Good morning everybody and a very warm welcome to you all. My name is Anuj Sonpal. We represent the investor relations of Sheela Foam Limited. On behalf of the company, I would like to thank you all for participating in this conference call to discuss the acquisition of Kurlon Enterprise Limited and House of Kieraya Private Limited of Furlenco. 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. 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 conference call is purely to educate and bring awareness about the company's business and recent acquisitions. Let me now introduce you to the management participating with us in today's call and hand it over to them for opening the mics. We firstly have with us Mr. Rahul Gautam, Managing Director. Mr. Amit Kumar Gupta, Group Chief Financial Officer. Before we begin, I'd also like to request everyone to focus their questions related to the acquisitions and not anything regarding the first quarter of financial year 2024 results or operations performance. Now, without any further delay, I request Mr. Rahul Gautam to start with his opening remarks. Thank you, and over to you, sir. Thank you, Michelle, and thank you, Anuj, for the introduction. Very good morning to everyone joining us. It is my pleasure to welcome you all to the conference call to discuss the recent acquisitions announced by the company. I hope everyone has had a chance to review the exchange disclosures, press releases, and presentations that have made or that were made available on the stock exchanges. Let me first start with Kurlon Enterprise Limited. Sheela Foam would be acquiring 94.66% shareholding in Kurlon Enterprise Limited at an equity valuation of INR 2,150 crores, with the effective cost of acquisition becoming to around INR 2,035 crores. With this acquisition, Sheela Foam would add strength to the leadership position in the modern mattress segment with a combined market share of more than 20%, should be close to 21%. As you may already know by now, Kurlon is more than 60-year-old company engaged in the manufacturing and marketing of various home-based and coir-based home comfort products across the sit and sleep solution categories such as mattresses, furniture cushions, pillows, and coverings. It has 10 manufacturing plants located strategically across India. It also has a large pan-India distribution network comprising 10,000 touchpoints. We believe there are strong synergies between the two companies, which will not only widen the market leadership position of Sheela Foam but also cement and safeguard this position in the modern mattress market for years to come. Sheela Foam is a pioneer and leader in foam mattresses, while Kurlon's strength lies in its rubberized coir mattresses. Together, we would have a much-enhanced product portfolio catering across mass and prestige ranges. Sheela Foam being strong in northern and western India, whereas Kurlon having a higher market share in the southern and the eastern regions of India. The combined entity will enjoy a deeply entrenched pan-India footprint. Both companies have a complementary distribution network also. Sheela Foam primarily operates through EBOs or exclusive brand outlets, while Kurlon is strong in the multi-brand outlets. This consolidation would provide SFL with a robust distribution network with significant cross-selling opportunity, whether they are across the MBO/MBO points or they are across the various regions of southeast and northwest of India. Sheela Foam and KEL have many complementary manufacturing facilities, which will create significant production efficiencies and cost savings by improving both logistic costs and also create raw material procurement efficiencies. It is just a sheer coincidence that the factories of Sheela Foam, 12 in number, and the 10 of Kurlon do not have a single town where there is an overlap, and that helps in the distribution across the country because logistic cost is an important one. The integration is expected to be completed by 30th November 2023. I must also say that there are some cultural differences which, which will be important as far as the human, the human integration between the two companies that are done. Both have were promoter-driven. One, of course, is listed now, but the, but the, the DNA remains virtually the same, and therefore I believe that the integration would be, not so difficult. Moving to Furlenco, Sheela Foam is investing 35% stake in House of Kieraya, that is, the owner of the Furlenco brand, for an equity valuation of INR 900 crore, with the effective cost of 35% coming to INR 300 crore. Furlenco was founded in the year 2012 and is today one of the largest and fastest-growing furniture rental companies in India. I must add at this point that, furniture is an extremely fragmented, category as far as India is concerned, and there are multiple ways where you can interact with the consumer, be it selling new, new furniture, be it renting, be it buying back, be it refurbishing, etc. And all this is in the portfolio of Furlenco. Rental one is the strongest one that they operate in, and rental is also a good way of understanding and knowing the needs and requirements of the consumer, and it's probably one of the best and the quickest ways of doing it. The company also offers for sale of new and refurbished furniture under its Furlenco, and they have a brand which is a little on the premium side, and that's called Prava, which they have begun to operate. Those are designed, manufactured, and the products are offered online but would be a good option to go offline. It has a strong online presence but is also growing in the offline segment. The Furlenco deal, with the help of Sheela Foam, will enter the fast-growing branded furniture and furniture rental market and an opportunity to further diversify its presence and become a full portfolio company. As per the industry estimate, the furniture market has a significantly large span than the mattresses. As per the latest surveys that have been done in either of the industries, it appears that the furniture market is at least 5-6 times higher than the mattress market, and approximately around INR 1,50,000 crore compared to INR 25,000 crore or INR 30,000 crore of mattresses. Sheela Foam would benefit from Furlenco's digital-first, direct-to-consumer business also and the e-commerce capabilities that they have developed over the past many years. Another advantage of Sheela Foam and Furlenco coming together is the possibility of offering its products or offering the Furlenco's products, on the EBOs and MBOs that we have, and vice versa of Sheela Foam's products, which are the Sleepwell and the Kurlon mattresses, on Furlenco's platform for their online strength. This entire integration between the companies is expected to be completed by 30th August 2023. With our past record of acquisitions, there have been three small ones in India, and there have been the two big ones in one in Australia in 2005 and the Spain one in 2019. We have not only successfully grown with both these entities or now five entities, we are fairly confident of both these recent acquisitions that we should be able to