Ladies and gentlemen, good day and welcome to the V2 Retail Limited Q2 and H1 FY 2026 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. Before we begin, a brief disclaimer: the presentation which V2 Retail Limited has uploaded on the stock exchange and their website, including the discussions during this call, contains or may contain forward-looking statements concerning V2 Retail Limited business prospects and profitability, which are subject to several risks and uncertainties, and the actual result could materially differ from those in such forward-looking statements. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. I now hand the conference over to Mr. Akash Agarwal, Director and CEO V2 Retail. Thank you, and over to you, Mr. Akash. Thank you. Good afternoon, everyone. A very warm welcome to the V2 Retail Limited Q3 and nine-months FY 2026 earnings conference call. Thank you for joining us today. We trust you've had the chance to review our results. The earnings presentation and the press releases are available on the stock exchanges and also on our website. We are pleased to report a very strong quarter reflecting continued momentum across our business. In Q3 FY 2026, we delivered a 57% year-on-year revenue growth, significantly outpacing the broader market. This performance, once again, demonstrates the scalability, resilience, and execution strength of our operating model, even on a high base. Our ongoing investments in analytics-driven merchandising, supply chain responsiveness, and operational discipline have further strengthened our ability to scale efficiently in India's value fashion segment. Customer traction across categories remains healthy. This reflects the continued relevance of our price-value positioning and product refresh cycles. A steady flow of trend-appropriate assortments, combined with strong quality standards and competitive pricing, has supported growth across our store network. On the expansion front, our focus this year has been improving our geographic coverage through a balanced mix of rural market entry and deeper penetration in Tier 2, Tier 3 cities. This approach has helped us broaden our customer reach and improve regional alignment through localized assortments and stronger store-level execution. During the first nine months of FY 2026, we added 105 new stores, and our pipeline planned openings remain robust. Backed by a strong merchandising and inventory management team, we remain focused on disciplined expansion, efficient inventory deployment, and sustainable operating performance. Looking ahead, we continue to stay focused on profitable growth, capital efficiency, and disciplined execution, with a clear emphasis on enhancing shareholder value. Now, moving on to some key updates for this quarter and the 9-month period of FY 2026. First, the company successfully raised approximately INR 400 crore through a QIP with marquee investors. Second, we completed a physical verification of property, plant, and equipment, and reconciled this with the fixed asset register. As a result, we've written off assets with a carrying value of INR 5.06 crore, and this has resolved the earlier audit qualification. Third, we have been consistently sharing pre-Ind AS numbers to provide better transparency on our operational performance, and we will continue to do so going forward. While we fully comply with accounting standards for statutory reporting, the economics of retail operations are best understood when rent is included at the EBITDA level rather than below EBITDA. Our annual business plans, budgets, cash flows, store-level metrics, and incentive structures are all aligned to pre-Ind AS profit numbers. Our revenue and profitability guidance is also communicated on this basis. In line with industry practices and to better reflect the true profitability of our business, both under pre-Ind AS reporting and Ind AS 116 reporting, we reassessed the lease terms for our store leases. This reassessment reflects the evolving nature of our store portfolio and our strategic plans. As a result, we re-estimated lease tenures to better align with the period over which we expect to operate these stores. This led to a change in the measurement of our right-of-use assets and lease liabilities, resulting in an exceptional gain of INR 27.69 crore, with a tax impact of INR 6.97 crore. As of October 1st, 2025, ROU assets and lease liabilities were reduced by approximately INR 484 crore and INR 499 crore, respectively. Lastly, the impact of new labor code is not material and has already been recognized in our financial results for the quarter, and nine months ended December 31st, 2025. Now, moving on to the key highlights of our performance for the third quarter. Revenue in Q3 grew 57% year-on-year to INR 929 crore. EBITDA in Q3 stood at INR 174 crore compared to INR 112 crore in the corresponding quarter last year, registering a growth of 56% year-on-year. EBITDA margin stood at 18.7%. PAT for the quarter stood at INR 102 crore compared to INR 51 crore in the corresponding quarter last year, representing a growth of 99% on a YOY basis and also surpassing the record FY 2025 full-year PAT. We opened 35 new stores during the quarter and achieved a net addition of 105 stores in the first nine months of FY 2026, taking our total store count to 294 stores with approximately 31.9 lakh sq ft of retail space. Reported SSSG for Q3 stood at 2%, and normalized SSSG adjusted for the Durga Puja shift stood at 12.8%. We recorded a 48% volume growth in Q3, with full-price sales contributing 92%, which reflects the strength of our proposition and reduced dependence on discounting. Now, let me briefly cover our performance for the first nine months of FY 2026. Revenue for the nine months grew 64% to INR 2,270 crore. EBITDA for nine months stood at INR 346 crore compared to INR 200 crore in the corresponding nine months of last year, registering a growth of 73% year-on-year. EBITDA margin improved to 15.3% compared to 14.4% in the same period last year. PAT stood at a record INR 