Page Industries Limited (PAGEIND) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Page Industries Limited Q1 F527 Earnings Conference Call, hosted by Valroom Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touch-to-on phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purwangi Jain from Valorim Advisors. Thank you, and over to you, Ms. Jain.

Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purwangi Jain from Valorim Advisors. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the first quarter of the financial year, 2027. Before we begin, a quick cautionary statement. Some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now, I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. V.S. Ganesh, Managing Director, Mr. Dipanjan Bandiopadhyay, Chief Financial Officer, and Mr. Karthik Yathindra, Chief Executive Officer. Without any delay, I request Mr. V.S. Kanesh to start with his opening remarks. Thank you, and over to you, sir.

Thank you. Thank you so much, and good afternoon, ladies and gentlemen. Welcome to the earnings call for the first quarter of FY27. I am joined by our Chief Financial Officer, Mr. Deepanjan, and our Chief Executive Officer, Mr. Kastik. I will begin with a brief overview of the business and the quarter, following which, Mr. Deepanjan will take you through the financial performance in detail. We will then be happy to take your questions. Let me begin by saying that we are encouraged by the underlying performance of the business during the quarter, particularly the volume growth. Consumer demand remained healthy with good traction across our key channels. Including exclusive brand stores, e-commerce, and a wider retail network. Our new product introductions, including JKY Groove, also received encouraging consumer response. While volume performance was strong, reported revenue was moderated by temporary quarter-end logistics and manpower-related constraints. This affected billing during the period. The underlying demand and volume momentum, therefore, remained better than what was reported as revenue growth. The COTA also reflected inflationary pressure across key inputs, particularly cotton and synthetic materials, amid a volatile external environment. As regards pricing, we remain calibrated and chose to absorb part of the input cost increase. Balancing margin protection with consumer value and competitiveness. This approach helped us stay competitive while the subsequent moderation and some input costs supported opposition. At the same time, we continue to grow strongly. We continue to focus strongly on productivity and operational efficiency. Our strategic sourcing and supply chain initiatives helped us mitigate some of the cost pressures. We are also seeing steady progress in the scale-up of Odesa and KR-PET manufacturing facilities, which will progressively enhance our production capabilities and efficiency. Our digital transformation journey also continues to progress across ERP, distribution management. and HR transformation. We are also working on our consumer data platform. These investments are aimed at creating a more agile and data-driven organization and in improving the way we serve our consumers and retail partners. Our distribution network remains a significant strength with 1,15,871 multi-brand outlets, 1,640 exclusive brand stores and 930 large format stores. Our online channel also continued to deliver healthy growth. Financially, revenue grew by 7.9% during the quarter and profit after tax declined by 4%. Reflecting the combined impact of input cost pressure and the temporary constraints on converting underlining volume into billings. Looking ahead, we remain very confident in the underlying health of the business. We see multiple growth opportunities from volume recovery, new products, premiumization, retail and e-commerce expansion, and through improving our supply chain and manufacturing efficiencies. In fact, looking at the demand signals, we are working hard in augmenting our in-house capacities and also working on improving our outsourcing government supplies so as to cater to the demand. Our focus remains unchanged to strengthen the brand, deliver greater value to consumers, improve availability, and grow the business sustainably and profitably. I would like to thank all of shareholders for their continued trust and support. With this, may I now request Mr. Deepanshan to take you through the financial performance in greater detail. Thank you, and over to you, Deepanshan.

Thank you, VSU. Good afternoon, everyone. I will now provide an overview of the company's financial performance for Quarter 1 FI 27. In quarter one, revenue was Rs 14,204 million, which is a 7.9% growth year-on-year. Since volume in the quarter was 61.9 million pieces, growing by 5.7% year-on-year. EBITDA for the period was Rs 2,890 million, which has declined by 1.9% year-on-year. EBITDA margin was 20.3%, while EBITDA margin was within our planned range of 19-21%. A stronger EBITDA margin of 22.4% in Q1 FI25 due to the stable input cost there resulted in the decline in EBITDA in the current quarter. Profit after tax for the quarter was Rs. 1,928 million, declining by around 4% year-on-year. Inventory days was 66 in the end of quarter 1, as again 73 days in the beginning of the quarter. Networking tracking days was around 54 days, as I guess, 56 days in the beginning of the quarter.

