Ladies and gentlemen, good day, and welcome to the Stanley Lifestyles Limited Q4 and FY 2026 earnings conference call, hosted by Emkay Global Financial Services 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 this 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. Sunny Bhadra, Emkay Global Financial Services Limited. Thank you, and over to you, sir. Yeah. Thank you, Swapnali. Good morning, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Mr. Sunil Suresh, Chairman and Managing Director, Ms. Shubha Sunil, Whole-Time Director, and Mr. Venkataramana Seshagirirao Gorti, Joint Managing Director. I shall now hand over the call to the management for the opening remarks. Over to you, sir. Good morning, and thank you for joining us. As we reflect on FY 2026, I would like to begin by sharing some important updates on our business journey. Over the past year, we have remained focused on strengthening the foundation of the company through strategic corrections, investments, and operational enhancements aimed at building long-term value. While the financial performance over the last few quarters has remained relatively flat, the period has been marked by important strategic decisions focused on strengthening our capabilities, improving execution, and preparing the company for sustainable long-term growth. Before I go further, let me state this clearly. As promoters, we have been building Stanley for over 30 years. Throughout this journey, we have remained fully invested in the business. We have not diluted our shareholding, which clearly demonstrates our confidence and positive outlook towards the future of our company. We believe that when promoters have conviction in the future direction of the business, it is important to demonstrate that confidence through action and not merely through words. Our capital remains committed alongside yours, and our approach continues to be long-term, disciplined, and patient. Further, as already informed to the stock exchange and approved by the board of directors in its meeting held on 27th May 2026, we are proceeding with the proposed merger process of subsidiaries and step-down subsidiaries into a single listed entity, that is Stanley Lifestyles Limited, which will enable sharper operational focus, faster financial reporting, improved efficiency, and reduction in duplication arising from multiple subsidiary audit and compliance processes. At the same time, we have fundamentally reshaped our retail business. From being dependent primarily in Bengaluru, we now have a direct company-owned company presence across key markets including Chennai, Hyderabad, Pune, Mumbai, and Delhi. Together, these markets account to nearly 80% of India's luxury housing demand. Equally important is the manner in which the expansion has been built. Over the last two years, we strategically acquired and converted key franchisee markets, particularly in Chennai, Hyderabad, and Pune, into company-owned company operation stores. These markets have delivered over 40% year-on-year growth. More importantly, this transaction was about control and not merely growth. Under the franchisee model, we observed under-investment, inconsistency in customer experience, and deep discounting practices that did not align with the luxury positioning of our brand. We took a conscious decision to bring these markets under direct operational control. In the luxury segment, scale without control leads to dilution. We have consciously chosen control. Over the past year, we have taken several difficult but necessary decisions. The recent changes in the key management personnel resulted in certain short-term disruptions. However, we remain uncompromising in our commitment to bring the right leadership into the organization. Now I would like to invite Mr. Venkataram Managing Director, to walk you through the business performance of our company. Thank you, Sunil, and very good morning. Over the last 12 months, we have shut down three underperforming stores. On the positive side, we have also opened 11 new stores, with five additional stores expected to commence operations shortly. Importantly, over half of our stores are under gestation period and are still in the investment and ramp-up phase. In addition, the launch of our 60,000+ sq ft flagship store in Hyderabad was delayed due to certain regulatory approvals, resulting in a deferment of revenue recognition by couple of quarters. We would be opening our first international franchisee showroom in Sri Lanka at the beginning of Q2 FY 2027. The following factors have had a short-term impact on profitability. The first one is new stores that are yet to achieve maturity, pre-operating and expansion-related expenses, and temporary overlap in KMP compensation. Due to Ind AS, lease rentals are front-loaded, which depresses reportedly profitability during the initial years of store operations, which resulted in higher depreciation and finance cost of INR 14.7 crores. These are forward-looking investments preparing us for the next phase of growth. We have assessed the impact of new labor code and have recognized INR 3.3 crores under exceptional item. We have also faced certain external headwinds. The appreciation in the US dollar and the euro impacted our input costs. Further, geopolitical disruptions, including the West Asia conflict, affected conversion cycles and the shipment schedules. From the middle of Q4 FY 2026, we started witnessing a decline in our B2B demand, consequently impacting our revenues in Q4 FY 2026. The supply chain disruptions, longer lead time, higher costs across value stream, along with the broader weakness on the demand side, impacted our performances in Q4 and is expected to flow into FY 2027. Despite these challenges, the underlying strength of our businesses remains intact. We are an order book-led company with approximately 75% of our B2C business driven by confirmed customer orders. We commence FY 2027 with our highest ever order book of approximately INR 62 crores compared to INR 45 crores in April 2025. Our cash reserve remains strong at almost INR 200 crores as of end of this year as compared to