144 crore compared to INR 66 crore in the corresponding 9-month period last year, registering a very strong 119% year-on-year growth. Same-store sales growth for 9 months FY 2026 stood at approximately 8.6%. Our ROE continues to improve and now stands at 24.5% compared to 23.2% in FY 2025 and 10.7% in FY 2024, reflecting disciplined capital allocation and strong operating leverage. So now, let me share our pre-Ind AS performance for the quarter and the nine-month FY 2026. For Q3 FY 2026, on a pre-Ind AS basis, revenue was 57% up year-on-year and moved to INR 929 crore. Gross margin was at 32.4% compared to 32% last year. EBITDA was INR 126 crore, up 50% year-on-year, with an EBITDA margin of 13.5%. PAT came in at INR 82 crore, up 47% year-on-year. For the first nine months of FY 2026, our pre-Ind AS performance reflects these. Revenue was INR 2,270 crore, up 64% year-on-year. Gross margin improved to 30.2% from 29.7% last year. EBITDA was INR 223 crore, up 80% year-on-year, with an EBITDA margin of 9.8%. PAT stood at INR 138 crore, up 83% year-on-year. Lastly, in line with our disciplined expansion, we've already added 10 net new stores in the current quarter, taking our total store count to 304 as of today. With that, I will now open the floor for questions. 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 Ankit Babel from Subhkam Ventures. Please go ahead. Good afternoon, Akash. Congratulations for a great set of numbers. I have a few questions. First question is if you can explain in simple language regarding what changes you have made in your lease accounting and how is it compared to the industry practice? So to answer your question, firstly, we always focused on pre-Ind AS numbers because the Ind AS should not apply to retail businesses like us. But we obviously followed the accounting policy. But it showed a very big difference because our industry peers use this lease accounting policy that we just moved to, where our lock-in for every location is around 1 year, whereas the lease period on the lease is 9-12 years. So we have an option of reassessing whether we want to continue running the store or not. So now we have linked it to store sales performance. So every year, there will be a review of the store yearly performance, and that's how their lease period will be reassessed and updated in the accounting system. So everyone, including Trent, Vishal Mega Mart, Style Bazaar, V-Mart, they all moved to this new accounting standard. So we wanted to be at par with our peers, and so we took a decision along with our auditors to move to the same. Your pre-Ind AS numbers won't change because of this? No, the pre-Ind AS numbers remain the same. Only the post-Ind AS numbers changes. Is it fair to assume now that from now onward, the difference between your pre- and post-Ind AS numbers would reduce significantly? Yes, that is correct. Especially because we are expanding and opening so many newer stores, the impact of pre-Ind AS versus post-Ind AS was much higher on our books. That should be diminished now. Okay, great. Okay. Second is on your working capital. What I observed was that your inventory days are stable, but there seems to be a sharp decrease in your payable days, which has resulted in a slight increase in your working capital. So what was the reason for it, and was it by choice, or was there some compulsion? So we raised around INR 400 crore from our QIP proceeds, and the needs of those funds for capital allocation would have been over the period of the next 12 months. So we always have a bill discounting feature available to our vendors. So we prepaid our vendors about INR 300-odd crore because we want to be the best paymasters in the industry, and we always want to be in their number one priority. So we helped our vendors by giving them the bill discounting feature. Is it fair to assume that this line of credit from your payables will always be available to you whenever you require it? Yes, that's correct. So as and when we start using the funds for capital allocation and opening newer stores, you'll see the credit term back to 55-60 days. Okay, okay, okay. Next question is on the difference in your numbers in your standalone and consolidated statements. So why is the difference? And as investors, we should focus on which numbers, basically, standalone or consolidated? So because now we have shut down three manufacturing units, so the numbers we should focus on for the future is standalone. But we are still liquidating the inventory left in our subsidiary, and those inventory is being converted from fabric and accessories into finished goods. That is why we've taken an extra. Sorry to interrupt. The line for the management has been dropped. Please hold while we reconnect them. The speaker is back on the call. So you may. Yeah, hi. Sorry. So I was saying we're going to merge both the entities now. So going forward, we should always focus on the standalone numbers because we have almost liquidated and converted all the inventory. There is some left, which will be done in the next six months. So basically, there is no business in the subsidiary, the whole retail business into the standalone numbers, and the subsidiary numbers, as you said, you'll merge, and then we should focus only on standalone numbers. Is it the conclusion? Yes, that's correct. Okay. And so, lastly, what's your outlook on the demand side, both in the near-term and medium-term, and how is the response from the stores you have opened, say, in the last couple of quarters? Are the PSF of those stores in line with your expectations, or do you have any other thing to tell me? The benchmark that we use for newer stores is they should be within 30% sales PSF of older stores. Our older stores this year have already touched INR 1,200 per sq ft of sale, which was the next ideal milestone for our business. All the new stores that we opened last year, as well as all the new stores we have opened this year, both cohorts are performing better than INR 720-INR 730 per sq ft of sale. They are contributing to