Good morning, ladies and gentlemen, and welcome to the Q2 FY 2023 analyst Conference Call of Shoppers Stop Limited. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the Conference Call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Mamta Samat. Thank you, and over to you, Ms. Samat. Thank you, Michelle. Good morning, and thank you for joining us for the Shoppers Stop Q2 FY23 earnings Conference Call. Today, we have with us the senior management, which is led by Mr. Venu Nair, Managing Director and Chief Executive Officer. Mr. Karunakaran Mohanasundaram, Chief Financial Officer, and Mr. Jaiprakash Maheshwari, Vice President, Finance and Accounts. We will begin the call with the opening remarks from the management, after which we will have the forum open for the interactive Q&A session. I must remind you that the discussion in today's earnings call may include certain forward-looking statements and must be viewed therefore in conjunction with the risk that the company faces. Please restrict your questions to the quarter and yearly performance and the strategic questions only. Housekeeping questions can be dealt with separately with the IR team. I will now request Mr. Venu Nair for the opening remarks. Over to you, sir. Thank you, Michelle and Mamta, and good morning, friends. Thanks for joining us today to discuss the Shoppers Stop financial results for Q2 of the financial year 2023. Along with me, I have my colleague, Karuna, our CFO, and Jaiprakash, our VP who heads our F&A. I am delighted to share that we achieved the highest- ever sales, EBITDA and PAT for Q2 in the history of Shoppers Stop. All the KPIs have improved significantly. I will share these with you over the next few minutes. Before I start in detail, can I just remind you that we have shared our Q2 and first half results in the investor deck and the press release, and I'm sure you would have had a chance to go through the same. Let me now talk on the Q2 performance and the way ahead. For the last 6 quarters, we have been growing consistently. Customer sentiment was strong in the quarter and continues to be so in the Q3 of this year. Our wardrobe reboot, followed by the office reboot, is making us to be one of the best destinations in our chosen segments. Our customer footfalls, both offline and online combined, has surged significantly to an overall 40.8 million visits in the quarter that we are talking about, which compares to 25.3 million visits in the corresponding quarter last year. From the time the economy rebounded from the third wave of COVID-19 in January 2022, I have been saying that we've had a strong momentum, and that is continuing. Sales, gross margin, EBITDA and profit have witnessed strong growth. Sales grew by 62%. Gross margins improved by 180 basis points, driven by an increased share of full price merchandise. On EBITDA, we made INR 75 crores as against INR 2 crores last year. We also grew versus the pre-COVID period. Our non-GAAP sales grew by 19%, and EBITDA grew by 55% versus the pre-COVID period. Our gross margins also improved by 40 basis points. The same growth has been particularly impressive during the festive period. During the Q2, our East region, which has the highest impact due to Q2, grew by 45%. It is pertinent to note that during the quarter, we had closed a few of our stores for refurbishments, which are now open. We could have had sales of another INR 20 crores and profit thereon if these stores had continued to be trading during that period. However, we do believe that customer experience is critical and hence we chose to shut the store in full while the refurbishment was on. Some other KPIs. Our ATV grew by 8% versus last year, primarily due to the increased demand for premium and lifestyle products. The growth in ATV has now been consistent for 10 quarters. Let me now share some important details on the operational costs. On a like-for-like basis, we have saved INR 20 crore, but we have also invested in marketing and digital commerce, besides inflation in the existing stores. We also had a one-off expense of INR 2 crore from the consideration adjustment from Crossword, which we had sold a year back. Specifically on Crossword, we have now received 90% of the amount, and the balance 10% will be received after two years, after which 100% of the amount due will have been received. With strong sales and tight control on costs, we reported an EBITDA of INR 35 crore in non-GAAP, a growth of 55% and INR 155 crore as per the GAAP financials. Our CapEx investments in new stores and repositionings are INR 38 crore. We opened three stores, that is one department store and two beauty stores during the quarter. Our expansion plan is on track. We are currently under fit-out in four stores, with two stores having opened last week, and a further three beauty stores where we are also under fit-out. As always, our CapEx has been funded through our internal resources. We reduced our working capital by INR 18 crore, and our cash from operations remained positive. We continue to be cash surplus or a net negative company. Today's retail landscape is changing rapidly and dramatically, driven by the big shifts with consumers getting far more informed, product choices multiplying rapidly, technological advancements, and public policy liberalization are all contributing to new flows of information, knowledge and resources. During these changing times, customers are looking for multi-choice, multi-product destinations. Our company has been ahead of the curve, focusing on harmony, and we are confident that we are well placed to reap the benefits of these investments. From operations, I will now move on to the performance of our strategic pillars. Our first and foremost strategic pillar, our First Citizen, which is our loyalty program. Our engagement with our loyal members has been at its highest- level. For this quarter, they contributed to 77% of our sales. Our new enrollments have increased by around 2 lakh during the quarter, and cumulatively by 5 lakh. We have consistently engaged with our First Citizen members. To give a few examples, our 360-degree campaigns with appropriate content and creatives were extremely successful. Our active base has increased by 300 basis points, and we achieved this by concentrating on activating loyal citizens, loyal First Citizen members who had lapsed and had not come to our stores for a while. Last, we introduced gamification for our loyal members, which also has been very successful. Most importantly, we continue to grow the First Citizen Black member base and this too during the quarter. To