Vedant Fashions Limited (MANYAVAR) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Vedant Fashions Ltd. Q2 FY27 Earnings Conference Call, hosted by IIFL Capital Services Ltd. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star. Then, zero on your touchstone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Samir Gupta from IIFL Capital. Thank you and over to you, sir.

Hi. Hi. Good evening, everyone, and thanks to the Vidhan Fashions management for giving us this opportunity to host this call. We have with us the management of Vidhan Fashions on this call, and without taking more time, let me hand it over to them. Over to you, sir.

Joining us today to discuss the Vidhan Fashions Limited Quarter 2 and first half of Financial Year 27 results. I hope everyone got an opportunity to go through our financial results. and investor presentation, which have been uploaded on the stock exchange as well as the company's website. During the second quarter of financial year 27, sales of our customers were 3,515 million INR, reflecting a growth of about 0.6% over the same quarter 2 of last year. The quarter's performance should have been viewed with the context of a meaningful shift in the festive calendar. While Navratri commenced in September during FY26, The festive season moved to QP in FY27, and at the same time, the last 10 days of Q2, this year were actually a shirat period. So the best 10 days were replaced by almost the worst 10 days in our business from a quarter perspective. During the first half of FY27, sales of our customers were at about 7,710 million INR, reflecting a growth of about 2.1% over the same first half of financial year 26. Consistent with our focus on strengthening the quality of retail, we adopted a phased approach to expansion. Store additions during the quarter were measured, while we built a decent pipeline for the coming period of H2. We believe that continued prioritization of high-potential locations and rationalization of select stores is resulting in a net addition of about 5,000 square feet to our retail area during this quarter. During this period, we also opened an exclusive flagship Tome store. And an exclusive EBO for Mohe. We witnessed improving retail KPIs during the quarter and H1 period, reflecting our focus on retail quality supported by customer experience, training, data-led merchandising, omnichannel integration, and disciplined KPI management. We also continue to scale up our marketing across key channels, combining social media, influencer and celebrity collaborations, and stylist partnerships across our brands to enhance visibility. Widen reach and build long-term brand equity. During the quarter, Thwame built momentum around its flagship True You campaign featuring fashion icon Ori. The campaign culminated in a high-impact reveal that Ori's widely speculated high-profile wedding was in fact a self-marriage ceremony, reinforcing Thwame's philosophy of individuality, self-expression, and self-love. The initiative generated substantial viral buzz. Grove exceptional social media engagement with campaigns surpassing 700 million views cumulatively and earned widespread designation as a masterclass in curiosity-led brand storytelling. The campaign effectively showcased Thwamev's premium wedding and occasion wear for both men and women, strengthening brand visibility and consumer connect. We further extended our approach of shorter-format campaigns designed to improve virality, viral reach, and keep our brands visible throughout the season. Manivar strengthened its wedding leadership through its Quiet Luxury campaign, the launch of the After Hours collection, and the association of the Manivar Wedding Ambassador. At the same time, we've signed hundreds of influencers and have been working with AI on improving our Meta and Google campaigns to a very effective level. While Mohay connected with brides and their families through its Made for Moments campaign, supported by influencer partnerships, Divas gained strong traction to its viral collaboration with Flipkart Fashion featuring Booha Bouncer, complemented by targeted digital and social media initiatives that broadened reach and engagement across marketplaces. Together, these initiatives have strengthened our brand presence, deepened consumer engagement across our entire portfolio, and positioned us well for the upcoming festive and wedding season. We also undertook a series of measures to improve operational efficiency. We further strengthened our retail teams thereby building capability, along with in-person training on product knowledge, customer service, and key performance metrics. And we also introduced a performance-linked incentive program to sharpen store-level execution. This is on top of the incentive programs that our franchisees already run. We further refreshed our range with trend-led design and silhouettes. We will be launching almost six months. We've also launched Mandevar Celebration Club, which is our first-ever loyalty program, offering 1% points to all customers to drive even more repeat purchases. Building on these efforts, along with our early initiatives and the core strengths of our business, including our brand equity and operational efficiency, we are very confident and well positioned to capitalize on the upcoming season. And deliver sustained long-term growth and value creation for all our stakeholders. With this, I will now hand it over to Mr. Rahul Muraka, our CFO, to take you through the financial performance of the company. Wish you all and your families a very happy Diwali and a wonderful festive season ahead. I hope you all celebrated dressed well in Indian clothes. Thank you.

