Ladies and gentlemen, good day and welcome to the Stanley Lifestyles Limited Q1 FY25 earnings conference call hosted by JM Financial. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mehul Desai from JM Financial. Thank you and over to you, sir. Mr. Mehul, may I request you to unmute your line? Yeah. Good afternoon, everyone. On behalf of JM Financial, I'd like to welcome you all for Q1 FY25 earnings call of Stanley Lifestyles Limited. From the management side, we have Mr. Sunil Suresh, Managing Director of the company, Mr. Subhash Sunil, the Whole-time Director, Mr. Pradeep Kumar Mishra, Group CFO, and Mr. S. Srikrishna, Chief Executive Officer, Retail Division. I'll hand over the call to the management for their opening remarks, post which we can open up for the Q&A section. Over to you, sir. Good afternoon, everyone. Welcome to Stanley Lifestyles Limited's first earnings call following our successful listing on BSE and NSE on June 28th, 2024. The IPO marks a significant milestone in our company's 25 years of journey, and I want to express my sincere appreciation to our shareholders, our employees, and our loyal customers. We raised INR 200 crore in primary capital, which we plan to be utilizing for expansion and ensuring Stanley capitalizes on the growing premium and luxury markets. Let me briefly introduce Stanley Lifestyles Limited. Founded in 1999, our mission has always been to deliver high-quality bespoke leather products and luxury furniture that meet the customization needs of our discerning high-end customers. Over the years, Stanley has built into a strong pan-India presence brand based on its innovation, fine craftsmanship, attention to detail, and consistent marketing. With our three different store formats of Stanley Level Next, Stanley Boutique, and Sofas & More, we're able to cater to homemakers in luxury, premium, and value premium segments. We currently operate 61 stores spread across 25 cities among all the three formats, of which 37 are company-owned and company-operated, and 24 are franchisee-owned and franchisee-operated. Over the past 15 years, Stanley has maintained a steady, organic growth and profitability. In the Q1 FY25, I'm pleased to report we delivered revenues of operations of INR 100.70 crores, reflecting a 5% increase compared to the same period last year. Our EBITDA grew by 25.6% to INR 20.10 crores, achieving a margin of 20%, and PAT increased to 8.6% to INR 3.80 crores. These results are a testament to our positioning in the premium and luxury furniture markets, the launch of our new product line, and optimization of our supply chain. We have commenced localization of our leathers, which is helping us reduce dependency on imports, and we continue to improve our sustainability initiatives with installation of solar systems across our facilities. In the recent quarter, we have faced new challenges and developments which I would like to address. While premium and luxury housing has been witnessing tremendous demand, there has been an average 18-24 months delay in handover of projects sold in the past three-four years due to disruption caused over COVID years, and RERA has extended the delivery deadlines to builders across the country. New homemakers constitute the majority of our customer base, and we are witnessing postponement of purchase due to this handover delay. We encountered delays in the opening of new stores due to the non-availability of construction labor, and we had to relocate three matured stores due to disruption caused by a metro line and a fire incident in one of the stores. Despite these hurdles, we observed demand in the premium and luxury offerings, which reinforces our market positioning and growth strategy moving forward. The recent general elections also temporarily slowed high-value customer purchases. However, traction has picked up ever since. Our new stores are typically fully operational in four-six months and come to maturity in 24-36 months. I'm pleased to report that new stores we launched in FY23 and FY24 are showing promising signs of sales attraction. We continue to have over 50% of our stores under maturity and remain positive about our sales, with matured stores' count increasing. Looking forward, we have a pipeline of 11 stores across three new formats planned for FY25, which will further strengthen our presence in key markets. Our focus remains on capitalizing on the growing demand of premium and luxury housing in India, and our industry knowledge, strategic presence, and strong brand awareness will position us for further success. The diverse product range we offer, combined with our commitment to design, innovate, and our exceptional customer service, will be our key drivers of our growth going forward. At Stanley Lifestyles, we are deeply committed to creating long-term value for our shareholders, our customers, and our employees. Our management team is dedicated to maintaining a high level of transparency, upholding the highest standards of corporate governance, and ensuring sustainable growth. We remain focused on delivering consistent performance and executing our strategic plans efficiently. Thank you for your time. I now hand over to our CFO, Mr. Pradeep Mishra. Thank you, Mr. Sunil Suresh. Good