With that, we can now take up the queries.

Shall you open the line for questions?

Yes.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and 1 on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 comes from the line of Ashutosh Chyothilathitya with ICICI Securities Fiscal Yeah, hi.

Thank you, sir, for the opportunity. So I have two questions. First one is on the volume growth trajectory. So I believe I like in view for what the CEO has highlighted that we are focused to deliver the double digit kind of a volume growth going ahead. But I don't understand like what was the miss there. And second question is on the pricing thing. So as far as I remember, last quarter, the management said that in January, the price hike that was taken across mainly to improve the product quality, and they were anticipating that there will be some calibrated price hikes going forward to mitigate the raw material impact. But again, on that front also, what I can understand is that the management seems to have missed the outlook what they have given. Yeah, two questions. Thank you, sir.

Thanks, Ashutosh, for the question. On the volume side, I think we still remain committed towards the goal of a double-digit growth in terms of volume for the financial year. This is going to be phased across quarters. With regards to the quarter one deliveries, there were two major pieces that has affected the volume delivery. One is a planned one, which is structural in terms of how we are planning our growth across quarters. With the ARS now fully in place, we're also not front-loading our performance like it used to be, and hence schemes and incentives for the trade have been designed in a way that it is better distributed between quarters. So structurally itself, you will see a difference between performance between quarters. However, the annual goal remains unchanged, which is to, you know, aim for a double-digit growth in volume. The second bit which has affected the quarter delivery has been essentially our undelivered billing. So, unlike the last year, Q1, this year, we've had extraordinary volume that has not been delivered in spite of being billed. That's because of the disruption we've experienced in the logistics and manpower towards the quarter end, which is what was, you know, narrated also in the MD's commentary. I'm sorry. These two have impacted So, volume reported, volume growth reported for quarter one, both of which we believe one planned, the other is temporary and hence should be absorbed going forward. With regards to price increase, you're right. The January price increase was largely to enhance. The product itself and was not linked to input cost. We have undertaken a price increase partially to absorb the input cost in quarter one. This was done sometime in mid of May. However, the full gains of the price increase has still not been realized, and that's something that we'll be realizing in quarter two, purely because of the FIFO principles that we operate in our billing. So, a large portion of what was invoiced in quarter one was in the previous pricing and the gains from the price increase which was taken in the middle of May would be realized in quarter two.

Okay, okay. Sir, just to, on your reply on the volume growth, so, as per my understanding, like, you are saying that for the remaining three quarters, we should be seeing, like, 11-12% kind of average volume growth, and how confident are, yeah, sorry.

Fairly confident, given how the demand atmosphere has been in quarter one, so we should see recoveries for us to make up for lost grounds in quarter one.

Okay, fair point, sir. Thank you. Thank you for the opportunity.

Thank you. Next question comes from the line of Vidisha Seth with Ambit Capital, please.

Yes. Hi. Thank you. So, my first question was on the comment made on the new product lines. So, which segments would it be focused towards besides the younger consumers who grew or licensed merchandise, if you could help on that, please?

So we've got product introductions across the category. Some of it has hit the market in quarter one. Some of them will go through in quarter two before, you know, the pester season is upon us. Quarter one, the big ones were group three, which is our, you know, street fashion line, which This was launched in the month of June. This is our third line. If you recall, we had launched this as a proposition starting quarter one last year. This year, the collection was taken to close to 500 exclusive brand stores across the country and has been received very, very well, and our sell-through numbers look very good. So this was a large one. Other than that, we've had specific products that have come in across the portfolio. Another big piece is the collaboration with Disney and Marvel to bring in character merchandise. But this, again, while the go-to market was planned towards the end of June, a large portion of revenues from this will be realized in quarter two.

