Ladies and gentlemen, good day, and welcome to the Q1 FY 2024 Earnings Conference Call of Page Industries Limited. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V. S. Ganesh, Managing Director, Page Industries Limited. Thank you, and over to you, sir. Thank you. Thank you so much, and good evening, everyone. Thank you all for joining us in our evening earnings call today evening. I'm joined by our CFO, Mr. Deepanjan, and our CEO, Mr. Gagan Sehgal. I hope you have already seen our press release. There are more than 20 parties in the conference. Before we dive into the numbers and specifics, I would like to provide a context and an overview of the quarter that has just concluded. In a time characterized by significant challenges, I am pleased to share that the company has exhibited remarkable tenacity. Q1 witnessed a sequential revenue growth of 28% and a volume growth of 31%. As you know, macro headwinds and market conditions did pose some challenges, leading to slight. We have lost the connection for Mr. Ganesh. Please stay connected. We'll re-connect him. Ladies and gentlemen, we have the line for Mr. V. S. Ganesh connected. Sir, please go ahead. Yeah, thank you, and apologize for that call drop. Hope you can hear me loud and clear. So, you know, I was just saying, you know, during this quarter, the macro headwinds and market conditions did pose some challenges, leading to a slight year-on-year degrowth, reflected in a 7.5% decline in revenue and an 11.5% decline in volume compared to Q1 of the previous year. The prevailing demand remains subdued due to several factors aligning with our anticipated expectations, which contributed to lower sales volumes. It is worth mentioning that our industry has witnessed an accumulation of excess inventory, which has had repercussions on the overall ecosystem, resulting in certain unsustainable business practices, which is happening in the marketplace. Our brand's growth strategy are deliberately designed to ensure sustainable long-term growth while upholding sound financial health and maintaining the integrity of our brand identity. To navigate the temporary phase of market conditions, we have taken enough measures to safeguard and improve our market share. Additionally, a diligent control over expenses has been instituted to protect our margins. Speaking of some of the key updates for the quarter, our EBITDA margins witnessed sequential improvement, which is attributed to lower product costs and better overhead absorptions. While we have taken several measures to control operating expenses, I would like to highlight that the higher EBITDA margin in Q1 FY 2023 was a result of the higher revenue recorded during the, that period. Our distribution network expansion remains in line with our plans. As of end of June, we have extended our presence to over 120,000+ MBOs, 1,330 EBOs, and 2,800+ outlets. We are strategically directing our attention towards metro and Tier Two and Three cities, while keenly gauging the potential PIN codes for expansion. It's heartening to note that our e-commerce channel witnessed substantial growth of 43%, reflecting evolving consumer purchasing habits and our commitment to bolstering our online presence. I'm sure you must be wanting to know our progress on the ARS implementation. I'm delighted to state that the implementation has been making significant progress and is being strengthened for extensive adoption. While demand continues to be subdued, we remain steadfast in our conviction that this is merely a transient phase. Our proactive approach involves continued investment in shaping the future, thereby ensuring that we capitalize on the promising prospects that lie ahead of us. Our strategic focus continues on multiple fronts through intensifying general trade distribution, expanding modern trade and Exclusive Brand Outlets, growing our D2C business, improving our customer experience, strengthening our product portfolio and consumer engagement, which will go very hand in hand with building, brand building and ensuring a very robust supply chain. I will now let our CFO, Mr. Deepanjan, to give you a detailed view on our financial performance, after which we'll be happy to take your questions. Let me thank you once again for joining the call today. Deepanjan, over to you. Thank you, VSG. Good evening, everyone. I hope all of you are keeping well. Thank you for your participation on this evening. I'm pleased to report that Page Industries has delivered a reasonable performance in Q1, despite the current market challenges. We have successfully improved our margins by enhancing the qualitative aspects of our inventory. Let me begin by breaking down our quarter's performance. Q1 revenues stood at INR 12,400 million, a growth of 28% quarter-on-quarter, and a de-growth of 7.5% year-on-year. Volumes were 55.8 million, which was a growth of 31% quarter-on-quarter, and a de-growth of 11.5% year-on-year. Q1 EBITDA was INR 2,338 million, which was a growth of 80% quarter-over-quarter and a de-growth of 19% year-over-year. The Q1 EBITDA margins were at 19.6%, which has grown by 5.6% quarter-over-quarter, largely due to raw material cost softening and operational expenses optimization. Q1 FY 2023 EBITDA margins were higher at 22.2% due to higher sales and better cost absorption. Q1 PAT, we are at INR 1,584 million, a growth of 102% over sequential quarter, and a de-growth of 23.5% year-over-year. Q1 PAT margin was around 12.8%, as against 15.4% in Q1 FY 2023. Inventory was INR 14,321 million as on quarter end, as against INR 15,921 million in the end of Q4 FY 2023. Which was around 105 days at the end of June, versus 154 days in quarter four FY 2023, which is in line with our target, annual target of optimizing the inventory days. Net working capital was INR 8,470 million at Q1 FY 2024, as compared to INR 7,710 million at the end of Q4 FY 2023. Working capital in days is at 58, which was around 73 days at the end of Q4 2023. To summarize our financial performance, so despite the challenging demand contraction, Q1 FY 2024 focused our agility in navigating demand challenges and capitalizing on growth opportunities. Our EBITDA performance highlights our commitment to operational efficiency and prudent cost management amidst the demand fluctuations. With this, we can open the floor to any further questions that you may have. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi there. Congratulations on this performance. Sir, I wanted to kind of understand the volume trend. Would you envisage that volume weakness is bottoming out now in this quarter, and that we should probably turn maybe positive next quarter? How do we, how do we kind of see this as we go forward? Would, you know, any, you know, indication or guidance on how should we look at this would be very helpful, sir. Yes, Avi Mehta, thank you. Yes, as regards volume, if I look at the last few weeks, we are seeing some improvement, but I feel it's early days. We have to keenly watch how the festive period is. We are very, very optimistic that this festive season will be buoyant. Last year was not all that buoyant. Mm-hmm. We are seeing some uptake, but it's too early for us to give you a guidance or tell you very, very clearly that things are turned around, though we are seeing some light at the end of the tunnel. So when you say festive demand, that would be more a third quarter phenomena? Is that how I should understand it? That is, so, you know, what we had said, look for more in the second half from a demand recovery. Is that what I will, I should read? Or maybe you could kind of I am not really sure of when you say festive, is it 2Q or 3Q that it plays into? Yeah. Basically, when we say festive, of course, we are looking at Diwali, which is the main, main seasons, and that's what we are looking at. Mm-hmm. Of course, there are also regional. Now, in Kerala, now the Onam is going to kickstart, and I think it is, this is the time for Kerala. It will start in a phased manner in all these states, but mainly Diwali, as you said. So we are seeing already some, some improvements, but it all depends on how long this trajectory can the upswing can continue. We need to keep a close watch because the market seems to be very volatile. I will say the demand is continues to be subdued, and we need to keep watch, having a close watch. Got it, sir. Got it fairly clear. The second bit on the margin side, I mean, last quarter you had given an expectation of moving to 20%-21% in second half. Now, post this performance, would you look to upgrade that guidance? If you could also give us some sense on which line items in the other expenses have you focused on primarily, which have helped drive this margin improvement? Yeah. So, Avi Mehta, we, we have always been comfortable between 19%-21% EBITDA. Even when we look at all our interventions, we always try and maintain this margin. We are happy with that margin. We don't want to tighten too much on the need to have expenses. We need to also look after the brand and its long-term prospect. The short-term challenges apart, we need to invest for the future. We always are comfortable with the 19%-21% range. Coming to the areas which we are concentrating on to, to control, mainly we are looking at how we can bring the inventory down, there has been tremendous progress in this front, we'll continue to work very hard on that front. Our overheads, we are really tightening our belts, and our overheads are well under control, and we are looking at every rupee spent, whether it is necessary or not, and that is something we are looking at. We will continue to be people-friendly. We will continue to look after our associates, so we will not take those actions, but we will be making sure that the expenses are under control. From a cash flow point of view, again, whatever CapEx that can be postponed, we are postponing it so that we are in a comfortable position because we are also blessed with a very good inventory health now. There is nothing to panic on that front, and there is no need to have an accelerated expansion plan. We are working very closely based on the demand, we are synchronizing our capacities. Perfect. Perfect. If with your permission, just the last bit, any indication, would it be fair to say RS impact is more or less done now, or do you- Absolutely. RS impact is more or less done because see, last time when I told you that there is a temporary correction in inventory, because inventory was bloated at that time. Mm. We have gone through that phase, so there is absolutely nothing to worry as far as RS coming in the way of our sales numbers. Okay. It's just a demand thing now, and that you're saying let's just wait and watch for one week. Yes. Okay. Perfect, sir. I'll come back in the queue for the other question. Thank you. Thank you, Avi Mehta. Thank you. Next question is from the line of Ravi Naredi, from Naredi Investments. Please go ahead. V. S. Ganesh, really in tough situation, you have tried your best to give the result. Sir, June quarter is highest for company. It's down year-over-year 7.5% in top line, profit after tax down 23.6%. Our old stock of raw material and fabric has been wiped out or still we are having? What you learn from this lesson when maintaining high inventory of raw material and everything? Okay. Reddy, thanks. A very good question. Actually, Q1, when you look at it compared to last, last quarter, last quarter, Q1, was our historically high quarter. Never in our history we had that kind of a quarter. I can say it was partly abnormal because of the, the supply chain disruptions which we had, and there was a pent-up demand. There was event stopping happening. You can't compare that quarter with this quarter from a baseline point of view. That apart, you know, when the inventory side, you know, hindsight, we can say the inventory is very high, but if you see last year, previous year, Q4 and Q1, Q2 of last year, we did exceedingly well and none of us were able to predict how long this continue. These were very, very