Ladies and gentlemen, good day and welcome to the Metro Brands Limited Q3 FY 2026 earnings conference call hosted by Avendus Spark. The management is today represented by Mr. Rafique Malik, Chairman, Ms. Farah Malik Bhanji, Managing Director, Mr. Nissan Joseph, Chief Executive Officer, Mr. Kaushal Parekh, Chief Financial Officer, Mr. Mohit Tandon, Chief Operating Officer. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Tejas Shah from Avendus Spark. Thank you, and over to you, sir. Thank you, Muskan. Good afternoon all. On behalf of Avendus Spark, I welcome you all to the Q3 FY 2026 earnings call of Metro Brands. I will now hand over the call to Mr. Nissan for the opening remarks, post which we will open the floor for Q&A. Over to you, Nissan. Thanks. Thanks, Tejas. Good afternoon. Thank you all for joining, and welcome to our Q3 FY 2026 earnings call. As you are aware, we posted a 15% growth in our standalone business and our consolidated business. It was good to have a quarter without any unusual events or any offsets from the year before. The Diwali and wedding season performed well, and we are pleased to see that the traffic stayed steady both in our online and offline channels. Despite a slightly early festive Pujas season that fell into Q2, I am pleased to see that sales did come through with a strong mid-teen percentage growth, and we crossed INR 800 crore mark for the first time on a consolidated basis. The GST benefits continued to help specific parts of our business, and our ongoing focus on premium products kept our sales of over INR 3,000 at a 55% share of business. I am also pleased to see the consistent growth from our multiple e-com channels with our digital commerce business as it grew 4% and now reached a 12% share of our total revenues. On the EBITDA side, we grew by 16% for the standalone and 18% for the consolidated business, and we delivered a 33% EBITDA for both. On the PAT front, Ind AS accounting and a INR 3.3 crore accrual for the new proposed labor code from November 2025 dampened our PAT, which was offset by a one-time tax charge in the same quarter of the previous year. Nonetheless, our PAT grew by 33%, and we achieved 16% for the quarter for both the standalone and consolidated business. We opened 35 new stores this quarter and closed 11, bringing our total new stores this fiscal year to over 100. Additionally, we're excited to announce the launch of three new MetroActiv stores. These stores are designed for athletic performance seekers, featuring brands like Nike, New Balance, ASICS, and Fila, along with workout apparel to provide a complete experience. We'll continue to invest in and refine this concept over the coming quarters. Meanwhile, our Foot Locker stores will continue to cater to lifestyle sneaker fans, which is a different customer segment than the performance seeker. As I mentioned on our previous call, our new Clarks partnership is off to a great start, and we plan on opening Clarks stores around Q3 of this coming fiscal year. In closing, I'm pleased to see our business improving steadily and growing with double-digit increases, and more importantly, our key metrics of EBITDA and PAT staying consistent to our guidance while we continue to invest in marketing initiatives and a significant amount in our new stores. Our differentiated banners, each with a runway for growth, positions us well to cater to the complete footwear wardrobe of the Indian consumer. With that, I would like to turn the call back to the operator and open it up for Q&A session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on the touch-tone telephone. If you wish to remove yourself from question queue, you may press star 2. Participants are requested to use handsets for asking a question. Ladies and gentlemen, we wait for a moment while the question queue assembles. The first question is from the line of Gaurav Jogani from JM Financial. Please go ahead. Thank you for the opportunity and congratulations on the strong set of numbers. Nissan, you know, we have been seeing a slowdown across most of the discretionary consumption in Q3 also because of early Pujas and early festive that has occurred in Q2, but you completely are defying that trend. What has really helped you in this, and how confident are you of sustaining these trends going ahead? I think the evidence is in the numbers that we've now had our third quarter of double-digit growth. We see business trajectory headed the right way. There's a lot of initiatives that we've put in place in almost all of our banners to see how we can continue that growth trend. We don't see anything significantly one way or the other that's going to dampen this or a massive tailwind coming our way necessarily either. As always, we just see consistent growth happening, and we hope to see these numbers continue. We see no reason for these numbers not to stay in the range that we've always guided to. Nissan, one of the issues in the past quarter had been the store openings, but the background of store openings have also really picked up. Any guidance or anything that you can guide us to use the store opening can give me the new normal in terms of store opening. In addition, with the new formats also coming in, would there be any revision in the guidance in terms of the store opening that you can give to the past? First of all, I would like to point out that we've invested in