Okay, so just two follow-ups to this. One is that in this licensed merchandising piece, it's quite a competitive space with multiple D2C players already present. So what is the differentiated opportunity that Jockey as a brand has? And the second would be, fair to assume that new product lines will be dedicated to the at-leisure space rather than the inner-wear space.

Okay, so specific on the character merchandise, you're right. I think they're prevalent across many brands, both D2C brands as well as legacy brands. We are looking to differentiate this with the design aesthetic and the signature handwriting that we have the opportunity to put out in the market. Of course, this is backed by the trust and the quality that you can expect with jockey merchandise. These two pieces, I believe, will help differentiate our product offering when compared to the rest of them in the market. And the start is this with Disney and Marvel. This also opens up a window for us to collaborate with other licenses in the character merchandise space going forward. As far as the second question is concerned, there will be upgrades as well as newness across the portfolio. But the large pieces, which will be backed with, you know, marketing investments, new propositions, etc., is going to be in the at-leisure space.

Noted. And the second question was on the inventory level. So, if further reduction of inventory days from 73 to 66 or 67, could that also lead to loss of sales to some extent? So, what's the thought process here in bringing down inventory levels all the more?

No, right observation. I don't think our intention is to bring down inventory level any further. And we should admit there has been some level of lost sales opportunity in quarter one as well, because of non-availability. And this was largely attributed to some level of disruption we've had on the supply side in quarter one. But I think we've reached optimum level of inventory both in the value chain as well as the inventory at page level. In fact, we are now looking at augmenting capacity, investing above plan in terms of manufacturing to make sure that both in-house as well as outsource to make sure that we're able to do justice to the demand that's coming our way.

Oh, got it. And just last bit, if I may, would it be possible to give a ballpark range in the difference between primary and secondary growth in this quarter?

We don't give away secondary numbers, but I can say that secondary growth performance has been much better than primary. That's largely because of the undelivered inventory and hence us not reporting it as primary in quarter one.

Sure. Thanks for that. I'll get back in the queue for the question.

Thank you. Thank you. Next question comes from the line of Saurav Kundan with Goldman Sachs. Please go ahead.

Yeah, thank you very much. So, Karthik, my question was actually around the logistics instructions only. If you could just double click in on exactly what these were and some idea on the quantum of the undelivered volume will really help. And related to that question, does this mean that for the year you said double digit volume growth is your target, could it be a little bit higher in 2Q because 2Q will have this undelivered volume and then also whatever the underlying volume is there in Q2. And could you please double-click exactly what manpower issues and what logistics issues these were?

Yeah, so this was actually a disruption because partly to be attributable to, you know, the rumors around Escalation in fuel prices, availability of fuel itself, and all of our logistics are third-party, and the third-party labor having a concern given the SAR drive that was undertaken through the month of June. We had disruptions in the last-mile delivery with our distributors towards the end of June. That's what has impacted deliveries. I cannot exactly quantify it, but what I can say is, Rough and ready, about three days of billing went undelivered when compared to normal. So typically, every quarter we have, quarter ending, we have about three to four days of billing that does not get delivered and gets pushed to the next quarter. This year, that moved to about seven days. So a delta of about three days of invoiced revenue, invoiced billing was not reported as revenue this quarter one. So that's what has impacted. And on your second observation, largely, yes, a majority of this should be reported in quarter two. And anyway, the next three quarters, given that our goal is to hit a double-digit volume, should see above-average volume growth to make up for the shortfalls in quarter one.

Okay, just one more question. The difference between value and volume this time is a little bit lower than it was in, let's say, the previous quarter, which is basically the price and mix. So, pricing ideally should have been slightly higher than previous quarter because you took something in May. So, what change that the difference should shrink a little bit if you can just check it out and what route to going forward?

Yeah, so two pieces there. One is the product mix like you rightly pointed out. We've had some of our lower ASP products like accessories and stocks. In a way, again, this is by design in terms of scheme design, seeing above average performance in quarter one, which has in a way contributed to a lower ASP. And the second is the price increase taken in May, like I mentioned earlier, not much of it we've realized in quarter one in terms of benefits. That's something that will flow in from quarter two. So the outlook going forward will definitely be much bigger difference between volume and value performance than what we've seen in quarter one. Purely attributable to mix, as well as the price increase in May, which will start kicking in by quarter two.