buoyant. I can say compared to overall what is happening in the industry, we have done much better. We have less than 100 days inventory as Deepanjan showed our inventory levels are well under control now. I can see many of our peer companies have even eight to 12 months of inventory, and that's why we are seeing a lot of interventions happening in the market by way of discountings and schemes and other things. Luckily, we had always had that prudence and much better control over supply chain, so we didn't get pushed to that extent. Right. Right. sir, my one more observation, as we using all Jockey products since last so many years, we find that cost of products are very much expensive now, so we face intense competition. Is it so? Our commitment to being a value for money brand remains unwavering, and this is deeply ingrained in our core pricing strategy. What we are doing is we are elevating the quality and features of our product, and thereby we are offering enhanced value for the price paid. Okay. We always look at how we can strike a right balance between quality and affordability. You know, if you, if you see our products, you, you will see we have upgraded our products. We might not have reduced price, but from a value for money proposition, We, we have really enhanced our products, and that's what you will see in the market. Yes, we're gonna say really fantastic. When all expansion of company will complete, including Odisha? Odisha project will hand over to operations by Q4 of this year. Then, then we will be starting off the trial production and then going for commercial production. Okay. The rest of the production, the rest of the expansion, which you are doing in Karnataka and Tamil Nadu? There is no much work in progress as far as expansions are concerned. The Karnataka plants are already in operation, which we said last year. Last quarter, if you remember, we said, you know, it's starting operation. So our elastic unit is now operational, and our men's innerwear in Hassan is also fully operational now. Okay. All the best, sir. You are really doing great. Thank you so much. Very well. Yes, sir. Yes, sir. 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 one or two per participant. Next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Hi, sir. Thanks for the opportunity, and congrats on a good set of numbers in difficult environment. So, first question is, with the distribution reforms behind us, what are the key growth drivers leadership team is focusing on in near and medium term to revive growth and gain market share? Okay. Tejas, as far as distribution is concerned, it is work in progress. You know, our distributors are getting the auto replenishment system in a phased manner, but it is progressing very well. As I told you before, there is no, no impact to sales now. We have crossed that bridge. Coming to our strategy long term for growth, first and foremost, is intensifying general trade distribution. We are committed to amplifying our reach within the general trade distribution channel, ensuring that our products are readily accessible to a wider consumer base. This is the most important thing. We continue to expand modern trade and Exclusive Brand Outlets. We have made significant strides in modern trade expansion, with a particular emphasis on rapidly growing our network in Exclusive Brand Outlets. This approach aligns with our mission to provide premium shopping experience to our customers and to do justice to our entire product range. One other area where we are giving disproportionate attention is in growing the B2C business. We, we all know this is the most important space, which is having the highest growth traction, and we are dedicated to nurturing our B2C business segment. The, the next area which we are looking at is on improving customer experience. We have made tremendous progress in the last few months, a few quarters, and we will continue to concentrate there. Our central to our strategy is enhancing the overall customer experience. Then we, we have been strengthening our product portfolio, and our endeavors are geared towards further enhancing our product portfolio, catering to a diverse range of consumer preferences and needs across the price points, and we leave no white space. Sure. Of course, brand building initiatives, to grow the awareness, interest, and desire for the brand in their respective categories is something which we are now looking at, and we are no longer media dark, which we were during the pandemic. This is where, as I told you before, we don't want to cut costs where it matters. We definitely want to spend where it's required so that, the long term of the business is in good hands, and our long-term outlook is so positive that we, you know, it is very important that we, we are very aggressive in the marketplace. Of course, there is a lot of work happening in, in further strengthening our supply chain, which has always been our strength, but there is-... There's no end to continuous improvement, and we are taking a lot of action in further improving our supply chain and make it much more robust. Sure. Very clear, sir. And, and sir, second and last question, among the four categories, men's, women, athleisure, and kids, which categories or, if you can give us some qualitative ranking on, which categories are growing above company's average growth rate, and which are kind of, relatively struggling to grow, or keep the or take the averages up? Yeah. It is where what we can see is the men's premium category is having a good growth comparative to all other categories that are growing a much higher growth action. The area which, which is going through a flux across, across industry is athleisure side. Again, this is a temporary phase, and we discussed about it in last quarter also. If you look at overall, the evolving lifestyle needs of the consumer and the market has shifted more towards athleisure and everyday wear, especially post-COVID. Our confidence is deeply rooted in growing this, this