opening up 6 Foot Locker stores and 3 MetroActiv stores. That's our commitment to stay relevant as a footwear retailer to the Indian consumer, right? It's not like we're hesitant at all to invest in new stores. As you know, all new store concepts have a gestation period for it to get up and running, and we're happy to do that, and we see that as a necessity for growth. That's number 1. Number 2, we will continue to open as many stores as makes sense. Fortunately, Gaurav, we're not capital-starved in any way to do that. We want to make sure that we open stores for profitability. We open stores for growth. We open stores to capitalize on market and market share. We are not going to be driven by a fixated number. I think our results speak for itself that, as and when time comes, we do accelerate growth when we see the right opportunity. Sure. Just one last question for Kaushal in terms of the accounting bit. Kaushal, this time around, look at the absolute depreciation. If you look at it has hardly increased on a quarter-over-quarter basis, the other income has also dipped this time around, and also the finance cost. Anything to read on these fronts, especially the other income, because it has dipped quite sharply in Q3. Gaurav, you're right in terms of other income, this is purely the effect of payout of special dividend that happened in Q4 of last financial year. In the first half, although our treasury was lower by INR 450 crore, we saw benefits of fall in interest rates that happened in H1 of this financial year. If you see for entire nine months, in absolute amount, our treasury income is still higher than last year, though at a much lower investable surplus base. This quarter vis-a-vis Q3 of last year, broadly, return in terms of percentage has been same. The delta is purely on account of lower treasury funds post payout of special dividends. That's only the finance cost and the depreciation bit because there are multiple store openings that has also happened. Ideally, because this finance cost will also have an element of the Ind AS, the finance cost, still it has gone down. Anything to read there? No. If you're comparing it with last quarter, if you remember, we had mentioned that in that particular quarter, we opened four Foot Locker stores. Hence absolute hit on account of Ind AS was higher in Q2 as compared to, say, Q1 or, say, when you compare this nine months as a whole. If you see nine months versus nine months, our notional cost on account of Ind AS is almost close to about INR 39, INR 40 crore versus INR 28, INR 29 crore last year. Okay. Perfect. Thanks. That's helpful. Thank you. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Hi, team. Thanks for the opportunity. Nissan, I wanted to better understand this growth improvement from 11% in Q2 to 15% in Q3. The main aspects, right? In terms of revenue per square feet, we were flat in Q2, we are flat in Q3. Our omni-channel growth was about 30% odd in Q2. This time around it is 25%. What exactly has driven this growth improvement? I guess within the core retail aspects, the performance is more or less in line with Q2. In addition, we report these channel-wise revenue, that indicates that the RM sales that we do, plus some subsidiary sales, have near doubled on a combined basis. Also if you could comment on the sustainability of growth in these segments. All right, Devanshu. First things first, while you refer to a flat square foot growth, it's disguised because we opened up 100 stores this year, right? New stores seldom come in at the same rate of sales as your base stores do. 10% of our chain actually that was new, came in below. The fact that we are flat to last year is a sign that we're actually doing well in our existing stores to maintain and keep that propped up. That's number one, right? Number two, we also have zero wedding dates in January this year, right? We should have seen that impact in December. That should have affected our sales in December. While I'm not trying to single out a single month, it didn't have an impact to us, not because it wasn't an impact, but it was because we were able to mitigate it through our performance of our regular products and what we're doing out there, right? There are no extraordinary subsidiary sales. There is no sales that are hidden in there. These are all our stores performing, getting better at performing, both at an SSG level, both at a square foot level. You won't see that at the total numbers. Overall performance has started to improve, and that's the bottom line to it. Just wanted to clarify. No, it's not. Devansh, we just wanted to clarify on the first point on sales per square feet, and this is for everyone. Our formula is very simple. We are dividing total sales by total square footage for the entire company at the end of the period. Although for all the stores that we opened in current year, we might just have four, five months of sales coming in in this financial year. But the denominator is full entire square footage. We're not using average here. My question was growth pickup between Q2 and Q3, right? Obviously you've added stores, that 100 stores on a LTM basis was true for Q2 also, and that is true for Q3 also. In Q2, our growth was 11%, in Q3 our growth was 15%. Ideally, when there is no pickup in revenue per square feet in both the quarters, and then in online channel, omni-channel also, we reported 