Great, thank you.

Thank you. Next question comes from the line of Tejas Shah with EvanderSpark, Institutional Equities. Please go ahead.

Hi. Thanks for the opportunity. A couple of questions. Given the rise of e-commerce and digital channels in our mix, how are you leveraging real-time data analytics to harmonize, let's say, channel pricing, maintain margin parity, and also build some sort of KYC on the customer base as well?

Thanks, Tejas, for this question. On pricing parity, see, because there is no real-time data required because we anyway don't, unlike most other brands, our pricing, we follow a uniform consumer pricing principle, irrespective of the channel of purchase. So there is no quick deals or flash sales or any kind of markdowns at any given point in time for the end consumer, irrespective of where that consumer is shopping. However, on the larger point of about how we are leveraging data, we are probably in the apparel consumer space, we are best positioned to leverage consumer data given the large set of consumers that we serve. And in terms of B2C, our avenues today is jockey.in as well as EBOs, where we have direct first-party information. We are trying to synthesize this data, first-party consumer data, by building a CDP, a consumer data platform, which is largely in place. We should be going live by end of. We are now ensuring that... We're being completely compliant with the DPDP Act and ensuring that all forms of consent in usage of this data is being secure. Once that is done, we would be in a position to leverage it. Now, leveraging this data is on two fronts. One is a direct impact on, you know, revenue in sense of cross-selling and up-selling products. The second and more importantly and a little bit more strategic is about understanding consumer buying behavior, having cohort level analysis of what is being bought, and feeding that back into our category management and product design teams to better make informed decisions on what to launch, how much to launch, etc. So that's something that we're building as a foundational capability within the organization.

Super. And just one follow-up there. At what stage do you expect these digital investments to kind of become a source of efficiency tailwind also to, let's say, operate, to unlock operating leverage and specifically the DMS improve inventory turns and replacement cycle also across the distribution network?

Yeah, so the DMS is underway, but we've not yet completely moved ahead. It's still a very small portion of distributors who are on DMS today. But the goal is... By end of this year, or latest first quarter of next year, all of the distributors in our network should be on DMS, and then give it about a quarter more to stabilize as a tool, and thereafter, you will start seeing efficiencies coming into the system. Great. Thanks, and all the rest for coming forward.

Thank you, Tej.

Thank you. A reminder to all the participants, please resist yourself for two questions. Next question comes from the line of Avi Mehta with Macquarie Capital. Please go ahead.

Yeah, hi, Karthika and Ikeem. Sorry, just two bits I wanted to understand on this growth outlook. You know, the way you're essentially witnessing and just clarifying, there should be, in the next quarter, there should be a benefit of these lost billing days as well as the underlying sales, secondary sales trends which we saw. I just wanted to clarify that part and that should rationally flow in the next quarter only, right? Is that a fair expectation to have?

That's correct. I think that's a fair expectation to have.

Perfect. And just on the, you know, input cost bit, see, I mean, if I recollect, there was some low-cost inventory benefit that we had in this quarter, despite that gross margin did come under pressure. Wanted to just appreciate how are we placed now, and should we see sequential margins kind of more or less now improving, or is there some pressure in the near term that we should kind of put it in? And in turn, how do you see the full year activity about this margin guidance? Would you agree that is 1921? Thank you.

As we stand, okay, go ahead, go ahead. Dependently, go ahead.

Okay, so mid of last quarter years, we did see inflationary conditions in the input cause especially, in fact, fabrics also went up and as well as any synthetic products that we are buying, it is petroleum-based. There also, there was a significant escalation. So while we did pre-positioning of supplies, We couldn't fully absorb the extreme increases that happened, but yes, at the end of June and even now, the things, the situation is to a large extent, normalize and going forward, we expect things to be stable, of course, if there's again an escalation in the medley The situation is going to happen differently, but as of now, we expect. It should be stable and with that our annual outlook on EBITDA margin will still be within this 19 to 21 percent.

