Brand Concepts Limited (BCONCEPTS) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, on behalf of Captify Consulting Investor Relations team, I welcome you all to the Q1 FY27 post-earning conference call of Brand Concepts Limited. Today on the call from the management, we have with us Mr. Abhinav Kumar, full-time director and CEO. And the management team. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, this is a reminder that this call is being recorded. I would now request the management to detail us about the business performance highlights for the period ended June 2026, the growth perspective and the vision for the coming years, post which we will open the floor for Q&A. Over to the management team.

Hi, am I audible?

Yes, yes.

Vinay, I'm actually joining from another system. There is some system problem. So we'll just log out and we're joining again from another. Yes, sorry. Sorry for the initial glitch. Okay. Hi. Good afternoon, everyone. Just a lot of introductions. I'm Abhinav, Abhinav Kumar. I'm the whole-time director of CEO of Brand Concepts. And I'm joined with, on my left, Mr. Kalyan Maheshwari. He's President, Finance and Accounts. Ms. Swati Bhutada, she's the Company Secretary. And on my right is Mr. Manish Bheshwani. He is Vice President, Commercial. So welcome, everyone. And thank you all for taking out time and joining the world. So just giving a summary, we've, in terms of the revenue, we've grown by almost 11%. Our EBITDA growth is also very good owing to the revenue. Thank you, everyone, and welcome to the call. Also, reduction in certain expenses that we are working on. Reducing certain overheads, certain expenses, optimizing our resources. So all that has led to a healthy EBITDA growth as well. The bottom line, the PBT loss has widened marginally. It's, again, continued pressure from higher depreciation interest cost and other operating investments. Giving an outlook from the sales perspective, we have been consolidating in most of the channels, focusing on the sustainable, better margin growth rather than just chasing a higher top line. So there are certain consolidation exercises that we had undertaken and very happy to share that things are going as well. One major restructuring that we've done is in our e-commerce, where certain high-volume SKUs were realigned to certain channels. This is pertaining to a long-term strategy of sustainable growth. And hence, momentarily, in this quarter, we would have probably suffered some taint on our primary billing. However, our secondaries continue to be strong. So, very confident that we should be able to bridge this gap in the coming quarters. Even in terms of modern trade, our focus is more on Focusing on high throughput counters, where we are healthy at the bottom line. There still seems to be a lot of challenges in terms of, you know, pricing pressures and new incumbent players coming into our category, specifically when it comes to the travel game category. The pricing pressure still remains to be there. It's training conditions are not very, very tight. At the same time, it is further fueled with War situations which have escalated the cost of Ramaphir and also to go up. At the same time curbing travel or reduction in travel is being seen. However, In spite of all of this, we are very, very happy and proud to share that we have not lost market share. On a secondary basis, we have not lost market share. There are a lot of bigger companies in the premium space who have lost actually market share to new incumbent players, but thankfully, your company has not lost any market share. So, which is a very silver I mean, you know, interesting. Another thing is we have been You know, consolidating our bag line. Last time also I mentioned that we feel that single monogram stores are going to be more healthy for us. So we've been consolidating on the bag line. We've closed down certain stores which were not profit making, which were the bottom end of the thing. So long story short, in retail, every now and then, you need to clip your tail. And we have successfully undertaken that whole activity of clipping down the tail so that we remain profitable. The focus is on optimizing the balance sheet, optimizing our resources, and very confident that we are in good to that. With this, we can open the sessions of Q&A.

Thank you. All those who wish to ask the question may use the option of raise hand. In case you are unable to raise your hand, just drop your question in Q&A box and we'll ask on your behalf. We'll take the first question from Ankit. Ankit, you can go ahead.

Yeah, thank you for taking my question. This is Ankit Kanodia from Zen Divesh. So, I really admire your philosophy of not going with what the general D2C players are doing in the market. Just wanted to understand, given that They have the financial muscle power, and the way we have shared in our presentation about expanding to categories where probably we are entering into those categories where these guys are not there because they are majorly into, I've been to some of their stores, they are majorly into luggage, and most of their luggages are sold through e-commerce at hefty discount. So, is it right to assume that increasingly our revenue will have more share of non luggage items going forward?

