Ladies and gentlemen, good day, and welcome to the Titan Company Limited Q1 FY 2024 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. C. K. Venkataraman, Managing Director, Titan Company Limited. Thank you, and over to you, sir. Thank you very much. Good evening, everyone. We have just completed our board meeting for the first quarter FY 2024 results. Results have been uploaded for all of you to see, which you'd have seen. Very satisfied with the quarter's performance. We have achieved the growth rates for the company that we had budgeted. Businesses like Jewelry, International Jewelry, Smart Wearables have done exceedingly well. Businesses like watches, analog watches, and eye care have delivered a decent growth. Businesses like the ethnic wear and our perfumes and fashion accessories have faced some challenges, but at a quarter level, some of these are, you know, part of life. Overall, exceedingly satisfied with the sales growth, competitive improvement in terms of market share in virtually every category where we operate, and on plan for the profits for the quarter. We have a certain scheduling of the profit and profit growth over the four quarters of the year, leading to a handsome growth by the end of the year. This is determined by events of FY 2023 across quarters, as well as the strategic investments that the company needs to make in every business in multiple ways every quarter. These two define the manner in which the profitability moves across the quarters. As far as Q1 is concerned, we're very happy with the sales achievement as well as the profit achievement. The extent of innovation, customer innovation, customer experience, delivery, operational excellence, all that is continuing to play in the typical Titan way in every business. We're very happy with the overall standards of customer satisfaction that we continue to maintain, multiple stakeholder focus that we continue to maintain, and the confidence level in every business, all the teams is very, very high. I'm looking forward to the other nine months, eight months of the, of the year. Now I leave you to, you know, get in with your questions. Thank you very much. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, Venkat. I wanted to pick up on the last slide that you said about certain scheduling of profits. Now, you know, especially in the Jewelry segment, given this quarter's Jewelry performance, would you need to revisit the expectations of 12.5%-13% Jewelry margin FY 2024, as the competitive intensity necessitates a more aggressive pricing stance, or, or was this a part of your scheduling that you highlighted? It's very much a part of the scheduling that I described, Avi, and maybe Ashok can just elaborate on it to give you a more wholesome picture on this. Avi, Ashok here. You know, our guidance of 12%-13% for Jewelry remains. You know, we are pretty much, and that is for full year, not every quarter. If you also look at history of, you know, our performances across quarter, there has been evidence of Q1 versus full year number being different. It is not that something out of the place. Even to, just to, you know, deconstruct, that we have always talked about that growth on priority with a consistent margin delivery, and that we are pretty confident for FY 2024 as well. And, and - I would maybe again remind you, because that question is likely to come this time, that last year we have been talking about certain one-time gains. In quarter one, it was 1% last year. We have been talking about our pricing, pricing competitiveness, actions taken by us, which have been playing out in the last year. Quarter one versus quarter one, there is a distance, and that impact is there. Marketing communications have been there, you know, and gold exchange program has been there. All these things were very thought through investment, which has been made by the Jewelry division. 12%-13% is still in our view is deliverable, and we maintain that. Perfect. No, I'll, I'll be... Just to clarify, sir, the reason why I asked is, you know, while that 13.5 that we did odd, odd, that we did last quarter, while we acknowledge that hundred bips one-off, it was, you know, the further, you know, the, the steps that resulted in 11, and the steps that you indicated, one was higher exchange, the other was pricing rationalization, both of which seem to be a more structural rather than one-off, which is why the question, sir. Hence, any clarification on why you believe this is not something that is structural would be very useful to appreciate, especially the pricing realization bit, sir. Does it indicate that competition is a lot more and hence you have to revisit pricing? That is what we wanted to kind of better understand. That was the ethos of the question, to be frank. While Ajoy can outline his future strategy, but on pricing, but I believe, having said that, there is no structural change, and that is why I'm referring you guys to look at even past historical performances, Quarter one versus full year of Jewelry division. This is pretty normal for quarter one to be slightly on the lower side. We are not reading any structural change in our margin profile. Ajoy can, of course, add to that. Avi, Ajoy here. Yeah, hi. We have chosen to invest in growth as a strategy. We continue to do so very aggressively, because we are very clear that the market share gain opportunity is far, far higher than worrying about a particular quarter here and there. Secondly, we've also gone ahead and invested quite significantly in brand-building efforts across multiple brands. you know, we are wanting to keep that momentum on, because what you start doing in a quarter will start bearing fruit in the next quarter or the quarter after that, many a times. That's the second piece. Exchange is a huge opportunity. We were seeing that in a market. See, what happened in quarter one also is a lot of volatility in gold prices and significant high level of gold price, which remained for at least two months out of the three months. As a consequence, it was a intentional response to that market situation to solve for the consumer's uncertainty. During a wedding season, should I buy or not buy? There was a lot of confusion for customers, we said it's better to solve for the customer, and therefore we went keeping the customer in mind, not so much competition in this case. Gold rate, program, in which the way we are managing that is on very smoothly. It's a combination of multiple things that we did to ensure that the customer remains excited and comes in, and we have seen that play out very well because of buyer growth that we have seen, because we were able to pull up wedding growth. First one month and a half, two months, when the gold prices were volatile, people were staying back, but in June, they came back. This exchange plus wedding as a combo has delivered very well. I would also add that, yes, certain geographies saw differential performance. Consequence to that, there may be some, you know, realizations also that might have varied in terms of product mix and channel mix. Those variables are, you know, there are many of them, and they keep playing out. I don't want to confuse all of us, but we remain confident about growth, and we are in fact seeing good growth even now as we speak. Therefore, for us to confidently say 12%-13%, which Ashok said, absolutely no confusion on that. For a year. That's very clear. Just on the last bit, you know, taking the last comment, you said good growth continuing, which suggests that demand per se is not a concern as we speak. That's the right way to kind of. Yes. Read into that comment? Totally. Perfect, sir. I will come back in the queue for the other questions. Thank you very much, sir. Thank you. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead. Yeah, thanks. My first question is also on, amongst your last comments. You mentioned you expect handsome profit growth during the year. Any target which you can share, and is it fair to say that earnings growth, this year will lag revenue growth, considering that, there will be margin impact, from diamond inventory gains, which you saw last year for three quarters? Yes, you are right. I think last year was, in a way, slightly, not, not that normal year from the margin point of view. We have been telling that consistently all the four quarters. Revenue growth will be likely to be better than the earning growth in this financial year. On the comment on handsome profit growth, I wanted to, like, get your thoughts on, like, what, according to you, will be handsome profit growth this year? No, no, I think, we will not able to guide you. You know our long-term plan. That's what FY 2027 ambitions are. We are tracking that, and those numbers, CAGR numbers, are there on your mind. It would be slightly lower than that. Absolute amount will be certainly much better than what we have delivered last year. Okay, thank you. The second is on CaratLane. We've seen a slight moderation in growth from 50%+ levels to 30%, close to that, and you also seen some decline in margins sequentially. Can you share your thoughts on growth and margins going forward? Actually, it's after a very long time that this kind of, you know, slightly lower than our, what we're used to, has happened. Because of that, lower growth on the one hand, but continuing investments that we are making in people, assets, and technology that the margin has actually fallen. It's just one quarter, so the prospects for CaratLane are exceptional, and we are committed to sort of coming back to that growth rate in future itself. That's it for me. Thank you, sir. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Stock Broking. Please go ahead. Yeah. Hi, good evening, Venkat. Thanks for the opportunity. My question is pertaining to Jewelry. I think there are a lot of data this time is not there, so maybe, quantitatively, if you can help us out of that 19%, what is the grammage growth? The related question is that last quarter, we have seen a new buyer contribution at 49%, which has come at 46%. I'm reading that we have been now trying to get heavy on the wedding segment, which has seen a 26% growth. In terms of new buyer, have you been able to clock that kind of growth? I can give you the new buyer growth, Shirish. 6% of you should not compare it again to last quarter because it's not sequential. Last year, it was, I think, 47% new buyer contribution for the quarter, and this year it's 46%. Yes, repeat buyers have grown at a faster rate than new buyers, but the percentage difference is only 1%. I wouldn't compare it to quarter four because there is a seasonality element in, in whatever we do. Grammage growth, et cetera, is good, but actually, grammage growth is not a operating KPI that management actually tracks very, very actively. We are aware of it, but for us, volume is driven largely on buyer growth, and within that, we look very closely at new buyer and repeat buyers, and the rest of it is average spend per buyer. That is helpful, but I'm just trying to point out, on slide 23, our contribution or studded portion has remained flat, 26%. That's why I was more keen that, if there is a volume which is playing an angle, then that will also have an impact on the margin. No, studded so when we are saying studded share is constant, it means that we've had as much growth in studded. In gold jewelry and gold jewelry plus gold coins. To that extent, that clarifies the volume, in terms of buyer growth for both. Okay. Just one follow-up here. We said that we are now trying to pursue the market opportunity and trying to grab the market share. What is the market share target or in the medium to long-term aspiration we are holding at this time? Yeah. Last year, our best estimate was a 7% market share of an INR 450,000 crore overall Jewelry market. We have actually set our sights on a certain long-term market. We are expecting or we would like to gain, not expecting, we are, ambition is to gain a percentage point in market share year on year. We've done that successfully in the last few years. We've come to 7%. We think we can aim to get to a double-digit market share in the next three, four years. That's the aspiration we've set ourselves. This is technically, we are targeting all the energies and investments towards South? Not necessarily. This is not entirely driven by South. We are, in fact, doing regionalization and winning in different India's program across many markets, not just South. In South itself, there are differential programs across different states, as well as we are looking at parts of East, we are looking at parts of Bharat Markets, we are looking at. A few other markets as well, which are in the pipeline to come alive in the next couple of years. We have a whole milestone and a schedule of markets to kind of bring alive between now as we go forward over the next few years. This is not entirely South. Okay. My second and last question on the Watches segment. Can we get some volume numbers? Generally, you used to give the volume number, but this time it is missing. Out of 13% growth in the business, what is the volume growth in the analog? Finally, there is Analog and Wearables, and we have seen exceedingly good volume growth in Wearables, and it, it is, you know, in a way, consumer segment-wide. If you take youth segment and say brand Fastrack, the analog has actually seen a decline in volume, but the Wearables have seen a significant increase in volume. The interplay between volume, value, Analog and Wearables, and also the premium brands and the mass brands, it's quite a complicated kind of thing. At this point, I think that's what I would leave you with. Okay. One follow-up here, I mean, rather two follow-up. The margin has settled around 11.5. In the medium term or maybe next, 3-4, four quarter, because I see that directionally, the premium segment has grown much faster for us. What should we read? Is the margin will come, and recover with a lag, or there is a thin margin on the international brands? No, international brands actually have quite a healthy margin. There was a one-time, you know, some provisions made for some developmental costs, as well as some other smartwatch-related things, which has brought the margin to 11.8%. In general, through the year, we will see margins between 12%-13%. Yeah, that's, that's, that's what we are confident. Just one more follow-up. In