Thank you, Vikant. Namaskar and Gratman, everyone. I would like to highlight the key financial performance matrices. For the quarter and half year ended, 30th September 2026. Starting from Q2 FI27 performance update, during the quarter the company reported revenue from operation of around 269 crore, delivering a growth of 2.4% over Q2 of FI26. The profit after tax stood at around 56 crore with a growth of 0.2%. During U2-FI-27, The performance was mainly impacted due to shift in festive surrender, with Navratri moving from Q2 in FY26 to Q3 in FY27. Now coming to H-127 performance update. The company reported revenue from operation of around 571 crore, with a growth of around 4.8% over H-1 of FY26. During the period, the company continued to report industry reading loss margin of around 65.3%. The profit after tax stood at above 137 crore, with a growth of 8.3%. Moreover, during the trading 12-month period of September 26, the company reported healthy cash conversion ratio of above 93%, which has been computed based upon operating cash flow over PADS, excluding financial income. As we look ahead for the upcoming season, We remain focused and confident in the core strength of our business, allowing its various initiatives taken, positioning us well for the sustained long-term growth. Wishing you our very happy Diwali. Thank you and Namaskar, everyone. We can now move to the Q&A session.

Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. I repeat, if you wish to ask a question, you may press star and 1. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ms. Prerna from Dam Capital. Please go ahead.

Hi, thank you for the opportunity. We just wanted to understand... How you are thinking on SSG for the full year now, given the first half is also very muted, and festive season demand, how is it panning out in the month of October, as some highlights over there would be helpful to gauge whether second half is as promising as we are expecting.

Thank you for this question. While I agree on us having to do better overall as a company, I feel the shift that we saw at the end of Q2 made a little bit of a difference to our H1 numbers. At the same time, I don't want to talk a lot on dates, but rather, we definitely see the need of continuing to do better in what we do. From an SSG point of view, right, October is slightly difficult to comment on because again, Diwali was in October and we now have Diwali in November. But the kind of trends, the way we internally look at data is Diwali minus 30 days on a comparable period. So that we see a lot of green shoots in. And overall, with the kind of efforts that we put in, I think H2 as a whole, we are very confident on delivering a strong set of numbers. And while I can't give you anything particular on an SSG perspective. We feel very confident, not from a guidance angle, on achieving, you know, high single-digit SSG is the target that this company aims to deliver from a long-term basis.

So, for this year, how do you see, Vedan, and just trying to understand how we should really look at the stock, like, if there is an outperformance or an underperformance to our expectations, how do we really gauge that? Thank you.

I think we are very excited with the B-30 numbers, and that is what we are focusing on further improving from here on. A lot of effort has gone in from a product and marketing perspective, from a retail experience perspective, and we feel those results we will see in H2. Now, as a company, we don't give much guidance, but the real numbers only have started showing up in November because this H2 will be a very November, December, January heavy focused H2. We are confident that these numbers will start to, you know, sort of deliver in a very good way as this quarter moves ahead.

Okay.

And the second question is around area addition. Now that you are getting some fruits to the efforts taken over the last one year, and festive season looks promising, do you see area addition scaling up, going ahead, and what would be your strategy towards the same to reach double digit? Mid-double-digit to high-double-digit growth.

Yes, again, an interesting question. So, from an area addition point of view, like I've been mentioning in the previous calls as well, we have been a little strategic with our approach where the closures we've taken in the first half of the year, because that's when the business is over or lower for a company like ours, while majority of the openings will happen in second half of the year. And we expect to, you know, open around mid-single-digit sort of a fleet this financial year. We will continue in a similar fashion next year, maybe improving a little bit from here on. And we feel the year after that is when we can get to a double-digit, early double-digit sort of a number when it comes to store openings. That coupled with good SSG. The continuous growth that we are seeing in other channels of our company, like e-commerce, online, LFS, these kind of areas, should help propel us to a high double-digit sort of a number as we look two years forward from now.

