note that this conference is being recorded. I now hand the conference over to Mr. Tejas Shah from Spark Institutional Equities Private Limited. Thank you, and over to you, sir. Yeah, thank you, Sagar. On behalf of our industry, it's our pleasure to host the Q1 FY25 earnings conference calls of V-Mart Retail Limited. From the management side, we have today Mr. Lalit Agarwal, Managing Director, and Mr. Anand Agarwal, Chief Financial Officer. I'll now hand over the call to the management for the opening remarks, followed by a Q&A session. Thanks. Good afternoon, ladies and gentlemen. Thank you, Tejas. Great to see you guys all once again in the call. Very, very, very, very happening quarter in terms of political scenarios in the country, in terms of the consumption habits change in the consumer behavior. So what we have noticed in this quarter, which is April to June, this is the biggest festival. In the world democracy, which is the Indian election, and then a lot of people cry, a lot of election rallies, and a lot of media, a lot of media exposure, a lot of discussions for the citizens, which was largely around politics. We all know about that, but it definitely impacts the businesses also, especially the smaller districts and the smaller towns. It also creates some amount of movement and some amount of law and order situations in that particular town or city, wherever these kind of events happen, wherever these kind of rallies or wherever these kind of big, large leaders come to them and attend those functions. There were, on average, almost 3-3.5 days of disturbance that we had across our towns, wherever we operate stores in the country. So largely, this also definitely has been a big driver of economic stability because there's been a lot of spending by the whole machinery, the government machinery or the political party machinery, and the candidates themselves. So some spending definitely is not big spending for the consumer, but definitely it is good to trickle the economy and then put inertia to the economic wheel. So that's what I believe in because there was a hidden consumption demand. There was. People were trying to consume, but there's some amount of inertia there to try and push it a little bit. We saw some betterment. We've seen some betterment coming in from the markets. We are getting definitely this response from other companies and other players and contestants as well. So what we are also noticing is certain companies haven't still recovered or are still looking at this as a low time. But I see some green shoots. There are definitely some green shoots, not too much because when we go to the hinterland and we go to these towns, the problem that used to exist is already there. Definitely, there is some relief from the basic staple inflation, especially from the oil side or fuel side. So some part of that, I'm seeing a little relief, which is definitely leaving some money for the normal household to spend on other items. But still, the inflation rate continues around 5%, still on the high base. So that is still a problem to the Indian consumer and to a normal household, which is earning between INR 20,000-INR 25,000. So that's the normal household that we study and we try to study. So the market seems to become a little better. Employment status looks a little better on the ground level. People are confident that there is definitely going to be bigger, better employment because states are trying to open consumer and open the large amount of markets. It might give him a lot of good promises and newer promises and newer benefits and newer plans even before election and now after election as well because of the kind of results that we have got, which is also bringing in some kind of confidence in the overall market, which is what we required, which is what we require in the future development. So I think that's the good news that we are getting. The confidence index of the consumer is getting better. They believe that they will not be spared in the coming future. They will definitely get more employment, and their ability to earn and more is definitely going to sustain. Even on the skills part or even on the employment part, a lot of work has happened. So some of those good news. On the competition side, I think the competitors have been doing good. A lot of competitive activity has been seen. Always we see good activity. Still, people who are able to give good experience to the consumer and provide good quality and provide good variety and create experiences are able to sustain and definitely are able to grow much beyond what is required. So we are seeing those good positive signs in the market. The market definitely is there. It is all about how much market share can we acquire. And versus there are also other kinds of competitors who are also struggling. Largely, we have seen some struggle coming in also from the premium segment of the market or the upper middle segment of the market where the prices or the premium brands operate. So we are seeing some pressure there. We are also seeing pressures on so-called value retailers who are still on a little higher edge of the market segment. They are also hearing reports of struggles also in there. But I think these are all temporary phenomena. People will get back to the basic demand and they will come back to their fields. On the other side, I think for V-Mart, I think we have been trying to focus on our basic fundamentals. We have focused on these all agri-generated markets and then largely impacted by agri. But yes, we definitely believe that these consumers are aspirational now, and they will want to consume more, consume better. They are much more aware of the audience. We believe and we understand and we recognize that these consumers are no more the traditional consumers. They are definitely a little more learned consumers, demanding a little better fashion, demanding a little higher fashion, demanding the latest collections, which is coming in. So some of those pieces we are seeing. Definitely, consumers are appreciating all good things that the brand does or what we have been doing. As we have been speaking for the last two years, we have been continuously working on our internal processes, on our internal parameters, on our internal understanding on the consumer or even technology or even the way we source and the way we procure and the way we design and then the kind of quality that we want to provide to the consumer and the experience and the betterment in the experience that we want to provide. Some of those initiatives, which we were struggling in the last year, are showing some results. We still believe that most of all of our efforts have not still been completely rolled out. We still believe we have reached up to 50% of what we could have done, but still there is a lot more that we have in plan that we will want to better and give this experience to the consumer. The consumers are ultimately worried about the product that they get, the prices that they get, and the experience that they have when they are shopping at the store or when they go back to the home and post-sales experience or they connect with the brands when they go back home or they are not coming to the store. How do we do