remind you, the average transaction value is over twice that of a normal First Citizen member, and overall they spend four times more than our regular First Citizen members. As you are aware, Black Card members have to pay INR 4,500 to join this program, and we have been witnessing steady and sequential growth ever since it was launched two years ago. We held a number of exclusive programs for our Black Card customers, and this has been extremely well received. The feedback from our customers indicated that these programs are hugely successful, and this is something that we intend to continue to do, providing exclusive experiences for our First Citizen Black members that they can't get elsewhere. Personal shoppers have also continued to engage with our customers, and this is again a point of difference for Shoppers Stop. A number of our customers love the experience that they get because of the advice and assistance they get from our personal shoppers. This is something that we are continuing to dial down on. Our association with HDFC Bank credit card has been progressing, and we added over 3,000 cards in the first six months. Moving to the next strategic pillar of private brands. During the quarter, our private brands recorded its highest- ever sales in a quarter at INR 192 crores. Our private brands grew by 76% last year over last year. Specifically, our apparel business within private brands grew by 78% and a whopping 64% over pre-COVID numbers. Consistent with the previous quarters, it has been increasing its share. As of now, our private brands constitute 21% share on apparels and 15% on overall business. The average selling price increased by 25% during this quarter for private brands. Kids continues to grow within private brands and grew by over 93% on last year. To move the journey of converting these private labels to private brands, we have Sonam Malhotra as the brand ambassador, and we have had 2 campaigns with Sonam during the first half of the year. We had Sonam fronting Fratini for the Q1 of the year, and in the last quarter, beginning September, Sonam has been the brand ambassador for Kashish. This specific campaign has been extremely well received, with Kashish growing by 170% year-on-year. Our focus on the Indian wear brand, Bandeya, in men's, has also been very well received by our customers, and it has grown by over 3 times this quarter. Our focus on women's wear in private brand continues, and this category has grown by 82% overall. Most importantly, women contribute to the largest share of our total customer base, contributing to 57% now versus 55% last year. This is for Shoppers Stop as a whole. Moving on to beauty, which is our third strategic pillar, and our sales for beauty for the quarter grew by 45% against last year. During the quarter, we launched 24 brands in our store, bringing the total number of brands that we have brought in into the store at 35. On our private brand, Arcelia, we launched 35 new SKUs during the quarter, and in total, we now have 135 new SKUs on a year-to-date basis. The global supply chain issues have continued, though it has improved as well. During the quarter, we opened 3 new beauty doors, and we have another 3 doors that are under fit-out. In the last quarter, I had spoken to you about the importance of content in beauty, and we have continued to invest in the same. Beauty content marketing increases brand awareness, differentiates the brand, builds audience relationships, and drives more revenue. Customers rely heavily on different types of content to make buying decisions, research new products, and learn how to use different types of beauty products. It's critical that our brand is there to engage with them throughout the customer journey. We have begun this journey, and this will help us to diversify further in beauty, which is a growing category. This also will be a big point of difference when we launch the SS Beauty app, which I will talk to you about when I talk about omni-channel in the next few minutes. At this stage, I'm extremely glad to announce that as a part of strengthening our third strategic pillar of beauty, we have now obtained exclusive rights for retailing and distribution of a few beauty brands from L'Oréal and Clarins. Brands that we will be distributing from L'Oréal will be in the niche fragrance segment, Atelier Cologne, in the couture brands, Prada, Valentino, Mugler, and Viktor & Rolf, and in the premium brands, Ralph Lauren and Azzaro. Clarins will have an offering of skincare and makeup. Our objective of venturing and adding distributions within our beauty pillar is threefold: to create and evolve to serve the rapidly growing beauty and personal care market in India, create a better and unique brand proposition to create a win-win for our retailers, have a better brand representation by bringing the best-in-class global practices to India. We expect the sales from L'Oréal to commence from December and from Clarins in Q4 of this fiscal. The SS Beauty stores continue to trade well and are something which will continue to grow as we go forward. Moving on to omni-channel, we achieved our highest-ever gross sales through our digital channels. We have been leapfrogging in our digital sales at 9% this quarter. This is significant considering that we had a large base in financial year 2022, largely because stores were either closed due to lockdown or partially closed, and hence a largest portion of our sales coming from e-com. However, as mentioned in the last call, we do look at online and offline together now, given that a large portion of our sales offline is influenced by our digital presence. Apart from reaching out to a larger customer base through Amazon, we also sold 30% of our digital sales to customers in cities where we are not present in shoppersstop.com. We are also in the test phase of the SS Beauty app, which will augment the SS Beauty stores that we have opened. This will be an app dedicated to beauty, and we are in the test phase, as I mentioned. We expect to go live with this new app later in this quarter. Further, we continue to leverage on the investment that we have made in digital mediums across data lake, analytics, and personalization tools. Using these tools to aid the personas that we have created on First Citizen helps us to target and offer much more focused offerings to our customers in the communication that we have with them. Finally, expansion. We opened one department store and two beauty stores during the quarter. Our pipeline is very strong. Even as I speak to you today, we opened two stores last