Understood. And my last question is on margins. This quarter, first time ever, we have reported 39% EBITDA margin on a post-end-day basis. Do you think there are any margin-related challenges given that growth in the near-term to mid-term may be in high single-digit or low double-digit type, and your operating leverage may not play out eventually? So, any kind of risk that you're seeing on either operating leverage or on input cost inflation that may not be in a position to pass out because of increasing competition?

So, I think it would be relevant to look at a full financial level. When we look at full financial level, I think we are very confident that we will be able to deliver strong margins as we have been doing it historically. But because this is a Q1, Q2, and the majority period is H2, as explained by Vidhan. So, we are very confident that, you know, we will be able to make up the margin 3 in the next H2, and overall financial year level, we should be doing pretty well on margin 3.

Okay, sure. Thank you, and all the best, and festive greetings to you.

Thank you. The next question is from the line of Mr. Rishi Modi from Modi Advisors. Please go ahead.

Hi, I'm Sanyamu.

Yes, sir. Hello, good afternoon.

Hi, good afternoon. A few questions from Mayan. First, in your FI26 annual report, you mentioned that, you know, we're using customer conversations and AI-led camera infrastructure to improve our merchandising and upfales or sales conversions. So if you could just give us some details on what. This technology has helped us. Like, what was happening prior to this? How are we capturing feedback? And now, what new information has come to light using this technology for us? And how are we incorporating that into our improvement of our operations?

Sure. So, you know, before we had AI cameras on the store, we used to primarily rely on sell-through data. And growth in number of bills as a primary metric. So those were the sort of two numbers we would focus on and try to do the store from that point on. But with the AI cameras in place, wherever we saw that conversion is lower than, let's say, the city average or the state average, then we would take a three-pronged approach where there would be a larger training done for that store. We would also evaluate if the correct store manager was in place for the store, and all those kinds of activities were undertaken. And then our supply chain teams would also really look at the store and look at rejigging the way the store's entire, you know, category management was done. And the goal is... Can all the stores of a state reach what the top 10% of the state was doing last year? And so it's small increments. The goal is to improve conversion rate in the company by 1.5% every year. And that is what we are trying to achieve with this.

And we are seeing results on that or too early to tell right now?

Sorry, I couldn't hear you.

Are we seeing the results in the conversions?

So, yes, absolutely. I think if I break it down into the top 30%, the mid-40% and the bottom 30%, we've seen clear results in the bottom 30% moving closer to where the mid-40% is. So, those are the stores we've seen a clear improvement in from this project. The mid-40% moving to top 30% is the next focus that we're trying to try.

Okay, got it. Second, you know, hopping back on the marketing strategy for the company, right? So Q4, we saw last year, the Rasmika Vigaya Girok on the campaign, the more larger scale in the Primark. If I'm to say, more what we used to do pre-COVID, where, you know, we used to run more film-based or more actor-based models. And now again, we've seen this Ori campaign, which, in my opinion, seems a more short-lived campaign in the minds of the consumer. Now, I know you might be doing your own assessment, so if you could just give us more details on, you know, how are you comparing the two campaigns, and are you seeing any divergent trends and incrementally allocating more capital towards which style of marketing?

Sure. So, thank you for that question, Rishi, but the way I would put it right is that both the campaigns were for two very different brands and for very different objectives. Manavar's PG is very different from Thomev's PG. And Manavar already has a 99% awareness in the Indian market, while Thomev's awareness levels were very low. So the goal with this campaign was just to put Thomev's name out in the market, for people to know us, for people to consider us fashionable, to know that this is a potential place they could visit. That was the sort of objective we were battling with. And we wanted virality at a controlled budget compared to a very high celebrity campaign. On the other hand, when I talk about Manjavar, the goal is every time we have a big wedding we could capitalize on, we will continue to do that. But on the other hand, if you look at our Q3 strategy, we have pivoted to trying to make 150 short videos and seeing what works best on Mechang Google. That's the kind of strategy we are going after, which is the strategy that has worked for every new age brand in India today. And we've built our own AI-based systems that are continuously optimizing our campaigns, both on Meta and Google. And this is the kind of progress you're making on the marketer side, where awareness is not the goal, but consideration is the goal. And we want to drive that very deeply with our target audience.

