Ladies and gentlemen, good day, and welcome to the Q3 FY26 earnings conference call of Senco Gold Limited, hosted by Asian Market Securities. 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 this 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. Vikrant Kashyap from Asian Market Securities. Thank you, and over to you, sir. Good morning, everyone. On behalf of Asian Market Securities, I welcome you to the Q3 FY26 earnings conference call of Senco Gold Limited. Today, we have on the call with us, Mr. Suvankar Sen, MD and CEO, and Mr. Sanjay Banka, Group CFO and IR Head. Without much, much ado, I now hand over the call to Mr. Suvankar Sen for his opening remarks. Thank you, and over to you, sir. Thank you very much, Vikrant. Happy morning to everyone. We would like to start the call, yeah, being grateful to all our investors for having their faith on us and on our team and on our performance. We must say that this particular quarter has been a historical quarter for Senco Gold Limited. We've crossed INR 3,000 crore of revenue, an EBITDA of INR 400 crore, and a PAT of INR 264 crore, in this particular quarter. So this is something which becomes much more special because we have seen that this particular financial year has been one which has been extremely volatile. The gold prices have reached INR 140,000 for that particular quarter. Post that, it has gone up furthermore, and currently it is in the range of INR 150,000+. There has been a growth of almost 65% in the gold rate and about 23% in the quarter itself. But in spite of the high gold price, what is most encouraging is that the consumers have continued to keep their faith and confidence on the gold and jewelry as a category. We had Dhanteras in that particular quarter. The wedding season was in full swing, and keeping all those two aspects in mind, we have seen that itself, on the Dhanteras month, we have had a sales of INR 1,716 crore for the month of October. But very important that we, as a team, have kept in mind is that at these high gold prices, how is the consumer behaving? It is not that, you know, the high gold prices is discouraging the consumer. It is rather that their faith and trust on the commodity of gold or silver as a category is increasing. It is only up to us as jewelers, as to fit into the budget of the consumer, create products, whether it be in 22 karat, 18 karat, 14 karat, or even nine karat, which became, you know, allowed by the BIS agency, by the government of nine karat hallmarking. And I think we can proudly say that Senco Gold & Diamonds has been one of the first few, jewelry brands to have introduced 9 karat jewelry in gold and in diamond jewelry as well. It is this mindset of trying to understand the pulse of the consumer and fitting to the budget of the consumer that is allowing and enabling us to continue to sell and continue to grow. Our hyperlocal strategy that we have been pursuing for the last one and a half years, studying very closely on the local consumer needs, the use of technology in analyzing the data as to what is the exact, you know, product that is being sold, at the store level in terms of design, in terms of budget. I think that all have played on, and it has become that much more important in today's day and time in analyzing the data and exactly placing the right kind of product that is going to fit into the budget of the consumer. Our franchisee revenue out of the total share has been 33%. The own stores revenue has been around 65%, and 2% has been on the other channel sales. I must tell you that this particular quarter, because the share of our own stores channels have been higher than that of franchisee, that has been one of the major factors that has led to a higher profitability. The fact that our diamond jewelry studded ratio sales have also gone up by 38% in terms of value and 10% in terms of volume, has also played a pivotal role in adding to the profitability for that particular quarter. Now, in terms of designs, we have launched, you know, more than 6,000 designs in gold and more than 3,000 designs in diamond for the quarter. New collection, new ranges, whether it be for weddings, whether it be for, you know, everyday wear, gifting. I think that has always, we have segmented all those, various needs of the consumer and accordingly, designed. Our philosophy and our vision is that Senco Gold and Diamonds should be known as a house of design. You know, whether it be in jewelry or in other accessories, after all, being from a place which is of art and culture, design should be our forte, and that is what should make us continue to grow in the future. We have also seen that the growth in the Tier Two and Tier Three markets have been robust as well. Currently, we have got 196 stores in the whole network, and hopefully, by the end of this quarter, we should be reaching 200+ stores as we end this particular quarter. We need to look forward. This particular quarter, we are seeing Valentine's Day. It is tomorrow, so therefore, we are seeing a decent attraction from the consumers with relating to diamond jewelry, everyday wear jewelry, couples coming and buying. So that has been, you know, the Elements of Love has been the campaign that we have launched. The wedding season also continues to remain strong, and we are seeing that many consumers who are not only having weddings in the close proximity, but also in maybe six months, eight months down the line. But in this volatile gold prices, they are thinking that, you know, these could be the good levels to buy, and they are preponing their purchases and buying. So we continue to see a strong, robust growth. This particular quarter, we hope that we should be 25%+ growth that will continue to happen. And going forward for the coming year, we shall remain focused, we shall remain strong. We shall want to drive our franchising model in a much more stronger way, work on the diamond jewelry segment so that we increase our stud ratio, continue to work on the operational efficiencies, economies of scale, building the brand, and have a growth of 20%+ for the coming financial year as well. So thank you very much for all your ideas, all your encouragements, inputs, and we shall be thankful to our team for the great performance. Please, Banka Ji, if you would like to say something. Yes, sir. Sir, thank you very much. And once again, thank you to our investors. So as we have said, that for the quarter, the revenue has grown by 50% YOY, to INR 3,000 crore. The adjusted EBITDA, like the EBITDA, had grown by 406% from INR 80 crore to INR 404 crore. But if you look at the customs duty impact of in quarter two and quarter three last year, then the adjusted EBITDA for last year quarter three was INR 107 crore, and this year is INR 404 crore. So the adjusted EBITDA margin is around 13.2%, and PAT has grown from INR 33 crore to INR 64 crore, 689%. But adjusted PAT, taking the impact of customs duty, it has grown from INR 53 crore to INR 64.6 crore. That is 390% for this quarter. For the nine-month