Ladies and gentlemen, good day and welcome to Q3 and 9-month FY25 Earnings Conference Call of Shoppers STOP Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pranay Premkumar from Shoppers STOP Investor Relations Team. Thank you, and over to you, Mr. Premkumar. Thank you, Ranju. Good morning, and thank you all for joining us on the Shoppers Stop Q3 and 9-month FY26 Earnings Conference Call. Today, we have with us the senior management represented by Mr. Kavindra Mishra, Customer Care Associate, Managing Director, and Chief Executive Officer, and Mr. Karunakaran Mohana Sundaram, Customer Care Associate and 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 risk that the company faces. Please restrict your questions to the quarter's performance and to strategic questions only. Housekeeping questions can be dealt with separately with the IR team. I would now request Mr. Kavindra Mishra for the opening remarks. Thank you, and over to you, sir. Thank you, Pranay. Good morning. I have Karunakaran, JP, and Rohit with me. Biju and Devang will join me later. We have uploaded the investor presentation on our corporate and BSE and NSE websites. Let me start by talking about the operating environment during the Q3, which, quite frankly, was more sluggish and muted than what we had initially expected going into the festive season. Consumer sentiment throughout the quarter remained cautious. We saw demand getting impacted by a combination of factors. One key issue, especially in North India, was the high pollution levels during parts of the quarter, which kept customers indoors and had a direct impact on footfalls and discretionary spending in some of our important markets. We had also expected a stronger demand pickup during GST reduction. While there was a visible spike immediately after the reduction, that momentum did not sustain beyond the initial period. The broader uptrend we were anticipating did not really play out over the rest of the quarter. If I break the quarter down month by month, October post-Diwali was relatively soft. Diwali demand itself was reasonably good, but the festive season shifted earlier into October this year. Once Diwali was over, demand tapered off sharply, as a result of which our like-for-like sales declined in October. November showed some improvement. The first half of the month was slow, reflecting an overall market slowdown post-festivities. However, demand picked up meaningfully in the second half of November, driven largely by events like Black Friday, which helped drive footfalls and conversion. This resulted in a like-for-like growth for the month. December, however, was a disappointment. Given the early Diwali, we had expected a stronger December, but that did not materialize. Consumer spending stayed muted, and December ended up being largely flat on a like-for-like basis, so overall, for the quarter, like-for-like sales declined in October, grew in November, and were largely flat in December, resulting in flat sales for the quarter. The early festive shift, the broader market slowdown in the first half of November, along with economic factors and environmental issues like pollution, collectively weighed on demand during the quarter. This also impacted our overall business. Similar to the previous quarter, I will start with the core performance, and then I will dwell upon Intune new businesses. Capital allocation, including working capital, and way forward for the Q4 and beyond on our recovery plans in detail. Let me talk about the core businesses. As I mentioned, last quarter, our premiumization journey has been progressing really well, and that momentum continued throughout this quarter. Wedding with Shoppers Stop was a huge success, and along with the introduction of several new premium and premium-plus brands, helped us move the premiumization mix from 65% to 69%. What we focused on in Q3 was building on what we had already put in place while also adding a few incremental initiatives to further strengthen the premium play. We see a steady increase in the share of non-apparel categories, which tells us that customers are increasingly engaging with us beyond just apparel and trusting us across a wider set of lifestyle needs. From a profitability standpoint, we are encouraged to see consistent improvement in GMROI for both premium and premium-plus brands. This reflects better brand selection, sharper buying, and improved inventory productivity. Overall, these efforts are helping us elevate the customer proposition and position the business as a more premium multi-category destination while continuing to drive healthier returns. Let me give you some snippets and the results of what we did. We launched India-Fest Shoppers Stop, and it has gone really well. Sales from this campaign came in at INR 104 crores, which was up by around 160% over last year. When you walk into our stores now, the vibe is just better. More international brands on the shelves, fixtures that look sharper, and services that feel more personal. Our personal shoppers have played a big part in this, with their contribution climbing from 23% to 27%. And of course, our First Citizen membership keeps growing strong, driving loyalty sales that now stand at 84%, proving how much they value being part of the family. Our First Citizen members cumulatively stand at 13.3 million as of end of Q3. Let me share some numbers that reflect our execution strength. Customer entries grew by 5% despite a challenging operating environment. New customer acquisition remained strong at 40% of total customers. Key KPIs continue to show healthy trends with ATV at +7% and ASP +7%, while IPT remained stable. The loyalty saw its highest-ever enrollment during the quarter for Black Cards, which was around 38,000, while Silver Card sign-ups were at 220,000 cards, which was 8% growth over last year. We launched several new brands during the quarter, including DKNY and watches, Prada Eyewear, Marks & Spencer, and Hugo Boss, Everlite and Senco Gold & Diamonds, among others. Overall, premiumization improved by 6% during the quarter. Despite the above, our sales largely remained flat due to the operating environment, which I discussed a few minutes back. Our EBITDA before one-off costs dropped by 24%, mainly because we have been spending more on customer acquisition, running bigger marketing campaigns, and putting extra money into improving the tech behind our website. While that hit our short-term numbers, these are deliberate investments aimed at driving growth and strengthening the business for the future. We have also considered an additional cost of approximately INR 17.5 crores arising from the revision in Labor Codes. Given the materiality of the impact, it has been included as an extraordinary expense in line with recently published ICAI guidelines. Let me talk about the new businesses, starting with Intune. I have said this earlier. We are consciously investing in product sourcing and brand building, and we are encouraged by the way the business is shaping up. Having said that, the broader value segment saw a fairly tough quarter with muted demand conditions across the market. Post the festive period, there was a noticeable and sharp drop in conversion, which did weigh on overall performance. The marketing environment also remained challenging with higher noise, deeper discounts, and pressure on spend. Despite these headwinds, our festive period performance was resilient, delivering a 4% like-for-like growth. While the near-term environment remained uncertain, we remained focused on strengthening the fundamentals and are confident about the medium to long-term opportunity. Let me clarify our new businesses, including both Intune and the new website on beauty. The losses include for both, with nearly one-fourth of losses coming from SSBeauty.in in its infancy due to tech and