Ladies and gentlemen, good day and welcome to the Q1 FY25 earnings conference call of Page Industries Ltd. by Valorem Advisors. 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. Anuj Sonpal from Valorem Advisors. Thank you, and over to you, Mr. Sonpal. Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from the Investor Relations team. On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the first quarter of financial year 2025. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter-end review. Now, let me introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We firstly have with us Mr. V.S. Ganesh, Managing Director, Mr. Deepanjan, Chief Financial Officer, and Mr. Karthik Yathindra, Senior Vice President and Chief Marketing Officer. Without any further delay, I request Mr. V.S. Ganesh to start with his opening remarks. Thank you, and over to you, sir. Thank you, Anuj, and good afternoon, ladies and gentlemen. Welcome to the earnings call for the first quarter of FY25. As Anuj updated you today, I'm joined by Mr. Deepanjan, our Chief Financial Officer, and Mr. Karthik, our President and Chief of Sales and Marketing. Before we discuss a specific number, let me briefly touch upon the performance in Q1. The operating environment in Q1 remained stable and largely consistent with the preceding quarter. We are yet to witness significant improvement in consumption, though there are early signs of positive indicators. Uptake in rural consumption is engaging and is expected to provide an impetus to overall consumption in coming quarters. Our unwavering focus on sustainable sales practices and enhancing inventory health has contributed to revenue growth and maintaining operating margins. We continue to invest in digital transformation, consumer engagement through marketing initiatives, and in leveraging technology. These focused pursuits resulted in a PAT growth of 4.3%, while revenue growth was 3.9% in Q1. In line with our objectives, we also continue to invest in enhancing consumer reach and experience. We also aim diversifying and enriching our product offerings, focus on operational excellence, and in digital transformation. Their control over expenses has ensured strong operating margins without touching product prices. Additionally, we have expanded our distribution network in line with our long-term objectives. As of the end of June, we have a network of over 104,696 POS, 1,395 exclusive brand stores, and 1,137 business outlets. We have strategically directed our attention towards metros and Tier 2 and Tier 3 cities. The e-commerce channel had a growth of 32% in Q1, reflecting evolving consumer purchasing preferences and the commitment to bolstering our online presence. Our strategic focus encompasses multiple fronts, and this includes intensifying general trade distribution, expanding large-format stores and exclusive brand stores, growing the B2C business, improving the customer experience, strengthening the product portfolio, strong partner and consumer engagement, and brand building measures to ensure good brand recall and ensuring a robust supply chain. Your unwavering support and trust in Page Industries is very encouraging, and we eagerly anticipate the opportunity to address any questions you may have and provide further insights into our performance during this call. Deepanjan will now take you through the specifics of the quarter, followed by addressing any queries that you may have. Thank you so much, and thanks once again for joining the call today. Thank you, V.S. Ganesh. Good afternoon, everyone, and welcome again to today's earnings call. I hope you're all keeping well, and I'm pleased to share the results of Q1 of FY25. To take you to the highlights of key financial highlights in Q1, we recorded sales volumes of 57.4 million pieces, a growth of 2.6% year-on-year. Revenue in Q1 was INR 12,775 million, which was a growth of 3.9% year-on-year. EBITDA for the period was INR 2,433 million, which was a growth of 2% over the last quarter. EBITDA margin was 19%. With stable raw material costs, margins have remained healthy, though there was marketing spend for the ticketing season in Q1. PAC in Q1 was INR 1,652 million, which was a growth of 4.3% YOY. Inventory days was 72, as against 93 days in end of FY24. Focus on healthier inventory in the distribution network has resulted in maintaining optimum inventory levels. Working capital days was 73 days, and it was in line with that in the end of FY2024. We continue to remain debt-free. To summarize our financial performance, with robust operational parameters, we are well positioned to benefit from the resumption of demand. We remain focused on expansion in multiple channels, digitization, and leveraging technology to deliver value to all our stakeholders. We can now discuss any queries that you may have. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avi Mehta from Macquarie. Please go ahead. Good afternoon, Sophachinathi. I'm heartened to see your comment on Avi's handle on demand revival. Wanted to just check, are you more optimistic on calling the recovery now versus where we were in the end of the fourth quarter? Avi, thanks for that question. Yes, more optimistic because of two things. One is we are seeing better footfalls and the revival in demand, and all the hard work we did in the last one year, I'm sure it will pay dividends as we move forward. The actions we took to improve the inventory health at our distribution, making sure the launch of a new product has seen the light of the day, bringing in more hygiene and discipline across the value chain, the marketing efforts we have taken, all this is definitely going to help us. So that gives us a lot of courage and confidence. So you expect, how do you expect the year to pan out? Again, second-half mid-teens to, or how do you see that would be useful to understand that changes? Early days, Avi, because of whatever we are seeing is something we have to see how long it will last because it has been pretty volatile in the past. So it is definitely a little watch for