Adita Lifestyle Brands Q3 FY26 Earnings: Strong Growth and Expansion Insights

and welcome to the third quarter earnings conference call of Adita Bila Lifestyle Brands Limited. The call will

begin with a brief discussion by the company's management on the Q3 FY26 performance followed by a question and

answer session. We have with us today Miss Ashish Dshit Managing Director ALBBL

Mr. Vishak Kumar deputy managing director and CEO ABLBL Mr. Dr. Dhmra Loda, CFO, ABLBL.

I want to thank the management team on behalf of all the participants for taking valuable time to be with us.

I must remind you that today's discussion may include certain forward-looking statements and must be

viewed therefore in conjunction with the risk that the company faces. Please restrict your questions to the

quarter performance and to strategic questions only. Housekeeping questions can be dealt

separately with the IR team. With this, I hand the conference over to Mr. Dhindra Loda. Thank you and over to

you sir. >> Thank you. Good afternoon everyone. Thank you for joining us today. I would

like to welcome you all to the quart26 earnings call for Adita Lifestyle Grants Limited. As we reflect on demand during

the quarter, it began on a strong note with healthy momentum through October and November before moderating in

December partially due to a shift in wedding dates. Additionally, a portion of the festive

season played out in the previous quarter this year compared to quarter 3 last year impacting sales growth in the

current quarter. Against this backdrop, through a sharply focused and disciplined execution across

brands, ABLBL delivers strong double-digit growth during the quarter with healthy performance across

channels. This high growth on a disciplined and tightly run cost base, delivered strong operating leverage and

further margin extension. Now moving to the financial performance of our business. Overall revenue grew

10%age yi to reach 2343 cr rupees led by strong performance across brands and channels. Lifestyle brands grew at 9%age

yi while emerging businesses grew at 13%age versus last year. Overall business delivered 6% liketo-like growth

despite the festive shift continuing its strong performance. Other channels also recorded a healthy rebound with both

trade and e-commerce growing double digit. Operating on a solid and profitable base, we expect growth

momentum to remain strong and profitable going forward. Consolidated up 21% in this quarter

driven by strong operating leverage at the back of double digit sales growth. In absolute term, EIDA stood at 4, 431 K

rupees compared to 355 cr rupes in the same quarter last year. IDA margin expanded by 180 bips from 16.6%age in

quarter 3 FI 25 to 18.4%age 4 percentage in quarter 3 FIR 26 PAT at 100 crores uh growing 66% versus last year reported P

came at 69 cr versus a PA of 60 cr in the previous year this includes a one time exceptional item pertaining to

impact of labor code this quarter or net debt reduced to 800 K rupees as of December end from 1,000 K in September

end moving to the year to date performance Overall revenue stood at 6,230 uh22 cr

rupees up 6% yida grew at 12%age in absolute terms to,54 cr rupes versus 940 cr rupes in uh

previous year with margin improving by 100 bits to 16.9%age despite higher advertisement spend

versus last year. Reported PBT PAT was at 117 cr versus 21 cr rupes in last year. Our normalized PAT for the 9 month

YTD stood at 147 K rupees up 55%age versus last year. We continued our expended uh our network adding around 90

plus stores during the quarter as expansion momentum gained pace during the quarter. These stores are larger and

feature more impactful facets along with a sharper and more relevant assortment. We expend we expect this momentum to

continue with further addition meaningfully contributing to our sales growth.

Our footprint is now 3,300 plus stores spanning over 4.8 million square ft across more than 785 cities and town.

Turning to our lifestyle brands, uh the business delivered growth of 9%age during the quarter supported by healthy

liketo-like growth of 5%age. This marks the sixth consecutive quarter of sustained lactolike growth.

Performance across other channels also improved meaningfully during the quarter while secondary sales continue to remain

strong in line with past quarters. Quarterly revenue for lifestyle brands stood at 22 crores with an IIAida margin

of 20.6%age. This is the highest epida margin excluding any one-offs both on pre and

post India basis for lifestyle brands in last four years. Growth during the quarter were driven by a combination of

targeted product portfolio upgrades particularly in wedding categories and continued enhancement to the instore

experience. Ongoing innovation, the addition of relevant assortment and focus efforts to

attract new customers to stores help deepen our customer engagement and further reinforce brand salience.

