Ladies and gentlemen, good day, and welcome to the Q1 FY 2024 earnings 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 from Perfect Relations. Thank you, and over to you, ma'am. Thank you, Sejal. Good morning, and thank you all for joining us on the Shoppers Stop Quarter 1 FY 2025 earnings conference call. Today, we have with us the senior management represented by Mr. Kavindra Mishra, Customer Care Associate, Managing Director and CEO, Mr. Karunakaran Mohanasundaram, Customer Care Associate, Chief Financial Officer. 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 risks that the company faces. Please restrict your questions to the quarter performance and to strategic questions only. Housekeeping questions can be dealt with separately with the IR team. I will now request Mr. Kavindra Mishra for the opening remarks. Thank you, and over to you, sir. Thank you, Mamta. Good morning, everyone, and welcome to the conference call of Shoppers Stop Limited. This morning, we will cover the results of June quarter for the financial year FY 2025. On the call with me is Karunakaran, our CFO, our FP&A lead, Jayaprakash, and our investor relations lead, Rohit. We will start with prepared remarks wherein we will cover an overview of our performance in detail. I will also cover the performance of our KPIs, our strategic pillars, and in the end, our future broad outlook. We expect this to take around 15 minutes before we open up for the Q&A session. I'm sure you would have read the investor presentation, which is available in our website, and it has been sent to both the stock exchanges. Let me first start with an overview of the opening context for this quarter. Demand remains subdued due to several reasons, such as fewer wedding dates, long election season, and a strong heat wave. This was coupled with high levels of cumulative inflation. Make us say this influenced our growth and volume recovery remained negative, except in value fashion and beauty. Given this context, I would say that our sales growth has been muted. Our EBITDA margins declined due to our new stores, wherein it will take some time to turn into profitability. Let me cover some of the highlights of our performance. Our customer entries largely remained flat during the quarter. Our private brand business has improved full price and through to FY 2024 range, an effective pricing strategy which has resulted in lower discounts. On the same subject, our inventory in private brand is lower by INR 65 crore against the same period last year. We have taken a conscious call to have right and fresh merchandise for the festive. This will boost our sales during the festive season. I have been speaking to you about our key search areas for Shoppers Stop in the last few earnings call, which is our premiumization drive. A lot of what we have already been doing and that has strengthened our business and we will continue to build on it. Given the context of increasing affluence in under-indexed premiumization, we have a huge opportunity to build categories of the future. We are doing this through persuasive communication, partnering with premium and digital luxury brands, innovating in new demand spaces and formats for the future, and educating customers at a scale. The results are evident. Our premium plus product portfolio grew by 10% on a like-for-like basis and overall growth of 14% for this quarter. Our Beauty and INTUNE vertical remained EBITDA positive during this quarter. Our store openings are on track, with 11 stores opened during the Quarter 1. As I said before, our strategies are giving us desired results, and we just need the external market to be favorable to deliver the margins and the overall recovery. Be that as it may, we are working on it to recover the profits and have respective return on capital employed. I will discuss this at the end. Meanwhile, I will start with the KPIs, strategic pillar performances, and discuss the future outlook, both short term and long term. Here are the snippets on our KPIs. We delivered Q1 sales of INR 1,260 crores with 2% growth. If I have to analyze month-wise performance in April and May, while our sales declined by 1% and 2% respectively, in June, we grew by 7%. Performance in June was also positively impacted by advancement of EOSS by a few days. Women's wear, women's western wear, beauty and INTUNE categories outperformed. During the quarter, our gross margins are largely flat versus FY 2024. While private brand trading margins were higher by a percentage point, it was offset by the mix. On some of the other KPIs, such as I just spoke about premiumization and K- shaped recovery. Due to this, our ATV grew by 5% and ASP grew by 3%. This is something which we have been seeing quarter-on-quarter consistently now. The great news is that our items per transaction also grew by a healthy 2%, and that's a very, very favorable point of view. Our EBITDA was impacted by the slowness, with costs are largely fixed, such as rent, staff and energy costs at the store and other fixed costs. Consequently, our EBITDA declined against last year. During the quarter, we opened two department stores and seven in-tune stores. From operations, I will now move to the performance of our strategic pillars. First Citizen. Our engagement with our loyal customers remains solid, as it's always been. Our loyal members' contribution to sales remained at 80%, with marginal increase in repeat purchases. I'm extremely happy to say that our First Citizen member now has crossed an important milestone of 10 million during this quarter. Our premium Black Card customers contributed 14% of our sales, with a 5% growth. There were several events such as AI-based and persona-based personalized videos, personality quizzes, loyalty plus schemes, which has driven engagement and resulted in additional revenue. Now, let me talk about private brands and INTUNE. First, about the private brands. The slowness which has impacted private brands is particularly on men's and women's wear category. The private brand growth has to be read in the context of, first, we had discontinued some of our exclusive brands, which are contributing 1.1% of our total revenue, as these are making lower margins, besides not fitting in the redefinition of positioning, which we are currently doing. Our improved offerings and competitive pricing helped us to achieve higher trading margins. We are launching Autumn/Winter 2024 season in August. This