Kewal Kiran Clothing Limited (KKCL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Kewal Kiran Clothing Limited Q4 and FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. Before we begin, a brief disclaimer. The presentation which Kewal Kiran Clothing Limited has uploaded on the stock exchange and their website, including the discussions during this call contains or may contain certain forward-looking statements concerning Kewal Kiran Clothing Limited business prospects and profitability, which are subject to several risks and uncertainties, and the actual results could materially differ from those in such forward-looking statements. I now hand the conference over to Mr. Hemant Jain, Joint MD, Kewal Kiran Clothing. Thank you, and over to you, sir.

Thank you. Good morning, everyone. It is our pleasure to welcome all the participants to the earnings conference call for Q4 and financial year-ending 2025. Joining me on this call, Mr. Pankaj Jain, President, Retail; and Marathon Capital, our Investor Relations adviser. I hope everyone had an opportunity to go through our investor presentation and results release that we have uploaded on the exchange and our company's website. Financial year 2025 marks a significant milestone for our company with the consolidated operating revenues surpassing INR 1,000 crores mark. This achievement underscores our relentless pursuit for growth and excellence. As we build on this momentum, this milestone lays a robust foundation for our future endeavors positioning us for the sustained success and further expansion. Before diving into Q4 and FY 2025 performance, as mentioned during our previous con call, we would like to outline our road map vision FY 2028 driven by our management strategic direction. This framework underscores our ambitions, key priorities and strategic initiatives providing context for our future growth trajectory. India fashion market is evolving rapidly and KKCL is poised to lead this transformation with a clear vision to reach INR 1,500 crores revenue by FY '28, while maintaining healthy operating margin between 17% to 18%, we're rebuilding a high growth capital efficient business that the balance scale with sustainability. Retail will remain at the core of our expansion strategy. We aim to grow our EBOs from 609 to over 900, coupled with deeper penetration in Tier 2 and Tier 3 market through cost effective format like SIS and MBOs, while our large-format stores presence will continue to expand in premium zones. In parallel, e-commerce will become a strong growth engine through digital-first consumer engagement and AI-driven personalizations. Product wise we are scaling from being dominant menswear post to become the full lifestyle house. While denim and casual wear will continue to anchor our portfolio, we are actively growing into womenswear, kids wear, athleisure and accessories, building wardrobe ownership across categories and consumers. What truly sets KKCL apart it is integrations of in-house manufacturing strength with emerging technology. Our brownfield expansion plan will enhance capacity with AI-led forecasting, smart inventory planning and digital trend mapping will bring us closer to our consumer with precision and speed. Financially discipline will continue to define us with a sharp target of working capital cycle of 125 to 135 days and strong internal accruals, we will fund growth while protecting profitability. We are also actively exploring inorganic opportunity to enter new categories or acquire strategic brands. Internationally, we see significant export potential for our flagship brand like Killer and Kraus especially in market with a strong youth and diaspora connect. By 2028, we aim to establish ourselves as a creditable Indian fashion voice on the global stage. We at KKCL are set to redefine the way we design for our consumer. Today, the biggest challenge that the industry faces is to predict the right consumer -- right consumer demand. Forecasting what is going to keep our consumer interested and define their fashion age is what would be our top priority at KKCL. We are evolving beyond traditional consumer insight, leveraging our rich history of understanding our consumer to anticipate their needs. Now, we plan to take a step further by predicting personalized preference for special occasions as well as everyday wear, ensuring our offerings resonate with their unique taste and lifestyle. Today, consumers are seeking products tailored to their unique preference and will not want to buy what you make. By adopting generative AI tools, KKCL aims to deliver customized solutions that progressively meet individual consumer needs, ensuring a more personalized and satisfying experience. Further revamping of strategy for Lawman brand is an integrated part of this road map, ensuring group robust presence across the entire fashion spectrum. Evolving Lawman as a fast fashion D2C brand shifting from a me to approach to a distinct identity coupled with expanding EBO strategy would help in driving quicker engagement with our end consumer. Further, with higher integration of our women's casual wear focus Kraus brand and growth of our kidswear for boys focus Junior Killer brand coupled with a winding product offering will be key enable for us to achieve the target revenues. Our vision is clear to transform KKCL into a future ready omnichannel multi-category fashion powerhouse that reflect the aspirations of New India and command respect across consumer investor and global peers. Unlike growth fueled purely by discounting or capital burns, KKCL's model is fundamentally sustainable. We have built this company on unit level profitability, prudent capital allocations and working capital discipline and that DNA will define our next lead. On the performance from the quarter ending FY 2025, it is hurting to see the strategic initiative playing out positively resulting in a robust growth of 31% year-on-year for Q4 FY '25 with EBITDA margin of 18.1% within our guided range. Resultant of our effort especially toward improving our inventory management practices coupled with successful integration of Kraus casual have helped us to achieve an annual growth of 16.5% in FY '25 in our operating revenue which stood at around INR 1,003 crores with EBITDA of 19%. Our growth momentum was not only fueled by consolidation of Kraus reflecting the effectiveness of our strategic initiatives but also on the back of strong volume expansion. Even on stand alone basis, we deliver positive double digit volume growth in April showcasing the effectiveness of our design capabilities. In line with our policy to widen our presence through brand-led EBOs, we have aggressively added stores through the financial year resulting in a net addition of 121 EBOs across our key brands and the tally stand at 609 EBOs as on March 31, 2025. With the encouraging response to our trade show for autumn/winter 2025 collection of Killer, Easies, Kraus and Junior Killer brand, we are confident in achieving robust growth in the coming financial year. With a clear laid out pathway of growth, we will continue to diversify our product offering, leverage the lifestyle appeal of our brand and strengthen our position as a leading lifestyle category to all genders and ages. With this, I would like to conclude and open the forum for questions.