make a success out of them. We believe that over the next 2-3 years, the synergistic benefits of both these acquisitions will not only lead to significant growth to Sheela Foam's business but also improve the company's profitability due to the sheer scale of operations and economies of scale, but most importantly, to create an undisputed strong market leader. I am reminded of 1994. That was the time when we were looking at extending our portfolio. It's primarily Sheela Foam is a polyurethane foam manufacturer. That is what we do well, in India, but we are doing that from 1972 onwards. We do that very well in Australia. We do that extremely well in Spain. I have no hesitation in saying that, whether it's the raw material procurement, it's the technology, it's formulations, it's the products that come out of it that we can be compared to any in the world. It would probably be, I would say, one of the best in the world. Polyurethane foam has two major applications. One is the bedding one, and the second one is the furniture one. The bedding one, in 1994, we were looking for customers when we were trying to expand our polyurethane foam market, we were looking for customers who would buy foam from us, who would be mattress brand owners, who would be mattress manufacturers, etc., and would help us to grow our polyurethane foam market. Unfortunately or fortunately, there were none who would want to get into that area. Kurlon was there. Rilaxon was there. Dunlopillo was there, but they were not on the foam side. That time, the stress was on rubberized coir and on latex foam. So we did that ourselves, and since then, we can easily see that how the market has it took some time, but the market that has grown and how mattress market has become a or is becoming an organized product offering to the consumer. I see a similar situation as far as furniture is concerned today, where we, of course, make all the intermediate foams and the different grades and qualities. It's going to refurbishment. It's going to small manufacturers who buy, etc. However, big branded furniture manufacturers who consume foam are just not there, and we see that as an opportunity for us. Furlenco really is our foray into the furniture market and where we would be we would have the experience or advantage of the brand. We would have the experience of the strong management team that is there, and then linking it to the input, which is the foam from our side, as well as the point of selling, which will be the MBOs and EBOs, which together, Sleepwell and Kurlon would have. I think it's a very strong proposition that will come about. So with those words, I just want to thank you all for participating in this phone call. I hope we have been able to answer your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our IR manager, Anuj Sonpal from Valorem Advisors. He's, he's present here, and, and I understand that there would be some question and answers that we would be addressing right now. So thank you very much, and over to you, Sharon. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press * and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press * 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. We have the first question from the line of Nihal Mahesh Jham from Nuvama Wealth Management. Please go ahead. Yes, sir. Thank you so much. And first of all, congratulations on concluding the deal. Sir, my first question was that, if I look at Kurlon's performance, there has been a fall from FY20 in terms of the margins, and maybe the growth has also stayed flat. No, these are COVID impacts. Nihal, if I may interrupt, your voice is coming through a little faintly. Is there a possibility of raising the volume? Sir, is it better now? Better. Better. Apologies for that. Rahulji, I was asking that if I look at Kurlon's performance, there has been a fall in the margins as I compare from FY20. I know that the last two years, FY21 and 2022 were COVID impacted, but if you want to highlight about what has led to the contraction in the margin performance specifically for Kurlon. So, Nihal, you're, you're right that the margins have fallen. You know that there was a change in management, and they were looking at some transformational changes as far as Kurlon is concerned. By the time they planned and got began executing them, you ran straight into COVID. COVID, of course, everyone was impacted, both on the cost side as well as on the revenue side. Then all these changes could not be done. Then, of course, there was a little bit of a situation created where, you know, you had to probably leave out a few of them. Those had been primarily responsible for this drop in margins. As we get out of COVID or the COVID-like situations and as we get into not being wedded to the changes, etc., we will very quickly get back to the levels that they have been of close to INR 1,000 crore as top line and 11%-12%, or even higher than that, etc. Sure, Rahulji. So were these initiatives a reason for the increase in the cost base, which you plan to reverse, or is it that these initiatives will now be implemented, which will lead to, say, growth normalizing and, say, the margins also normalizing? I would say that there would be a complete review of these changes, and some of them would be good, in fact, beneficial, but there may be a few of them which doesn't make sense. And there would also be a few changes that we come out with the two companies coming together. There may be some altered options or changes that may be there, you know, whether it's on the manufacturing side or the front side. That is helpful. My second question was that, on the cost synergies, I think you've highlighted you're looking at a 4% improvement, 2% spread between, on the raw material side and the other two basically on logistics and other aspects. Coming to the revenue synergies, could you give a sense of what are the angles you're looking at? Because Sleepwell as a brand is primarily selling via its own EBO network. So maybe that cannot look at cross-selling Kurlon. So is it mainly the Feather Foam brand being stepped up via Kurlon's distribution? Is that the main revenue synergy that you feel this merger could or sorry, this acquisition could drive? So let me just understand the question. You're saying that's because Sleepwell sells primarily through an EBO network, and therefore, any cross-selling would be a difficulty. Is that correct? Yes. I would believe that selling Kurlon via our Sleepwell EBOs or vice versa is not something possible. I'm assuming that the main place where the revenue synergy could come through is using Kurlon's distribution to upsell Feather Foam. Would that be a right understanding? I think there will be look, this entire issue will be probably it will be revisited on how we want to structure and to what that is where do we sell our product. I'm not bringing Feather Foam into the picture at the moment at all. And I would say. We should restrict to the promoted and advertised brands and the consumer brands as they stand, which is both Sleepwell and Kurlon. Our attempt and look, it may be a little premature for me to say, but our attempt is to recognize the differences between the two, to celebrate those differences, and to figure out how we can make a clearer proposition to the consumer. Now, how will that change as far as leveraging the places where they are sold? It may take a little time to figure that out. There can be a mix of many things happening. It will also depend on zone to zone and the strength, etc. I mean, for example, if we would look at each zone where, yes, we sell through EBOs, but we are present in a very few numbers that are there. And it may not be difficult at all to look at a kind of a combined possibilities. So I think those are just being worked out. I would request that if you can sort of hold on for about a couple of weeks, we will be able to unfold the entire plan there. But there would be cross-selling possibilities almost everywhere. Understood. I'll just take my final question in this round if that is fine that. Mr. Jham, I would request you to kindly re-. Sure. I'll come back into queue. Thank you, sir. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. We have the next question from the line of Dhananjay Bagrodia from ASK Investment Managers. Please go ahead. Sir, sir, maybe I missed this. Firstly, congratulations on this acquisition. Will we need to. Sorry to interrupt. Sir, your audio is too low. I would request you to. Can you hear me now? Yes, sir. Please proceed. Yeah. Okay. Sir, wanted to ask, maybe I missed this. Will the two entities be still selling separately, or how would that be taking place? And B, now with the combined entity, do we see growth rates improving as we move along? Because as growth rates have been a little tapered for the last few years. Dhananjay, I am sorry. I heard them very faintly. Could you could you speak out a little, you know, please, yeah? Hello. Can you hear me now? Oh, clear. Great. Thanks. Perfect. No, firstly, congratulations on this acquisition. Maybe I missed this earlier, but will the two entities be selling separately, or will it be considered will be all the brands now be renamed for Duroflex and for Kurlon be renamed into Sheela Foam and we'll be selling it as one? And secondly, now would we see growth rates significantly improve? Because that's been a little pain point for us for the last few years. Okay. So as my the first question, as I understand, is that will the two entities be working together or selling together? Look, these are a few things. Again, I would suggest and request that if we give it a few days. We are also taking some professional help on these matters. There are companies, which are national as well as international who have experience on this issue. There have been such kind of mergers, such horizontal mergers in the past, and some of them have done phenomenally well. And therefore, we just need to understand that part. But I mean, just to give you a principle, as I was saying, Nihal, that our aim is not for them to go out and compete against each other and not be conflicting as far as the sales part. We would ideally like that both of them support each other and make the offering. And therefore, there is a need to position them properly. And that's an area that we will be working on here. That's how it was done, naturally. There have been, of course, also national examples like more in the luggage space where you have Aristocrat and Skybags and VIP and American Tourister, etc. And if you just if you just look at Skybags and VIP, from the same stable. But completely different and therefore continuing on its both paths, no conflict, but actually helping each other. So I think something like that. But just give it a couple of weeks that we'll get back. Okay. On the second one that you talked about, the growth rate part. So the growth rate has been a combination of a couple of things. And in the past, it's been, you know, whatever happened during COVID times. Then subsequently, people have reduced buying. There has been a lower push for ASP to get lower. Therefore, the unorganized sector getting a little more active. However, of course, there was inflation. As all these things are beginning to fade out, these growth rates are bound to rebound, you know, to come back. Whether it'll happen now or it'll happen close to Diwali with the impact of the monsoon, etc., and all the other things, as I said, going away, we'll just need to wait and look at it. But the signs are very ominous. Okay. Okay. Sure. Thank you. Thank you. The next question is from the line of Varun Singh from ICICI Securities. Please go ahead. Yeah. Hi. Am I audible? Yes, sir. Please proceed. Okay. So thanks for the opportunity and congratulations for the acquisition. So my first question is, I understand that the, like, the acquisition would be 300 basis points accretive to EBITDA. But, if you can share, some, calculation, with regards to EPS, you think, this acquisition I mean, both the acquisitions would be EPS accretive, for existing shareholders? So, let me just say this thing, that even this 300 basis points number that we have thought, this has been a talk. This has been expectations. This is probably but, but as things would unfold, this may alter a bit. On the EPS part, I would just say that, again, it depends on, the kind of debt and equity that we would be using to or the cash that, that we would be using to, to fund this. I think or I, I can make a guess of saying that there may be a little bit of a fall for a short time, but it will soon pick up. And it should become accretive in a few months' time in any case. Okay. Understood. Okay. Fair enough. And like, regarding 7%-7.5% net profit margin that we have seen in Kurlon pre-COVID, I understand you highlighted that the new management could not implement or execute their strategy well due to COVID. But now that FY23 was a year which was free from COVID, so I mean, two questions on this front. If you can highlight what was the strategy strategical change which was affected into the business. And I mean, of course, FY23 should be a reflection of that. I mean, if you can throw some light on the strategy I mean, change in strategy part, and also with regards to the 7%-8% net profit margin. Which is equivalent to our own company, the sustainability of that margin going forward. So, maybe you can say this that as far as what did not work and what worked, at that time, it may be I mean, one won't have enough details or knowledge to share with you that exactly what. We have a macro-level picture on it. We know that, what is going to continue to, work in the post-COVID era and what will not work or what will be changed because the two companies are kind of coming together. We will be drawing up a detailed strategic list. I think you will have to just wait for a couple of weeks more to see that. Getting it back to its pre-COVID levels should be easier done possibility. Whether FY23 will reflect that or not, look, the transaction has been done, but it has not been closed yet. It will also close in the next 2.5-3 months or so. And then, the changeover and all that will happen. But I think you can be pretty sure that things should be back to that level or in an improved version as far as FY25 is