will ensure 70% full fresh stock and should surely drive revenue and margins growth. We are also implementing a new merchandise planning system called Goldratt from this month end, which will help us to improve the inventory turnover, besides obviously, improving customer availability. As I said, our operational focus is to improve margins and reduce and optimize the inventory. We have been successfully increasing our trading margins and expect to increase this in the next few quarters. From private brands, I'll move to In tune. I'm extremely happy to inform that we opened nine stores during the quarter, taking the total stores to 31. More importantly, even at current scale, the In tune business has achieved all the requisite KPIs. Our customer conversion is at 33% even during this period, wherein our peers were at end of season sale with large offers, which symbolizes the strength of our business. Our IPT remains strong at 3.8 items per bill. Incidentally, we are selling at full pricing even now. Our sales per square feet are at INR 11,000, with several stores also opened in high streets. Our full price sell-through is by 80% year-over-year, which indicates the strength of the brand and the product we offer to our consumers. Our margin delivery is higher than expectation. At the store level, our In tune business continues to remain positive and higher than our internal budgets. We have also entered the northern markets with two new stores in NCR region. The store expansion is on track. With the success in the last one year, we are planning to escalate our store expansion. Originally, we had planned to open close to around 60+ stores in the current year, but we'll be increasing that guidance to 75+ stores this fiscal. During the quarter, subject to regulatory approval, we should open 20+ stores. Beauty. We are the largest offline beauty departmental store format in India, with a history of creating categories and brands across color cosmetics, fragrance, and skincare, making us a distinct number one in these segments. Fragrance continue to outperform with 19% growth over last year. During the quarter, we also added Tom Ford and Kate Spade in our fragrance portfolio. In our journey of sustaining number one premium beauty company in departmental stores, we opened state-of-the-art large beauty store in Quest Mall, transforming our beauty business. Our beauty business has been and continues to build through experiences. On the tactical initiatives akin to previous quarter, our customer engagement and education reached to 239,000 makeovers continued. We also launched four SIS for MAC stores during the quarter. Our 100% subsidiary, Global SS Beauty Brands Limited, delivered INR 39 crore sales with a growth of 2.5x. On our beauty distribution, we expanded 27 brands with eight fragrance brands. We had a mega launch on Giorgio Armani, near Gateway of India, Mumbai, this month. Our distribution network increased to 444 points of sale. This business continues to be EBITDA positive and encourages us to expand further. We are planning to add three prestige brands during Quarter 2. With the upcoming launches and festive season, we should be able to achieve INR 200+ crore of sales during this fiscal. Omnichannel. Our omnichannel sales largely remained flat. We've been delivering omnichannel brand experience with messaging campaigns across 12+ channels, including push, email, in-app, SMS, WhatsApp, and others. We have curated our content personalization with fine-tuned message content and delivery time for individual users based on their behavior. We have improved campaign performance with our best-in-class tools for incredible engagement. We are also elevating our consumer experience to an upgraded version of our shoppersstop.com mobile app by end of Quarter 2. HomeStop. We are in the process of revamping a few standalone stores, including our largest store in Malad. Our shop-in-shop stores registered a healthy double-digit like-for-like growth, with significantly higher than budget. We also had a strong SPSM growth of 65% in our HomeStop business. Our way forward would be to focus on private brands and aim to increase the contribution from 27% to 30%. Now, let me talk about the department stores and national brands. I've been discussing about premiumization in our department stores. We'll be launching the autumn winter session season ahead of time, with a target of around 60% freshness by July end. Specifically, on the premiumization, we have launched True Religion and also planning to extend Beverly Hills Polo Club, Dockers, and, and other premium brands. In women's category, there is a slew of brand launches which are planned, which includes Tommy Hilfiger, Calvin Klein, Mac Duggal, aarke, Saundh, Ritu Kumar, and Indya Luxe. On the watches category, we are launching Aigner, and in sunglasses, Gucci, Prada, Montblanc. Our new brand launch would be Raymond Loungewear, Iconic, Elle, RSVP, Autumn Lane, Juniper, and Arrow New York. Needless to say, there are these are very fantastic brands, and they will be working with us very, very closely. We did a pilot of sunglasses luxe concept in five stores, and we are adding five more stores with encouraging results. This is something which is we are really banking upon to drive premiumization in our stores. We recently opened Starbucks in our Kanpur store, and we are witnessing a significant amount of business contribution from these customers. Based on this experience, we are adding more coffee shops in many standalone stores in the next one year. In our quest to elevate our customer experience, we have recently increased our personal shoppers from 300 to 400 and will increase it further. Our personal shoppers enhance our customer experience and thereby increase the ATV, of which is normally three times of our normal customer ASP. On the investment, we have been renovating our flagship store at Malad with the help of renowned global design firm and investments of nearly INR 20 crore. Our new Malad store will be lean with lesser space, but far better curated brands and a delightful consumer experience. We should be able to open the Malad store before Diwali. Now let me talk about CapEx, working capital, and cash flow. We have been discussing about the capital allocation in the last four quarters. Akin to previous quarters, I reiterated that our capital allocation would be higher, wherein we have higher ROCE and shorter payback