So, if I am just clarifying you have the price basically what I am trying to say is the price hike that has been taken passes on the current input cost and hence kind of gets us back to Here we go. That understanding is I want to kind of just confirm.

You are right. So, we did initiate the pricing fees as Karthik said in mid of May. It did not absorb the entire impact of cost improve increase. Now, that will completely flow in Q2 and with that we should start getting the stabilization in the gross margins.

Got it, got it. No, I think Devangin has a question. I think I... I think I... Let me just clarify. I think the price increase that we have taken does not completely absorb the input costs. If the input costs continue to be or resumes to the level of what it was in April and May, then the quantum of price increase will not be enough. to observe the complete input costs. We have taken, and I think that's what MD also mentioned in this commentary, we've taken a very measured approach keeping in mind Not to outprice ourselves and keeping competitiveness in the market in mind, we have partially absorbed the input cost in the form of MRP increase, believing that many of these, both the raw material increase as well as operational costs through, you know, logistics, etc., are temporary in nature and should in a way stabilize going forward. So we've not, in a way, attempted to completely absorb the input cost in the form of MRP increase taken in me.

Got it. Very clear on this, Kathik. Kathik, I just had a bookkeeping and if anyone could try to slide with a speedo, you know, the drop in interviews, is there anything that we should be aware of? That's all. Thank you.

Yes, I think we've gone through a consolidation, especially in the swim business and the offline space, given how quickly that business has moved from offline to online. Today, our online contribution to the overall Speedo business is upwards of 35%, and hence our network of multi-brand outlets for Speedo has consolidated to about 700 stores in quarter one. But if I had to consider quarter four as well as quarter one, because typically multi-brand stores slash traders tend to build up inventory at the beginning of the season, which for Speedo is typically January, February. If I had to combine the two, it's about 950 odd stores.

Thank you very much.

Thank you. Next question comes on the line of Nihal Vahesh Jam, HSBC. Please go ahead.

Yes, hi, team. Good evening. Am I audible?

Yes, Nihal.

Yes, Nihal. Please go ahead. Yes, a couple of questions. So first one was again on the impact. You did highlight about the second part, which was the undelivered billing. Just to understand the first part, we have ARS being fully in place and as we highlighted in Q4 also that the channel inventory across all segments are sort of normalized, let's say close to between 45 days. So with that as a framework, what is the kind of normalization that we are looking at in terms of sales because generally Q1 is one of the higher quarters, given it's also a back to school kind of quarter. So just wanted to understand the first part better in terms of the two impacts that you highlighted.

Yeah, so it's got to do with how we design our schemes across months in the year. You would also have, if you see the last two years' performance, you will see how contribution of each quarter to the overall annual number has gotten a little more flatter. Prior to the implementation of ARS, we had quarter one being the biggest quarter of the year, which is not the case in the last bygone year as well. We're trying to see how we can normalize between the four quarters in terms of more or less equal contribution. Obviously, seasonality will play a role which is beyond what we tend to design, but by design to make sure that there is no inflation of inventory or any kind of push abnormally in one quarter when compared to the other. That's why we're trying to design our schemes to ensure that between quarters by design there is normalization.

Understood, Kartik. The related question to this was, you did highlight the impact of three days ballpark, which could have been related to billing. Now, if you just take a very crude of, say, three days contribution to the quarter, it is like a 3-3.5%. And, you know, we were clocking like a 14-15% growth in Q4. So, is it fair to assume, saying that you saying that underlying momentum is secondary slimmer, that because of this normalization, the 2-3% impact and the growth moderation is more related to this normalization? And the secondary trends or the tertiary, if you have your EPO data sort of remain similar to Q4.

Yeah, in fact, EBO has been better than Q4. We've seen quarter one perform better than quarter four when it comes to tertiary level performance in the EBOs as well as distribution secondary. But coming back to your observation on impact on the top line, I think you're more or less there in terms of what impact it has had on the top line.