period, the revenue has grown by 30% approximately. The adjusted EBITDA has grown by 133%, that is from INR 298 crore to INR 694 crore. The adjusted PAT has grown from INR 139 crore to INR 417 crore, that is 200%. So it's very important to understand that while we have been talking about a sustainable business margin of around 7.2%-7.5%, and recently, in this quarter, we have given a guidance of around 7.5%-7.8% for FY 2027. So that is a full year margin, but quarter three margins are usually higher. So last year, we had given the detail that our quarter three margin in 2023 was around 12.1%, and quarter three margin in FY 2024 was 11.1%. So if you look at 13.1%, it should be seen in that context, because the sales are quite high, wherein the fixed OpEx remains the same. And if you look at, we have ascribed this to two, three reasons. One is your product mix has improved. Secondly, the lightweight jewelry, where the customer does not get the same jewelry weight as other jewelers, and then he's willing to pay extra prices to us, extra making charges to us. Similarly, the diamond prices which we are offering are quite attractive, and moreover, some impact of gold price rise has also come. Overall, overall, this is on the financial side. The working capital requirement has also increased. So what you have seen is that the inventory value has increased from INR 2,963 crores to INR 4,602 crores. This has been funded by the borrowing as well as the trade payable. Importantly, we have focused very highly on the working capital efficiency and inventory management. We have implemented an AI-based software which helps us to monitor the inventory real time, and, our inventory days have remained range bound at 166-188 days. Going forward, we look at similar trend. In fact, if you look at other players, it is also in the range of 180 days. So as the stud ratio improves, the inventory days is likely to remain in the range up to 180 days. Moreover, as far as the labor code is concerned, we have analyzed the impact of labor code, and we have taken a one-time extraordinary impact of around INR 6.2 crore. That's on the financial side. So we should see the results for quarter three and YTD in the context of customs duty impact of last year. Similarly, from the banking side, we have maintained a very good relationship with our working capital bankers. Our working capital limits, which is INR 2,400 crore, and our blended ROIs during the last year, due to this elevated gold price, we had to reduce the percentage of GML, and it got increased. The portion of CC and WCD got increased, which led to our blended ROI slightly higher. We are very happy to note that our grade rating has been first-time grade rating. While our current grade rating is being done by ICRA, Care Edge has done our second grade rating, and they have given us a rating of A1. So they are doing the rating for the balance entire amount, and we are very confident that with the enhanced rating from Care, we can look at reducing the blended ROI by 30 basis points, 40 basis points in next year. So with that, we pause our discussion and opening remarks, and then, thank you very much, and we invite queries from you. 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 touchtone 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 Devanshu Bansal from Emkay Global. Please go ahead. Hi, Ankur and team, congratulations on a good performance and improving franchisee interest for the brand. Mr. Bansal, are you there? Yes. Hi. As there is no response, I'm taking the next question from the line of Mihir Shah from Nomura. Please go ahead. Hi, hope I'm audible. Hello? Operator, am I audible? Mr. Shah, are you there? I am there. Can you hear me? Am I audible? Seems like, there's a mute from your side. Hello. Hello. Operator? Am I audible? I can hear you. Am I- Yes, you are audible. Okay, perfect. Okay. Perfect. Thank you. Thank you for that. So congrats on a great set of numbers. So firstly, just wanted to check on the guidance of 25% sales growth that you highlighted for 4Q. Given the gold prices, where they are and the increase that we've seen during the last quarter and this quarter, it seems the 25% guidance seems quite low given the current momentum. Do you expect a material drop in ASPs in 4Q or a material drop in volumes, which is leading to this lower guidance? So that is question number one. No, no, I do not see any material drop in ASPs. I'm just looking. See, if you look at the Q2 performance also, you will see that there have been a drop in volumes even though the ASPs remain the same. So we are about 45 days into the quarter. In the month of March, there is Holi, the exam seasons go on. And then, we also start looking at consumers behaving in a manner that on 19th of April, we have Akshaya Tritiya. So then consumers start, you know, waiting for Akshaya Tritiya, an auspicious day to buy. So yes, our guidance of 25% is little on the conservative side. Maybe, you know, as the, you know, we are closer to the end of the quarter, this 25 might become 30, 35, but we are still giving a conservative guidance of 25%-30%. Understood. Understood. So this is not a function of what you have seen thus far in 45 days of the quarter. Fair to assume that the growth momentum that we saw in third quarter continues in the first 45 days of the fourth quarter, and it is just the conservative way that you are thinking about it? Yeah, yeah. We need to believe in that conservative way. See, the growth momentum of third quarter has to be also because of the Dhanteras, but you know, Dhanteras doesn't happen every quarter. Therefore, yes, it's that way to look at it. Mm-hmm. Understood. Fair point. Second question, again, is on the margin front. You know, margin improvement of 7.5%, it was indicated it was a function of the product mix improvement and lightweight having higher margins. So as far as the product mix is concerned, we probably thought if the studded ratio increases, but given that the gold in the studded prices, gold prices are significantly higher in the studded, the margin profile for studded also goes down. Is that understanding incorrect? And if not, then what is driving the improvement in margin from 7.1% to 7.5%? See, when we talk about product mix, it is not merely the Stud Ratio. Obviously, on the diamond jewelry, the margins are higher, but there are different types of jewelry, right? You know, like you've seen in case of other players, the high bullion sales. In our case, bullion, we don't sell, we don't sell bullion. In our case, the coin sales, which I have said earlier, is around 4%-5%. Mm-hmm. It is about the jewelry as well. There are different types of jewelry, different sizes. If I sell more of antique jewelry, more of bulky jewelry, as I said in the opening remarks that if I sell more of lightweight jewelry, the making charge, effective making charge on lightweight jewelry is more, much higher. Moreover, with the gold price rise, since we charge the making charge on the value, while I would have