See, I believe it's not that our luggage will not grow. We foresee that or we are very, very optimistic that even our luggage business will grow, right? In fact, as a matter of fact, From the last Q1 to this Q1, we have in fact grown in luggage, right? But the growth is probably low single digits, growth in luggage. Overall, travel care, we are sort of in negative, but not because of luggage, because of... Backpacks where certain SKUs we needed to consolidate certain high volume, but low throughput or low margin items were sort of, we had to take a call and discontinue a few of them. But otherwise, it has been growing. But to answer the question in a broad way, Luggage will keep on growing. I don't see a rhyme or reason for that. But current trend is that, you know, discounting is the way to lead, right? With all these new players coming in and sitting on a lot of private equity money. The idea is to grab market share from their side, right? They want to grab market share at even if the pricing is unsustainable, even at that price, they want to grab that market share. We haven't taken that route yet. And we don't intend to take that route. We don't want to do anything which is at an unhealthy pricing. Our new hard luggage plant gives us the opportunity to compete. With a lot of these players at a fair price, market price. So that is the route that we are taking. Backed by your manufacturing, we'll be able to compete better in the market. And apart from this, the other categories, we see strong momentum, and hence we keep pushing on it. I believe going forward, it's not one category getting marginalized over the other. I think we'll see a combined effect of all the categories coming together.

Yeah, that was very helpful. My next question is, see, we have our advantage in terms of manufacturing. But when it comes to sales, and especially sales channels, the two big sales channels which we have, one is the modern trade and the other one is e-commerce. And I think it is very difficult to escape the competition there from these D2C players. And if they are in the game of Reducing their price point. How do we manage to still follow our philosophy of not going down that ladder of reducing price and yet manage to increase our sales? That is an area which I am unable to figure out.

So, if I tell you, for example, you know, in terms of travel get, if I talk about Modern trade. So if I talk about, for example, shopper stock, our growth this year from last year has been upwards of 12% at the secondary level. Primaries, we are, as I said, we are trying to optimize every counter. So if there is excess inventory anywhere, we've been trying to optimize all of that. But our secondaries continue to be strong. See, the biggest challenge that, you know, one has in travel gear versus the other categories, so You know, now there is a luggage available for as low as 900 rupees, right? So the question is, how will we be able to sell a luggage for 8,000, 9,000 rupees, correct? Now, if I take a parallel example of, for example, the apparel category, there are shirts available for 200 rupees also, right? You get a round neck t-shirt in Decathlon for as low as 300, 400 rupees. And it's a decent quality T-shirt. It's 100% cotton, decent quality T-shirt. But then, you know, people are ready to pay 1,500 to 2,000 rupees for a U.S. Polo T-shirt. They're ready to pay 3,000 rupees, 3,500 rupees for a Tommy Hilfiger T-shirt. They pay 8,000 rupees for a Hugoverse T-shirt. So, it's not only about buying that product. It's about the perceived value of buying a brand. Sadly, in our category, specifically in travel care category, nobody has focused on or let's not talk about anybody else. I'm saying consumers are still not that. Brand savvy, right? The brand penetration is still at a very low percentage level of the entire consumer base. But today or tomorrow, this is bound to happen. Today, you might shift, a consumer might shift from an unbranded to a branded buying a branded 1,500 rupees or a 1,200 rupee luggage rather than buying an unbranded. Eventually, all these consumers will aspire to grow ahead, right? And if I talk about, for example, Tommy Hilfiger, we've launched some, you know, high price point, premium price point products. We've launched products at 32,000 rupees a set. A set of three. We've launched product at 27,000, 28,000 rupees a set where, you know, the competition is selling, your mass brands are selling at 4,000 to 6,000, 8,000. Even your new age players, premium brands, they are also selling for 12,000, 13,000, 10,000 for a set. And our top sellers, by volume also, in our top sellers, the 27,000 rupees set, the 32,000 rupees set comes in our top sellers. So, I would say that, you know, consumer today is very, very discerning. He understands the value that they're getting. So, if at the premium end of the market, I believe there is still a resilience which the consumer has. And I think we should be able to capitalize on that.

Thank you so much for the elaborate answer. My next question was related to, see, ultimately any retail business which has retail stores like ours, they report SSSG, same store sales growth. Any idea or any plan of doing that? I think our presentation is very detailed. I should congratulate you and your IR team for those details. But if you can just include SSSG also as a metric, I think that would be very helpful.

We will, we will see right now what is happening is we are also, as I said, this year is a year where we are also looking at certain consolidations, clipping of our tail. So once we've done all of that, I think we'll be in a much better position to share that information with all of our investors. And I've always maintained, you know, all of us had brand concepts. We maintain that transparency. So I don't have an issue in sharing that. So we will probably, you know, going forward, but give us a couple of quarters, and we should start sort of putting a matrix together so that we are able to give you guys the correct picture on same sales, same store growth.