EBITDA from the first month of operations itself. Talking about demand, there's a huge wedding season coming up. Hopefully, with the GST trickle-down effect and government trying to ramp up consumption because it has been a little damp for the last two to three years, we always try to have a positive outlook. Hopefully, the decisions by the government also help boost demand. We are taking an 8%-10% SSSG target for next year also and adding 150 more stores next year also. Any view on the gross margin side? Because your margins are way below compared to your peers. At the gross level, I understand at EBITDA levels, you might be better than them. But at the gross level, your margins are way below there, I mean, the industry peers. So any thought on that? Is there a scope for improvement, or you feel that these would remain at these levels next year also? Our gross margin strategy is by design. We want to pass on most of the benefits to the consumer. We like having the metric that most matters to us is EBITDA margin. We'd rather have more EBITDA margin by higher sales per sq ft than higher gross margin. Going forward also, we target a gross margin of 28%-29%. All the margin expansion should happen from operating leverage and from higher sales per sq ft. Okay. That's it from my side. If I'll have anything, I'll get back into the queue. Thank you. Thank you. Thank you. The next question is from the line of Palash Kawale from Nuvama Wealth. Please go ahead. Yeah, thank you for the opportunity, sir. So continuing from the question of the last participant, again, I would like to shed some more color on the metro setup stores. Let's say when you started expanding in eight quarters, you've added around 190 stores. So how are those older stores performing on margins and PSF, and how are new stores performing? There are three cohorts to talk about. One would be the stores that we had at the end of 31st March 2024. There are about 72 or 74-odd stores that we opened in FY 2025. There are the 116 stores that we opened in FY 2026. Like I already mentioned, the cohort of stores that are mature that we had at the end of 31st March 2024, they are already at a level of INR 1,200 per sq ft of sales per month. Both the other cohorts, FY 2025 new and FY 2026 new, they are at a level of INR 730-INR 740 per sq ft of sales per month on average. On margins, sir, how are the margins for the metro stores who are at 1,200 PSF? The cost at company level is the same. The cost is around INR 190 per sq ft, and the gross margins are 28%-29%. You can calculate the margins because the costs remain constant for new or old stores. Okay, okay. Yeah, that's helpful. And so, good slide on states. So going forward, expanding, where is your focus? Is it on emerging states or new states or states which are already mature? In percentage terms, how should we? Yeah, we entered about seven new states this year. So the whole expansion strategy depends on the performance of each geography. So to give you an example, Karnataka was a relatively new market for us, but it was performing so well. Now we have 14-15 stores in Karnataka. The same goes for West Bengal. So 60%-70% of our new stores will come in existing strong clusters for us where V2 is already performing well. And the rest, 30%-40% of the stores will come in new geographies that are performing very well for us. Sir, any difference in the geographies where you are entering, where players are already present, or if you are a new player there? Any difference in the performance of the stores there? I think out of 304 stores that we have now, there would be less than 20 stores where we don't have any organized competition because competition has become the new reality. So it's not an external variable anymore. So it's about surviving with multiple retailers around you. So it's about focusing on your strengths and continuing delivering that value proposition to the consumer. Okay, okay. And so, last question, your employee expenses, if I calculate on per sq ft, have come down. So any reason for that, or is it just seasonal? If you look at consolidated numbers, whatever we used to make in our subsidiaries, a lot of the manufacturing cost used to be employee expenses. Whenever you compare employee expenses, you should do it at the standalone level. Even at the standalone level, it has come down because we are adding more area. We are getting operating leverage because the same head office is now servicing 50%-60% new area. We'll continue to get this as we expand to more and more stores. Okay, sir. Yeah, thank you. Thank you so much. That's it from my side. Thank you. All the best for the upcoming quarters. Thank you. Thank you. The next question is from the line of Rehan Saiyyed from Trinetra Asset Managers. Please go ahead. Yeah, good afternoon to the team, and thanks for giving me the opportunity. So sir, most of the questions have been answered. So I just want a clarification regarding your Men's Wear side. So sir, you have Men's Wear continues to contribute 41% of revenue while kids' wear remains 23%-24%. So are you seeing faster traction in any specific subsegment like winter wear, occasion wear, or that could structurally alter category mix towards the next two to three years? There wouldn't be any significant change. But what we have seen over the last two years is definitely our Women's Wear category has been growing the fastest. And that is because of the kurti department and the kurti category growing the fastest. But if you talk about any significant differences, I don't see any significant differences coming in the future. It will be very similar to the product mix that we have right now. Okay, okay. Second, on the ABV increasing to INR 964 in quarter three FY2026, so is this being driven more by higher basket size or premiumization with the categories, and/or either that management sees hope to push ABV further without diluting the wealth position? Just wanted understanding regarding this. No, so if you see historically, quarter three, ABV is always the