week, and we expect to open another four in the next six weeks. There have been delays due to regulatory approvals, which in turn delayed the opening of our stores. We are on track to open 12 stores for this year, and nine of these will be in Tier Two cities. In addition to these, we are planning to open the 15 beauty stores that I had committed in the previous call. Again, three of these have opened, four are under fit-out. In summary, we have grown consistently through the impact of COVID-19 that caused all economic activities seven quarters back into lockdowns. We are extremely focused on execution of the strategy that we had put in place after COVID-19, and we are pleased with the progress being made. All our KPIs are consistently improved in this period. I am particularly impressed with the growth of our strategic pillars of private brand, beauty and omni. We expect sales to remain robust and our growth momentum to continue for the remaining half of this fiscal. Even as we speak, the festive sales for Diwali are strong with four days to go. With our new partnership, we will evolve and serve and grow rapidly in the beauty and personal care market in India. We are planning to create better and unique brand proposition to create a great experience for our customers in retail in beauty. In this process, we have better brand representation by bringing in the best-in-class global practices to India and also bringing in a lot more newer brands in beauty to the country. Our private brand has been firing on all cylinders with a current annual run rate of INR 1,000 crore. We have been investing into this segment, which we will augment and continue to grow. We continue to remain debt free, which helps us to leverage better. I wish you and your family a very happy Diwali, and we'll open the call to questions now. 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 phone. If you wish to withdraw 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 Percy Panthaki from India Infoline. Please go ahead. Hi, sir, this is Percy here, Percy Panthaki. My question is, can you give some idea on the competitive intensity, especially together with the sale days this quarter? How much was it higher or lower than normally what you see in Q2? If there's any adjustment to be made between the timing of sale in Q1 and Q2, and if you look at it on a half-year basis, have the sale days been lower than what a typical year would have? Thank you, Percy. Thanks for the question. Sorry, Percy. Sorry about that, Percy. In terms of the sale days, overall, there was a reduction of 10 days in the total number of the sale days, as you call it, or the end of season period. Most of I mean, some of the reduction, I would say 7 days out of the 10 happened in the previous quarter, or what I mean quarter one, and there were 3 days in quarter two. To be more specific, it went on till the nineteenth of August in FY 2020, whereas this year we finished on the fifteenth of August. From Q1 was where the impact was more, Q2 it was lower. Overall, the reason, and I think it goes back to what we have been saying about the consumer sentiment being strong, and also because of that, the confidence for brands to focus on new and fresh merchandise, latest fashion, rather than selling out what was left behind from the past. The one thing we did specifically see was the mix of full price went up even during the end of season sale period, which again is a reflection of the strong consumer sentiment that we have been seeing. In context to that, just wanted to understand the EBITDA and the margins. I'm assuming that obviously because the sale period is sort of lower, there's a positive effect on the overall EBITDA of the company. Just wanted to try and see if it is possible to quantify that impact in INR million terms. I think specific to the end of season sale period is probably too granular to be covered. What we did see was a growth of 50 basis points over the pre-COVID period on gross margin. Of course, the EBITDA growth was 65%, which not necessarily only due to margin, but specifically, I think at the gross margin level, it was a growth of 50 basis points over FY 2020. Right, sir. My next question is on margin trajectory over the next, let's say three years. There are two moving parts to this. One is your investments in Omni, et cetera. I don't know whether we should be taking a reduction on that for let's say a FY 2025, 2026 level. Or do you think it would continue at these levels as a percentage of sales? Secondly, apart from that, whatever EBITDA you're clocking, what is the trajectory there and where do you see these numbers going? What are the drivers for margin expansion over the next three years? Percy, Karuna here. Normally we don't give any guidance on the margins. Answering your other question, yes, the margins should improve because we are focusing on private brands, which will improve the overall margins. We are also focusing on beauty, which will improve the overall margins. As you rightly said, omni, the margin will come down, but we should be able to offset that, because of our private brands and beauty will have higher margins. In terms of a very broad guideline on the EBITDA margins, Percy, we have been quite consistent in saying that, probably for the next 2-3 years we will be in high- single digits. At the end of the third, it will be high- single digits, and it should be low double digits, by fourth year. That's the consistent guidance we have been giving, Percy, for some time now. The main driver of this expansion, like for example, if I just use this quarter, I know it's not representative of the full-year margins, but this quarter you've done 5.9%, if I take your non-GAAP numbers. This moving up to a double digit over four or five years, apart from product mix change, is there any other driver which will be responsible or do you think that this 400 basis points or whatever number it comes to product mix change itself is enough to drive that? No. It will be a combination of the product mix change plus overall productivity change in our other office expenses. It will be a combination of both, Percy. Okay. Yeah, that's all for me. Thanks, and all the best. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to answer questions from all participants in the conference, please limit your questions to one per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Ankit Kedia from PhillipCapital India Private Limited. I have three questions. Firstly, you know, on the ESOP expenses, is this recurring in nature? What is the total quantum of ESOP expenses we should build in for this year and next year? My second question was the beauty offline distribution, which you have just entered into. It's a very working capital intensive business. How big is the opportunity for you from these brands of, you know, L'Oréal and going forward, you know, are you in constant touch with other brands to launch more brands in India? Third is, what is the management view on value fashion, given that some of your peers are aggressively entering into the value fashion segment, and are you all considering that? Hi again. I will answer the ESOP part and Venu will take the other two questions. On ESOP, we expect a 14%-15% growth impact this year and more or less same impact next year also, probably slightly lower. This will be first two years. Having said that, Ankit, this is a non-cash item. There is no cash outflow because of ESOP expense. We are deleting the expense and creating the reserve ultimately. I thought I'll just clarify that. Sure. On the other two questions, Ankit, the first one was on beauty distribution. As I had mentioned, we are starting off with eight fragrance brands of L'Oréal, and also Clarins, which will start in Q4 next year. It is a business which helps us to secure supply and also given that we are one of the largest retailers of beauty, and these are brands which would be retailing from our own stores. It helps us to actually have a better offering for our customers from our own stores and online channels. We do intend to continue looking at this avenue to bring in more new brands into the country, especially the ones which are focused in the segment that we operate in, which is the premium and lifestyle segment. There are still a number of brands which are not present in the country, and this gives us the opportunity to bring them in, both for distribution as well as for retail. That's something we intend to continue doubling down on. Your third question in terms of the value segment, you are absolutely right. The value segment is a large segment in the country. It is a segment we are not present in, specifically, apart from, and given that we are focused on the premium and lifestyle segments. It is a segment we are continuing to look at and evaluate, and as and when an opportunity arises, that is something that we may want to get into. I think there's a follow from the beauty. Are the margins in the distribution business of beauty would be similar to the company average, or do you think they can be slightly higher given that these are premium brands? Cumulatively, it would end, given the flexibility, have higher margins, which is one of the reasons we are getting into it. Effectively, we are controlling the entire chain from the time the product comes into the country to when we sell off to the customers. Hence, we have preferably much better margins. Sure. That's helpful. Thank you so much. Thank you. The next question is from the line of Gaurav Jogani from Axis Capital. Please go ahead. Thank you for the opportunity, sir. My question is with regards to the beauty arrangement, offline arrangement with both L'Oréal and Clarins. If I get it right, you know, in the most recent deals you have rights for both online and offline distribution and exclusive. Does this mean that those brands only you will be able to retail and not the other players? The rights is exclusive for distribution and retailing is not exclusive, and we would be supplying to the other retailers for those brands. In that case, they will have to source it only from you, right, in India? That's, yeah, that's correct. Yeah. In that particular part of the margins that, you know, you are distributing to other retailers, so margins there would be lower than what the company would be making, right, in terms of we are retailing? Yes. For that particular part, yes. Overall, as I said, given that we are also the largest retailers for this, hence it gives us the opportunity to have more margin than we currently make. I think what is also worth mentioning is that it is a business where we are funding completely from our internal flows, and it has the internal flows are quite strong, as I have already mentioned. Worth also pointing out that the distribution will be in a subsidiary business that is separate. Sure. Okay. Just one more clarification on this part. If you'll be able to highlight, you know, what is the current size of this particular business from the existing, I mean, the existing vendor who was just one of the licensors, and what kind of an opportunity can it create for you going ahead? I think there are a number of new brands we are talking about, so I would not want to get into specifics in terms of the size of that. It's something which we can give you separately. Overall, these are set of brands which are new to the country, and that's the one that we are going after. Okay. Got it. Thank you, sir. That's all. Thank you. The next question is from the line of Bharat Choudhary from ICICI Securities Limited. Please go ahead. Yeah. Hi. Congrats on a good set of numbers. My query was regarding this, currently we are at around 119% of pre-COVID levels. How much of that would be driven by a price hike over the pre-COVID levels? And what would be a sustainable SSG day expectation going forward? Thank you, Bharat. Our overall ASP increase has been to the tune of 10%. These were price increases that we had taken at the beginning of the year. It's not something which we did during the quarter. It was around when the season began. The previous season, that is Spring Summer '22, launched in February of 2023. That is when we had taken the price hike. Those price hikes have been well received. We have not seen a dramatic impact on volumes despite that. As I said, our overall unit values have continued to grow and have now grown by 10% for 10 consecutive quarters, which essentially points to the fact that we have customers putting more items into their basket when they engage with us in the stores or online. You said that SSG is what we are expecting going forward on this base? We don't normally give guidelines, but it should be in the high- single digits, mid-single digits to high- single digits, Bharat. Sir, just one more thing. Like, our private label brand share has increased from around 12% to 15% if we compare it with pre-COVID levels. Actually, if you look at the gross margin, it has not translated into much more of a gross margin. It's like 32.8 compared to 32.4. What is the reason of this not translating into a better gross margin in spite of a higher- private label share? Bharat, if you are