Great. Sir, one last question before I go back to the queue. In our presentation, in one of the slides, we have clearly highlighted phase one, phase two, phase three. Phase one is the foundation building, which is already done. Phase two, which is the platform expansion, which we are under. And phase three is the operating leverage. I'm not asking for a definite guidance, but conservatively speaking, Sorry, how many quarters down the line do you expect us to move into the phase 3?

I think phase 3 would happen, you know, if I speak conservatively, about one and a half years from now.

Okay. Thank you so much, sir. I'll come back in the queue if I have more questions. Thank you and all the best.

Thank you. We'll take the next question from Nesar Parekh. Nesar, you can go ahead.

Yeah, hi. Thank you, sir. Hi, Abhinav. So, first of all, I just wanted to get your, you know, update on the Tommy Hilfiger license.

Yeah, so I think there is a delay from the international counterpart, but, you know, we have been promised our business plan and everything is approved. So if I can actually mention this, then we've got an assurance from the India team. Even the India team has not received their renewal, you know. So, as soon as they receive, it's Tommy International giving the rights to Tommy India, giving the license to Tommy India, Tommy India giving the license rights to us. So the license rights of Brahmi India is also not done yet. But I am given to understand it is just a paperwork and we are very, very confident that our business discussions, business plans, all of that is already done and closed.

And the last time we had a three-year license, you had mentioned that this time you will try for a longer 10-year license. So just from a broad contractual perspective, in terms of both the duration as well as the terms like royalty, etc., where does it stand? What will be different and same?

Yes, so I can officially on record say this, that our 10-year business plan, royalties, figures, numbers have been closed.

So it's just the paperwork that we are making. And the royalty will be, is there any step? It'll be same.

Same, same, same. Okay.

Got it. Okay. My second question is on manufacturing. You know, now it's been, I think, maybe a year or a plus. So just where do we stand in terms of our utilization? You know, how much share are we, you know, doing in-house outsourced? And we were expecting margin benefits to obviously come in. So, if you can, you know, give us a bridge kind of thing to say that, you know, how much benefit has come in and how much of that we have had to pass on to the channel, either as pricing or discounts, that will just give a sense of the manufacturing benefit.

So, inside the first phase of manufacturing, we set up the PC unit, and Very happy to share that we are already at a 80% plus sort of a utilization of that. Currently, the entire thing is an internal consumption, right? We have yet not started producing for external clients. The second leg of the manufacturing investment was on PP plant, on one PP machine, right? So we've taken one PP machine at the moment. And that also, as we speak, you know, trials are done. You know, we are beginning with the production. By, at best in the next two months, I think we should reach a You know, 75-80% capacity over there also. So, to put in perspective, you know, the PC unit has about a 25,000 kind of production capacity, and same would be a PP, right? So, both together would be about a 50,000 capacity. Today, we are operating already at a 20,000 capacity plus, and by October or latest by November, we should Start reaching about 40,000 pieces a month. In terms of margins, we are seeing a benefit. In fact, you know, if I, you know, internally, we do a SBU kind of this thing. I'm very happy to report that the plant is positive at a 20,000 level itself, you know, which we had earlier anticipated that we'll take at least 30,000-35,000 units For the plan to sort of break even or make money. But we've been able to do that in 20,000 pieces itself. In terms of what sort of EBITDA, it becomes very difficult because it's all internal, right? So it's all internal consumption. So, you know, how do you take this? How do you, what do you load over there? And what do you load over here? But I believe that out of 40,000 pieces, I think, you know, the plant individually, if it was not applying to brand concepts, we would have easily made between, you know, 11%, 13%, approximately 12% kind of a bit down. At the plant level, that gets passed on to Grand Concepts. How much are we passing on to the, in terms of pricing, I would say a bulk of it today. You know, to stay relevant, to get this thing right. We are passing on bulk of it in terms of our pricing to the end consumer at the moment. But I believe once, you know, things start to settle down, see there are 10-15 new players who have entered, who are currently flush with money. Everybody is clamoring for growth. But do you think all 15 of them are going to survive? No, they're not. So, it's a matter of time. Rationalization will start happening in terms of pricing. And that's when we will also start seeing the true benefit.

Right. My next was, you know, in terms of like, just like you said, they are flushed with money, right? And in competition, if we are sitting with debt, and whatever our EBITDA is completely going into interest, so our operating cash flow, investing, we are completely negative. Now, to what extent can we, you know, sustain this? At some point, we are already closing stores as we speak. So, what is our capital plan? Because, you know, we can't assume they will run out of money in 12 months. Maybe even we will. So, what do we do? Like, what is our plan over the next two years in terms of the capital?