afternoon, everyone. I would like to present Stanley Lifestyles' financial performance for Q1 FY25. Since our IPO, the company has delivered revenue from operations for the quarter of INR 100.70 crores, marking a 5% growth compared to Q1 FY24. Our EBITDA grew by 25.6% to INR 20.10 crores, with a margin of 20%. PAT increased by 8.6% to INR 3.80 crores. These results reflect our focus on driving operational efficiency and maintaining profitability in a difficult macro scenario. Looking at our revenue contribution from different perspectives, our B2C business accounted for 78% of the total revenue for Q1, while B2B segments contributed 22%. From a store format, our COCO stores represented 61.5% of the total revenue, and the balance came from franchisee and accessories. Geographically, our business in South India accounts for around 83% of our total revenue, which will continue to moderate in the near term. Our pan-India distribution underpins the reach of Stanley Lifestyles' luxury brand in the market. Despite operational challenges such as supply chain disruption, continued delays in residential property handover, and low consumer sentiments, we have managed to navigate these issues effectively to ensure consistent profitability. Turning to our balance sheet, Stanley Lifestyles maintains a strong financial position with a net cash balance of INR 199.50 crores. Regarding the IPO proceeds, we have strategically allocated the funds to expand our retail network, open new stores, and renovate existing locations. These store additions are planned to target upcoming premium residential markets where we are underrepresented. Our investment in backward integration, particularly with metal processing machinery and better sourcing of leather and localization initiatives, will further strengthen our operational efficiency and reduce costs. Looking ahead, we expect to continue growth in the coming quarters, driven by our store expansion, new product launches, and the overall resilience in the luxury market in India. We are optimistic about achieving our financial and strategic targets, though we remain vigilant of potential short-term operational challenges. Our focus on point-of-sale technology enhancement and sustainability initiatives will also contribute to our long-term success. We will be happy to answer any questions you may have on the company's recent performance. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants: you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. The first question is from the line of Rupam Jaiswal from InvestWell. Please go ahead. Hello. Yes. Good afternoon. Good afternoon, sir. Thank you for giving me this opportunity. I just wanted to know what is your growth what kind of growth strategy you have and what plans do you have for the company's future? Okay. Hello? Yes. Pradeep here. See, from a company if you have understood the company, we drive in the tailwind of premium residential markets, and we see a very what we have seen in the last three, four years is a very strong sales cycle, which has happened in the last two, three years. What needs to for us to really grow very efficiently would be to see when the sales cycles get into a handover mode, when the residential property is into a handover mode. So that cycle is delayed beyond our control, and there's a lot of industry reasons for that. However, as companies, we have continued to expand our retail footprint. We are strengthening our presence in regions where we feel these trends are very strong, and we are readying ourselves to capture this trend when it starts. I hope I've answered your question. Or if you look for something specific, please let me know. Yes, sir. I just got the view. I just wanted to know if I see the quarter-over-quarter, your EBITDA margin has gone down. Is there any specific reason for it, or is there any secondary we faced a margin hit? Yes. What has happened quarter-on-quarter is, I'm assuming you're referring to quarter four of FY24 and quarter one. Right, right, right. As a reflection, we have continued to expand our retail presence from last year and quarter four. Because of quarter one, April and May, our sales were not reflected of the retail presence that we had. There is a huge operating leverage cost in terms of high store running costs, which we incurred in quarter one, which did not yield sufficient results or revenues in the top line. Hence, that has been one of the major reasons for us to not be comparable with quarter four performance. Also, H2 for us is slightly better than quarter four. Better. Better. Yes. H2. Because season H2 for us is definitely better than H1. So normally, we compare our track record with Q1 to Q1 of last year. Okay, okay. Thank you, sir. Thank you for this opportunity. Best of luck. Thank you. Thank you very much. Thank you. The next question is from the line of Rohan from InCred Capital. Please go ahead. Yeah. Thank you for the opportunity, sir. So with respect to what you were talking about earlier, with respect to the units being delayed in terms of delivery, by when do you expect maybe this pent-up demand for us to solve unlock? These are cases we follow regularly and look at what is happening from the RERA perspective. There are