the capital employed, we have seen against INR 243 crore, INR 2,243.7 crore, our capital employed has gone up by almost INR 700 crore. Is it primarily because of the international portion or there is some element setting in? There is some element of inventory build up as well as some element of debtors. Again, this is quite complex because we have differential sales in different channels, and our sales in channels, where especially marketplace e-com and large format stores, has been higher than budget, and that has led to, you know, higher receivables. Sorry. Inventory also has gone up. This is over and above what we had budgeted, and is likely to remain like this till quarter two end, because a lot of it is also built up for the activation and August, as well as Diwali, Akshaya Tritiya, Diwali, the festive season, which will be in October, November. I'll just point out what you just repeated. The inventory will remain at that level of INR 3,000 crore. It will not improve or it will not go up, rather it will come down directly. What I'm trying to say is until Q2 end, it will remain high because a lot of inventory buildup is done for the festive season in anticipation. Okay. All right. Thank you, and all the best. Thank you. Thank you. The next question is from the line of Nihal Mahesh Jham from Nuvama. Please go ahead. Yes, thank you so much. Good evening. My first question was on the demand in Jewelry for this quarter. If you could just bifurcate the demand across the three months. I was also interested in knowing if, say, the correction in gold prices in June had any impact in improving the demand for that specific month. In June month, as I said, we saw a stability of gold prices and also at a slightly lower level compared to April and May. That certainly played a role in giving people confidence. As I said, we also did a fair amount of work on exchange to solve for consumers, and therefore we, we kicked that in by May, let's say, third week of May. That carried forward into June, and therefore that combination of all that helped. People were able to buy. There were wedding purchases, et cetera, that happened. In the current quarter, I, I could only tell you that we have, we continue to see very good and healthy demand growth in the same vein, as I said earlier. I, I can't say much about how the next two months will be. We expect it to be good, but, you know, we are yet to see that. July has been good, is what I can say. It will be difficult to give you a breakup of how month to month will quarter two shape up, unless, unless I didn't understand your question right? No, it was related to the first quarter only, not about how July has been. More about April, May, June, because I was trying to look at different drivers in each month, is what I understand. You mentioned about Akshaya Tritiya in the last call for April. Was wondering if June was partially driven by the gold prices, and then obviously we had the gold exchange program and all the other initiatives that you mentioned. Okay. No, no. I'll clarify now that I understood a little better. April, first half of April was quite slow. Things just took off during the Akshaya Tritiya period, the next fortnight. May, again, it kind of went very quiet. Again, from about 20th May onwards, it picked up very well, and June then also continued to grow fantastic. That is the kind of volatility we saw across the three months. This is helpful. A related question to that was that when you speak of wedding segment and how that has also grown, I think at 26%. Overall, the wedding dates have been lower this quarter, and most companies have mentioned about wedding demand being a bit of a challenge. While you did allude to, would it be right to say that the specific activations more related to the gold exchange program is what drove a lot of the customers on the margin to, say, prepone their wedding-related buying, and that is, in a way, been a driver for this growth coming in? Difficult to answer that, really. We know that quarter one is a good Lagan market wedding dates, and the markets which typically do well in Lagan are, you know, eastern markets, Bihar, eastern UP, parts of MP, Chhattisgarh, Jharkhand, those markets. We did see good traction in the east and those parts of the north, as well as other parts of north as well. We didn't see as much traction in some of the other markets, where we thought it might happen. Frankly, the Lagan markets have done reasonably well, and that is what has helped us. Perhaps the exchange helped, but I don't know whether they prepone or bought for that quarter. I can't really answer that. Sure. Just one final question was that, in our history, as I understand, gold exchange has been used tactically a lot of times to sometimes activate, demand and obviously get customers in. Correct me if I'm wrong on that. Going forward, would it be right to say that this is now gonna become the main avenue for acquiring customers or would have a much larger share? See, the gold exchange program is a very robust growth engine for us and has been so for the last several years now. It continues to be. You know, typically, it, the non-tarnished gold, that is, other outside gold, typically contributes 30%-31% of sale. This quarter, it happens to contribute to a 35% of sale. But whether that will remain likewise in the rest of the quarters is difficult to say. It may range, it may vary between these two. It's not, it's not you should worry about structurally, does it change things and does it actually make... It's not a problem. As long as our payouts are under control, we are fine with it. Actually, it's a reasonably healthy and profitable growth engine. So- Offers may come from time to time. It's not something which is structural. Sure, sir. Thank you so much. Ladies and gentlemen, to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. You may rejoin the queue if you have a follow-up. The next question is from the line of Vivek M. from Jefferies. Please go ahead. Hi, good evening. couple of questions. First is, you know, on the margins, but again, on Jewelry. So let's say this quarter you did about 11%. For the guidance of, let's say, you know, what you gave in the last quarter of 12.5%-13%, if I assume 12.5%, that means 13% margins for the rest of the year. Is, is that what is, you know, looking reasonable right now to you? You know, several time we have reiterated our guidance is 12-13, but somehow or the other, 12.5-13 has got stuck in this community's mind. 12-13, and that is what, we, we would continue to aim for. Yeah. Okay. Sorry, because last quarter you have had explicitly guided for 12.5%-13% instead of 12%-13%. I think that's the reason for, for that. No, 12-13. Suppose for some reason, then that was not the right. 