See, even if you look at last year, Q1 was negative. But we ended the year at a positive bottom line, right? Or I would say, let's call it a break-even. You just, I think, around a crore plus. But this year, Q1 negative does not mean that my rest of the quarters are going to be negative. So, as I said, we've taken some consolidation exercises, which is a temporary sort of horror, you call it a short-term sort of horror hit that we've taken. But I'm pretty confident that we'll be ending up very healthy this year. So, uh... In terms of cash running out or money running out, I don't see that happening because I think we've already bottomed out. From here on, our working capital cycle is going to go better. From March to Q1 itself, you know, our stock has come down. So we have almost four to five crores of inventory, which has come down, you know, stock holding, which means, you know, that five crores extra cash flow has come into the system. So I think we have enough and more leverage right now. I don't see a point of Neither we are short of capital nor I foresee that we would need a lot of capital. Yes, whatever debt was available at that time, we have taken that debt to fund the growth. And I think we have healthy margins which will be able to cover this debt. From a long-term perspective, probably once we are absolutely fine, we are absolutely good, we also aspire that probably five years down the line, we'll be a debt-free company. But that's a long-term vision that we have. At the moment, I don't think money is a constraint where we will not be able to sustain. Closure of stores is not because we don't have money. The key closure of stores is because those stores were draining money. You know, so we're cutting down all our losses.

No, no, fair. Sorry, just if I could just follow up. What I meant is that, you know, do we plan to get some more firepower? Because we might be breaking even, but from operating cash flow, we are, you know, obviously negative. So do you have any capital raise plans? Do you think infusing some equity? Does that help to give us the firepower to actually fight? And when we are more in a growth mode, because obviously we have a bunch of, you know, brands that we've taken. So just from that perspective, I'm asking that does capital pose a constraint to growth, which otherwise you would have done if you had more capital?

No, so we did, you know, the promoters have already infused money when we needed the capital for new brands, and it was primarily taken for new brands. And we infused 20 crores of promoter capital. Out of the 20 crores, I think 15 crores is already into the system. So when we required. We funded it. And Pramata himself putting in the capital goes to prove that, you know, that we are absolutely confident of the story of how we are going.

Got it. Okay, I'll come back in with you. Thanks, Binav. Thank you again. Sure. Thanks. Thank you.

We'll take the next question from Resha Mehta. Resha, you can go ahead.

Yeah, thank you. I hope I'm audible.

Yes, Indira.

Yeah. So, you know, on the consultation bit, if you can just, you know, talk about that for each channel, when did we begin this consolidation journey? And how far are we into, you know, let's say, are we nearing completion of the consolidation in each of these channels? And yeah, maybe I will ask my second question after this.

You want to ask the second question right away?

No, I'll wait for your response. So, probably it'll be more of a follow up.

So, see, every channel. You know, retail as a business, or I would rather say every business, you know, it's a cyclic process, right? So you have expansion, expansion, expansion, then you have some consolidation, and then you once you consolidate, and then you again get into an expansion. So it's not about one particular channel that we are consolidating, it's across all the channels, right? So we've had a good run for the past three to four years, we've expanded into multiple We have multiple stores, multiple categories, multiple channels. But, you know, we are not a company which is chasing only top-line growth, right? We're very, very focused that we need to have a healthy balance sheet, we need to have a healthy bottom line. And in order to do that, every channel will have some Thank you. You know, superheroes and some villains. So you need to clip the villains every channel. So we take that as an exercise. And we keep strengthening ourselves. So there might be a For example, in e-commerce, there might be one particular SKU which might be giving you 10-15 crores of revenue, but you feel that somewhere that SKU has now outlived its age. You want to change that because as a brand, you need to have that health check also in place. Good morning. So, you have to take those calls for, you know, you might have to let go of some short term benefits. But keeping the long term in mind, you will have to take those calls, you know, to protect the brand.

Sorry, Abhinav, my question was actually in terms of the timelines. I appreciate the reasoning behind the consolidation. I think that's mentioned in your presentation also. Like when did we start off this consolidation journey? And how far away are we from nearing completion in each of these channels? And also in terms of, yeah, and also in terms of your retail stores. So I think the number of closures are pretty sizable, right? And with new additional nine stores on notice. So, you know, when do we see this consolidation coming to a closure across channels? And probably then can we expect, you know, growth to come back? So that really is the context of asking this question. Okay.