that? So in that respect, our Omni team has also really worked a lot, the LimeRoad team, including the offline team. They have really worked very, very nicely on a product called One Click, which is actually giving a great experience to the consumer, giving more satisfaction to the consumer. We definitely have a much better communication tool. We have integrated some communication tools. We have now 100% digital billing done at the store, integrating the customer or getting integrated with the customer on his WhatsApp account. So that is also giving a lot of personalization to the consumer and then definitely talking to them over a period. So some of these pieces and then also reaching them out on the digital medium, trying to create those impacts. So what other we have got is the brand trust, whatever the understanding, the trust on V-Mart, the trust on our customer, of our customer, on our giving in the past and even today. Yeah, it definitely showed up. Whatever we did, whatever we were doing wrong and wherever we corrected, we got great response. We got really good trust and good feedback from the consumers. Consumers came out in huge numbers and then they really turned up and then gave us the confidence of that whatever we are doing is on the right direction, both in terms of the fashion element because that was a big, big change that we brought in in terms of focusing more on the Gen Z collections, focusing a little bit more on the fashion and the changing fashion needs of the consumer and understanding those and implementing those in an agile way in the store. So some of those areas and our special focus on quality, which we have been merchandising for the last two, three quarters, has also shown good results. So quality, the customer is recognizing and customer is appreciating those quality efforts that we have taken up. So all of these areas given together have really given us good input. So that's the area that we want to really focus on. We believe that our doing is going to definitely give us an outcome. That is the potential that we look at in the market. The market is definitely very large. The market is too large, and we all understand and we have seen and we know that this market is becoming larger and larger as India is growing and India's position is very good. What we see in this value retail market, definitely there are more players walking into this market. But in that same rate or more than that rate is the per capita income growing or is the per capita consumption growing at the fashion level? And there is definitely some shift which is happening from unorganized to organized and which is bound to happen more and more. So that part has to remain. So it is more about reacquiring our market share. The market is definitely there. So that's the plan. We will definitely want to focus on both the market. Our approach on pricing at our Unlimited market in the South India also has given us a lot of confidence. The customer has really understood what we are offering, and we are getting a lot of new set of customers and retail customers from there. So good input coming in both from the existing store, from new stores that we have opened up. We are really getting very good benefits from there also. So that's the part we are all into. We have also touched on one new concept in a town called Hubballi in Karnataka with the LimeRoad branded stores. That will be the best time to pilot one store in trying to build a little more elevated fashion, a little more lighter density of inventory per square feet, which is giving a little more premium feeling to the consumer, keeping the pricing at the same level or even at the lower level, trying to create a niche experience for the new generation customers. So we are trying to do because we saw some brands really getting good response, and that gave us a real confidence. The consumer need and the consumer approach towards buying great fashion is coming in not only from quantity but comes in from more the way in which you are showing up the attire and the way in which you show up the brand. So there is definitely, we believe that there is some amount of baggage that the brands carry, whether it be Unlimited or V-Mart. So we are trying to experiment that with our new third brand, which is the LimeRoad brand, which is more digital savvy, which is more nearer to the Gen Z audience and the millennials. So that's where we have touched with one store. Until now, we are learning, and that's on the learning phase. We would definitely want to experiment more with four or five more stores in this particular year so that we get the confidence on this particular new initiative. And then we may try to then allocate some amount of budget in the next year, but that's still under discussion. So that's what we have. Definitely, there have been some areas where we have really worked hard in terms of people, bettering the people's motivation in terms of bettering their base salary, trying to retain them, working on attrition. That's one of the major areas that we have worked on. Some of those stores or some of those markets where we used to have higher attrition. Really, attrition rates have come down. Those things also are really helping us in achieving the sales. There's a very good incentive plan that we have rolled out for the team. Some of those things are giving a lot of motivation also to the consumer. One more thing, all those stores which we always said that which were opened before COVID and just after COVID, some of those stores also started showing us good response. We believe and feel that some of those stores are getting rediscovered or are getting discovered for the first time because they never got a discovery time just after COVID and before COVID and around COVID. So that's the change that we are seeing in our market. Consumers are appreciating. We'll definitely talk about this more. Let me just hand it over to Anand so that he can give you the detailed guidance. Over to you, Anand. Thank you, Lalit, and good afternoon, everybody. As Lalit mentioned, it's been a good quarter with, in fact, a few changes that we have been busy doing over the last two years, starting to become slightly visible. Let me first take you through some of the key highlights from the quarter, and then we can open the floor for questions. So quarter one typically is the onset of the summer season and is marked by a strong wedding calendar. This year was slightly unusual with no wedding dates, but despite that, we have seen good improvement in our like-for-like sales as well as the sales per square foot. On the sales front, we are seeing much better footfalls and improvement in total number of invoices cut, which is a strong reflection of the improved efficiency measures being taken by the company since the last two years. At an overall level, our sales grew by 20% for V-Mart and 5% for Unlimited year-on-year. The Unlimited sales growth was impacted in the quarter marginally due to the closure of 15 stores since last year. Normalizing these store closures, the Unlimited stores would have also grown by 18%, which is closer to the overall V-Mart sales numbers. The new stores opened in south under the Unlimited brand continue to deliver higher sales growth