the last year, where we ended with INR 215 crores. In spite of our highest ever capital investment exceeding INR 60 crores, this clearly reflects disciplined capital allocation and the inherent strength of our operating model. At a structural level, the operating environment continues to remain favorable. Furniture imports, which represents our primary source of competition, are currently under pressure due to the foreign currency fluctuations, the supply chain and logistics disruptions, and the regulatory measures, the QCO, the quality control order, coming into effect from August 2026. At the same time, we are very well focused on our best cost country strategic sourcing approach, where our key inputs and continue to remain competitive in these challenging situations. This continued approach has enabled us to achieve cost optimization, leading to year-over-year expansion in gross margin in FY 2026 by 151 bps from 56.3% in FY 2025 to 57.5% in FY 2026. Improved turnaround time, the higher customization capability, and stronger quality controls. We believe this transition is creating a meaningful structural competitive advantage for Stanley. On the demand side, the project handovers across key markets continues to be delayed. While the customer footfalls remain steady, conversion cycles have become longer. We believe handover activity across the top six cities is likely to accelerate over the next few quarters and will keep increasing trends during the FY 2027 to FY 2030 period. Stepping back, the long-term fundamentals of both our businesses as well as the market remain strong. India is entering a phase where the highest ever inventory of completed premium homes will come into the market over the next five years. This is not merely a projection, it's already visible in the supply pipeline. To summarize, we have a strong presence across the most relevant markets, a significantly expanded retail network, a structurally improving competitive position, and a disciplined, debt-free balance sheet. We are not building Stanley for the next quarter. We are building Stanley for the next decade. We now open the floor for questions. Thank you. Thank you. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants, you 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, you may press star and one to ask a question. We have the first question from the line of Sidharth from iThought Wealth. Please go ahead. Hi, sir. My first question is regarding the performance of matured stores. Let's say stores which have been opened for more than three years. What is the revenue growth for these stores in the last three years? Hello. Most of the stores which are over three years have grown by about 4%. However, most of the stores still do not have our complete own solutions. That is a process that is in process, and as we go forward, they're moving from only living room furniture stores towards complete home solution stores. We keep adding our kitchen and cabinetry into these stores. We expect the healthy stores to generate about 10%-15% going forward. Matured stores. When you say four. Yeah. When you say 4% is the growth, let's say, the number of stores you had in 2022, are you saying that they've been growing at 4% for the last four years? Yes. That is correct. I just had this doubt because your revenue from company-owned, company-operated stores is the same for 2023 and 2026, while the number of stores have gone up. I was wondering why that is the case. Probably, I think you might want to understand that while there are certain new stores that have kicked in, so when you really look at it, certain old stores are performing better than 4%, but averaging around 4% is what we have seen. Okay. Yeah. Thank you. We will take the next question from the line of Kranthi Bathini from Wealthmills Securities Private Limited. Please go ahead. Hi, Sunilji. Just want to know how the predictions for the next coming quarters seems to be, because you are mentioning that from the past one year, there is a lot of euphoria. Of course, there are pre-booking for ultra-luxury homes and flats and villas are concerned. By when you can see some kind of a visible growth in terms of the sales are going to be? What are the strategies you are implementing? This is my second question. The third question is, you mentioned that there are short-term disruptions that you experienced. Could you just elaborate what are the short-term disruptions that you experienced in the past one quarter? Thank you. Yeah, in terms of our earnings call, we have clearly mentioned that we have used this past 18-24 months to consolidate ourselves, actually move from our home market and acquire cities. The top six cities today contribute to 80% of India's premium housing, which is Delhi, Mumbai, Pune, Hyderabad, Bangalore, and Chennai. Today, we are very happy that we have complete control and company-owned, company-operated stores in all these cities. Earlier, these cities had either franchisees or partnered stores, and we had a lot of issues because they were not investing for the future growth of those markets, and there was a deep discounting. We took a strategic call to start acquiring this, and as we have demonstrated, the three cities of Pune, Chennai, and Hyderabad. In the last year, they've demonstrated more than 40% growth. This was the first strategic move, what we did. We have taken control over the major six cities of the country, which contributes to 80% of the premium housing that has already been sold and in inventory and is scheduled to come into market in the next five years. Secondly, from a strategic standpoint, we are quite positive because the QCO is going to take effect from 15th of August. That will start deterring imports, which is our main competition. We do not have segment-wise competition in the local market. We have mostly importers who are our main competitors. Also, the increase in forex is affecting them to import going forward. We believe that we are in the right position. We also consolidated all the downstream companies that we had, and we will be a single entity going forward. That's how we believe that