paid a lower making charge to the carrier or vendor for getting the jewelry manufactured, let's say around INR 110,000 or INR 120,000, I would have paid him some 4%-5%, but I am instead of charging 15%-16% on INR 120,000, I am charging 15%-16% on INR 150,000 or INR 160,000. So due to the gold price rise, the making charge also increases. I'm not just talking about the inventory gain. So that has led to improvement in the margin profile from, let's say, 7... That's what we are saying, 7.8% or up to 8%. That is one. Secondly, in quarter three, the mere sales volume itself is quite high. While the office remains the same, that means rental, manpower, marketing and other office remain the same, the sales volume has increased, and that's why we said that if you look at the margins in quarter three of FY, quarter three of FY 2023 and 2024, it was in the range of, it was in the range of 12% and 11%. So we said that you can still look 9.5%-10% as a sustainable business margin for quarter three. For the whole year, 7.5%-7.8%. So if you look at the press release, when the EBITDA margin for nine months is 7.8%, you can take 7.8%-8% as far as business margin is concerned, and balance 2-2.5%, you can take it to price rise. Got it. That, that explains. Thank you very much, gentlemen. Wishing you all the very best. Yeah, thank you. Thank you. The next question is from the line of Bharat from MC Pro Research. Please go ahead. Good morning, sir. Congratulations for a great set of numbers, actually. So just one confirmation. You indicated that FY 27 sustainable EBITDA margin for the next fiscal should be in the range of 7.5%-7.8%. Is that correct? Yes, it is absolutely correct, provided the price range remains elevated. See, we are talking about the current price ranges. Otherwise, between 7.3%-7.5%, at a elevated price level, 7.5%-7.8%. So there's a gap of only 20 basis points, 30 basis points, whichever way price moves. Okay. Okay. And, sir, next question is what would be the level of inventory hedging that we do currently, and what is the plan? So, for nine months, FY 2026, what was the hedging proportion? What is the intention for the hedging proportion in or inventory hedging proportion in FY 2026, and the same for FY 2027. If you can provide guidance on this, sir. Thanks. We've been mentioning that our hedging percentage is in the range of 55%-60% for the last six months, nine months. In the last two, three years, it has been in the range of 80%. There were times when we were up at 90%, but in the last six months, in this high price gold volatility, there have been pressures on liquidity, there have been pressure on maintaining the margins. And in this kind of a dynamic, volatile scenario, based on our prudent hedging policy and guidance, we said that let us keep it at 55%-60%. That would ensure that we continue to focus on our business, we continue to manage our inventory well. And, also very important here to note is that the old gold exchange of the consumers have also gone up. So the old gold exchange, maybe two years, three years back, was about 25%-30%, but that old gold exchange today is in the range of 45%-50%. So when the old gold exchange comes in, then automatically those price risks that we always talk about is, you know, partially reduced. And keeping all those aspects in mind, we know we've also started to focus on the customer advances, with gold rate getting fixed. That itself also starts working as a hedging tool. So keeping all of that in mind, we've kept our hedging ratios in the range of 55%-60%. Sir, I just want to comment here. When we are saying about the hedging ratio, it is only considering GML and MCX hedge position. But this customer offer which we give, where we give a fixed offer to the customer, it is as good as a future sale position. Or when we give a flexible offer to the customer, where the customer can go either way, those are the additional impacts which we don't get into too much detail. These are the business strategies. Okay, okay. But, sir, roughly, if we like, if you, as you said, like, you know, fixed offer to customers also, given in the way of, you know, customer advances or the or this kind of a gold financing scheme. So, what would be that proportion, so we can, you know, get a sense of how the overall hedging works? So we don't want to discuss those details. These are... See, See, finally, these are strategic points, and they are calibrated from time to time. We just want to give you a comfort that we are very cognizant of the risk management. It's a very, the hedging policy considers the risk as well as the balance sheet, both. See, and it varies from company to company. Let's say in the recent times, when the gold price fell by almost 10%, from INR 5,500 to INR 5,000, even INR 4,800, the balance sheet and how much margin call would have come? Around INR 400-INR 500 crore. So it depends upon the jeweler to jeweler. So we have maintained a very fine balance between the risk management, business efficiency, and the balance sheet as well. I think I can leave it there, that we are very much cognizant. This policy is approved by the board, and our large investors are fully aligned with our risk management policies. Okay, sir. Thanks for the clarification, and all the best from my side. Thank you, sir. Thank you. The next question is from the line of Vijay Chauhan from Right Horizons PMS. Please go ahead. Thank you for the opportunity, and congratulations for good set of numbers. So my question is, I have basically a question on the inventory hedging level side, so that has been answered. But is there any component of inventory gain, like we highlighted some less than 0.5% in quarter two? So is there any component that you can provide as a percentage? I'll explain to you. See, if you refer to our hedging slide in the presentation, accounting is done based upon cost or market price, whichever is lower. That is first point. So there is no inventory gain for future. That means whatever inventory lying in my balance sheet, it is at a cost price. So there is no hidden inventory gain lying, point one. Point two, in the gold price rise, when I take my GML and MCX position, there is, in a hedging position, it gives us a loss. So the balance sheet, in a rising gold price, in a hedging position, in any the scope of my question, in any claiming to be 100% hedged or 90% hedged, the inventory will have hedging loss and not hedging gain. Whatever gain has come, the gain has come to the P&L account. But in a rising price, there will always be a loss. That loss is sitting in the inventory. So in quarter four, when the price will rise, they will have a realization gain and adjusted by the inventory losses, which are sitting in the inventory. You can kindly refer to my slide, and it is more of an accounting issue. Okay, so going ahead, it is safe to assume that, like, typically the gross margin that we have around 9.9% for this quarter be. So it doesn't- Yeah. have any inventory gain component. Right? No, no. The 9% is EBITDA