customer acquisition costs. As I mentioned earlier, the short-term losses we are seeing do not reflect the true potential of the business. These are the functions of the investments we are making at this stage to build scaling capability. I will share a more detailed view on our plans and the way forward in my concluding remarks. Let me talk about the beauty business. Beauty sales grew by 14%, driven primarily by fragrances, which grew 12%, along with strong performance from a distribution business, which supported overall growth. As in previous years, we continue to engage actively with consumers through multiple initiatives during the quarter. We also expanded our physical footprint by opening eight Shoppers Stop locations, enhancing accessibility and brand visibility. Looking ahead, our focus remains on delivering a personalized customer experience through technology. Let me talk about the distribution business now. Our distribution business delivered a very strong performance during the quarter, with revenue of INR 122 crores, growing by 58%, reflecting both the strength of our portfolio and improved execution. We achieved revenue of INR 122 crores in Q3, which effectively means a run rate of INR 500 crores and above per annum. GSSB continued to expand its brand offering with the addition of new brands such as Playboy Fragrances and KimChi Chic in makeup, which have been well received in the market. E-commerce remains a key growth driver for the business, and we are further strengthening this channel by expanding existing brands across new platforms while also onboarding additional platforms. We are also seeing deeper penetration with our existing customer base, which is helping drive consistent growth. The launch of EuroItalia brands in September has been encouraging, with healthy sales through so far, reinforcing our confidence in the long-term potential of the distribution business. This marks a significant milestone in our strategic focus on beauty as a high-potential growth engine for Shoppers Stop. Capital allocation. We have been quite disciplined and cautious on capital allocation this year, keeping a sharp focus on returns and balance sheet strength. During the quarter, we opened three departmental stores, three Intune stores, and one HomeStop store. As a result, the total Capex incurred stands at approximately INR 90 crores, all of which has been funded through internal accruals. Looking ahead to Q4, we plan to open another four-five departmental stores, three Intune stores, and two beauty stores, taking the total number of new departmental stores adding during the year to nine. I'm happy to share that all the departmental stores opened during this year have performed exceedingly well and are tracking ahead of our expectations. On the balance sheet front, our net debt currently stands at around INR 90 crores, which is lower by INR 159 crores versus the year-end position. We expect the net debt to close the year in the range of INR 150-INR 160 crores, which would be nearly INR 100 crores lower than last year. This improvement is largely driven by a focused effort on reducing inventory, which is reduced by INR 122 crores across verticals, without compromising on availability or growth. Going forward, we will continue to balance growth with prudent capital deployment, maintain tight controls on working capital, and ensure that the new store additions and investments are aligned with long-term value creation. Way forward. I will start by saying that we are very clear that Q3 has been an exception due to festive shift and higher level of pollution. We are confident of bouncing back from here. We have seen this play out before. Even in FY25, sales declined in the first two quarters, but we saw a strong recovery over the next four quarters, and we believe a similar trajectory is possible this time as well. Let me address the elephant in the room on Intune and the way forward. We have been getting a lot of calls asking whether we will continue with this business or not, and the short answer is yes. We genuinely believe the worst is behind us, and more importantly, value-added business will drive meaningful profitability gains, while more importantly, building a strategically important portfolio for Shoppers Stop. Let me talk about inventory first. We have made solid progress. We started the year at around INR 100 crores, which is now at about INR 70 crores, and by the year end, we should be close to INR 60 crores in inventory. So a big part of the risk has already been taken out. Secondly, we have already absorbed most of the inventory-related pain. We took roughly INR 10 crores of provisions, mainly in the first half. Those numbers have come down quite sharply now, which tells us the legacy issues are largely done. Third, and this is important, we are entering Spring Summer with completely fresh inventory. Stores will be filled with new merchandise, and that changes the story materially in terms of sell-through and margins. Fourth, we have gone store by store on profitability. Where we feel the turnaround will take too long, we will take clear calls on closures before mid-next year. We don't want capital stuck in the wrong places. We believe that the value fashion market itself is large and still under-penetrated, but to be clear, we did face demand issues as well, driven by the product mix, freshness, and price-value equation. With fresh inventory and sharper assortments, we believe demand will normalize. From a numbers standpoint, yes, this year will close with a loss of about INR 60 crores, but Q3 losses have reduced significantly versus Q2, despite the festive shift. Next year, we expect that to come down meaningfully to around ₹20-₹25 crores, and even after overheads. And from FY28, we expect the business to turn profitable. For us, we believe that Q1 FY27 is really the inflection point, and both the board and the management are confident that the story will start looking very different from here onwards. Now, I will discuss the core business. We continue to execute our strategy meaningfully to elevate our store portfolio, with a clear focus on the premium and bridge to luxury segments. The launch of our Juhu store on January 14 marked a key milestone positioned as one of India's most premium experiential retail destinations. It reflects our long-term commitment to curated, differentiated customer experiences. Looking ahead, we will further expand our premium footprint with the opening of state-of-the-art stores at The Pavilion, Pune and Jora, Raipur in Q4, supporting sustainable growth and brand elevation. Our immediate priority is improving conversion. With customer entry already trending up, even a modest improvement in conversion can drive overall sales in a geometric progression, and this remains a key area of action for us. We will continue to drive the business through personal shoppers and plan to invest further in the capability this year. We expect the contribution from personal shoppers to improve by at least 200-300 basis points over time. A critical area for us is improving its supply chain efficiency in our private brands, particularly Indian women's wear. This was the primary reason for the dip in revenue and profitability in Q3, and corrective actions are already underway. Non-apparel continues to be a strong growth engine for us, having grown at nearly double-digit rate for the last few quarters, and we are continuing to sharpen our efforts in this category. Customer acquisition has been strong, and we intend to build on momentum through multiple programs and initiatives to further widen the funnel. Our loyalty programs have delivered excellent results, growing significantly over the last year. We believe that this remains as a key pillar of our strategy, and we will continue to strengthen it and drive it over the coming year. On capital allocation, finally, we will remain prudent and disciplined. Alongside growth in investments, we will continue to reduce working capital. As I mentioned earlier, the stores opened during this year have been performing exceptionally well, which gives us confidence in our expansion strategy. To conclude, I would like to reiterate that Q3 was an exception. We are confident that with the actions underway, we will see a clear turnaround over the next two quarters. Thank you. Should I open the floor for questions? Yes. Yep. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on your Touchtone telephone. If you wish to remove yourself from the question queue, you may press Star and Two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sameer Gupta with IIFL Securities. Please go ahead. Hi, good morning, sir, and thanks for taking my question upfront. Firstly, on department stores, am I audible? Yes, Samir. So firstly, on department stores, I mean, we have had around five closures this year, if my calculations are correct. And last year, this number was nine closures. Now, persistently, with the exceptions of few years, we have had a fairly decent amount of closures every year in department stores. Now, could you first elaborate the reasons for these five closures that happened this year? Because I remember last year we had said that we are towards the end of the journey of closing stores, and going forward, the closures will be more like in the normal course of business. And if these are the normal course of business, going forward, also should we expect a similar amount of closures? Okay. Samir, thank you for your question. I think, as I mentioned last time as well, we are in the process of, or I mentioned last time, we are in the process of cleaning up of the tails, right, which we felt are important because the stores which are of a certain size and profitability don't make sense for us to continue. So I think we made a lot of corrections there. We definitely have made corrections this year as well. But if I talk about, for example, we have shut our Ludhiana store, but we have opened a larger and a better store in the same market. So some of these actually, like the Bata Chowk, Faridabad, Ludhiana, are stores in the same city or catchment. We have opened a better-looking store and replaced this store. So I think when we see these five stores being closed, a few of them come from that perspective. We have a very active mechanism of looking at the stores which profitability makes sense or not. I think, as I mentioned last time, the heavy lifting has been done, Sameer. Three to four stores is quite a possibility in a business where markets keep on changing, or we keep on getting a better opportunity in the same market, like we did in the case of Ludhiana or in the case of Faridabad. Incidentally, wherever we are opening or shutting the old rundown store and opening a new store, the performance continues to be more accurate both in terms of profitability and returns to the business. So now what you are seeing is also a correction of the market. It is not that we are vacating the market. We are opening a better store and opening stores which were at one point of time relevant in some market, which are now moving out. So if these are largely relocations, then I should only be looking at the net store addition. And there also, we have actually not done, I mean, we are down by two department stores this year, if you look at the net. So I mean, if a large part of the additions are happening via relocations, we are not really adding a lot of stores, right? So as I mentioned, the stores which we have opened this year, and if I can tell you soon, then Ludhiana is a replacement, okay? Janakpuri is a completely new store. We have opened a store in Hubballi, which is a complete new market. We have opened Rajahmundry, which is a completely new market. And the balance four stores which are opening, between four to five stores which we are going to open between January end and March are all new stores. Got it, sir. And these relocations are largely your high-street stores because malls, I mean, there's no real point of relocation unless the mall is shutting down, right? Yes, so it's still, for example, Faridabad was a high street, and we opened in the mall. But on the other hand, the Ludhiana which we did, we moved to a stronger high street because the mall had become irrelevant at some point of time. Got it. Got it. And if I can just ask you the mix of high street versus mall stores in department, would you have it handy? It would be, I think, 80% mall stores and 20% high street stores. High street. One thing which I wanted to maybe for your comfort and for everybody who's on the call, the quality of stores which are opening in terms of the mall stores or any stores which are opening now have the potential to be far higher than the averages which have opened in the recent past. We are now signing up stronger, bigger properties which have the right to win in the markets in which they are. I think that has become one mix we have now changed, and you would see that playing out very nicely over the next few quarters. Sure, sir. All the best for that. I think 35,000 sq ft is what you have mentioned in the PPT. Yeah. Okay. And second question, last one from me. Gross margin contraction of around 111 basis points this quarter. Now, in a quarter where premium has done well and winters in general have been harsher, plus you mentioned Intune provisions have come down, what really explains the GM contraction this quarter? Thanks, Samir. That's a fabulous question. Though the Intune provisions have come down, I mean, the end-of-season sale in Intune started earlier this year, and out of these 110 basis points, almost 50 basis points is because of the Intune lower margin this year. Last year, Intune, the end-of-season sales started in the last few days of December, whereas we started almost 19th, 20th of this year, and that's one. Second one, the private brand, because of the reasons what Kavindra explained, both the overall mix, and there has been a slightly higher provision in private brand, and that impacted almost 40 to 50 basis points, Samir. These are the two large reasons of 110 basis points drop versus last year. Got it, sir, and one last question, if I may squeeze with your permission. Go ahead. So when I look at department stores, footfall growth is decent. Average ticket value is growing. So the problem then, the only thing left is conversion. And for a retailer which is largely third-party, improving conversion is not really in your hands, right? I mean, people come to your store with the Shoppers Stop pull is to drive footfalls, and from there on, conversion is a function of the merchandise. And if the merchandise from the third-party retailers is not exciting, third-party brands, then it's not really in your hands. What I'm trying to ask is that is it also a sign that brands are also focusing more on opening their own EBOs? Because any mall that you go, you'll have a Shoppers Stop, but you'll also have brand EBOs who are selling in Shoppers Stop in the same location, and the merchandise available at Shoppers Stop is lacking in depth or is subpar in any way? So Sameer, I don't think that's the reason because brands continue to have multi-channel, and I think if you speak to brands, they will tell you that they have grown really well with Shoppers Stop versus the other channels in which they operate, including their own. For us, Indian wear, especially private brand Indian wear, is one of the biggest recruitment categories, okay? That actually has a larger-than-life play in terms of conversion. Obviously, there are a couple of more things how to drive your personal shopper thing, but we feel that somewhere we, because of the stock issues there, we have