period. We had earlier said that we would open 15 departmental stores. Due to issues in certain markets and regulatory delays and financial issues of local builders at Tier 2 cities, we expect delays in some of the departmental stores. At this point, I would say this may impact 3-4 stores, and we should be able to open 11 departmental stores this year. However, in June, we have a complete visibility, and we should be able to open 75 stores during the quarter. We expect to open during the year. We expect to open 20+ stores during the quarter. Overall, we expect to spend INR 225- INR 250 crores in CapEx, including shifting to a new warehouse in Bhiwandi. On the working capital, with increased focus on reducing our private brand inventory, our overall working capital has reduced by INR 20 crores. Now, let me end this meeting with some bit on the outlook. We have strong strategies in place, and I am seeing green shoots of marginal recovery in this quarter and, more importantly, during the festive season. We are reasonably optimistic about our wedding segment in June, beauty vertical, and our recently started beauty distribution. Our expansion plans remain intact. I've already discussed about accelerating our INTUNE store expansion. Due to regulatory and other issues, we may have to defer a few store openings for department stores this fiscal. We are exploring further collaborations and tie-ups with beauty and apparel brands, particularly premium brands, and they will continue in FY 2025. We strongly believe that the festive season should have decent growth, aided by monsoon and strong GDP growth. On the cost and capital spend, the outlook is as follows: First, rationalize costs in line with the business, particularly in unproductive stores and a few verticals. Optimize inventory at our private label. We have already reduced INR 65 crore versus last year, and we continue to keep on optimizing this further in line with the business. We are also committed to give the right consumer experience to our customers, which means that we continue to churn brands and add stores to improve the GMROI. While Q2 would be better than Q1, I am confident our H2, with large festive season and increased weddings, approximately 50 dates versus 14 in H1, should give us higher productivity and take us back to where we belong to. With this optimism, we expect near-term demand to recover gradually. We remain very confident of mid to long-term opportunity in Indian retail. India's booming economy, expanding affluent population, accelerating digital transformation, coupled with under-indexed premium spend with power premiumization and many more, would be the recipe for the stronger than the off growth. With our distinctive capabilities and our strategic test of transform to our perform for, of- s orry, with our distinctive capabilities and our strategic test of transform to outperform, we are confident of delivering higher growth and margin. With this, I conclude my remarks, and we will take Q&A from the participants. I am also pleased to share that I have with me Biju Kassim, who is the CEO of our beauty business, and Devang, who is Head of Business for INTUNE, to answer any queries, specific queries on the business, on these two businesses as well. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Participants are requested to limit their questions to one per participant. Time permitting, you may return to the queue for your follow-up question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Agrawal from Ikigai Asset Management. Please go ahead. Yeah, thank you so much for the opportunity. Good morning. I just had two questions. Firstly, you know, we all hope for recovery into consumer demand, lot of hiccups which have happened over the last four or five years, I think, now for retail industry. As we look with optimism, I just wanted to understand, given what you had mentioned on the square footage addition and the FCG recovery, would next two year look like 15% plus on control top line? That's one question. And secondly, on the cash flow. So as I understand, I think, your store expansion plan looks pretty strong, and as you mentioned, it will spend about INR 200-INR 225 crore on CapEx, all inclusive, including the warehouse. I just wanted to understand the funding for this in terms of, will this be 100% internal funding, or are you seeing some cash flow mismatches right now? And if you could elaborate more on fiscal 2025 and 2026 work, it will be really helpful. Thank you so much. Hey, hey, thanks a lot. Let me answer the second question. Yeah, we do, with the softness what we have seen in Q1, we may have to borrow probably INR 100 crore during the year. We don't expect to borrow anything more than that. And for next two years, with the CapEx more or less remaining at the same level, and we do expect the business to improve, I don't think we will be borrowing. So this INR 100 crore would be probably a one-time borrowing in this fiscal. On the first question, so I think the next store, if you're, if you're looking at the way we are expanding and the kind of investments we are making in this business, over the next two years, I think overall business, when you look at Shoppers Stop, including the INTUNE business, the beauty business, the beauty distribution, and the box itself, I think we should be in a double-digit growth over the next two years. That's the number we are looking at. The square footage coming through itself is like almost like upwards of 14%, 15%, right? So the growth will be higher. Obviously, they'll come over 12 months, so you can take an average number, but I would imagine, given the strength of store openings itself, that number should be 15%+. Is that a wrong understanding? I don't think it will be such a high number because, one INTUNE will be 5,000 sq ft -5,500 sq ft. And the large departmental stores, we are now opening between 25,000 sq ft -30,000 sq ft. On the back of the back-of-the-envelope calculation, it comes anywhere between 8%-9%, not more than that, the space addition. Secondly, it doesn't happen uniform, or it doesn't happen on the first day of the year. It happens throughout the year. And what we have seen is, most of the store openings happen during the first Q4. And, internally, we are also evaluating, to rationalize the store size, and a few more things. So yeah, probably, we don't expect such a large increase because of the additional space, Rahul. Got