we have used this last 18-24 months to completely prepare for the next three to five years of solid growth. My other question was, what are the disruptions that you experienced? You also mentioned in your statement also, the short-term disruptions the company have witnessed in the last quarter. Could you just elaborate? Yes, sure. As you know, we have a B2B wing where we supply to one of the world's largest furniture brands. That furniture brand was actually importing from us for their Middle East market. When the war broke out, the entire logistics completely came to a standstill, and all the orders got postponed. We are still struggling with that. Hopefully by Q2 it will get streamlined. The entire export that we were doing from here for that world's largest brand has been suppressed for a while because of the Middle East. Because Middle East was the main country where they were importing from us. Okay, sir. Thank you. Thank you. Best wishes for the coming quarters. Thank you very much. Thank you. We have the next question from the line of Sanjay Singh from Tenex Capital. Please go ahead. Yeah, hi. I think, Sunil, I had a discussion with you guys some time back, a few months back, or maybe a year back. One thing which I'm completely surprised in today's age, where discovery for anything from a large item like a car to even a small item like a fan is discovered online, all features, pricing, et cetera. Today you still don't have a functional website where I can go and check products, sizing, pricing. Some products are there. In some products, the sizes are there. In some products, the sizes are not there. There's no pricing. The digital discovery is not difficult, but impossible. There are other brands, including a premium brand like BoConcept or an Indian brand like Tianu, where you can actually go and see the sizes, see the pricing, et cetera. I don't know why is this missing and why is it so difficult to do this. That is one question. Where are you in this journey and where can we see a proper digital discovery? Number one. Including when you visit in the stores. I've personally bought a few products recently, and something as basic as if you want to see a sofa in a different leather color or something, you cannot show it digitally. I mean, in today's AI age, you can just put a prompt in the ChatGPT and you can get the picture. Even after requesting the store, and this is I'm talking the Worli store, they couldn't give me a digital picture of the image of the color I wanted. I don't know why. You can do it. The cars do it all the time online. You can change the picture, color of the car, you can see the color, how it looks like. Again, third is on pricing. I think you have a great product. The prices are extremely good, somehow it is priced above and then you have to haggle for a discount, which kind of disturbs the whole experience. I've watched you in the past, again, as you look at a brand like Tianu, where the pricing is there and there is no discounting unless until there's a sale going on. The sale is very short-term, very practical, not a blanket, like sale is open anytime. What happens is when a customer goes and somebody quotes a sofa of INR 10 lakhs, which is beyond his budget, he doesn't even ask for a discount. Whereas if the same price is around, let's say INR 6.5 lakh, INR 7 lakh, which what the actual price would be, it comes into his buying range. Many customers don't even probably go through the process. Three things, digital discovery, a transparent pricing is I think what would do very well for the brand and for sales. Any thoughts on these? Yeah. First of all, I think I must thank you for these questions, and humbly will also like to say that we have been a little bit slow in terms of our digital implementation to the required standards of what the world is going to. We have been a bit slow on that. Having said that, I think we are going to also do a very surprising orbit leap, if I might say, because what was available as tools to people like us in the past and post AI has been completely changing. While we actually started on something about a year and a half, two years ago, we realized that that is also going to be defunct, and so now we are in the process of actually coming up with the latest gen of technology with what is known as AR and VR implemented. Answering your question, I think, which is a very relevant question is that we did not have absolute control over the major markets of the country. First we decided to do company-owned, company-operated, which was very essential because furniture as an industry suffers from deep discounting, and we could not control that with our franchises in the past. That is already past us now. We have very quietly, very silently, post IPO acquired the top six markets, which are all now under complete company-owned, company-operated control, which was very essential for this. Coming back in terms of, yes, the global brands, you're right, they are actually quite advanced in terms of how they are able to get themselves digitally discovered. Our previous era, we were spending more time on business development and customer acquisition because most of our customers were above 45 and 50 years old. I think by 2025, now we have changed our methodology as we realize we are getting more younger customers now, and we are going to be actually doing a lot of digital implementation going forward in the next I understand the whole world of furniture business because I have the exposure to all the major global brands. While they are mostly very limited in their bespoke offering, Stanley, because of Indian requirement and Indian customer demand for multiple choices, has a lot of bespoke offerings. It is a bit difficult for us to technically be advanced in a way, so that piece is being done. The SAP implementation is done, so we're able to get a control on everything right now, and the digital implementation is in process. We will be definitely making sure that by end of this financial year, actually starting with our new flagship store, which is now scheduled to go live hopefully by July in Hyderabad, which