Yeah, so we embarked on this, I think, last year, Q4 onwards, January onwards, we started sort of, we said, this season, we're going to take on the consolidation drive. So we've started on that. And I think we are almost, at the moment, I can safely say, and Manish or Mr. Manishwari can actually comment on this. But I think we are almost 80% through? 75-80% through? Yes, by September, Joby Stores, we have decided we will be out of it. Okay. So by September, I think, you know, we should be through with this. E-commerce, as I said, we've already, whatever new things that we have to take, we've already taken that. So, hopefully, from this month itself, we are now sort of getting back on track in e-commerce, certain old redundant SQ styles have been done away with, channel strategy is in place. So, e-commerce, we are getting back within this month itself. We are starting to see the results. And from modern trade perspective, I think by September, we should be done with all of this. Then, going forward, it will always be a continuous process, but it will not be at a scale probably that we've done it right now.

That's right. So, which means that at a company level, we should probably get back to growth October onwards, broadly speaking.

Yes, yes, 100%. I would love to see it earlier than that, but yes, by October for sure. Sorry, your voice is not very clear.

Hello.

Oh, hey.

Shesha, our voice is not clear.

We can't hear you, Rishan.

Meanwhile, we'll move to the next participant. We'll take the next question from Randeep Pal, Randeep, who can go ahead?

Yeah, thank you for the opportunity. So my question is regarding the 19 stores which will get closed. So how much would be the impact on top line? That is my first question. And we had earlier discussed about 1000 crore top line.

Thank you very much.

Yeah, sorry. So one was on the impact of the closure of these stores. Yeah. And second.

Yeah, we had earlier alluded about 1000 crore top line over four, five years. So are we on track on that target or we need to recalibrate?

Okay. So, answering your first question, Neep, Whatever figures that we report are post all these closures and everything, right? So, now, one advantage that we have is, you know, we have a very healthy mix of the channels. So, for example, our EBO business overall. All the stores put together was about 10% of our overall business. So even if we close a few bottom stores, the impact on the overall revenue is not going to be so high, number one. Number two, while we are closing the bottom ones, we are also opening new ones. You know, we are still opening new high-throughput area stores. So, you know, for example, just giving an example of a new brand, Off-White. We opened one in Bangalore. And we've already opened one in Delhi. And touch wood, the initial response of our Delhi store is fabulous. It's giving us very, very good numbers. Even the Bangalore store, though our floor, the entire mall is not operational, a few brands yet need to come in. But we've been consistently giving good numbers, getting good numbers in that store. I might have closed a store which might be doing 5-7 lakh rupees of sales a month, but I've added a store which is now giving me 30 lakh rupees sales a month. I've added a Dalil store which on a weekend is giving me 15 lakh rupees a sale. You know, so it's always a combination. We've always taken a policy that whatever we are doing, we will obviously inform it of the consumer. So don't get this thing by the fact that, oh, the company is shutting down 10 stores. What will happen? I think the previous gentleman also was this thing that, yeah, nothing of that sort, you know. So, and we are very much. On track to that thousand corrosion, no deterring from that.

Okay, yeah, it makes sense. Thanks for the pivot. And my next question is, you have mentioned that you have not lost any market share at company level, but have we lost any market share at brand level like Tommy Hilfiger versus Abhin Jungle or Mokobora?

No, no, no. Tommy, in fact, has overall we remained flattish. But if I see my ASP growth is better, probably volume, there might have been some low minus single digit negative, but ASP level probably we've grown. And we are retaining the market share. Only place where I think we've not done two or two The group attention is, being very candid and open about it, is yet Benetton. We've had couple of, you know, strategies that we tried and which has not worked well for us. We have already revisited those strategies, pivoted ourselves. And we're going on a new path now when it comes to Benetton. So, Benetton, we've seen a de-growth in our primaries, but I'm very confident that this year we'll be able to turn that whole business around and we should be back on, we'll cover for whatever lost opportunities.

Okay. And my last question of you know, is that since you're cutting the long tail, so currently our inventory days is around 300. So what's our target inventory days? Like our competition mostly has around 120 days, right?

300 days. We had 128 crores of inventory at March and Currently, we have about 123 by June end. So it's about 130 odd days of inventory, sir.

Okay.

Yeah.

Okay. Then it's good. Yeah. Thank you.

Yeah. All right. Thank you. Thank you, sir.

Thank you. We'll take a follow-up question from Ankit. Ankit, you can go ahead.

Yeah, thank you so much for allowing a follow-up. Sir, when I compare our quarterly results with the other larger... Listed players. What I see is that the seasonality is a little different in our case compared to them. So they have generally Q1 as their best quarter and Q2 is their weakest quarter. And in your case, it is just the reverse. I think Q1 is the weakest quarter and Q2 is the strongest quarter. Why it is that and is it going to remain like that in the subsequent quarter as well?