it. That, that answers my question. I'll come back in the queue. All the best. Thank you. Thanks, Rahul. Thank you. The next question is from the line of Ankit Kedia from PhillipCapital. Please go ahead. So my first question is on INTUNE. What is giving us confidence on the ground that we are, you know, accelerating our store opening from 60 to 75 to 80 in INTUNE? Can you share, you know, now it's been one year for the product launch, how are the first six, eight stores response been? Because at the blended level, if you're seeing INR 11,000, two quarters back, we were speaking of INR 14,000, 15,000 SPSM. Last quarter, it was INR 12,000. This quarter, it's INR 11,000. So that number is on a declining trajectory. But the initial eight, ten stores, how is the margins and, you know, between metros, non-metros, malls, and high street, how is that response coming, and how is the customer acceptance of the product? Because it's becoming hyper competition in value retail now. Thank you, Ankit. Good morning. To answer your question, right, I mean, first of all, with the kind of expansion that we have, the blended numbers will not give you the full story. The six stores which have seen the Quarter 3 now, their SPSF in Q1 of FY 2021 was upwards of 14,000. We are holding on to the SPSF in the buckets from the last three quarters to now. That's the first question that I'd like to answer. Second question is what Kavi mentioned in his opening address. About 40% of our stores right now are high street stores, which are within the first three months of their operation. So there is a discussion period of walk-ins growing in our new brand high street stores. Right? Yeah. The last point in terms of customer acceptance, in terms of our product, I think we have a very, very high delivery on that KPI. I think, Kavi mentioned, no, in the presentation, it was mentioned that we had 75% plus full price sell-through. I'm happy to share that from the day that presentation was made to now, our full price sell-through is north of 80%. In fact, it's reached the point where I don't have enough stocks on discount. So I think, the product acceptance in this hyper-competitive environment is very, very strong. Also, what I've seen is now that a lot of my stores are in the Quarter 3 of existence, you know, we've started tracking repeat customer behavior and seeing a very, very healthy repeat, to a point where one out of every five customers is shopping more than once within a quarter. So I think when we just club the product performance and the customer metrics... The customer acceptance seems to be increasing quarter on quarter, and when you see the older stores' performance, the high SPSM delivery seems to continue. So I think I wouldn't read too much into the 14, 12, and 11. I think we will, as the stores age, we will come back to the same level, at the blended level also. Devang, how are the margins for these older stores? Are you seeing at the store level, are they near double-digit margin, these stores? You are referring to EBITDA margins, I'm guessing? Yes. Yes, yes, they are. They are. Yeah, close to that, close to that, I'll get, yeah. Sure. Coming to second question is, you know, regarding your omni strategy. Now, three years back, we had spent, you know, more than INR 100 crore on the omni channel, and that was one of the strong pillars of growth. Last year, we didn't speak of omni and the customer experience as a customer. It's not great versus competition. Now, again, next quarter, we are gonna spend money on relaunching our app and website, and SS Beauty Online was just launched last year, right? So what is the CapEx plan for omni, and how much is coming in OpEx? Do you think there's a right to win for Shoppers Stop in, you know, having omni channels, marketplace, what we have of all the brands together, and is there a cut out of, you know, some OpEx part, for this part of the business? No. So I think, Ankit, great question. See, our stated intention is to be a premium omni-channel player. And, as you rightly mentioned, we had some gaps in the consumer experience, and so that's the reason why over the last 12 months or so, we have been working on the new app version for ss.com. The new SSB is built on the same platform, and the ss.com is coming on the same platform as on 30th September. If anything, it will ensure that two things will happen. One, from the consumer's end, the experiences will actually be far, far better in terms of search, searching the merchandise queries. I think it will be at the top end, number one. Number two, what it will- h ow it will also help us is that because once both SSB and ss.com are on the same platform, the costs actually will start shrinking on this piece from next year onwards. So Ankit, to be honest, essentially right now, that the two platforms are on a different basis. We will be merging the platforms on September end, and we will start seeing the benefits going forward. So I think it's a win-win because it takes care of the costs, it rationalizes the costs, but more importantly, the customer experience becomes better. In fact, with ss dot com, the new version which we are seeing, we will be also able to target things like same-day delivery, some things which will be very, very powerful for us as we drive the omni-channel experience. Sure. Thank you so much, Kavi. I'll come back in the queue for more questions. Sure. Thanks. Thanks, Ankit. Thank you. The next question is from the line of Sameer Gupta from India Infoline. Please go ahead. Thanks. Good morning, everyone, and thanks for taking my question. So firstly, I see your expenses see a sharp jump this quarter. It's up 21%. Now, I understand that you're opening new stores, but usually this line has been, you have exhibited quite a strong cost control here. So just wanted your thoughts, is this front-ending of some costs, or is it going to stay at this level? And in that context, how do we see the EBITDA margin for this year panning out? So Quarter 1 is around 1%. You usually guide towards a mid-single digit, around 5%. Is that doable given this performance? Your thoughts on that, sir. Okay, thanks for the question, Sameer. I'm, I'm not sure when you say that the cost increased. If you, we have also attached the non-GAAP income statement. The overall cost increase is 10%, out of which the like-for-likes is between 2%-3%. The cost increases have happened primarily because of new stores and new