various city clusters where projects are delayed beyond others. For example, Bombay and Bangalore, there are more delays compared to Hyderabad and Delhi, for that matter. We are expecting a solid delivery to start happening, perhaps, by H2. Most of the projects that were delayed are now coming almost into completion stage, and we expect a very good housing handover to happen in H2, starting from H2 of this year. There's a lot of pipeline for the next two years. Sure, sir. Just one more question. In terms of your need historically, have we seen better demand from, let's say, new unit sales, or has there been also a heavy contribution from renovation? Okay. That's a very good question. In fact, for us, in most of the markets in the segment where we are presented, most of the business comes from new home makers, except for certain markets, matured markets like Bombay, where there is a renovation and restoration that happens. Most of the other cities, for us, it is always the new home that actually gives more opportunity for business. Sure, sir. Just one final one. In terms of your need, Lahiri has otherwise been an urban place, but now we're also going into tier two. So what is your need on or what do you expect maybe in terms of growth from your non-metro markets going forward? Do you think it will sort of outpace your mature stores going forward? So we are fairly, I would say, calibrated in terms of expanding, and we do not wish to expand to too many tier two and tier three markets because since luxury furniture and homemaking is a once-in-a-10-year kind of a cycle, customer often tends to come to the nearest metros. So we rather expand in the same metro cluster rather than go to too many smaller tier two and tier three cities. That is what we are doing right now, and that is working out well for us because some portion of our sales from, for example, Bangalore comes from catchment markets from other towns. So we don't see ourselves, at least from the COCO perspective, company-owned, company-operated stores. We don't intend to expand too much into tier two, tier three markets. It doesn't suit our business so well because most of the high-end customer tend to come to the nearest metros for high-ticket purchases. Sure, sir. Thank you. Thank you for your detailed responses. I'll get back to you too. Good luck, sir. Thank you. Thank you very much. Thank you. A reminder to all the participants: you may press star and one to ask a question. The next question is from the line of Abhishek from Narnolia Financial Advisors. Thanks. Please go ahead. Hello, sir. I just wanted to get a hang of how much you have placed between the new homeowners who will be making a purchase and what will be the renovation or maybe a contract manufacturing, the split of the revenue between these markets? Sorry, we couldn't hear you very clearly. Can you please make it clearer? Yeah. I think you are too close to the mic. If you can be a little away, and we can hear you better, please. Hello. Is it clear now? Yeah. I just wanted to understand what is the revenue split between, as in, new homeowners and other renovation or contract manufacturing because expecting the entire revenue to be driven by new homeowners who will be getting the new home allotted is a little too optimistic, don't you think? No. So I think, like I said, when I look at the quantum of new housing that has been sold over the last five-seven years and the quantum of new housing that needs to be yet delivered, we remain very optimistic. I think we have moved in the right period, in the right time, in the right cluster. So when these homes come for delivery, we will definitely be able to get a larger chunk of these new home markets. As of now, we could say that, depending on the market, 65%-70% comes from new home makers as far as our business is concerned. So where we are going is that we are very carefully following the trends. And today, RERA does permit us to understand where the developments are happening, where the premium houses about INR 3 crore-INR 4 crore are coming up, when the projects started, and when they're expected to deliver. So based on that, we have expanded our catchments. Just another point. What's your future outlook regarding contract manufacturing? Contract manufacturing has been there from a legacy perspective. We will continue to do contract manufacturing, and currently, it's an 80/20 split between B2C and B2B. We see that being similar going forward also. We are getting some inquiries, and we want to continue doing B2B also because it gives us the scale and flexibility. In contract manufacturing, we manufacture as OEM to bigger entities. Global players. Global players, yeah. Okay. Okay. Thank you so much. Thank you. Thank you. The next question is from the line of Mehul Desai from JM Financial. Please go ahead. Yeah. Hi, sir. So first question is on the gross margins from Q4 of FY2024 to Q1 of FY2025. There is a drop in gross margins. So can you explain the reasons for that, and also how is your current trajectory as far as leather localization is on the leather localization? If you can give response on these two aspects first. Okay. Let me answer the localization piece first, and our CFO will answer the GP-related