30% growth in Q2 and this time around it is 25%. I just wanted the bridge as in between Q2 and Q3, what has led to this improvement? Well, you're anchoring what you're saying, Devanshu, on sales per square foot, right? That's the entire anchor that you're basing it on. It's obvious that we are having comp store growth. We're having new store growth as well, we're having comp store growth, you cannot hinge it on per-square-foot sales when, as Kaushal mentioned, if I open the store at the very last day of the quarter, we're taking all year revenue, dividing it by that square footage, right? And all quarter revenue and dividing it by that quarter. It's always gonna be a little bit muted if you open new stores. I think your entire formula would be reversed if we just did it on a comparable store basis, which as you know, we don't disclose. I think you should be able to infer that quite easily. Sure, Nishant. I'll discuss this offline. The second question was on sports and athleisure space. There is new player, Agilitas, who has deep funding, manufacturing capabilities. There are celebrity endorsements as well, and they have recently come up with a unique format like SportsYard in Bengaluru. While I agree that we play across the consumer needs for fashion, comfort, functional, et cetera, our salience towards this particular category is currently lower. How are we sort of working towards improving the internal agility so that our portfolio salience is also aligned to the evolving needs of the consumers? First of all, I think the market size for athletics is big today, both for performance and for fashion, and I think it's gonna continue to grow. That's number one. Number two, what we are retailers first and foremost, right? If you notice the concept of Foot Locker and MetroActiv, they're retail concepts. These concepts carry brands that are in that sports space to create that salience for themselves, and then we capitalize on it by giving them an avenue to sell and reach different parts of India, different consumers in India, right? It's not necessary for us to have that. Where it is of utmost necessity for us is in the Fila business, right? We have to have that competency in the Fila business. We've invested heavily in design studios. Have we been a little set back on Fila because of the BIS norms? Absolutely. Do I believe that we've got all the right things in place to capitalize on that growth? Absolutely there too. You've got to look at it holistically as opposed to I hope there's many players that come into this space because the space is huge and the more players that come into it, we actually increase the size of the market more than you realize, right? It is something that we're very good at, which is the retailing part of it, which all said and done, every brand comes to life only because it has an amazing retail presence, right? I think it's not like we're missing the entire formula here. There are bits and pieces we don't have specifically for our Fila business that we're growing, that we have invested. We have a design office in China, we have design teams here, we have marketing staff, we have agencies working on it. It is putting that ecosystem together. No, really encouraging, Nishant, just that the BIS-related challenges are just getting extended quarter by quarter, that reflection is still not happening. That was the main concern here. What is being extended quarter by quarter? The BIS-related challenges. Yes. No, because we work seasons out, right? In that business, you're not working on a next-day delivery program. Quite simply put, we have to buy componentry from around the world and assemble them in India, some of which there isn't the technical expertise to do so. There are some obstacles to it, absolutely. More than just a BIS reason, but it is a challenge, and we're okay with that because we're here for the long run with Fila. Sure. Just couple of bookkeeping questions. The store closures were a bit higher in Q3. Is this a one-off or are we making some strategic portfolio corrections and these closures can continue in the next few quarters as well? Secondly, there must be some loss related to these write-offs. In which line item does this get recognized? On first question on store closure, Devanshu, nothing much to read about. If you see overall store closures for nine months, it's around 18. On a base of almost 1,000 stores, it is still up 2%. We don't expect our store closures to change significantly from here on. Broadly, every year it would be in that range of around 2%-3%, which is the basic cleanup that we keep doing every year. In terms of your second question on loss related to store closure, this will all go into other expense line items. Is the amount significant, Kaushal? Can you call that out for this quarter maybe? No, it is not significant, it is not material. Otherwise, I would have called it as I did for other expenses. Sure. Last question from my end. From a pre-Ind AS PAT margin that you have reported, the difference is 1.5% for nine months, for Q3 the difference is 1.1%. Going forward, what is the run rate to go ahead with? And also placing a request, if you can consider sharing the detailed pre-Ind AS P&L, like most other retail companies do in the listed space. On an ongoing basis, I think it should be around that 1.2%, 1.3%. YTD that percentage is higher because, as you remember in Q2, we opened four Foot Locker stores. Whenever we open these big size stores where the rent-free periods are slightly higher because the stores are bigger and it takes more time in the fit-out of the store. That is why you get that higher hit. If you take Q2 exceptional hit on account of opening those four, five Foot Locker stores, broadly it should be in that range of around 1.2%-1.3%. Obviously, if we increase our new store openings, it will move in line. Sure. Kaushal Parekh, please consider that P&L request. If you can provide a detailed P&L across line items it would be very helpful to better analyze your performance. Sure, will evaluate. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference, please limit your questions to two questions per participant. If you have a follow-up question, we request you to rejoin the queue. The next question is from the line of Rahul Aggarwal from Ikigai Asset Management. Please go ahead. Yeah. Hi, good evening. This is Rahul Aggarwal from Ikigai Asset Management. Just two questions, Mr. Kaushal Parekh. Firstly, just on the top line. Positive surprise on the growth side of it. The incremental color on SSGs or bill cuts, average order value will really help just to understand the volume and pricing bit. If you could just throw some more light in terms of how are the cohorts looking across India and across categories, that will help. That's question number one. Question two was on the inventory health. Last quarter we were about INR 785 crores of inventory. If you could throw some light on how is that moving into December and how do you see that settling down over the course of the year? And thirdly, just as a bookkeeping question, just want to know the exact square foot area you've used to calculate the revenue per square feet. Those are my three questions. Thank you. Management line has been dropped. Please stay connected. We will connect to the management. We have connected with the management. Yes, sir. Go ahead. Sorry for this inconvenience. I think our line got dropped. Rahul, on your first question on top line. On a medium to long-term scale we have always guided that our average CAGR should be around 15%. Broadly, if I could give you a back of the envelope calculation as to how we reach that, it's basically broken into three parts. The first one being like-to-like growth, broadly in that mid to high single digit range. Every year if you open, say, 100 stores on a base of 1,000, that is about 10%. That 10% is expected to give you half revenue for the first year in which you open. That is another 5%. Then the last one-third is impact of annualization for the stores that we opened last year which will have full 12 months revenue this year. Broadly, that's the breakup. When you see our number you would broadly be able to gauge as to what particular quadrant has performed. Though we don't give specific numbers, we give enough details to sort of gauge in terms of the overall top line. With respect to inventory, as of December, we have seen slight built-up of inventory, which is in line with the season, Q3 being the season, also considering our store opening plan. Broadly in line, nothing much. We don't see anything abnormal there. Broadly in line with what we see year-over-year. Got it. Just a bookkeeping question on the exact square footage you have used to calculate the revenue per square foot, please. It is 13 lakh 90,000 odd square feet. Okay. All right. Get that. Thank you, sir. Yeah. Square feet, we only take store revenue. Got it. That's the standalone store revenue, right? Yeah. Overall store revenue. That is something that I was trying to explain, that even if we open store, say, on last day of December, we will not have anything in top line, but the denominator will have square footage of that particular store. Got it. Thank you so much, and best wishes to surpass the 1,000-store milestone next quarter. Thank you. Thank you. Thank you. The next question is from the line of Sameer Gupta from IIFL Capital. Please go ahead. Hi, team. Good afternoon, and thanks for taking my question. I just have two questions. Firstly, I understand there is some benefit of GST reduction this quarter. Last time around you had pointed out that 40% of Metro Mochi and 90% of Walkway typically will benefit due to the GST cut. If you could help us understand this quarter, if you just gross up the sales, let's say you include GST and you calculate growth, what would that number be? Broadly, if we take that 40%, it would be about 3% higher. Broadly. For the whole business. 3% lower, you mean, the growth? Gross would be 3% higher. Higher. There is no impact on the net sales, Sameer, because the entire GST amount is now broken up into two parts. One is GST that you pay, and remaining is being offered as discount to the customer. Sameer, we recognize gross sales lower. Yeah. To your point. Correct. That's what- If GST was not there, we would have had gross sales that were 3% higher. Yes. Okay. Let me rephrase my question. Yeah. Let's say in 3Q, you had INR 811 crore of sale. In 3Q of the base, you had INR 703 crore of sale. If I gross both up and then calculate the growth, which is 15% on net, what would this number be? I want to make sure I understand your question exactly correctly, right? If you took last year's gross and this year's gross, what was the delta caused by the GST, right? No, I'm just interested in