category. You know, this is a short-term thing as what we see in athleisure side. Men's premium is, to answer your question, is the one which is growing better, faster than all other categories. Thanks a lot, sir, and all the best for coming quarters. Thanks. Thank you. Next question is from the line of Nihal Mahesh Jham from Nuvama. Please go ahead. Thank you so much, and good evening to the management. Two questions. First is, if you could just give the ballpark inventory number. I know you mentioned 100 days, but the absolute inventory number at the end of Q1. Absolute inventory number was INR 14,321 million at the end of Q1. That is helpful. When you mention about these unsustainable business practices, is it more in terms of incentives or aggressive discounting on the pricing by the competitor? Just if you could give a little more color, that would be helpful. It is, it's actually both. You know, if you, if you go to the market, you will see except us, a few of us, almost all the brands are having, offers, promotions, you know, buy one, get one free or more. When, when I look at retailers, there are a lot of schemes which are happening. If you look at it from a bottom line point of view, these are not sustainable, and it's, it's not a bit, bottom line friendly. In a way, I can say this is, this is a way of liquidating the stock and bringing the inventory down. That is what is happening in the marketplace. That is what we meant by unsustainable business practices. Of course, we as a brand, we work in a very hygienic, focused, sustainable growth initiatives, is what we take. While we are making sure our partners are happy, and this is where ARS is really helping our distributors because the inventory terms are improving, and this is much better than any schemes or incentives which we can give. Our retailers are getting better products. Our consumers are able to discover more product ranges of ours. We will continue to focus on these aspects, which will bring in sustainable growth. Sure. Just have one question, if I may, that when I say, look at how your EBOs are shaping up, is there a thought for Jockey as a brand to go beyond athleisure and become a full-fledged apparel brand? We had a certain jeans SKUs also that, you know, we had discussed about. If you could just comment on that. Nihal, I didn't get the last part of the question. If you can repeat it once again, please. Yes. Mr. Ganesh, I was asking that while Jockey has expanded very well into the athleisure space, is there a thought to make it into a full-fledged apparel brand, just based on observations of some of your EBOs and also some SKU launches of jeans and some other product categories which are beyond athleisure by definition? Okay. Nihal, there are two parts to this question. When you see our EBOs, it's not athleisure, it is House of Jockey. We have presence across our range, men's innerwear, women's innerwear, women's outerwear, men's outerwear, and juniors. This is the entire product line we have to offer today. When it comes to adjacencies, we only look at adjacencies which are relevant to the brand signature, which is relevant to Jockey and how we are positioned. We don't see ourselves coming with something like denim or something, because that will confuse the mind of the consumers. Today, there is good clarity among our consumers as to what Jockey stands for, and our adjacencies or the expansions will be in line with the brand signature. Sure, Mr. Ganesh. Thank you so much. Thank you. Next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Yeah, thanks for taking my question. You know, just to repeat to one of the earlier questions in terms of, you know, the category trends, where you talked about men's premium growing faster, whereas, you know, athleisure, there are certain issues. Now, you know, talking about the festive season, how do you plan to, you know, have the inventory in place in anticipation of the demand, which we expect to be strong in the, you know, third quarter onwards? Well, our distributor inventory health is very, very healthy, and we with, with good adoption of the ARS, they also have a wide representation of our product range. We also are back with good inventories in our warehouses, so if there is an uptick in demand, we are well positioned to cater to those requirements. We have also taken enough and more initiatives in the back end as far as agility is concerned. Today, we have made tremendous progress in turning around the order to shipment as far as back end is concerned. With all this in place, we, we, we'll be the first to make use of the opportunity when the market bounces back. We are on a sequential basis also seeing that changing, right? That is, you know, demand is improving for us in general. Absolutely, yes. My second question was, you know, on the gross margins. Why is there a dip on the gross margins this quarter? Dipesh, you want to take that? Yes. The dip in the gross margin as we compare with Q1 2023. There have been several factors. Firstly, the prevailing demand has remained subdued, and as VSG explained, we had the highest sales in a quarter in the previous year, so it was the highest ever sale. Naturally, with the high sales, our overheads optimizations were much better last year. I mean, last year, yes, with that, the margins that we reported last year were quite high. Mm. At the same time, we have. I hope I'm audible? Yeah, yeah, you are, sir. Okay. At the same time, as we explained, there are situations in the market that is inventory exit, and there are promotional activities given by other competitors, which has impacted our sales turnovers. We continue to focus on the long-term sustainable growth. To navigate this temporary phase of marketing conditions, we have taken measures to safeguard and improve our market share. Additionally, we have taken steps for controlling our expenses and optimizing them. This is broadly the, broadly the reason is that with, when you look at Q1 in FY 2023, the sales were significantly higher, and