question. As far as localization is concerned, since we do operate in the luxury segment and we have been importing our raw materials, especially finished leather from Europe, it is not easy for us to localize very quickly. Though we have started the process almost a year and a half, two years ago, close to about 30% we have already localized. And now we are seeking some technical know-how with Italian tanners, and we are starting to further localize. While the raw material, which is the hides, will come from Europe, the value addition will be done in India, and that itself is a tremendous saving for us. So this process, I feel, is going to take us another couple of years by the time we come to almost 70%-80% of localization. We commenced this operation about a year and a half ago. Today, we are at about 30%. On gross margin, quarter four, gross margins were 56.5%, and current quarter one is about 53.2%. What really impacted was because of sea shipment, which is we import leather from sea. Because of the sea freight going up and also the delays in arrivals of these shipments, we had to airlift a lot of leather or a lot of imported goods for our supply chain. So that really impacted us in quarter one. Along with that, there were small increases in forex, which caused certain cost escalations. Another point was, we had a huge review in one of our locations or subsidiaries. We had bulk transactions where we had a bulk sale agreement at a little lower than our retail margins, which got reported in quarter one. Okay. Secondly, if you can throw some light on Kitchen KCD portfolio launch, which happened last year, how is that shaping up, and how do you see that going ahead also? Yeah. So while we have successfully launched our KCD in Bangalore, only Bangalore last year in September, and we have done the pilot marketing here, we're happy to say that we have taken close to about 150 projects and executed close to 100 projects in Bangalore. Now, having gone through the learning curve and the challenges that we faced in terms of last-mile installation and so on and so forth, we have constantly been focusing on getting a five-star rating from our customers because in the premium and luxury business, it's very important that we get a 100% customer satisfaction report. So that has been our main focus. As we speak, I think at this point in time, we are convinced we have been able to successfully launch and succeed this in the Bangalore market. While the stores have been put up in Bombay and Hyderabad, we are going to start marketing it one city at a time, and there will be a gradual ramp-up as far as this is concerned. We are hoping that in about a year and a half time, we will be pan-India present with our kitchen brand. Okay. Got it. And Pradeep, sir, can you split your revenue growth and give us a segmental revenue in terms of your store format as to how Stanley Level Next, Stanley Boutique, and Sofas and More have grown in revenue in this quarter? Sorry. What is the question there? Sorry. The question is if you can give format-wise revenue growth for the quarter. For Stanley, how much has Stanley Level Next grown in the quarter, Stanley Boutique growth, and Sofas & More growth? Okay. Okay. Yeah. Compared to last year Q1? Yeah. Yeah. So of all the three formats, Stanley Level Next has reported a growth from quarter one to quarter one almost 35%, and Stanley Boutique and Sofas & More have almost been flattish to negative to almost like negative 5% growth in other two segments. So our luxury segment is really showing significant growth. Stanley Boutique had its own challenge where a few stores were under renovations, and hence, it is a little flattish. Sofas & More, for the first time in this quarter one, is showing flattish to a little negative kind of growth. Okay. Okay. Lastly, how has been the trend in A&P spends? Trend in? Advertising spends. Advertising spends. In fact, I think we have been restrictive and reduced our advertisement spend in Q1 considering that markets were fairly subdued, and we didn't get initial response. So I think we have ended up spending what is the percentage? Much. It's about 3.4%. Compared to? Versus 5.5% last year. We have reduced by almost half. 2 percent. Yeah. 2.5%. Yeah. Okay. Got it. Got it. Lastly, sir, this gross margin, obviously, the impact that you said because of certain shipment, forex, are the things normalizing from Q2 onwards, and you think whether we'll stay at 53% or you can move back to that 55%? No. I think it will definitely improve because we have taken a small price hike, point number one. Point number two, we also see the shipment cost stabilizing just at this point in time, plus also the localization. So these three items should kind of bring us back to our previous GP. We are also working on a lot of internal operating efficiency on leather, the way we process and the leather. That is supposed to start yielding results, which we will see the impact from September, October onwards. So we are taking a lot of steps other than price increase to improve internal efficiency to offset this cost. What we believe is from quarter two onwards, we should come back to our 56 I mean, all these scenarios and those one-time bulk sales that we had in quarter