is our Stanley Superlative Living, there's a lot of tech implementation we have done. This time, like I said, we are going to do it with the help of AI. This is what I can tell you, but you'll see a surprise change going forward in the way we are going to approach digitally. Will you have a completely revamped website by end of this financial year is what you're saying? Exactly. Absolutely and exactly. Already the entire framework for that has started, and we'll have a very exciting and new website by the end of this financial year. I'm sure you'll be aware, if you're not aware, I would urge you to look at the website and the pricing policies of this Indian brand called Tianu. I think it is the best in class. I've bought from both these places, both Stanley and Tianu in the past. I think while you stand great as a product, I think the pricing and the digital offering of Tianu is worth studying for probably replicating it, if possible. Is what I would urge you to do. Thank you. Thank you very much. 100%, we will take a look and learn from it. Not a problem. Thank you. Tianu, make a note. Thank you. We will take the next question from the line of Arvind Arora from A Square Capital. Please go ahead. Hello. Am I audible? Yes, you're audible. Please proceed. Yeah. Sir, can you please give us a break-up of B2B and B2C sale during the current quarter? Breakup of? B2B and B2C sales during the quarter. I think B2C we have grown. Both here. In the last quarter you want, in Q4? Yes. Yeah. B2B and B2C in Q4. We had about 70% is B2C and about 30% is B2B. Okay. Is it like we have grown in B2B, like 30%? Normal mixture is 75/25. Actually, B2B also is technically not so much of growth. Going forward years, I think we have a lot of forecast from B2B also. Hopefully, end of the day, I think we will keep that ratio between 75/25 or 80/20. That is how we look at how it's going to play out. Sir, considering that you are saying there are lots of challenge, why we are not strategically taking? In the past, you said there are lots of inquiry that we are getting for B2B business, but we are not going ahead because of the pricing and everything. If you look at our plant utilization level, it is not at so great level. Why we are not converting that deal? Is there any rationale on that? Our fixed cost can be absorbed, correct? Agree with you. Again, the thing is that, always having been setting up our back-end facilities to be catering to the premium end of B2C, we are not prepared to go into the market and compete with the low-end B2B requirements and inquiries that come our way. Whereas we are really capable of catering to the high-end B2B business, and that is what we see is slowly coming to us. We have a couple of very strong inquiries which have come. Our expertise has been in managing the natural materials such as marble and leather, and so on and so forth. The competition in the low-end B2B is very difficult because there are a lot of unorganized players. When the segment improves, when the people are asking for a higher end of B2B, I think they will look at us as one of the opportunities. In fact, as we speak, we have been inquired by some major MNCs who are wanting high-end replacement for large American companies that are present here and doing thousands of crores of business, such as [Inaudible], and so on and so forth. We are getting some inquiries where they want high-end products. Going forward, I think when the segment pitch is correct, we will definitely participate. Right now, as I said, we are unable to compete with the unorganized market in the low-end B2B China import as well as local B2B manufacturing. Understood. Thank you. Sir, where we are investing for future growth in the coming year, in 2027 and 2028? What is our target so that we can grow faster? Are you expecting J shape recovery, sir, since three years is almost completed now? How you look at going ahead? Basically we have a strong measure and in terms of us, we are definitely going to focus more on becoming a complete solution provider because our breadth has developed significantly in some measure now. As we open up new stores, as we do our bit, there are going to be more designer-like complete home solution stores that we are going to target. A lot of imagery that we showed in our five to seven years, which is going to come to fruition in the next five years. Our primary focus in the major six metros is to be a strong player as a complete home solution provider. That is going to be our core area of focus and growth. We are now quite excited. If the tariffs increase, we have an opportunity for some exports. We are also looking at some exports. We want to hedge our imports, we are also looking at some exports in B2B. These are the two major area of focus for us. Understood. Sir, any specific reason we are not doing social media influencer or advertisement to gain the market in B2C segment? The dynamic has changed. Now, people who is like 22, 25 age bracket, they are also on it, and they also want to upgrade their home and everything, but they are heavily addicted to social media and everything. Unless they don't see our advertisement, then there would be an impact. Is there any rationale where you have done any study and you are thinking that return on investment would not be great or something like that? I will answer it in a very specific way, the way we understand it. One is that the entire digital marketing has been flooded with lot of funded companies who are actually spending a lot of money, and their entire customer acquisition cost is over 25%, 30%. As a 30-year-old brand, we have been very, I would say, reserved and very meaningful. Never has our marketing expenses gone above 10%. We have always restricted below 10%. Having said that, I think there is a lot of fatigue, and also we are constantly keeping an eye on our customer base and customer profile. While actually the social media is used by younger people, they are becoming influencers for their parents who are buying the furniture from us. If somebody has to buy a furniture from us at the Pan-India level, they have to have a budget of