Our emerging business portfolio comprising Zebok, Vanusen innerware and American Eagle now spans over 375 stores

with an addition of 20 plus store in this quarter. The store network delivered a robust 16% likelike growth

during the quarter. Segment revenue grew at 13%age on a comparable basis excluding forever 21 in the base growth

was even higher at 19%age. Profitability improved by 790 base yi reflecting positive operating leverage

and continued improvement in manus in business. Performance during the quarter were driven by strong product innovation

and compelling marketing initiatives. Rebok delivered a 20% plus growth in this quarter with strong improvement in

profitability. Overall network expanded to 200 plus stores doubling from 100 stores at the

time of acquisitions. American Eagle remained on sustained profitable growth trajectory delivering

doubledigit growth in quarter 3. Vanosa business grew at double digits in this quarter marking a strong recovery

after several subdued quarters. Business also saw a sharp decline in losses and is consistently pursuing the path to

break even. In summary, despite festive and wedding related shifts, ABL delivered accelerated momentum during

the quarter. Performance was supported by focus initiatives including product upgrades across categories and ends

retail experience. discipline store extension and sharper implementation across channels. Looking ahead, a strong

score addition pipeline, sustained detailed growth and improving performance across other channels

provide confidence in the continuity of this growth trajectory. In parallel, emerging brands are

expected to begin contributing more meaningfully supported by clearly defined strategy around growth and

profitability. This portfolio is expected to be 1/4 of a overall ABL business in next four to

five years. Together, these efforts will deepen our presence across key micro markets both existing and new, while

ensuring we are relevant in the lives of our consumer that indeed is of strategic focus. With disciplined execution to

drive this strategy, we believe the business is well positioned to translate this momentum into sustained long-term

value creation. over to you. Thank you. Thank

>> Yes, please. >> Thank you very much. We will now begin with a question and answer session.

Anyone who wishes to ask questions may press star and one on the touchstone telephone. If you wish to remove

yourself from the question Q, you may press star and two. Participants are requested to use handsets while asking

questions. Ladies and gentlemen, we will wait for a moment while the question Q assembles.

To ask questions, please press star and one. >> The first question is from Vidisha from

Ambbit Capital. Please go ahead. >> Yes. Hi. Uh my first question was that uh time and again since the de merger

announcement it has been called out that no fund raise would be made in either of the two entities barring for the

tomorrow business but in yesterday's filing it was mentioned that nearly 500 crores of NCD issuance was approved by

the board. U so can you please highlight as to what would be uh the utilization areas for this fund raise and by when

are you looking to when are you intending to raise it? >> Thanks Vidisha. You know uh at the time

of de merger the company got the borrowings transferred based on the allocation formula the 500 cr debentures

which we repaid recently in the month of January we intend to raise it and you to refinance the existing the debentures

repaid there's no boring boring >> got it so uh how should one be looking

at the reduction in the net debt amount because I think in earlier calls you called out that every year the net debt

won't reduce by um I mean substantially by two three years it should be net cash. So any any thoughts over there?

>> So if you see from March beginning of 800 cr the September borrowings were roughly 1,000 cr which we reduced to 800

cr. The plan is to reduce it bring it to by another 75 to 100 cr but you know Vishak and Ais can talk on the growth

growth capex after de merger which was the rational which we conveyed that the company will have the growth capital

available to them. Vishak ais vishak you want to just come in. Okay uh let me answer this question. Uh

just to give you an overall summary, the business uh generates through profit uh which is through Eida uh a cash

equivalent of close to 900,000 crores. Uh part of it goes into working capital funding. Uh the other part goes into

capeex. Uh typically we have been spending close to 150 to 200 in the best years maybe 225 odd kind of cex. uh one

of the primary reasons for de merger was to create an entity which can reinvest back more aggressively into growth. Some

of those signals are visible here. This year a cape will be uh north of 300 crores perhaps 320 330 crores and that's

really why the debt reduction is not very large this year. We still feel that over next three years which is what we

had indicated the the net debt will be closer to zero in this although that's not the only goal we're driving here.

Okay, sure. Uh the second question was on net basis. What is the store edition of what could the store edition of

lifestyle brands look like for FI27? Any any number or guidance that you'd like to call out?

>> Um we've added about 50 plus stores in this quarter. Our sense is that we should add another 90 plus net stores in

the next quarter. So that would take the overall addition to about 150 stores this year. We also have already built a

pipeline for next year of 120 odd stores and that momentum should continue. Whatever we are able to find right up to

November, December would be expansion for next year. So it should be another significant expansion year going forward

next year also. We already have a pipeline of about 100 odd locations that we've identified where our RBD team is

looking at properties etc. Uh usually we convert half of that. So you should look at another significant expansion year

next year Visha. >> Sure. I'll get back in the queue for further questions.

Thanks. >> Thank you. The next question is from Archa Menan

from Morgan Stanley. Please go ahead. >> Uh hi. Thank you so much for the opportunity. Um my first question was

mainly on the demand side and the revenue growth that's been posted. So is there any divergence this quarter

between the primary and secondary um sales growth and is there any element of channel restocking after the GST related

um disruption in the second quarter? >> So uh hi Asha uh three questions here. So first is the impact of GST has been

pretty much digested through the quarter. Okay. So there's no change in stocking or stockholding with any

partner because of GST. So that's there was first couple of weeks of that but that has been digested through the

quarter itself. Okay. Uh to the second question around demand like Dendra had said in his opening uh statement u