Got that. And final bit on the RM impact side, incrementally, we would have covered for what proportion of the RM inflation that we're seeing with this second price hike in May also that we've implemented.

Very difficult to put a number or say what percentage of the impact has been offset with the price increase because it's been very volatile. March and April operated at very different levels. We saw further escalation in May, a sharp decline in June, then again gone up towards the end of June. So it's very difficult to put a number and say, you know, this portion of this amount of increase in input cost has been covered with MRP increase. What I can say to me is that it's only partially covered. It's also got to do with how we are forecasting the RM prices to be. And that's a bit of a punt because we don't want to be in a position where we've authorized ourselves because we don't want to discount the brand later on. And hence, And we've seen a trend towards prices coming back, not to, let's say, the pre-war situation, but definitely better than what it was in April and May. And hence, it's a waiting game as we go ahead. We are hopeful that, you know, it will not escalate to the extent that we need to come up with another price intervention. We believe that with this price intervention, we can operate in our targeted EBITDA range of 19-21. As long as we are able to operate in that space, I think the intent would be to hold prices and drive volumes.

Thank you so much, Karthik, for coming back.

Thank you.

Thank you. The next question comes from the line of Sameer Gupta with IIFL Capital and Indian Fuller. Please go by.

Hi, sir. Good evening and thanks for taking my question. First question is basically on the RM side only. So, I understand you will not be able to quantify what kind of RM inflation you are facing, but can you quantify the kind of price hikes that have grown in one in the system?

Yes, yes. So it's about 2.2% weighted average increase that we have taken in the month of May. This is on the back of 2.5% which was taken in the month of Jan. Jan, of course, had nothing to do with input price, but the May one, the 2.2% is directly as a result of increase in RM cost.

Just a follow-up on this one. So basically, in the first quarter, you still would be having a lower cost inventory given that price escalation only started from March onwards. So suffice to say that as you basically encompass the new price inventory in 2Q, these price highs will flow through, and net-net, we are in a similar situation as in 1Q.

No, see, if you see the number of days of finished goods inventory that we started with, we had some level of pre-war inventory and a lot of March inventory as well. And in a way, that is a net-net situation when it comes to Q1 opening. So, a large portion of our finished goods, and to some portion, the raw material that was procured was through April and May. But we also had pre-positioning of inventory, specifically in raw materials, to offset this RM escalation impact. But again, the escalation has been much higher than what we had anticipated. So, that impact did flow in in quarter one. So the price increase in May should help offset that partially. And now that raw material prices are better than what it was in April, May, it should have a net-net equal impact and take us back to, you know, early Q1 kind of a scenario.

Okay, so with the price hike, you will be back to like pre-Q1, assuming that the prices stay where they are today.

Yes, going forward, because we've already, I mean, the prices have come down when compared to April and May. If it sustains at this level, we should be okay.

Fair, fair. Second question, very different versus what has been asked. So there has been a minimum wage hike in Karnataka, and while garmenting at this point is still out, but we still have a very large workforce which is based in that state. A large number of our manufacturing units are there. Fingers crossed, but if we were to assume, you know, the worst were to happen here, a similar kind of a 60% minimum wage hike, if it includes garmenting as well, what kind of margin pressure are we looking at? Any indication you can give will be helpful, and another way to look at it would be how much percentage of our employee cost is basically at minimum wage in Karnataka.

So, the first announcement that was made with this regard, see, by the way, the minimum wage increase for garmenting has already been actioned in the month of April, which was applicable for garment industry. That's already flown into the salaries, and it has, in a way, hit our P&L as well. Now, the announcement that was made towards mid-May, which did not affect garmenting industry, still affects us marginally because of, let's say, third-party employed support staff, like security, like drivers, like our sales specialists at the stores, all within the Karnataka state. It is only to that effect that this second announcement by the government of Karnataka is going to have an impact, which is not a material impact in terms of the overall P&L. By the way, that also has now been withheld temporarily with the latest announcement made towards the end of July by the government of Karnataka. So as of now, and the first announcement was challenged and was in the court. Meanwhile, by the end of July, the government has withheld that announcement temporarily. So even if that were to go through, it's not going to have a massive impact because it does not affect employees who are directly related to garmenting. So all of our tailors who are today governed by the minimum wage code do not get impacted by this announcement.