that helped in optimizing the costs. Current quarter, when you look at it, and naturally seeing the sales were much higher in that quarter, we had less investments in advertisement and less investment in other sales initiatives. This year, we have resumed the advertisement, and that has impacted our margin firstly. Yes, I mean, if you look at the sequential margin, yes, we have improved significantly, so we have increased almost 5.6% as compared to the Q4 FY 2023. Yeah. Sir, if I could, a follow-up here. Why is there a sequential dip in the gross margins? We, our gross margins- Okay. in March quarter was 56.6, and now we are at 52.9. No, when we are commenting on gross margin, which is the overall operating margin. At operating margin level, I think Q4, we are at 13%, and now we are at 19%. That's the improvement around 5% and odd. If you look at gross margin perspective, I think between the two quarters, considering we look at gross margin based on our product cost plus conversion charges. Considering that, we are more or less at the same level as Q4. What is that number, the gross margin number as per your calculation? As per our calculations, we are at a gross margin level of.. One minute. Yeah, we are at around 53%. That is a comparable, comparable number for the last quarter also. Yes. Understood. My final question, sir, was respect to the distributor count. For last couple of quarters, what we have observed is that the number has been coming lower, versus, you know, 4,800 earlier, now we are at 4,000. Is there any particular reason why this has been lower? Well, the Gagan will be able to answer this. Just to tell you, some of this is also some consolidation happening, especially on the accessories distributor distribution. There is realignment happening. These are all designed. Actually, there is no distributor attrition. Per se, in fact, it has only strengthened, and I, I feel this will further improve with ARS coming in. I can already see excitement in our distributors, the way they're shaping up. We don't have any such worry, but I think Gagan can add more value to this point. Gagan? Thank you, Mr. VSG. I think you have answered it. We don't really see a decrease as such in the distributor count, because when you look at the unique distributors, currently, you know, we used to have around 1,350 distributors couple of years back, and currently, we have 1,736 unique channel partners. Yes, there is a bit of consolidation wherein, you know if any channel partner for any reason, say, would have exited at any point of time, so that, which is a normal attrition, right? Which is, which is not more than what we expect. You know, the first right of refusal is given to existing distributors. We are consolidating and making sure that our existing distributors, you know, they, they, they continue to grow. At the same time as we have created another, you know, vertical for accessories, as Mr. Ganesh has rightly mentioned. You know, we want the right kind of channel partners who should invest in us because we see a lot of potential in, in accessories. That's the consolidation that has been done from our side, by design, you know, so that, so that we should have bigger channel partners who can give you the adequate investment and manpower, so that we can create accessories as another vertical and continue to grow because we see huge opportunity there. There is no cause of concern in terms of any attrition. It's all in control. We are keeping a very close eye, because our channel partners are our primary customers and, you know, we, we continue to engage with them very, very closely. Understood. Thank you. Thank you very much. Thank you. Thank you. Next question is from the line of Rishi Modi, from Marcellus Investment Managers Private Limited. Please go ahead. Yeah, hi. My first question is to Mr. VSG. We've seen... Could you just quantify the impact of ARS in this quarter? How much of secondary sales, which is not being recorded in our primary sales, or just the volume which has actually happened at end consumer level versus what is being recorded in our books? Rishi Modi, as I told you sometime back as well, we don't have any impact on primaries or secondaries because of ARS. That was an issue which we had in Q4 because of the bloated inventories the distribution had. Now our secondaries and primary is are in line. Our secondary sales has declined by 9%, 8%, is what he is suggesting, right? Like, we are not, we haven't taken any price hikes, we haven't done anything different this year, this quarter around, and hence, the actual numbers have started reflecting. Yeah, yeah, our, our secondaries are in line with our primaries, and therefore, you know, if you look at it from a growth point of view, what you said is right, and that is, that is understandable because the market is not buoyant, it's sluggish. Okay. Okay. It should also compare against the high base of last year's Q1, which was abnormally high, if you look at it from a baseline point of view. Right. Right. I understand. My second question is on the absolute decrease in employee cost. I think you were saying something, but I just couldn't wrap my head, head around it. If you could explain how has this decreased in an absolute term, amount? We, as we have high inventory, we have been allowing normal attrition. As a company, even during pandemic and even today, we never have post attritions, you know, that's a principle with which we work, and we are a very people-centric company. Last few quarters, since the inventory has been high and there is a need to manage inventory, we have been allowing normal attrition, and that has helped us to bring the cost down. Like, basically you're saying that we are under-investing in our people, we are not replacing people who have left? Which, like, wouldn't this threaten our long-term business capabilities, business strength? It, it will not, because we see since we have very healthy inventory, when we see uptick happening and when we see the trajectory, we