Final question. Rahul Ji, you changed the investor presentation in the last couple of quarters. We are now reporting only the EBO count. Earlier, we used to report the SIS count as well. If you could just provide us with the Q2 FY26 EBO count and the square feet for EBOs, as well as how much typically the sales contribution comes from EBOs only, so we have a more like-to-like comparison versus last quarter. Last year.

So, we have around 497 EBOs along on 30th September 2026.

I'm asking Q2FI26 EBO counts around here.

Q2FI26, we have 508 EBOs.

508 EBOs and square feet would be how much for those 508 EBOs last year?

It was same, 1.67 million.

1.67 million. And how much sales typically comes from EBOs, like if I would just put a multiplier to assess your sales per square feet now, versus, so I know a progress on that. 90% comes from EBOs. And this is standard or it's been coming down with e-commerce coming up or, like, I'm just trying to get that.

I would say that over the course of last three years, it would have moved from maybe 92% to 90%, majorly on account of e-commerce.

Okay.

All right.

Got it. Thank you. That's it from my end. All the best, guys.

Thank you.

The next question is from the line of Mr. Ashish from InvestQ. Please go ahead.

Yes, thank you for the opportunity. Just wanted to check, I mean, this quarterly shift on the numbers is fine, but you mentioned that you're pretty confident that maybe we are done with the bad phase of the business and maybe even beyond the next two quarters. We're looking at reasonably good growth. So, what are the underlying factors? I mean, what gives you that confidence? Is it to do with competition subsiding plus your own efforts on different parts of your book of offerings? If you could just make us understand on the ground what has happened that makes you so confident for the next BFI 28 and beyond.

Of course, thank you for that question. I feel that, you know, number one from everything we are doing internally as a company, we've spoken a little bit on the marketing side. On the product side, we have been very aggressive with our new product launches and the width of product we're offering to our customers now. So, all in all, all the metrics that we track, be it average basket size growth, we've seen it kicking in. ASP is something I've been mentioning that we should have done better ideally in the last couple of financial years. I already see that growth coming back on an ASP side. Repeat consumers have been doing fantastically well for us in the last couple of days from a growth angle. So I see every lever working in our favor. The only thing that we need to do slightly better in is newer customers making more bills. If that part of the business is cracked, then we get back to a very good level of growth. And with the kinds of changes in marketing and in product, we are very confident that these changes will happen. At the same time, having visited multiple parts of India again recently, we are seeing decent amount of consolidation from a competition angle as well. And while Poster IPO competition would have six, seven exit number overall. Now we see that in the last couple of months, net store openings have not happened, and people are in a lot of pain from a P&L perspective. Local and regional players don't have very deep pockets, and the kind of losses they are facing, I'm not sure how long it will sustain for. So given all these factors, while competition, consolidation will not give us any short-term benefits, I do think in the long term it will again help us bring back a lot more new customers. From a short-term angle, everything we're doing as a company, the efforts across the ground, I think will definitely help prop this growth back.

Second, just want to understand, I mean, we used to be a wedding wear company, then we got into the regular wear, basically, not on the kurtas and stuff. I was addressing that way, we've done. So how is that going to help? I mean, is it bringing that addition of Delta to the overall numbers? If you could share, how do you think about it? Because for long, Manure has been our go-to brand or strong brand, and the remaining have to kind of get into the groove overall to help the company to deliver much better numbers. So, if you could help us understand that.