businesses, what we have established during the quarter, not, which is not comparable to the last quarter. If you want, we can take it offline, and then we can discuss about the cost. But all I can assure you, it's not more than 10%, which is last year. That's one. Second, on the EBITDA margins, normally we don't give a guidance. Yeah, but with what has happened in Quarter 1, we expect a mid-single digit for the full year. And, and Sameer, I think one of the big things, and, Ankit kind of referred it in his previous query, we continue to invest on tech. We continue to invest in, on ensuring. In fact, we have also taken a big bet on how to strengthen our security systems and all. So I think you will see some investments there, but I don't. While they might be recorded as expenses, they are investments to ensure that the business remains strong and profitable. So I think that's the journey we are in right now. We will definitely see some improvement in tech costs next year over this year's base, once we rationalize the platforms on which we have our omni plan working on right now. Got it, sir. I'll take it offline, probably the cost question. Sure. Second was a more general kind of a question. So department stores, specifically, if any broad trend that you can share now, is it some particular brands, third party or your own, which are facing an issue? Is it mall versus high street? In general, we are seeing, you know, most of the brands opening EBOs in malls. Is there, you know, consumers are moving in that direction. So any broad trend that you can share here as to, you know, the future of department stores? Well, I think great question again, Sameer, and it's actually this question, this discussion and debate can take actually hours and hours, but I think fundamentally two, three things I wanted to share. We have got very strong partnership with our brands, and we see a lot of consumption of the brands by their consumers. That's one. We clearly mentioned that one of the big trends globally, and I think in India also that's very relevant going forward, is that premium and premiumization is a very, very important thing. Even in a very tough quarter when we shared our revenue growth, our premium plus portfolio actually grew by 10% like for like. So what we are saying is that we need to sharpen our product offering. We continuously engage with our partner brands to ensure that what you see in Shoppers is not what you see everywhere. There will also be a lot of consumers who prefer to shop in EBOs, but there are far, far more who want to engage with a departmental store because they come to us for the convenience and for the house of brands possibility. That's one. Secondly, from the brand perspective, for a lot of brands, the profitability in this channel is higher than you know their own EBOs. So I think there are a couple of angles. There's a customer angle, where we need to continuously upgrade and ensure that the kind of merchandise which we offer is differentiated, number one. But there's also a business angle, where the partners, the partner brands also feel that the kind of walk-ins which we are able to draw to our stores, and the kind of experience which we are able to give through things like use of technology or through use of personal shoppers, I think it's a very, very strong thing which we have. I think we had a soft quarter generally, and I speak to people across the board. So if we look at the numbers across the board for the brands, whether it is for their own EDOs or for... I don't want to talk about that a lot, but fundamentally, I think we have done fairly well vis-à-vis brand channels across the board. Just a follow-up here. Can you share the like-for-like number, the overall for the department stores? I think I might have missed it. For us, it is for the Quarter 1 is -6. April and May were fairly negative. I think June we saw a recovery, and we became positive. Got it, sir. That's all from me. I'll come back in the queue for any follow-ups. Thank you. Yeah, thanks. Thank you. The next question is from the line of Gaurav Jogani from Axis Capital. Please go ahead. Yeah, thank you for the opportunity, sir. So my first question is with regards to the store opening guidance that you have given, that you have said, you know, that there might be only 11 departmental stores that we might open. So two parts to this. One, is it a net number or is it a gross number? Because you also alluded to some closure of some unviable stores. And the spillover that you're talking about for the next year, the 3-4 spillover, so would that mean in the next year, can we open 20 departmental stores in that case? Okay. So, Gaurav, thanks for the question. First part is the number which you have said, 11, is a gross number. It's not a net number. As a good business practice, and I think in these times when the customer journey and the customer demand is always something, we have all been seeing how things have been in the past years. We have to be very, very conscious of the stores and what we have. So we are looking at close to 5-6 stores to rationalize, and that's the present sense I have got. The numbers which I spoke to you about are the gross numbers, the 11 store openings. Sir, the spillover number, you know, because you mentioned that then there might be some spillover to the next year. So that 3-4 spillover, and then 15 number from next year, is that intact, or that will also kind of get changed going ahead? I think broadly that number will be there, but again, that will be a gross number. Okay. Okay, got it. Yeah. So my next question is with regards to, again, the cost line item. I mean, you know, I do realize that, you know, on a YOY basis, there has to be some inflation that cost increases, and given the store openings that you're having. But even if we look at it on a quarter-on-quarter basis, there is a sharp jump in the other expenses line item. So the question really is, one, the cost that we have seen during the quarter, are they sustainable at the same levels, or there might be some rationalization in this because of the efforts that you have talked about, like closing of the unviable stores and other strategies? Yes, there will be some rationalization. We are working on right now. Probably when we come and speak to you next quarter, we should be able to give a lot more details, what are the costs and how we are going to rationalize, Gaurav. But, but Kavi, I