been able to make our, obviously, there are a lot of other reasons for that, and it is more operation-driven and internally and nothing to do with customer per se or the brand mix. Because if you ask the brands, we have performed very well for most of the brands. My sense is that, one, the inability of our key private brands in terms of stock being very, very low versus last year, I think that was a big issue for us. And I think also because as more and more new customers are coming in, and as I mentioned, 40% of the bills which are coming are through new customers, their conversion tends to be a little lower than the thing which has happened. So I think it's a fundamental question of that, Samir, rather than because brands have been opening EBOs for the last so many years, right? And that doesn't answer this drop. And we are very confident that we will be able to do that. We have already done some workstreams to work on that to ensure that while the customer entry keeps on growing, we are also able to drive conversions up. Got it, sir. Thank you so much for answering all the questions so elaborately. I'll come back in the queue for any follow-ups. Thanks a lot. Okay. Thank you. Thank you. Next question comes from the line of Ashutosh Mishra from ICICI Securities. Please go ahead. Thank you. Good morning, sir. So my question is on the growth front. So despite the strategic focus on premiumization and also the focus on value segment, we are not kind of seeing consistent growth, right? So somehow we are missing that growth momentum. Even like-for-like growth also is negative. And so just want to understand what is missing here. By when can we see a consistent growth going forward given the strategies which the companies follow? Okay. Thanks, Ashutosh. So if I look at, let me step back and answer your query and break it into different businesses so that it becomes easier for us to answer your question. If I look at the departmental store, the last three to four quarters, actually, if I keep Q3 aside, have been rather good. I think we have been having a consistent mid-season or mid-single-digit like-for-like growth, and even actually the Q2 was close to 9.5%, right? And we had a flat Q3 for departmental store business. As I said, there were some issues on conversion which is led more by internal operational issues. There's obviously a shift of the festival Diwali this quarter versus last quarter last year. And there were some issues in North which we mentioned. And some of our big stores, like for example, Juhu was under renovation for the entire Q3, which has also impacted part of the business, and you will see the recovery happening there. Otherwise, actually, if you look at it, by TD, we'll be close to 4.5%-5% like-for-like growth. So it's not that, and I think when we started the year, that was one thing which we commented that we will be between 4.5% and 5% like-for-like growth for the year. I think we are sticking to it. Definitely, you are right that from the 9% or 10% which we did last quarter, we have come down to a flattish number this time. But as I mentioned, that is an aberration. We don't see this happening, and the secular growth of 5% will remain. I think the important thing is that when will our new stores start kicking in? Because rightly so, the overall growth should not be limited to 5%. It should be close to the high single. I think that's where we have to make our new stores sweat harder, and whatever needs to be done to ensure that that happens, we are doing. Beauty, we have spoken about the beauty. The business is growing and is doing really well, powered by fragrances and globalized beauty. In case of Intune, which is actually the place where we said maximum growth should happen in terms of the top line, we did have a 22% odd growth this quarter. Should have been far, far higher because the bases are very small in this business right now. We were struggling with the inventory issue, which we have just shared. My sense is the departmental store business, you will start seeing back in action from this quarter onwards. Beauty continues to be strong, and Intune, as we mentioned, it is Q1 of next year when you will see the profitability as well. And I think one good initial opening sign is that for the festive, Intune grew by 4% like-for-like, so I know these are very small wins, and in the larger mix, it doesn't reflect in the right way, but very, very confident that we are in the right direction, Ashutosh. Yeah. So that is very helpful. So just to clarify, so I understand the demand situation and the festive, all those things. So just to clarify, so there isn't any slowness or not slowness exactly, but any internal issue which is impacting the growth, right? Just to clarify on that. Because as you mentioned, just for example, Intune, so it grew by 22%. And if we see a like-for-like trend, their growth is also moderated, but still on such a high base, they have delivered almost 17% growth. So if we compare, something is not actually adding up, right? Given your focus and all those things and a very, very small base, still only 22% growth. Well, it should be much higher. I completely agree, Ashutosh. I think we were stuck. I did mention about the inventory and the freshness of the inventory not being there during, especially for Intune, which I also mentioned that by this summer, we should be 100% fresh. So as we enter the season in March end, I think it's more to do with the inventory in the stores, which we have been able to remove now, and we are in a much better situation in terms of inventory as we speak. So you will see the growth. I think at the end of the day, for a business which is on product, if the product freshness is not there, it will definitely impact. If you ask me, what should this number be? This number should have been 65%-70%, which should not have been 22%-22%, right? I think what a similar number which we achieved in the quarter before. This will go back to that number. It is a question of inventory freshness, but I think we have done a lot of heavy lifting and cleaned up the stuff. The inventory which used to be INR 100 crores has now come down to INR 60 crores, and that is why it has come down to that INR 60 crores by liquidating old merchandise and making it fresher. I think the customers, when they enter the Intune stores, will see a far fresher and cleaner inventory and relevant inventory than seeing things which are old. Okay. Okay. Understood. So that is helpful. And just one last thing. So what kind of revenue growth we should expect in FY27 for the overall business? I would say we are working on those numbers. I would say, I mean, including both organic and inorganic, we would expect a mid-teen growth. Hello? Yeah. Did you hear me? No, sorry, sir. I could not hear you. No, I said we are just working on those numbers for the next year budget, so the initial estimate seems to be a mid-teen growth, say between 12% and 15% for the next year. Okay. Okay, sir. Okay. Thank you. Thank you, sir. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Rihan Sayed with Batlivala & Karani Securities. Please go ahead. Yeah. Good morning, both, and thanks for taking my question. My most of the questions have been answered, so I just want a clarification on the. Am I audible now? No. Am I clear now? Can you sort of speak slower and louder? Yeah. Sure, sure. Most of my questions have been answered, so I just want one more clarification on the Intune format. The management commentary mentions a calibrated approach and measured expansion for the Intune value format due to subdued business demand. The plan for Q4 is to open only three more stores, reaching a total of 84, despite a format delivering 22% YOY sales growth this quarter. The question here is, is the moderation in Intune openings a permanent pivot in strategy due to unit economics not meeting the initial RRR? How does the company plan to compete with other value creation retailers if it is slowing down its footprint such as the format gains? Great question. I will request Devang to answer this. Thank you, Devang, for the question. I'm sorry if I have misunderstood. I'll try and answer as per my understanding. The growth in Q4 being restricted to three stores is largely on account of what Kavindra mentioned in his opening remarks that we were trying to get our current operating business sorted out in terms of the legacy inventory problems being solved and the growth of the operating stores being brought back to expected levels. Once we see a quarter of our expectations flowing through, the previous pace of expansion will again catch up. So I think this is more internal than external if that is what your question was. Yeah, yeah. Thank you. Yeah. Okay. Thank you. Thank you. Next question comes from the line of Ankit Kedia with PhillipCapital. Please go ahead. Just one clarification needed. In one of the questions, you answered that in FY27, we are expecting Intune losses to be INR 25 crores. In another question you mentioned from Q1, we will see breakeven. Can you clarify what will be the FY27 EBITDA or PAT loss of Intune, and when will the breakeven happen? Hi, Ankit. I think between me and Kavindra, we'll try to answer. So what I mentioned was that the expected losses for Intune for the business would be around INR 20-25 crores for FY27. And when I said Q1 is really the inflection point is when we will start seeing a big shift in terms of the performance and consequently the EBITDA. So I think just to give you that sense, we expect that FY27, the entire business would be when I say INR 20-25 crores, that includes the head office cost as well. As in the entire business, not the store profitability. And this is a PAT loss, not EBITDA loss, right? So when you say breakeven, you are expecting EBITDA breakeven and not PAT, right? That's right, Ankit. See, between EBITDA and PAT, the difference is only on account of depreciation. Other than that, yeah, when we can allow the notional interest, other than that, it's only the depreciation. So it doesn't make a significant difference. It's primarily EBITDA, but to answer your question, it's in EBITDA. Sure. My second question on the store opening for Intune, what are we planning for next year's store opening? Because if I look at a two years back, then we reduced it to 30, 35, and now we are going to close at mid-teen store opening for Intune. So next year, if the SSG doesn't come, what we are anticipating, will the store opening still be sub-30 stores, or we will still expand given the inventory collection is already happening? So, Ankit, I think two parts of it. One, the current focus is to get the, I think, all the models across inventory and supply chain right for this set of stores, right? As I mentioned, Q1 FY27 is where we see everything playing out in the right way for us. And this is that I think we will have a much stronger opening plan in S2. You need to give us some time to come back on because we don't want to commit a number, and then I think we have seen that experience this year, and I think we would rather be a little shy around that. I would rather get the team to deliver on what we are supposed to do as a team. Because if you are able to do that 75 stores well, that itself will be a big turnaround for us in profitability. Then with the engine of store opening we have got, I think we can open multiple stores. I don't think that's an issue for us right now is to first get the inventory right, which I think I'm very confident that end of March, we should be in that situation. That's the feedback I get from the operational team as well. Let me first sort that out, and then we move into the thing about expansion. Initially, Q1 will be very moderated next year in terms of store opening. I see more expansions happening in S2, but I think Q1 end, we will be able to answer that question better. Yeah. Because the turnaround time for Intune for us is very, very short, these are departmental stores. The opportunity, since we have already mapped the market, we know what stores to open and where. We just want the current set of stores to get fixed first. Sure. My last question is on departmental stores. For the last three, four quarters, we have focused on premiumization. If you look at a new store, your Inorbit store in Malad also, it's more high-end, more premium also there, right? So what is the kind of customer profile is Shoppers Stop targeting with these premium brands coming in? And do you think the sales which you are garnering are youth or 30-35 age group who have the money to spend on these brands today while the younger audience is going towards more value fashion? I think we are very clear, and I think Ankit, you have banged on this. For us, our key customer base is 30-35. That is where we want to focus on the young families, what is our stated ambition, and also our vision statement. We just want to be focused on that. You spoke about both Malad and Juhu. Well, you will find that there are premium brands in Malad and experiences, but you also have a good mixture of Bridge to Luxury, and you have got premium brands in Malad. On the other hand, Juhu, which is a more differentiated kind of neighborhood, you have much, much more premium set of brands there. What we are seeing in both the cases, as we've done the renovation, and it's too early for Juhu only a week or so, but we are seeing a 35%-40% uptick in numbers. So I think as long as we are able to meet the customer requirement, and I think the important thing is that our customers have also grown up in the aspiration, and we continue to ensure that we also improve the quality of brands and the kind of brands we have in our system. So young family, 30-35 years, premium, I think that's very clear as a business strategy. And I think it's working out well for us. If you look at even this quarter, while the overall or the Like-for-Like for department stores is flat, for premium plus set of brands, it's like 9 or 10%, and for premium brands, it's between 2 to 3%. So what we are seeing is clearly there is a set of brands which are performing better in this portfolio. And it is no longer that the premium plus is a small part. It has gone up to as high as 25% for us. So we are seeing across, and Non-Apparel especially is leading that big change for us. Sure. And one last question for Devang. Devang's market leader, Zudio, their numbers are out. Seems like their like-for-like growth is high single-digit negative. We are not performing like other listed players. So in the value fashion market, why suddenly slow down here? Is it competitive intensity? Is it inventory? For you, was an issue. Similarly, for peers, where do you see the challenge lies for all the value fashion players or their new customers are tired with stores around and now wanting to go shop somewhere else? Thank you, Ankit. The question is quite reflective in nature, so I'll try and give my point of view, and I will obviously not be able to comment on a competitor's performance at this stage, but I think in the near and long term, the value fashion space is very, very lucrative. I don't see the space slowing down. There could be some hiccups in the short term. All I can say is that as far as Intune is concerned, we fell into that cyclical problem of legacy inventory slowing down, freshness slowing down, the promise that we made to the customers, resulting in top-line issues, which, as Kavindra said, we've addressed, and I think towards the end of Q4 and in Q1, we will see our freshness promise really fulfilled and the numbers coming back, so I don't see the segment itself under any kind of duress. That's my personal view. Sure. Noted. Thank you