[Operator Instructions] The first question is from the line of Tejash Shah from Avendus Spark.

Sir, you have guided for INR 1,500 crores revenue by FY '28 from INR 1,000-odd crores in FY '25. So just wanted to know what are the key growth drivers? Will it be volume-led pricing, new formats or geography expansion? How are we planning to reach there?

So okay, we have forecasted that all our brands will have a separate strategy, okay. Killer being on the auto mode perspective, it will be led by volume as well as the price growth structure. Kraus, there are a lot of channels which are yet to be explored. So there will be a channel expansion going on there. And Lawman and Integriti would be more LFS led and Lawman would be more D2C perspective.

Okay. Okay.

[Foreign Language] Next 3 years we are planning to open 900 stores, EBOs. [Foreign Language] In 2025, we will achieve INR 1,000 crores and we will maintain the EBITDA of 17% to 18% and we achieve that our goal.

Perfect. So just wanted to know that EBO expansion what you spoke about 600 to 900, will it be mix of EBO and -- sorry, COCO and FOFO or will it be only COCO of for both?

[Foreign Language]

Perfect. And second point on that. So usually, like, obviously expansion is a very good strategy here but are we doing anything to increase the square footage -- the revenue to put per store or per square footage of the existing store? So what are we doing to increase the full effect of the brand? Push is clear...

[Foreign Language]

Tejash, if you are asking me for an SSG growth or like to like retail format growth in the last quarter has been close to around 13%.

That's very healthy. Perfect.

The next question is from the line of Manasvi Shah from ICICI Prudential AMC.

Sir, 2 questions. One is on working capital. So if I look at your inventory and get to the sport, they have significantly increased versus last year. So how should we think about working capital going ahead? And like what are the key reasons for this increase? I'm sure Kraus acquisition would be one of them. But like how should we think about working capital?

I understand, Manasvi. Okay. There has been a growth in the working capital value structured as well as the number of days. We feel that going forward it will stay between 125 to 135-odd days. Basically the reason for growth in the working capital has been one of because of the Kraus integration, okay, where the working capital cycle is higher as compared to Kewal Kiran. That's one. Okay. Secondly, you are comparing at the base of last year's number where the absolute inventory was around INR 82 crores which has drastically increased this year.

So 125 to 135 networking capital. That is the number that we should leave.

I feel that we'll be able to bring Kraus working capital also to that limit. Okay. But it will take at least 2 quarters to do that.