mean, the number, you know, at least the reported number of the, the stock exchanges that you gave, that is around, you know, INR 177 crore for the quarter that we see. So is it fair to expect, you know, the numbers to be in line with this, or there might be some, we can expect some moderation in that? There will be some moderation on this, Gaurav. We are working on this right now. There will be definitely some moderation. Okay. Thank you for this. That's all from me. Thank you. The next question is from the line of Chintan Shah from JM Financial. Please go ahead. Hi. Thank you so much for the opportunity. So two questions. The first is, I wanted to get a better sense on the EBITDA margins. So right now, if I see there are a lot of initiatives happening in terms of beauty, INTUNE, renovations, and store closures, et cetera. So if you can broadly indicate on, I don't know, departmental level, what sort of EBITDA margins would be making? That is one. And secondly, from a, from an outlook perspective, is it fair to say that the broadly store closures, the renovations, and lot of major expansions should be completed in FY 2025, and then when we enter FY 2026, we should see much better traction in terms of profitability? So that's my first question. Chintan, thanks for the question. Yes, so, I think as we mentioned, we are looking at a mid-single digit EBITDA for the year. There are a lot of initiatives which we are looking at in terms of rationalization wherever required, and the steps to take. So we spoke about, in certain cases, store closures. We have also seen in the past that whenever we rationalize the spaces for our larger stores and make them sharper and fitter, they tend to throw out a better EBITDA, so that particular piece is also happening as we speak. We believe that this. And obviously we are looking at all cost items. It's good always to have a tight control on cost. We believe that the margin should improve in FY 2026. Also, we see that the play of private brands, whatever we wanted to do in terms of putting the positioning strategy in place, putting the structure in place, I think that we are at the end of that cycle now. That should start showing in better margins from Q3 onwards. All right. Understood. So just to be clear, so when you say mid-single digit EBITDA margin, so is it fair to say that standalone departmental stores will be much higher, since a lot of this initiatives would be very low in terms of profitability? And for this quarter, per se, if you can give some indication how those margins would look like. See, Chintan, you are spot on. The department stores, I believe, will have a higher margin, because INTUNE is a new business. We have opened number of new stores, so expecting those stores to remain to achieve the same level of margins would be difficult. At this point, there are common costs, and I - we don't want to dwell into details, like what would be the department margin and what would be the INTUNE margins. But yeah, to answer your question, the department margin would be higher than other verticals. Okay, got it. Understood. And my last question is on the beauty side. So if I see the other retailer, probably the leaders in the industry, they have been able to report a consistent growth quarter on quarter of 20% plus. And we look at, as I mean, including, even including the distribution, we have been, you know, in single digits, probably. So just wanted to get your thoughts, basically, what is happening here, and in the future, how do you intend to grow this business, and what are the steps you're taking to drive this growth? We lost you. Sorry, we lost you in the first half a minute. Can you please repeat the question? Yeah, I'll just repeat, I'll just repeat my question. The question is on the beauty segment. So if we see the market leader here, they have been growing consistently, 20% plus, quarter-on-quarter. And when we look at our performance for last few quarters, including the distribution as well, it's been single digits. So what I want to understand basically, one, what is the reason for this? And second, basically, what steps are we taking to improve the growth profile, and what is the outlook on this? Biju, you would like to take the question? Yeah. Yeah, sure, sure. Yeah, thank you for the question. So from the point of view of what we do and what we have been doing well, we have been operating fairly well on the premium space. So the growth, if I look at it across segments, you have the premium, and then you have the prestige and the mass. I would reckon that mass and prestige is obviously growing much faster because that's a lot of recruitment category. So in our case, while we also have a prestige representation, our current mix is largely on the prestige space, and prestige is probably growing at a lesser rate than the prestige and the mass, and hence, is reflective of what our growths are. Second part of the question, in terms of way forward, we have actually set up beautiful and amazing stores with the most compelling brand mix. In the philosophy of what we think is working well for shoppers, the premiumization journey, we would really have the education, expression, and engagement path that will hopefully bring in better growth prospects in the year and going forward. So we are actually building up a strong base to be able to really give the best of the expression and engagement and experience to the customers, largely on the prestige part of it, which is what we are heavily focused at this point. Okay. So I understood, but still some guidance in terms of growth. Basically, how do we kind of say from a retail perspective, not just here or something. So, to complement this, we have put it out in the public domain. We are currently working on prestige brand, which is actually where volumes come in. This quarter and beyond, we will have prestige brands that will largely accelerate the existing pace of growth to have a blended growth of which will actually be at par or around the competition in the next few quarters. So, Chintan- Okay. Just to add on what Biju has said, I think for beauty, we are looking at a 12%-15% growth as a base for this year. That is the number or that's the guidance we are looking at. Okay. Sure, that's helpful. I'll get back on with you. Thank you so much for answering the question. Thank you. Thank you. The next question is from the line of Shalini Gupta from East India Securities. Please