Interesting question, Ankit. Actually, if you have seen it, two years, three years back, and the other listed page that we're talking about, I'm sure you'll be comparing us either with Safari or VIP. If you look at Safari also, if you study, two, three years back, you're absolutely right that Q1 used to be much bigger. But now I think over the past one to two years, if you look at, I think there also you will realize that Q2 has started becoming bigger generally than Q1, and it also coincides with the fact that You know, now, even with these listed players, a large part of their business is coming from e-commerce. And Q2, you get a lot of primary orders from all these players, and the supply happens because then you're preparing for the festive season, and hence the supply generally happens, the primary filling happens in Q2. So, hence, Q2 now has started tending to be bigger than Q1.

So, we will have the same Q2 trajectory this year as well. Is it right to assume? And the EBITDA margin trajectory, which we have shown considerable improvement year on year, will that also continue to be there? I'm not asking for a definite guidance, but generally just a trajectory.

Yes, I hope so, because all these changes, all these consolidations, everything that we've been doing, we've done it to make the balance sheet healthy. And hence, I foresee that our EBITDA margins will continue to sort of show a healthy trend.

And one last question. Is it right to assume that FY26 debt is the peak debt and probably by FY27 end we will have debt a little bit lower than what we see today in the balance sheet?

Yes, we do not intend to, at the moment, at least, we do not intend to sort of take more debt. I think we availed the government scheme which was available and it was proven to do so. But apart from that, we are not increasing our debt levels. I think we are sufficiently funded for now.

And same will go for the depreciation also. We have done with all our manufacturing, so depreciation. F527 end should be lower than F526 or should be higher or what would be the trajectory marginally higher

because 26 was not full year operation for manufacturing, right? So F527 would be the full year of operation and hence the depreciation would be marginally higher. But just to answer your listening also on another level in terms of So, major capex investment, I think we are done for the next one to two years until unless suddenly we get, we have seen an order pipeline which is looking very, very healthy for our luggage plant. But until unless we suddenly get a windfall gain and we get 10 new clients Thank you.

Thank you so much and all the best!

Thanks, Tanya.

Thank you. We'll take the next follow-up question from Risha Mehta. Risha, you can go ahead.

Yeah, thanks. Sorry, I had some network issues. So just on the depreciation and the interest bit, I did hear your response to the previous participant. So depreciation, 4 crores run rate that we have seen in Q1, can that be assumed? So around 16 crores for the full financial year, would that be a right number or would that still be higher? And then on the interest bit, I think, so basically, on the debt side, I think what you said was that, yes, by FY27N, we should peak out on our debt. That understanding is right?

Yes.

Okay. And, you know, now, just on your manufacturing, Thank you very much, actually. So, we are at somewhere around, you know, like you said, 25,000 pieces per month capacity for both PC and PT each. So, each, yes. Yeah. So, and you said we are at 80% utilization, right, for each.

We are already at an 80% for PC. PP, we are now starting because PP, you need molds, and that's a complicated process. So, cutting a long story short, we've got one mold, and we're getting another three to four molds, three molds at least, by next month end. So, October, we'll start, and hence I said either by October or max by November, we should be at a 80% replacement in PP as well.

So this existing plant or facility, what is the, you know, peak capacity that it can reach for both PC and PP each?

So the existing building, you know, if I... Few tweaking around changes here and there, and we can have another 40,000 or, you know, another two lines set up in the same building premises. I will have to make small bit of investments for an HBMS, sort of warehousing and all of that, go-downs and all of that, but it will not be a massive, massive investment. So, this particular building can suffice up to four lines, and every line can have 25,000 peak capacity, so 100,000 pieces per month. Can be housed over here. Though, there will be an investment required in terms of the machinery, two more lines to be set up. So, net-net, just to give you a brief, broad understanding, another 10 CR of investment can give us another 50,000 capacity.

Sorry, 10 CR can give us another 50,000 capacity. Capacity.

Yeah.

Okay. And, you know, I did hear that you mentioned that we will also basically, so basically the entire manufacturing facility will not be used for captive consumption. We would even have other clients for, you know, whom we may be doing third-party manufacturing, right? So was it always a part of the plan when we set out this plan? Or has it been an afterthought? Or if you could just highlight there? And out of this 1 lakh peak capacity, eventually, you know, how do we envisage the split between, you know, captive consumption versus, you know, third party manufacturing?