Yeah. So, I would say that as a company, we've not borated into a regular bed at all. The new addition to the family has primarily been in the form of Divas. And you could say in the form of Tromev. So, Tromev is the premier higher end of our company, which allows us to capture 20-30% extra addressable market. Divas, on the other hand, is on the value side of festive kurtas. Which would again increase our addressable market by 30-35% because that market on the mass side is very large and a big volume play for us. So those things will definitely help us grow faster as we move into the future. And even in the past two years, while the base of these brands are low, they've been growing very well internally.

But do you see that these would be making a mark or they will still remain, I mean, WIP, which is a small portion of the entire basket?

So, sir, the way I would put it right is to amaze is something we are extremely confident of that it is already on the path of becoming a big trend. Every KPI that we track internally is performing really well. The only thing which we need to accelerate on is store openings. Now, this is something I've mentioned time and time again is that Twomev requires 30 best stores in the top 30 markets of India. And if we could, we would open all those 21 remaining stores today itself. It's just that we're signing built-to-suit properties that are taking two years is time to open. And that task is taking a little bit of execution time. But I think Twomev is definitely on that growth path. Divas has grown beautifully well. I think it will easily cross the 100-gr mark this year. From that point again, we will be able to scale it into becoming a very large brand online and on the MBO marketplace front. So again, I would say a one-to-two-year journey for Divas. So this is how I would look at the newer brand, and I think given that that base is now increasing, and if we keep the kind of growth we've been able to maintain till now, it will show us very strong results.

Thank you.

The next question is from the line of Mr. Rahul from Ikigai Asset Managers. Please go ahead.

Hi, thank you. Good evening, everybody.

Mr. Rahul, I'm so sorry to interrupt. Can you come again? Your voice is breaking.

Am I audible?

Yes, sir.

Okay, hi. We have two three questions.

I'm sorry, you're breaking up again.

Now your voice is breaking, actually, we are not able to hear you.

The next question is from the line of Mr. Sameer Gupta from IIFL Capital. Please go ahead, sir. Sorry, I was on mute.

Sorry, sorry. I was on mute. Good afternoon, everyone, and thanks for taking my question. First question, so one of the initiatives that we have mentioned is increase in number of designs and breadth to basically address the challenge of both footfalls and conversion. Now, in the past, we have avoided this path, given there is no concept of EOSS in this category and increasing risk of write-offs if we pursue a higher breadth of products. So, what has changed? Are we okay now to take this risk to address growth challenges, or fundamentally, we have done some changes in our systems that make us more confident to achieve success on this path?

So, thank you for that question, Samirji. It's an interesting question. We didn't make this change overnight. We took six, seven months. We designed our internal systems and processes in a way where even though we've doubled, rather more than doubled the number of designs we make over the last two and a half years, we still will not generate any more desktop. And this was by improving the algorithms that the whole company runs on from an inventory replenishment point of view. So, this will allow us to improve our conversions, try out a lot wider range of products, but at the same time, dead stock levels will not increase, is how this whole project was managed.

And you have changed the teams internally, or is it something analytically that you have worked with all the data that you had?

No, so it's the same teams when it comes to inventory replenishment. It's a very core, central team of ours. And it's just the problem statement was changed, and hence a lot more SOPs, processes, and newer algorithms were designed to help sustain this.

Got it. Got it. That's helpful. Second question is on Mohay. So, if you could share some metrics here, how has it been growing? If you could share with what is the number of EPOs, exclusive EPOs in Mohay now? I think you mentioned during the call that you've added one this quarter, but what is the count overall and what is the salience now of this brand?

So Mohi has been doing BCG, where we had a strategic shift where we were a very... We have a very focused bridal lehenga brand. We pivoted to starting to do a lot more things around it like skirt top lehenga, stitch suits that people around the bride now wear. And we've seen decent growth coming from this change in strategy. At the same time, when I look at Mohay, it's become part of the Mannevar Mohay ecosystem where the majority of the newer stores that we open now carry Mohay in it. So Mohe from that angle has been growing pretty well, from a footprint perspective, from an SSG perspective. So all in all, things have been in a decent way. EBO perspective for Mohe, we now have six, seven stores of Mohe, and we are still trying to work on concepts where we make the model more economically sustainable before we actually start to really go aggressive on that model.