one. Without that, we should go back broadly to our quarter four margins. Yeah. For you to also understand times when we have certain store counts which are below maturity at a higher level, these things tend to kind of impact us a little bit. So we try to balance it out. Sure. Got it. Thank you so much, sir. That's all from my side. Thank you very much. Thank you. The next question is from the line of Jaspreet Arora from Equentis PMS. Please go ahead. Yeah. Hi. Good afternoon. Thanks for the opportunity. My question was around the real estate units or quantum of stock to be delivered. What's your broad sense? How much is expected to be delivered in the next two years versus what was actual in the last two years? Just to understand the kind of demand that could be there. Broadly, our data shows that close to about 30,000 units have been sold above INR 3 crore in the past four years, of which I think almost 85% of the projects have been delayed. I'm talking about fully sold inventory, which are delayed in terms of handover. We are not mentioning what has been sold in the last 12 months. We're talking about properties that were sold about 24 months ago. So we believe that where we were expecting, let us say, 100 homes being delivered, only 15 have been delivered in certain key markets. So there has been a cascading delay, primarily because of COVID shutdown and return of employees and so on and so forth. So we are expecting, starting Q2 onwards, better inventory handover, and thereby, we are expecting also better business. Meanwhile, I think we have expanded our store count in the places where this inventory is supposed to come in. Okay. You mentioned ticket size of INR 3 crore and more. Did I hear that right? Correct. Yeah. Okay. This is the segment where the most premium offering is. That's why the Stanley Level Next is that? Somewhere there. This is in the center. For Stanley Level Next, we are safe to say INR 4 crore and above. Stanley Boutique is between INR 2 crore and INR 4 crore, and Sofas & More is INR 1 crore and above. Again, when I look at all-India pricing, Bombay, again, will be almost 2x of that. Good. And just to clarify, this is 85% of the 30,000 units that were sold in the last 12 months and beyond, which are delayed and should see light of the day in the next maybe 12-18 months or 12-24 months? Correct. Also, it will add because also a lot more units have been sold post that. Right. Right. Right. And again, just to clarify, this is pan-India. This is not necessarily our catchment area or where our existing stores are. It's not that, right? It's all-India. No. No. It is top five cities. Oh, I'm sorry. It's top five, and therefore, it is entirely relevant to our markets because we are there in top five. Yeah. Though we are more penetrated in the south, and that is where a lot more inventory is also. So yes, you're right. This is in the top five metros. Okay. Interesting. So okay. Great. This helps. The second is around the store count. I think we are about 61, if I saw that number correctly. Over the next three-four years, what could be our target, or maybe how soon can we go into the triple-digit number? So we are planning 11 stores this financial year. We are more or less on track for that. Having said that, we are not one of those companies who want to rush into store opening because real estate plays a very important role in our business, and finding the suitable real estate still remains a very big challenge. So in my mind, it is planned in such a way that we plan to get to about 100 stores in the next three-four years and a very meaningful growth without losing any stores for lack of business due to bad location. So we have been more and more careful, understanding urban planning where metros might come and disrupt even if you open a store. So a lot of research is being done, so we are cautiously moving forward. Interesting. Got it. Therefore, over the next three-four years, given the existing store count and the new upcoming and the mega real estate units to be handed over, do you think we could easily do INR 900-1,000 crore of top line in that period, three-four years? That's the target. That's a very clear target, primarily. More than the top line, also, we are focused on making sure that we are able to get our bottom line also growing parallelly. Got it. Got it. Thank you so much. And around marketing, I notice there is a fair amount of presence in tier two towns, and obviously, it is, as you said, the catchment areas. So tier one, sir, our product and brand is fairly established, admired, and probably is number one by far and probably would be facing competition only from the imported brands. But when it comes to tier two, how are we kind of positioning it or using what kind of marketing strategy are we using when it comes to the tier two towns? Very important question. Well asked. We are actually now looking at the number of airports that have come up in tier two and planning to do some airport advertisement as far as our catchments are concerned because mostly, our customers do take flights into larger cities. That is one of the things in the plan. Secondly, wherever possible, we are also planning to do some amount of road shows in certain key tier two