minimum INR 2 crores for the house. INR 2 or INR 3 crores for the house, minimum. Mumbai will be almost double. To get to that point, the average age is about 45-50 years, 40 years plus are our customers. You're absolutely right, we are transiting very meaningfully. Now the rates are also cooling. Also being in the premium and the luxury segment, it is difficult to communicate within a fraction of a swipe. We were quite traditional in our approach. Definitely having said that, we are going to now look at social media starting from 2026 in a very different way. We might even start looking at some meaningful, I would say, influencers, so that we are able to position ourselves better. This is a transition period for a 30-year-old brand. Definitely we are going to transit, if I might answer you that way. Understood. Okay, sir. By the way, one paid question. Sorry to interrupt in between, Arvind. I would request you to please rejoin the queue for more questions. Thank you. We will take the next question from the line of Mahesh Attal from Beria Investment Advisors. Please go ahead. Sir, I assume you have 21 stores which are less than two years aged. At what level do they maybe start gushing out cash? If you can just elaborate on the store economics. I think 21 plus 12 are below three years. If you can just tell me more about how do we look at stores aging and the stores gushing out cash. Yeah. In our experience so far, we have seen various kind of results coming from stores. If a store is probably one in the particular catchment, sometimes even in 15, 18 months, we have got our ROIs. Sometimes if the market has. For example, in Bangalore, we kind of had to open more stores because the city is growing in such a way and the locations were not. We have micro markets in Bangalore. Sometimes it is taking between 24 to 36 months. Today, if you ask me in 2026, I will safely say that our ROI is about three years. That is what is our ROI. Okay. Second question would be more on all the things that you are having on your stores, all the inventory, is it all locally sourced or you are manufacturing it? How much of it is done locally and how much of it is imported? If you can just throw some light on that. Basically, if you go back around three to four years ago, the import content of furniture, finished furniture in our store was almost 30%, and our Made in India products were about 70%. Today, we will say that I think most of our stores are about 85% to 90% completely made by us. We have expanded our facility to add different products such as beds, mattress, dining table. We are a complete solution provider. I think almost 90% today is our Made in India product. While we still depend on raw material imports because we don't get high quality raw materials, everything is locally made. We have actually de-risked ourselves from the supply chain from the [Inaudible]. What would normally take about two months to get in position earlier or one and a half months is now taking almost four to five months. That challenge we don't have because while we still depend on raw material for our manufacturing, but we are able to still deliver product in six to eight weeks, which I think is a great mode for us. All right. If I go along with what you have said for the stores aging thing, so I assume that another 12 or maybe 15 stores would be turning out in that ROI phase. Do you think that your margins shooting up in the coming years because of this happening? Also you said once everything is localized, I think that also helps you in adding a bit to your margins. How do we look at that, sir? With stores aging and then you localizing everything, both things coming, does this help our business? Yes. basically, just to go back, even if you look at last year performance, we have not changed top line growth. We have been very prudent in our investment. Despite INR 60 crore going as investment, we still hold INR 200 crore from INR 215 crore last year. We've been very prudent in our investment. Secondly, if you also look at it, our GP has actually improved. Though by marginally, it has actually improved. We believe that with the 151 [bps], it's actually improved. We believe that we will definitely start looking at better margins going forward with most of the stores now becoming company-owned, company-operated. To also answer you, this investment will continue for some more time because we are in the process of consolidating. In markets where we have been present for more than 10, 15, 20 years, and we understand where the actual locations are better, certain smaller stores we might shut down, relocate to much bigger format. We might reduce the store count. It is not necessary that we are going to increase the store count, but the business from single stores will be much larger because we will go in with larger format. We also realize that homemaking is not an everyday affair. Homemaking is once in a 10 year, and people like to go to a place where there is a bigger choice. Our new age store that is coming up in Hyderabad, which is spread over 60,000 sq ft, that is the new model that we are thinking of because we believe that will be better for control and better for margin improvement and profitability also. My last question would be. Sorry to interrupt in between, Mahesh. I would request you to please rejoin the queue for more questions. Thank you. We will take the next question from the line of Gunit Singh from Counter Cyclical Investments. Please go ahead. Hi, sir. We have almost doubled our Stanley Next Level Next store counts since FY 2023, added five Stanley Boutiques, and almost doubled our Sofas & More stores also. If you look at the revenues for FY 2023, we have seen no growth at a certain point. I want to understand if something different we will do going forward. Are we thinking of pivoting a strategy because things don't seem to be working in the favor of the company since FY 2023. The operating profit that we made this year barely covers our interest payments and the depreciation. I want to understand what is the strategy going forward for growth and to increase profitability. If you look at