us. And I hope with the festive season coming up, it should be buoyed, and we hope to see a good second half of the year. That is the hope which we have. Got it. So just on the second bit was on the, just understanding the industry dynamics one. How is the retail inventory in the apparel space now? Where does it stand versus normalized level? And also, if you could update us on the discounting pressures, how are they in the industry? Avi, I think Karthik will be able to throw more light on that. Karthik, if you want to take that. Yes, please. Avi, thanks for the question. From the time we've started all the replenishment as a process for primary billing to our distributors, our inventory levels have now come down by about a little over six days at an overall level. Of course, it's a lot more pronounced for the athleisure. More than 10 days of inventory has been reduced at the distributor level. And as far as discounting is concerned, I think it's a lot more under control as an industry right now because I would imagine that players who do indulge in discounting have actually not seen much of a throughput during those periods of discounting. In the early times of last year, the first two quarters, there was rampant discounting in the industry. However, that has come down substantially in the second half of last year. We've not seen major discounting from players in quarter one either. Perfect. Sorry, just a clarification. You said more than 10 days reduction in last three years. Is it now lower than normalized levels? I didn't kind of understand that part, sorry. No, what I mentioned, Mr. Mehta, was that from the time we started other replenishment system to where we are today, we have more than 10 days of inventory that has come down at the distributor point. I see a couple of quarters more before we can be at an optimum level where secondaries and primaries will be at tandem. Got it. Got it. I just have one question if I may. Just on how is the input cost environment and whether there is any need for price hikes as far as you might see it? The input costs have been largely stable. In fact, the cotton prices are quite stable on the lower side. So we don't see any input costs, especially in the fabric and yarn trading at pressure that can lead us to any price increase. So current financial year, as of now, there is every reason to believe that there will be no price increase in the current financial year. Okay. Thanks a lot, Deepanjan. Welcome back in the digital quarter. Thank you very much. Thank you. Thank you very much. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Amar Kalkundrikar from Nippon India Mutual Fund. Please go ahead. Yeah, hi. Good afternoon, sir. Can you speak a little bit about secondary demand trends? That's one. And number two, did I hear Karthik right that it will take a couple of quarters for secondary and primary sales trends to sort of come in tandem? I am not comfortable with the question. In quarter one, we've seen secondary and tertiary numbers to be ahead of primaries. That's a reflection of the inventory holding in the value chain. So we've seen better secondaries and primaries compared to what they reported as primary. And yeah, I repeat myself. I think if the demand continues the way it is, if quarter one is any reflection of what we expect in the future, then it will take us another couple of quarters before secondary and primary. Thank you very much. Thank you very much. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes, sir. Hi. Thanks for the opportunity. Sir, I want to better understand your comment around green shoots in demand. So typically, Q2 and Q3 volumes have historically remained in line with what we have delivered in Q1. Is it that this time around we may see some growth in the coming quarters versus Q1? Is this a right reading of your comment? Mr. Bansal, it's early days, but we are optimistic as we move forward. Things should look better. So we are gearing up towards that. Got it. Mr. Ganesh, just a small follow-up here. So as the current demand environment is there, so in that light, would that be a fair assumption? Obviously, we don't know how coming months will behave, but based on whatever we have been through this quarter so far, based on that, will that be a right assumption? Yes, you are right. Got it, sir. Thank you so much. Karthik, last time around, you mentioned that channel inventory was closer to 20 million pieces. Just if you could sort of suggest the number at Q1 end, how is that as of now? There's not been much of a decrease from an absolute point of view. However, Q1 typically is a high contributing quarter for us. From that standpoint, the number of days of inventory has come down, whereas the absolute inventory holding will remain more or less similar to what I've mentioned earlier, Mr. Bansal. Got it. Last question from my end. Realization has improved 1% almost in this quarter, and this is despite we not taking any sort of price hikes. Is this due to better revenue mix with at least women going faster than men? Is this a right assumption? We've seen both. It is a function of category mix, and also within categories, we've seen the premium ranges perform better than the mixed premium ranges. Thank you, sir. That's it from my end. Thanks for taking it. Thank you very much. The next question is from the line of Kirti G. Dalvi from Enam AMC. Please go ahead. Good evening, sir. Just a couple of questions. Coming back on the same secondary or tertiary demand, if you want to regard a guess against our 3% growth in our sales number volume-wise, how much would be the growth you see in secondary or tertiary demand? Kirti, without mentioning the absolute numbers, let me just mention that secondary and tertiary demand has been ahead of primary. So we've seen better numbers at point of sale when compared to what we've realized in primary, purely because of the inventory holding that we have in our channels. Okay. Second question pertaining to margins trend. Gross margins have been growing on a YoY basis, and OPM got impacted