and profitability versus relative legacy stores in south. In the last three years since acquiring the Unlimited brand, we have closed 19 stores and opened 23 stores in South, taking the net Unlimited store count today to 78. At an overall level, while all states saw good growth during the quarter, but in particular, UP, Bihar, Uttarakhand, Rajasthan, West Bengal, and Karnataka saw relatively better traction in footfalls as well as sales growth. Another heartening fact evident is the higher sales growth visible in tier two and tier three towns as well as tier four towns, geographies which form the biggest base for the typical V-Mart customer profile. The apparel ASP degrew by 3%, largely due to the product mix change as a fallout of zero weddings during the quarter in North, while in South, the ASP degrowth was a fallout of the strategic shift towards sharper and more value-driven product pricing that we have been trying to incorporate since the last two years. The price correction exercise, which was initiated last year, is already over, and we should see ASP stabilize at these levels in the quarters to come, but for any product mix changes due to shift in weather or any festive calendar shift. The stabilization of the two towns in the last five, six months has also helped improve the supply chain efficiencies, which should see even further betterment in the months to come. In line with our strategy on making the LimeRoad business sustainable, we cut down on the marketing spend, which impacted the top-line growth, which reduced by 33% year-on-year from INR 12 crore from INR 17 crore last year. Coming to margins, the gross margin for the offline business remained healthy while flat. While the decrease in the revenues for LimeRoad business segment, which 100% flows in as margins, optically reduced the overall gross margins by 60 basis points at company level. On a full-year basis, the gross margins from offline business should remain at similar levels as last year as we continue to drive giving higher value to our customers and focusing on growth through volumes. Coming to expenses, while the overall expenses have decreased by 7%, the major shift is due to the reduction in marketing by 59%, which largely has come in from the reduced spend in the LimeRoad business and also a very significant and strategic planned reduction in marketing spend in the offline business, which Lalit also talked about, that the increase in the customer trust quotient has definitely worked wonders for us. That reduction in the offline marketing spend in the V-Mart business or Unlimited business is also close to 44%. The marketing spend will remain reduced on both the segments, online as well as offline, as we create better synergies through cross-promotion opportunities on the digital front for a unified Omni customer base without impacting sales growth at an overall level. Despite this low marketing spend, we have definitely improved our customer connect. Our NPS scores, which we have started to track since the last almost eight, nine months, have averaged at greater than 60 consistently. We've had more than 500,000 Google reviews, averaging 4.4+. That is a strong testimony to the value proposition and the brand trust that the company is able to generate. Coming to manpower costs, the manpower cost is up by 17% on the back of the annual increments, slightly higher ESOP expenditure, and also increased incentive payouts in line with the sales growth. As Lalit mentioned, I think we have been trying to curtail attrition, which should effectively yield into better top-line growth and more efficiency going forward. There is definitely a higher focus on employee reward and motivation to positively influence efficiency, which should drive our overall profitability and growth. On the other expenses side, we saw a decline of 5% year-on-year due to some store lease renewals, which were earlier part of rental expense being short-term leases till last year. But post-renewal have moved to interest and depreciation lines as part of the Ind AS 116 adjustments. The other saving is on account of reduction in the LimeRoad logistics cost, which is in line with the reduction in top line for the online business. Moving on to EBITDA for the V-Mart core business, EBITDA for the quarter was 13.4% with Unlimited at 18%. At the entity level, the EBITDA stood at 12.6%, which includes a loss of INR 10 crore coming in from LimeRoad, which is 60%. The EBITDA improvement has been a fallout of 60% reduction in loss from LimeRoad. Healthy like-for-like growth as well as positive impact from the closure of loss-making stores in the last year. On the CapEx side, we spent INR 26 crores during the quarter or paid out INR 26 crores, majorly on new store openings and few store refurbishments. Inventory reduced by INR 144 crores quarter-over-quarter, helping improve the working capital cycle, and also it will help in improving freshness for the upcoming festive season even more. Free cash flow for the quarter stood at INR 43 crores. During the quarter, the company opened seven new stores, five in North and two in South under Unlimited brand, and closed three, four Unlimited stores. The runway for the year is still maintained at 50-odd stores, a large part of which should be opened between quarter two and quarter three. Most of the unprofitable store closures have already been completed now. There may be the regular tail closures, which may still happen in the usual course, but nothing significant. Coming to the last part on LimeRoad, LimeRoad continues its improvement journey with 60% reduction in losses year-on-year. This is the fifth straight quarter of continuous improvement in EBITDA losses for LimeRoad. The strategy on LimeRoad remains the same. Extend LimeRoad as the fashion-forward Omni arm of V-Mart and facilitate very easy order placement process by V-Mart customers through the LimeRoad app, initially for missing sizes or missing colors in offline stores, but eventually extending it to offering a bigger catalog of products which can be offered beyond offline retail. So getting into more and more mix of Omni share. This is a long-term strategy, and we remain committed to enhance this offering with minimal loss funding or marginal profitability in the quarters to come. The losses in this business should continue to keep coming down quarter-on-quarter. LimeRoad will remain an important but financially a small non-material digital business platform for V-Mart. So that is all from my side, and let's request the moderator to 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 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. Participants, you may press star and one to ask a question. The next question is from the line of Shirish Pardheshi from Centrum Broking. Please go ahead. Hi, good evening, Lalit ji and Anand ji. Hearty congratulations for good sets of numbers. I think in the beginning, if I may ask, the footfall growth which we have reported in the quarter, which is 36%, which is very strong. However, when I look back, it is still lower than pre-COVID level. So I was more curious if you think tier three, tier four markets are falling well and you have reported 11% growth in tier three and 19% growth in tier four. What