the total growth number. Sameer- It will imply the GST, yeah. Sameer, let me try and explain. On a net sales, that is what I was trying to explain to you. On a net sales basis, there is no difference, because earlier it was gross sales minus, say, 18% GST for simplification, right? That is how we were getting net sales. Right now, we are selling at MRP, offering discount to the customer for differential GST, and the remaining GST has been paid to the government. On a net sales basis, there is no difference at all between pre-, post-GST numbers, and that is the number that you are seeing in the financials. I understand, Kaushal. What I basically am trying to understand is what the consumer at the end of the day is paying, what is the growth in that number? Ultimately, post four quarters, that is the sustainable number. This anomaly is because you are paying lesser GST to the government versus what you were paying last year. Around 3%-4% less is what the customer is paying on our entire portfolio. On specific sales, if the item with MRP was below 1,000, the overall differential would be around 6%-7% from a customer point of view. And if it was between INR 2,500 to INR 1,000, the differential would be somewhere in the range of 11%. These are the percentages based on which customers would pay slightly lower. Got it. It is suffice to say that on a consumer level, the growth will be somewhere in the ballpark of 12% versus the reported 15% that you have clocked. That's what I'm trying to explain. On a net sales basis, there is no difference. Maybe I'll take a short time. That's fine. Earlier it was 118 minus 18 that was giving you a net sales of 100. Right now it is 11% discount. INR 7 goes as GST and again, 100 gets recorded as net sales. On a net sales basis, there is no difference at all. The consumer is paying 11% lesser, right? Because that 11% is now the discount, right? Correct. Well, Sameer, that adds up to 3% on a company-wide basis. Got it, sir. This is really helpful. Second question is on Foot Locker. The commentary in the press release suggests that the expansion from here on would be measured. First of all, is this a correct interpretation? Would this mean a pause in Foot Locker store addition in the near term? If at all, what can we expect for FY 2027, 2028? If any number you can give. Lastly, is it solely BIS which is the constraining factor here? Yeah. Thanks for asking that question because BIS is something that affects not only us, but also global companies that operate in India, right? Some of the best global companies are also dealing with it. Yes, it is primarily because of BIS that we've slowed the growth down. We haven't stopped the growth, but we slowed it down till we have visibility. We were actually assured that by this quarter, the BIS issues would be resolved, which it hasn't been, by the global brands. We're being told it would be Q4 of this year, Q2 of next year, before it will be resolved. It's a wait and see, right? Till we have visibility, it's hard for us to invest significant CapEx and also significant OpEx in getting these stores open so we know that it has fully the inventory it needs. Having said that, it's not like these stores are not doing great sales. They're just doing about 20-25% less than we would have anticipated, had we had the right product in these stores. It's not like we're going to stop growing these stores at all, but we're going to be much more measured because you don't always get good real estate as and when you're ready, we want to make sure we don't miss on those opportunities. That's what I meant earlier on by saying we are investing in new stores despite the fact that it may not be profitable right away, especially these new concepts because of BIS mitigation issues. Sameer, just to add, what we mean is we will not be aggressively scouting for space for Foot Locker. At the same time, if we get a good real estate property at a good rent, we will be more than happy to go ahead and open a Foot Locker store. Got it. This is very clear, sir. Thank you very much for taking all these questions. Nissan, best of luck and congratulations on your reappointment. Thanks, Sameer. Thank you. The next question is from the line of Navneet Naredi from Naredi Investments. Please go ahead. Hello, am I audible? Yes, ma'am. Congratulations on the good set of results, and thanks for the opportunity. I just have one question. It's regarding, will we also be getting benefited from Indian Europe FTA? If yes, then how are we planning to tap this opportunity towards better monetization? We don't see any benefits directly come to our business from the European FTA. However, I think it encourages our footwear manufacturing to keep investing and growing their capabilities, which in the long run is always good for us because we source a vast amount of our goods from India. That's where we see the advantage, but that's a little bit more long-term, Navneet. Okay. Also on the MetroActiv, why did you open the first store in Indore? I mean, why not Delhi or Mumbai? Yeah. What we want to do is come up with a format that can cater to tier 1, 2 cities, not so much the metro cities. That's why we've opened up in stores like Indore and Jodhpur and Dehradun. Also, we want to use these places to really refine the concept, learn from the concept. You don't want to do that in your metro cities from day one, right? That's