Anything you can share on the salience now? I remember once it used to be around 14%. Where are we right now?

Apologies, are you talking about desktop of Mohit?

Revenue salience, as in how much is the contribution of Mohit?

It's just about double digit. It's just as double digit, broadly.

Okay, and area-wise, it will be higher than that, right?

Slightly higher than that.

Okay, okay. Last question, if I may squeeze in. So, more of a bookkeeping one. So, same-store sales decline of 5.8%. If you could help us with a comparable number, and whichever way you would want to compare it, maybe growth till Shrad or taking into account Navratri this year, what would have been the growth, something like that.

I think the easiest thing which I can leave you with is if we remove the last 10 days of Q2, then we were positive SSG.

And something that you are happy with. Positive is a wide range, but...

No, no, not at all. Not at all. So, like I mentioned before as well, right? For us, as entrepreneurs, nothing below a high double digit can lead to happiness at an annual level, right? And there is absolutely need to do better in everything that we do. And we are well aware of the fact. But the kind of efforts that are going in, we feel very confident that the results will start leading from H2 and would further amplify as we move ahead into the future.

I completely understand, Viran, but I mean, even when you are at a 5%, suddenly you will not be doing double digits. So from that perspective, I was asking, right direction if you remove the 10 days from Q2?

Again, I have been purposely avoiding this. I do not want to be a person that talks about dates in detail or length. But just to give you one angle, right, like AP Telangana is a very big region for us. Q2 last year, there was a very big wedding date segment. This year, there are no wedding dates in Q2. So those things do impact our business. So I don't want to talk about these smaller aspects. For me, the goal is to deliver. Very good number for the whole financial year, and more importantly, H2 for now.

Got it, Vedan. Thanks. That's all for me. Wish you, everyone on the call, very happy Diwali. Thank you very much.

A reminder to all the participants, if you wish to ask a question, you may press star and one on your touchtone phone. The next question is from the line of Mr. Ridesh from Discover Capital. Please go ahead. Mr. Ridesh, are you online?

He wants to go around 40 meters of wire.

We'll move on to the next participant. The next question is from the line of Mr. Rahul Agarwal from EKG Asset Managers. Please go ahead.

Hi, I hope I'm audible now. Okay, thank you. So, you know, Vidhan, I just want to push on the same question. Next three quarters, I think we have almost 80 days of Hindu wedding calendar, I think. There is a great chance for the company to deliver double-digit SSG growth over the next three quarters at least. Are you thinking on those lines? Is the company fully prepared for that? So, that's just the first question.

So, if we look at overall the next three quarters, I think the ambition is to definitely work towards, you know, achieving very good SSG. High single digit to double digit sort of a number is definitely what we aim to achieve, and everything that we're doing is geared up to try achieve those numbers.

Okay, okay, get that. Secondly, you mentioned pipeline you have created for store openings, but at the same time, you said you should be mid-single-digit kind of area growth this year, next year, and then maybe high double-digit going into fiscal 29. Just wanted to clarify, is this understanding correct?

Yes, I mentioned double-digit. I didn't mention high double-digit as we move into FI 29.

Okay, go ahead. And just last, you know, one question I had was almost three years of hard work has gone into reshaping this company. You know, next phase, Moneyless 2.0, it'll just show you out on, you know, what's your vision goal more like three, four years from now? Because as investors, just trying to figure out, you know, I understand shorter term quarterly variations we keep on discussing in terms of, you know, where is the company headed, but just a bit more medium term vision in terms of if you could help us appreciate, you know, what's your plan? Where is the business headed? You know, and we can actually monitor that over the next two years, whether we are, you know, going in the right direction in terms of the goal set. So if you just quantify certain things, whatever is possible, how should Manevar look like Vedans Fashion as a company three years out? In terms of scale size, which brands could be bigger? What's your goal? That will help us, you know, be aligned with what you are thinking internally. So that's my last question.