so much and all the best. Thank you. Next question comes from the line of Devanshu Bansal with Emkay Global. Please go ahead. Hi, Kavindra. Thanks for taking my question. So first, I wanted to understand you mentioned focus on working capital optimization. We understand there is a certain innovative brand that we've exited also. Is this also more to do with the working capital management thing that you sort of alluded to? If that's the case, I also wanted to understand what is the size of business that we've sort of exited to optimize our working capital? Hi, Devang. No, no. Can you just summarize your question? What do you mean? I think it was actually muffled. So if you can, may I request you to? Yeah, I'm now audible. Yeah, yeah, yeah. Go ahead. Yeah. So, I was indicating that you mentioned focus on working capital optimization, and we understand that you have exited the leader in the innovative space. So, wanting to understand innovative brand. Okay. Okay. Okay. Innovative brand, yeah. So is this also more to do with the working capital management? And what was the size of business that we have sort of exited from that perspective? No, Devanshu. So no, I think the brand which you are referring to, it was not because of we don't remove performing brands because of working. I don't think we are at that stage or is there any issue of working capital there. It was more to do with the commercial items which we had agreed to, and there was a desire of the brand to change it, which we were not comfortable with. I think the business for that brand is even less than 1% of our revenue. So I don't think that's an issue. In fact, to add, we have also been able to successfully convert a lot of our OR brands into SOR, which has actually added to a stronger working capital statement. The brand whom we have removed from our thing, we have been able to replace in a lot of cases that brand with Maxim Sensor, which is a premium brand portfolio which we added. I don't think that decision was anything to do with working capital. It was more to do with the commercial terms, which I think we had a different point of view, which is fine. Brands will have a point of view. We'll have a point of view. We have to see each other's interests and see what works or what doesn't work. Just to give you a sense, we don't take these decisions on the basis of working capital. Fair enough. Kavindra, is this the only brand that you have sort of exited because of the differences on opinions related to commercials, or there are a few that you have exited? This is the only brand what was in difference of commercials. Otherwise, because we at this point of time have the ability to have the best, and I think it's the blessing which we have from our customers, we definitely there are a lot more brands who want to come inside and whom we don't have a space. So as a process, what we do is we continue to churn the brands. I think one of the most important things is to speak to the customers and get feedback from them what kind of brands they want within our system. So to give you a sense, more than 100,000 customer voices are collected every month. We share with them the kind of brands we want to introduce, take their feedback, and get them. So I think the churn is something which we will continue to do. And thankfully, the brands continue to support us in a very, very strong way. Given also the fact that at this point of time, for a premium, super premium Bridge to Luxury, we are the only relevant partner at this point of time. Fair enough, Kavindra. And last question from my end, I wanted to understand, is there a growth divergence across categories as well for you, or most categories are seeing sort of a particular kind of growth similar to the company average? Sorry, Devang. Again, this question got muffled. I'm sorry, but can you repeat this? Yes, definitely. Apologies if my voice is not clear. I was asking, is there a growth divergence across categories that we offer to customers, or most categories are seeing similar to company average growth? No. So, for example, the non-apparel categories have done really well. So if I talk about watches, handbags, have done exceedingly well. In fact, they are double-digit like-for-like. Beauty, especially fragrances, has done really, really well. Women's western wear as a category has done really well. I think one category which didn't do that well was Indian wear because of shift of festive, right? Because I think that's something which suffered. We also feel that men could have done better, the branded men this quarter. And that's more to do with a couple of some amount of churn happening in the brands, I think, which I believe that is getting stabilized as we move into this quarter. So clearly, non-apps is a big winner. Fair enough. Thanks, Kavindra. Thanks for answering my question. Thank you. Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Deepali Kumari with Arihant Capital Markets Limited. Please go ahead. Thanks for the opportunity. So I have a question. The GSSB distribution business doubled its revenue to INR 106 crores this quarter. As you scale the segments with global partners, how does the margin profile and working capital requirement for distribution compare to your SS Beauty retail areas? Deepali, your voice is not clear. So are you asking that for global SS brands? How do we manage working capital? What's your question? Yeah. For distribution business, how do you manage the working capital? Okay. So distribution, by definition, is high-intensity working capital, Deepali. So we do hold anywhere between 16 to 20 weeks of inventory. We are also funded largely between 6 to 8 weeks. So the net inventory would be 12 weeks. And that is taken care of in the margin part. So the churn of the inventory is also very high in beauty business. So overall, if you see the profitability on the distribution business, you can see that it's highly profitable. And most importantly, when we import the multiplier, what we call the price what we import and the price what we sell it to our customers, there is a significant difference. And that's the way we make the profit, Deepali. Okay. Got it. And still, private brands sell through by only 3%, and their contribution to the apparel business stands at 19%. So given your focus on Stop in brand portfolio and design and everything, why is this segment lagging behind the overall core business growth of 7%? Deepali, if I understand your question, why was the PB or private brand business slower in Q3 versus the business? Is that what you are asking? Yeah, yes. Okay. Okay. So Deepali, basically, the private brand business for us, a large part of it is driven by Indian wear. And because of the festive shift, because Diwali this year versus last year, the dates were split across September, October versus entire October last year, we had a little bit of a loss of sales there. Also, as I mentioned, we had some availability issues in our leading brand called Kashish, which actually led to this. Otherwise, if I look at other parts of the business of private brand, they are more or less they did fairly well. Okay. I have one last question. What is the conversion percentage of customer entry? The conversion? Okay. So for our departmental store business, the conversion is around 18%. Okay. And for beauty? No, no. So as in this 18% is more or less for the entire departmental store. So beauty is a part of that. Okay. Okay. Thank you so much. Thank you. Next question comes from the line of Amit with HDFC Securities. Please go ahead. Good morning, sir. Am I audible? Yes, yes, Amit, you are. Yeah, yeah. Thank you for the opportunity. And sir, congratulations. At least you're on your quarter-on-quarter ASP is increasing. I appreciate it. And sir, the question is also connected to the Labor Codes. How much of the Labor Codes