highest. It's because of winter garments. So the winter garments, ASP is much higher than summer garments because we sell jackets, sweaters. So that is why you see a bump in ABV during the third quarter. Yeah. So you are saying it's just a seasonal effect, or it's like a category which is attracting more ABV? Yes, correct. Last one more bookkeeping question from my understanding. So you have turned INR 400 crore QIP. So how does management prioritize capital allocation between faster store rollouts, or either supply chain management, or balance sheet strengthening, especially considering ROE dilution in the near term? No, so that is why most of the proceeds would be used for general corporate purposes. That is a mix of new capital allocation for the new stores. That is a mix of additional working capital required. That is also some investment in the regional warehouses and the hub-and-spoke model that we're doing. Most of the capital is being used for expansion itself. These are the three biggest areas where we need to make the investment. Okay, okay. That's it from my side, and good luck for the upcoming quarter. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question is from the line of Abhishek Gupta from AB Capital. Please go ahead, sir. Hello. Am I audible? Yes, sir, you are audible. Yeah. Just wanted to ask, why has the sales per sq ft reduced? Is it because of the new store rollout, sir? Yeah, so new stores perform at about 70% of old stores' throughput, and it takes about two to three years to mature. And the share of new stores in our total portfolio has increased. That is why you see a slight dip. Can you tell guide about the trajectory of it going forward, the sales per sq ft, how it will be? If you talk about company blended level, we are targeting it to maintain at INR 1,000 per sq ft even when we are adding 50% more area every year. Even if we achieve that, that will be a very good target. Okay. Why was that one store closed? The one store that we closed this quarter, it was below the EBITDA mark. We tried to revive it, and we found a better location about two kilometers away from it with a bigger floor plate. We moved there. You stick to your earlier 8%-10% if this is the long-term guidance for next year? Yes. And before I had asked, now also just wanted to ask, are you facing any significant competition from low-cost online players like Meesho and all? Because they are also operating in your market. So what you need to understand about pure online players is just logistic cost itself is around INR 65-INR 70 in India if you move goods from state to state. And then you add customer acquisition, you add tech cost, head office cost. So the total cost, if you're selling a INR 250 T-shirt, it becomes almost 50%-60%. But cost of retailing for us is around 18%-19%. So pure online cannot deliver the same value that we're delivering just because of additional costs associated with online-only players. Whereas if we are doing omnichannel, which we will plan and which we are planning to do and will launch in the future, where you're using your store inventory as a dark warehouse and delivering from the store itself within a very small radius, then your logistic costs come down significantly. Only then you can sustain low ASP items selling online. Okay. Why was the proposal to do stock split done, and when it will be done? I think now we've passed the resolution. It should be done very soon. It has been 25 years since the company was incorporated. We started in 2001, and it's been a 25-year journey. We wanted to have a broad base of investors also. It should be accessible to the retail investors also. That's why we took the decision. Okay. Thank you. Thank you. Thank you for answering all my questions. All the best. Thank you. Thank you. Thank you. The next question is from the line of Ankush Agrawal from Surge Capital. Please go ahead. Yeah, hi, Akash. Thank you for taking my question. So for me, just a clarification, you said older stores are at 1,200 sales per sq ft, and the newer stores are 720-730. So this number is for nine months or for Q3? This is for nine months. Nine months. Okay. And have you changed any classification for older stores? I think earlier we had one-year-old stores were older stores. But this conversation today, you have sort of mentioned older stores are those that have been opened in March 2024. So have we done some reclassification even for SSSG? No, we've always calculated SSSG this way. So for example, all the SSSG that we calculated this year has been on stores that were operational throughout the last financial year. We have used the same policy throughout our company history. Okay, okay. So basically, for FY 2027, you're saying that only stores that are open till March 25 would be considered for SSSG? Exactly, exactly. Okay, okay. Then technically, if we take the one-year threshold, then actual SSSG would be higher, right, if we go by that? Yes, yes. Okay. That was all. Thank you. Because then you have to find out the weighted average of every new store, how many days they were operational, and the calculations become very complex. Right. Okay. Thank you. Thank you. Thank you. The next question is from the line of Shreyansh Jain from Svan Investments. Please go ahead. Hello. My first question is, can you help us with the absolute inventory amount at the end of this quarter? And what was this last year? I don't have the exact numbers with me, but I think the inventory is around INR 900 crore. But if you look at the stock turnover days, it is at a very similar level that was there last year. So there has not been any significant increase. Whereas we have increased the pace of expansion. So the inventory for the stores that we are going to open in the next two months is already in the system. Okay. All right. And we've obviously done well on the employee cost per sq ft. So I'm just trying to get some sense. Where does this actually stop at? INR 65 PSF, is that the threshold that we should look at, or you think there's some more room in this line item to go down? Because I'm just looking at V-Mart and Vishal. So V-Mart obviously is operating at INR 70, INR 72 per sq ft, and Vishal is obviously at INR 45-INR 50. So I'm just trying to understand with higher store addition, and you're adding at what, 45-50%. So is there room for this number to actually go even further down? Yeah. So our head office cost currently is around INR 26-INR 27, and that is mostly employee expenses. So I think it has the potential to come down to around INR 15-INR 16. So there's a scope of INR 10 per sq ft reduction in the future. Okay, okay. And blended cost of retailing, you're at about INR 195 for Q3, and you were at about INR 205 last year. So overall, including rent and OpEx, what should the cost of retailing be as we gain size and scale in terms of store addition? What is this number that ideally we should look at? I think we can target INR 180 in the near future. Okay, okay. And sorry, just the last participant had asked, can you just clarify again, SSSG, you're calculating so this is for a two-year period, is it? Because when you're saying FY 2027, you're looking at stores which are opened by the end of FY 2025. So that's actually two years, right? So you're looking at two years which have been in operation, is it? So it's not really two years. So when you're in first quarter of FY 2027, for example, you're in June, so those stores have been operational for only 15 months that opened in March. Are you getting my point? So it's basically all the stores that were there operational at the end of the last financial year. So some stores will be two years, some stores will be 18 months, some stores will be 15 months, and it works like that. Okay. Got it. Got it. Thanks, and all the best. Thank you. Thank you. The next question is from the line of Anupama from RatnaT raya. Please go ahead. Yeah. Hi. I think I missed the number on revenue per sq ft. Could you just repeat that? For the next year? What is your target? We target to maintain it at INR 1,000 even after adding 150 more stores. Okay. That is overall number, yes. Company blended level, yes, including new and old stores. You're saying old stores will be at around 1,200, 1,100? So old stores are at 1,200 this year, and they will have an SSSG. So they will move even higher. But the new store contribution in the total stores portfolio would be much higher. That's why it will bring the per sq ft sale at the company level down. Right, right. Okay. Okay. Yeah. That's it. Thank you. Thank you. The next question is from the line of Videesha Sheth from Ambit Capital. Please go ahead. Yes. Hi. I'm sorry. This question has been asked before, but what is the kind of demand momentum that you've observed now that we're in one month already into the quarter? And what would your outlook be for the entire fourth quarter of this year? The momentum has been the same. We are seeing the same kind of footfalls and demand in the fourth quarter. That is why the next- year guidance is also the same. We guide for 8%-10% SSSG for next year and at least 50% revenue growth and adding at least 150 new stores. Noted. Thank you. That's all from me. Thank you. The next question is from the line of Aryan Singh from Hem Securities. Please go ahead. Hello. Sir, you may unmute and speak. Good afternoon, sir. Congratulations for great sets of numbers. Hello. Yeah, we can hear you. Most of my questions are already answered. I had questions related to what will be mature stores TSF into the future and how many mature stores we have. Great luck for future quarters, sir. Yeah. So I think I've already answered that question. Yes, yes. Thank you, sir. Sure. Thank you. Thank you. The next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead. Hello, sir. Yeah. My first question is, sorry, I missed the point, but you said 150 new store additions in FY 2027. What would be the size of each new store? Average size would be the same, around 10,000 sq ft-11,000 sq ft. Average would be 10,000 sq ft-11,000 sq ft. And so what are we expecting in terms of new store addition in quarter four? Quarter four, I think the total addition would be around 30-odd stores, 30-35. Okay, 30-35. Okay, sir. Yeah, that's all from me. Thank you. We have already opened 10, and we should open 20 more. Yes. Thank you. The next question is from the line of Arvind Arora from A Square Capital. Please go ahead. Hello. Am I audible? Yes, sir. Yeah. Hi. Congratulations, Akash and team. A very good number. So my question is on the advance that we have paid INR 15 crore to BCCL in April 29. So could you please throw some light why we have paid? What is the nature of this advance, and how we are planning to utilize it? Because it's been six years when we have paid to them. Yeah. So it was an equity barter deal where they gave us this balance to use in their various publications and various channels of marketing. And they took equity in the company. And we took it that time because we had a big focus. It was around COVID time. There was a huge focus on e-commerce. So we thought we'll do above-the-line marketing for e-commerce, but that did not work out. But now, because we are present in 25 states in India now, a lot of new states that we've entered have big Times of India prominence. So we have started utilizing about INR 50 lakh-INR 60 lakhs of this every quarter. And the plan is to increase it to about INR 1 crore utilization per quarter. So I think it should be finished in the next two years. Okay. But it says we will be utilizing in next months. The agreement is still April 26 only. We have a word with them. We have a verbal agreement with them. They have been extending our agreement for the last 4 years. We've already had a word with them. As long as we are utilizing INR 0.6 crore-INR 1 crore every quarter, they are willing to extend the agreement again. Okay, okay. And this is open to all other advertising? It's not only for e-commerce, correct? Yeah, it is. It covers all the publications, all the company assets, everything. Okay. Sir, any threat due to this quick commerce thing in the business? We haven't felt any impact. If you look at the data also, apparel is a very, very marginal or very small contribution of quick commerce. Apparel purchase is still an experience for customers, especially in tier two, tier three towns. So I don't think there will be any impact or any significant impact. Okay. Understood. Okay. Thank you. Thank you Thank you so much. And congratulations once again. Thank you. Thank you. The next question is from the line of Videesha Sheth from Ambit Capital. Please go ahead. Hi. Just one more question from my end. At an industry level, have you seen now, in the light of competitive landscape having intensified, have you also seen discounting inch up in this end-of-season sales season? There is not a big significant change. We also sold more than 92% of goods at full price in this quarter. So in fact, our full-price sales have been increasing. But we haven't seen at the industry level also other retailers because, see, everyone has a lot of margin pressure. So I think putting discounts would increase that pressure, so. Right. But discounting in the industry has not inched up accordingly? No. Got it. Just one more question is that when you're entering into newer markets where there is an existing value retailer, what is your observation as to how are they looking to gain back the lost market share which they land up losing once you enter the new region? See, that's a very, I think, difficult question to answer because every retailer has a different strategy. There is no fixed template that everyone uses when we enter a market. Somebody puts a special offer, somebody gives more incentives, somebody gives gift items. But ultimately, we've seen no matter what marketing schemes you give, the retention of customer and the long-term performance of the store completely depends on the store's assortment. And that assortment is obviously a mix of quality, price, fabric, size, color. So more than 95% of the locations, we are at least 30% higher in terms of SPSF than our peers, whether we entered that market first or whether we entered that market last. Sure. Got it. Thanks a lot for answering the question. Thank you. Thank you. The next question is from the line of Harshita Jain from Eterna Investments. Please go ahead. Hi. My question is regarding the net working capital days. We've seen a steep increase from 37 to 69. I understand this is from the creditor payment cycles that we're giving them better terms here. What is the sustainable level here, and do you see a corresponding improvement in gross margins due to discounting, or how should we look at this strategy? Yeah. So whenever we have extra cash on our books, we always give bill discounting to our vendors. And we get a 1.5% per month bill discount from those vendors. That becomes a part of gross margin. And going forward, like I said, as we utilize this money for capital and CapEx, then you would see the sustainable level, the working capital days will go up to around 60 days. Got it. So the improvement in gross margin from 29%-32% in Q3, is that because of the bill discounting, or is this the sustainable level of gross profit you're expecting? No, that is also a part of this. But you'll see a gross margin improvement in the first six months of the year also. And we have done this bill discounting for the last two years. So of course, the quantum of it has changed in this quarter. And definitely, it also had an impact on the gross margin. Okay. Thank you. One more question is regarding the CapEx per store. So what is the maintenance CapEx you need to incur on the already built-out stores of the year? That is already covered in a INR 190 per sq ft cost. It differs a lot, but yeah, that is already covered in the per sq ft cost expenses that we talk about. Got it. Thanks a lot and all the best. Thank you. Thank you. The next question is from the line of Samarth Nagpal from Surana Family Office. Please go ahead. Yeah, that's a great question. Akash, as we are expanding through newer states also, and we are very set up. Sorry to interrupt. Anyone on the leadership hiring just wanted to yeah? Sorry to interrupt. Your voice is breaking. Hello. Yeah, I saw your voice is breaking. It's not clear. Sir, can you please speak through the handset? Yeah, yeah, please. So am I audible now? Yeah. Yes, sir. Yeah. So Akash, congratulations on a great set. So just wanted to ask, with the kind of store network we have right now, what is the update on the leadership hiring? I mean, are we moving in that direction? Yeah. So we had about, I think, 360 people in our head office just last year. And now we have more than 600 people. So like I always mentioned, a big emphasis and focus is being given on hiring and getting good leaders because the growth that we are targeting, we need a very good foundation. So we have a leadership team already in place. But to reduce the workload on each one of them and to make more broad-based management, we are regularly hiring. And every month, good quality people are joining our organization. Sure, sure. On the leadership front only, just wanted to understand that do we have a CEO or something of that sort to handle the operations at these 350-odd kind of stores? And 500, we would be eventually having by the end of next year. So just wanted some color on that. So we haven't hired a CEO. I'm the CEO currently. I am handling that part. But we have a marketing head now. We have an HR head now. We have an IT head now. So all those positions are covered, and they are handling the department. But definitely, we are on the lookout for a new CEO also so that I can take a more strategic role. But of course, finding a good CEO is a long-term challenge. We have met certain people, but it did not work out. But definitely, we are always on the lookout for good professionals. In this segment, I mean, the kind of customer assortment we have, the kind of demographics we have. So just wanted to understand what is the kind of repeat purchase we have in value retail? I