how we wanted to do it. Eventually, we think it's a great play for those kind of markets as well. Yeah, 100%. Even I appreciate that because I also feel this is a good strategy. Usually anybody would like to tap the metro cities first, I think this is an underrated market when there is a lot of penetration which we can get from that market. Thank you. Congratulations once again, looking forward to meet you soon in the next quarter. Thank you, Navneet. Thank you. Thank you. The next question is from the line of Ankit Khera from PhillipCapital. Please go ahead. Sir, we have a format called Shoe Depot, which we started couple of quarters back. Just wanted to know how we account for that. This is like a factory outlet which I've seen in multiple cities. How does the store because all the brands are housed in this format. How do we account for that? What is all the inventory which is left over from end of season sale is what do we sell in that format? How do we manufacture separate inventory for that store? Let me explain the concept. Kaushal will walk you through some of the other questions you had. First of all, we do need outlets as any retailer does. Typically, retailers will have anywhere from one in every 10 stores to one in every 15 stores as an outlet to clear goods, right? Instead of relying heavily on a very concentrated period of time, which we call end of season sales in India, we would be good to have an outlet valve all year long. That's the first point. We have about 19 Metro and Mochi outlets and Crocs outlet stores. It's not like we were not operating the outlets before. We were just never called out because we operated under the Metro banner or the Mochi banner or the Crocs banner. From a real estate perspective, when you go rent 1,000 sq ft Metro, 1,000 sq ft Mochi, and a 500 sq ft Crocs, you're not going to get as good a rental deal as if you rent 2,500 sq ft and house all your brands in there. That's number 1. You're able to get some economies of scale on the rental side. Number 2, it's not always that everybody has the same inventory problem. Sometimes Mochi may have a little bit more to get rid of, sometimes Metro may have a little bit more, sometimes it might be Fila that has a little bit more, right? This gives us the flexibility to put in there what we needed to do to liquidate and perform its primary function, which is to liquidate product. That's the reason for the concept. Ankit, I wanted to make sure we explained that because I don't think we've ever called that out today. We have 8 Shoe Depots operating today. 7, sorry. 7 operating today. The concept's only a little over a year old, but it actually replaces our other outlet stores. In terms of number, Ankit, it is currently being classified under Metro. Understood. My second question is on online traction. Do we manufacture separate inventory, low quality for the price points we are selling online, or is it purely the liquidation channel for the store inventory which is not getting sold? It's a combination of both, right? First of all, there are no low-quality products. I want to make that very clear. You can achieve price points differently when you manufacture shoes, and it's not a question of quality. It might be a question of embellishments or the manufacturing method you use. We do create an online line of goods, and that's exclusive to the e-commerce channel because we don't want it to create a dissonance with our in-line stores. We also want to be able to cater to the eyeballs and the ZIP codes that e-commerce can penetrate too, right? It's important for us to play in that area, not because we don't think we're serving the consumer well in the places where we have stores, but because we believe a disproportionate number of those sales are going to ZIP codes where we don't have a presence penetration or probably never will have a penetration for the foreseeable future. That's why we play it that way. It's not a discount game for us. It is not something that we just want to make sales at any cost. It has to make sense. It's got to also be with price points that don't in any way affect the stature of the Metro or the Mochi brand. My last question is, if you look at the price point between INR 1,500 and INR 3,000 and lower than INR 500 for this quarter, we have seen more than 100% growth in price points which are lower than INR 500. At the same time, growth in price point between INR 1,500 and INR 3,000, the growth is single digit. Ideally, that price point should have grown the fastest given that the GST cut is maximum there and more footfalls would have drived there because product would have become significantly cheaper for the consumer. Anything to read at these two price points from the consumer optic? We've seen that. Ankit, broadly what we are seeing is the number percentage has remained almost similar. 