comparing with the, because the pre-COVID, there are two reasons. One, in the pre-COVID, we had a one-time gain on the gross margin, probably by 50-60 basis points, specifically in quarter. Second one, if you remember, our omni channel, our digital sales was less than 1%. Right now it's at 5%-6%. That's, and normally you are aware the margins in the digital channels are lower than the offline sales. That's a business we are investing to grow right now. These are the two combinations has impacted the overall increase in the gross margins specifically for this quarter. Going ahead, at least, if this momentum in private label continues, so we would see an improvement in gross margin. Is that understanding correct? Absolutely correct, Bharat. Okay. Thanks for answering my query, sir. Thank you. Thank you. The next question is from the line of Nihal Jham from Nuvama Institutional Equities. Please go ahead. Yes. Thank you so much and good morning to the management. A couple of questions from my side. Of course, on your beauty distribution business, would the distribution infrastructure be primarily the stores you open or you would be required to invest in separate warehouses, across the country? Good morning, Nihal. For the beauty distribution business we will be using our existing infrastructure of our warehouses to do it. We don't expect a significant incremental cost to do that business. That is helpful. The second question was that, you know, you've spoken about store expansion between the tier one, tier two and tier three cities, but I think you're looking at least for the other 12 you shared in the entire 150 and the other 9 being in tier two and tier three. Nihal, your voice is not clear, Nihal. Can you just come closer to the mic? I'm so sorry. Am I audible now? Yes. Better. Yes. Sir, I was asking that you've given the bifurcation of the store expansion of the 12 stores, where only 3 are in Tier 1 and the other are in Tier 2 and Tier 3. Going forward, when you're targeting 10 stores each year for the next 2, 3 years, would it be fair to assume that majority of them would be in these Tier 2, Tier 3 cities when you look at adding to more cities going forward? Nihal, you're right. The current base and also the current outline for stores that will open this year and next year could be in, I would call it tier two city, probably not as much into tier three yet, but that's obviously an opportunity going forward. At the moment we are focusing on, tier two and even at tier one suburban clusters where we may not be present. I think what's important to, underline is we will be where there is an opportunity that exists. Where our customers are and where there is an opportunity we would be. The splits being higher into tier one suburbs or tier two is because of the fact that we don't have a presence there and that is where the opportunity is higher. As the economy grows and as cities enlarge, that's where the opportunity presents itself which we would capitalize on. Understood. Sir, this last thing I was looking for a better point was just give me the offline customer entry. We are clubbing it currently with online or offline. I I was just looking for the offline customer entry from this quarter. Offline customer entry grew by three times here. It was around 25 in Q2, so it grew year-over-year 3% you're saying? Yeah. Thank you so much. I wish you all the best. Thank you. Thank you. The next question is from the line of Aliasgar Shakir from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the question. Couple of questions. First is on beauty. So I think you are targeting to add about 15 stores in this year. I just wanted to understand with this, you know, tie-up with L'Oréal and, you know, the other, should we expect this target to go up? And if not in this year, should we expect the, you know, pace of addition to go up because of this factor? And second is on the private label. So yeah, I understand in the smaller stores the mix of private label, particularly in the shoes, is far higher. You know, it's probably even about 30% or 40%. So just want to understand given that now we are opening more smaller stores, you know, how should we look at the private label mix? I understand, you know, we've grown 20%-50% now. Should we expect this to grow, you know, much more significantly as we add a lot of stores in the smaller, you know, store size? Thanks, Aliasgar Shakir. On the first one on beauty, yeah, it's 15 stores that we are targeting for this year, and we are in line to have that. Going forward again, we've maintained the guidance that it will be 15-20 new beauty stores that we would look at, which is what we do target. As momentum grows on this, we will look to accelerate that, and that's something which I think we would have a better view on in the coming quarters as we get there. What I would like to state is that this is a segment where we see a huge opportunity for ourselves. We are the largest physical retailers online, and with the augmentation of that with our SS Beauty app and the SS Beauty stores, we do expect to continue our growth journey there. The focus will continue to be across growing the real estate that we have along with acquiring customers online through the SS Beauty app on BG specifically. Next year onwards, we would also look to add boutique stores. For example, the L'Oréal brands that we have bought in, for, at least a few of them, we would have standalone boutique stores for those brands specifically. That would be addition to what we have already said. So that's one view. The second part, your question, was on private brands and the mix of private brands. Currently, as you rightly said, it's 15% to our total sales or 21% to our overall. We expect this to continue to grow. Again, as we go into tier twos, some of these brands have greater resonance, and that continues. We expect the overall share of private brands to grow up, to go up to between 25%-30% in the next couple of years. Understood. This is very helpful. Thank you. Thank you. Thank you. The next question is from the line of Varun Singh from IDBI Capital. Please go ahead. Yeah, thank you very much. My first question is on the data point that 20% of online customers shop from cities where Shoppers Stop did not exist. I just wanted to understand if you could give more color on what, you know, exactly are the products that these customers would have shopped for? I mean, will that be private label products from Shoppers Stop or branded stuff? I mean, these are some cities where we are not present, and that's very encouraging. It gives us a