mean, what's the kind of retention we have for customers? I mean, some color from the older stores only. I mean, new stores are very skewed towards getting new customers. So any color on that, what's the kind of retention rate we have or repeat percentage? Yeah. So for stores more than two years old, our repeat customer percentage on the total revenue is almost 68%. And this number used to be just 56%. So the retention has improved significantly over the last three years. And the frequency used to be every five months, every five, five and a half months. And it has also increased. Now it's every four months, 4.25 months. Sure, Akash. That's very heartening to listen to. And is it also because we have any loyalty programs for the customers, or is it purely organic because of the assortment and the kind of service we have? Our gross margin, our assortment, our product, everything is the loyalty program. Because we work on such thin margins, I think it's not feasible for us to have a loyalty program because we believe in true pricing. So customers know that we give the best value proposition. So that's why they come back. Got it. Akash, on the omnichannel piece, if I can squeeze in, I think we are fairly doing well offline. So is it that we are making a lot of investment into the omnichannel, or would it be a pilot sort of a thing? Because understanding the customer only, we are doing fairly well from our stores only. So any color on that? What is the vision about omnichannel? Is it going to be some percentage of the sale only, or are we going to scale it very rapidly? So the best thing about it is there is no additional fixed cost. There will be only variable cost. And there is no huge investment because now all softwares and technology companies give their services as software as a service, basically. So the expenses are monthly. So there will be no additional CapEx. There will be no additional investment. And in terms of sale, we are not looking at a huge or a big chunk of sales coming from their channel. It's just to have a presence. And I think even when it matures, the sale from that channel should be around 5%. Got it. Got it. And this time, I think Eid and Holi both are in Q4. So I hope that we are able to maintain the momentum going forward also because both the festivals are falling in Q4 for V2. So am I right in assuming that? Yes. So Q4 should be, but I think most of the sales fell in Q4 of last year also. So there won't be much difference. So yeah, both the festivals were in, yeah. And how has winter wear done for us this year? What's the kind of percentage sale we have done? I mean, this is the last question which I had. Any color on that? Sorry, can you repeat that? How has winter wear done for us? What is the percentage of sale from winter wear in Q3 compared to last year? Any color on that? How has been the winter wear? I don't have that number ready. But winter was very good. There was an early onset of winter. That is why you're seeing this SSSG and Q3 numbers because bulk of the sales come from winter wear. It's a high ASP, high margin category for us. So winter was very good for us, I think much better than last year. But I don't have the exact number of winter contribution for this quarter. Sure, sure, sure, Akash. I think that's it from my end. And wish you and the team the best. I mean, the very best. Thank you. Thank you. Yeah. Thank you. The next question is from the line of Vidisha from C.R. Kothari & Sons. Please go ahead. Sir, can I know what is the CapEx per store that you incur? The CapEx per store is around INR 1.1 crore. The investment inventory for that store is around INR 1.3 crore. Total investment is INR 2.4-INR 2.5 crore. Okay. And sir, can you repeat your outlook on the working capital cycle, why it has increased in quarter three? We did early payments. We prepaid our vendors. We prepaid about INR 300 crore of our creditors because we had that extra cash on our books. So we get a 1.5% bill discount from them. And we wanted them to help them with the working capital. So as and when we start using it for our CapEx for new stores, the working capital will come back to normal. Okay. So we can expect it to go back to 60-70 days? Yes. Thank you, sir. Thank you. The next question is from the line of Prabal Jain from SM Holdings. Please go ahead. Yeah. Hi, sir. So sir, as you have classified your stores into three cohorts, the mature stores, right, and they are at 1,200 PSF. And the new stores that you are adding, they are starting at around 750 PSF. So sir, my question is, over the next two, three years, would your new stores, which are right now at 750, would they scale up to 1,200? And if they would, what kind of factors do you see in contribution to this? And if not, what are the risks to this thing? So if you take out the data of FY 2023, in FY 2023, this old cohort of stores that are at 1,200, they were at INR 650 per sq ft. So it's the same journey that the new stores will take. And that's the plan, of course, if we keep doing the things right because more and more customers come. There's word of mouth. You retain the old customers. And your catchment area of each store increases. It's about maintaining the offering and the customer service and the assortment at the store. Every customer should feel that when they go to a V2 store, they would get the latest trends, latest fashion that they see their celebrities wearing or their fashion influencers wearing at the best price possible. Once they get that brand positioning in their head, then the growth happens. And two to three years it takes historically. So all these stores should move towards that number. We are reasonably confident to take this number to 1,200 PSF in the next two to three years for new stores? Yeah. So we have done that for these stores also. So looking at that, the new stores should also move in the same trajectory. Yeah. Do you think geographical location of the stores or anything plays any role in this growth figure from 750-1,200? See, now we have moved away from