4% below INR 500 versus last year. 8% between INR 500 to INR 1,500, again, same as last year. We have seen slight dip when you see Q3 numbers between INR 1,500 to INR 3,000 and above INR 3,000 has increased by 1%. Broadly similar, nothing much to read into because all our formats are growing. Obviously, over a period of time, if we expand the Walkway slightly more aggressively, you might see some change, but that also won't be material because all other formats of ours are also growing simultaneously. We don't see any significant impact there. My last question is regarding the GST benefit which you're passing on to the consumer. Now it's been nearly 4 months now. Does the discount still there or with the new product pricing coming in with the new season being there, discounts will go up across the stores and now the new products are at a cheaper price point, or we will keep some benefit with ourselves and, in some product categories, pass on the full benefit to the consumer. At the end level, how does the bill you expect now in the new season? Ankit, all the existing inventory wherever we have a GST benefit on account of rate rationalization, discount continues. Please go and visit our store, buy something, you will see that discount on your invoice. This was on a lighter note. Second point, for all the new products that are getting added, we are evaluating what is the final GST that we had to pay to the government and accordingly realigning our MRPs. We believe in maintaining our markup and passing on benefits to the customer wherever we get, just to make sure that customer continues to see value at the price point at which the product is offered. For all the new articles, we are revising our MRPs accordingly in line with the GST% reduction. That's how we are taking this forward. To be fair, we also have to keep an eye on our input costs, right? If the input cost increases, then we might use it as a way to mitigate some of those price increases. It's a balance of things. Foundationally, anything that was manufactured before the date of the new GST law will continue to get a discount in our stores till the very last shoe is sold. Sure. That's helpful. Shop I shall, I'll definitely go and buy something. Thank you. Thank you. The next question is from the line of Shraddha Kapadia from SMIFS Limited. Please go ahead. Hello, am I audible? Yes, ma'am. Yeah. Thank you so much for the opportunity, congratulations team on a good set of numbers. Just continuing with the previous participant question on the digital and the e-commerce which is there. Currently, if we take a look, then the digital contribution is approximately 12%. Is there any medium-term target for the e-commerce and the omni-channel mix? It's not so much as a target for that mix. We want to make sure that it is a profitable business at all times. Right? I think in healthy companies, it's always sub 20. When I say healthy, I mean where they have good brands, good retail operations, and customers understand their product. I think the range can be anywhere between where we are today and 20%, but that's not necessarily a growth target we want to chase because we could get there tomorrow by discounting. We don't want to do that. We will not do that. We want to create a business that's accretive both to our sales but also to our brand value. Sure. That is quite helpful. Also, if you could help me understand the margin differential between the e-com and the physical stores. Is there a huge differential? There is a differential because obviously, we do use e-com as a liquidation channel also, apart from promoting full-price sales which is primarily driven through omni-channel sales that happens to our stores. Since discounts are offered online, the reported gross margins, if we see at a division level, would be slightly lower than gross margins that we report on an overall basis. Sure. Thank you. Also, if we take a look at the current quarter, we have witnessed good EBITDA margin expansions. Is there any range which we should be considering going forward? I think 33% is a real good range, isn't it? It's one of those things that I would tell you that what we need to do is ensure that we continue to provide value to our consumers, right? Are there operating leverages that we can get? Potentially. I think maintaining that number is not an easy task in itself. We've done it quite consistently. We've guided to it, and I'm happy to say that we've hit our guidance almost every single time, Shraddha. Sure. Thank you so much. That was all from my side. Thank you. The next question from the line of Gaurav Jogani from JM Financial. Please go ahead. Just thank you for taking the question again. I just have one question on the margins bit, that what is the kind of drag that we're seeing on the margin because of the new ventures like Fila, Foot Locker or even MetroActiv because these are now under a gestation period, and they would be incurring certain losses or maybe at the EBITDA level, they will be profitable, but at corporate level could be losses. It will modify the drag because of that. Gaurav, as we have informed earlier, formats like Foot Locker, MetroActiv, since we are largely dependent on third-party brands, almost 90% of our revenue would come through third-party brands, hence our incoming margins there are lower as compared to margins that we report on an overall basis. Obviously, over a period of time, as these grow, you will see some impact on our overall reported gross margins. In terms of Fila, we had completed our liquidation last year itself. In terms of Fila, we are not seeing any significant drag in our gross margins. We had also told that once this format sort of stabilizes, I'm talking about Fila here, we expect it to be at least equal, if not accretive to the gross margins that we are reporting currently in that 55%-58% range. Kaustub, just the thing was that I understand on a gross level there will be