Okay. Okay. And sir, my second question is related to the land parcel side. So you had made changes in your articles of association. Sir, is this clear? Is it clear?

Yes, tell me.

Yes, sorry. The second question was regarding the land parcel and you had made changes in the articles of association, I think 2 quarters back related to the sales. Any update, sir, potential land sale or anything like that?

There is no intention of land sale as of today. Okay. We have already acquired it so that, okay, the head office could actually be shifted to that land parcel. And the current property where the head office is we could explore the opportunities for the current property.

I'm talking about the current property which is where the current headquarters are. Before we....

So if you see that, okay, last quarter if you'll see that we have already acquired one of the land parcel which is closer to the current head office.

Okay. So like is the land...

It is [indiscernible] head office and then monetize the current land parcel.

So any timelines for that?

Manasvi, it is too early to say. [Foreign Language] It will take some time.

But we have already in discussion with lot many people regarding how to go ahead with it. So, right. But I will not be able to comment till things get freezed up.

The next question is from the line of [ Lakshminarayanan from Tunga Investments ].

I hope I'm audible. KKCL has always been known for low discounting and also managing low inventory. Now I think there has been little flexibility on that in the last 1 or 2 years. Can you just talk about what has been your 100%? I mean, what has been the discounted sale in the overall scheme of things? And then there has been a increase in the inventory as we see in the balance sheet. Just talk a bit more about it. Is it one off or how you think about it? Because you answered for the previous participant on working capital. Just want to understand that firstly.

Lakshminarayanan, firstly, you'll see, okay, from last year comparison scenario. A year before the inventory was up to the trade and we were able to match our targets. Last layer, we tried to reduce the inventory to go on a real time basis, which we felt that, okay, we could not achieve. And that's the reason the inventory cycle -- inventory has gone up. That's one of the reasons. Secondly is that, okay, because of the consolidation also the inventory cycle looks on a higher side. Okay?

And what is the normalized inventory date you would actually expect and by when it would actually come to that level?

We feel on -- okay, the working capital it should stay between 125 to 135 days-odd.

Okay. Yes. On the first one in terms of discounting?

The first question when you asked, yes, we have in little -- we have had our norms relaxed in terms of discounting. So we do do discounting and/or participate in the discounting aspect. But still our fresh sell-throughs have been more than 60%.

And can you just tell me how it has moved in the last 2, 3 years? So this year it is at 60% than last year what it was in the previous year?

The discounting percentage may vary, but sell throughs have been similar to 60%.

The second question is correct. I mean, the third question is in terms of Kraus acquisition, can you please highlight the areas where you are positively surprised and where you think -- and what are the areas where you think after acquisition you think there is lot of scope of improvement.

So we feel there has been a successful integration, okay. Where there was a robust sale of close to around [ INR 162 odd-crores ] for this 9 month period. When we acquired it, it was close to [ INR 175 crores ] for an annualized basis. First focus was increasing the EBITDA margins and we feel that it has aligned with our group targets closing to around 16% to 18%. Okay. We have been able to introduce or, okay, on a Kraus in the export market for the current year. Okay. We have also started working on widening its distribution in the distribution channel. The next phase -- next phase would be on realigning or refining the working capital limit there.

Got it. And I see that you have around 12 to 13 stores in Kraus. What is your plan to enhance that reach?

Yes. Okay. We have seen that there is a significant -- okay, in fact, the retail numbers looks very exciting for Kraus. Okay. So going forward with the number of stores -- there will be a healthy number of stores improvement. In a vision perspective, also if you will see that we have seen that in next 3 years at least there should be at least close to around 50-odd stores for Kraus.

Got it, sir. And just from the outlook point of view in the near term and little long term, how do you think as we stand now the year would look like for you in terms of volume growth or value growth?

[Foreign Language] Treasury map was very good. So I am thinking.

And wonderful to see good numbers, despite having a large acquisition which you have done.

The next question is from the line of Pritesh Chheda from Lucky Investments.