So, you are saying that... Even, like, if there was a rollback of the minimum wages, it will still exclude garmenting. That's what – or the employees which are directly employed at your place.

That's what you're saying. Yeah, it always was. The announcement by the government anyway did not cover the garmenting industry. For garmenting industry, a separate announcement was made in the month of April itself, New minimum wages announced, and the same is passed on to all eligible employees.

Got it, sir. But subsequent to that, in May, I think there is a review committee separately made just to re-look at garmenting, and that is why the question that if we were to assume a similar kind of minimum wage hike that comes in through garmenting, what kind of margin impact are we foreseeing?

Okay, that is something that we have not done. Maybe it's something that we can do and come back with a number because the announcement that was made was clear that it was not to do with garmenting. It still affects us, like I said, for, you know, associates who are not directly involved in garmenting, but that did not have a material impact on the P&M.

And just a question. Just to clarify, even that initiative also by the government seems to be going slow because there has been change of hands of government at the ministry level, and things are going very slow on that trend.

Got it, sir. That's very helpful. Last question, if I may squeeze in. I have seen your annual report, and in that, the ad spend, selling, and distribution expenses are down 5% in FY26, and I believe this also includes the commissions that are paid to the third-party e-commerce channels. Now, in a year where e-commerce has grown at 60%, I was just wondering why overall ad spends are down 5%. Would it imply that we have meaningfully moved to an outright sale model to e-commerce platforms? And if yes, what is the rationale? And if you could give the salience of outright sale and marketplace model within e-commerce, the other implication would be the brand level sales itself has been meaningfully cut down. Again, just wondering why that should happen.

Okay, so within the e-commerce business itself, if you had to look at it between marketplace model and outright model, yes, the contribution is shifted more towards the outright model. And this is largely because of quick commerce. Quick commerce, we cannot operate on a marketplace model. With the large, with the, you know, fast-paced expansion of the quick commerce players, all of them operate on an outright model with jockey. And that's why you see a swing in business tilting towards outright when compared to marketplace. Even with, you know, traditional marketplaces, our endeavor is to actually operate on an outright model when compared to marketplace. Because the last mile delivery and consumer experience happens to be better. Because we today operate with two fulfillment centers, one in south and one in north. Whereas most e-commerce players that you can think of operate with a lot more DCs, distribution centers and fulfillment centers, and hence the SLA to the... The chat to deliver to end consumers is a much better and results in better consumer experience. So that's something that has definitely had an impact. In terms of overall brand spend, the difference that you're seeing is because the year before last financial year, we had a large campaign for the World Cup, which was a disproportionate spend, which did not follow through in the last financial year. That's the delta that you see in terms of lesser spends at a brand level. Otherwise, the intent is to continue operating between a 4% to 5% of the revenue towards marketing.

Got it. Just very clear. Just a follow-up here. So basically, going towards an outright model, you also will be losing control of pricing on these marketplaces. Would you be comfortable with that as a strategy?

No, so we are looking to, you know, have the best of both worlds. We are in strategic partnership with both of our, with majority of the marketplaces where we are operating in outright to ensure that price governance is maintained and, you know, we don't in a way dilute pricing principles to the end consumer. We're fairly confident that that is something that we'll be able to maintain.

Got it, sir. Thanks a lot for all these very detailed answers. I'll come back in the queue for follow-ups.

Thank you. Thank you. A reminder to all the participants that you may press star and want to ask a question. Once again, a reminder to all the participants that you may have a star and one to ask a question. Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. And now I hand the contents over to the management for closing comments.

Thank you for being with us today. We truly appreciate your continued interest, confidence, and support. While the operating environment continues to evolve, our focus remains clear to serve our consumers better to strengthen our brands. Execute the discipline and build the business that creates enduring value. We look forward to engaging with you again the next quarter. Thank you again. Have a good day.

Thank you. On behalf of Page Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.