12-13, we have been maintaining consistently. Got it. Got it. That means, there will be a big step up in the next three quarters. That looks like... You know, whatever, you have mentioned about the markup rationalization, that was essentially a very short-term thing for this quarter. From next quarter onwards, you are going to see, you know, a similar margin, you know, bank what you have in a way highlighted. Vivek, Ajoy here. I'll come in. Hi, sir. Typically, quarter two and quarter four are the highest studded ratio contribution quarters, you would recollect. Therefore, quarter one, being a more gold-oriented quarter, is typically low. As Ashok pointed out, if you go back, leave aside last year, the previous 3-4 years, you will see that typically it's been around this 11% range, and we've ended the year between 12-13. Okay, in the same vein, we expect this to happen, and it is well planned and, you know, exactly planned by us in that manner. Quarter three onwards, there is also urban wedding season, which kicks in. That also increases the contribution of a richer product mix, even in the gold, you know. Quarter three, quarter four tends to be even that. C ombination of those is what will help us get to the 12%-13%. Okay, got it. The second question is on the Jewelry capital employed, you know, at about, net capital employed of INR 6,500 crores. This is like, we are stable quarter-on-quarter, you know, significantly higher than what it used to be in the past. Can you just, you know, give more color to, you know, where this number will settle at, and what, what has driven this, you know, increase, particularly for first quarter? This number looks quite high. Yeah. I'll, I'll take that question again. Ajoy here. Our inventory is pretty much as per plan and well, and the stock trends are also good, actually, they're better. The capital employed is higher because our GML contribution has come down to a much lower figure. It's around 27% by quantity, I think, if I'm not mistaken. Typically, it should be in the 50% range. That happened because of some timing of gold on spot that we had to buy, thanks to CEPA and other such opportunities which are there. That will get corrected as we go along, because, you know, the timing issue, as well as the fact that, at that point in time, can we manage to sell more bullion in the market, et cetera, without giving away too much margin or without giving too much discount? Those were tactical considerations. Over the next quarter, you will see it stabilizing much higher in terms of the GML contribution, therefore, the capital employed will start correcting. Got it. It's entirely on the GML contribution. Got it. it. Got it. Thank you very much. All the best. Thank you. Thank you. The next question is from the line of Siddhant from Goodwill. Please go ahead. Yeah, hi. I would like to get an idea on the international business. Are we on part of achieving the 24 stores that we had told about in the annual report? You know, could you just speak something about on the break even, when can we achieve that in the Gulf region and the North America region? How much more capital will be we infusing in both these divisions? Siddhant, here. We are on plan for that. We've looking at an expansion, we're up to 11 finished stores so far, one in the U.S. and six in the GCC region. The plan for the rest of the year is to add about five more in the U.S. and about 13 more in the GCC region, which will take us to that number of 24-25 stores that we are looking at. From a profitability standpoint, they are all doing pretty much better than what we had planned. While obviously the costs are higher, operating these stores in international markets, the GP profile that we are getting from these stores are also substantially higher, with the U.S. being even better than the GCC market. From that perspective, we are pretty much on track. There are some struggles in the newer markets that we are going to, to get them open, because new territories, we are a little bit unfamiliar with things. Till we get the first store open, opening the first store takes a bit of time. After that, usually we figure out things, and then we are able to proceed quicker. That's the story overall. In terms of the capital investment. L inked to the stores, each of the stores requires the right level of inventory. That is what we would put in. We may start with a little bit of a higher inventory than usual. Then work our way over, let's say, the next 12-24 months period, to get to a ideal stock turn of two, which is what the norm, we follow across the country. Yeah, I was more like, you know, could you quantify like, you know, INR 100 crore, INR 200 crore, INR 300 crore, whatever number, how much are you investing in these international businesses? Typically, each of these stores would take-- consume something like $6 million-$8 million in terms of inventory. Okay. My next question would be on Titan Eye+, you know, how much is e-commerce as a% of sales, and what are we doing, you know, there to take on Flipkart? Hi, this is Saumen. Our e-commerce contribution is in the ballpark of 6%-7%, both combined our in-house brand channel, as well as through Flipkart, Amazon. Flipkart, Amazon, we mostly sell sunglasses, that to lower end, Fastrack products. So, focus is more on the in-house, you know, e-com channels. The last quarter, compared to the previous quarter, e-com in-house channel has almost doubled in terms of its sale, but the base figure is small, so to that extent, it may not be seen. Ladies and gentlemen, the line for the management seems to have disconnected. Please stay with us while we reconnect with the management. Ladies and gentlemen, we thank you for your patience. We have reconnected with the management. Sir, you may proceed. Yeah. I was saying that, while the in-house e-com channel is doing better and focus is also on that, and we are seeing a visible lift in, in that channel sale. In the foreseeable future, we still don't think the contribution of this channel will be more than 10%. It will be sub 10%. Okay. My last question would be, you know, about our TEAL and, you know, CaratLane businesses, because both of them are breaking even or, you know, slight profitability, and there's a big order book in TEAL, and, you know, CaratLane is, you know, very strong growth plans. Will we be infusing capital in these businesses or any plans for that, raising equity? Ashok here, TEAL as you would have observed from our commentary, have a very, very strong order book, and for that, whatever necessary investments are needed, they are being done, but they can manage through bit borrowing and their own internal generation. There is no further equity coming in, either from Titan or they need to raise. As far as CaratLane is concerned, again, the same story. Their growth is well supported by working capital finances, small, on lease, et cetera, et cetera. We don't see an immediate need for any infusion of equity in these two entities. Okay, just one last question, if I could please then. The gold markup rationalization program, how much of a hit in our gold prices will we be taking? How much will be spread between the franchisee partner and Titan over there, the hit? The entire, gold pricing, the partners don't take any hit, actually. It is entirely borne by us. We have already done what we had to do. This is playing out the way it is. We are not seeing more rationalization. In fact, many a times we see that there's opportunity for us to keep correcting it upward, downward, so we keep making further refinements to it. By and large, this is something which we have, you