margin. Gross margin is more than 15%-16%, and we are- Yeah, I'm looking 19.9% for quarter three only. So it is 19.9% for- Yeah, yeah. Gross profit. Yeah. So it doesn't have any component of inventory, right? It has the impact of realization gain. So I am using two words. Mm-hmm. One is inventory gain and realization gain. Realization gain means whatever inventory has been sold at a higher price in quarter three, that we call realization gain. Yes, it has impact of realization gain, and I clarified it in the opening remark itself, that 2%-2.5% for the full year on a INR 6,400 crore, you can compute the number back of envelope. That is on account of price rise. Balance out of, I'm again repeating, sir, 10.8% is my EBITDA margin for nine months, and out of that, you can take 2%-2.5% as a realization gain or inventory gain, whatever you are referring to. Similarly, in quarter three, the EBITDA margin is 13.2%. You can take around 9% to 9.5% - 10% as the business margin. Balance you can take as the realization gain or inventory gain, which you are referring to. Yeah, yeah. That answers my question perfectly. The second question is on the because we are seeing lot of shift towards the low carat products and also the studded item side. So can you provide some breakup of the range? Maybe let's say the plain gold jewelry has maybe 20% making charges or some margin, and maybe 30% for the stud ratio. So is there any breakup or range that you can provide so that we understand that how the product category movement puts, let's say, positive pressure on the gross margin? So, see, the gross margin is a function of own store sale and franchisee sale, and we've said it earlier, and I'm giving you ballpark number. Let's say from the own store, we make 20% gross margin. When we make a sale to franchisee, we make around 7%-8% margin. So you can take 60%, 35%, and 5% on exports and e-commerce. These are, these are the broad three areas. I'm repeating, sir. 60% own store sales- Mm. 30%-35% franchisee sales, balance 4%-5%, the e-commerce and exports. From the own store, we make around 18%-20%. From franchisee- Mm. We make 7%-8%. From e-commerce and other, we make around 5%. Now, within this 20% of own store, I am not, I don't want to give you the breakup, so you can visit the store and understand. The jewelry- Mm. -making charges can vary from 6%-25%. So if you want to go for an antique jewelry or a Polki jewelry, we can charge around 24%, 25%, along with discount in the respective periods. Okay, so these are net of discounting that, this range you are referring, right? 6%-25%. I have the. These are the gross amounts. Yeah. These are the gross amounts. Okay, okay. It will vary from time to time, sir. These are based on market dynamics, these are based on the competitive situation in the market and the competitive advantage. As you are aware, we are a second most trusted brand. The customers are willing to give us extra fee for the trust and faith and the comfort and the design which they get from us. Got it. Yeah. Thanks for the clarification. And the last part on the... Any guidance on the next year store addition? Next year, sir, we continue to focus on 18-20 stores. Our focus will be that we should open more franchisee stores. You know, broadly, 8-10 own stores, 8-10 franchisees. If possible, we will open more franchises and less own stores, but 18-20 stores is our next year's guidance. Okay. Thank you for all the clarifications, and good luck for the future. Thank you. Thank you. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes. Am I audible now? Yes, sir. Yes, Devanshu. Yeah. Hi. Congratulations, Suvankar and team, on good performance, as well as improving franchisee in turn. Sir, I wanted to understand, the traction in, schemes for monthly grammage, that are there, right? So typically, such schemes, gain good traction, in times of high gold price, and, provide some comfort on, future growth as well. However, when we see our December 25 balance sheet, the growth in customer advances is somewhat softer, right? So, what initiatives are we taking to, improve, onboarding of consumers under such schemes? ... So see, December, quarter three, it being a Dhanteras, quarter, most of the consumers who have been doing their advances and savings, you know, they kind of redeem it during the festive season. So that is how, you know, it looks low. But going forward, with the targets in place, with the teams in place, and, you know, with the communications in place, we are putting our best efforts that we continue to raise these advances back, which will also help us with the cash flows and also help in the future, sales that we can book. And I think that the traction of the consumer at these is that, see, what had happened previously, two, three years back, was that our advance scheme was more flexible in terms of pricing. In the last 1.5 years -2 years, the gold prices kept on going up, so the consumers felt that the savings scheme was not as useful. But now, with the fixed rate option coming in, I think consumers know that they can continue to look it as an EMI and fix it at various rates. We have certain Marigold for the big wedding customers, where if they can do some 6-11 months kind of booking, they will get some extra benefit on the discounts of, you know, making charges and discounts. So all of that is there. I think we have our certain limits set by the Companies Act, ROC, and we will try to maximize and utilize as much limits that have been given from the government to raise the advances. Sir, so Suvankar, just a small follow-up here. Currently, we must be at around INR 200 crore of such deposits, right? First customer deposit. But from your equity perspective, I guess INR 500 crore can be raised through such schemes, right? 25%. Correct, correct. Devanshu, Devanshu, you are right. We are raising the... So we are, first of all, we used to take the rating. So we are taking the rating for a higher amount, let's say INR 500 crore. And when we file the, this return for this purpose with ROC, which will file by August, it will go up to INR 500 crore, and we are taking all steps to raise these funds. And we are aware that this Swarna Yojana, Swarna Saubhagya, Marigold, they give us a good handle because the customer footfall increases. So we are fully confident, and you would have seen that how we are promoting, we are sweetening the offer without compromising on the margin. So, so depending upon the offer, we are sweetening the offer without compromising the margin to increase these limits. You would see a good traction. So if you mark 26 balance sheet, you will see a higher number, where customers would like to redeem during Akshaya Tritiya and Poila Boishakh. Fair enough. Sir, last question is on the balance sheet side, which appears to be a bit stretched. I understand that high gold price and festive preparation would have led to increase in inventory, but this needs a strategic focus, right, in terms of inventory optimization. So what is your thought