because, as you mentioned, we spent on the marketing and other stuff. Do we see this spend continuing, especially on the promotion and the marketing side? So typically, on the marketing side, we spend around 45% of our net revenue, and that's what will continue. So that's on an annual basis. In a quarterly level, there can be some variation, but overall, for the year, it will be at 45% levels. And the overall operating margin at EBITDA level, I think we have done around 19% current quarter. It will be largely there within that 18%-21%, even at the annual level. Okay. And sir, on capacity utilization and the expansion path, if you could take up, that would be my last question? Currently, our capacity has a planned capacity around 200 million pieces. Our current expansion plan, with increasing efficiency, we do not have immediate plans of any additional manufacturing facility. The Odisha plant is nearing completion, and I think we should be getting into initial production days in the last quarter of this year. Okay. So plan, I mean, in terms of the absolute value-wise, there won't be any backward integration related to Kitex plant? Not this year. Okay. Thank you. Thank you very much. Thank you very much. The next question is from the line of Sameer Gupta from India Infoline. Please go ahead. Hi, sir. Thanks for taking my question. Firstly, some bookkeeping questions. Growth in the EBO channel this quarter, is it materially higher than the reported number? And just to add to that regarding the channel, in the LFS channel, if I look at, there has been a sharp reduction over the quarters, in the past few quarters, in terms of our reach, used to be around 3,000 stores, and today it's around 1,300 or something, 1,100 or something. So I just wanted to understand this aspect in a little more detail as to what is going on in this channel. Thank you, Sameer, for the question. To address your first question, yes, we've seen when compared to the average, e-commerce has performed much higher, followed by the exclusive brand store given the expansion drive that we have in that particular channel, then followed by general trade. Coming to your second question on the large format store, we've taken strategic calls in terms of consolidating our presence in this particular channel, and I've had to exit a few key accounts where we've been present in the past. This is in line with our long-term plans of building the brand in this channel. Has that been a material contributor in the kind of growth or the kind of sales performance that you have reported in the last few quarters? Not necessarily. Large format store as a channel is a small contribution to our overall business. The loss in sale that has been experienced because of the consolidation has not affected the overall numbers that have been reported. Great, sir. Secondly, sir, I mean, it's been like six, seven quarters now, and we are still contingent on overall consumption coming back. There was lack of discipline in terms of other players. But what I also noticed, sir, there's a feeling that there has been a pricing gap between Jockey and smaller brand, which has kind of widened in the last few recent years or so. And incomes have not really kept pace with this kind of pricing. And the natural upgrading which used to happen from smaller brands to Jockey, that has kind of been paused. So is there a plan to launch a flanker brand at a lower price at some point if this kind of performance continues, or is that not possible? Some thoughts on that? A couple of things. Firstly, in the last couple of years, if at all, from what we study of competition and who we consider our target audience, the available brands and Jockey, the gap has only reduced because Jockey has stuck to its prices for the last 24 months now. The last price increase that was initiated by the brand was back in July 2022, and we're exactly about two years since we've touched up prices. The way we've mapped it against players who address the same target audience, the gap has in fact come down. As far as the second question is concerned, there is no plan for the launch of a sub-brand at least. But of course, if there is an opportunity for us to hit value price points with our products without compromising on quality or consumer experience, that is something we strive to do. With some level of input cost reductions that have been favorable to the brand, there have been a few products strategically launched over the last four to five months, especially in the athleisure category, which are at very tight price points addressing the value-seeking consumer. This would be under Jockey brand only? That's correct. It is under Jockey. Is there a restriction on launching any other brand apart from Jockey? I mean, just trying to understand that part also. I mean, strategically, we don't see a need for us to launch a sub-brand within Jockey. And again, we would not be entering a sub-brand that directly competes with Jockey either, even if it is a separate brand. Got it, sir. That's all from me. I'll come back in the case there is any follow-up. Thank you, Sameer. Thank you very much. The next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Thank you for taking my question. So thank you for giving this idea that there are green shoots emerging, secondary and tertiary doing better than primary, premium doing better. So just wanted to understand if there are any specific markets where we are seeing these green shoots emerging. Is it the metro cities or the smaller towns? So if you could give more details around that, that will be very helpful. Thank you, Sheela, for the question. We are definitely seeing better growth rates in smaller towns when compared to metros, and this is in fact inversely proportional to the size of the town, right? So Tier 3 and Tier 4 towns are seeing better growth rates when compared to metros, Tier 1's, and Tier 2. That's what we witnessed in quarter one. But otherwise, in terms of geography, we don't see a big difference between how the different geographies are performing between