October November were strong demand months. uh December um the wedding calendar was such that the last of

weddings was on I think 5th December. So the the calendar was not the same after 5th December. Uh Q4 again there are

weddings and uh February on February March onwards there are weddings. So that that impact of demand is there

because of that. In terms of the last question you asked which is on primary versus secondary uh nothing unusual

usual uh practices around season launches and build up towards season and end of season is what has broadly

happened. They've had robust secondary sales across uh department stores which is what has led to an overall primary

sales also being fairly healthy. Partner to partner there might be variation some higher some lower than uh secondary

depending on uh their inventory situation. Also some partners would be expanding more etc. So that would be the

ups and downs but no uh general trend around uptocking or down stockalking. >> Understood. And uh how have trends been

in January? >> Uh you know uh the calendar is uh is uh is

such that the most of the weddings began uh from the the wedding season began postmukar sranti. So we've had an

encouraging uh second half of January and my sense is that momentum should continue uh through uh through the next

couple of months. >> Understood. Very clear. And just finally so I think this quarter in terms of um

your growth itself with return to double-digit growth which is your ambition after many quarters. Um so do

you expect this double digit momentum to sustain >> in 4Q and in 1q?

>> Thank you Arna. you noticed uh yeah I think uh you know we we've said this for uh some time you know we we want to be a

steady double digit growth and aid uh you know 11 12% uh steady uh sorry the pre India's margins uh so that is

something which we should go on momentum if you see even in the last few quarters our retail has been very strong we had

some course corrections to do on the wholesale side of business and the e-com side of business most of that is done so

you should see a a more steady trajectory hopefully over the next few quarters.

>> Understood. Thank you so much. I'll get back into the queue. >> Thanks.

>> Thank you. The next question is from Gorov Joani from JM Financial. Please go ahead.

>> Uh thank you for taking my question. Uh my first question is with regards to the wholesale and the uh the other fees of

the business. Uh Gorov, I'm sorry to interrupt, but we can't hear you very clearly. If you're

on a hands-free request you to use the handset, can you hear us?

>> Hello, you can hear us. Uh maybe there's a network issue. we request you to go uh

to an area with better network and please rejoin the queue. Uh we'll move to the next question. The next question

is from uh Samir Gupta from India info line. Please go ahead. [clears throat] >> Hi good good evening everyone and thanks

for taking my question. Congratulations on a good set of numbers. Uh am I audible?

>> Yes. Hey, so firstly uh so there has been a DST cut for apparel below 2,500 and above 2,500 there has been an

increase. U so just wanted to get a sense on what would be the blended price decrease for a consumer of lifestyle

brand uh plus and minus both these aspect increase or decrease I mean whatever has happened at the consumer

and if you can help me with that number. Okay. So, uh the parts of our business where it has a benefit uh especially uh

brands like Peter England uh brands like uh uh Reebok in in Paras etc. So there is benefits there. There are some parts

of business especially in wedding parts of business there's negative because those move from 10 to 18. Overall it's a

small net negative but not a significant one. >> Oh okay. I was but in lifestyle brands

it would still be a decent benefit right because uh uh overall discounted sales I mean the full price sell through etc. uh

uh I guess you had indicated sometime that 50 50% of the portfolio would be above and rest will be below. So 40% of

the portfolio has actually benefited something like that. Yeah. Uh

it's like I said it's product to product. So let's say on t-shirts it's a gain on suits and blazers it's not etc.

Alltogether lended weighted average with current sales ratio it's a small negative. If some other parts of grow

business grow faster etc it could be uh neutral also. >> Got it sir that's also very helpful. Uh

second question sir on the innerware and a pleasure segment. Now this quarter has seen a doubledigit growth and this is

growth after many many quarters in this segment. Just wanted to get a sense on what has led to this turnaround after so

many quarters of weakness. So I think uh lot of uh initiatives which have behind the business they are

coming into function now. So one of the biggest things which has happened Samir is the kind of retail likes to like that

we've had we've been fine-tuning our retail model for innerware uh and retail likes to like have been north of 30% in

this side of business even by if you look at it it's been a very very strong 25 plus% L to like that we've had in

this business so that has also improved overall profitability because uh the retail profitability retail viability is

uh a lot better with that uh we've also done various initiatives around product innovations, other things around methods

of replenishing with distributors uh various things which are going on which are you know intrinsic and hence likely

to stay in the business. You recall that we've also had some quarters of inventory correction which was a tough

phase that we had to go through. uh most of that is behind us and uh as with that what happens is you're able to infuse a

lot of freshness of merchandise into the market that also spurs growth further. So uh I think it's maybe a few more

quarters of just fine-tuning that model and then it should be able to uh take off on a even stronger growth

trajectory. >> Got it. And uh you would still attribute this as most of the initiatives that you

are industry still where it was there is no real change there. I would think so. I mean uh if you're

saying are there significant tailwinds in this category? Not yet. Okay. Uh but again uh to uh earlier question uh you

know uh that you had uh BS helps this side of business also. So some of the uh impact of that should also start here.