towns so that we are able to attract the right set of customers. Thirdly, which has already started, we have a business development team which has actually started networking and connecting with architects and interior designers of tier two and tier three towns. We have also started conducting what we call as the familiarization trips. We get architects and interior designers to our facilities, show them everything, how it's made, how it's designed, and thereby, they become our mouthpiece in those catchment areas. Okay. Interesting. In terms of growth level, sir, the top five tier one towns versus our top five in tier two towns, is there a drastic difference in terms of the aspiration level, the ticket size, and the growth that we are witnessing, or is it not too much of a difference? There is definitely. If you look at the wealth spread, I think the major metros, the wealth is more uniformly spread. When you look at the HNI count, there are also a lot more in the urban top five metros of the country, in fact, top three, four metros of the country. However, having said that, there are larger ticket opportunities because there are sufficient rich people in smaller towns and cities of our country, and they tend to go for what you call as villa construction. They don't depend on builders to give them their apartments or penthouses. They do their own large homes, and they are very expansive large homes, and they need a lot of furniture. We are tapping into both these segments. But then when you look at the real HNI housing or the luxury housing, it is more an urban phenomenon at this point in time. Understood. And just last question. I remember listening to one of your interviews where you mentioned that one of the triggers for this organized furniture market and lifestyle market could be a change in the import duties because of the influx of huge imports. Just wanted your thoughts. What's your thought on how soon this could be, and what's the kind of impact it could have on branded players like us? Sure. I think already what is that new rule that they have brought in? BIS. BIS. [crosstalk] Yeah. So already, the Indian government has brought a compulsion for BIS certification while a lot of other retail traders have requested they have extended our one-year time frame. Already, six months has done. So that itself will be the first barrier for free import of furniture from various countries. So we believe that while this process of what you call as blocking free import has already started, it will definitely come into full play probably 12, 24 months from now. The government also is working very clearly with a lobby of furniture manufacturers to give PLI. PLI. PLI to manufacturers. So things are already happening. So we expect that this should come into full play in maybe 12-24 months. Both of them? Both of them. Absolutely. And that jointly together, they will come in together. The first point you mentioned, did you mean BIS certification for all the manufacturers who have units outside India? Absolutely. Already, that has come into play. And I think, like I said, they have given a. Just for chairs and seating? Just for chairs and seating right now. Yeah. So right now, they have implemented BIS certifications for some components which are used in seating solutions. Slowly, they will. We are expecting what we understand is this should get the scope of this should get expanded and include furniture as a category also. And if that happens, it will be a huge tailwind for us. Understood. Understood. Understood. Got it, sir. Thank you so much for that, and I'll come back again. Thank you. Thank you very much. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Abhishek Jain from InvestWell Agents. Please go ahead. Hello. Yeah. Good afternoon. Good afternoon, sir. Sir, I have got most of the answers. Most of the questions have been answered. Just wanted to know about your focus on the contract manufacturing. Since it's a legacy business, what kind of opportunity do you see going ahead? What is your vision in INR 1,000 crore of revenue target? Where do you see your contract manufacturing division? Our main focus continues to be our B2C business because we see tremendous opportunity in terms of premium housing just now while India is maturing steadily from basic needs and necessities to lifestyle, and then finally, from lifestyle to travel and automobile luxury. In this phase, a lot of HNI Indians are entering what is known as housing luxury. That is a little matured phase in a developed country. And as the country develops, a lot of people are getting into what we call as premium housing. So we will continue to invest in ensuring that we are able to play an important role in premium housing where branded furniture and custom furniture comes into play. That will constantly remain our absolute focus while B2B has been a legacy business for us, and we have already set customers for over multiple years, and we have a good opportunity to also grow with their needs for global requirements. We already started exporting our furniture to certain countries. To hedge the forex, we will also continue to keep the B2B business in a similar position where it is with a 20/80 formula going forward also. Thank you, sir. That's it from my side. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Avinash from Parimal Financial Services. Please go ahead. Yeah. Thanks for the opportunity. I have a. Sorry to interrupt you, sir. May I request you to please use your handset? Yeah. I'm calling from my landline phone only. Can you hear me now? Yes. Better. Yeah. So my query is regarding to the growth in the matured stores, whatever operating matrix you track it internally. So what has been the growth for stores which has been there in the system for at least one year or more? Actually, as I mentioned, our stores come to what we call as full maturity around the fourth year. The trend we have been observing is that the store usually gives us about 60% of business the first year, about 70%-75% the second year, and about 85% the third year. Then at fourth year, we call it as a fully matured store. Also, having said that, it depends. If we are expanding in the particular cluster, there will be some amount of cannibalization from older stores, but that doesn't matter because we actually take a larger market share. Having said that, our challenge has been constant, and we look at how do we expand our product portfolio. Four years ago, most of our stores only sold living room sofa sets or recliners. Today, most of our stores are selling a lot more. We are actually focused on getting the average ticket size of the customers also bigger as we go forward, and that is how we have continued to expand. I understand what you're saying is that the first year of new store opening, you hit 60%, 70%, 90% over the subsequent quarters, subsequent years. So what I want to understand is, so if you can provide us whether that 60% is being achieved by the newer stores because there's a 5%, 6% growth which is the value growth. So what is the volume growth between Q1 last year and Q1 this year? Yeah. So what we do is we see more than two-year store as a more matured store. And across all the three formats, Stanley Level Next, which is my luxury format store, this more than two-year store format is showing an average growth of 20%-25%. Again, to understand here, this growth is coming in mainly because we have pivoted to a more complete home solution offering where we are now catering to furniture for the entire room of the house, including kitchen, which is your modular kitchens, wardrobes, living room furniture, dining room, along with the existing seating solution which we already had. So this offering right now, we've only. Started. Started in Stanley Level Next, and hence, we are able to see this strong SSSG growth. In Stanley Boutique FY24, while it was the old legacy format, what we have seen is this store format currently is undergoing a renovation where last year, two major stores were down for renovation, and a couple of stores got impacted. It was a one-time impact. So in this particular format, we are seeing a negative SSSG. The third format, which is Sofas & More, this format is again very promising. It's at the value premium range. Again, in Stanley Boutique and Sofas & More, we are only selling loose furniture which are more seating and very small dining table and other offerings that we have. It's still not a full home concept. So in Sofas & More also, we are seeing a moderate 5%-7% SSSG. Also, we have innovated and added a lot more SKUs which are going to go to market from 1st of September in Stanley Boutique as well as in Sofas & More. So we are expanding the product offering. Of course, we are not getting into kitchens and wardrobes just yet, but we are offering a lot more loose furniture such as cabinets, bedside tables, and so on and so forth. Are we doing anything which we are not adding value, and they are imported and straight away sold from our stores? A small percentage of case goods which are primarily coffee tables and dining tables in the Sofas & More are imported and retailed. While we have just commenced our case goods facility and added more equipment and machinery, the plan is to kind of completely be self-sufficient in terms of manufacturing in the next 12-18 months. Until such time, there will be some components and some pieces of furniture that will be imported and retailed. As of now, Level Next, almost 95% of the furniture is fully made in-house. Perhaps only the lighting and certain accessories we are importing. Stanley Boutique, almost about 85%-90% is fully made. And again, maybe 10%-15% is imported, like carpets and accessories. Sofas & More, 65% is produced by us. About 35% is imported and sold. That also, as we go forward, we plan to bring it into production. So we are actually whatever learning and success we have had in the luxury, we are slowly and steadily dropping it into the other two segments going forward. The format of the stores in terms of the size of the stores are likely to be around the average what we have now, or is there a change in thought process of having slightly larger format stores? More or less. We have also piloted with our anchor store, the first store that started almost a year ago near the Bangalore airport, houses all the three formats. Actually, that has given us more success because we are able to cater to a wider customer base and also to the same customer who wants a slightly less expensive item for different rooms of the house. Going forward, in certain matured cities where we already have a strong brand presence, for example, like Hyderabad, Chennai, and Bombay, where we have identified locations closer to the airports, and we might put up these kind of anchor stores. Okay. Thanks a lot. Thank you very much. Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Nishant Sharma from Nuvama. Please go ahead. Thank you for the opportunity, sir. Sir, you were referring on the B2B business. Sorry, I joined a little late, so may not have the earlier update. While IPO meet, you were also discussing about the B2B segment. So can you just update what is happening on the B2B side? Have we added any new client, or are we reducing our focus on that segment? No. It's not that we are reducing our focus on that segment, but our full focus remains more on our B2C business. Having said that, yes, we have added a new customer in the form of Steelcase, which is an American company for their domestic manufacturing. We have signed up a contract with them, so we will start supplying to them as we go forward. Our current business with certain traditional players, which we have already been associated for more than 5, 7 years, continues. They are, in fact, facing some global headwinds, and their business has been slightly more subdued in the last quarter. We are hoping that their business also improves so that we are able to export. We currently export to quite a few countries through those brands, including Europe and America and Middle East. What is the share of B2B and B2C right now, and how do we foresee going forward? Yeah. 78 and 22, that's been the trend for FY24 as well. As per what we anticipate is both the segments will continue growth, and we'll maintain a ratio of 80/20 between B2C and B2B. Going forward. Going forward. Okay. Lastly, on the domestic sourcing, is there any update on the domestic sourcing which can help margin improvement going forward? That would be my last question, sir. Definitely, sir. As I mentioned, we have already started the localization process almost a year and a half ago. Currently, around 30%-33% of our leather has been localized. My target is to get to a point of 75% localization in the next 18-24 months. Since we cannot manage to drop our quality, and we will continue to depend on European JV partners to kind of give us the technical know-how, this process is going to be fairly organic, and we need to have patience because we need to invest in certain the tanners who are supplying us in India need to invest in certain machines and equipment. Right. What kind of margin benefit we can get through this overseas next 18-24 months once we are able to expand this thing? So two things. One is that we'll be fairly protected from two things. One is from the most expensive, what do you call it, transportation costs that have actually skyrocketed in the last three-four months because of the Red Sea issue. That will give us a little bit of savings. Secondly, also from the forex. That could also give us sufficiency. Our target is to get to about 20%-22% overall savings as far as the localization is concerned. Okay. Fair, sir. Thank you very much, and I'll fall back in too. Thank you. Thank you. Thank you. The next question is from the line of Rohan Kalle from InCred Capital. Please go ahead. Yeah. Thank you. Thank you for the follow-up, sir. Just wanted to follow up on the B2B side. May I request you to please use your handset? Yeah. Is this better? Yeah. Yeah. So just wanted to follow up on the B2B side. We already service a large Swedish retailer, and we also, like you said, have Steelcase now in pipeline. So just assuming if we get another account on the B2B side, do we have enough capacity in our existing facility, or will we need to maybe look at a new facility? Absolutely. So yes, you're right. We are servicing a large Swedish retail chain now, and we have adequate capacity. Capacity as far as machinery as well as the plant is concerned, there is no challenge. We'll need to probably only include more manpower as we go forward. Sure. And on the localization part, I understand that we're targeting a 75% localization over the next few years. Just to understand, will it largely be the case that for Stanley Level Next, we will still be importing, and the localized sort of sourcing will be used for the other two brands? Yes, you're right. You're right. And even the entry level of Stanley Level Next is being planned to localize, but the top end of Stanley Level Next will continue to be Europe independent. Sure, sir. Okay. Thank you. I'll get back to you. Thank you. Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to the management for closing comments. Thank you, everyone, for joining our Q1 FY25 earnings call. In summary, I want to thank you all for your time, and we reiterate how excited we are about the future and look forward to continuing our post-IPO journey with your support. If you have any further questions, please feel free to contact our investor relations advisor, Churchgate Partners, and we'll be happy to address your queries. Thank you very much. Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect.