Ladies and gentlemen, good day, and welcome to the Titan Company Limited's Q1 FY25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. C.K. Venkataraman, Managing Director, Titan Company Limited. Thank you, and over to you, sir. Thank you very much. Hello, everyone on the call. So quarter one of FY 2025 was characterized by multiple external factors. The rising gold price on the one hand, a relatively low number of wedding dates in the country across India, superheated summer, especially starting late April, all the way into June, and multiple excitements caused by the elections, leading up to the results on the 4th of June and thereafter. On account of all this, there was an overall consumption challenge that, you know, you must have read across the board, and our different businesses performed differently in this context. We shared this through the filing to the stock exchange in the first week of July, as all of you were aware. Overall, you know, we are quite satisfied from a, from the position of where each of our business stands in the category and the growth that we have achieved in sales, in overall position in the market, in this context of, external and industry factors. And of course, you would be aware of the end of the board meeting and the results, published as well. Now I would request you to come in and, you know, with your questions to all of us. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on their touchtone phone. 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. Our first question comes from Manoj Menon, from ICICI Securities. Please go ahead. So hi, team. Just on the jewelry bit, there are two questions for clarification. One, you know, what would be the SSG for the quarter, and what would be the new store growth? Same store growth is around 3% for the quarter, and overall growth is around 9%. Yeah. Thanks, Ajoy. So I thought it's LSL, right, so not SSG. Is there a difference in definition here of LSL and SSG? SSG, like-for-like and same store growth. It's just our term versus somebody else's. Okay. Okay, now the reason I ask, because Domino's, for example, defines LSL and SSG as two distinct things, actually. So it does the same thing, right? Any store which has been around for more than a year. Yeah. Okay, sure, sure. Thank you. We just have a quick follow-up on this. You know, do you see a possibility to, let's say, accelerate the store expansion over the next 12, 24 months, you know, given the, let's say, what you highlighted in the, you know, annual meet also on the competitive context changing, is there a possibility to accelerate expansion, again, the word land grab, you know, is that a possibility? This is for jewelry, you're asking, Manoj? Only jewelry, only jewelry. So our aim is to, you know, target around 40-50 stores in Tanishq and about 70-80 stores in Mia and a substantial similar number in CaratLane. So that those plans are on. I don't know. Further beyond that, we are not sure whether it makes sense to push aggressively, because it's also a function of our current base. We are already at a fairly large base. Our presence is also very strong across most towns, 270 towns, etc. So we will stick to what we think is the right opportunity and ensure quality of stores that we open are good. Also, what Ajoy has expressed over many of the earlier calls is that the prominence of the network and not just the size of the network. For example, next weekend, we are inaugurating a new version of our Sector 17 store in Chandigarh, which is a much bigger Sector 17 store compared to earlier. So it's not increasing the count; it is substantially increasing our presence and competitive advantage. Yeah. So those will continue. Around, you know, 20-30 stores will get transformed into significantly larger stores in addition to these. So each of those expansions is like adding a store. Loud and clear. I must say that, we visited recently the Chennai T. Nagar store, and I could see the transformation. Yeah, I could get where you're coming from. Yeah. Thank you. Second and last question, I'll come back in the queue. So recently we noted the customs duty reduction, you know, which is, which has been fairly material. There is a consensus expectation that, look, you know, GST can increase. Now, I'm just—I just want to only understand from the historical experience, you know, let's say, if I'm trying to think of a hypothesis of GST of 3% looks like a 5% or 7% print. You know, but how does the consumer behave in that context? Because let's say in a INR 500,000 bill, today, let's say I see GST as a separate number, which is a INR 15,000 number. Suppose if suddenly that increases to INR 24,350, the worry or the concern here is, you know, in that sort of a scenario, can it trigger a reversal of formalization because it's a separate expense the customer gets to see, because I'm not sure the normal consumer really understand the unbundled way of calculating whole price. There is just one number she sees, right? And then this is an expense. So historical, you know, implementation, let's say state VAT or GST, etc., are you-- how, how was that transition journey has been? Thank you. Not an easy one to answer, Manoj, but I would say that, sure, the store of value challenge comes in when I have to pay something which I don't get back. But I don't think the formalization is at all going to be lost. Too many things that have happened in the country for people to buy respectable things and live with a life that holding their heads high and, you know, spend the money in a straight way and all that kind of thing. So I don't think... In the margin it may happen, but that's not the something that we are thinking at all. The government may be wanting to do that for mopping up part of what they gave away, but, from a customer side, I don't think they will go back to a jeweler who will give a parchi and not charge GST. Very clear, very clear. Thank you so much, and good luck. Thank you, sir. Thank you. The next question is from the line of Avi from Macquarie. Please go ahead. Hi. Hi, sir. Thanks for the opportunity. Sir, I just wanted to kind of understand the jewelry growth a little bit more. You pointed towards multiple headwinds. One of them you said was the volatility in gold prices. Now, I just wanted to appreciate what is it that gives us confidence that, you know, competition is not a concern and it is more this volatility? If you could give us some understanding on that, please. And whether any of these headwinds have moderated sequentially, one more thing. So I don't think we would like to take away from competitive intensity. Surely, competitive intensity is a force we have recognized and spoken about in every earnings call as well as the investor day. We are certainly not undermining that. We think competitive intensity has only gone up and will continue to increase. In addition to the fact that we saw a huge gold price rise, 20% year-on-year for the quarter is pretty large. And that has, from our own understanding of being in touch with customers, kept many customers on the fence, which coincidentally we also saw post-budget. There is a certain people who are on the fence wanting to come back in a bigger way. So that is the hard truth of what we experience, besides other things like, you know, lesser wedding dates and election-related disturbances and especially post Akshay Tritiya. So all these forces put together, I would certainly not undermine competitive intensity. If that's the impression you've got, then perhaps we've not- No, sir. Maybe... Sorry, I may not have come across clearly. But what I meant is that, that has not been one of the key reasons for weakness versus last quarter. It's more an industry phenomenon, how I read it. And there's no material change in that competitive intensity, how I read the comment. But I wanted to kind of just appreciate if that understanding is correct. So, see, different parts of the country have behaved differently. In some regions we have gained, in some regions we have been flat, and in some markets we might have lost to either a local player or a rapid expansion suddenly on by some national players. So there are pluses and minuses. At an overall level, our belief is we have held on to overall market share, because it's not just one player versus another. There are 40, 50 players we are tracking. So you know, it's not a straightaway win-loss game that you can conclude upon. Therefore, we didn't choose to highlight it because, we don't believe we have significantly lost market share, or for that matter, we have not even gained. So it's, it's been an even stevens. Okay. From an explanation or a determinant of growth point of view, the macro factors have a much greater determination role than this. That's the point. Okay, got it. So the second bit I wanted to understand, you know, your comment on the customs duty. You know, A, is there any quantum that we could share on what is likely? And B, does this in any way moderate the discounting pressures in jewelry and studded margins, either in terms of the overall quantum or in terms of period of impact? How do you... Would that be a possibility? Yes, we hope so also, because finally the gold prices have cooled down, right to the extent of reduction in customs duty so far, notwithstanding what changes may come either due to GST or anything else. Another factor that, you know, geopolitical uncertainty suddenly pushed up the gold rate in dollar terms, higher in the last one to two days again. But those are factors beyond our control. But if gold rates remain moderated down like we've seen, then it does give some relief on the gross margin, especially for studded. And certainly, with a reduction in customs duty by 9%, it significantly reduces the attractiveness of illegal imports into the country, though it won't make it zero. But certainly, it's a step in the right direction, and we really think it is the most appropriate thing that's happened, especially for gold imports into the country. And the ability, simultaneously, the ability of those players to undercut the formal, you know, jewelers and all that dramatically reduces, and therefore, your point about the discounting. But it's too soon, just, you know, a week, so we'll have to see how that plays out. But if the general principle of the decision, you know, is right, and it is right, by and large, then hopefully that should also help. Got it, sir. And the quantum, I thought, will you be able to share the likely near-term hit? So, Ashok here. I think while all of us agree that long-term benefit of this move and maximum loss, which we think over the next six months, would flow through our PNL, could be in the range of INR 500 crore-INR 550 crore. But, many things can work in different directions, which we yet don't know, and that is why very accurately estimating this is very difficult task. This is the maximum number which I shared with you. It can be slightly lower, depending on the gold prices, what kind of discounts are happening in the market, etc, etc. Got it, sir. I'll come back in the queue for other questions. Thank you very much, sir. Thank you. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes, sir. Hi, thanks for the opportunity. During the analyst meet, we indicated some margin pressure related to our ability to charge the making charge in the wake of sudden spike in gold price. But when we see our Q1 margins, it has actually improved 20 basis points, and this is despite a lower steady growth. So wanted to check on the drivers of this margin improvement for Q1. So large part of it has been on account of overheads management, in line with the subdued growth compared to what, let's say, we would have wanted to see. I don't think there is any significant change in the gross margin or the premiums, etc., in this quarter. The pressures on margin, I believe, would continue depending on how gold rates behave, notwithstanding the customs duty. Got it. These cost optimization levers are expected to continue in the coming quarters as well, right? It's... Yeah, it's an ongoing thing, Devanshu, because we are constantly alive to the fact that our costs and growth should kind of be in sync. This is not just for the jewelry business. I think, it's, you know, all the businesses. Probably, Ashok can share if there is something more, but it should be in line. I don't know how it will- Also, the dynamic aspect that Ajoy is referring to, you know, when there is a need, you compress, when there is an opportunity, you let, let it go. It will be like that. But very agile to deliver to, to some- Yeah. New estimate, like that. So, one other element I want to just share, that, because of competitive intensity and newer players, etc., coming in, we may have to also think of stepping up marketing investments tactically in markets, etc., which may have a bearing, you know, so- Inventory. And also inventory. So it's a dynamic thing. We kind of take it quarter- to -quarter. Got it, Ajoy. That's very helpful. Second question is more on a slightly longer time frame. So, globally, our leading jewelry players are catering to more consumption occasions as well. There are, their presence is also into services and customization, etc. In light of rising competition, what is your thought process on these aspects? So, services, I don't think we have really thought too much about it. We do some amount of service through our Karigar network or the craftsmen in the stores, which is refurbishing old jewelry, et c., but it's not really seen as a revenue stream. We see it as a customer value add. Having said that, on bespoke in customization, we have a fairly substantial business in the made-to-order space, which is completely customized designs. And, we are, we are expanding that on an ongoing basis and working hard at ensuring that that piece of the pie keeps growing, because it's, it's something which customers really want. It doesn't change the margin profile or anything of that sort. It's just another growth driver, but, you know, it's something that we have driven for some years. Got it. In terms of consumption occasions, Ajoy, do you see some white spaces here which we can cater as a leader? Not any new one. Maybe, I think both CaratLane and Mia do cater to payday and, you know, self-reward, et c. But I think pretty much birthdays, anniversaries, weddings, milestones continue to be special, you know, occasions around which jewelry gets bought for sale or gifting. I was most asking from athleisure, casual, from these occasions perspective. No, no, nothing that I can comment on athleisure. Casual and modern wearable jewelry, yes, we do a lot of that, but, athleisure, no. Got it, sir. Thank you. Thanks for taking the question. ...Thank you. The next question is from the line of Aditya Soman from CLSA. Please go ahead. Hi, good evening. So two questions. Firstly, can you give us a sense of, the contribution in the jewelry business from the, overseas stores? And secondly, are we seeing any, sort of underlying change in the demand environment, post this, customs duty cut, any sort of sense in the, whatever, 10 days that we've had? So I think the first answer to the first question is it's around 3% international. It's still very small, but growing rapidly. On the post budget announcement and 9% reduction, certainly there has been a lot of people who are on the fence who have come in and started buying, and we are seeing a continued upswing, significant upswing in gold and studded both, more in gold, but also in studded. And overall, I think the market has seen it. It's not just us, all players. So I think there was a lot of fence sitting even due to election, deferred purchases in Q1. Some of it has now begun to come through, is my own understanding as pent-up demand. Yes, so we are seeing good, good response as we speak. Understand. Thank you. And just to follow up on that, I think this also coincided with your activation, right? Or it coincides partly. So how has that played out? Yes, it is true. In fact, we advanced the activation by a few days, but it has played out pretty well, so it works. Both the forces are at play. But even last year we had this, and we do compare our growth to similar periods of activation, and even that, the numbers are looking good, as we speak. And certainly, they have jumped up post the announcement of the budget. That's very clear. Thank you. Thank you. The next question is from the line of Percy from IIFL. Please go ahead. Hi, sir. So my question is on the customs duty cut. So while the customs duty has been cut materially, still the gold price today is only 5% below the all-time high. And 5%, that kind of volatility can happen on a day-to-day basis. I mean, it's not a material sort of drop. So how much do you think can this small cut really spur the demand by? So, Percy, difficult to answer that question, but just to give you a sense, even two to three days before the budget, MCX rates were already 2%-3% below. Yes. Okay, and then post that, there was some fluctuation in it. Then, then I added up both over a period, it looked like 8%-9% reduction. But in the last couple of days, again, due to geopolitical or other international factors, the dollar gold rate has gone up. So, it's a dynamic environment, is the best I can say. But so far, what has happened is, this has resulted in a customer sentiment to come in and buy jewelry, and we are continuing to see that. Let's see how the next few days also progress. Let's say, this weekend will tell us how things, you know, stabilize in the mind of the customer also. Mm-hmm. Also, the other side of it, which we spoke a little earlier, is the level playing field aspect of the formal organized sector players who play by the rules, versus those who may be using the illegal gold coming into the country. That change is in favor of the organized players. Sure. Demand, total demand is one part, yes, but the relative demand and market share potential in the near term is into the advantage of the organized player. Got it. Secondly, just wanted to understand the competitive dynamic here. So, this was a weak quarter, and even so, more because the wedding season was very weak. And, the other large listed player has a higher share of wedding jewelry than us. And, yet, their SSG is 12%, we are at 3%. So how do we look at this? And is there any sort of, I mean, in terms of market share within the organized player, is there some decline that you see? Or whatever is this differential is made up by some of the other organized players doing worse? Okay, I'll try to keep it as succinct as possible. See, the contributions of different regions is very different for us versus, let's say, the other organized player you're referring to, and some of the other large chains. Materially, it's, it's very materially different. So just to give you a sense, while we have declared a 9% growth in total business, and a 3% on same store, actually, that figure doubles. I mean, not double, 16% is the growth figure if I look at only south markets. And in a way, somehow that aligns with or is slightly better than whatever we have picked up of the reported figures of other organized players. And we, we do track many of them, not just the listed ones, but even the unlisted. So South has performed rather differently in this quarter compared to other regions. Any reason for this differential performance? ... Actually, very difficult to say. It's just that I think the election-related disturbances as well as the heat wave and the wedding dates. So in the South, wedding dates were not as badly impacted. In the North and, you know, Lagan markets and all, which is Bihar, UP, etc., there was no dates in the quarter. Whereas South had some dates, and also had some more dates in July. So I think South had some different forces at play, and that has benefited, I think, all players, not just us. So there's a difference in the relative regional contribution. And our own sense is that there has been substantial expansion activity by some of the organized, listed and unlisted players in North and East. that base itself is very, very low for them, and therefore, that shows up in differential growth as well. And if I were to pick up my own reading, I think, at least the bigger share gain or loss would have come from regional players, and there, I think we've, in fact, gained. West, I think, it's, it's, it is more or less stable. It's not too much of a difference, is our reading. And North, there has been a lot more competitive activity by organized players, but their base is small, so they have certainly grown faster than us. Unable to say right now whether we've lost to them or, or we have gained something from local players. That, that bit is very difficult to make out. Got it. Last quick question on margins versus your guidance in the analyst meet a couple of months earlier. Is there any sort of tilt towards the upside or downside in terms of confidence around those numbers? I know it's too early to change the guidance, but just in terms of the confidence, is there an upside or a downside risk to that number? If you compare, you know, Q1 of last year and Q1 of this year, actually, we are slightly better off through cost control, etc. Customs duty impact, we already articulated, which is going to be certainly affecting margin going forward for us. Yeah, that I'm treating as a one-off anyways. So if we normalize to that, then we don't have any reason at this point of time to think about changing our guidance. Okay. That's all for me. Thanks, and all the best. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, team. Good evening. I'm more curious to understand our focus recently. I'm seeing that there are a lot of emphasis, store openings on Zoya and Mia, not Tanishq, Zoya. So maybe if I look back, I think, if you want to help us to understand, what is the value contribution non-Tanishq will have, broadly, I mean, not specific? It's less than 5%. Okay. And the reason why we are pushing a lot of Mia is that you think there is an ample opportunity beyond CaratLane? I think there is opportunity for both CaratLane and Mia, and there are six to seven other players in the market. So if you think of it, the market size of younger, modern audience is pretty large in India. We're talking about 40-50 million addressable people. And I don't think put together, we are able to address even less than 10% of, 15% of that market. So as more and more players are also there, it is actually quite good to have multiple horses in play. Pretty much if you think of an F1 race, there are more than one car for a Ferrari or a McLaren, et c. So it's actually good that we are able to dominate that part of the market. As I shared in the investor day, between Tanishq, Mia, and CaratLane, we are a significant player, and the portfolio play in terms of buyer growth, acquiring new buyers is very good. Hence, the opportunity is large, very large for both brands, CaratLane and Mia. We don't see the reason to hold one back for the benefit of the other, I mean, both can grow. What would be the new buyer contribution this quarter? Overall, excluding CaratLane, I have the data on Tanishq, Mia, Zoya, readily. It's around 45% is the new buyer contribution, which is just a percentage point lower than last year's same quarter, despite whatever challenges that we talked about that quarter once. Okay. Now, why I'm asking this, because if last two quarters, if I see, our exchange used to be one-third. I don't know what this quarter is, but if the exchange is strategically coming down, will it, will it have a direct impact on our revenue growth momentum? Exchange? Yeah. Not really. Exchange is not. It is pretty much in the same ballpark, just a couple of percentage points here and there. It would, it would be 35? Nothing has actually altered in exchange. It would be around 35? Yeah, it is around. It is 35% if I look at the Tanishq numbers. No, I was, I was just more asking, curiously, Ajoy, if the exchange is one of the components of buying the high-value jewelry, and if the gold prices are higher, that will also influence the customer decision. So that's what I was more curious about, if the customer has had a different taste. Ah, okay. No, no. So let me clarify. If your question on exchange, it is different. I was mixing it up with the previous one. Yeah. Exchange is lower by a couple of percentage points as a contribution in the current quarter, but not significantly more... and it is in correlation with wedding. There's a lot of correlation between wedding purchases and exchange. Wedding contribution was 21% last year, it's 20% this year. Exchange was 37 last year, 35 this year. So there is a correlation there. And typically, this year we have seen, compared to last year, lesser people. In fact, people are thinking gold prices may go up further, or also gold movement during election period is restricted. So those factors also come into play. So I wouldn't read much into these figures. It's materially not too different. We should wait and see for how first half looks overall. Okay. My second and last question to Suparna. It's heartening to see that Fastrack volume growth is upward of 16%. Is there any specific regional changes we have done in terms of promotions or penetration or offers? So most of the change has actually been in the product, and we have worked a lot on making the product more fashion forward. We had launched a sub-brand called Vibe for young women last year, and also on the main Fastrack brand, the two, three things that are working are differentiated products as well as premium products. We've introduced premium products like ceramic automatics, which sell at INR 10,000, and consumers have lapped it up. So our product lineup is now much more oriented towards today's young customer, and that has given us a lot of boost. And this is actually work in progress that is going on for more than a year, and I think now we are seeing the results of this. No, but I'm asking this question, if this volume continue, there will be some exchange towards, the second half, and that's my worry, is that, if we have the margin guidance, whether we will be able to continue with that margin guidance? No, in Fastrack, the sub-brand margin profile is different, but the main Fastrack brand is very healthy margin. Okay. There are no margin issues there. Okay, all right. Thank you and all the best. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have any follow-up questions, you can rejoin the queue. The next question is from the line of Nihal Mahesh Jham from Ambit. Please go ahead. Hi, good evening, team. Rather the first question was, again, to the jewelry segment, that from the way we look at it, the competitive intensity looks like it is here to stay, given the rise of some of the organized players. Historically, have you seen some trigger which has helped moderate competition, or you think this is a new reality going forward? I think it's a new reality. More will come. In fact, one more has entered the fray also in July. Absolutely, yes. I had a second question, which was on the bill, on the charge that we saw. That, just to clarify, the impact of this charges, which is related to the factor in import duty, is mainly on the gold on lease portion that was outstanding on the day of the budget, right? Or is going to be some impact which could continue going forward? No, it will not continue. It was Gold on Lease and some of the portion which we hedge to forward, that was also there. So these two put together... So there is nothing, you know, going forward. It is, it is determined at that point of time, and that's the maximum number which I shared with you. It can be slightly better than that, but yeah, that's the one. As we liquidate this inventory, this will flow. Understood that. That was from my side. Thank you so much. Thank you. The next question is from the line of Vivek M from Jefferies India. Please go ahead. Hi, good evening. My first question is, you know, for, over the last decade, at different points of time, you have given your market shares and your aspirations. But, you know, Venkat and team, when you look at market shares today, do you look at the total jewelry market, which is where you want to gain the market share? Or do you also look at within organized, do you want to hold on to market shares, or do you want to gain market shares? Because, let's say by your own admission, you are saying competition will rise in the organized space. Does that mean that, you know, from an overall market perspective, you may gain share, but within unorganized, sorry, within organized, you may lose? How do you think about this, you know, sharing from an organized perspective? No, we think about it from a total market point of view, because there are so many markets where we are going into, there is no organized player only. For example, if I take Sitamarhi, Madhubani, Raxaul, there is no, no brand there which of the kind we typically speak about, and we are putting up stores which are doing INR 40 crore, INR 50 crore, INR 70 crore in a year, and so many small towns across the country. So we look at it, you know, from a total market point of view. But from a competition point of view, particularly those who are likely to affect us, are the larger players, the more professional independents, the more professional regional players, and therefore, in each state or city, we have to reference those and act accordingly. So, you know, just to throw a little more flavor, in many regions, the local player is very strong compared to, you know, some of the other places. Not just in small town, but even in, let's say, certain larger states, et c. So there we refer to them. We do track growth of all the organized players, and we do track our relative growth, like-to-like, total growth, for these organized players, as well as for the unorganized key players. Around 40, 50 brands we tend to track, city by city. So we are mindful of their growth and our growth as well, and therefore, we would not like to fall behind as far as possible. Also, you know, it's a very complex situation because the nature of the industry, I mean, the size of the industry being so large, the formalization opportunity still being very large, we can continue to do exceptionally well even when some others come in and do well. Because, you know, they may be going after customer segments of a different type and all that. But all those who are likely to play in the same customer segment as we do, and therefore we can get affected by their success. Our failure and their success are, in a way, intrinsically linked. That's where the focus is greater when we start understanding. And because we are a retailing company with, you know, very high database, there were more than 10,000,000 Tanishq customers in our database, and therefore, if somebody buys, if we lose, we know. All that kind of city level, catchment level, gain, loss thing is the continuous but improving focus of the division. Got it. Thank you for the elaborate explanation. The other thing, Venkat and team. And we have asked this at different points of time, but given how situation is, or the scenario is emerging in, particularly in the developed markets, in your Tanishq network, do you see customers asking for, you know, let's say, lab-grown diamond, increasingly? So we've been tracking. This is Ajoy here. We've been trying to track inquiries on a continuous basis across all the stores, you know, Tanishq, CaratLane, Mia, Zoya. Zoya there's, of course, very few. And so far, we have not seen material, you know, inquiries. What we do hear about this, that customers want to know... They're a little more curious, and they want to be assured that what we are selling, is it natural? Is it? Has it got any lab? etc. There are some questions, and some of them have even gone on to demand, "Can you please, certify that yours is entirely natural?" etc. We've had to do that, and we've gone ahead and done that. But yes, there is enough and more, you know, noise in the market if you think of media, if you think of number of players, etc., coming in. Also, you know, I mean, it, it'll play out, and we'll know better. But I'm just saying, if you go back historically to maybe even two decades back to American movies, right? And where a male, you know, proposes to a, to a bride-to-be or a bride-to-be is showing off what she got from a fiancé. So this whole rock and the size of that rock and the solitaire, and, "My God, that guy thought of you so much, and therefore, he bought such a bigger rock." That has been at the center of the American jewelry industry, and therefore, the motivation of all those men who are getting... who are proposing or getting married, to buy the best rock possible for the bride, is also at the center of what is happening in the American diamond, American LGD industry. And you combine it with the sanction that the American jewelers have also given in a big way to the LGD product lines by keeping it within and the overall penetration of naturals in the American consumer market. So you combine all this, so the potential playground for LGDs have been dramatically lifted there. Whereas in India, this first point, you know, where the man is trying to impress the woman with the size of that big diamond rock that he's buying for this, is not even present. Of course, it is evolving. The solitaire market in India is in a way in that space, but the share of the solitaire to the total diamond jewelry in India is relatively small. So therefore, that also, including the fact that women are not asking or men are not asking in India, what Ajay was saying, that's also because of the absence of the latent demand or something like that. And therefore, the way it will play out in eastern markets, not just in India, because you can look at even other eastern markets of the world, where one big signal of affluence is the acquisition of a natural diamond product, apart from a big car, a big house and stuff like that. So it, it's a very, a multidimensional thing at play as well. Hmm. Got it. Got it. And a very small question for Ashok. Just for my understanding, and sorry if it's a very naive question, but in case of gold on gold exchange, there is no GST implication, or is there? On the gold itself. Yeah. No, no, there is. When we take back gold on exchange, there is a GST element. True, but- PEP, there is certainly a GST element when we take a Tanishq exchange. Mm-hmm. For the gold that comes in from non-Tanishq, we just melt the gold and give that person a credit note. But on Tanishq exchange, there is a GST loss for the customer. Customer loss, but we don't have any implication. Once we sell again, then, of course, GST will play out, yeah. No, sorry. My question is, the GST impact will be only on the differential, which is the gold, which is the making charge, right? On the gold itself, if I give my gold to you, you give me back the gold, and whatever making charge that you charge me, on that will be... There will be a GST, because it's my gold which I'm giving you, and you are giving me back, assuming I give you 100 units and you... Yeah. ... These are two different transactions. We are buying, we are taking from you, and we are selling it to you. Oh, okay. So there is an implication on the gold itself for the customer? Yes. There's a loss of value. There is a loss of value. Wow. Okay, got it. Got it. Thank you, and all the best. Thank you. The next question is from the line of Siddhant Dand from Goodwill. Please go ahead. Yeah, hi. My first question was regarding the CaratLane leadership changes. So has this affected the business, and have there been other leaders who have exited lately? Sorry, who, who is that, please? The management. So there's been leadership changes at CaratLane, right? Hi, Siddhant, this is Venkat here. Yeah. Yeah, hi. Yeah, how are you? Yeah. So, you know, Avnish Anand was one of the founders, co-founders of CaratLane, has chosen to, you know, leave for personal reasons, and it was, you know, a amicable kind of discussion and decision. After considering all possible candidates, we concluded that Saumen Bhaumik should be the new leader, and she will formally move in soon. And there has been a lot of welcoming of Saumen and the new leadership that he brings from the CaratLane team, and the early signs are very, very exciting and positive, and I'm sure we are headed for even greater things in CaratLane. Okay, perfect. My second question was, you know, regarding the big difference in consolidated and standalone profit. So is this largely the losses in the international business? There are two elements. Apart from losses in the international business, there is one-off item, which has been explained in our presentation. We had a $2 million loan extended by our US subsidiary, TCL NA, to an entity. Recoverability of that has come under question mark, so we have fully provided for that. So that's a kind of one-off item also sitting there. Okay, just a request to upload the presentation a little earlier for that. Yeah. Okay. Yeah, we take your request, but, you know, we are also when the board approves the accounts, thereafter only we can upload that. So, yeah, but we will try to keep that in mind. Yes, perfect. Thank you. Thank you. The next question is from the line of Akshay from Fidelity. Please go ahead. Yeah. So, some of my questions have got answers. I want to take them, but we just wanted to congrats Venkat on the book. I really loved reading your perspective in detail. So thanks for writing the book. You know- Thank you. One question, one question was around the lab-grown diamond. I know it's, it's work in progress, so you guys, you said you are monitoring data, but you know, when you speak to customers, have you seen resistance? Like you said, you know, some people are asking for guarantee, et c. How can you provide that guarantee? I mean, it's a naive understanding, but from what we understood, it's very difficult to differentiate once polished on what is natural and what is lab-grown. So, do we have that kind of control on our sourcing that we can give that guarantee to the customer? Yeah, thanks. It's an important question, and we've been at it for the last several years. In fact, four to five years. Because lab-grown has been in the market for quite some time, supply side at least. We have invested extensively in equipment across all our partners and our own labs and our own sourcing and importing offices. We are ensuring that every stone... First of all, we source most of our stones directly through sight holders and through very, you know, stringent norms. We work with very stringent norms. So every stone is tested. Thereafter, if we do pass it on to any of our job work vendors or outwork vendors, it is tested by them. It is again tested before we take it in, and it's ensured that, before it enters our warehouse, it is completely checked. In fact, even outward, there is checks done. So there are three to four times that the product gets tested, and we have the latest equipment, which will ensure that there is absolutely no contamination. And this is one of an important risk, strategic risk that we had identified almost four to five years ago, and a lot of investment has gone into this. So we, for sure, can, because we are deeply involved in the manufacturing, sourcing of stones and supply of, manufacturing of the jewelry, we can say that for sure. I agree with you that for many other retailers, it may be a challenge because they are not involved so much in the back end of the value chain. I'm just trying to think, is that something that we can publicize and advertise? Because, like, the Karatmeter was a differentiator then, could this be a differentiator as now? No, good input. Thank you. My second question was, just the difference in EBIT margins between consolidated and standalone in jewelry. If, you know, the margin seems to be low in the implied subsidiary number, I don't know if that's to do with only the extraordinary or there was something more at play over there. So it is lower in the subsidiary. Outside, in subsidiary, it is scaling up, but our expectation is that as they grow, their margin profile certainly should improve. But of course, in this quarter, it has not happened. So yes, that's the reason. But eventually, you know, when we spoke about in even annual investor day, over two to three years timeframe- ... We believe that subsidiary, which is CaratLane, should scale up as well as improve their EBIT margin profile. Okay. I mean, this year. Okay. Hope so. Yeah? Thanks. Very last question. Just how should we be thinking about your net interest expense going forward? It's sort of been rising from about INR 100 crore a quarter now to INR 230 crore this quarter. You know, is there a rate we should be working with right now? I know there is a M&A debt which is sort of carrying forward the interest, because that's something that I think there is a very wide variance on street, so just love to get your guidance on that. Thanks. So, you know, there is one component of borrowing is sitting on our balance sheet, which we raised for acquisition of balance stake of CaratLane. And there is a defined timeline when those bullet payments would happen. Until that point of time, that is going to stay. Currently, it is INR 65 crore in a quarter. The rest of it, I think, you know, is the short-term borrowing and versus our investment. If you look at other income also, other income is also at a higher level in quarter. So more or less, that interest cost is neutralized by our liquidity management and cash management, so we are not worried about that. The CaratLane piece will be out of our way in next two years, and then it is the treasury management. So interest costs, the short-term borrowing costs will never be, you know, hit to PNL because there will be commensurate other income. It is just part of cash management and peak cycle of peak cycle management. And sometimes, you know, even in the inventory when we decide to purchase spot gold, because we see some benefit, etc. So that's the part of, I would say, surplus treasury management, that interest should not be hurting PNL. The long term, which is about INR 60-65 crore at this point of time per quarter, will get paid off over the next two years. Awesome. Thank you, guys. All the best. Thank you. The next question is from the line of Latika Chopra from JPMorgan. Please go ahead. Hi, thank you for the opportunity. Two questions from my side. The first one was, you know, on your comment that the high-value studded generally has been subdued. And just tying in with the point that I think Ajoy mentioned, you know, this time the activation started a little earlier. Wanted to understand, you know, in this activations, are we making any specific interventions to incentivize the customers to, you know, to buy more of high-value products? And any early signs of any kind of feedback in customer behavior change towards this segment? That's the first question. It's too early to comment, Latika. I don't have that kind of data in terms of how is the composition of growth, et c., being. So I can't really answer. Are we incentivizing more for high value compared to last year? No. We are more or less in the same ballpark. Certainly, you know, we didn't have too much of products in the Q1, especially INR 5 lakh+ and INR 10 lakh+, and that could have also contributed a little bit to what was the comment made in the earnings presentation. Going forward, we have infused new collections as well as some very good inventory into, you know, into high-value studded INR 5 lakh+, INR 5 lakh-INR 15 lakh, INR 5 lakh-INR 20 lakh, actually. We think there should be a good uptick, but very early to comment because I really don't have that level of data right now. We'll wait and see how it plays out. Sure. Sure. The second one was on, you know, this customs duty reduction. Just trying to understand, you know, I know it's