know, something which the company absorbs, nothing to do with the partners. Partners don't absorb. Okay, perfect. Thank you. Ladies and gentlemen, the line for the management seems to have disconnected again. Please stay with us while we reconnect. Ladies and gentlemen, we thank you for your patience. We have reconnected with the management. We will now take the next question, which will be from the line of Amit Rustagi from UBS. Please go ahead. Sir, could you help me understand that you have mentioned about gaining a market share, but if we combine together all the organized players, I think the number of stores they're planning to open are significantly higher this year versus last year. Will the strategy be moving towards more stores in India as well? Like, the number of stores you planned versus would you like to increase them as well? Yeah, we are actually. This is regarding Jewelry or any other business? Sir, Jewelry. Yeah, we are, we've identified a potential list of stores across many towns and catchments which is like a, you know, more longer term 2-year plan, because we don't know which catchment comes alive in terms of getting the right property. We are pursuing a much more... Ladies and gentlemen, the lines, the management seems to have disconnected again. Please stay with us, we will reconnect with the management. Ladies and gentlemen, we thank you for your patience. We have reconnected with the management. Over to you, sir. Right. I was answering the question from Amit. Amit, are you there, and am I audible? Yes, sir, I am there. You are audible. You were asking about more rapid expansion, and I don't know whether I completed it, but yes, we are also looking at accelerating our expansion plans because we see the opportunity is large. While historically we opened 30 to 40 store, new stores in a year, we will look at accelerating that even further. We are keeping a much healthier and longer pipeline in place. Something which I'd mentioned in the previous call as well, we are also expanding many of our existing stores and adding significant square footage. So both programs are on significantly. Got it, sir. Thank you, sir. Thanks for answering my question. Thank you. Thank you. The next question is from the line of Latika Chopra from J.P. Morgan. Please go ahead. Yeah. I thank for the opportunity. My first question was on, we are just trying to understand the failings of exchange gold in this quarter. You mentioned 35% for non-Tanishq gold. What is the failings of Tanishq exchange gold here, and combined number, if you could share, and how does that compare with your, you know, regular normalized share? Also, if you could comment on, on a like-to-like basis, you know, how much relative margin on exchange gold purchases versus a regular purchase? Fresh gold. Thank you. Okay, I'll answer the first question. Second one, I didn't follow. I couldn't understand the last portion. Let me first answer the first one. Typically, we see a 30%-31% GEP or non- Tanishq gold, and we see about 9%-10% of Tanishq gold. This quarter, we have seen about 35% non- Tanishq gold contribution, and very interestingly, close to 15% Tanishq exchange also. That probably indicates customers were also looking for this kind of opportunities to kind of deal with different kinds of, you know, gold price fluctuations and their requirements. Overall, therefore, between the two, we have seen close to 50% exchange gold in this quarter. Second question, I couldn't hear you properly. Can you repeat the portion, the last one? Sure. Sure, Ajoy. So what I was checking was on a like-to-like basis, you know, what could be the margin differential between on exchange jewelry versus a fresh gold purchase that you do? I, I mean, it's always tough to say whether, you know, 50%, you know, numbers will go back to normalized levels a lot. I'm just wondering, in a scenario where you, because of the way the gold prices are moving, is there any other way you could manage this, margin dilution or mitigate this margin dilution in future? If you think, you know, we could probably see structurally higher exchange ratio, simply because gold prices themselves have become quite high in absolute basis. Yeah. Latika, just wanted to share. See, when we don't run any offer, actually, exchange gold, yes, we are buying. The way it works is we are buying on spot from the customer, as opposed to buying jewel from, let's say, the banks. There is a difference because we are buying versus, you know, and the, and the rate at which we buy from the customer is the rate at which, let's say, we sell. Okay? By and large, that gets covered because of upselling that happens. People come in with X grams and they'll end up, you know, buying Y grams, and that is much higher than what they came in. That sets it off, including whatever processing charges we take for melting and refining and everything else. Typically, it is, it's not margin dilutive, and it is helping us to acquire customers. In Tanishq exchange, also we see a similar situation, and many a times people also land up picking up a richer mix. They may buy a studded product, et cetera. It's only when we run a little more aggressive offer to be able to solve for customer challenge, that's when there is some margin dilution, and therefore we capture that as increased payouts. By itself, exchange is not margin dilutive. I wanted to leave you with that. We don't run offers all the time. We plan to do it as and when we require, tactically, which, you know, we look at it in. Like, just like we run a making charge offer, there's sometimes can be an exchange offer, sometimes there may be some other best deal offer. Those are tactical and market specific. Okay, that's good to know. My second question was, you know, your overseas Jewelry business, you know, once, your stores normalize or become mature, how do you think the margin profile will look like versus the India business? You've mentioned gross contribution is higher, but so are the expenses. Do you anticipate that overseas business over medium term would be in the zone of 12%-13%, or could even do better because of richer mix? From a PBT standpoint, Latika, we'll have to wait, watch, and see that. What is apparent at this point in time is that the mix in terms of the more profitable categories is better. Okay, between the GCC and North America, GCC still sees a large share of gold, but North America, the new stores that we've opened, it's sort of high studded ratio. At a relative high percentage of profitable gold. Therefore, the final GPs are better than what we enjoy in India. That compensates for the higher cost. Latika, we are comparing a 27-year-old business with a 3-year-old business, and therefore, what Dheenee is saying is right. At the same time, the intrinsic opportunity, of course, by the North America market particularly, I would certainly say that the stable profitability of North America should be at least as good as India. Sure. Thank you so much for your answers. Thank you. The next question is from the line of Jai Doshi from Kotak. Please go ahead. Yeah, hi. Thanks for the opportunity. Based on your experience, so far, are you able to kind of get a sense or quantify, you