north, southeast, and west. Understood. So Karthik, just to follow up here, is this a change versus what we have been observing for the last fout to six quarters? Yeah, it has been consistent in the sense not significantly higher, but definitely higher than metros and Tier 1's and Tier 2. Tier 3's and Tier 4 have been consistently doing better over the last two to three quarters at least. Okay. So it's a trend which is continuing from a Tier 2, Tier 3 market where they are doing better, and the metro cities are relatively doing weaker versus the past. Is that a fair assessment? No, I'm not saying they're doing weaker when compared to the past. I'm saying in relation to Tier 3 and Tier 4, the growth rates are lower in metros. The base of the business is still much higher in metros than Tier 1's, as you would imagine. But the growth rates, because these markets are nascent, are much higher in Tier 3 and Tier 4. Okay. A second question, because the e-commerce channel is doing well for us, just wanted to understand, is there any margin gap which we observe here versus the offline channel? I mean, are the margins comparable, or are the margins slightly low on the lower side? e-commerce as a whole, I mean, we have got three verticals in e-commerce, B2B as well as D2C. So there are three verticals. So e-commerce as a whole, the margins are more or less comparable with the offline business. Whereas within the e-commerce, B2C has got slightly lesser margins because the spend in marketing, even the delivery costs are slightly higher, but largely they are comparable. Okay. B2C will be lower than the B2B. Is that right? Yes. Yes. Okay. Correct. One final question. In terms of international opportunities, are we seeing any—I mean, are there any thoughts around increasing our exports in the coming years? And what are the early thoughts? We are looking to consolidate our international presence. There are a few markets which lend themselves to the products that we make here from India and become a natural extension in terms of placing us there. There is specific focus towards those geographies. I believe in the coming years, we should see some level of focused approach towards our international business. Most of the plans will be more from a medium-term perspective. Is that fair? Or we could see this in the coming quarters or something? It would be from a medium term because entry into any market and to have a meaningful presence in the business there takes time. We are looking to make sure there is sufficient market and consumer understanding before we go and have a meaningful playlist. Okay. Understood. Thank you, Karthik. Thank you very much. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi Ganesh, team. Good evening. A couple of questions starting with on slide 4, you mentioned the green shoots. So let me harp on a little better to understand. And just relating to what Karthik just mentioned, that Tier 2, T ier 3, Tier 4 markets are doing better. So if you can help me to understand what are the top 20 markets' contribution, and I would assume that that will contain the metros. And then equally, what is the Tier 3, Tier 4 contribution or how it has moved over one year? Karthik, do you have the data for that? Yes. Just give me a moment. Yeah. So metros and Tier 1, the way we classify it, contribute to a little over 50% of our business. And Tier 2 downwards are in the late 40s% in terms of market. The balance is Tier 3, Tier 4, what you're saying? That's correct. Okay. So why I was more interested to hear, if you can give me some regional variation, because what I understand and our market visit says that there is no that big problem in south, but it's more on the northern side. So is that observation correct, or maybe if you can help us, what is actually happening on ground? Yes, we don't see a differential performance from a growth rate point of view across—that's what I clarified earlier—across the region between north, south, and east. Yes. Contribution's varied. That's a function of our presence. But in terms of growth performance, we don't see a stark difference in how one region is performing compared to the rest. This is comment in relation to your Tier 2, Tier 3 comment, sir? Tier 3, Tier 4. Tier 2, Tier 4 across the country, like I mentioned, is growing better than metro and Tier 1. But as that's split geographically between north, south, east, and west, our performance has been consistent, more or less. Okay. My second question is that recently, the SMCG trend, which is looking at the rural, is growing much faster, while there will be some issues in the urban regarding the income generation activities, which are a little more. So do you anticipate this kind of issues will come up in future and then we'll be forced to drop the prices further, or it's too early to take a call at this time? We don't anticipate such adverse reactions to the product at the current pricing. At least in the foreseeable future, we don't see a need for us to drop the pricing. Okay. My last question on our revenue growth was about 3.9%, while our other expenses have grown much higher and sharper. So if you can tell me if there is one of, I mean, you did explain there is an ad spend, which is a thing. But is there any material change which you can see? No, not exactly. So when we say other expenses, it does include marketing. It also includes IT expenses. So marketing is what we have seen a bit of a higher spend in the current quarter, though we remain within the 4%-5% annually. And in IT expenses, we have gone into major digital transformation initiatives. So we do see a slightly higher digital spend towards IT in this quarter, as well as it will escalate a bit more in the coming quarters. But we are factoring all those things as still our operating margins, so we are quite confident they should be maintained within that 18%-21%. Wonderful. Thank you, Deepanjan, and thank you, team, for my question. I'll answer you. All the best. Thank you very much. The next question is from the line of Gaurav Jogani from Axis