view of where our future expansions can be, as well as the demand that we can get. On shoppersstop.com, we are a house of brands. We offer everything that we have in our stores. As I have mentioned in the past, as an omni-channel retailer, every single store of ours, and today we have 91 stores, 91 department stores, over 100 beauty stores, all of these stores are linked to shoppersstop.com. Hence, consumers and customers across the country are able to buy all of what we retail from anywhere. Hence, it's not just private brands, it will be a combination of everything. Sure. Second question is, like out of 12 department stores, you mentioned that around 9 stores will be opening in tier 2 cities and, also looking at the other statement that you made that our focus is not value fashion, but premium and lifestyle segments. So sir, on premium and lifestyle segments, why are we not seeing higher opportunity in tier 1 cities and why only tier 2 cities? I think I need to clarify myself. First, we are skewed towards metros and Tier 1s today, and roughly around 65%-70% of our business comes from Tier 1 and metro cities, and this is something which we will continue to grow in. The fact that our store isn't in some of the cities that are growing is not there is what presents us with the opportunity to go into those cities. Hence, I had clarified that we will be where our customers are, whether it's Tier 1 or Tier 2. Again, while we talked about the I think the tier two needs to be understood very clearly that when we are saying tier two, it does mean, it could be, a place, like, Gwalior, for example, which we are terming it as tier two, but by a lot of definitions, that could also be tier one. I'm not wanting to get drawn into that. But essentially these are cities where we are not present, consumer is there, customer is there, opportunity is there, hence we're going. The other part too also 3 of the cities or the 3 of the stores which we are opening out of the 12, they are actually in Bangalore, Delhi, and Pune. These are again places where we already have stores, opportunities where we are going in there. I think we should not draw very strong inferences on the tier one, tier two. I think what's important is we are going in where an opportunity is there, where we are not present, and hence, creating customers and consumers for ourselves. That will be kind of more of a virgin geography or places where we see relatively less competition, something like that? These places, it's basically we are a one-stop shop. We are a multi-choice, multi-product retailer, and as consumers are getting exposed to wider choices, we become a great destination because of the fact that as house of brands, as a one-stop shop, and customers can come to us and make their purchases. That's the reason we go into these places. It doesn't. I I mean, competition would be present, and that's something which we welcome, and it enlarges the market when that happens. Understood, sir. That's very helpful. Thank you very much. All the best. Thank you. The next question is from the line of Disha Sheth from Anvil Share and Stock Broking Private Limited. Please go ahead. Ms. Sheth, I have unmuted your line. Kindly proceed with your question. Yeah. I just wanted to check on two points. Since you're sounding so low, could you please switch to your handset? Kindly proceed with your question. Hello? Yes. Please proceed. Yeah. Sorry for the inconvenience. Sir, I just wanted to check that the private brands which we are at 15% of total sales, you mentioned that going forward it will go 25%-30%. Is that right? Over the next couple of years, that's the aim that we would want to make it 30% of our total apparel business. Okay. That is, which is 15% right now, correct? It's 31%, moving that to 35%-30%. Okay. Secondly, on our same-store growth, so what is it in this quarter and what do we aim going forward? For this particular quarter, on pre-COVID numbers, I mean, I guess last year it makes no difference. On pre-COVID numbers we had a 10% growth. Okay. Our aim, as Sharma has clarified earlier, our target is to have mid- to- high single-digit growth on a quarter-by-quarter basis. Okay. Sir, can you just throw some light on margins for private label and beauty segment, which is higher- margin, and what is the difference, if you can quantify, please? These are confidential information. We don't normally share what are the margins for the private brands. Having said that, it's higher than the brand margins. Okay. Beauty are higher than private? No. Okay. Okay, sir. Yeah. Okay, sir. Thank you. That's it from my side. Thank you. The next question is from the line of Manjunath Anjogin, a retail investor. Please go ahead. Mr. Anjogin, I have unmuted your line. Kindly proceed with your question. Hello? Sir, please proceed. Hello? Yes, we can hear you. Can you hear me? Yeah, we can hear you. Please go on. Okay. Thanks for receiving my call. Just wanted to like to know what is the outstanding of loans? You mean the term loans? Any kind of loan. Total, how much do you have loan? The loan is around about INR 134 crore as on September 2022, Manjunath. Sorry, can you tell me again? The loans are INR 134 crores as on thirtieth September 2022. Okay. Yeah. Thank you so much. Yes, sir. Thank you. The next question is from the line of Jay Gandhi from HDFC Securities. Please go ahead. Yeah, hi. Good morning, everyone. Thank you for the opportunity. I just missed this one. You mentioned the offline customer entry. If you could just repeat that for the quarter. Offline customer entry was a growth of 3% over pre-COVID numbers. Those are pre-COVID numbers. Okay. Pre-COVID you did around INR 10.5 million. Three percent of that. And the conversion. Sorry, go on. No, go on. You go on. Yeah. The conversion ratio typically is that kind of. Does it hold? Or Conversion was fairly flat. The absolute number that you gave of 10 million, I am not sure. It was much higher. Overall, Okay. Higher. Overall the conversion was fairly flat and the customer entry total growth was 10%. Right. If you could just, you know, share these details at some point. I mean, I don't think these are very confidential anyway, these numbers. I mean, it does, sir, certainly help us reconcile to the top-line at some point, and just a feedback, with that. Okay. Fair enough. Sir, the other thing I wanted to ask is, you know, what was interesting today is the 19% jump in sales, right? I was trying to connect that to the working capital movement. Now, inventory days, comparing pre-COVID versus the current quarter. Inventory days have