>> Sorry again I didn't I didn't get that. Impact of what? Sorry. >> And the GST change again. power of

business is also a good thing. Yeah. For a lot of athleisure parts of business etc. It's a it's a good thing uh for

this uh this part of business. >> Got it. Got it. Yeah. That's that that is something we'll Yeah. And lastly if I

miss I think Gor was also trying to ask this. So the wholesale under lifestyle brand that has seen a growth of 21%. And

past two quarters has been subdued before that it was good. pre that it was a decline. I mean is there a change in

strategy here? The segment has been bit of up and down in past few quarters. >> So two things uh one is also ask same

question uh you know one is we had the uh base effect of central and the transition that we went through in

centro in the past that is out of the base now. So you know so you will see in that sense a more applesto apples

comparison. uh beyond that uh there is also the strong secondary sales growth which we've uh we've had in the last few

quarters which is helping us. So those are some of the factors which are going in. Likewise on the uh e-commerce side

of business we went through one phase correction lot of things that we did to sharpen the model. Large part of that is

also done and that also again is reflecting in the numbers. Just for my understanding sir on the wholesale piece

this is a mix of consignment as well outside sale or now it's primarily outside that we book in this

>> sorry can you repeat that samir I'm so sorry >> so what I mean is that the wholesale

channel the the sales the way you record it is it on a consignment basis you record the end consumer sales and the

inventories on your books till that end or do you book the sale to the distributor and to the retailer and uh

with the margin how does it work? >> So we recognize revenue when we sell to our uh customer. Okay. Our entire terms

of trade are built around that that we recognize revenue when we sell to the partner.

>> Sell to the partner not the end consumer >> not to the end consumer. In in retail confinement retail sales we recognize

that when we sell to end consumer. uh in the wholesale side of business we recognize revenue when we sell to the

party. >> Got it sir. And there is no change in the accounting over the over the years.

This has always been the case. >> No, always been the case. In fact, uh we are extremely conservative in the way we

recognize revenue uh in the way we recognize docy all of that. So uh no change in the way we uh recognize.

>> Got it sir. Got it. Uh that's all from me. I'll come back in the future for any followup. Yeah.

Thank you. The next question is from Dvanchu Bansal from MK Global. Please go ahead.

>> Hi Vishak. Uh thanks for taking my questions. Uh so first question is on retail channel growth. Uh uh if we

compare this uh growth with some of the other players that have reported so far uh it's it's a tad weaker. uh even the

LTL that we've reported is uh running a tad weaker versus uh the other players. So I just wanted to check within the uh

marketplace. So what is leading to uh this weakness for our brands? >> So if you split the uh brands in the

market into brands which have a significant wedding impact versus brands which don't have uh impact of wedding

calendar in our own portfolio. You'll see that. Okay. Uh whether it's on Reebok, whether it's on American Eagle,

it's on Innoware, uh they would have all had very very high aggressive uh double digit uh secondary growth uh L2L growth.

Parts of business which have had a greater dependence on weddings, the that evaporated after 5th December. So you'll

see the impact of that. Uh so it's it's more of a thing. Uh if you look at our retail sales YD uh December, it's still

double digit. at 10% for lifestyle brands itself. So some of it you you know you you get the benefits of

calendar and some quarter you don't in the other even if you see it for the overall industry itself you will see

that pattern for uh brands which have a greater dependence on weddings. >> Uh that's fair vish but I was taking

from a 9 month perspective also. Uh so if we see our uh retain sales growth has been uh a tad weaker versus what other

players have reported. >> Uh so even on a n >> no 10% like for like a 10% like for like

in in three quarters which is vitally deep. >> No no that is like for like sir but uh

from a consumer perspective I guess it's the retail channel revenue growth which matters right. So like for like is okay

but from a market perspective I guess the overall growth is a better metric to track your market

share. So that growth has been tad weaker versus what other players have reported and the difference is almost to

the tune of 500 600 basis funds. >> No no uh uh it's our retail overall would

also be about 8%. So >> yeah the other I was referring to if you want from urban fashion perspective we

reported almost uh 13% growth in 9 months right so so possibly and maybe we could look at

comparisons etc but all I want to assure you is that in our brands we are at a like to like of 10%. uh to the question

Arjuna asked earlier. Uh some of the impacts of the retail expansion will start showing. Now this quarter itself

was a significant impact of net expansion that you will start seeing in the overall growth. Q4 will see that

even more where there is about a 90 net store addition that you will see. So if you look at it, we will enter into next

financial year with a 150 store larger network than last year. that itself you know broadly is a 5% extra business in

retail that you would have next year. >> Sure. Sure. And uh Vishak just one uh bookkeeping understanding. So your rent

expense uh which is largely uh franchisee commissions in my opinion uh has been on a declining trend by about

