opening cost which is attached to it. I am just more curious that if there is another cost line item which can come as a surprise in next few quarters. I don't think it's a surprise. What happens every Q1 is people expect raises all across the globe, right? That's something we planned on. I think the other thing is, I honestly believe the team has done a great job controlling expenses. Because if you look at it from the consolidated numbers, it's 1% down in revenue, 1% down in profits roughly, right? Which is hard to do, as you and I know, because you de-leverage a lot when you go down, or worse, if you don't grow. I don't believe there's any additional surprises coming in an exception. That to us wasn't a surprise, by the way. Shirish, just specifically on the manpower cost, you should also see this in light with all the ties that we have announced, starting with FILA, Foot Locker and now New Era. I think as we mentioned in our earlier call also, we have not started with Foot Locker store. Our team who is dedicatedly working on Foot Locker is virtually in an excellent place. These are also investments that we have done for which revenues will start flowing from S2 and subsequent period onwards. These are all good expenses, if I may term it that way. All right. Thank you. Onwards to you. Thank you. The next question is from the line of Saurabh Kundan from Goldman Sachs. Please go ahead. Yes. Thank you. My question is that footfall was understandably subdued during the quarter. Do you have any observational trends on the conversion from last year that you can share with us? Yeah. The conversions remained flat or gone up just a tad, Saurabh, across the different divisions. Some geographies go left and right, but as an average, we track conversion on a weekly basis. We're not seeing anything distinctly different in conversion, which is good. Also, like I reiterated, the categories that we didn't expect to be impacted by the headwinds were not impacted. Obviously, when a store is closed every category for a day, every category is impacted for that day. Overall, we're not seeing a shift in conversions. We're actually seeing also that the average items per bill has stayed constant and actually gone up just a smidgeon. It's not like the consumer is, or they're not trading down in ASPs. We're not seeing anything that indicates that they're not willing to buy. It's just that we have some industry seasonal headwinds going on. Great. Thanks for that. That's good to know. My last question is, you made some comments on BIS-related challenges in your opening remarks, especially on the high-end sports footwear side. Does that in any way, also affect your plans on the Foot Locker side? I read in the media that the first store is going to be up, so I'm assuming the inventory for that would be ordered. How confident are you of genishing that concept class? Yeah. I think it's a moving target right now. As it happens, Saurabh, it may, it may not impact it. What we need to create is a nimbleness and an agility in here to deal with it. The Treasury has not come out with a final circular on how it's all going to play out yet. We're working very closely with all the major brands that supply to Foot Locker. We're in constant communication with them. They also have mitigation plans that they have in place. Overall, I think, it's a little bit of a wait and see, it's not going to be forever thing either, right? We're building agility into our plans just to make sure that we don't get surprised by it. We don't like surprises, and neither do you. Having said that, though, when it comes to the biggest bulk part of my business, which is Metro Mochi Walkway, we are 100% sure, right? That's the good news to it, that even if this were to be some fluctuation in the sports end of the business, that's on the fringe of our business. That's not our core business. Right. Thank you very much. Thank you. The next question is from the line of Sunil Gupta from India Infoline. Please go ahead. Hi, sir. Thanks for taking my question. Firstly, when I see the performance this quarter, I understand there are specific factors and other retailers or brands have also alluded to the same. Over the last three quarters, if I look at, growth has been around 69% in second half of our FY 2024. Is it just external environment or base issue, or would you like to call out if there are any other factors which have led to such weak performance versus our own expectations? Is it some new entrants which has entered competition, an organized coming back, any other factors which you are feeling? In this context, the second half you alluded that your company is very confident. What is the driver here? Is it just a base normalizing or is it a real pickup in consumption which you are investigating? Anything on those lines sir. Yeah. I think you nailed it on the head when you said it's just base normalizing, right? We've gone through 2 years of somewhat crazy growth. I think the growth that we had just coming out of COVID was unsustainable. Was absolutely unsustainable. We had a 294% growth. I know that's on a low base, but even if you look at the sheer quantum of number that represents, it was significant, right? We had record-breaking quarters, if you remember right. Going against those numbers, we still had a 12% growth last year, right? People are wondering, is this a sign of demand shifting? It really is normalizing, like you said, it really is a normalizing of demand more than anything else. We're not seeing anything that would indicate to us that the consumer is not buying footwear. They're choosing to buy their footwear elsewhere, that there's new competition that we should be aware of, that the e-commerce business is eating into it more disproportionately. We obviously look for all these signals in the market, we're not sensing any of those signals, because if I were to dissect what the headwinds would have impacted us by, we've got a healthy business. On top of LB business from the year before and the year before that. Some of it is base, some of it is headwinds. I say the base, especially with the quarter preceding this one. We have talked about it, that it's normalizing. As things normalize, I compare it similar to the wobble on a bike. If a bike wobbles, you don't get right back to the center line. You wobble to the right, then you wobble to the left, the oscillations become less, then you normalize. That's what we're going through right now. Got it, sir. Based on your assumptions, estimates, Q3 is the quarter where sales will be absolutely normal going forward. Is that a right interpretation? We remain convinced that the business is solid, the company is solid. The operational efficiencies and the rigor that we have continue to prove themselves out over and over again. The future inventories that we have coming in are in tune with what the customer wants. We have all the indications that we're ready for Q3. Okay, sir. Second question, and last from me. Implementation of BIS and the recently announced PLI for manufacturing footwears in India. Are there any implications for Metro in the near term versus other competitors who are more into manufacturing products? We don't have a disadvantage because we don't manufacture. If anybody else manufactures and sells, it's not a distinct advantage to them yet. We think that PLI is a great thing for the country. We think five years from now, it's going to be an amazing thing. It's just that as you walk through that journey, it's always a little bit rocky. We've weathered many other storms, 10 times tougher than this one. Like I mentioned before to Saurabh, we keep making sure that we're staying nimble and agile to what's going to happen because the rulings come out, the circulars come out, and notifications come out succeedingly at a pretty rapid pace. We just keep watching what's going on. Let's say in future it comes out that there is some sort of disadvantage. Would the company also explore into getting into manufacturing meaningfully? It's hard to say, looking at all those things. As you know, we're well capitalized, and we have capital at our disposal. If there's ever an opportunity that we see would give us a competitive advantage, then we would definitely consider it like we do all other good opportunities, right? I just want to let you know, there's a small company called Nike that has zero manufacturing and seems to have done well for many, many years, right? Manufacturing is not necessarily the forte that we want to develop. Like I said, if it's a great opportunity and the correct capital deployment, we would definitely consider it. Got it, sir. Just to follow up on this. As you said, possibly, we have a different skill set in terms of retailing and branding. It may be very difficult to make a business out of manufacturing also in a short period of time. You're absolutely correct about that. The fundamental guiding light, the North Star that we use here at Metro is wherever we play, we want to play to win. If we don't believe we have the right skill sets to do that, we will not play that game. If we feel we do, we will consider it. Great, sir. That answers my question. Thanks a lot. I'll come back in the queue for any follow-ups. Thanks. Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all participants, you may press star and one to ask a question. If there are no further questions, I would now like to hand the conference over to the management for closing comments. Thanks, everyone, for attending the call, and we appreciate your time and interest in Metro Brands. Thank you. On behalf of Motilal Oswal Financial Services Limited, this concludes this conference. Thank you for joining us, and you may now disconnect your lines.