know, what is the extent of additional growth that you can achieve if you make the gold exchange program, zero default gold exchange program, more or less the default policy around the year? Good question. We'll have to work on it. We're, we're not so sure, because many of these things are iterative. When we've tried to, in a way, settle down to a gold exchange program policy which is consistent across markets. They are very difficult to estimate, whether because of the program being that way or is it better to do it tactically as offers from time to time, because it creates a certain call to action when you do that. Difficult to answer your question, but we'll work on it. Understood. I will maybe take it offline some other time. Second question is on international market. Now, you know, your original guidance at the time of, you know, last year that investor meet was 30 stores by FY 2027, INR 3,000 crore top line, or INR 2,500 crore top line. You'll be at 25 at by end of this year. Should we expect that you will achieve that top line milestone or target much earlier than originally guided? And if there is something, you know, additional you can share in terms of how you're thinking about assortments and some other aspects of, you know, manufacturing as well as go-to-market strategy to cater to the, you know, consumers in those markets. From a growth perspective, yeah, things look like that we can do better than what we planned, and we will obviously accelerate as much as we can, wherever we are able to. The approach is to build templates that can be replicated first, sort of refine the template till we are reasonably confident that those can be scaled without creating problems. I think we've kind of achieved that in the GCC region and in North America, too. North America is still early. We just have one store open, but by the end of this year-... with five more stores, we should be in a much better position to do that. We are looking at other markets like Singapore, Australia, and looking at how much we can replicate and scale that up. From that perspective, yeah, at this point, we certainly look like that we can do better than what we thought we could. Some of these things, one has to wait, observe, and, and see how exactly they play out. On the manufacturing aspect, we are looking at sourcing locally in Dubai. We're looking at right now about 10% of what we sell in the GCC is sourced from Dubai. Over a period of time, we will continue to explore that and look at certain products that are required in local markets, the ability to get them from wherever it is most efficient to source and obtain them. One quick one, if I may, on the same thing. Are you targeting Indian diaspora, or do you think there is a big market amongst international sort of consumers as well? Thank you. Yeah. At this point, we are clearly going after the Indian diaspora because that's a relatively, say, easier audience. They're familiar with the brand, we know what they are looking for, and in many markets like the U.S., they tend to be underserved. Once we sort of stabilize that, and as also it depends on where we open the stores. Initially, we were opening them in what are largely Indian catchments, but in some of the locations, we've started moving away to a catchment that has other local customers as well. Say, for example, in Abu Dhabi, we are finding a reasonable number of non-Indians turning up. Certainly, we will look at them, but that will be a second phase kind of an approach. The strategy is to build a large and profitable beachhead, focused on the diaspora, and once that gives us a little bit of leeway in terms of a stable business, then certainly, exploring beyond Indian shores is very much on the cards. Thank you so much, and best wishes for the coming quarter. Thank you. Thank you. The next question is from the line of Alok Shah from Ambit Capital. Please go ahead. Yeah, hi, good evening, team. Thanks for taking my question. My first one was, just, just harping more on the margin bit. When you mentioned that, you know, you decide how much margin you want to take each quarter from the business, and that's how it's played out historically. This time around, the competition seems to be quite different than what it was historically. Just wanted to get a sense that if competitive dynamics were to remain high, then what levers do you think you would have to protect the margins for this year? Ajoy here. Margin protection will come from two or three levers. One is, geography and channel mix. We believe that, there are opportunities in certain geographies which give us a richer product mix and richer realization. The second one that we see is on product mix itself, in terms of as we, do a lot more work on both studded as well as wedding and, you know, richer product mix occasion wear, we are seeing better realizations there as well. The third piece that we are actively exploring also is, as we keep doing a lot more of lightweight jewelry and, modern jewelry, especially in gold, there is opportunity to take up a little bit more of the gross margin as well. These are two, three levers which are in our ambit, but right now, and actually, it's not so much competitive pressures which have which have played a role. It is about trying to enhance consumer sentiment in a fluctuating and volatile environment, which has been the larger concern, and that is what has actually motivated our actions. Yes, there is competitive intensity, but the brand is also that much deeper across so many geographies. To that extent, I... Yes, it's there. We'll take it on. Got it. Got it. Just the second bit was that, you know, lower making charges, I mean, the duration of that seems to be, at least from our lens, extending for you and, of course, the competition also. Do you, from a strategic perspective, do you worry that the customer behavior may change because of this, multiple times that offer keeps on flowing versus what it used to be historically? I think customers are always seeking good deals, so. We are also seeing, if you see post-COVID, customers' preference for brands which are trusted, brands which are there in the long run to be around, that has also gone up significantly, and we have seen that resurgence. In fact, Tanishq has grown significantly over the last few years, during COVID and post-COVID. I think there is the reverse thing also, and there is also formalization. Yes, this, you know, price off and making charge off, that will keep going on. As long as we are able to excite the customer with appropriate product and appropriate brand messaging and play up on the trust, including very... In fact, what, what we believe we have is the best exchange offer going on. I think those are all things which are really playing very well. Even Golden Harvest as a program, is really kicked off very well, and we are seeing exceptionally good response. All the indicators, you know, future forward indicators that we see is a very, very healthy response to many of the growth engines that we have outlined many a times in this forum, as well as in the investor day when we had. All those are faring well, and we are not concerned about any of the growth engines as we