go ahead. Okay, thank you for giving me the opportunity. So I wanted to check, can you hear me? Yes, ma'am, we can hear you. Hello? Yes. Yeah, Shalini, we can hear you. Go ahead. Yeah. So I wanted to check, was the discounting in the quarter higher, higher than what it was in the previous quarter, that is Quarter 4? Because, because your, gross margins have come off Q- over- Q. Okay. Shalini, we have explained in the past, the GAAP gross margin is a function of two things. One, what is our SOR sales? Because if the SOR sales are higher, the contribution is added to the margin, and to that extent, the margin is always higher. And precisely for this reason, we always request all the investors and analysts to see the non-GAAP margin, which is the true reflection of our margins. So if you see the non-GAAP margins, it's more or less flat with the Q4. So I don't think there is any reduction in margins with the Q4. Okay. And, sir, so a lot of people have asked questions on the other expenses. So I just wanted to check, the other expenses are mainly rent, is that right? No. I mean, there are multiple heads in the expenses, Shalini. Like, one is rent. Of course, we have electricity cost, we have marketing cost, we have admin operating cost, and we have the service office cost, which is also there, where all of us are working here. So there are 5 or 6 line items. The highest cost what we have witnessed is on the rental cost, which is around about, the increase is around about 14%. So we spoke about the investments in tech, particularly in cybersecurity, and we are also moving from on-premises to cloud. So whenever we move from on-premises to cloud, the tech expenses are bound to increase because we don't invest anything on the CapEx. So these are the two large reasons for the increase of expenses by 10%. Okay. Those were my questions. Sorry, one last question. In the presentation or in the write-up, press release, you mentioned that growth has disappointed. One of the reasons you've said is because of elections. Now, I just wanted to understand why would elections impact a B2C business like yours? Shalini, thank you for that question. Let me take this. I mean, fundamentally, when the elections happen, obviously, and, and if you would have seen, lot of elections happen on the dates are over the weekend, so that obviously that day, that particular market gets shut. Store opening, so for example, a lot of cases are open only in the evening, and if you are doing your Friday, Saturday, Sunday, I mean, we did that math, and that's how May was worse than April. Elections also, what they do is, if there is a particular rally or something near, in the vicinity of the store, the store operation gets tends to get affected. In fact, it's a good point because see, when we looked at the last two elections, and when we're looking at analyzing the data, during the election time, the quarters, the numbers actually were slightly positive. So we were quite hopeful with, with the slew of things which we are doing, we should have seen a bumper. This has come as a surprise to us as well, but when we went deep dive into it, I think a longer election period, lot of the election dates happening over the weekend, on Friday, Saturday, Sunday, a lot of dates happening, the stores being forcibly shut for whatever reason, obviously for the right reason. I think this all disrupts store operations. Okay, sir, thank you. That's all from my side. Thank you. The next question is from the line of Jay Gandhi from HDFC Securities. Please go ahead. Yeah, hi. Thank you for the opportunity. Just among the EBITDA margin guiding the mid-single digits. I'm just trying to reconcile this. How do we achieve this? Because, let me try to paint a picture. Beauty distribution is a low margin, relatively low margin business. INTUNE, I think for 2025 is going to be a relatively low margin business compared to the core. And the core itself is actually, likely to, you know, just about recover, especially in the second half. So how, how do we get to mid-single digits? Because the core itself is effectively, by and large, a cost-plus model, right? So- Hi, Jay. That's the question number one. Thanks for your question, Jay. Two things. Yeah. One, and I think I will likely talk about the revenue part more, because I think that's important. All, all margin improvements, primarily in a business like ours, should come through, and, and for the business as a whole, should come through the demand, you know, rebound in the demand. So I think that's something which we are banking on very strongly. We are looking at a very strong festive campaign. We have talked about last year about weddings, and I think that's something which we'll go after in a very, very big way. I mentioned somewhere that there are around 50 odd dates of weddings this year, in second half, and we believe that we've got a right to win with the kind of merchandise. We want to be the wedding destination. So I think that's something which we are looking at and driving. So that's one. We see a strong demand recovery in H2. That's one point. Second, obviously, there are certain steps which we have to take from the cost side to ensure that we are fit and, you know, fine, and we are a bit sharp in terms of how we are executing. So I think these two, one in terms of growth, in terms of using the festive and the marriage season to drive revenue, I think that's one part of it. And obviously, we can take it offline and have a larger discussion around it. And second, we have to work on the cost part of it. We are fairly confident about the mid single digit number which you are mentioning right now Okay, fair. Also the second one, second question I had was on the working capital needs for INTUNE. Now, I'm presuming it's a faster moving format, right? Because it's affordable category. So now, if I was looking at, you know, the Q1 inventory days, it has actually worsened to about 140, 143 days as a percentage of GAAP sales, right? Or, you know, in terms of days. Now, I'm presuming that, you know, INTUNE would have contributed meaningfully higher versus what it was in the base quarter. Even beauty distribution would have probably contributed higher versus the base quarter. So we should have ideally seen a decline in working capital inventory days, right? Jay, if you have referred to our non-GAAP balance sheet, we always give inventory, which is outright purchase, and it's our