concerned because a couple of months going away for things to kind of settle down. And the detailed strategy, we will be, of course, having the earnings call one of course in the first week of August and then subsequently. And every quarter, we would keep informing you as to how things have unfolded and how we can do that. Just kindly bear with me for some time. Understood. Very, very clear, sir. Thank you very much. And, sir, just wanted to confirm. You mentioned. Oh, I'm sorry. Mr. Singh, we have lots of people in the team. Yeah. Absolutely. Yeah. No problem. No problem. Thank you. Thank you very much, sir. Yeah. Thank you. The next question is from the line of Nalin Moniz from Edelweiss Asset Management. Please go ahead. Yes. Good morning, sir. I wanted to ask you about the money going into Furlenco. Can you just speak a little louder? Because somehow. Yes. Am I audible? Am I audible? Yes, sir. Thank you. Yes. My question is regarding Furlenco. This INR 300 crore that is going into Furlenco is going to be what is the split between retirement of debt and growth capital? And for the growth capital, where is that going to be used? And my second question is, what is the plan to acquire a majority stake at some point in, in Furlenco? Is there a roadmap in, in place on that? Sir, I'll take the first question. So this is Amit Kumar Gupta, group CFO here. So the INR 300 crore that will go into the company is totally primary inclusion. And, broadly, say you can say 50%-55% would go for the retirement of debt. The remaining would be, with the company for growth capital. The company is currently having a lot of orders which are to be serviced into. And that is what the growth of business would lead to the profitability of the company. So that's why we have decided that all the capital which would go to the company would go in the form of primary capital. And on raising your stake in Furlenco. Okay. Amit, so I'll take that question. So currently, we have 35%. And we have another option of 9% at the same valuation to be exercised within one year. And that option, we will take in 6, 7, 7 months down the line or a couple of months down the line. That would raise it to 44%. There is a PE fund which will be holding 26%-27%. And their time is now coming to an end. And from 2024 onwards, FY2024 onwards, or calendar year 2024 onwards, they will be looking for exits, etc. So, besides these two, there are the promoters who hold about 12%. And then there are multiple investors, very small, close to 60-70 investors who hold very small shares. Most of the investors have also expressed their view to sell. Some of them, of course, want to stay or want to stay and see the value increase. But if the day that we decide that we want to go into a majority one, we have the options to do that or we will have the options to do that. But at the moment, we will be the largest one there. We would have the board, etc., being controlled. And we would also get a feel for the business and for the industry. And then we can take our calls as we move forward. Thank you. Thank you. Thanks. The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead. Thank you for taking my questions. I have a few. I'll just go through them. First, on the acquisitions, in terms of EPS accretion, in terms of EBITDA, we would be consolidating Kurlon. But Furlenco, I would assume, being an associate, is that the right understanding? Or do we have management control on Furlenco? So, at the moment, this is a little question that we would be probably answering in a few days' time. We have raised that question. But I think just the definition of saying management control, I think it also requires that, by management control, what do we mean? Is it just a breach of a board matter? Or is it that you have 100%, all decisions being taken on a daily basis? So I think there is a bit of a gray area there. Most probably Amit, you may answer that. But most probably, I think it'll be like an associate company for a while at least. Is that true? Yeah. Yeah. That's right. So, currently, it will be treated as an associate company. And we would not be doing a line-by-line consolidation. Sure. Sure. So therefore, we say, yeah, it'll be accretive on EBITDA. But EPS, obviously, we would be consolidating. Hence, we are looking at FY25 EPS accretion. Is that the right understanding I have? Yeah. Right. So it won't affect your EBITDA, either positive or negative. But as soon as it gets into a positive fact environment, it would be adding to the EPS. Sure. Secondly, sir, if you could help us understand in terms of the integration you talked of, the cultural integration. Ourselves at Sheela Foam. We've got a new India CEO. We've got a new CFO. So in the sense, how do we look at in terms of management bandwidth, in terms of acquisition, in terms of the cultural fit with Sheela Foam, for Kurlon and potentially for Furlenco going forward? So thank you, Arjun, for asking that question. That is, I mean, I think the less you, the more you do, the less it is on that part. Number one, we have, or just about to appoint a leading consultant for the post-merger integration. And this is a practice which is, internationally as well as nationally, well understood. And I will disclose the name and before we do that, but probably in the next 2 to 3 days' time. We've had presentations from the top people. And I think the need and requirement for that is there. So there will be a structured integration process for the three that will begin to happen in a week's time. This, the second part, how will we structure that integration? Will it be a corporate-to-corporate, entities existing? Or will it be a back-end to a front-end kind of integration? Most probably, the latter so that the synergies can come about easily. And, the front-end, the growth can be, you know, sort of at the moment, we have decided that, we will not be conflicting the brands. Or we will not be working towards letting them fight it out in the market, but more to, to be complementary to each other. And to do that, it may be better to have the front-end kind of united and the back-end united. But let me just say, Arjun, that it will in the next two weeks' time, things should hold. But we are taking professional help. The other point that you made was on the, the resources or the, bench strength, so to say. We have a couple of more people on a senior level joining into the company to strengthen the working. And our attempt will be that the integration process is not done by the regulars. And they follow or they do what they need to do as far as the existing business is concerned. But the complete clear blueprint, as I said, will be in about a two weeks' time. Sure. Looking forward to that. Just the final part in terms of funding for this transaction, could you help us understand how do we expect to do the same. And in terms of low-hanging fruits, what do you see the time what are these low-hanging fruits potentially that we could quickly realize? And what is the scale of the same? That's it. Thank you. So, Arjun, as far as the funding part is, Amit, you respond to that. The second question, I will respond on the