So, third-party manufacturing was always part of the plan, right from the day we conceived. Even in our backpack unit, if you will look at, one of our largest clients today is the Samsonite Group. We manufacture gold wonder bags for American tourists and other brands. So even with the hard luggage, we always had the vision that we will not keep it only on capital consumption. In fact, to be very honest, I personally believe, I don't know, I might be right, I might be wrong, but I personally believe that of the total installed capacity, neither your consumption should be more than 50% and the other way around also. So, I think that gives you a very healthy balance, you know. So, we always had plans that we'll have. Third party clients also. And we are actually in talks with a lot of brands, you know, we also look at, I particularly see a huge, huge opportunity of the export market as well. But probably currently looking at all the... You know, the events that are happening around the globe, it might not be. Right now, it's a little difficult. It's tough waters, but eventually that could also fuel a lot of growth for us. And we will not shy away from all of that. We've built a world-class manufacturing facility. We've built a state-of-the-art facility. It's 100% compliant facility. So why not engage that? So it was always a part of the plan. And how much of whether we go to that one lakh today or tomorrow, again, right now, we good with 50% capacity, 50,000 meters capacity. And most of it, at the moment, 100% of it is in-house consumption. Tomorrow, even if we get third party, I would believe that for some time I would want to run it at this level and keep maximum capacities to be consumed in-house. Then we will evaluate, you know, once the plant is running efficiently, all our matrix is in place. Expansion is just a matter of putting the money and purchasing those machines. So we are ready for that. Right.

Last one.

Sorry.

PC and PP is fungible.

PC and fungible. No, then. Done. So, PC is a different mode, different technology. PP is a different mode, different technology.

All right. Thank you.

Thank you. We'll take another follow-up question from Nesar. Nesar, you can go over.

Hi, thanks for taking my question again. So on the PP side, right, we discussed this last time also. So for the festive season, you know, will we be launching that because that could be the confidence to the lower end?

Yes, yes, 100%.

And what, like, from a revenue contribution, do you see, like, that reaching what level for this, say, year or season, however you track?

It's too early to say that, but, you know. See, the cost of production of PP from a raw material perspective, from an power perspective, everything is better than PC. And because today there is this price sort of wall which is there and price factor which has come in so strongly, we believe this will give us a lot of bite. Okay. How much are we able to bite? How much are we able to chew? I think that we'll, you know, whether those tiles are successful, not successful. If they're successful, then I can for sure tell you that, you know, straight away you can add up from October onwards, you can add up 20,000 pieces a month, you know, and if I do the math right, 20,000 pieces a month at an average selling price, even if I calculate, say, at around 1,500 rupees, you know, that gets added. So, I don't know how much that would be at a larger scheme of this thing. But I think it will give us the confidence of adding more lines. We will start seeing real volume growth.

Right. But will we be competitive given that, you know, our skill is obviously like maybe in like 1-2% of what some of these larger players produce PP at. So, like, will we be competitive from a cost perspective or will it get more expensive for us actually to manufacture in-house at a lower scale?

No, we'll be competitive. See, obviously, if you compare us with... Say, a safari, for example, they are already at, I think, 10-12 lakh pieces per month. And from what I hear, they have again bought another land in Gujarat where they want to, they again have bought a land on which they can install another 10-12 lakh. So, obviously, to compete at that scale, probably would be difficult, you know, in terms of costings. But, you know, the advantage with us, Nisar, is that, you know, he, we... We are talking about brands like Tommy Hilfiger, we are talking about brands like Benetton, Superdry, all of this. So, I feel very confident that we will be able to sell at certain premium.

No, got it. Makes sense. Last question is just you mentioned the brand, right? And that's where I wanted to get to that. Besides Tommy, if you can just talk a bit about how these other brands are doing and what is the plan, you know, because eventually they also need to fire. So just if you can talk a bit about the hits and misses over there. So, I think they've already started firing.