our store aging today, we have almost 30 stores which are below a year, and 38 stores above three years. As I mentioned, most of the cities that we did not have a COCO presence, we have obtained COCO presence. We believe that going forward, we'll be able to manage this in a much better way, and that's exactly what we have done. You might want to think of it as a sort of a pause that we did to kind of get an understanding. There were a lot of issues in terms of getting our kitchen and cabinetry business up and running. We had a lot of challenges in the field. That has been managed. Our average ticket size are constantly ballooning now, and we believe that we will be able to demonstrate much healthier growth in the next coming quarters. Not in terms of the top line, but also in terms of bottom and top line, both. Got it. Since we've added so many stores over the last three years, why have the stores not contributed positively to the revenues? Also, if you can share the same store sales growth year-over-year. Have we been seeing negative same store sales growth? Is that the reason why the revenues do not grow? For the mature stores over three years, what is the same store sales growth? See, we have a SLN, this one is? Yeah. We have a same-store sales growth of 11.6% improved in our Stanley Level Next. In our Sofas & More, we have a 3.5% improvement. Only we have lost 8.1% in Stanley Boutique, which was a old format, which is now being converted into a complete home solution format. When you look at it as a mixture, as a complete mixture, we have still grown at 4% when you look at same-store sales growth. Yeah, that is definitely in the positive way we are growing. What happened was, since we started moving towards acquiring more of our franchisee stores in our six major metros, the other franchisee businesses dropped. Though they are not investing enough, the other smaller franchisees, almost there is a 35% drop in our franchisee business. In the company-owned, company-operated, you are seeing a growth. Same-store growth is 11.6% in Stanley Level Next, 3.5% in Sofas & More. Stanley Boutique, because it is going through a complete, I would call it as an evolutionary change, where we already have two stores, new format up, we are deliberately slowing down on that. In the presentation, the number of stores slide that we have, does it only have the COCO stores? No. I mean, I don't understand why the numbers are coming up, while same-store growth was 3.4% and revenues are flat since FY 2023. As I mentioned to you, we have suffered a 35% degrowth in our franchisee stores. While our company-owned stores have grown, we have actually suffered a 35% degrowth in franchisee stores. Also, we lost about INR 18-20 crores of business in terms of our leather trading, which we converted to cash and carry. Now we have started improving because a lot of debt in the market, and we want to be a cash-and-carry company. That is another item that we lost almost about INR 18 crores last year from INR 24 crores. Got it. Yeah. Got it. Now that we have these learnings and, I mean, now how many stores do we have, and what is the strategy related to franchisee now that we are at the juncture? What kind of growth are looking at in FY 2027, and what kind of income margins are we looking at given the added stores and they are also maturing? Currently, we have 49 CoCo stores and 22 FoFo stores, that is franchisee-owned, franchisee-operated. Of course, our model is a 100% cash-and-carry model. In our CoCo also, we run a 50% advance and 50% before delivery kind of a system. From a business standpoint, we are not changing anything to achieve any immediate top-line growth. We will continue to do this. Our strategy is that, like I said, at this point, we are very clearly, and with the knowledge of data and understanding the premium housing market of India, where it was sold, how many units were sold in each of the cities. We realized that 80% of India's premium housing was sold in these six metros. Strategically, in the last two, three years, we have actually taken a decision to negate our franchises in these six cities and taken company-owned, company-operated store positions there. We believe that. Also, as we are pivoting from a furniture brand to a complete solution brand, that transition is taking more time. You will definitely see much improved growth this year. We believe from our data, the actual handovers are going to peak in FY 2028, FY 2029. We want to be present there because from a franchise point, we understand the handovers of most of the premium and luxury homes, whatever is in the last six years, is all coming to market in FY 2027 and FY 2028 and FY 2029. Those three years are going to be acute requirement for home furniture, and in these metros, we have a good position. This is how the strategy moved. Understood. Thank you very much, I wish you all the best. Thank you. Thank you. You're welcome. Sorry. We'll take the next question from the line of Sidharth from iThought Wealth. Please go ahead. Hi, sir. I want to know what percentage of the matured stores that you have currently are already in catchments which are matured, like you have to relocate them. It's a very good question, what you ask. You are right. I think we have about three to four legacy stores, especially, I think, in Bangalore, one or two in Hyderabad. I think about three to four stores, either we will relocate or we will consolidate and open one larger store. That is the plan. We will definitely, probably, I would say, shut down a couple of stores. One we already relocated in Bangalore which was actually in a fully developed catchment and it was slowing down. We moved the same store to almost three, 4 km ahead of the same road where the residential development is happening. Similarly, we are doing the same activity in few more stores, which are our legacy stores. This will all be consolidated by end of FY 2027. My next question is, since you guys are now into full home solutions as well, do you have any idea of the new houses that are being built? The new homes that are being built, are they coming with this warm