low-hanging fruit. So first, you go ahead and speak on the funding part. So on the funding, see, we have a total requirement of, say, around INR 2,350 crores for both the acquisitions, out of which around INR 800-850 crores is on our balance sheet. And the rest would be funded through a combination of debt and equity. We basically want to keep debt at the minimum. So we will be looking into as to what is the most optimum leverage ratio, such that there is no impact on the rating of the company. And based on that, we would decide what would be the component of debt to equity. But broadly, broadly, you can assume that, say, around 2-2.5 around in the first year. Gradually reduce into below 2 in the subsequent years. Okay. Thanks. So on the low-hanging fruits that you mentioned, there is the back-end side. And on the back-end side, there are some things which can happen very quickly. For example, volumes of purchases on the raw materials side, integration of stuff like, where does the expertise lie as far as manufacturing of foam is concerned or manufacturing of where acquired products are concerned. And how do we kind of so that kind of, just a little bit of shifting around, just a little bit of talking to the suppliers, exchanging formulations, exchanging manufacturing, all that will happen very quickly. I assume it'll end up in less than a few months' time or less than a three months' time, that that should happen. As a first principle, we are saying, let me use a phrase like, "Do no harm." Let things be as it is. What we are looking at, the combined entity, we, the resources that we see, the human beings that we see, and the plans that we would have, which there is absolutely no worry on anyone to be disengaged or anything like that. On the other hand, we would need people to be hired and help and support in the other part, the more difficult one, the back-end part of integration. I see that happening in a couple of months' time. the front-end part of it, because it didn't involves places of selling, it didn't; it involves some changes of a few structures here and there. I think the real, real benefit will come in FY25. But some changes will start happening from, I would say, from January onwards, sir. Thank you, sir. Thank you. The next question is from the line of Harsh from Altamount Capital. Please go ahead. Hello. Hi, sir. Basically, my question is regarding the, you know, your acquisition and your investment in Furlenco. So basically, is there, as you have told us that, you know, you're investing INR 300 crore. So, are you also planning to kind of do some debt investments? Or do you have any, you know, already any, you know, existing debt lines with the company? That's the first question. The second question is regarding, that, you know, since Furlenco is already in a rental industry and you are into a selling industry, so will the investment not cannibalize here? Like, you know, your, mattress selling would, you know, would be, you know, there's a rental industry of mattress. So I feel that, you know, maybe, you know, you could just give us a small, you know, enlightenment on this cannibalization part. So, Harsh, I'll take the second question first. And the first question on the existing debt line or line of debt or etc., Amit, you can respond to it. So listen, I've, I've said that Furlenco is doing that on a rental basis, number one. But they are, they are a full, full portfolio furniture company, which means that they do design, they do manufacture or outsource. And internally, there is some manufacturing. They do rent. But they also offer to sell. They get the bag buy-back. They also do refurbishing. So the entire gamut of stuff is being done by them. And therefore, there is no conflict that will exist. Whatever mattresses that they are renting, number one, they will be Kurlon mattresses. But they, you know, that's a small part of the entire household stuff that they rent. So it includes the bed. It includes cupboards. It includes dining set. It includes all the stuff that is there. And therefore, there is no conflict. The selling part that Furlenco is doing, they have one offline, the other one too, the second offline store coming up. But their products will be selling on the Sleepwell and the Kurlon stores, soon. So again, there is no conflict at all that will be there. There will be no cannibalization, not at all. On the other hand, there would be complementary support that should come in. On the debt line, Amit, where do you want to put this point? Yeah. So, depending on the basis of the working capital gap that is there in Sheela Foam and Kurlon, we can draw working capital to the extent of INR 200 crore plus at any point of time. We have the credit lines in place, and they can be drawn anytime when it is required. Does that answer your question? Or was there something else to it? So basically, I just wanted to understand if, you know, you already have a lending line with Furlenco. Or are you planning to go that side as well? No. So we don't intend to fund Furlenco through debt. We don't have any lending line with Furlenco. Oh, great. Okay. Thank you so much. So that is own lines which it has taken from banks and financial institutions, which, of course, would go down once we infuse primary capital into the company. But going forward, in case Furlenco needs more money, which we don't anticipate, they would have sufficient lines on their own. Understood. Thank you so much, sir. Thank you. The next question is from the line of Anirudh Shetty from Solidarity Investment Managers. Please go ahead. Yeah. Hi, hi. Thanks for taking my question. So my first question is around, you know, I just wanted to understand, you know, how do you guys define your business model? Because, you know, it seems to be that the business is evolving, you know, over time. It has evolved by, you know, as you'll enter into new geographies and, you know, you'll intend to enter into new categories as well. So, how do you guys define your business? You know, help me appreciate, you know, the vision that you guys have for Sheela Foam. And, also, how do you guys manage complexity? Because, as of today, you are now in multiple categories, multiple geographies. You have multiple plants as well. So do you think that this complexity is manageable? So that was my first question. So thanks, Anirudh. Number one, as far as the geographies are concerned, I just want to say that if you look at the company, it started off being a manufacturer of flexible polyurethane foam, which is basically a cushioning material, goes into other businesses. However, there are two major end uses, which is one is bedding and the other is, furniture bedding. Because, as I said, 1994, 1995, nobody else came. And therefore, we started our own. And we created that. Furniture, we intend doing that right now. When it comes down to an international location, we would stick only to manufacturing flexible polyurethane foam, which is based on machines, technology, and sourcing of raw materials and formulations that we can share with each other. We would not enter into a consumer business in a geography outside of India, because that's