See, SuperDry and Off-White, I think they're too early to be talked about because we launched both of them in around April. So, it's just been three months. SuperDry, Touchwood, again, initial response is good. Off-White. I think that's what brilliant response we've got till now. We are already there in Collective. We are already there on your luxury e-commerce platforms. Bangalore store has opened. We've opened the Delhi store. We're going to be doing the launch of the Delhi store in the 6th of September. Then we've already secured a location in Kolkata. And I'm talking the best malls of the country. So Bangalore is mall of Asia. Delhi is DLF Promenade Mall, right? Kolkata, we are opening in Quest. Next, Q1 will be opening Bombay Palladium. And I had mentioned this way back also when I taken the brand that this will open up new doors for us, you know, and which it has. So we are now in the top mall in the country. We've seen good response of Off-White, but it's just been three months, you know, so Superdry, we are already there in their own stores of Reliance. We're there in about 70 odd stores of theirs. We are already there in Shopper Store. So, it's growing. It's expanding. We're taking our learnings. Some products are working. Some products probably not working. But today, that entire range is not complete. Molds have just come in. Trials are happening. So, now we'll be launching Superdry luggage. So, these two brands are relatively new. But Juicy, I had launched last year. And I'm very, very happy to share that. You know, we're doing well in terms of our revenue, in terms of top line. Last year, we closed at almost what, 14 crores, 15 crores, 12 crores. We closed at a 12 crores top line last year. And this year, we aim to cross at least a 20, 22 crores kind of revenue. So, we've been growing strong. All these new brands, as I said, are really doing well. They are firing, but give it a little more time, you will start seeing very, very good results after them. And Benetton, what's the plan? Benetton, you know, we had some sort of You know, a strategic failure. So, when we launched the first time, we went offline first. And then the market crashed, the pricing sort of crashed. And hence, we were a little, we were left irrelevant in terms of pricing in the offline market, in the distribution general trade market. Then we tried to pivot and we said we'd come online. But by then, obviously, online also was heavily discounted and a lot of pricing pressure. We had that whole inventory. So first and foremost, we had to liquidate all that everything, which we did. And we had to reject the strategy. We came up with new products. Back with our own manufacturing, we were able to lower those costs. And now we are able to sort of segregate two clear, distinct lines, one which we've dedicated to e-commerce, where we're playing that, you know, a sharp price point game. And even on the offline side, where we are launching, as we speak, we are launching by next month, we will be there in the market launching with new styles and this thing. In Benetton, we have another very good development. So Hopefully, we should be starting the CSD business also pretty soon in Benetton. So we should be entering the canteen stores department with Benetton as well. In Tommy, we've already seen that success. We are also, in fact, You know, now introducing other ranges apart from luggage, apart from travel gear, we are also introducing other ranges in canteen stores department and in Benetton. And we are also now getting into canteen stores department with Benetton as a brand. So working on a sort of a 360 degree, this thing with distinct product for each channel and then scaling the business.

And Aeropostel, we are like planning to give up and also any new brand that is any discussions or anything that or right now the focus is just on these brands

focus mostly on these brands Aeropostel. Yes, time to give up to be honest.

Okay. All right. Thank you so much and all the rest. Thanks. Thanks.

Thanks. Thank you. We'll take the last follow-up question from Randeep. Randeep, you can go. Yeah.

Thank you. So, uh, Avinu, uh, regarding juicy and, uh, off-white. So how much percentage of the products we are doing in-house and saw small goods, ladders or in luggage?

So, our categories, accessory categories, we are doing completely in-house, not in off-white. Off-white is a complete import model. In Juicy, our products, we are doing complete in-house, but apparel is completely imported. But now we are getting into getting the apparel also in-house, you know, so we've already invested in the right team. And we are starting with, we're starting small, we're starting with small India capsules. But I can safely say that this fall winter will have a very small India capsule. Spring, summer, obviously the capsule will go bigger. By next fall-winter, which is Q3 of the next financial year, I think 70-75% of even the apparent line in Juicy should be in-house, which would give us a much better margin. Okay.

Yeah. And my last question, so how do you have any target about the off-white and juicy the number of store counts over next 12 months you want to roll out?

See, off-white, we have thought of five stores in totality. I think we are done for now. By next Q1, we'll be opening the fourth one in Bombay, and I think we are done for off-white. Okay. There is a diffusion. Line of Off-White internationally, they have launched that brand by the name Lab. We've got that as well. But, you know, there might be some store plans in that, but we're too early. It's too early for me to talk about it right now. But Off-White, Off-White for say, four stores and we are done. Juicy, we already have three stores. I think we're going to open a couple of more. And then we'll not be in a rush to open stores. We'll understand these stores. We'll take our learnings. We'll get all the matrices right. Once the matrices are right, once we know that the India merchandise is also doing well, then I think the potential is huge. But next one year, we're going to be cautious, going easy.

Sure. Yeah. Thank you so much. Wish you all the very best.

Thanks. Thanks. Thanks.

Yeah. Bye.

Thank you, sir. Since this was the last question, would you like to give any closing comments?

No, I think, uh, good. Thank you all, uh, for joining and, uh, taking out time and hearing me patiently. Um, I think, uh, uh, just as a closing this thing, I would like to say that, uh, You know, we are in a good position and I'm very, very happy and very, very confident that, you know, this year should be a good year for us. And whatever, you know, bottoming out had to happen, I think has happened. So it's all upwards, up and upwards from here on. So thank you, everyone. And thank you for your good wishes always.

Thank you to the management team for your valuable time, and thank you to all the participants for joining on the call. This brings us to the end of today's conference call. You may all disconnect now. Thank you. Welcome to the call.