percentage of this footfall recovery has happened? Or maybe if you can split in tier three, tier four specifically, if you can break down 18 million, what kind of footfall is there? We have seen better footfalls. We are still unable to compare it with the earlier, five-year before footfalls. But still, I don't feel that the footfall is lower than the earlier footfalls. There were definitely always some reporting errors that we used to have on footfall. But otherwise, what we have noticed is there's a good amount of substantial growth in footfall. Also, just to understand that since that period, the market has also broadened a lot and there's a lot of retail and a lot of brands which have got opened and a lot of stores have got open. So it is more about quality customers. It is not about the customer who is just coming in. So it is more about quality customer which is coming in, and it is there. So don't worry. It is better. So the reason why I'm asking in the beginning, Lalit ji, you mentioned that there was a change in consumer behavior. I was more curious if the profile of customers has completely changed because we have taken a pricing action, if that footfall is goi ng to be sticky. Definitely, what we have seen is these are very clearly, these are showing an element of trust. Consumers are always around us. This is such a wildfire that spreads in this market if you do certain good things. What we believe, we have to continue definitely doing good things, sustain them, retain them, and bring in more betterment in what we are delivering and what we are doing. Footfall, I don't think is a concern because if you understand this whole piece, Shireesh, this year you must have seen a reduction in advertising expense also. We have not pulled in customers. We have not asked or pushed on certain promotion or certain discounts or certain advertising that we have tried to bring in customers. So this is a natural footfall which has got created. We actually did not do any advertisement in this first quarter. And it is just whatever that we are seeing in advertising income is largely from the LimeRoad side. And the other pieces are also on the for the branding, which is at the store branding and store handle branding and stuff. But we have not done any advertisement. And these results are great results, giving us more confidence that whatever initiatives and whatever betterment that we have done are all bringing in some result and giving customer the confidence to the customer, wherein they are spreading the word. They are becoming our brand ambassadors. And we have also started tracking some NPS scores and stuff. We're getting great reviews and great inputs. We are getting great Google reviews. So all of those are really helping us a lot. Okay. And still, the heartening of this number because even ASPs has dropped. And we also heard another player, V2 Retail, has also reported a very strong set of numbers. So is the market, which is downtrading and lower price point, is going to drive the volume? Is this the strategy which you will also follow, or there is a change in strategy and our core footfall, which we have lost in between, has come back? There's no change in strategy. We had taken a price rise two years back. We came back. We reduced our prices last year. This year, we have not cut down any more prices. It is only at Unlimited where we have cut down the prices because we wanted to attract new customers. But at V-Mart level, there is no cut down of prices. We have retained our ASPs, and we have no plans to cut down our prices. We still believe quality, good fashion, and right pricing is what we are focusing on. We are not driving or cutting down the prices and then driving customers. There's no such strategy. Okay. That's helpful. My second and last question on the margin. After many years, we have delivered a very strong margin. So my question is that two questions, rather, there. This LimeRoad, what you have done, INR 10 crore and INR 10.3 crore, is this going to be a steady or we will think the losses will come down? How confident are you that because in a weak quarter, we have delivered a good margin? So if quarter two, quarter three is going to be a good jump in the festive season and marriage, do you think margin expansion can happen from here? Yeah, Shirish, so on the LimeRoad side, we should definitely see quarter-over-quarter further reduction in the EBITDA loss. It may not be very substantial, but maybe 20%-30% EBITDA loss is something that I would definitely want to visualize and achieve. It's a strong work after already cutting in a lot of or already improving the efficiency significantly in the last one year. So it's going to be a tough task, but that is what the team is committed to deliver. On the main offline business, in terms of margin expansion, quarter one is a good quarter. Quarter one is not a weak quarter. Quarter one is a good quarter. Always is a good quarter. Quarter three is the best quarter, followed by quarter one. Quarter two is typically a weak quarter for us with monsoons and with end-of-season sales, which is not a very festive period also. Quarter two typically is a loss-making quarter, and we should not see any margin expansion or any improvement there. But definitely, we should see betterment coming in from quarter three again. There should also be some betterment in terms of top line in quarter two and definitely in quarter three. Otherwise, we are not looking at margin expansion in percentage terms. As we have always stated, we would want to look at retaining the margin percentage but improving the rupee margin throughput through higher volumes and through higher top line. The reason why I'm asking is because if I look at manpower cost has grown 17%, power fuel has grown 8%. What are the source of these margin drivers? The source primarily is going to come in from lower discounting, also some like-for-like. We have seen good like-for-like coming in this quarter, and we should continue to look at improved like-for-like through improved efficiencies that we've been talking about of all the work that has been going on in the background. And that is something the results of which we have already seen in quarter one. And we are also seeing similar kind of trajectory building up in quarter two and probably also going forward. The HR cost increase is partially an investment and partially also a correction. But we are quite hopeful and optimistic that we will be able to contain this inflationary rise or compensate this with adequate amount of margin delivery through like-for-like as well as lower discounting through improvement in the freshness index of the inventory. Okay. Thank you. It's helpful, and all the best to you. Thank you. A reminder to all the participants, if you wish to register for questions, please press star and one on your touchtone phone. The next question is from the line of Sameer Gupta from Indian Infoline. Please go ahead. Hi, sir. Thanks. Good evening. Thanks for taking my question. Firstly, sir, on the store addition targets, and during the call earlier, you mentioned that you'll be looking to add 50 stores during the year. Now, we've added around four stores. So that's a very large pipeline of stores that you're