process around inventory optimization going into the next fiscal? Any targets if you would like to share here? So Devanshu, see, we are, as I mentioned before, using the technology, AI tools, softwares, data analysis. Our merchandising team is very much closely monitoring what is the exact kind of products that are selling, what are the reasons for non-conversion. And based on that, we will be, making sure that we are keeping the right kind of products, and our supply chain continues to remain strong. With the gold price going up, one has to understand that it is not just about the quantity of gold that you're keeping at the store, but it is also the exact, you know, quality of the design and the kind of products that you're keeping it. So, we will, not want to increase and, and, you know, unnecessary stocks. We are analyzing on those stocks which are not selling beyond a certain number of days, and we are focusing on recycling it and fulfilling those stocks which are selling. So we are doing a very scientific approach across the country, and we will ensure that, you know, all the number of days of inventory that we have, it does not unnecessarily increase because of the gold price going up, but it remains under control. Just a small feedback here, Suvankar. I take your point that you're taking strategic actions. One, if you could provide some guidance around the number of days of reduction that we are targeting going ahead into the coming fiscal would be very helpful to sort of better track your performance on inventory optimization. Devanshu, we are not targeting any reduction as such. So we have clarified it earlier also. Targeting reduction is an outcome. What we are targeting is improving the efficiency of inventory sales across all stores, across our portfolio in East and North and West, right? And you are aware that, no, there are always regional disparities between the various zones and the pricing. So if you ask me a straight question, we are certainly, we are looking at improving inventory efficiency. We are looking at supplying out slow-moving inventory. We have also seen as the trend is changing, that the high weight inventory, which has been prepared and which is, which is not selling, we will take a call. So you will certainly see an outcome, which will be in terms of number of days, what we are constantly working with inventory optimization. So the answer is that we are looking at this thing... and it will depend upon market dynamics. What you are seeing inventory, there is the value. The quantity of inventory remains the same. What inventory quantity per store was there two year back, it remains the same now. Due to Yeah, so Mr. Banka, limited point that I was sort of indicating is that if the focus is on lightweight jewelry, lower caratage jewelry, then in KG terms also, at a per store level, that should see some reduction, right? So that was the limited point, but I can take this, offline, maybe, for- Yes. Third party friends to take the questions. Yeah. Yes. Yes, yes. Thank you. Thank you. Thank you. The next question is from the line of Rupesh from Long Equity Partners. Please go ahead. Hello, sir. Thank you for the opportunity, and congratulations on a very good set of numbers. First question, sir, is this 200-odd stores we have, can you give rough split in terms of, you know, mature stores, new stores, maybe in between stores? What kind of annual revenue they are doing? What kind of margins they are doing? What kind of same store sales growth they are doing? Some split would be very helpful. So basically, Rupeshji, if you look at the definition, we... When we say same stores for the current year, that means stores set up prior to April 2024. So in the last two years, you can take around 40 stores, which are the new stores, right? Around 40 number, owned and franchise taken together. Out of 196, 156 are old stores, 2 number here and there, 40 are new stores. Now, obviously, as you have said that when you look at the return on equity, the blended return on equity, which had come down due to the IPO fund infusion and subsequently to the QIP, my existing store, so the SSG, SSG means the growth of old stores, which have, which are around 155 or 156. That number we have given is what? 21%, right? Out of 30% growth, 70%... 70%... I've always said the SSG growth is 70% of total growth. So if it is, if the total growth is 20%, SSG is 14%. If the total growth is 30%, SSG is around, SSG is around 21%. In the quarter three, the SSG growth is around 21%. Out of our SSG growth is around how much? Thirty-nine. 39% in Q3. But this is misnomer because in quarter three, the growth itself is 15%. So from the 15%, we can look at that. I'm mostly referring to the YTD number. So the growth is there. Now, out of that, you'd be happy to know that we have got around 8-9 stores which have crossed 150 crore, 100 crore mark. So we are constantly looking at increasing the store turnover. So we are not looking at this 20%, 20% SSG. Our target is clearly to take all the stores to 100 crore-150 crore level. The new store which we set up, in the first year they give a revenue of 18 crores-20 crores, but I think these are too much details. So, obviously, a new store takes time to mature. The maturity speed is, momentum is higher in East and slightly, slower in other markets. Okay. Okay, sir. The second question, sir, is Non-East was roughly INR 1,100 crore, so that is nine-month number, I assume. And then where do you see this Non-East in FY 2027? See, you know, the growth rate that we are seeing in the Non-East market is, you know, as much as maybe a little higher than that of the East market because the base is lower. We are continuously looking at 25-30% growth in the Non-East market, while an 18%-20% growth in the East market. This is how one has to look at the overall numbers. But this number can go to, let's say, INR 2,000 crore in FY 2027? At least, at least around INR 1,500-INR 1,600 crore of the mark, but maybe, so we have to recheck the number for FY, FY 2027, but INR 1,700 crore, clearly I see. So let's say it could be around INR 1,300 crore, INR 1,300 crore into thirty. Correct. Okay. Okay. And, sir, I mean, you talked about this realization gain of 3, 3.5% in Q3, 2.5% in 9 months of this year. If, I mean, for whatever reason, let's say gold prices go down from, let's say, $5,000 to $4,000, what kind of realization loss can we see? And then this 7%, 7%-8% margin guidance number you gave, if there's a realization loss, can the margin be something like 5%? Or, I mean, can you just explain that? If the gold price goes down, what happens to the realization gain or loss? The EBITDA, EBITDA shall continue to remain between 7.2%-7.8%. This kind of price fall, if it happens, I think based on our prudent hedging policy, today our hedging is at 55%-60%, and then the hedging percentage will go up to 75%-80%. So, in this kind of sudden price fall, as you are expecting to happen, then we will accordingly, you know, our treasury team will take the call, and