Capital. Please go ahead. Thank you for the opportunity. Actually, my first question is with regards to a comment on the annual report. You have mentioned that you target to be a $1 billion revenue company by FY 2026. Now, going by the current trends, do you still feel that target is achievable, or there is some postponement to that particular target? We are right. It may be tough to achieve the target at that speed because it works. We projected this number way back when we had the volatility during the pandemic, and then we had the last year challenging year for retail across brands. We have to consider all this, and then we need to retrack the numbers and look at a more realistic trajectory for us. We are actually working on that. We are revisiting a three-year and five-year plan. Any sense that you can give as per your internal target, where you think you can achieve this mark, or at least the best possibility by which this mark can be achieved? It's still a work in progress for us. We are revisiting the playbook for the three-year and five-year. So maybe we'll be able to give more clarity in the next meeting when we meet up next time because it's still a work in progress. Sure. So my next question is with regards to the Bangladesh recession. I remember earlier there was some supply chain or some sourcing that you used to do from Bangladesh. So any impact on your sourcing because of this near-term recession that you see there? No, because we import very small quantity to Italy and pieces in Mango from Bangladesh. And those retailers are actually having very healthy inventory in our EBOs. And today, I got an update that factory, which is actually supplying service, is back in operation. So we didn't foresee any risk at all. And secondly, when it comes to supply chain, we have made sure no category or no product, typical product, is with one vendor. It's always having multiple vendor sources, both geographically also. So we always have the risk mitigation plan. And for major size, we also share the selection between in-house and outsourcing so that we can manage all these volatilities. So my last question is with regards to, again, the industry inventory that you used to see earlier, that used to be quite high. Now, given the fact that the discounting has come down meaningfully in the last six months and even in this quarter, do you think the channel inventory overall for the industry is at a healthy level, which eventually could help you to grow during the second half without any increase in competitive activities? Yes. As Karthik updated some time back, the inventory should be the inventory levels have become more and more healthy over time with the discipline with which we have driven the areas. The numbers vary category to category, it is in the teens as far as inventory days reduction of concerns for the innerwear product. And some of the other categories, we embarked on this journey later. For example, the last category we touched upon on ARS, which is still a work in progress with juniors, which has comparatively lesser inventory-based reduction. So as the inventory health improves, it will definitely help our margins. And as Karthik said, while it will show good health improvement and therefore good sales in the coming days, the primaries will be in line with secondaries once we give a couple or two more of the inventory to continue optimal level. Thank you for answering my question. Thank you very much. Next question is from the line of Nihal Mahesh Jham from Ambit. Please go ahead. Good evening. Good evening. So when clarification is there, can you see my? Mr. Jham, you're not audible. Mr. Jham? Am I audible? Yes, sir. Yes, Nihal, we can hear you now. Sorry. So just clarifying on the manufacturing capacity. Historically, I think 16 million pieces. See? Nihal, your lines seem to be very choppy. We are not able to hear you now. The next question is from the line of Ankit Kedia from PhillipCapital. Please go ahead. So my first question is regarding the consumer movement from economy to premium. Previously, the luxury per dollar consumers used to migrate to Jockey, at least Modern Classic. Do you think no w with Zudio coming in and having a good inventory of men's and women's wear, our customers have got more choice now? And instead of moving towards Jockey or Modern Classic of Jockey, at least the young audience is first trying Zudio and then seeing the movement there? Because they also have now 550 to 600 stores today. Yeah. So if you look at it in a way with the category that's more relevant when you take that company and compare all, I don't see when you talked about Zudio and other companies because for them, they are multiple products. They are not an innovative brand per se. And if you look at the market share and the penetration, which we are 17%-18% and dominating the market, you can understand how fragmented it is. And there is enough headroom for it to grow, and we have tremendous opportunity. Sure. So my second question is regarding the accessories portfolio. Our check says that you have really invested a lot of the sales force in the accessories part of the business. Can you just help us understand over the next few years, which all category extensions are you doing in accessories? And what could be the revenue contribution coming in from the accessories portfolio now? Karthik, you want me to? Yes. Yes. Thank you, Ankit. Even the current portfolio of accessories that we hold is quite substantial. We moved to have an independent sales vertical addressing only this vertical. Within accessories today, we include our categories like socks, towels, caps, handkerchiefs, and face masks, which have little relevance today, but they form part of our portfolio. We have a good enough width in terms of set of products to put out in the market. I think we have a lot to achieve within what we have as a product portfolio from a revenue standpoint. Obviously, we will still be in the lookout for relevant categories from a product development point of view, where we see an opportunity for