can always get time to do the course correction. We can build that capacity. You know, Odisha is a virgin place, you know, it's a greenfield. So for us, it's question of timing as to when we are to start recruitments there. That has nothing to do with our current operating plans. Thirdly, we have enough muscle in outsourcing now. You know, if, yes, if you want to double the capacity there, we can do it. That's the kind of relationship which we have built with outsourcing and the partners. We don't have any worries as far as seizing the opportunity is concerned when the, when the demand bounces back. This attrition has largely come on the labor front, not the corporate front. Is that correct for me to understand? Sorry, I didn't, I didn't get you. This is on the factory side, that the attrition has come in and you haven't replaced, while the corporate employee count is not, it's being replaced adequately. Is that a correct read on this? It is mostly on the operating side, because that is where there is no pressure. There is, you know, we need to manage the capacity. In fact, when it comes to sales, feet on the ground, based on a distribution expansion, we have been adding people. As I told you some time back, our approach on cost control is measured. Wherever it is required for the growth of the business, we are not holding back. We are making the right investment, and wherever we can tighten our belt, we are tightening it. Okay, got it. Thank you. That's it from my end. Thank you. Next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes, sir. Thanks for taking my question, and congrats on a good market performance in Q1. Sir, if I understood it correctly, you said you did better than peers in Q1, despite them giving higher incentives and discounts to the trade channel. Wanted to check, is this comment at the volume growth level or at the EBITDA level that you're mentioning? Mr. Bansal, what I, I said was, we did better than the peers as far as inventory management is concerned. We, you know, we, we are 105 days of inventory compared to nine to 12 months of inventory, which the competition or the peers banks have. That is what has actually pushed those banks to take certain action on the marketplace, which may not be sustainable. Luckily, [listed] brand are not pushed to that wall. That's what I, I meant. Got it. Sir, a quick follow-up to this: Do you expect this to continue for another two quarters since they are having, like, 10, 12 months of inventory, so that sort of incentives or higher margins can continue for another couple of quarters from the competition perspective? It can, if you see the sequential growth, despite all that, what is happening in the marketplace, if you see our performance compared to last quarter to this quarter, there is tremendous growth. You know, end of the day, this is determined by the end consumer. If he's loyal to your brand, he will continue to buy your product as long as we are value for money. The last quarter growth clearly shows we are not outpriced ourselves, and therefore, we are not worried about it. We, you know, the last quarter to this quarter, sequential growth is a good indicator of how things are heading. Got it, sir. Typically, after Q1 has always been a strong quarter for us, then we see a sequential decline for all the three quarters. That trend should continue this year, or you expect demand sort of picking up and that trend can reverse this time around? See, it depends fully on the market, you know. Generally, you know, the market needs to pick up, you know, if anybody does. We hope, you know, this can't last for so long and things should bounce back, and that's where we see there will be uptake, because this has been two, three quarters of sluggishness, and how long can it last? Right. Last question from my end. If you could call out the advertisement expenses that we did in Q4 FY 2023 and Q1 FY 2024, as a% of sales. Didn't get you, Mr. Bansal. I'm asking if you can call out the advertisement marketing spend that we did in Q4 FY 2023 and Q1 FY 2024, as a% of sales. Uh. Yes. Advertisement was around 1.9%, around 2% in Q4 FY 2023, and in FY 2024, Q1 FY 2024, it's around 2.5%. This has increased, right? Sir, this is a 600 base sort of gain that we have done in the operating cost, since you mentioned that gross margins are largely stable. Can you help us sort of better understand this such a strong improvement, as in, is it largely because of this attrition thing or, or we have taken some more initiatives? Sorry, can you repeat the question? I'm saying, advertisement expenses have increased on a sequential basis. The improvement in other operating expenses is almost, like, 600 basis points. You mentioned that we have done some we are not doing replacements. Is it the only reason, or we have cut some other expenses as well? It's a combination of- Yes. Go ahead. Sorry. It's a combination of several things. First of all, our softening of the RM prices, that has been started gradually flowing in into. It was already started flowing in from March in the Q4, it has continued. That is one of the reasons why our margins have started improving. At the same time, there are. Gross level margins are stable, right? On a sequential basis. Yes. The gross level margins are stable. If you look at the employee expenses, that is also in absolute cost terms, it has reduced, but yet, in a percentage basis terms, it is slight increase. The savings that we have received is in terms of other expenses, which is more things like our logistics charges, our travel costs, those kind of things, even the market, such mother is selling and expenses, what we give typically the incentives to our trade partners. Savings has come into play very well. Got it, sir. Got it. Thank you so much. 