we'll manage the situation accordingly. So I think our EBITDA historically over the last 4 years, 5 years have continued to remain between 7%-8%, and we will continue to make sure it remains between 7%-8%. Okay. Okay, that, that is good to know, sir. And, and, and final question, sir, is you said that the studded ratio is not the only high-value business. There are some other parts of the business which are also high value, like antique jewelry. So on nine-month basis, whatever INR 8,000 crore-INR 8,500 crore revenue we have, can you split it between, let's say, regular, regular business and a high-value addition business? No, see, I, I'll tell you. As Banka Ji said, that the higher margins comes from, one is diamond studded jewelry, gemstone jewelry, antique jewelry, and also very lightweight jewelry, where if we are creating very nice, beautiful, lightweight designs within the budget of the consumers, whether it be in, you know, 18 karat, 14 karat, or nine karat international designs, there also, the consumer is willing to pay a 1-5 higher making charges because of the design. So, so when it comes to lower making charge items, which are mostly standard machine-made items, those are the ones which brings down the overall, you know, making charge scenario. But the moment it is exclusive, handcrafted, very modern, then the premium list goes up by 1%-2%. So it's very... No, I don't think we will be comfortable to share the ratio of what is premium, what is not premium. Those are strategic in nature. But believe on us, that our forte is to create lightweight jewelry and cater to the needs of the consumer. And for that, if it is a jewelry within INR 50,000, a consumer is willing to pay INR 50,000, but if that makes that 1% higher making charge, and it's a great design, they'll be happy to do so. So that's how it is. I must mention to you that our ATV this year has gone up to about INR 90,000. So gold prices are going up. Now, INR 90,000 in today's day and time is what? 5 grams-6 grams. So we've been the masters of creating lightweight, affordable jewelry of various ranges. So, that is our USP, and that is what is helping us to grow in these challenging, uncertain markets. So I get all of that, sir, but I mean, that is the right metric to track. I mean, the studded ratio is an incomplete metric to understand how the business is moving toward, you know, higher value addition. So I would request you, if you can find some way to figure out to share this number, because that is the right metric to track the business. Thanks, sir. We'll take, keep the point in mind and see what can be done. Yeah, yeah. Thank you for the opportunity, sir. Thank you. The next question is from the line of Raj Sarav from Finvestor. Please go ahead. Yeah. Am I audible? Hello. Yes, Raj, you are audible. Sir, Yes, you are audible. You are audible. Yeah. So very congratulations for this stellar set of numbers. So, though you replied, but I want some more color on that. The rapid gold price fluctuation, which occurred in Q4, all the way from almost $4,500 to $5,500, and then again, sudden drop to $4,400, and now settling around $5,000. So, realization losses, how much that can be and how that is managed? So I'll just tell you that this sudden volatile price movement happened for a matter of 7 days-10 days only, right? So therefore- Right. It has not been of that much of a great impact, in terms of, overall purchase and, average rate of procurement and rate of sales. It has just created a lot of turbulence, you know, in, in our, hedging, hedging action, I would say. Because there was a time, and now we all, you know, part of the market have faced it, that, every day, based on your, hedging percentage, because you are on the sell side and the prices are going up, you are being call- you know, having hedge, calls on mark to market. And that, based on every day, your sales are happening to a certain extent, and the mark to market calls are of a different. So it created a lot of... You know, those 7 days -10 days was very much volatile and not a very comfortable situation. But to assure you that with this sudden movement up and sudden movement down is not something that has created that much of an impact. It is the continuous movement up which has been the one which is creating impact and creating those extra 2.5%-3% profit for gold price rise. And this current movement has not been of that much of a great impact. Okay, sir. Sir, while I'm going through the last 3 years, 4 years results, quarterly results, so what I found that we are having a substantially higher operating or a better margin in Q3, and that is north of always more than 10%, to be precise, more than 11%. So, just on steady gold price, just let assume a scenario when the gold price next year settle at the same price which is right now. So in that case, what is actually our margins in Q3? The margin in Q3- ... having said that my sustainable business margin is 7.5-7.8, when in Q3, the sales are usually substantially higher. And hence, in Q3, since the sale is higher, gross margin absolute amount is higher, and hence margin percentage looks higher at around 9-9.5%, it can go up to 10% also. If, let's say, next year, gold price remains the same, and if the sales grow by 60%, then my OpEx remains the same. OpEx will be, let's say, INR 100 crore-INR 200 crore in one quarter, and let's say, I'm just giving you a ballpark number, INR 4,000 crore. INR 4,000 crore, 20%, INR 800 crore. INR 800 crore - INR 200 crore, INR 600 crore. Then INR 600 crore upon INR 4,000 crore, 15%, will be the EBITDA margin, without doing anything. So if the sales are higher, absolute EBITDA margin becomes extremely high. Okay, so it is just the, you see, operating leverage. When we, when we sell, Yeah, yeah, that's what we clarified, sir. Yeah. Exactly. That is exactly the operating leverage which comes into full play in Q3 and Q1. Okay. And while, Q1- But overall- Q1 margin- I'm sorry. Yeah. Sorry, I was just adding, sir. So while these are the figures of Q3 and Q1, we still look at conservative EBITDA margin of 7.5%-7.8% for the whole year. Which means that if I'm looking at 10% or 11% in Q3, it can be lesser in Q4, so that your full year blended EBITDA margin of 7.5%-7.8%, and that is not a quarter-on-quarter variation. I hope that clarifies, sir. Yeah, that clarifies, sir. Just wanted to confirm, sir, on steady, steady gold prices, what is our gross margins? EBITDA margin you already talked about. What is our gross margin at steady gold prices? 