kind of broadly grown in by 21%, slightly higher than the 19% jump in sales. More worrying was that the payable days have grown at 29%. It's literally around INR 1,800 crores. It's a INR 400 crore-INR 500 crore jump. I get that we are net cash surplus right now. Do you worry that at a certain point, maybe in the next 12-18 months, we might have to rein in payables days, and hence effectively at some point again assume that or top-line growth, which of the two? Neither of the two, JP. Sorry, Jay. See, when we classify our inventory, we have consignment stocks, which is what we call as an RO stock. We also classify the creditors below that. Predominantly, if our RO stocks grow, our creditors will also grow up to that level. Except the last month sales, for example, the September month sales we pay in the month of October. That will be the only difference. Other than that, our creditors are absolutely in line with the expansion of the business. Right. In terms of days, it would not change, right? If I compare September to September, pre versus post-COVID. I get that you probably have some payments to make in October, which will not reflect in the financials right now, but even in terms of days or the proportion to sales, that may not necessarily change, right? Yeah. For our non-RO business, it will not change. In fact, it will marginally come down. Right. Unfortunately, I can see that it's kind of been stuck. It's not just pre- versus post-COVID-19 thing. It's actually over the last 3-4 years, our support from creditors has been stuck. From a business point of view, Jay, a couple of things which need to be factored in. As I mentioned, our private label business grew by 37%. Obviously, the overall share of private label has also grown significantly over the pre-COVID numbers, which we already talked about. Further, we are looking at a fairly large growth in this Q3 as well. Apart from the festive season for which we bought inventory, also we have bought it for winter wear, which have already come in and then that is reflected. It is that investment into the future growth, which is being reflected as higher inventory, and that's something which we expect it will get neutralized and come down as the quarter progresses. Further, I think what's important to note is that our working capital continues to be negative. Right. That's fair. Good. I'll probably follow up with you at some point, just for a more nuanced look at it. Thank you for this. No problem. Thanks, Jay. You can call us anytime. Thank you. Okay. Thank you. There is a follow-up question from the line of Ankit Kedia from PhillipCapital India Private Limited. In the presentation you have mentioned, you know, on the expansion in the industry, there are some innovative deal structuring happening with landlords, and they are increasing stock of Grade A malls in top seven cities. Are you expected to lose market share? Sorry, there is some background noise. Your question is not very clear. Sorry. I was saying in your presentation you mentioned there are some innovative deal structures with landlords, you know, for the industry and at the same time there is significant supply of Grade A malls in top seven cities. With these two, you know, your over-indexing to Tier 2, Tier 3 cities incrementally, are you expected to let go of these Grade A malls in top seven cities? At the same time, how is the deal structuring being done with the landlords currently by you guys and the industry? Okay. Firstly, Ankit, we are not looking to let go or not be present in Grade A malls, Tier 1 cities, metro cities. These are large markets. These are places where we have very high- brand equity, and these are places we would absolutely not just be present, but continue to grow. That's something I want to be absolutely clear. I think it needs to keep going back to we are where our customers are. Now, these are places our customers are, they are significant, and we will always be present. In terms of the deal structuring and what we have been looking at as we get into some of the newer cities, et cetera, we look for CapEx support from our from our landlords, and this is something which has helped us to go faster. Because that way our overall outflow gets optimized and that helps us to go faster in terms of our expansion. Sir, lately we have seen, you know, Reliance start Centro, you know, which used to be Central. How do you look at the competitive intensity from a department store perspective now? Given these last two years, you know, there were some tailwinds given that only Lifestyle and you were aggressive in the market. Now with Reliance coming in and, you know, could be signing more properties, how is that playing out in the market now? I think so far the number of stores of Centro that have opened are quite minimal. I think it's a bit early to comment about it. Even otherwise, we as a rule, as a practice, we don't comment about competition. What we would say is that when you have a larger critical mass in terms of number of retailers, number of players present together, it becomes a destination or becomes a larger destination for customers to come in, and that's what we would expect to see. Of course, also worth mentioning, I guess, the fact that even today the unorganized market is large compared to the size of the organized market. I think organized retail is still under 30%, and hence the headroom for growth is very significant all across. That will also mean that, you know, if there are more people eyeing the same property, the rentals will increase. Are you seeing that in the market now? I think competition has always been there. Demand for good property will always be there. To that extent, we've not seen a drastic movement per se. Sure. Thank you. Thank you. The next question is from the line of Parag Sheth from Quest Investment Advisors Private Limited. Please go ahead. Hi. Thanks for the opportunity. Sir, my question is on this distribution design that we are undertaking for Clarins and L'Oréal. You said it will be through subsidiary, and we will be using our own existing infrastructure, which is a part of the Shoppers Stop. Do Shoppers Stop will earn some kind of logistic margin or distribution margin from subsidiary? The distribution company will import the products. Correct. Shoppers Stop and other retailers also. For the consolidated Shoppers Stop, there will be an additional margin. That only a gross margin will be additional, but in standalone image houses, we will be able to. That will give some kind of operational leverage of our existing infrastructure. Is that fair