Absolutely. Thank you so much for this question. Broadly, the 10-year vision of the company is to own everything Indian-wise. That is what we strive to achieve. That is the passion with which we work. From a slightly smaller term perspective, if I talk the next four to five years, the clear goal is to own the men's celebration wear industry from a premium price point perspective, a mid-premium price point perspective, from a value perspective, to have a very deep control of the festive Indian men's wear market as well on top of that. And the newer brands that we've launched are already part of achieving those numbers with amazing profitability metrics. And I see we've gotten to a base where now the kind of growth, if we continue, this will really add a lot of value to the company overall. is from a Mohy perspective, where we operate in the mid-premium celebration wear women's industry. There we are under 1% of the market share right now, and we are still one of the largest shares. The potential to grow from here on is very large, and the goal for us is to take another two to three quarters, but figure out the kind of model that will give us the financial profitability for the future, and then go really aggressive in that model. And that is going to bring in the next lever of growth for the company as we look at three to four years in advance. And hopefully by the end of this four years, have newer brands which could either be built in-house or acquired, looking at more areas in the engine wear industry itself.

Could you quantify where we can add some numbers to follow and appreciate this path to growth?

You know, of course, Rahulji, there's a big number in my mind, and I'm young, I'm 27, so the ambition I have for myself and for the company is very large, and the kind of growth targets that we keep for ourselves, the bar is set high. Unfortunately, I think we don't want to share any guidance, and Rahulvia from the other end is asking me to not speak up my mind, so I'll pass on mentioning a number.

Sure, good day. Thank you so much and happy to be here to you and Raoji. Thank you.

Thank you very much.

The next question is from the line of Mr. Yatin from ICICI Securities. Please go ahead.

Hi, thank you for the opportunity. Just a couple of small questions. In the balance sheet, you can see that other current assets have gone up from 56 crores to 256 crores. What is this?

So, basically, on 30th of September, we have redeemed some mutual fund, liquid. So, it is actually a bank balance only, because the funds we received in the bank account on 1st of October, that is why we are not including the cash in bank, and rather we have the financial asset, for which we have included a note also in the results page in the last page.

So, we are not including the cash in bank, and rather we have the financial asset, for which we have included a note also in the results page in the last page. Thank you. The other thing that I wanted to ask was, I remember in the last quarter we spoke about a new leadership team for the MBO and the FIS channel. And mentioned that the dynamics over there are different from the rest of the business. Could you just share like what is the progress there? Because I think we have discontinued the disclosure regarding the SIS channel now. So, do you think this gives us some sense?

Yes, absolutely. So, in the MBO business, after a long time, we actually achieved 100% of our budgets per quarter too. So it's progressing really well. The kind of growth numbers we are looking at is on high double-digit side. And I think the way things have progressed, we definitely look at achieving those numbers. And further from that point on, look at doubling the business from a two-year point of view is the bare minimum we are looking at. The reason we are not reporting SIS anymore is also because we wanted to give the team flexibility. In some cases, the team feels we can do better business by not doing a SIS but treating the same retail location as a MDO. The idea was to give them as much flexibility and look at total business that they achieve rather than focusing on how they achieve it. And so that flexibility is also driving the numbers a lot better now.

Not for many chance. Also, I recall that, you know, sometime in the past, you also mentioned that I think you were conducting some research and you identified around seven, eight states where you want to sort of reduce your presence. Could you also share an update on that? If there is any like, if there are any more learnings and directionally, like what do you look to implement?

Sorry, I think you might be confusing that from another company. We have not mentioned anything around seven or eight states as such.

Correct. And just my final question is, the margin for this quarter is obviously lower. Is that also because like ad fines have been pulled up in Q2 for session season for Q3? Or is it just that the sales are lower and that's why, you know, there's operating day leverage?

So broadly it is because of operating day leverage and this quarter represents a very small quarter from a full financial care prospect and revenue prospect. So, once we look at the full financial year prospect, we are very confident that we'll be able to deliver good, strong margins as we have done historically.

Thank you so much.

The next question is from the line of Mr. Ridesh from Discover Capital. Please go ahead.