impact is one-time versus recurring? The INR 18 crore impact? The INR 17.5 crores is a one-time impact, Amit. The recurring impact will not be significant because, having seen, I'm sure you would have read the entire labor code, right? It sits on the one-time contribution to both gratuity and leave encashment. The leave encashment itself will be reduced to 30 days from now, the labor code has said. As far as the gratuity contribution is concerned, the one-time impact is 17.5, and we are working with the management on how we neutralize, even if there is an incremental impact from the next year. Sir, the second question was post-GST reduction. Have any categories shown subsidy in elasticity, or was the demand entirely front-loaded? So, to be honest, Amit, we felt that this should have been the demand, as I said in my opening remarks, the demand should have been throughout and not for a particular time, which is especially festive. What happened is that we have seen that certain categories like watches, handbags, and perfumes have still had the sustained this thing. But if you ask me, apparel, whatever impact was there was only till the festive. After that, it has slowed down considerably. Understood, understood. And sir, last question, sir, do we do it online and digital as well? Of course, we have two apps, SS Shoppers Stop app and SSBeauty.in. There are these two apps which we have, I think you must have seen the investments also which we are doing in both these to ensure that if I'm not mistaken, last quarter, we said that we will be closing especially the SS.com change of the backend completely, which has actually happened, and I think we should see some good results coming in this quarter on that. Thank you, sir. That was from my side. I'll do this for the future. Thank you. Thank you. Next question comes from the line of Muskan Agarwal with Swan Investments. Please go ahead. Hi, sir. Good morning. Actually, can you explain in detail the inventory problem that you highlighted for Intune? Okay. So hi, Muskan. I will try and give the overall sense, and then maybe Devang can detail it further. So when we were launching Intune, I think we had a very, very, very aggressive plan, and we were looking at close to 100 stores launch. And then we, but because of the soft demand, we actually decided to fix that before. And what that ensured was that we had a lot of inventory which got accumulated. Once the inventory gets accumulated, and because the promise of any product business is freshness, I think that's where we started getting hit. So we actually did two things last, and which we did actually one big thing which was very different from last year was we took an accelerated inventory provision, and we ensured that, okay, can we ensure that we are able to liquidate inventory as much as possible. When we started the year, we were sitting at around INR 100 crores of inventory in Intune, which for the number of stores, I think, was a little bit too much. We have been able to reduce it to INR 60 crores. So this is just to give you a sense of the overall picture. Maybe Devang can add on how this inventory he sees will be able to turn around his business and the throughput. Thank you, Kavi. I think the inventory problem that we spoke of was largely localized to one season, which is Autumn -Winter 2024. Over and above the soft performance that Kavi spoke about, prior to Spring Summer 2025, we were launching every two months. It's only from Spring Summer 2025 that we started launching on a weekly basis. So combining the three, four months buying period for outright private label fashion with the two-month drop, we kind of had a chunk which was pre-committed on a bigger base than what we realized. So all throughout the last quarter, we are just trying to get rid of the excess from Autumn-Winter 2024. From Spring onwards, the excesses are not in place because we aligned our buying with the throughput that we were seeing, and I think we've seen the worst of it. I think going forward, the inventory problem is solved to a large extent and is not likely to resurface. Mr. Agrawal, are you done with your question? No, no. So actually, I also wanted to ask, what could be the reason that apart from this inventory problem, that you guys are not able to perform well in the value fashion segment whereas other players are succeeding in the same? Okay. I think what we mentioned a few minutes back, the value fashion business is very dependent on consistent freshness being delivered to the customers. The freshness is a function of the right profile of inventory and not being choked with old inventory. Since we had old inventory, we were not able to launch freshness as much as we wanted, which is affecting our top-line KPIs, which stands solid, and Kavi also mentioned in his opening remarks that the Spring Summer season will see the stores full of freshness, so we should see that cycle come back. Also keep in mind that we are practically in the second full year of operation, so there is some bit of learning that we take as a business and we course correct. So maybe as we go from this year to the start of FY27, again, requoting what Kavi said, we will see a lot more stability in terms of business. Thank you. What is the conversion ratio for Intune and Capex per sq ft? Conversion stands around 18%. And inventory per square feet, sorry? We don't measure inventory per sq ft. The CapEx is INR 1,600 per sq ft, Muskan. Okay. Sure. Thank you. Inventory, you can broadly take it as INR 1,700 per sq ft. Okay. Yeah. Thanks. Thank you. Next question comes from the line of Gaurav Gandhi with Glorytail Capital Management. Please go ahead. Yeah. Thanks for the opportunity. Sir, two things I want to understand. While visiting Shoppers Stop stores, of course, excluding the flagship ones, still a lot of stores are not feeling as much premium as we feel while entering in stores of our competitors. And the second observation is, of course, are we curating our private brands in a serious, proper, better manner as we are unable to understand how are we moving there and assortment there? So shouldn't we be more moving faster, more aggressive, or more agile in terms of changing our store looks, pushing private brands? Your thoughts on this, sir? Thanks, Gaurav. So I think first, you need to a little bit detail to me that what is it that you are comparing us with because it will give me a sense to answer your observation or to address your observation. Otherwise, on an average, we do five to seven stores we renovate every year. And I think as we renovate the old stores and as we open the new stores, you will see the premium version only. So I think that's very clear. It's a function of what store comes when in the cycle, right? So again, I don't know which store you are comparing us with, so I cannot comment on that. On the other part, which is of the private brands part, obviously, private brands needs to be better. In fact, both in our investor deck and in our call last time, we spoke about ensuring that the private brands become more and more premium. So just to give you a sense, we have just launched Fratini Girls as a premium kidswear brand as a part of our private brand. So I think that's something which will now move to 60 stores. Okay. So I think this is something which we'll keep on doing. Now, if you are comparing a Juhu or a Topsia store, which we have, they are the flagships. But otherwise, you will see Malad and Malad-like stores coming in a lot of the stores which are renovating now. So I mean, you are right in terms of agility, but I think there's a five to seven store which we look at as every year, and we'll keep on innovating it. And all the new stores as we open, they will be premium ones, right? But I would love to maybe offline have a chat with you that what is the feedback of the stores