100 to 150 basis points uh both in Q2 and Q3. Right. So what is driving this change as in uh are we shifting from u

uh franchisee stores to company stores? Is that leading to this change? >> Not really. So look, it's a uh it's a

it's a network of stores is a balance of stores and uh coco stores. So uh uh we've been driving a lot of initiatives

around cost reductions. Uh there is uh also you you must recognize that um when you've had a retail network which has

grown 10% on like for like whereas your store costs grow at about 5 to 6%. So that also gives you the cost leverage

right? So that's commission right this must be percentage of sales. So, so we have we have uh uh a significant number

of poker stores where we pay the rents directly and an equally strong network of franchisee stores where it's a

percentage commission where it's a percentage commission the percentage doesn't change it. It helps the

franchisee to make a better ROI. >> But this in the P&L rent expense that we report this is largely the commission

paid to the franchises. If you could confirm that right in the reported P&L this is the

franchise commission >> yeah largely it is the variable rent so it is both franchise commission as well

as the variable rent which you pay to mouse >> yeah that was my question so why is that

as a percentage of sales reducing >> okay is that question answered now I think it's the leverage operating

leverage of having a higher uh like with Excel which is what is bringing that down.

>> Sure. I'll take this offline. Uh maybe uh I I'll take this. >> Better you connect offline. We'll

>> Sure sir. Sure. Sure. No. What is the >> Sure sir. No issues. Thank you. Thanks for taking

>> Thank you. The next question is from Ankit Kadia from Philip Capital. Please go ahead. Uh

>> two questions from my side. Um in the quarter we saw you know gross margins decline marginally. Um industry trend

suggests that the discounting is actually reducing and you have also done that. You can see that in a channel

checks. Uh so what is leading to this gross margin decline? >> Uh not sure where you're seeing gross

margin declining. Kit uh which where are you seeing because actually cross my fairly healthy uh Dinda you want to

respond to that which uh the CGS for corresponding Q3 FY2 5 was 41.1

this time it is 41.4 four it is of the overall business including you know lifestyle brands plus various other

businesses so I think uh this is a composition of various business lines >> it's more in the range

>> more or less business mix >> then uh any shift >> and the change is only cost

>> so if you can highlight in uh lifestyle uh what is the gross margin expansion we are witnessing due to lower discounting

and which business is actually dragging the gross margin down from the mix perspective.

>> Okay. This is at the publish result level lifestyle. I have to dig out separately. We can connect separately.

Yeah. >> Sure. Um my next question is on inare. Uh we have seen strong growth in the

innerware category. Uh what is leading to this growth um overall and I what changes are we doing in the inearware

category from a medium-term perspective? >> So I think asked a similar question. So let me just tell you that two three

things are happening which you should uh you know uh see the see the benefits of that. Uh one is of course the sales

growth that you've seen and like I was explaining earlier as inventory freshness improves the health of overall

inventory improves etc. that is giving us a good impact that is also giving us a significant impact on profitability.

In fact our losses in this business this quarter have halved. So that is again something that uh is reflected in the

overall numbers. The other like I was explaining to Samir very significant improvement in retail performance. So

retail like for like and likewise in department stores etc. very strong store performances that we've had which have

bring which have brought down the fixed cost as a percentage of sales resulting in both overall growth as well as

improved profitability. In addition to that, Tankit running a lot of uh initiatives around uh quality of

replenishment mechanisms to distributors, running pilots around uh lot of new product initiatives. Uh many

things which are going into into driving overall uh overall traction in this category. So it's it's uh a lot of those

things are falling in place quite nicely and so over 2 years if I have to see do you think you can have a mids

singledigit margins by fi28 in this business and what will be the ebo strength if I have to see from a

medium-term say two years out uh given that now unit economics is set for the business product is new everything is

changed yeah >> yeah so u okay first question the fi 28 I hope is going to be a profitable uh

year. Uh I don't want to comment on what kind of profitability but I'm hopeful that FI28 will be a profitable year and

that's the kind of trajectory that we've built for ourselves right now. Uh yes uh you're right on the network part the

retail network we've got a reasonably robust proof of concept. Now we also want to uh strengthen further the uh

partnerdriven model here. There's a model which can work nicely service through distributors, neighborhood

catchments, tight shop stores which have a nice sharp assortment which is relevant for that neighborhood. Some of

those also we are working on different sizes and formats to be able to scale that. That can be a pretty significant

exponential scale up. So don't want to put a number on that now but uh by and large you should expect to see a

significant scaling up of the retail network >> and um what it's been more than a decade

now we are doing this business right and we have had cycles u what gives you confidence now this change what we are

doing is there because you know the some of the D2C startup brands both on at leia and in our side have started to

become aggressive while some have also closed shop but we are seeing new competition also emerge right. Uh and

the market leader is slowing growth and some of the private labels are also started to do well. Um now

you know the changes which you have you know talking of you know how confident that these are the right changes to be

done in the market. Now >> I think first thing is uh the biggest thing which gives me confidence

personally is the uh consumer acceptance of uh of this brand and this category. I think the consumer stickiness on those

who ever tried the product is very high and that gives us tremendous confidence. So a lot of initiatives by which we've

been able to generate trials they've all translated into secure business with consumers. So that's the first thing. It