Hi, guys, just had a question. Look, I mean, just I'm slightly like new to the company, but just looking historically, obviously, you know, looking at your own success after the IPO, you had a lot of the competition which has entered and which has in turn impacted your growth and operating leverage. So just want to understand in terms of we can hear all of the interesting new steps which you have been taking to handle competition and become a little bit more optimal. But just wanted to understand, is this a competition in your view going to actually reduce? What sort of growth rate do we expect to go back to? And what is it giving us the confidence that we can achieve the guidance of high double digit growth that we're looking for?

Thank you for your question. So, from a competition angle, our understanding is that men's celebration wear is probably one of the most difficult verticals of fashion to operate in. The desktop pain in this industry is very real, and this is a pain that most retailers understand only after two to three years of operations. And the way we've seen the market evolve over the last 3-4 years, we feel a lot of the retailers now are facing that pain and challenge. And hence, the market might have 6-7x over the last 3-4 years, but has been flat and slowly starting to consolidate now. So we definitely see that competition overall is starting to wave off. On the other hand, from a company's angle, like I've been mentioning throughout the call, we've taken drastic measures, be it team building, be it from a marketing point of view or a product point of view. We've been trying to do as much as we can to further improve ourselves, further elevate ourselves. Actually, I think we are at the forefront of AI. For any fashion company in India, where we have deployed multiple agents across multiple departments, taking care of a lot of our functions now internally. So there's a lot of progress that we're making internally, and as we move into the future, we feel these will help fuel our growth. The major challenge right now that we face is to grow from a new customer base point of view, and we feel with the efforts we are taking, consolidating competition. And hopefully the Indian economy doing even better from here will gear us up for the incredible growth that the company can do and has the potential to do in the future.

And just to understand, is there a competition consolidating in terms of are you seeing a lot of stores in specific areas actually closing the town?

So at least from our internal data, our teams capture this data every single month and quarter and our internal data shows a little bit of consolidation from a quarter-on-quarter perspective for the last two quarters now.

Got it. And then, so then even adjusting for, look, so even if we look at how the festive season has gone now, if we compare it to the festive season, not the exact same period last year, because obviously some amount of sales were deferred, how is that growth looking like? No, no, no, I'm seeing from our angle, effectively, are we seeing a higher, just wanted to understand how to compare like growth that you're seeing now in this existing quarter, even the festive season is on right now, compared to, let's say, the festive season actually last year, which was in Q2. Are we seeing this high double-digit growth?

Overall, when we look at H2 is something we are very confident about, of delivering good goods. Talking about the scenario right now, the way we look at data internally is we compare Diwali minus 30 to Diwali minus 30, and we see a lot of green shoots from that period. So the goal of the company is to do very good results overall in H2 as we move forward.

Okay, all right. Thanks. That's all. Thanks.

Thank you.

The next question is from the line of Mr. Rishi Modi from Modi Advisors. Please go ahead.

Yeah, all right. I'm just giving you the opportunity to ask questions again. Mehran, you mentioned that M&A is a possibility. Just wanted to understand what type of M&A would we be more... Are there any gaps in the portfolio that you want to fill up? And secondly, how are we in this process? Like, do we have a separate team internally who constantly assesses M&A, or are we relying on external consultants to bring us the deals and work with us for the future integration of this? How prepared are we on this, given you seeing stress in the industry, and obviously it could pop up?

Yeah, so thank you for that question. So, again, right now, there is nothing active in the pipeline. However, given that we are a cash-rich company, and fundamentally our biggest moat is we can reduce dead stock in any company that we acquire potentially. That gives us a very big synergy from a long-term angle. And majorly, we work with external partners as of today to help look at opportunities, but we are also planning to build our own team to further evaluate assets in the market more closely. And from the kind of companies we look at, I would say, given that we've not done this a lot, it's a very difficult question for me to answer. I would say we are open to opportunities in the Indian West segment is how we look at it.

All right. Fine. Thank you.

As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir.

Thank you, everyone. It's always a pleasure interacting with you. We have been really looking forward to seeing what all the efforts by the company and the kind of results that can bring us in H2. Wishing you all a happy Diwali, and thank you very much for attending the call.

Thank you, sir. On behalf of IIFL Capital Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.