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 per participant. Next question is from the line of Amarnath Bhakat from Ministry of Finance of Oman. Please go ahead. Yeah, hi there. Am I audible? Yes. Yes, Mr. Amarnath. Yeah. Yeah, so just trying to understand the way Jockey has performed in the main section so far. Of course, this is the market leading. What is holding us back, to, to replicate the same type of performance, in the women's section and as well as in the kids sections? We, we have tried, a little bit in the early stage to do something in the kids section, but it seems that that section is, not really picking up. Can you give us some color that what the management is thinking about this women and the kids section, and some, some light on the Speedo side as well? Okay, excellent. Thanks, Mr. Amarnath, for asking that. In the women's category, you know, the organized market exhibits notably very low penetration. It's the premium side of the business where we operate. Our current focus is not regarding the market share, we want to actually gain market share. Lot of the focus on expanding penetration and capitalizing on the untapped market. We are allocating resources both through above the line and below the line initiatives to foster awareness in the category. That is one of the foremost things which we need to focus on, and that's what we are doing. This concerted effort serves the dual purpose of bolstering leadership and cultivating consumer understanding regarding the women's swimwear segment. We under observe that there's a lot of awareness that we need to create in this category, especially on the women's, especially on the bra side of it. Wherein we are actually converting all our associates over on, on the retail space to be a consultant, a fit consultant and a product consultant, who can prescribe the right product based on the need of our consumers. We also formed a dedicated team for women's swimwear and juniors, and I can already see this has seen the favorable outcomes in our go-to-market strategy. This approach has facilitated the establishment of a distinct and dedicated distribution network, and it's extending to the very last mile as far as women's swimwear and juniors are concerned. All these moves which we are taking will help us to harness evolving premiumization trends and the transition from unorganized market to the organized layer. All this will help us. If you see our product range, we have a very rich product range, and we are blessed with a very strong research and development team. We have the luxury of having some world-class international talent heading the research and development team, who are able to come with exciting products, very, very functional, understanding the consumer's requirement, and also rightly priced. We are nicely positioned where it is aspirational, yet affordable for our consumers. You know, we have parts to take off here. I think we have done all the groundwork which is necessary for us to take the business forward. What you said is very right. There, there should be nothing which should be stopping us, and we, we are firing on all cylinders as far as women and juniors are concerned. Coming to Speedo. Speedo has done exceedingly well in the last year. We are therefore refocusing on it. In fact, we are working on a long-term business plan for Speedo with the current improvements which we are seeing, we will be focusing on further growing this category. Speedo as a market, you know, in India, this is evolving and there is much more awareness today. You know, there is going to be significant lifestyle improvement, and we are expecting this category to grow. We stay invested as far as Speedo is concerned. Sir, a follow-up relating to that. If I, if I read you correctly, that means our endeavor is to increase the percentage of this women and kids on revenue. Just in this regard, these products of women and kids, are they at the similar margin level of the men's product, or it's substantially different? Just to add to this, sir, what is our effort to extend our beyond India? That means are we doing something to extend to international space as well? That's my last question. Thank you. Okay. Margins, it is similar. As I said, brand, we always work that way, and it has worked very well. What is more important is how we manage the inventories of distribution, how we can make sure he has a relevant stock at the right time, and make sure it's there in the right place. He gets much inventory turns and thereby becoming more profitability rather than having more percentage points as far as margin is concerned. This is where our focus on AR is is very, very important. As far as international is concerned, we have 13 overseas DBOs, 10 in UAE, one DBO in Sri Lanka, and one in Qatar, and one in Oman. Thank you, sir. Thank you very much for your answers. Thank you. Thank you, Mr. Bhakat. Thank you. Next question is from the line of Gaurav Jogani from Axis Capital. Please go ahead. Thank you for the opportunity, sir. My first question is with regards to the ad spends. You know, you mentioned that the ad spends was around 2.4% odd for the Q1. However, in the past, you know, in the pre-COVID times, if you see, the ad spend generally has been in the range of around 3.5%-4%. While I understand, you know, that there would be a phasing issue quarter-on-quarter basis, but what kind of targets are we seeing on ad spends for on an yearly basis? Mr. Gaurav, our, our ad spend is in the range of 4%-4.5%. You know, that is what we have been doing. Of course, it came down during the pandemic. It was, you know, we were media dark, but generally it's around 4%-4.5%. Now we, we are focusing on, on, creating those awareness both in the brand as well as all the product ranges which we have. We are getting back to that normal trajectory as far as that, spend are concerned. Sir, would it be prudent to assume, you know, that the ad spend or these the spends would pick up in the later half of the year? It is bound to pick up in the later of part of the year, but, you know, it's all part of our budget. When I, when I say we have taken enough measures to protect our margins, all these are considered. We have already baked these in our budgets, and we also taken