been two days only, but you did talk about, you know, a better demand coming back. But do you also think some bit of, you know, later demand in the year because of wedding or festivity getting a little bit more pre-paid? And also, do you think there could be a scenario where the jewelers could probably raise making charges a bit to kind of mitigate the impact on inventory losses? Because, you know, customers got used to a level of high absolute making charges, you know, when gold prices were higher. Just trying to, you know, check if there's any thoughts there. Thank you. I hope the latter comes true, but I really can't comment on behalf of the rest of the jewelers. We are not likely to, you know, do this kind of game because we are anyway at a premium vis-à-vis the market. So we'll stick to what we have; it is what I can say. How demand will play out, let's hope it does play out well, because it all depends on how gold rates dynamically behave. It's not easy to predict what happens to gold rates, especially dollars per troy. The macro, the global macro is pushing the gold rate up despite the customs duty, you know, pulling it down, and therefore, in a matter of just a few days, the difference is gone almost, you could say, right? Or could go, so. Yeah. Yeah, sure. Thank you and all the best. Thank you. Thank you. The next question is from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Hi, thanks for the opportunity and, thanks for writing the book. It was a fantastic read. Just, ... question. See, as you have been highlighting for a while, that the regional players are expanding nationally and formalizing a lot, have you become a favored hunting ground for talent, and have you earned an unwanted distinction of becoming CEO factory for the sector? We've had some exits or joining, you know, from this. Certainly, if I look at the most recent entrant into this industry, it's got a good lineup. If you take a photograph, it look like a Titan, you know, team meet. And, yes, so from You know, one of the things, the advantages that Tanishq had for a very long time was the whole capability, leadership depth and professionalism. And that is a challenge today, because certainly the other companies are starting to become much more professional, wanting to attract talent of that type, changing their profile from a typical owner-driven kind of culture to give freedom and opportunity. So you could also look at it from one point of view, it's also a better thing for the industry, you know, from multiple points of view, customer experience, employee experience, partners will become more better treated and all that, while certainly raising the stakes for Tanishq to reach its next level of excellence. So what Ajoy and team is doing, and in a way, forced to, into doing also, but it's a good thing. It's—I wouldn't like to, you know, be always in a state of, you know, being where we were maybe 10 years back. So we are a hunting ground. We are losing people. I mean, we have lost some people. And on the retail side, the challenges are, perhaps even greater from a store point of view. But the Tanishq culture is strong, the Tanishq brand, even for employee brand side, is strong, and, you know, we need to work harder to retain, you know, people. But that's part of life, you know, I think. And it's also an evolving thing, so it's not like a sudden change. So the team is also used to continuously improving how we play that game on multiple fronts. Got it. And how are we replenishing this talent? Are we, do we, have homegrown talent, or are we also looking for other industries or our industry to kind of replenish this? Actually, the category expertise is actually, is key, very important, if not crucial. And therefore, you know, from other industries or even within the company, from other categories, and especially in certain functions where that depth of expertise is key, it's not that easy to replicate. But because Titan Company has got a very, very, long-standing and a very deep and wide talent management program, we have people across the company who would have served in jewelry for a long time earlier and maybe now doing roles in other divisions, and therefore, at short notice, you know, we can mobilize, if necessary. And we also have a very robust, you know, talent transfer program within the company through which they can come in and pitch in or step in if it is required. But we would need a good mix of category experts from within and outside. And of course, some can be from outside the category, from within or outside. Just to add a- Mm-hmm. Add a little bit more flavor. So if you think of retail, it is not necessary that you need pure jewelry experts all the time. You can develop them within. Though, when you go to maybe wedding and high value, you need a few experts. Think of supply chain, you don't need. Think of marketing, you don't need. But certainly design, categories, and specifically- Manufacturing. Some parts of manufacturing. Sourcing, also you can manage, you know, so it's, it's a mixed bag. And it's a combination also of homegrown from within at the cadre level, and then there is lateral. So it's a combination of these, these play. Sure. So I just hope that you don't leave your family pitch, which has worked in Titan for a very good work for many future talent, because we think on that part. So just the one which you mentioned in the book, right? Yeah. Yeah. Just one request, again, somebody also highlighted earlier, if you can increase the gap between the result release and phone call, we can have much more time to go through the accounts and have much more studious discussion on numbers. That's all from my side. Thanks. You'll be happy to take a call at seven to eight? Then maybe think about that. Perhaps next year then. Perhaps next year then. Let's see. Okay. Yeah. Just, yeah, taking note of it. Thank you. Thank you. Ladies and gentlemen, we would take that as the last question for today. I now hand the conference over to Mr. Venkataraman for closing comments. Thank you very much. It was a very useful conversation with a lot of perspectives coming from your side to make us think more about our future, and see you next time. Thank you. On behalf of Titan Company Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.