the brand to appreciate its strengths and capitalize on market opportunity. But for now, at least this financial year, the move to have an independent sales team is to essentially address the portfolio that's already in hand. Is it fair that the number would be high single-digit contribution for this vertical? Yes, it is thereabouts. Sure. My last question is on the EBO store opening. May we request that you return to the question queue for follow-up questions as there are several participants waiting? Sure. Thank you. Thank you very much. The next question is from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Yeah. Good evening, team. Thanks for the opportunity. So my first question pertains to distribution. I believe in your opening remarks or somewhere answering the question, you said that we have consolidated our presence in modern trade. So could you share the insights behind this decision? And additionally, how should we think about distribution expansion at a consolidated basis for this fiscal and the next? So I think expansion is something that we are committed to, but meaningful expansions where we believe the brand would be placed and done justice to with all the brand principles and business principles with which we've grown the brand thus far. So as long as these are in place, and we believe the channel provides an opportunity for us to grow, expansion will be the way forward. We have, however, like I said, taken calls on specific accounts where we believe it's not favorable for the brand to be present in the way we want to be present from a strategic standpoint, which is why we have consolidated. But otherwise, across modern trade as well as general trade, we will be looking at expansion in a meaningful manner. Sure. Any number you can actually give to this meaningful number? Number four? In the sense, ballpark, how much you target usually expansion, distribution expansion, looking at demand scenario and our own challenges on inventory today? So especially in modern retail, expansion is not under our control. It's got to do with how the accounts that are there and what expansion plans they have. As far as a brand that operates in that channel, we just want to pick and choose who we want to work with and make ourselves available there. We have no influence on driving expansion as far as the modern retail channel is concerned, the large format store. We also categorize our exclusive brand stores under modern retail. There, it's a stated strategy that we look to expand anywhere between 140 to 180 stores every year. That's the plan we have for this year as well. Got it. And last, I'll say for the last almost two years, in some way or another, we are trying to figure out if our value proposition to customers has changed after COVID. And we seem to be very confident that it has not. So what tools or benchmarks do we use to measure our product's competitiveness or value proposition compared to our Peer products? So we do a like-to-like comparison of the product and the price point over a period of time. So we have a clearly defined target audience. We have a clearly defined set of competitors who we believe address the same target audience. We benchmark ourselves against these competitors in terms of their product offering and price points. That's the confidence we have having done this consistently. And it's not a new exercise or activity we're doing. We've been doing this since a very, very long time in terms of ensuring that we are relevant in the market, both in terms of product offering as well as price points. Have we added Zudio or Decathlon production in this Peer set in the last two, three years for comparison? Not for Innerwear as a category, but in relevant areas in Athleisure, they do feature. Got it. That's all from my side. Thanks a lot. Thank you very much. The next question is from the line of Garima Mishra from Kotak. Please go ahead. Yeah. Hi. Thank you so much for the opportunity. My question was more on the various categories you have and the green shoots in demand that you mentioned. Should we construe that you're seeing very similar trends across the three categories: men's innerwear, women's innerwear, and athleisure? Thank you very much. From a secondary and tertiary point of view, yes. We are seeing a similar uptick across the categories they're present in. However, how it translates into primary, like I mentioned earlier, is a function of the inventory that we are holding. That's why we are seeing the difference. Our inventory holding at the channel level is today higher for outerwear when compared to innerwear. And hence, that affects on our primary reported numbers. Got it. But what you're trying to say here is that at least if we exclude this inventory bit, then you are seeing very similar demand trends across the three categories, right? That's correct. At the tertiary and secondary level, it's consistent. Got it. Understood. Second question is, see, women's wear, you've highlighted women's is a very large under-penetrated category, largely informal today. Are there any steps you are taking in terms of your own capabilities, design, distribution, etc., to better tap into this category? Yes, definitely. Women's innerwear is one market which is obviously much larger than the men's innerwear market. It is also a market that is, in relation to men's, the level of organization of the market is much lower. It's largely unorganized. Even within the organized sector, within branded players, the number of credible players are much higher in the women's innerwear space when compared to men's innerwear. Hence, makes that market that much more competitive. In order to address that opportunity, it's only recently that we've had the last three years now have dedicated sales vertical addressing this category separately. Even the way we approach this business internally in terms of our structure is there is an independent team right from product design, marketing, product management, as well as sales, addressing only the women's innerwear market. So this is to ensure