is I think it's a fairly wellestablished distribution network with the kind of distribution points that we've got with

the kind of retail presence that we've got presence in department stores etc. I think it's a fairly u you know uh uh

strong network which is also getting u steadily more uh welloiled machine kind of thing in terms of replenish this you

know is ankit it's a sticky replenishment business so you know as you keep getting better and better at

that process and the wheel is nicely balanced uh it it's a nice flywheel that works for you we are fairly close to

that in my sense so uh you know I would say that some of the uh last few years learning also come in handy in terms of

making sure that we do the right thing going ahead >> and between at le

3070 or would at leer percentage for us >> uh let me take last quarter's exact numbers maybe if we just put that

together uh number broadly you'd be right but let me not make a mistake on that so I'll give

you a a sharper number you can take the next question and answering between. Thank you.

>> Thank you. The next question is from Rajiv Bharti from Noama. Please go ahead.

>> Uh good afternoon sir. Thanks for the opportunity. Uh so continuing on the inner web piece if you can um clarify

what is uh the GT channels contribution in your uh entire mix. So when you say GT you mean the trade uh

business >> trade original trade yeah yeah yeah >> uh just check I'll give you an accurate

number um >> it's around 50%age >> it's still less than 50 yeah

>> got it and and the other part is in terms of the capex number which you have highlighted the 330 cr can you split

between your lifestyle brand and youth brand how how does it stack the >> line share would be for the lifestyle

brands probably 80% of that spend would be lifestyle brands, maybe a little more than 80%. Uh we've invested a lot both

in terms of uh expansions and renovations. We've also made stores larger uh created stronger shop facads

etc. So uh it's been a fairly significant uh impact on the lifestyle side of business.

>> And and and you you made one comment and and there's an opening remark in terms of you know you're looking for a steady

growth. Assuming that you look for let's say 10% growth on the top line on a conservative basis for the entire piece

um then on the back of the and and the comment which was made was that you know the emerging brands will become 1/4 of

the turnover uh in 5 years out that means you're you're projecting for a you said 22% kind of a growth on the

emerging brand side with bulk of the capex routed on the lifestyle brands I mean uh how how does uh is this is this

capital right the the emerging brand category. >> So two three uh uh responses to that

Raj. Uh so first is that uh the emerging business is still on the lower pace. So uh relatively speaking it right now

needs lesser capex but u we are not um averse to adding more uh for that side of business as well uh as we as we scale

up there. Um I'm personally between you and me and I've said this earlier as well. I'm hoping more for a 12% kind of

a steady state growth and we should uh aim for that. We will have pluses and minuses over quarters but we should we

should be able to drive something closer to that. uh and definitely uh innerware, Reebok these of business have a very

large role to play in overall driving because there the uh the base itself is relatively small and we should be able

to scale up much faster in that side of business. Reebok has had a uh has had a very good uh quarter and the momentum

looks very good. We've already doubled our network from what we bought on Reebok. We should exit this year. We've

already 200 plus. We should exit this year with 230 plus stores on Reebok. And I think there is still um a very large

um set of markets which are available for putting up stores on on on Reebok. So I think uh while a lot of questions

have been around in a way there are various other parts of business which are also poised for fairly strong

growth. Uh >> I think also also just to add to that uh

we have a fairly large distribution of uh lifestyle brand stores and a significant part of our capex goes in

renovations and making upgrading those stores and therefore in absolute terms the the because those number of stores

are so much higher uh and the emerging businesses are relatively newer they have less renovation needs. Uh that's

also another reason why uh the current capeex that won't be the case all the time is significantly higher in

lifestyle. >> Sure. So so thanks for this this 12% number. Uh so if I reverse work the

number becomes 24% for the rest of the category. So what is the network edition and the SLG assumptions in this?

>> So on a steady state and we had said this earlier this year as well uh 6 to 6 7% of lack for like is what we should

expect uh in the in the lifestyle side of business and the rest of the growth comes through expansion. uh of course

every year is not going to be the same but let's say in a 3,300 store network if you're able to add even say 200

stores that is 5 6% growth that is coming out of u network expansion in that side of business I think there is

headroom for at least 3 four years of growth like that in terms of network expansion

>> I was asking from let's say new brands and innerware uh sector uh piece >> okay where the headroom for growth is

even stronger Rajie. Uh you know because uh let's let's look at it this way. If say a brand like um Louis Phipe has a

network of 500 plus stores there's no reason why a brand like Zebok cannot have more than in fact category like

that can have an even larger uh play in terms of network size. So in that side of business it's even more aggressive uh

growth possibilities that exist. Likewise in inner there is also the possibility of many more the opportunity

of many more neighborhood markets as well. So there again the um the headroom uh is is much larger beyond the beyond

the part around the what what you would call GT GT or general trade. >> Sure. So just one last question on

innovate. Has there been any price hike? >> Sorry indeed. >> Has there been any price hike on the

entire innovate portfolio? No actually we pass down the GST benefits to consumers. So you you will uh you know

uh you would have seen that uh you know a lot of segments which had a 12% which moved to 5%. So we passed that on to

consumers. >> Sure. Uh that's all from Thanks for >> Thank you.

>> The next question is from Tjas Sha from Aendis Spark Institution Equities. Please go ahead.

Uh hi, thanks for the opportunity and uh sorry if I'm repeating the question but I logged in a bit late. Uh can you

provide some regional color on the lifestyle brand performance specifically? Are we seeing any uh

demand pressure in urban IP heavy markets let's say Bangalore, Hyderabad, Pune.

>> Okay. Hi pages uh uh yes we missed having first question from you uh uh just to give you some color one is that

uh pages this year uh small towns have had a good run okay so while I can't give you regional uh that there have

been too many regional biases but purely um uh small town India has had a good run you know that small town India went

through few tough quarters this year it's been you know our own same growth pages in small town ITG would be about

13 14%. Okay. So, small town India has had a has a much stronger uh run. Uh other than that I can't uh point out any

region specifically which has grown more or less. >> Perfect. Very assuring

uh you spoke about the lifestyle portfolio. lifestyle portfolio uh has a very strong loyal base of customers uh

but but the growth is moderating and it's actually uh it answers there it says that it's a very matured portfolio

or at least the size is huge in terms of both distribution uh and in the absolute number so what are the biggest uh or

where are the bigger wide spaces is it new formats locations geographies that can actually help us to go into let's

say double digit growth sustainably and not is just one or two low base highways kind of uh triggers.

Uh I guess uh simple answer all of these that you've said and a few more like uh [clears throat]

very very large brands. Uh you know uh fashion business doesn't have a billion dollar brand. Uh most other categories

have very very large brands. So you know let me play put it this way. uh take a brand like uh say Louis Philippe which

has 500 plus stores. The uh opportunity for a brand like Louis Philip in India should be about 1500 stores. So maybe

the the the methods of opening these stores. The formats will have to be more nuanced. We'll have to find the right

regional assortment requirements etc. But we've been figuring formats which have worked. There have been formats

which have been more casual driven, formats which are more wedding driven and so on which have worked fairly well.

Uh we have also created u we just uh put a bridge to luxury store from uh little called Philip which we've opened in DF

Prominard in in Delhi which is again been off to a very good start. So a lot of new format uh new new segments new

usage occasions with consumers uh as they as they emerge again are other growth possibilities. other parts of

business. Women's wear again is another in two of our brands we have very meaningful women's presence whether it's

in Venus or in Alen Sulli. So that is again another uh opportunity for growth. Uh so there are various segments. So

there is of course distribution and presence etc. Uh many of our partners are also looking at aggressive growth

plans. Some of the department stores are looking at growth plans that adds to that. Uh the the e-commerce space also

with quick commerce is also driving consumption. and there is opportunities for growths there. So I would say yes

while it might look like look these are large brands I still think these are very early days in the evolution of

these brands. >> Yeah. Uh my next question pertains to Reebok from from day one since we

acquired it looks very promising. Uh but uh and then when we look at the other player numbers also in this space that's

actually very very healthy. So and then you also called out there's a huge possibility to expand footprint as well.

So where what is the limiting point as of now? Is it that the brand product market fit is yet to be established

before we scale it up very fast or the route to market itself is not very clear or as of now before we scale it up.

Okay. Uh just to give you some facts here we've more than doubled our business in the last 3 years. Okay. In

Rebok. Okay. We more than doubled our business. Uh in spite of all the market challenges or whatever that might have

been, we have more than doubled our business. We have more than doubled our network. By the time we exit this year,

we'll be close to triple of the network that we had uh inherited. So it's been at a fairly significant pace, but you

would argue it was on a small base. And you're right. So the good news is that we're still relatively uh on a on a

small number and hence the headroom for growth is quite significant. Uh let's look at what are all the things which

are going into the mix which have to make this uh this faster growth happen uh continuously. Uh first is on product

assortments itself. So a lot of very good work has happened in Reebok across categories. The Reebok which was uh you

know um in in its early years in India very very strong across multiple categories had uh you know uh got

limited to largely lifestyle kind of footwear uh uh before we we we took it over as we've gotten into this segment

you know and uh we we've added a very strong line of walking very strong line of performance footwear some very very

good running uh shoes you know in the in the segment and in fact we have some very top quality you know most of the

running shoes in India carbon plated running shoes are all about 10,000 bucks we've got very nice uh carbon plated

running shoes at 9,000 rupees and so on so there's a very strong assortment of footwear that we've been able to

generate also big lever for growth you know we've been able to leverage our expertise on apparel creation and

apparel uh product uh designing etc very strongly when we took on the brand uh the apparel contribution was about 25%.