15%-16%, sir. You can take 15.5%-16%, or you can take 15%-15.5%. Our intent is to improve it with a higher Stud Ratio and operating leverage. Yeah. We have not compromised on our making charge so far, and if you look at comparative numbers for the industry, it remains to be superior and superlative. Okay. North of 15%, you said, sir? Yeah, yeah. Yeah. And, sir, with rising gold prices, now, gold price has been, like, INR 5,000. So what is the traction in the business right now you are seeing? The footfalls and any effect, negative effect, actually, I'm ruling out, I'm just wanted to rule out from the conversation. So you are talking about the, the gold price rise and its impact on the consumer. So the negative effect, if you may say, is that people are looking for jewelry which is of lower weight, so that it is as per the budget of the consumer. So see, what's happening is gold price has gone up by 65%-70%, but the consumer's budget has not gone up by 65%-70%. It has gone up by, say, 20%-25%. So that is where we need to make sure that how we can reduce the gold weight or make the purity of the product lower. That is number one. Number two is that old gold exchange has gone up, you know, because consumers do not have so much of liquidity to buy it with their liquid money. So they are utilizing the old gold, and that is also a very strong part of our strategy, and I think it's a strategy for the industry also, but how we can utilize and recycle the old gold lying in the households. So that is also another thing that will keep the industry moving forward and make sure that we continue to sell our new products and new designs and serve the customer. Third is, yes, there are some consumers who are sitting on the sidelines, on the fence. At these high gold prices, people are thinking: What is the point of going to the jewelry store? What can I buy? And it is for them that we have to come up with nine karat or fourteen karat, lightweight gold and diamond jewelry that is within their budget, or even look at other options and make those customers buy. So footfalls in the... Like, like I said, the volumes have gone down 10% for the whole year, 3% for this quarter. Footfalls also, if I look and analyze, it has compared to the previous year, come down by 10%-15%. So, so it is lesser footfalls, but those customers who are buying is buying a little more jewelry, or the prices are making them buy more jewelry, and that's how the business is going on. Okay, sir. That helps, sir. And the final question is, sir, you are still looking at 25% year-on-year growth in the Q4? Yes. Is it correct, sir? Q4, yes, correct. Very much so. Okay. Thank you very much, sir, and best of luck for future endeavors. Thank you very much. Thank you. Thank you, Rajeev. Thank you. Thank you. The next question is from the line of Pallavi, an individual investor. Please go ahead. Yes, Pallavi from Sameeksha. I just wanted to understand what would be our gross margin guidance for Q4, given that we have, I think, inventory, you have disclosed in the presentation cost is INR 13,500 approx, and gold is at above INR 150. Pallavi, good morning. Sorry, I missed your question. Can you kindly, repeat? ... Yeah, thank you for sharing in your presentation first, average cost for gold and, I think you've given it INR 11,500 in 2Q, INR 13,500 in 3Q. So based on that data point, 4Q also, we should see some 150 basis point of realization gain. Would that be a fair assumption in the gross margin? No, we don't want to comment on realization gain for Q4. See, it's all a function of how much price is volatile in quarter four. We have seen only 45 days where the prices were very high. Obviously, there, there will be or would have been realization gain in 40, in the first 20 days, right? After that, the prices have come down. Right. So let's let the entire quarter span out, and then only we can—I don't want to make any conjecture on the rest of 45 days. As you said, this is a function of the market prices, market factors, and also accounting classification of the prices, loss, gains and losses adjusted to create an account in OCI account. But once again, we reiterate, sustainable EBITDA margin of 7%, 7.5% to 7.8%, 20 basis points here and there. Right. My second question would be, so assuming if we take a call, probably by the end of, by end of Q4, that gold prices are likely to stay at similar level for the whole of next year, no decline, no increase. So in that situation, we will increase our hedging ratio to back to 80%-90%. Is my understanding correct, sir? Yes, yes, madam. If the gold price are in a downward trend and all, there is a amount of stability and our balance sheet and liquidity is allowing us, we will go back to 80%-90%. But till that time, it will range between 55%, 60%, 65%, till that stability is achieved. So our hedging ratio, just to confirm this, is just dependent on once we get stability, we take it up so that the margin requirement doesn't fluctuate. It's not even about the decline. Right. It will be more about the call will be based on stability. Stability. Exactly, ma'am. Right now, it is not at all in a stable situation. Right, sir. Thank you, sir. Thank you. The next question is from the line of Dinesh, an individual investor. Please go ahead. Hi, sir. Is my voice audible? Yes. Yeah. Yes, yes, it is audible. Congratulations, sir, for a great set of numbers and amazing PPT. Just one question from my end. What is your current hedging policy as on date? How much percentage are we hedged as on date? Yes, sir, Dinesh, we've already explained this question earlier. No, I think repeated questions are coming from the same subject. Yeah. Okay. So, to kindly refer to our slide, we are saying that it's a board-approved policy, it's a prudent policy. We are saying minimum 50% has to be hedged. We have, during this quarter also, we maintain hedging in the range of 55%-60%, and due to the elevated gold price, working capital challenges, margin calls, we will remain in this range. And as Pallavi asked from Sameeksha, that if the gold prices are stable or if it falls, we can again take it to 85%-90%. But at the current elevated pressure, due to working capital challenges, it will remain in the range of 55%-60%, and it's a board-approved policy. Yeah. Thank you, sir. That was my question. Thank you. Thank you. Thank you. The next question is from the line of Sonal from Prescient Capital. Please go ahead. Hello. Hi, sir, this is Sonal Minhas. I hope I'm audible. Yes. Yes. Yes, we are audible. Okay. Sir, I wanted to understand, from a disclosure perspective, you've given sales realization, you've given your top line in crores. Just back calculating some numbers in terms of volume of items sold or let's say, grammage or tonnage of whatever gold sold, is it fair to assume that the volume is flat YOY for nine months? If we measure it in terms of tons of gold, if we measure it in terms of, let's say, items sold. I want to understand the volume growth, basically, for nine months. I want to understand volume growth for nine months. Yeah, yeah. So the volume, as I, as I mentioned, the volume, de-growth in quarter three was -3%, like, quarter on quarter. And for the whole nine months, if you look at it, it is -10%. That is for the gold. And for diamonds, if you look at just diamonds as a product, then it is up by 12.5% for the nine months. These are all volume numbers. Got it. Got it. So how do you measure volume, Suvankar, here? Is it in terms of grammage of gold, or is it in terms of items