guiding for. So just a clarification, is this firstly a gross or a net number, and how many more store closures do you envisage, at least in this year? Thank you, Sameer. This is definitely a gross number. We are focusing on gross number. There's definitely a deal in store openings. We are this year also strategizing that we would want to open more number of stores just for the festival so that we get a good run-up. And most of the stores that we have opened in the past during the festival period definitely gives us a better outcome even throughout the year. So some of those strategies also closing. But yeah, you would get a good number of store count getting opened in this particular quarter and the next quarter. So we will focus on those. And we have closed down some stores. There are still some three, four more stores that we may close down in the year. That's where we are. Great, sir. That's very helpful. Secondly, on the margin, so it's been a very healthy margin, I guess, 7% pre-Ind AS basis on the offline stores this quarter, which is quite healthy in recent times. However, we have reduced ad spends, and we have not added a lot of stores in the last one year. We have closed down the loss-making stores also. So in light of all this information, when you resume the store addition aggressiveness, would you not say that the margin will have some level of downside from here on? And this is adjusted for seasonality between the quarters. Would you agree with this assessment? Sameer, no. For us, till now, the experience has been that definitely there are costs that all the costs do not go into CapEx. There are some costs which do flow into the P&L. So there's some element. But otherwise, new stores normally deliver higher margins. The new stores in the first year of operation deliver higher margins, not necessarily lower margins. So I don't think this is completely true. Oh, okay. I would have imagined that they take some time to ramp up. So anyways, maybe my understanding is incorrect. You may connect, Anand, on one-on-one where you understand. But most of the time, the stores that we opened up are designed in such a way that the first year of operation itself, right from the second month, it should try and deliver the targeted EBITDA margin. So that's the way we plan the stores. But almost 80% of the stores get into that level. There are 20%-25% of the stores which do not get into that level. In the process, it all passes. Great, sir. I get this clarified. So lastly, sir, just if you could, I understand you have mentioned a lot of efficiency measures that you have taken, which is now showing in this like-for-like sales improvement. But if you could just list down top three, four, five kind of initiatives that you have taken, it would be very helpful. A little bit more on specifics. There's no specifics, Sameer. Retail is all about detail. And you need to actually tighten at least 150-200 screws at multiple areas to try and get some benefit. But anyway, the majority of those are ultimately what consumer is interested in is product. So more around product, we have been really working hard on the product, on the design part, on the whole assortment part, on the whole qualitative part, on the pricing part. So some of those areas which we were working, you remember, we had hired Kearney years back, now. Years back, and then there's a lot of work that they did. There were changes they proposed. Last year, we tried to implement those changes. Due to change management, some of those got disagreements and then moved. Not everything got implemented immediately. But otherwise, there were also last year that you remember, we had moved our warehouse into a new property and a new warehouse. Now, the new warehouse is ready. Some of those initiatives that we implemented in the new warehouse on the automation side, some of those pieces came in. Supply chain management technology or supply chain management, some forecasting rules, some allocation rules, some of those which create a better understanding on consumer persona, which gives us a real clear edge on the seasonality, on the customer type of the market. Some of those pieces, which is driven through technology and driven through the automation processes that we implemented at the warehouse, better at turnaround time at the stores, reduced our inventory, increased our freshness. So our freshness increase itself gave the customer more pressure than I think. So all those things actually brought in. And then people. And definitely, people is one key element which really has given a lot of support. And then their motivation, their chargingness, and the expectation, some of those pieces definitely brought in good input. And then a lot more to be done. A lot more has been done in the processes in multiple areas, but a lot more are still to be done, and then results are still awaited. Got it, sir. This is very, very helpful. Thanks for taking all the questions, answering them. And I'll come back in the queue for any follow-up, sir. Thank you. Thank you. The next question is from the line of Harsh Shah from Marcellus. Please go ahead. Yeah. Hi, Lalit ji, Anand, am I audible? Yes. Yes, indeed. Yeah. Hi. So just on the employee cost, right, how much of this employee cost would you say is non-recurring nature, maybe some one-time retention bonus or something? Harsh, I would not want to call it out as one-time changes. I think what we are trying to do is something slightly more sustainable. I would like to see this kind of at least the current cost that is there in quarter one to get replicated. Some part of this or large part of this is also variable cost. So if we achieve, we provide for more, or if we pay more. So thereby, it's not a fixed cost increment. It's also very largely linked to a variable kind of incentive or even our ESOP cost is also linked to performance. So a large part of the changes that you see in this quarter in terms of increase is coming in from variable increase. And that is what we would like to continue. There is no significant one-time change that should be there in this quarter cost. Okay. Got it. And just on this LimeRoad employee cost, we've seen a decent decline coming into Q4 on LimeRoad. But Q1, we have seen a sequential jump of almost 250%. So just is there an ESOP cost line there? Because I'm under the impression that a lot of the senior management of LimeRoad is now with us. So I think the ESOP would be 42. Our cost has also c ome down. It's not gone up. In fact, the LimeRoad quarter one cost has come down by 14%. Not on a year-on-year basis. On a QOQ basis, if I'm looking at Q4 numbers, I have INR 27 million as the cost. This has been an adjustment because of the ESOP structure. But otherwise, at an overall basis, there has been a marginal reduction in LimeRoad employee cost. Maybe the comparison that we are seeing from quarter four to quarter one may not strictly or truly reflect these two changes. But at an overall level, the actual employee cost at LimeRoad has marginally come down. Not substantially, but marginally come down. All right. Harsh just answering a question on that. The management cost, the management which went out at the LimeRoad, their cost of ESOP was actually not accounted because the