speak, right, including digital, which was a newer growth engine that was introduced during COVID. Got it. Perfect. Just a last bit of, bit of a clarificatory. You mentioned that July has, you know, turned out to be better. Just wanted to check, because usually in Adhik Maas, you know, historically, you know, we've seen for companies lower LTL and revenue growth. Just want to check. Then in that case, you know, despite there being Adhik Maas, you're not seeing lower footfalls, LTLs, et cetera? July has been-- I said it's been as good as quarter one. Even last year there was Adhik Maas, so it's all seasonal year-to-year. For us, it's also the studied activation which kicks off, and that has kicked off very well. That's, that's also our biggest growth engine in this quarter, besides the festivals that come up in August, from Raksha Bandhan to Varamahalakshmi and many others. Studied is a big engine for us this quarter, and that's also there. Got it. Very clear. Thank you. We thought the division particularly launches a big collection in June, and in other creates a lot of excitement towards the diamond jewelry category, and then launches the activation in July to capitalize on that increased desire. Sorry, what is the other collection? We've done two collections, which have impressions of nature and Tales of Mystique, both of which have received terrific response, and of course, we continue to see good response to solitaires. In a way, therefore, the actions of the division are building a growth which Adhik Maas are not, you know, happen because of strategic intervention. Got it. Fairly clear. Thank you very much, and good luck for the future points. Thank you. Thank you. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Hi. Good evening, and thanks for the opportunity. Just a couple of questions. You spoke about on, on Jewelry, the regional construct there. Just wanted to understand the regional construct of margins. Let's say a market where we are trending higher than our national market share. Over there, the margin profile will be way higher versus, let's say, where we are playing the role of challengers. Is the cost of growth way higher in some of this market? For example, Tamil Nadu, which you highlighted in our annual report as well, that it is one of the strategic market that we are trying to penetrate. Actually, it's not. What you're saying is theoretically true, but there's also another factor that certain markets and geographies are, are used to lower making charges or lower gold rates. Our market share may be low, not just in those markets, but also in other markets. As I look at AP, Telangana, that is not the case. Yes, in West Bengal also, people ask that much more price than this. In Tamil Nadu, yes, this is true, but in certain other states, it's not true. There are a few other states where it's not true. I don't know if we can draw a direct correlation from that angle. Also, see, if I take, a city like Chennai, where the making charges are lower compared to the city like Ahmedabad, the share of company stores, to total sales is substantially higher in Chennai. With the kind of scale that we reach, we have reached with every company store, the cost of retailing becomes much smaller than an L2 or an L3 share dominant city like Ahmedabad, and therefore that positively kicks in. On the product side, it is a little lower, but on the channel side, it's a little better. The share of profitable categories within that, not just the price of the category, but the share of the sales within gold, the share of diamond jewelry, all these have a direct bearing, and we are honestly not, I would say we are just maximizing. We look at every market maximizing rather than say, "Okay, this market is more profitable, let's push this. This market is less profitable, let's not push this." Because we are looking at multi-billion dollar scale company, we also want to serve customers. Very clear. Second question, see, usually there is a trade-off between growth and margins in any strategy. And you clearly called out during the call that competitive pressure was not the reason why you had to make an make extra investment in this quarter. Let's say if we, if we trend towards the lower end of margin guidance for this year, does it mean that the growth will be upper end of our guidance for this year, where, where we end up the growth for FY 2024? I don't know whether we've given you any growth guidance, but- No, we have a trajectory there. We have presented a pretty ambitious and detailed plan virtually for all businesses in the May 2022 investor meet. It's a 2.5x for Jewelry, which means there is a certain CAGR which is sitting in that. It is INR 10,000 crore for watches for 2026, which has got a certain CAGR sitting in that. That, in a way, is the revenue guidance from a longer-term point of view. We've also said that, that revenue growth is our primary focus and not margin expansion. Obviously, with that kind of revenue growth, profit growth will come, but whether profit growth will come every year, exceeding the revenue growth is finally management of overall value creation, competitive advantage and all that. As long as we are delivering industry-leading, sector-leading, you know, growth in sales and profitability. Returning very good value to the shareholders, you know, we would be very satisfied. I understand that this may sound like a unspecific answer, but it's the answer. Thanks. The last one, if I may, on Wearables. Wearables growth has been kind of very good, very, very good for a while. Just wanted to understand, how's the, how's our competitive position there, and whether the growth is very margin accretive to that segment's margin. Where do we see the size of opportunity there? Because theoretically, it looks like a very big market there. Yeah. Hi, this is Suparna here. You're right, the Wearables market is estimated to be about INR 9,000- INR 10,000 crore, continuing to grow very rapidly. We are also, you know, growing at a very, very big number, percentage. The opportunity remains. The way the segment, this whole category is playing out, is that there are the very high-end brands like Apple, and Samsung, and Garmin, but they are quite expensive. Then there are a bunch of brands which are frankly, all below INR 2,500 or INR 3,000. We have introduced a lot of new smartwatches in Fastrack, from around INR 1,500- INR 4,500. Also, we have a very strong strategy in the e-commerce platform. As you, you may know that Wearables is, as a category, 30% only on ground and 70% is sold online. We have made very good inroads in, in that, in the e-commerce. We also started recently, in selling in mobile, stores. Stores that sell mobile phones. Between the on-ground and the online, and the kind of, launches that we have for Fas track as well as for Brand Titan, it's a power-packed, upcoming two or three quarters, and we hope to continue to grow very well. Currently, we are ranked in the top five, and beyond a point, we are looking at very high growth rates for ourselves as opposed to really trying to climb to a certain position. I think we are just very focused on our own growth. Any, any color on margins? Margins are actually quite