differences, but I'm assuming that on the EBITDA level, there would be some drag, and by drag, I mean because we will be making lower profits. Is that an assumption right, that as this business kind of scaled up, there is a scope for you to improve the EBITDA margins that were largely It's a drag for a couple of reasons, Gaurav. One is that it is a new format. It takes a while for it to settle in. Number two, we're also investing heavily in the marketing of it. Those are things that start to taper off as the concept starts to establish itself. Yes, going forward, it should have room for EBITDA improvements. Having said that, Gaurav, as of now, contribution from our new format, Foot Locker, MetroActiv, Fila, is not significant. Hence we don't expect a significant improvement in the margin guidance that we've always given. Gross margins in that range of 55%-58% is what we are comfortable with. EBITDA in that 30% range and PAT in that 15% range is what we are guiding for medium to long term. Sure. Kaustub, just one last bit. The breakup that you gave to PPD in terms of the in-stores, omnichannel, online and other bit. This time around, there is a decent amount of growth that we are seeing in the other segment. I mean, the contribution is 2% odd for this quarter, and the H1 was just 1%. Is there something that has led to a decent INR 25 crores kind of a number for the others bit, especially in this quarter? At times, these numbers also change on account of decimal. There could be that effect of decimal there, but we don't see any significant number being present there. Okay. Sure. Thanks. Thank you. The next question is from the line, Saurabh Kundu from Goldman Sachs. Please go ahead. Hi, thank you. I just wanted to know, wonder if you can quantify the volume growth over the last three quarters, let's say three or four quarters. What has been the trend in volume growth? broadly, Saurabh, we have seen our ASPs grow up by approximately two and a half, 3%. We have reported overall 12% growth. Balance 9% is coming from volume, which will include both same store as well as new store addition that happened during the year. Understood. If you could tell me what it was, let's say in Q2, and what it was in Q3 on a year-over-year basis, the volume growth approximately. Yeah. Our ASP growth, Saurabh, has been in that range pretty much, 2%-3%. Say, for example, in Q2, our overall growth rate was around 12%. Take out 3% from there, and that's how you get the%. In this quarter, our overall growth is 15%. If you take out 3%, 12% will be volume growth. broadly in that range. Our ASPs growth has been largely consistent in that 2%-3% range. All right. Yeah, thanks. That's all from my side. Thank you. Thank you. The next question is from the line of Akhil Parekh from B&K Securities. Please go ahead. Yeah, thanks for the opportunity, congrats on a good set of numbers. I just have one question pertaining to BIS, right? What does a typical inventory look like for a Foot Locker store? Because we have six stores, so ideally, on such a small base, we shouldn't be having a BIS-related issue, right? If we have it for Foot Locker and Fila, why don't we have that similar issue for our MetroActiv stores? I don't think we ever said it was a big drag on us. We're talking about why we would be cautious in our aggressive growth plans for Foot Locker, right? It wasn't we were going to stop growing Foot Locker. We just weren't going to be as aggressive about it till we have clarity. To answer your question as to why we're concerned about it is only 20% of the sales, but it is the 20% of the high heat sales that create uniqueness, that create a brand position for Foot Locker. Why does it not affect everybody else except Fila and Foot Locker? Well, Foot Locker is everybody in the world in the athletic sports is affected, right? Fila falls in that category. It doesn't affect the rest of our business because 85%-90% of the goods we sell are sourced in India, right? BIS does not apply loosely to us. MetroActiv is also impacted by it because it's heavily reliant on outside brands. However, they don't need as much high heat product all the time. They have a different set of products. It may not impact our MetroActiv stores as much as it would impact our Foot Locker stores. To reiterate, as Kaushal said, these aren't significant parts of the business. What's significant to note is that Metro continues to invest, knowing fully well that we may not get payback the very next day in some of these new concepts. We're more than happy to grow our business for the long-term positioning of Metro Brands. Sure. This is helpful. Just a clarity, when you say high heat footwear, does it imply that the higher end of footwear is largely still imported while relatively lower end, maybe below INR 10,000 and below, that is kind of domestically procured? Yeah. It's a lot of things, right? It's collaborations that are done and are one-off factories. To answer your question loosely, it definitely is product over INR 10,000. I would even go as high as saying most of it falls well over INR 15,000. That's the kind of product we're talking about. Got it. This is helpful. That's all from my side. Thank you so much. Thank you. That was the last question for the day, on behalf of Metro Brands Limited, that concludes this conference. Thank you for joining us, you may now disconnect your lines. Thank you.