we don't understand the consumer there. And we will not do it. Any consumer business in India, we would definitely look at it. But at the same time, look at the most peripheral first. I think one thing which has worked for us as a company is the focus that we have laid on the product or the segment that we operate in. Let me share with you that in the early 2000s, when dot-com companies were in vogue and everyone said that if you're not in that area, you are dead, etc., we did not invest. A few years back, realty business was absolutely real estate business. Every company of any genre was doing it. We did we do it? No. We didn't do it. We don't want to do it. We will want to stick to at the moment mattress, furniture, because these are the two main applications of the core business of the business that the company understands very well. little addition, a little on the periphery, for example, if you make furniture and you make mattresses, will there be any top-of-the-bed kind of stuff that may come in, like bedsheets or duvets or quilts or etc.? I mean, that, that could be looked at. But at the moment, we don't have any, any thoughts on it. We do have some Sleepwell bedsheets and Sleepwell quilts, etc., which do sell very small, minimal quantities. But expanding into anything else is, is at the moment not, not in the question or not, not even being discussed. But I, we don't have any idea about that. So that was that part of it, and that's how we deal with complexity. And you are quite right. It's getting more and more complex as time goes by. But we have a simultaneous, at least, a thought of simplifying things as, as we move forward. That's the reason that I said, even on Kurlon and Sleepwell, how do we position themselves, the two brands, so that they have, they have their own grounds to stand on? They don't conflict with each other. And, there is less and lesser of complexity, that, that is there. Got it. And no, that, that really answers my question. Thank you. And so my second and final question is, you know, right now, post the acquisition of Kurlon, we are a very strong organized player, stronger, in fact. The unorganized or the unbranded still, you know, dominates the industry. It's been losing share. But it's still anywhere between 50%-60%. So one is, what, can you just explain the customer's mindset today, which explains why they still keep going to these unorganized and unbranded players? Now that we are an even stronger organized player, what steps are we looking to do, whether it's this, you know, steps that we've done in the past or anything else that we could do differently to, you know, improve the market share that, you know, we as a leading organized player have? Okay. So let me, let me begin by saying that, 60% of the country still sleeps on some traditional products like cotton mattresses, that is, chatais, etc. 40% is the modern mattress market. Slowly, the traditional is shifting to the modern mattress. Sheela Foam is the biggest author of that, action, which we started 3 years back. But because of COVID and the Ukraine war, it stopped. November, we would be where we would be making a product which is a modern mattress. It is affordable. It is accessible. We should be able to distribute right up to the village level or the tehsil or a block level. That's one part. That's the 60% part of it. In the 40%, we have a sizable number which is the unorganized sector and something which is the organized sector. Both us and Kurlon operate in the organized sector. But the larger one is the unorganized sector. There is, again, as time goes by, as GST came, more formalization of the economy and all that happening, people are shifting from the unorganized to the organized. However, during the COVID pre, post-COVID inflation time, etc., there was a little increase in the sales of the unorganized one. Number one, the organized ones didn't do their work enough because of the disruption. And second, because of an average selling price being lower. That issue is changing. It's changing back because, eventually, everything has to get into an organized sector. We, as a company, number one, we would advertise, promote, give guarantees, warranties, ensure that the right products are there. Those are the steps that we do. And it has benefited in the past, it will benefit in the future. But there has been a bit of a disruption, though. So that's how we intend dealing with it. Got it. Got it, sir. Thank you so much, Pavan, for your session. Thank you. The next question is from the line of Pallavi Deshpande from Sameeksha Capital. Please go ahead. Yes, sir. Thank you for taking my question. I would like to know, what would be the market share for Furlenco? And second would be on your international location. So I understand now you will be only doing manufacturing. But what was the reason for the, you know, doing the consumer business in the past in the international market? So I would not be able to tell you. I, I think you asked the question of market share of Furlenco. I mean, it will be in places, you know? So I'll not be able to tell because, as I said, the market, the furniture market is very fragmented. It's 4-6 times bigger than the; it's about INR 140,000-INR 150,000 crore market. And in that, what Furlenco would be doing is negligible, nothing. And therefore, it's not; it doesn't. I mean, I can't even guess what it would be. However, because it's negligible, I think the potential exists for the balanced part to be done. The other question I didn't understand or whatever I understood was that, why are you not in the consumer business outside the country? It's just because of the consumer, the culture, the setup, the languages, the way that people buy products, etc. And above all is the issue that where we manufacture, for example, in Australia, we manufacture foam. The mattress brand owner and the mattress manufacturer is already fixed for years together. He, in turn, sells to a retail chain of stores which are also a brand unto themselves. For us to try and get into the consumer business, we would be rapped on our knuckles straight away. And we would be told not to do it, because we cannot compete with our customer. And therefore, that's another big reason why we will not do it. But the bigger one is that we don't understand it. We don't understand that culture. And we are not present there, for let's say, generations to know that, you know? So at the moment, it's a no for us. So just, I think my question was, did we not try the consumer business there in those countries? Try the consumer business? Yeah. We tried, in the international market 2 years back, did we not try to do the consumer part of the business? So if, are you looking at the exporting from here or doing the manufacturing and doing the business there? Doing the business there. So I thought, initially, when we went into the international market, it was to do the business there itself. And so that's what I'm coming back to. I mean, even at the expense of repeating, I'm just saying that two parts to our business. One is the back end, which is manufacturing of foam, which depends on machines and technologies