kind of performance that they were delivering, actually, those ESOPs were not able to. They were not able to. There was a lot of cost to the company. So it never got replicated. So that is why it is not coming up. Got it. Got it, sir. Just, Lalit, Jay, you wanted to understand this LimeRoad physical store format. You mentioned some comments in the opening remarks that you're trying a more Gen Z kind of an offering here. But I think it's been operational for maybe a month or two. But what are your le arnings in terms of what's data telling you out there if you could just, versus, say, an Unlimited what's there in the South India market for LimeRoad versus Unlimited if you could help me with that? Hello? Definitely, it's a new testing for us. We've been trying with some multiple experiments in terms of the range, in terms of the product lines, in terms of the design, in terms of the basic belief of what the customer is, who the customers are. A little bit of change in the internal ambiance. So we've got a. We selected only a tier three town. We didn't go for a tier one town for all of those. But still, the response that we're getting is encouraging. It's better than a usual Unlimited store that we would have opened as of now. It has been only 18, 19 days since we have opened. We have very, very immature time for us to really respond on those. But we look at a lot of positivity. A lot of good things coming out. And it is also driving a lot of omnichannel mindset. And we saw a lot of existing customers at LimeRoad who were shopping online. A lot of them came in. So we saw a good amount of customers who were shopping online and coming to offline. The trust over the brand was there and then has been solidified. So good learnings coming in. We are yet to get into all the analytics. So we'll be taking it with that. And the team that's going to be running this experiment, it's separate from the V-Mart backend team? Or is there a bifurcation, or it's the same team who will be managing the operations, the inventory, all of that stuff? There's a part of team which is different. But most of the teams are common. So part of the team which is on the backend side, on the whole design and the procurement and the buying. So that particular team is a little different. But other than that, most of the team is common. Most of the internal team members only elevated themselves, created a new style, new purposes, and new design, and took up the challenge. And kudos to the entire team who really made it happen. All right. Thank you. Thank you. That's it from my end here. The next question is from the line of Kunal Bhatia from Dalal & Broacha Stock Broking. Please go ahead. Mr. Bhatia, your line is unmuted. Please proceed with your question. If there is no response from the line of the current participant, we'll move on to our next question. Our next question is from the line of Sabyasachi Mukerji from Bajaj Finserv Asset Management Company. Please go ahead. Yeah. Hi. Thanks for the opportunity. Good to see some great numbers after a long time, Lalit ji and Anand ji. My first question on the, if I look at the conversions, I think it is at probably a historical low below 50%. It slipped below 50% last quarter, 49%, and slipped further to 47% this quarter. While the footfalls have surged sharply, but how should one read this data point about conversions? If you can help us. Yeah. Hi, Sabyasachi. Good point. We have been always managing the fact that there is a different methodology and a little more compliance over footfall reporting that we have initiated. Because we believe, and we all know that most of the shopper comes in a couple or three people together and buy, and it doesn't become cheap on every vehicle. It doesn't move more than one vehicle. So normally, the conversion rate should not be greater than 50% is what my internal belief is. And that is what we are forcing at. This is still a manual process. But still, I would also say that because of more retailing around our stores, because of more retailing in the same market, people want to definitely go back, go back from our store, check other stores, come back, and then buy. So there is some amount of discovery which consumers are making while traveling multiple stores also. They don't end up shopping the first store that they get into. So some of these pieces, we also saw a lot of customers going back and coming back to buy, and then going back once and then coming back again to buy. So some of those things we saw, which definitely for us, largely we believe in taking up the growth in Casual format and how much Casual format has the growth and how our average bill size is moving. So that's the major indicator that we would have to focus on. And that is what we are doing. We still believe that better service quality at the store level. We have also somewhere brought down our convincing attitude where we used to convince customers, talk to them more, pressurize them more. We don't want to do that. We want a pull factor to get created. So that's what we are also trying to do. So that the customer comes back by their own if they like the product, if they like the prices, if they like the services. So that's the kind of model that we are getting into. So that we don't force or empower the consumer with our employees more. So that's the whole process that we are getting into. Got it. Understood. I understand the fact that probably five years back, there were not more options to the markets that we operate. And now there are several other options, and people are checking out other options. I was also wondering, does the freshness index of the stores, does it also, I mean, matter? If, let's say, a store for us gets refurbished or refreshed, does it pull more customers? It does. It does, Sabya. If the store looks better, it definitely pulls in more number of consumers. Because even we tried experimenting with new consumers. This year, we also tried to focus more on digital advertising and stuff and try to bring in customers because we never did a lot of print ad or a lot of those outdoor advertisements. So we tried to focus more on some organic kind of content. So which also brought in a lot of new consumers, a lot of new customers who wanted to first check in, come in, check in, and then go. And then definitely a lot of these developments that we did in terms of our facade opening or renovation and re-engineering of the front view of the store. So some of those things definitely attracted a lot of customers and new customers. Got it. Lalit Agarwal, the other question I had is, in your opening remarks, did I hear you right that you mentioned that some of the national chains' value formats are also seeing some sluggishness when you are talking about the competitive intensity? Did I hear you right? Yes. Yes. Sabya, I'm right. You're right. There is some pain with a couple of retailers also who have not been growing in line with what we would have done. And not necessarily everyone is getting a lot of growth. There is some pain in the market also which we have seen. So this is what I wanted to explain that it is just not driven by market. It is also initiatives and efficiencies that a brand brings in or the better value creation that a brand does for the consumer. Got it. That's very clear. Thanks. Thanks, Lalit Agarwal. Thanks, Anand Agarwal. Thank you, Sabyasachi Mukerji. Thank you. The next question is from the line of Nikunj Gala from Sundaram Asset Management Company. Please go ahead. Yeah. Thank you, everyone. Firstly, just want to understand on the working capital side. Sorry if I repeat this question, but there was a significant improvement specifically on the inventory side. So how one should consider from the going forward perspective, what is the steady-state working capital cycle one should assume here in the V-Mart case? Because definitely we are working on basic fundamentals. And basic fundamentals are trying to reduce the inventory, better the efficiency of inventory, have the base of inventory under control. Those are one of the basic parameters. Then definitely have a better cash flow. That is also very, very important and have a positive cash flow. I think the team has really worked a lot, and we are trying to. That's everything about creating efficiency. It is also about freshness. So all of those together, most of our capital investments have reduced. So those two quarters, we don't have those kind of CapEx also. And the inventory management has been also very, very tight and very, very good. That is also for some reason. So we should expect a little more betterment from our side. But it is also going to be seasonal in nature. Because if you look at Q2 numbers, it will show a little more business there. Because the working capital will grow there because that is an inventory filling season, and we will fill more inventory. So the inventory levels will go up. So it's more seasonal also, quarter-on-quarter you'll see variation. But yes, you'll see improvement in every quarter. Sure. Thank you. And secondly, from the product assortment side, since you mentioned, and we also understand that there is a lot of competition coming in. So how are we approaching the product assortment at the store level? What are the kind of fresh inventory we have? Or say 2022 inventory won't be there in any of the stores. What kind of a strategy we have on the product assortment side? So we've really worked very highly on the whole freshness index. And the freshness is the inventory freshness. And that has been key to us. That has also resulted in some margin losses because we've also cut down inventory, trying to liquidate inventory at this time. Our freshness index has bettered by almost 10%. That's something that we really have worked on very hard. You would also see the higher shrinkage numbers that are being reported because our provision policies and the provisioning that we are doing on the little-aged inventories have also been very strong. We are trying to really work very heavily because we now understand and believe there's a lot of change which is driven in fashion business. There's a lot of change in the assortment that we used to sell earlier and any brand used to sell earlier versus what we're selling today. There's a lot of fabric change, a lot of pattern and fittings change. So some of these things are making this business a little more agile-driven. So we are trying to get into more agility. And we are trying to make this assortment look much more better and much more fresher. So that's the area of work that we are doing. We still have not reached the desired goal where we could, but we are still working all towards it. Sure. And just lastly, since there is a lot of hopes going into festive and the H22 be a better one, have we seen any similar kind of trajectory in the last one, one and a half months? If you can comment on that, that would be my last question. Thank you. Because we believe the betterment that we are trying to bring in should continue our performance, and we should continue with our performance. And that's what we continue to do. We still believe there's a lot of opportunity. We haven't still done the glass is half filled, is what I always say. There's a lot more to fill in the glass. There's a lot more work to be done. If we are able to stick the neck out, do all of those things, it is definitely bringing more complications, more variety, more change management which is required. So all of those driven, we should definitely get those benefits. And then we should definitely come up. Okay. Thank you, sir, for your input. Thank you. Thank you. The next question is from the line of Ronak Khetan from Ishanika Securities. Please go ahead. Thank you for the opportunity. I have noticed our strategy is very much focused around tier three locations. So I just wanted to understand what is our right-to-win strategy against the traditional mom-and-pop stores. So apart from having an extensive inventory base, what is our strategy in terms of non-apparel sales? So expanding the SKU so that a consumer visits and gets almost everything at the store. So apart from the apparels, what is the kind of base which you want to offer, number one? Number two is the kind of loyalty program which we are running specifically for tier three locations? I mean, are we running a loyalty program, and what is the kind of enrollment in it? That's about it. Yeah, Ronak, very fundamental questions. I mean, we have been meditating these questions and answering them for the last one decade, but anyway, I'll do it again. So our model definitely is a unique model. I'm not a unique model anymore now. It was unique 10 years back. But now a lot of players are trying to play on this model. The mom-and-pop, definitely, you understand those bazaars which are in small towns. Those are 800 sq ft-1,000 sq ft or 800 sq ft-500 sq ft. There's a counter in front of that. The mom-and-pop has their own small variety, small process. Their ability to purchase and buy or source from the market or the manufacturer is very low. The cost of purchase is very high. Their ability to sell the consumer, give the quality confidence, and have the quality mindset is also very low. So all of those included, the experience of the consumer who goes into a mom-and-pop store is largely true because of relationship, but it is not more because he gets a great variety. But there are areas where products which are more regional, more seasonal, more ethnic in nature where the local taste is very important. And all those areas, mom-and-pop do act as a great retailer. And they are very successful retailers in those kind of areas. Like, for example, sarees. Mom-and-pop retailers are very good in those areas. So we are still not better. Nobody's better in that area. So there are areas where mom-and-pop have a strength. But other than that, mom-and-pops are not able to create that kind of largeness, that kind of variety, that kind of transparency, that kind of quality trust, and that kind of product. So they have a very small team. They are not able to showcase so much of product. They are not able to reproduce and replace those products very fast. And the pricing is also, most of the time, our selling price is their cost price. So they are not able to convert that also. Other than that, I think for us, it is very, very important to believe in quality, believe also in agility of fashion. Because internationally, whatever is running and whatever is selling in Los Angeles or Milan or Turkey in Istanbul, so everything is now becoming the gap is becoming so narrow. It is getting bridged very fast. So one has to be very, very tight on this. As I'm talking, I'm right now in Istanbul doing certain exhibitions. We are following those market trends. We are going out in those markets to understand what's happening in all of these markets. So all of this is very, very important, which is not possible for a small retailer. So I think that is where we are really looking at. I covered the last question. What was that? The second question? So my last question was around, do we have a loyalty program in place? So the repeat consumers who are— we've got a database for more than 35 million-40 million consumers, customers. And we don't operate a loyalty point-based program, but we have their mobile number. We have their communication process. We have proper process of analytics and driving customized loyalty program or customized solutions for them, customized offers for them. So there's a lot of analytics-based customer communication program that we run, which brings loyalty to the consumer. Almost 70% of sales coming in V-Mart is from the same customer who is repeating. So 70% of sales of V-Mart is from loyal customers only. So that works for us, and that is what the customer is very, very happy about. All right. That's about it. Thank you. Thank you. Thank you. The next question is from the line of Ali Asghar Shakir from Motilal Oswal. Please go ahead. Yeah. Thanks so much for the opportunity. Good evening, sir. Just the first question is on the margin, sir. You did give a lot of— Sorry to interrupt, sir. We are not able to hear you clearly. Is this better now? Much better, sir. Please go ahead. Okay. Okay. Thanks for the opportunity. First question, sir, is on the margin. So obviously, you gave a lot of insight in terms of margin. I just want to understand from a little, I mean, to your point of view. So we were doing 8%-8.5% kind of EBITDA margin. I'm seeing on pre-interest basis pre-COVID on a steady-state basis. Now that you mentioned that LimeRoad is at a loss reduction phase, and we are also seeing LFL, SSG, just wanted to understand, by when should we reach that kind of margin level? Should, I mean, FY26 be the year when we should be able to reach? And also, LimeRoad should break even by then? Ali, I think the margins is an outcome of how well we are able to grow our SSG and come back to the pre-COVID sales per square foot levels. We discussed this also in the past, and I think we did guide towards growing at two consecutive years of around 10% SSG or high single-digit SSG to reach that level. By then, we should be able to get back to the pre-COVID EBITDA margin level of around 8%-8.5%. We are actively on track of that, and we are definitely wanting to reach there sooner than later. Definitely, next year is something by the end of which we should exit the year somewhere around that, if not for the full year. As far as the LimeRoad part is concerned, we did mention earlier that we will be reducing our losses quarter-on-quarter like we've been doing for the last five quarters straight. I am not 100% sure that we will be able to reach profitability for the full year by next year, but we will definitely want to bring the LimeRoad losses down to almost negligible levels. They've already started to improve every quarter, and there is some line of visibility where we are able to see better contribution of V-Mart customers contributing into LimeRoad sales and vice versa. As the base increases, we will be able to reduce our operating costs, particularly the marketing costs, which will help us stem the losses there. It's an investment. Also, I must point out, LimeRoad is not just about a loss-making entity or a loss-making platform. It's an extension of what we eventually want also to provide to our customers in a digital format, and it will definitely be very important in the years to come. If we did not even have LimeRoad today, we would still be incurring some amount of that cost already in our P&L by way of our presence on other marketplaces or our own offering earlier, which was vmartretail.com, where also we were incurring some amount of losses. But we were not disclosing it or calling it out very, very distinctly because segment disclosure at that point was not required. But it is an important investment, but still a non-material number as of now. Got it. So this year, particularly, you mentioned, right, if I'm not mistaken, should be the losses in LimeRoad. So if any color you can provide, how much we can expect it to go down? You mentioned 20% quarter-over-quarter, but for a full year point of view, if you could give just some sense. So we'll definitely look at reducing. So if the first quarter EBITDA loss is around INR 10 crores, I don't think the full year number is going to be around that number. So I don't want to call out a number, but definitely it will be less than 50% of what we did last year. So we will definitely want to improve the quarter-over-quarter performance in terms of losses, but the full year number should definitely be lesser. Understood. This is very useful. And second question, just to clarify, you provided some insight in terms of how the SSGs are trending, but if I understood correctly, Ali, you mentioned that we also got this quarter some benefit because of the election-related spending. So just wanting to understand, I mean, post the quarter, is the, I mean, SSGs tracking at the same level? And I don't know if it's a little too early, but how are you seeing any early signs of festive trends? I mean, we did a very strong SSG, so just wanted to get some insight whether we can expect this level of run rate to continue in the coming quarters. I told you the earlier comment also. See, the good efforts that we have been focusing on continues, and we continue to get maybe not similar, but almost similar kind of response. So we are hopeful to have a realisation of growth for the festive period, but we don't know what comes. Let's wait for actual financial confirmation and win the customers. Because that's actually also shifting this time a little bit into the second quarter. The Puja period is getting preponed. So there will be some sales that we're also getting the second quarter towards the end of the second quarter, and then followed by the Diwali, because that is going to be largely in the third quarter. Got it, sir. This is very useful. Thank you so much. All right. Thank you. Thank you. Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to the management for closing comments. So thank you. We had a great discussion, a lot of interaction, a lot of sharing. Please continue to support us. Please continue to be there and keep giving us some insight. If anyone travels to our stores or anyone goes onto the online channel of LimeRoad, please do keep giving us continuous feedback on improving what we can do and what we can do in terms of also understanding the market, the economy, and also consumer segments. So thank you so much for being there. All the best. Thank you, everybody. Bye. Thank you. On behalf of V-Mart Retail, that concludes this conference. Thank you for joining us. You may now disconnect your lines.