that we give it the requisite focus so that we can capitalize on the market. Even from a marketing standpoint, our investments are skewed disproportionately towards the women consumer to make sure we are able to build that, connect with that consumer at an emotional level. So these are some of the steps we've taken as an organization, and we are in a way committed to these steps to continue persisting in trying to gain share from the existing organized market and also grow the entire pie of converting consumers from the unorganized market towards the organized market in the women's innerwear. That's helpful. Thank you for that. Thank you very much. The next question is from the line of Sabyasachi Mukerji from Bajaj Finserv Asset Management Company. Please go ahead. Yeah. Hi. Just trying to understand your comment on secondary and tertiary sales growth being better than primary growth of 2.6% volume growth for this quarter. Then, I mean, how does it the channel inventory is kind of stagnant at 20 million pieces, which was there in last quarter as well? Is it because of the different basis that we are talking about here? It also depends the way we, in terms of number of days, we're differently looked at. It's mainly because of, see, in quarter one, we tend to fill in a lot more inventory than the rest of the quarters. That's because historically, it's been a large quarter for us. Quarter one as well as quarter three. So there is some level of input that goes in as far as quarter one is concerned in primary. That is the reason you see that the overall base inventory remaining more or less the same. There is a reduction, not enough to speak to that. Okay. Okay. So basically, it means that while the percentage growth might be higher in secondary and tertiary, but because the base was lower in terms of absolute pieces, that's why we are not seeing a meaningful reduction in the absolute inventory. That's the correct understanding? That's correct. In the primary income, yes. Got it. You mentioned that probably this will take another couple of quarters unless we see a good uptick in the demand environment. Either way, it depends on how the secondary and tertiary demand continues. If you see a good uptick, this could be sooner as well, yes. Got it. On the e-com channel, I believe it is about 7%, 8% of our total sales. How much would be quick commerce out of it? Quick commerce is a new venture for us. We've been operating with one of the players for about a year now, but majority of it and today, we operate with about four players and soon to start with two more. But majority of this initiation has happened in the last two to three months. So at this point in time, quick commerce contribution is low, but I'm sure by the end of this year, it should be decent. When we mentioned that there are three verticals when it comes to e-commerce, so B2B, B2C, so B2B, again, would be some of these aggregators' platforms, online platforms, and there will be quick commerce as well. That is the point. With B2B, we have a B2B where we do an outright business with some of the large players. And then we have Page Industries listed as a seller in these marketplaces. That is the second route. And third route is Jockey.in, the brand monobrand website. Okay. Okay. And quick commerce should be that outright under the outright sale category? It varies, Sabri. It depends on the mode. In majority players, we operate as a seller on the marketplace as well as do an outright. Quick commerce also, it's not one formula for all the players. It depends on the agreement that we enter into with individual players. It could be outright. It could also be via marketplace. Margins and working capital for all these three modes of operations in e-com would be similar or any difference over there? I think we did answer that. There is a slight difference between B2B versus the B2C verticals. E-commerce B2B's margins are very much similar to our offline businesses. But as a B2C segment, B2C verticals are slightly lower because it does require heavy advertisements or marketing investments in terms of customer acquisitions. Also, the delivery costs tend to be slightly higher in case of marketplace and Jockey Dropping. That's why the margins in these two B2C segments tend to be slightly lower than the B2B segment. Got it. That's all from my side. Thank you. Thank you very much. The next question is from the line of Ravi Naredi from Naredi Investments. Please go ahead. Well, sir, we can extend this, sir. You are managing company well, and you declared INR 300 unseen dividend, which is fabulous one. It shows how our stocks and data are under control. Sir, you had given target to reach $1 billion by 2026 in your annual report. So what preparation in our mind? And have you sufficient capacity to achieve this? So how you grow 35% CAGR in the next two years? This is my question on it. Thank you. As we updated previously, that may be a tough ask. This was a guidance or a target we set for ourselves a few years back. Now we need to recap the numbers and be more realistic about it because we had a lot of turbulence in the business in the recent past. We also had a very challenging last year. We need to appreciate all those and re-look at our strategies and plan for the future. So we are in the process of recasting the three-year and five-year plan. Then we'll be able to kind of understand how quickly we can reach a 8,000 growth mark. Okay. Now, by 2026, we still have a plan to reach $1 billion U.S. dollar target? No, that's what I said. That may be tough to grow at that rate. And that's where we need to be realistic. There are two reasons. One is that it is tough. And second is we need to make sure whatever growth we achieve is hygienic and sustainable. We should not be looking at short-term sprints. We should be prepared to run the marathon. That has been our philosophy, which has stood the test of time. And we would be navigating through that strategy and for which we are now recasting a three-year and five-year plan. Well, we have sufficient capacity or