inventory. Yes. If you have to further segregate that, on our private brand, which Kavi spoke about, there is a reduction of INR 56 crore business last year. The only place where the inventory has increased marginally is on beauty, where we purchased during the last week of June for about INR 25-INR 30 crore, and which we will get liquidated in this quarter. So overall, yeah, we got your point. With the expansion of Intune, there will be a marginal increase in working capital. But at the same time, in our larger private brand business, we are working on to reduce the inventory, and so that will net the inventory should reduce, and the working capital reduction should be more or less in the same with what we have seen in the Quarter 1, Jay. That's for sure. And the last question again was, you know, on Intune's expansion plans. You know, looking at- right, so, again, this format necessitates a cluster-based expansion, right, I'm presuming. So, are we well equipped to do NCR while we are doing AP Telanganas, or, other geographies? Are we necessarily equipped from a supply chain perspective? Thank you, Jay, for the question. You are absolutely right. We are also following a cluster-based expansion process. I think, as this financial year progresses, and if you check the presence of Intune stores, you will find a presence of strong clusters, be it in north, east or north, west or south. To your question on whether we are equipped to handle national logistics, we are. We are very heavily leveraging on the routes of Shoppers Stop as a company, you know, where be it supply chain, be it a vendor base, be it any kind of a logistical support stemming from having an operational shop of Shoppers Stop in the vicinity. It all of it helps. So I think INTUNE is benefiting greatly from that, and I think from that point of view, no part of the country is out of reach from a logistical standpoint. I'm done. Sorry. Thank you. The last question is from the line of Ankit Kedia from Phillip Capital. Please go ahead. Thank you for an opportunity again. Kavi, if I see the Black Card customer base, the contribution has increased to 14% of revenue. Now, ideally, a customer is paying INR 5,000 for a Black Card, and on INR 75,000 of shopping, pretty much he's in the money. Do you think, with this increasing traction, margins will compress for us on the Black Card customer as the base is increasing? So I, Ankit, I don't think that is the case. In fact, the Black Card customer actually. And we have this persona where we do the clustering and the profitability of each of the personas which we have, right? So a Black Card customer, when he comes to the store, his average spend is around INR 55,000-INR 70,000, against a normal INR 5,500 for every visit. So I think we, the base is very, this base is a very strong and profitable base for us, Ankit. I didn't understand from where, where we, where you pick this point that the Black Card acquisition is a value-less acquisition. In fact, the repeats are higher and the cost of acquiring this Black Card customer, because we also have a high repeat rate of the customer in terms of renewal. I think it's a key to our business strategy to drive repeats and loyalty with the customer basically. So that's on the top line, Kavi. But if I look at the EBITDA, you're actually giving a five percentage points back, right? And that's where the margins could be lower for him, while obviously it's driving top line growth. Okay. From there. But, what happens is, the repeat rates take care of that, Ankit. If that customer is coming back, back and back again, and that accompanied along with the money which he's paying, he pays INR 5,000 to become a Black Card customer, takes care of any of these things. I think the strength of our program is to get him come again and again and get repeated, because the cost of acquiring the customer is far higher than the cost of 5 percentage points. Sure. And, you know, again, in one of your opening remarks, you alluded to personal shopper. Now, you know, at one point of time, we had around 600, 700 personal shoppers. It came down to 300, and now again, you are expanding the personal shopper program, and that will help the Black Card consumers also. You know, from, them, then that's an added cost.... Right? When you're talking of premiumization journey, all these things help to do that, be it personal shopper, be it black. Do you think at this point of time, in a 5% margin business, you first get it up to 8%-9% and then invest here? Because, you know, you're closing down stores, pretty much 65% of the stores was renewed till last year, and again, we are seeing some 4-5% attrition in the store itself. And along with that, we are investing for, you know, personalization and, premiumization. Do you think the mid-level consumers are, you know, going off the platform? So, Ankit, my sense is that the number which we had always was around 280-300. In fact, whatever engagements and discussions I have with the team here, we all of us know that this has been one of the reasons for customers to come and shop with us, but we were never aggressive on this, right? So strategically, when we are trying to say that we are going to drive the business through experiences and through premiumization, this becomes a very, very important phenomenon. So the idea is that from the 300 which we had, we have moved to around 400 odd in Q1. We'll take this up to 500. The ATV, which when the customer comes and shops through a personal shopper, is actually 3x the ATV of a normal buy. So actually, the program is structured, the personal shopper program is structured in such a way that it pays back for the cost, whatever, and it, and it's a highly incentive driven. So the cost of a personal shopper is not in terms of only, you know, the base cost. The more he sells, the more he gets back. I think that's, that's the, that's the important thing. And these things are very, very differentiated. So I think earlier in the call, we were asked that why is it that EBO different from a, from a departmental store? I think personal shoppers, these things define an experience which makes us different from a EBO of a certain store, and we'll continue to build on them. Sure. That's it from my side. Thank you, sir. Thank you, Ankit. Thank you. Thank you. Ladies and gentlemen, we will take that as the last question. On behalf of Shoppers Stop Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.