good. Obviously, there is a difference between watches. Watches is an established category where we are clear market leaders and have been for three decades. The Wearables margins are quite good. The way we are looking at it, is that the entire revenue is actually, in a way, you know, incremental. In the sense that the two categories, while both reside on the wrist, are not really substitutes. Customers who buy Wearables are buying it for completely different reasons, and customers who buy watches are buying it for completely different reasons. Any of the profits that we're making on Wearables is actually adding to the division's profit. Got it. Thanks a lot. Thank you. Thank you. The next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Thanks for take- thanks for taking my question. My first question was, with respect to the... You know, in the presentation, you mentioned that we have done, we have taken brand building initiatives during the quarter. Just wanted to get a sense in terms of what we are doing, with respect to, you know, enhancing our brand in the existing markets, as well as the new markets which we get, you know, enter into. A sub part to it is also, you know, in the annual report, what's mentioned is that the contribution of new products for plain jewelry stood at about 20% and studded jewelry at about 26%. Is this the highest level we have ever seen, or how is it in context to, you know, the past, recent past or last few years? That was my first question. Okay. I'll take the first one on brand building. There are two or three different dimensions that we've been working on. One is about ensuring that we are relevant to regional markets. We've done a lot of work of specific regional campaigns, coupled with regional collections. We've done something for Tamil Nadu earlier, as well as in this quarter. We also did something for AP Telangana, and we have done for West Bengal and Odisha. These, these four markets, we have actually done a fair amount of brand building efforts, many of them in the local language, with collections which are very relevant. For example, in Odisha, we launched an entire collection inspired by the temples of Odisha, and that was extremely well-received, and so on and so forth. That's one direction. The second direction has been towards high-value studded, as well as the collections Venkat spoke about, that we launched in June and July. We have launched, in studded, two collections, and that, that really builds desire, and that goes to cement our... In fact, we continue to do studded collection launches right through the year. We typically have at least three or four campaigns for studded collections across the year. That establishes or cements our position as a leader in design for studded products. The third piece we've been doing quite systematically and almost on a continuous basis, irrespective of the season, is on Rivaah. Wedding segment is a strategic driver, and we believe that it needs a 360 approach again, and therefore, marketing campaigns around Rivaah, around reinterpreting tradition, which is appropriate to the Tanishq bride, coupled with on the ground, brides of, you know, Tanishq, real brides of Tanishq, which we do as a very large scale, 16 city, BTL activity, engaging a lot of customers. The third piece on that surround activity is also building a strong retail zoning for Rivaah and wedding, and that's why we've also been expanding many of our stores where we see a lot of opportunity. So that's the third dimension. The fourth one, which we did in this quarter and we will continue to do, is while we ran the offer on exchange, our entire marketing campaign was about building a certain excitement around exchange. We didn't, in our campaign, talk about the offer at all. We spoke about how so many people have participated in exchange, so many tons of gold have got exchanged, so many brides have bought wedding jewelry on exchange, including extensive PR. That was celebrated in store in a big way. That's the fourth dimension that we've done. I've only picked out, besides what we do for Akshaya Tritiya or what we will do for Festival of Diamonds during the activation period. Those are, let's say, more business as usual, these four things which we did and we are doing strongly, we'll continue to do so. The second question that you asked me was... Can you repeat that? New product share. New, new product share has been broadly in the 20% range. It might vary from year to year, 20%-25% is a reasonable number, because customers don't come that often. It's, it's okay. Only some customers in certain categories may be coming once in six months or once in three months. Understood. My second question, Ajoy, was, you know, while there's a lot of discussion around margins, which has happened, but with respect to the revenue growth, while you said that July has been a good month for us, but when we think about the revenue growth, will it be fair to believe that, you know, bulk of the growth will be back-ended? The reason I say this is that, you know, most of the weddings this year would be somewhere around December and then from January to March, because Diwali is a little later. Just wanted to get a sense from you that whether the wedding spending will happen in the month of October, November, or you expect the demand to be more around, you know, December and then Jan to March? The overall, it's a seasonal category, so like every year, you know, even last year, the base of second half, et cetera, will be high. Percentage growth on that base, I don't know. I can't comment whether it'll be better. I think it's already a high base in quarter three, so to expect that the growth% will be even higher than what we have seen is, yeah, of course, if it happens, we'll be very happy, but that's not the point. I think because it's seasonal, the% growth year-on-year, what we are seeing right now and what we have seen in quarter one, will certainly be something which we'll be very happy with. Just as a concluding remark, we are now such a well-distributed brand with deep inroads into Bharat markets, and Bharat markets kick in a lot of weddings kick in, in quarter one. Bihar, Eastern U.P., some parts of Rajasthan and Chhattisgarh, they kick in. Therefore, that compensates for, in a way, for what you are saying about the winter wedding season. Wedding finally is still 20% of our total contribution to sales, so it's not how much should we attribute to that and how much that is gonna swing is difficult to kind of gauge. Understood. Back-ended or front-ended, I don't know. Whatever we are seeing is, if you can get for the year, it's fantastic, and we'll be very happy with that. Sure. Thank you. Thank you very much. Thank you. Thank you. Ladies and gentlemen, we will take that as our last question. I would now like to hand the conference over to Mr. Venkataraman for closing comments. Over to you, sir. Thank you very much, everyone, for the continuing support, encouragement, perspectives that make us go back from a call like this with some additional points to think about, and we'll circle back in November. Thank you. On behalf of Titan Company Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.