enough initiatives to control costs on other sides of the business, so that, you know, with the 4, 4.5% marketing spend, we still can maintain and protect our margins. Sure. So the margin guidance, you gave, you know, that's the 19%-21%, that includes the other income bit as well, if I'm right? Yes, it does. I mean, it's... Yeah, it does. Sure. Just one last quick question from my end is, sir, on the trends, you know, while we understand that during the COVID times, there was a lot of volatility in terms of demand conditions, and because of which, you know, you saw last Q1 being with a very high base. Would it be prudent to assume at least that the demand conditions have now normalized, and probably going ahead, we could see these normalized trends, and therefore, you know, these trends may follow now going ahead as well? Definitely. When we talked about volatility, it's not only the pandemic. If you see the last four, five years, there were enough and more things happening in the marketplace, which brought in a lot of volatility. You know, GST was one, then we had the pandemic, then there was also last year, we also felt like, you know, the above thousand and below thousand GST correction, then it was reversed back. All this is something which is we, we went through, so I won't say it was the pandemic alone. Today, what we are seeing is the overall bloating of inventory in the industry, which is affecting all of us. Going forward, I hope, you know, things will be normal and stable. Sure, sir. If I may just slip in one last question. Just to add. Yes. In the earlier clarification, with the margin of 19.5% doesn't include the other income. Oh, okay. It excludes it. Okay, okay. Yeah, it excludes other income. Okay. Sir, my last question, if we could slip in one more. You know, it's on the pricing bit, you know, this quarter around, if you see the top line growth was, decline was around 8% odd. However, you know, the volume decline was higher at around 11.5%, giving, you know, a 2% kind of difference. I am assuming that we haven't taken any price increase as such for now. So what will be- We have. We have taken a pricing increase in August 2022, so that that impact is definitely there. On top of that, there's a premiumization impact. That's what is the gap between 11.5% growth and the 7.5% growth. Sure. sir, just given the fact that- Further, sorry. Just to further clarify, we don't, we don't see any need for any immediate intervention. We, you know, we are very comfortable. There will be a need for intervention only if there is some abnormal input costs increase, like what we saw two years back. If such things happen, only we may have to look at it, and that, that is something for the industry per se to look at it. But as things stand now, there is no need for us to relook at that and have a price intervention. Yeah, actually, that was, I will be the last. Thank you, sir, for the clarification. Thank you. Welcome. Thank you. Next question is from the line of Ankit Kedia from PhillipCapital. Please go ahead. Sir, two questions from my side. When you say industry participants are filled with inventory, you know, once the inventory extinguishes in the system, they could take price cuts because of the lower raw material. You know, you have a policy of not taking price cuts. Don't you think that, post the price cuts, they will again be competitive and, you know, your products are still going to be expensive for a normal consumer? Ankit Kedia, if I look at MRP to MRP, we, we are still very, very comfortable. In fact, most of our peer brands priced much higher than us. Of course, they have taken certain promotional activities because of the inventory. Yes, that does play in the market, but if you look at MRP to MRP, we are much more competitive than most of our peers, perhaps. Sure. Sir, my second question is, you just entered into the institutional business last month, where you're making all the EBO franchisee partners, where you are, you know, distributors for the institutional. There you have actually told the partners that the Jockey logo will not be there, and they could scout for B2B business. In how big is the opportunity for Jockey here, and will you need to pay royalty on these products, given that the Jockey logo or the Jockey brand will not be there on these outerwear products? Just want to clarify on this, Ankit. The Jockey logo, this will be dependent on the institution, which is going to look at our products. Mostly it will be co-branded. In fact, what we see is most of the institutional buyers are so proud of the Jockey brand that they, they always prefer a co-branding. That is what it is. We are seeing a great opportunity. This is one area where we are not explored, even though we were present, we are not actually pushed this. We see good potential here. In fact, we also see this more, not only from a top-line point of view or the business potential, this also may help us to recruit new consumers. You know, they, for them, it will be a discovery for the brand, and so we, we are looking at it that way as well. Sir, from a three-year perspective, how big could this business be, from your perspective? Early days, Mr. Ankit. We are also trying to understand, because as I told you, we want to, You know, sometimes we, we can have a very high number at the cost of margin, you know, so we want to strike a good balance between it. For us, we are still exploring the opportunities which institutional business presents. You may have to give us the luxury of some more time to give a concrete answer on this. Sure. Thank you, and all the best, sir. Thank you. Thank you. Ladies and gentlemen, due to time constraint, this was the last question for the day. I now hand the conference over to Mr. Deepanjan Bandyopadhyay for the closing comments. Thanks again, everybody, for participating in the earnings call. I think it was an interesting discussion. Thanks again. Thank you. On behalf of Page Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you. Thank you.