where you went to and which you feel are the competitor brands. And maybe offline, we can have a chat on that to understand your point of view as well. Sure, sir. I'll get back to you. Thank you. Thank you. Next question comes from the line of Karan Gupta with Alchemy Capital Management. Please go ahead. Yeah, hi. So my question is regarding the strategy behind rationalizing the store sizes and now opening the stores in bigger sizes. So what is that? As all the peers in retail segment, I mean, it's a normal practice for them that they are closing down some of the stores and then rationalizing in terms of size and increasing the store size. So what is the strategy behind that? Mr. Gupta, please come in the range and talk. There's a lot of disturbance, and even your voice is muffled. Yeah. Now it's clear. It's better than before. Better? Better. Okay. So just a simple question. The strategy behind rationalizing the store sizes and opening up in a bigger size? Just a simple question. Understood, sir. Understood, sir. And maybe if you can mute because there is a lot of background noise, then I will be able to address this query of yours. So yes, you are right. I think we decided to open smaller stores. And when we opened the compact size, we realized that a lot of categories are not getting fit into the business. And also, the throughputs which we are getting from those kinds of stores didn't make any sense because we ended up typically having stores which are 18-20 crores of revenue for us, which doesn't make sense because the effort which needs to drive a store is the same whether it's a 30,000 sq ft, 20, or a 40, right? So that is one. Second, as a business, I think the two pegs on which we want to drive our business is premiumization and experience. For both the cases, if I talk about premiumization, you need to give the right kind of space to each of the brands to express themselves well. If I talk about experiences, you need to have a kids' play area. You need to have a proper personal shopper lounge because that's a strategic direction from our side, and that's what we really want to work on, a gaming zone. If you want to do all these things, give brands a size, then between 35,000 to 40,000 is what is the sweet spot for us. We are not in the game of opening too many stores at 18, 20 crores of business. We are in the game of opening few stores, but the store should be 50 crores plus. So I think as we move into that strategy, we are very, very clear that this is what we want to do. A lot of retailers and a lot of brands, actually, by the way, are shutting the smaller stores and opening bigger stores and the best brands in the country simply because you need to do that. And I'm talking about premium brands here. You need to do that because you want to give a better experience to the customer. And the better experience cannot come through clogging the aisles and making very, very small stores. You can't give the customers a proper departmental store experience. And we have realized that to our great detriment that that's always a problem. So does that mean in your main stores, which is the bigger in size, we can see the inventory per square foot will be the same, but it will be in the bigger size? Mr. Gupta, I'm sorry for interrupting. If you're speaking to the customers. Your voice is not clear. Can you come in the range and talk? And can you speak a little louder? Hello. Hello. Yes, yes, Karan, we can hear you. Yes, yes. Yeah, yeah, yeah. So, can we expect in the new stores, which are bigger in size, the inventory per sq ft will be the same? Or it will increase because you are saying that we are giving more experience kind of thing to the customer, like play area, playground area, and all these things? Sure, sure. What kind of customer you are focusing on because you have luxury brands also? You have value fashion also. So did all brands are putting in a same store, or it will be different kind of thing? No, no, Karan. Okay, let me address both the points. One is the inventory per square foot in a premium concept goes down. It doesn't go up, right? So that is the first point. The second point is 75%-80% of the inventory, which is in SOR. So I don't think having a larger store and having a larger inventory is detrimental for us in any way, especially because we use the KPI of e-commerce. I think that is very clear. And yes, you are right. As you put more and more experience zones, you need to have a lesser number of brands. And that's you change Juhu or a Malad or the new stores which you are opening. That's the third point. I think the fourth thing is for us, the customer base which we have is actually the customer base which is the first reason. It's a customer base which is for a more premium and premium-plus kind of a thing, and to give you a sense, we don't keep value fashion products in our store. Intune is a brand which has its own store, so we don't keep value fashion as a business, as a concept with us, Karan. Okay. Thank you. Thank you very much. Thank you. Next question comes from the line of Harsh Shah with Bandhan AMC. Please go ahead. Hi. Are you sure that the Intune's inventory per sq ft is INR 600? Karan? Mr. Shah, sorry for interrupting. Can you speak a little louder? Hi. Am I audible now? Yes, better than before. Please go ahead. I mean, are you sure that the Intune's inventory per sq ft is INR 600? 1,700. 1,700. Not 600. That's what we said. Okay. Okay. Sure. Thank you. Thank you. Next question comes from the line of Rahil S with Sapphire Capital. Please go ahead. Hello, sir. I'm audible? Your voice is muffled. Can you hear me? Yes, please go ahead. Is this better? Yes, please go ahead. Yes. Yes. Hi. Good afternoon. So just now, how has been Q 4 so far? And overall for FY26, then what can one expect when it comes to revenue and EBITDA margins? Q4 is a bit early to say, but the first 20 days, that is till yesterday, have been quite decent, particularly in the south markets where we have Sankranti. It performed quite well. The sales growth we expect in the single digits, Rahil, and the EBITDA margins would be close to in the low single digits. That's what we expect by the end of this Q 4. For Q 4. The sales growth in single digits is for Q 4 as well or overall for FY26? Sorry? What was it? Sales? The sales growth you mentioned, which you expect to be in single digits, is for the last quarter or for overall for the year? For the Q4 as well as for the entire year. As for the entire year. Okay. And EBITDA also in single digits expected for the last quarter. Yep. That's right. Okay. So what sort of improvement do you see in the next year with the kind of double-digit mid-single, sorry, mid-teens growth expecting in the EBITDA? And what will drive it? A number of things, right? I think we spoke in detail. One, the premiumization, what we are working on right now. Plus, the number of marketing campaigns what we had and the growth, what we are getting from the marketing campaigns. Third, beauty, the Global SS Beauty. I think, again, Kavindra spoke, we are already touching a run rate of 500, and we have been growing more than 50%. So those growth should improve. PB, the private brand, whatever that happened in Q3, that will not. I mean, we are working on to improve the overall efficiency in private brand, and Intune, again, Devang spoke in detail, and Kavindra also spoke in detail. With Intune, we expect the losses to be at minimum, it will come down to 50%, and if not, more than that. So there are a number of growth levers we are working on. That's the reason we are saying that the sales growth to be in mid-teens, and the EBITDA margin should also improve next year. Okay. Okay. Got it. Thank you for repeating that, and all the best to you. Thank you. Thank you. On behalf of Shoppers Stop Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.