and raw material sourcing and formulations and etc. That part of it, we know very well. And we can do that at any part of the world or the universe. We can do anywhere because that's our experience. That's what we have strength in. The front end, the consumer part of it is something which, in India, we know it. We know the people. We understand the diversity. We know what to do. We don't do that elsewhere. But foam manufacturing, we can do anywhere. That's how we look at the world. Right. Thank you so much. Thank you. The next question is from the line of Lokesh Maru from Vallum Capital. Please go ahead. Yes. Good afternoon, Rahulji. Am I audible? Yes, please. Yes. Rahulji, one question was that, over the years, we've positioned ourselves to, marketing's, you know, trying to convert the customer from traditional products, and from rubberized coir products to flexible PU, to the Sleepwell brand. And now that we have acquired, Kurlon, which is, pretty strong in rubberized coir, so how would your growth plans now pan out, you know, whether you would want to expand. Rubberized coir or, you know, you want to keep it the same and, continue focusing on Sleepwell itself? So how does this play out going forward for you? It's a good, great question, Lokesh. And thank you for that. And that's something which is, also, which is taking up our time, to take a call. But I could just say this thing that, globally, also, the mattress markets are, sort of, into compartments. It's divided into compartments. So you have foam brands. You have spring brands. And, of course, rubberized coir is not outside. And you have latex brands or rubber foam brands. So the input material does classify products. If you look at India. Yeah. And for donkey's years, rubberized coir has been there, and they have been doing well. And of course, initially, they had an advantage of taxation and other things. Now it's all at par. But the last survey shows that 35% is still dominated by or is a coir product. And about 55% is foam product. Now, you know, some places, there can be a bit of a hybrid nature. But by and large, the consumer and the channel, they understand, "This is a coir product. And this is a foam product." And therefore, the brands are also associated with that. So our thoughts at the moment and, as I said, it still needs to be crystallized. It still needs to be done or sort of sorted out. But that these are the differences between the two brands. And let's celebrate those differences and let them make the offering to the consumer far more focused and crystallized. That's our thought. But I think it's a great question. Both, it will evolve. And probably in the next couple of weeks, we should be able to answer that. Great. So my second question is, on the distribution network. So, would you be then keeping the policies that are applicable for the distribution network of Sleepwell similar to those of Kurlon? Or you want to maintain the policies that Kurlon follows for its distribution network? Do you bring them in line? Or, you let them you don't want to interfere too much to disrupt the existing business? How do you see that? Yeah. So, Lokesh, obviously, there are—I mean, the way the policies have developed and the production management, everything is developed. There are strong points on either side. And I think we must learn rather deeply about the way that each other performs and get the best out of both the world. In the moment I create a position of not conflicting, it makes it much easier. The policies also don't need to be treading on each other's feet. They can, they can be similar. They can have the advantages of both sides. Even on the distribution part, whatever may be the difference, you know, MBOs, EBOs, some other channels that would be there, we have first of all, we have no reason to believe that we would be disrupting anything on that at all. It will be as it is. We will only build up further on that. But would they impact our profitability if, you know, if. Sorry? We don't know the distribution policy of Kurlon, so we don't know whether that would have an impact on profitability of the consolidated entity. You know, have they engaged in deeper discounting or anything of that sort? So, is that the case? Can it have an impact on our profitability? Can it lower it? Yes. So this allows a couple of weeks to study that in detail. I mean, we've just signed the transaction. I mean, at the moment, even to get a little deeper into understanding. And as I said, that we have also hired an agency or a consultant to help us. We will bring all these things together. And we will see. But as I said, the first principle, do no harm. We're not going to run around and change it, change anything overnight. It's not going to happen. Right. Right. That's it from my side, Rahulji. Thank you so much for your time. Thank you. Thanks. Thanks. Thanks. The next question is from the line of Manish Poddar from Motilal Oswal. Please go ahead. Hi. Hi, thanks for bringing the call. So, finally, two set of questions. One is, can you help me understand why, you know, why is the EBO count in Kurlon, let's say, relatively lower compared to what our EBO count is? Sorry. Can you please speak a little louder, Manish? So I'm just trying to understand, sir. You know, Kurlon has roughly about 450 EBOs versus, let's say, us having about 5,400 EBOs. Right. So why, why, why is the, let's say, you know, is it a function of the category? Or is it a function of company strategy? You know, this number was relatively lower compared to us. From my understanding, it's certainly not a function of the category. It is just that the way that we have chosen to do business. And let me just say that because you are in EBO and you were earlier in MBO also, there are pluses and minuses of either side, you know? Therefore, there is no specific reason. But it's just that the way that you have chosen to, and of course, Kurlon has also have about 450. And they were also tending to increase that. I mean, there is as I said, I can't think of anything. There is no particular reason except that that's how it grew. Maybe people started it much earlier and did the learning and the other things and the way that this model should be developed. And the others are now doing it, you know? So that's why the number difference is there. And incrementally, would you cross-sell the two brands in the same EBO, let's say, your existing EBO network? So again, a question that is it possible? Yes, it's possible. Would we think about it? Yes. Would we do it? I think we'll spend about 3-4 weeks on discussing this and how do we do it. Everything will be definitely oriented towards a consumer, that how does the consumer, he or she, believes it to be done? Or it's less painstaking for them. It doesn't make it better for them to view that, "Look, I need to have a choice of 2-3 brands. And therefore, I want to go to a multi-brand outlet. Or I'm happy with one store, which has everything is offering, but is better displayed. And there is interaction." So there's that mix and match of all this. It's also giving us an opportunity to look and review stuff there. But do you think the two brands are positioned, let's say, in the minds of the consumer separately? Or, you know, there is a significant overlap in terms of mattress, how a consumer thinks of. So, my understanding. I will share my understanding. And we're going to do a little bit of a deep, deep study to find out what it is. But you see, when a transaction takes place today, 50% of that is the retailer who influences. 