we go without capacity? You mean manufacturing capacity? Yeah. Yeah. Yeah. Manufacturing capacity, we currently have a capacity for around 200 million pieces. With outsourcing, we can go up to 260. We are continuously working on expansion. So as part of our annual plan and the three-year and five-year plan, we keep looking at and we keep calibrating the expansion of the backend with new units. We are now having a Odisha unit. We are also having one more unit in the outskirts of Mysuru. These two are coming up. We will be constantly looking and planning expansions according to the market demand. Right. So 200 million our production, 260 million outside production. May we request that? No, no. 200 million our production and 60 million outsource production. So giving a total capacity of 260 million. Thank you. Thank you. Thank you, sir. Thank you. The next question is from the line of Onkar Ghugardare from Shree Investments. Please go ahead. Yeah. Am I audible, sir? Yes. Yes, please. Yeah. My question was, since you have declared ₹300 dividend, so has it changed any dividend policy? Or what is the reason of giving this dividend? Because last year, sir. Our cash balance looks very healthy. We have considered the investment requirements for the future with a very conservative plan. We always also look at the worst-case scenario, the likely, and the best-case scenario, and prepare ourselves accordingly. With a very, very conservative plan, we look at the projection. We also consider the CapEx requirements, the expansion plans, and the cash reserve we have. Since we have a pretty good reserve, healthy reserve, we thought it is better we have a better dividend payout and give the money to our stakeholders or shareholders rather than holding it foreign on behalf of them. So actually, what I meant was, this is a one-off or this is how it is going to be in the future? That depends on the top line every quarter. So we need to wait and watch. As already explained, we do assess the annual requirements and even the future requirements. Based on that, if our cash balance supports it, we can give higher dividends. Yes, every time we declare dividends, we assess for the future requirements. Okay. Because last year's full dividend was around this much. So that's why this question arises. Yes. Business situations are different. We are in a better position now. As already explained, we have assessed our future requirements, our CapEx requirements. Currently, yes, we are in a position to give a higher dividend in this quarter. Have you changed your capital allocation policy or dividend distribution policy? Just wanted to know that. Dividend distribution policy remains the same. So we plan to pay 50% of our tax as a policy. Okay. Depending on the situation, you will be looking how much to pay every quarter. That's right. Okay. Thank you. Thank you very much. The next question is from the line of Lakshmin arayanan K.G from Tunga Investments. Please go ahead. Yeah. Thank you so much. Sir, if you just look at your employee accounts that you gave in one of the pages, it has actually materially come down by almost 15% when I compared to Q1 of last year. And is it a conscious decision to bring down the workforce? Because your employee cost has been remaining the same. That is my first question. And also, when I look at your subcontractor cost, it is actually half in FY24 when compared to FY23. So if I just put together, are we trying to be more productive, or is it always a flexible workforce? We are trying. It's a combination. You are right. We are more productive. Our productivity has improved by more than 12%-13%. That means our outputs have increased. We have not reduced manpower. We are now normal at attrition. It was 21,000. Sorry. It was around 21,000 something in August end. I mean, sorry, last year around the same Q1. And it has progressively coming down. Now it's around 17,000+. That's where I'm saying there are monthly attritions which we have not replaced. That's why the numbers have come down. But if you see our output, it has remained the same because corresponding increase in productivity has been witnessed with all the initiatives the backend has taken. We also had a healthy inventory, which meant that we temporarily tuned down our outsourcing capacities because we had good inventory, number of days inventory, and we wanted to bring it to an optimal level. So that's one quick. What is the subcontractor cost? Because last full it is halved. So what is that for this quarter? Deepanjan, you also purchased goods. No, the subcontracted cost is what is captured as part of our other expenses. Can I just give a number and how it is compared to last year's in quarter? Compared to that, so it should be half of it since the volume has been halved. Got it. So what's the—I mean, any number you want to keep the subcontractor cost as part of the operation? No, how we actually look at it is when we buy from subcontractors, also we should, one, be outsourced approaches. So we want to make sure we get the right quality. So there is no difference in the product or quality. It should be an extension of Page. And we also pay the contractor or subcontractor well so that they can actually make meaningful profits and make sense at the business proposition, like how we work with our channel partners, Greenway. And we also therefore see whether we can have the same EBITDAs that we get from without manufacturing. So that has been our strategy. So they are virtually like our own factory outside. And we make sure that the EBITDAs are similar. Thank you very much. Ladies and gentlemen, due to lack of time, that was the last question for today's call. I now hand the conference over to the management for closing comments. Thank you again for participating in this earnings call. This was really a very interesting discussion. Thanks for your keenness in the results with Page Industries. We will look forward again to such earnings call in the future. Thank you again. On behalf of Page Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.