trying to open a store in the middle of the market. We used to find market proximity as the number one factor. But what we realized later is what matters more is parking space, frontage of the store, floor plate because opening in the center of the market might get you customers from the first day. But long-term sustainability matters more where customers get the best experience. So now we look for locations, even if they are 1one to two kilometers away from the market, it should have a big frontage, good parking space, and good floor plate so that it's good in terms of customer experience. Okay. Okay, sir. Thank you. Thank you. Thank you. The next question is from the line of Deepak Pruthi from Wealth with Wisdom. Please go ahead. Hey, hi, Akash. Hi, sir. Congratulations to you and the entire V2 retail team for posting a great set of numbers. A very elementary question, Akash. Can you help me understand what is the store-level economics that works? So let's say you're setting up a new store. What are the costs involved? Like you said, you incur around INR 1-INR 1.5 crore on setting up and then INR 1 crore in putting inventories. And what are the costs involved in running a store? Ye ah. Sure. So the CapEx, like I mentioned, is INR 1.1 crore. The inventory investment is INR 1.3-INR 1.4 crore. Total investment for a store is INR 2.5 crore. And store-level cost is around INR 140 sq ft. And head office and warehousing cost together is around INR 40-INR 50 per sq ft. That is how the costs are allocated. Oh, I understand. So when you're saying INR 140 per sq ft, what are the cost heads? Just a basic overview in terms of employee cost, in terms of what are the cost heads involved? So rent is around INR 50. Employee cost is around INR 40 odd. Power and fuel is INR 20, INR 25. And rest is marketing and other miscellaneous expenses. These are the three main heads. Okay. Okay. Okay. And Akash, just happened on the previous questions. How much saving are we incurring on reducing payables, which is we are taking less credit from our vendors? How much is the gain from that payables? So it depends on the number of days that we prepaid. But like I said, per month, it's around 1.5% that we gain from our vendors. Perfect. Perfect. Perfect. One more last question, if I can squeeze in. In terms of employee attrition, are you seeing a big challenge there? How is it vis-à-vis your competitors or peer group? Is it a challenge to retain people in a retail setup? So see, there are two parts to this question. One would be the floor-level staff. So their retention is a challenge for every retailer in the country because most of the staff is at minimum wage. They jump ship even for a INR 500 raise. But when you talk about the crucial manpower at the head office, then our attrition is well under control. Most of them have retention bonuses. And they've been with us for a long, long time. Okay. And in terms of definition of new store, you said any new store will become an old store when you consider it for a full financial year if it has been in operation, right? Is it the same for all? Is Is this definition the same for all retail players, all your competition, or is it something which varies from player to player? It's very hard for me to comment. I don't know how other people do this. But we have always done this historically. A store is old only if it has run for a whole financial year. I understand. I understand. Thanks, Akash. Cheers for the coming year. Thank you. Thank you. The next question is from the line of Shreyansh Jain from Svan Investments. Please go ahead. Yeah, Akash, just one follow-up. So when you're talking about 8%-10% SSSG, typically, matured stores and the newer stores, what is the SSSG that you kind of experience or you build in when you're talking about 8%-10%? So see, even mature stores need to be broken down into different cohorts then. There is a cohort that is stores more than 10 years old, 7-10 years old, five to seven years old, and so on. So of course, the newer cohorts perform at a higher SSSG. So you can say that the newer cohorts will be at a 12%. Older cohorts will be a 5%-6%. So the blended will be at 8%-10%. That's how it works. Got it. In your experience, stores which are more than five years, seven years old, SSSG typically gets saturated at 5%-6%. That's how we should look at it. If you look at last two years, even the stores that were more than five years old, they grew at more than 20% SSSG for us. So there is no cap or there is no limit that I can tell you, "Okay, this is what happens." Again, if we are able to do the things that we have done in the last two to three years, we might get a double-digit SSSG on those mature stores also. Got it. And can you just break that down? How have the older stores done 20%? Is it largely because of the value that you're offering at those price points, or there is something more to it? So it's a combination of everything. And most of the growth was volume growth. There were more bill cuts. So more and more customers were coming. So I think it's a mix of better supply chain, a bit of assortment, a bit of pricing strategy, fabric, color, and robust backend. It's a combination of everything. Okay. Okay. And how big would our design team be? If you talk about complete buying and merchandising, including design, there are about 180 people. And just pure design is about 45- 50 people. Okay. Got it. Got it. Thank you and all the best. Thank you. Thank you. Ladies and gentlemen, due to time constraints, that will be the last question. And now I hand the conference over to Mr. Akash for closing comments. Thank you all for joining us today. We hope we've been able to address your questions and give you a clear view of our performance and outlook. If you need any further information, please feel free to reach out to Marathon Capital, our investor relations advisors. We sincerely appreciate your continued interest and support. Thank you and have a nice day. On behalf of V2 Retail Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.