Today it's a little more than 36% already. That is again driven growth and but I still say that there are many

segments which we can do even more of. So that is again driving growth. Then there is network and we've still only

scratched the surface on network and there's a very large opportunity which exists on on geographical markets that

we will scale to. So it's it's very very exciting times in this segment. I also think consumer acceptance uh more and

more health and fitness is is becoming even stronger as as market trend. So this is uh an interesting time to be

debuck. >> Thanks. That's all from myself. >> Thanks.

>> Thank you. The next question is from God of Jagani from JM Financial. Please go ahead.

>> Uh hi, thank you for taking my question again. Hopefully I'm audible this time. Uh

>> one question now from my end is on the >> Yeah. Uh just one question on my end from the margin front. You know the

others uh segment uh that is the uh the rebok innerware etc business together is now shown a very good decent margin this

quarter around. So if you can you know break it uh how this improvement was and how much sustainable this is going

ahead. Uh given that you know you have also mentioned that innerware business losses have now. So when can we expect

this business to uh you know become profitable and where are the other pieces of the business on the profitable

journey? >> Okay. I think we answered that partly when Ankit asked and Samir asked that

question but let me attempt that again. So one is that I'm hopeful that at least we have one quarter next year which is a

profitable quarter on the inare business and that should be hopefully uh the beginning of another era for that

kind of business. So that is uh on the profitability part and lot of things are happening which which lead to that

biggest thing from a margin improvement perspective um uh is uh uh selling expense improvements. So we've managed

to significantly uh uh streamline selling expenses. Uh cost of doing business in that sense has has improved

and that should continue uh over some time as health of inventory improves. Uh that also improves realizations that is

again something which is which is giving us gains and that is a flywheel which should keep getting better over time. Um

overall also as uh overall scale improves the leverage of uh overheads and all other costs also then improves.

So we should we should we should see this uh improvements over over the next few quarters as well.

Yeah, just one thing you know while we understand uh the innerware business turning from losses to profitable will

be a bigger driver for the margins but how about the scale up of the margins in the the American Eagle and the repo part

of the business as well how that will uh shape up and in that context how can the margin expansion look like in the next

few years >> yeah I'll separate American Eagle and uh Reebok Look, American Eagle is fairly um

uh you know uh uh how do I say this? It's a very robust business but doesn't have the same growth opportunity let's

say as uh Reebok has. It'll grow steadily. It'll grow steadily hopefully double-digit growth and it'll continue

to have a very good space in markets for consumers and it'll make decent money as we do that. Vebbok has a much greater uh

room for ex uh exponential growth. I think that's a segment where you should see very very aggressive growth in times

ahead and u like I was explaining to pages right through uh both uh product categories as well as channel markets

there is a very large growth opportunity that we should see as that happens lot of leverages also come into play which

should also make the business more profitable as we go along. Does that answer your question?

Yes. Yes, that does. Thank you. >> Thank you. Next question is from Kunal Bhya.

I'm sorry. Kunal Bhya has dropped off. We'll move to the next question. The next question is from J from HDFC.

Please go ahead. >> Yeah. Hi, thank you so much for the opportunity. uh uh joined late. So some

of apologies if some of these questions are uh you know have already been answered. Uh see on the lifestyle bit to

begin with uh you guys had nearly 100 bits margin expansion. Now this is despite wholesale and you know online uh

in I mean growing two times the pace at which the core retail grew. I was just wondering how come this happened? what

were the levers which helped you get there? >> So yeah, you're right. We did discuss

this. So basically it's coming from uh reduced selling expenses through better leverage. So as your sales stores grow

better that that gives you um uh a better uh uh margin expansion. I think we have also been able to drive a lot of

cost reduction initiatives across the business including product cost, supply chain cost etc through the organization

which have also made us uh you know uh get uh some some benefits in terms of margin expansion. So it's uh if the

question is is it a one-off? Sure in terms of uh this quarter is a good quarter. So sure it's it's it's there

and in fact like Belinda said it's our best ever uh quarter in terms of margin improvement in the lifestyle business

but is it sustainable to a fair extent it is sustainable apart from the quarter toquarter seasonality it's fairly

sustainable what what we've got here. Uh well thanks. Uh the other bit is on the emerging businesses. Uh especially the

inner way bit you know you know through our channel checks also at least uh that's what we kind of picked up and

maybe we were wrong for a for the longest time the assortment at least from a price point perspective were

quite divorced from what the women really wanted. Now have we fixed this or how close are we in fixing it? where are

we in that journey of kind of marrying them together? >> Okay. Uh so um there uh you know it's a

huge country with a very very large you know we operate with some 5,000 outlets which are a universe of uh you know and

the universe actually Raja uh which is there uh in the trade side itself and of course there are different kinds of

retailers with different esportment preferences. The most critical thing to uh to do well here is replenishment and

predictability around replenishment. Once you crack a set of uh winning products, uh the market wants you to

then just keep replenishing extremely it's in some way almost a boring business where you just want extremely

high predictable replenishments again and again and again. As you keep getting better and better at that, uh your uh

appeal with the with the channel also keeps getting stronger. Sure there are more price sensitive markets and you

have we have assortments which address that.