50% is the consumer who's heard a brand and wants that particular thing, etc. Now, this number, 50/50, was, let's say, 10 years back, more in favor of the shop and less in the consumer. But as we advertise and share, it's 50% consumer. And we just take that as a, something. Now, we will keep that in mind. Or sorry. I was coming to that, that both the retailer for sure and consumer, to some extent, wants a coil mattress or wants a foam mattress. They, all studies have shown that, they, they want a coil mattress because they have some memories or legacies of it. And they also relate that to Kurlon. Foam is related to Sleepwell. Can we, but of course, as we were going individually, everyone was trying to do everything. And can we do this a little better? Can we answer that? I think that will unfold in the next couple of weeks. And probably, it'll help I no, surely, it'll help the consumer. But we'll see. All right. And just one last one. So how much capital has Furlenco raised to date? I won't have that number. Amit, would you have that number? Otherwise, we can reach it to Manish a little later. So, in the media article, it says, it's more. It's in four digits. So, what I'm trying to understand—for, you've given a INR 1,000 crore dollar valuation for a company. Which itself has raised a four-digit number till now in terms of crores. So, I'm just trying to get that number right. Is that in that range? Or, Manish, I won't be able to answer that. The only thing that I know is that their last round of funding that they did, that time, the valuation was INR 1,400 crore, you know? But I will. I'll get back to you on this. I'll get back to you on this. Okay. Okay. Thank you so much. And all the best. Thanks. And, Amit, just, just remember to—is that? Yeah. So, are we coming to a close at about 12:00 P.M.? I have another call to do. Sure, sir. Sir, can we take one last participant? Yeah, sure. Sure. Go ahead. Okay. Thank you, sir. We have the next question from the line of Pritesh Chheda from Investec. Please go ahead. Hi, sir. Congratulations on the two acquisitions, the acquisition and the investment. The question that I have for you is, we understood that, you know, the Kurlon business was undergoing management change. And then the COVID period hit. But in FY 2022, overall, the entire industry relatively performed fairly well, including our own business. So any reason that, despite COVID withdrawing, Kurlon's growth sort of continued to be in the tapered range? And the second question along with this I have is that the valuation that we've paid based on the case that has been presented looks like Kurlon may be a turnaround story for us. So do you believe that the valuation that has been paid for Kurlon reflects that? Amit, you want to answer both the questions? Yes. Sure, sir. So, I would request if you could please repeat it in a little bit short, one by one. Sir, on the Kurlon acquisition, so the understanding is that prior to COVID, there were some management changes and transformational changes being planned in the company and when COVID hit. But in FY 2022, overall, all the leading players in the industry performed fairly well, including our own business. So after COVID withdrawing, what was the reason why the Kurlon growth did not come back? And possibly, is the green shoots reflected in, let's say, first half or nine-month performance for Kurlon? Or have you seen any turnaround in that story? Yeah. So, see, the COVID had affected almost all the players. It's not that we were not affected. If you look at our margin trajectory, you will find that that also was hit a little bit. The challenge that happened with Kurlon was they basically embarked on a lot of organizational changes in the way they do the business, which we highlighted earlier also. And by the time they could realize that COVID was already on them. I think they have started improving. And the results that you will see, we hope, for 2023 and some of the indications that we have are better than what it was for 2022. And I think, going forward, the way we intend and we intend to see that improving is retaining some of the changes that they had made, which are quite good, and basically looking into some of the other changes, which were eating into a lot of profitability. And potentially, we can do away with those changes. Got it. Thank you, sir. Second question being on the synergy piece, I believe two reasons were, raw material procurement and some synergies on the logistics side. Now, raw material, being fairly straightforward, I would like to double-click on the logistics synergies that you expect, given that, you know, the regional presence for both the brands, is fairly different. And, Kurlon has no presence in the EBO segment. So if we have to increase the sales of Kurlon in Sheela Foam EBOs, will that not be a drag on our logistics cost? No. So it's, what distribution network will be like and from where it will be sold will be a different thing. But from a logistics perspective, definitely, it gives the combined company a more wider footprint in terms of production facilities. So yes, though it is yet to be decided as to what will be produced where, but yes, the distances between the final delivery destination and the point of production will go down. And secondly, Kurlon has a different model of distribution where they use certain warehouses. And then the material is transported, which we are to look into. We believe that once we rationalize it and, it will reduce a lot of costs on that account. So, with a Pan-India footprint, there would be a reduction to the extent that you have mentioned in our business. Got it. Thanks a lot, sir. Thank you. Ladies and gentlemen, as we take that as the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir. So thanks very much, everyone for joining and for asking all these questions. It has also made us, you know, sort of rethink, review. And I just want to share this with you, that it is, both the things have happened, only the day before yesterday. Allow us about a week, about a few weeks, for, for planning out and strategizing as to how we want to take this forward. But at the same time, I want to assure you that, we are committed, we are, you know, both the both the things are integrated into, into the core of our business, which is, manufacturing, flexible polyurethane foam. And it will only see advantages of that, rolling out. So thank you very much. And would say all the best. I look forward to meeting you in the quarterly earnings time, which is the first week of August sometime. Thank you very much, sir. On behalf of Sheela Foam Limited, that concludes this conference. We thank you for joining us. You may now disconnect your lines. Thank you. Thank you. Thank you.