shell condition? If yes, what percentage of it is coming with warm shell condition? A very well-articulated question, if I might answer you. See, earlier the builders were never selling in warm shell. About five years ago, a builder was ready to give in any condition that you want, what is known as cold shell, where they would give the building without even the flooring, and the customer could choose the flooring and do whatever they wanted inside. Of late, if you look at it, 90% of the matured builders do not offer in cold shell. They always offer only in warm shell. There'll be lot of restriction. You cannot change the walls inside. You cannot break down anything. You cannot change the flooring. Everybody is now offering, especially the premium houses, they're all offered with Italian marble or whatever. It comes as a standard fitment. I would say 90% of the matured builders who are offering premium and luxury homes are offering in warm shell condition. Once a customer buys a house in warm shell condition, there is very little that they will need to do in terms of breaking down and redoing anything. All they will need is fixed furniture and loose furniture. That is where they come to a person like us, where we are able to give a complete solution at a single point. Everything is factory-made, 100% made by Stanley, delivered by Stanley, assured by Stanley. That is what we are going towards. Understood, sir. One last question I have is, what would be the return on capital of your matured store? See, we have a slightly different method of looking at our business. From the very beginning, we have told that we normally don't look at per SSG, since we have what we call as a zero FG inventory business. We really don't have, like other importers or other traders, retailers, we don't carry inventory. Everything is 80% of our products are made to order. Thereby, our model of business is very different. What we look at is our ROI, where we calculate what the store, the CapEx, the OpEx, everything is calculated, an interest component is added to the CapEx. For us, ROI means returns of our investments. As long as that happens within three years, we are very comfortable to keep growing. That is how we have been measuring our retail model as a manu-retailer, not as a typical trader-retailer, but as a manu-retailer. Okay, sir. Understood. All the best. Thank you very much. Thank you. We will take the next question from the line of Rohit from ithought PMS. Please go ahead. Hello. Yes, sir. Yeah. Hi. Good morning, sir. Thank you for the opportunity. Many questions have been sort of answered. Just few more. You said, sir, this to the previous participant that you typically don't carry inventory. If I look at the balance sheet, the balance sheet has about INR 135 crore inventory that you have just posted. Can you just give me a breakup of FG versus WIP in this, just roughly? Yeah, I will give you. When I meant that we don't carry inventory, it is that we do not have a warehouse where we have to carry inventory to retail. Most of the inventory you see is in the form of finished goods that are in our stores and raw material, which is in our factory. We don't have FG that is sitting for customer anywhere. As we see it's a very sound model because we are customizing, we show our product to the customer. As I mentioned, 75% to 80% of the people choose a particular model of a furniture, whether it's a sofa or a kitchen or a bed, and then they customize it to the required size, which we have in our catalog, and also to the color they want. We take between six to eight weeks for delivery. It's a 50% in advance and 50% before delivery. That is the model of business for us. When I said FG, we don't have. Most of the retailers, whether it is larger retailers or even single shop retailers, they always have to have a backup warehouse where they need to keep a stock. They do not offer customization. They'll say, for example, the sofa is available in brown, black, and red color. They would have displayed one color, and they will have to carry two other colors in their warehouse. We don't have that issue. Hope I've answered you. Yes, sir. I think you've spent a lot of time trying to explain why the sales have not grown. Putting two things together now, you've been talking about luxury or home sales deliveries peaking in 2027, 2028, and 2029, and you have sort of come into some of these markets beyond Bangalore. How do you judge that how has your brand traveled? Because let's say if you're in Delhi or in Bombay, there would be certain existing players who would cater to these customers, and they would have been fairly popular. How do you ascertain how well has your brand traveled? Just a related question, who do you consider as your major competitors, both from international as well as national brands, if you can? Okay. Let me answer you. Your first question is that while in a way, we have had a fairly decent advantage because we have been first movers and had a single store presence in most of these cities for over 15, 20 years. While we have not really kind of marketed ourselves aggressively, we only started in Bangalore, our home market, about five, seven years ago. We had a particular model which became successful, and that's more or less a similar model is what we are actually articulating in the other cities, other major six cities that we now want to be company-owned, company-operated. For us, it is very important that while we have a first-mover advantage, it's very important that we network and connect in the segment where we play with specifiers, architects, and interior designers. Thereby, going forward, we will actually be doing a bunch of events. There are not too many good shows that we can participate in India, unfortunately, because being a premium brand, we cannot be seen with low-end brands. We have to have a segment where it's all premium. That is a little bit of a challenge, but that is slowly improving. A lot of other, I would say, brands such as AD, which is Architectural Digest, or ED, which is ELLE Decor, their fairs are becoming quite popular in Bombay, Delhi, and