understanding? Yes, absolutely right, Parag. Oh, thank you very much. All the best. Thank you. Thank you. Thank you. The next question is from the line of Gaurav Jogani from Axis Capital. Please go ahead. Just one question with regards to the receivables write-off of INR 5 crore during the quarter. This is used both in GAAP and non-GAAP, right? Yes. To that extent, our margins would be better if we adjust for these INR 5 crore, in that sense, because changes are one-off. Absolutely right, Gaurav. Yeah. Can you help us out with regards to when? This is the receivables we have written off in our digital business. We have the return timing between on the goods which has returned and then the customer account balance. That's the one where we have to write off. It's a one-time write-off we had this quarter. If I'm not wrong, couple of quarters back or the similar growth was there, right? Not just a single quarter, right? This was. Yes, you are right again. Yeah, that's right. Yeah. It's not regarding that, right? It's a different one. Absolutely different one. Yes. Okay. Okay, sir. Got it. Yeah. Thank you. Ladies and gentlemen, before we take the next question, a reminder to all the participants, anyone who wishes to ask a question may press star and one on their touch-tone phone. The next question is from the line of Devanshu Bansal from Emkay Global Financial Services. Please go ahead. Sir, thanks for taking my question. Sir, I just wanted to understand the consumption trends. We have delivered about 6% CAGR on a three-year basis, while other formats, footwear, jewelry, other luxury formats are also sort of delivering about 13% CAGR growth. Even this 6% CAGR growth that we have reported is a combination of about 8% growth in ASP. I presume there is some sort of impact on the footfall or maybe the conversion side. Can you help me understand what is leading to lower traction in the apparel space which is other categories? I think, I mean, when you say the last three years, I presume there is an impact of COVID as well, which has messed up a bit. The comparisons obviously may not necessarily be completely like for like because of the fact that, I mean, A, we are more heavily skewed into the metros and Tier 1s, where it had a larger impact during COVID. In terms of the other factor which also had an impact was the expansion or what didn't happen for the period 2015 to 2018. That definitely had an impact on our growth in the subsequent years. That is something as a part of our strategy, which we have corrected and is something which we're very aggressively on. Coming back to the categories and within apparel, since you specifically touched upon that, what I would like to highlight is that the two largest categories, men's apparel and western womenswear, these were the two categories which had the highest- growth that we have seen, not just in the last quarter, but a couple before that as well. The franchise for these large categories of ours is very strong, and that's something which we expect to continue to grow. Right. Can you sort of give us some break-up across regions? Is this growth of about 6% secular across regions or some of the regions are sort of lagging behind and some are sort of seeing higher- growth rates? Devanshu, I'm not sure about the 6% that you're referring to, where that comes from, so I'm not sure I would be able to. Topline CAGR on a three-year basis. What we can say is this quarter, the last quarter. Beyond that, I think again, and on the fact that ever since we've come out of COVID, 6-7 months now, we have seen significant growth every quarter, both essential and grocery. However, for the period, I mean, almost a year and a half after before that was the COVID impacted years. I think we can't, because that had multiple variables in there in terms of lockdowns, stores being shut, and so on and so forth. Hence the de-growth effectively that had happened during that period. Right. Yeah, sir, I just wanted to understand, as in the other categories have picked up relatively faster. Because of the pent-up demand, et cetera, or maybe the occasion wear declining before the festival. But the space where we are in has been a bit lagging behind versus the other categories. My question was from that perspective, so that pent-up element has still not been visible. Or do you see there are chances that wardrobe refreshes, et cetera, can possibly give us that sort of demand going ahead? I mean, pretty much from Q4 of last year and definitely since then, we are seeing very strong demand across all our major categories, across apparel, beauty, watches, sunglasses, bags. I mean, in all of them, we are seeing extremely strong demand. Consumer sentiment is strong and driven by the wardrobe reboot that started out post-COVID and then transitioned and expanded into an office reboot, as we would call it internally. Right. What consumer sentiment is, there is premiumization that is happening also weddings, occasions, and that's again driving demand up. Actually also, as we enter into this, I mean, when we enter is not the right word. We are right in the middle of the festive season. This is the first Diwali after two years, where people are able to come out and celebrate freely, mingle freely, meet up with friends and family and all of that is driving demand. Got it, sir. Thank you so much. Thank you. Ladies and gentlemen, this would be the last question for today, which is from the line of Shivaji Mehta, an individual investor. Please go ahead. Hi, thank you for the opportunity. Sir, I had two questions regarding the value fashion that you just briefly spoken about. Number one, the entry to value fashion will this be organic or could that be through acquisition? Number two, would you look at first stabilizing the beauty and the private label segment first before really entering into value fashion or can that happen in parallel also? That's all from my side. Shivaji, if I can just clarify myself, what I had said was that value fashion is a large market, and it is something that we would evaluate. We are not entering into value fashion at this point, or that's not, I mean, I have not indicated that at any point. That pretty much I think negates or makes the second question redundant. Right, sir. Thank you. Thank you. That's all from my side. Thank you. As that was the last question for today, with that, we conclude today's Conference Call. On behalf of Shoppers Stop Limited, I conclude this conference. Thank you for joining us, and you may now disconnect your line. Thank you, and I wish everybody a very happy Diwali.