sold, basically? No, no, grammage, grammage. We are measuring in terms of grammage. Grammage of gold. See, Sonalji, I will like to add here that India import of gold remains at 800 tons, 800-850 tons for last 10 years, while the- Mm-hmm. The jewelry consumption remains in the range of 450-500 tons for last 10 years. Sure, sir. The jewelry market size has increased from INR 30 billion to INR 120 billion, almost three times. So, volume is not a factor in jewelry industry. People don't consume jewelry by volume, but by value. So there is a high possibility that even for next year, and if the gold prices again rises by 50, 60%, you will not see any volume, because customer budget will not increase by 50, 60%. So he will end up buying a lower jewelry, low caratage jewelry. He may go for a silver, silver jewelry with diamond. He can go for a smaller size jewelry to maintain his pocket size. But we will continue to go by, to grow by 20%-25% and so on, depending upon our SSG as well. Got it, sir. Thanks for explaining. Thank you. That's it from my side. Thank you. Thank you. Thank you. The next question is from the line of Abhijeet from Antique Stock Broking. Please go ahead. Hi, sir. Thanks for the opportunity and congrats on a very strong set of numbers. So my first question was on, in the staff cost, you said that there was about INR 6.5 crore of impact from the new labor code, right? Correct, correct. That has not been separately shown. It's basically a part of the staff cost. So we have to separate it and look at the margin. Yeah, yeah. These are one-time, because the impact will be far lower in the forthcoming quarters. Yeah, yeah. Correct, correct. Impact will not be substantial as you've seen in other companies, because the labor code has come around 5 years, 6 years back. We have been aligning and calibrating our structure of the cost for own staff, as well as third party. We have been preparing ourselves for a long time, and as you said, we are a employer of choice. We are a great place to work. Our focus is for social value addition, so we've been preparing ourselves for those lines. Okay. So the staff cost during the quarter should be about INR 47.469 crore, if we remove the INR 6.5 crore from that. Correct, correct. That is one. And then, if I then look at the fourth quarter, and for the year as a whole, EBITDA margin still would be at about, even if we cut it down, it will be still at about 10% for the year. Correct me if I'm, you know, substantially wrong. No, correct. Correct. See, no. So we have given this number, EBITDA margin for the whole, for the nine months, right? Right. For the nine months- No, no. I'm saying for the full year, for the full year also- Yeah, yeah. even if we don't have a great fourth quarter in terms of margin, you know, so nine-month margin is 10.8%. So that should easily, the full year margin also should be around that then. You see, in terms of overall numbers, even if we have been guiding that our EBITDA, sustainable EBITDA, is 7.5-7.8. Right. So that is what we will keep guiding. But with all these, you know, numbers and, situations and what we will discuss, then the plus, what you can add certain pluses to it, but yes, a sustainable EBITDA margin of our guidance is 7.5%-7.8%. We will not comment more than that. Yeah, right, right. That, that I agree. And, so I was just working around the figures and, you know, coming to... I mean, this year would be a extraordinary year in terms of margins. Yeah, yeah. This is a, this is an extraordinary year, and that's why we, this is- we are. So let, so for that, that's why we are saying that quarter four, it's still some details are pending. Next year, we have given guidance of 7.5%-7.8%. Right. This year so far has been very good. Got it. Thanks, thanks. Thanks for that. That's it from us. Thank you. Thank you. The next question is from the line of Venkat from Mirabilis. Please go ahead. Hi, sir, this is Venkat from Mirabilis. Just one question on Melorra. How do we see the, I mean, integration over the next one year or two in terms of the stores that will be acquired? Any color on the store economics and the profitability of those stores will help. See, we will have a separate, you know, once the full acquisition is in place, we will have a separate, call with the analyst, with the strategy. But broadly speaking, we just want to tell you that, you know, Senco being a 88-year-old brand, and, over four generations we've been serving customers. So Melorra is one of our, one of the many strategies that we have to, connect with the Gen Z, millennial, young generation customers. If you look at it, our average ticket size, even as in, in the, you know, traditional Senco business that we have, is in the range of, INR 80,000-INR 90,000, which is 6 grams-7 grams is, of today's date and time, right? Right. So therefore, this will only add to the portfolio of design centric and catering to the young generation. And, that is how it is, and then we will, you know, once the full acquisition is in place, currently it is the board's approval that has come in place, and the final, you know, thing is still pending. So we'll have a separate analyst call and share our ideas in detail. Sure, sure. Thank you. Thank you, sir. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Over to you, sir. Yes, thank you very much, you know, all of my investors and well-wishers and, and, you know, every quarter, the questions that all of you keep putting on us makes us, think about it and, you know, formulate our strategies and how we can perform better. Once again, gratitude to the team that this particular quarter three has been a milestone historical quarter. This year has been historical as, you know, sir was saying, that with the gold prices, moving up, you know, in a way that has not been seen before, we are in the middle of history, taking place. I think that as a growing company, our focus is how we can keep growing, keep producing designs and products that we can serve the customers in these times also, and to reach out to the tier two, three, four towns and cities. One thing in the whole scenario, we must remember macroeconomically, that still the play of unorganized to organized continues to happen. The more these gold price volatility comes in, more the regulation comes in. Just to inform all of you, government is thinking of how to make hallmarking much more stronger. Traceability will be a key factor going forward. So, compliances, rules, regulations, systematic thinking, data analysis, these all will become very, very critical for the business to grow in the future. I think that we at Senco Gold & Diamonds are amongst the few jewelers in the country who are, you know, preparing ourselves and poised to grow with penetrating into the smaller towns of the country also. So thank you very much, and hope to connect with you all again in the next quarter. Thank you. Happy Valentine's Day. Thank you. Thank you. On behalf of Asian Market Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.