Hyderabad. This year onwards, we are going to actually participate. We have not participated in these shows in these cities. This year onwards, our strategy is changing. Our marketing budgets have been allocated more for participation and letting the local fraternity of architects and interior designers know that we have a strong presence in those cities. That is the way we want to answer you. For us, the competition mostly here comes from import trade. Main competitors are import traders. Importers who import either from Europe or from Turkey, or high-end furniture from China, they are our major competitors. Other than that, we have what we call local tigers. There are a few people who are very well established in the local market. There are two, three, four, I would say, manufacturers cum designers who actually give us solutions in local markets. They are not spread nationally, but they are very strong in their local markets. They are our competitors. We are quite clear that the headwinds that we see now are more favorable for us with import restrictions coming in. We will definitely be able to, I would say, be more competitive in that particular area, and we will start popularizing ourselves in these mega six markets of the country. This is a very clear focus we have for the next couple of years. Thank you. We will take the next question from the line of Sunny from Emkay Global Financial Services Limited. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. Sir, I had a question on gross margin. We have seen sequentially, there has been a dip in gross margin. Just wanted to check on what kind of RM inflation are we experiencing currently, and are you planning to take any price hikes maybe in the second half of the financial year? No, I think we have actually shown a slight improvement in growth in our gross margin. We have grown by 151 bps. Yes. Actually, there's not a dip in our margin. I'm talking about quarterly, sir. Only quarterly. Quarterly, Q4, like I said, we were affected primarily because of the Iran war. We were not able to get our raw material in time. Secondly, there was a small pull-down from our B2B business of almost about INR 15 crores. INR 15 crores. INR 15 crore we were pulled down because then that delayed. The war situation has continued a bit. I hope that it's going to get corrected in the due course of next month or so. This was in the B2B piece. B2C, we are fairly secured, and our margins overall for the year have improved. Yeah. Right, sir. Full year, the margins have improved. Sir, just on the FY 2027 bit, what are the revenue expectations from your side? As we have been around the similar range for a couple of years, what kind of revenue expectation are you building in? Also with the B2B business coming back and the current demand scenario, what kind of growth are you looking at in FY 2027? Broadly, like I said, we have used this last year to do a lot of major changes. 30 years of entrepreneurship, we are very invested in the company. We had to do those changes to stabilize and create a stronger foundation. I think, I would say 80%-90% of that plumbing changes are all done now, and we believe that we are positioned for a very healthy, meaningful growth going forward. While we are quite aspirational to deliver definitely double-digit growth, I hope that in terms of how the global situation is, we are reserving ourselves, and I would say we will be very conservative, and we want to continue to be profitable, and that's how we want to move forward. Right. We want to be conservative with our cash also, which we have been accrued in the past. That's how we are going to go forward. Sure, sir. Thank you. Last one question on this Sri Lanka. We are moving to the international business as well. We will open our first store in Sri Lanka. What are the plans here from full international standpoint? How are you looking at things shaping up, maybe in the medium-term? As a company, our 100% focus is going to be in the six major markets of India itself, where we believe that 80% of India's luxury housing is going to come for furnishing in the next five years. Sri Lanka, we have had an agreement with one of the larger companies there. They have close to 400 stores of electro domestics called Singer Group. It's a listed entity. We're opening the first store there as a pilot store, and based on what our agreement says, we will expand into five, six of their other shop-in-shops. We entered with our Indian brand, not with the Stanley brand, but with our Sofas & More brand into Sri Lanka. At this moment, I don't have very much visibility. We have some inquiries from Indonesia, but nothing has materialized so far. Export is not primarily, through that, is not primarily the target. Through B2B, we are planning to export to certain countries. We have already opened up accounts with countries like Williams Sonoma in here. Therefore, there are some opportunities for export in the future. IKEA and Williams Sonoma. Sure, sir. Thanks a lot, and wish you all the best for FY 2027. Thank you, sir. Yeah. Thank you very much. Thank you very much. Ladies and gentlemen, we'll take that as the last question. I now hand the conference back to the management for the closing comments. Thank you, and over to you, sir. Sir, over to you. Thank you everyone for your active participation and valid feedback to us. We take it very positively. To summarize again, we want to assure you that we are a very strong presence across all the relevant markets. We have significantly expanded retail network, we're structurally improving competitive position, and a disciplined debt-free balance sheet. We're building Stanley for the next quarter, we are building Stanley for the next decade. All the actions what we have taken, we are very sure that we'll move in the right direction. Thank you again for all your support. Thank you everyone. Thank you very much. Thank you. Thank you. Thank you, members of the management. On behalf of Emkay Global Financial Services Limited, we conclude this conference. Thank you all for joining with us today, and you may now disconnect your lines. Thank you.