Sir, I didn't catch your comments on working capital where you're now saying that your revised working capital days will be 125 days. Just that you know for when before the acquisition, if I take last 8, 10 years average, then it used to be about let's say 80, 90 days. So is it that the even the original base business of Killer, even there the working capital has changed or the whole change is because of the acquisitions from whatever the revised 125 days that you're talking about.

[Foreign Language]

Pritesh, to answer again. Okay, if I look from a FY '19 scenario, working capital have always been above close to around 120-odd day scenario.

When you say 120, what you do? You take debtor plus inventory only. What you guys do?

Debtors, creditors and less -- debtors inventory less creditors.

In Kraus, is there a higher working capital days?

Yes, there is.

Okay.

[ 40-odd ] days.

Okay. My second question is on your Slide 10. So when you look at your Slide 10, there is a very good volume growth but there is a pricing decline. So this pricing decline is to do with the Kraus coming in the mix, right?

A lot of factors. One is, the accessories contribution has increased, that's one. Secondly the category mix has changed, that's 2. Third, the brand mix has changed a bit, that's 3. And Kraus integration, that's 4.

Okay. So can you tell on the volume growth on the volume quantity sold what will be KKCL's volume growth? So if you just remove Kraus out of this and one can understand your base business volume growth.

The KKCL standalone volume growth was around 15%.

Okay. Okay. The other question is on KKCL and the just in time impact, the production schedule, the delivery that you are -- you had done and in the start of the year you had said that because of which our growth has slowed down. So when I come to this quarter, also the standalone growth is just 6%. So that impact is still experienced or when should we see KKCL standalone growing double digit?

[Foreign Language]

Okay. And you have got your manufacturing capacities in place?

Yes, yes. [Foreign Language]

No, on an ongoing basis, Pritesh. On an ongoing basis.

Okay. And my last question is on Killer Junior. So what portion of your revenue today is Killer Junior? And over the next 3 years when you talk about a INR 1,500 crore revenue, what should be the size of Killer Junior business?

It's been a first year for us. Okay. But we have seen positive attraction from most of our clients. Okay. Since it's already been 2 years numbers. Okay, projected growth structure, it's too early to comment on it. Next year definitely we'll come up with our capital targets for this category also.

So these are separate stores or they're going to be available within the Killer store?

None of them are available in Killer stores. Hardly, maybe one or 2 on an experiment basis where the size store is bigger. But the most major concentration is MBOs and LFS.

Okay. MBOs and LFS. Okay.

The next question is on the line of Viraj Mehta from Enigma.

What I wanted to understand is over last 2 years we have changed our working style in terms of -- if I look at our history, we were looking at much higher margins. Now we're looking at much lower margins of 18%, 19% compared to our own history. Even though at the industry level it is still very respectable. When you talk about 15% compounded growth over next 2 years, would there be again a trade off between margins and growth? If the growth of the industry does not revive and if that will be the case, what will be the option you will choose?

So if you see that our vision perspective says that our operating margin will stay between 18% to 19%. If there is a market demand, if there is a subdued market sentiment which is going on, the market will be still chasing growth as compared to our margins.

Okay. That answer my answers my question.

The next question is on the line of [ Shaurya from Ajay Partners ].

Sir, you mentioned in your commentary regarding some brownfield expansion. So can you elaborate upon that? Am I audible?

Yes, yes, go ahead.

Sir, in your commentary you mentioned about brownfield expansion. Could you elaborate upon that?

[Foreign Language]

[Foreign Language]

[Foreign Language] all put together, all the categories around 25,000 pieces. [Foreign Language]

And what is the cost of this expansion?

Normally [Foreign Language].

And sir, one more question. Sir, your current margins are around 18%. And you're saying in FY '28, the range will be around 17% to 18%. So is this a conservative estimate, or we are expecting like a dip in margin?

[Foreign Language]

To answer your question, we'll be chasing growth as compared to our margin structure. So we have given an estimate based on that only.

The next question is from the line of Priyank Chheda from Vallum Capital.

I wanted to know about the performance for FY '25 brand wise. [Foreign Language] Integriti, Lawman. And going ahead, say, INR 1,500 crores of sales vision. [Foreign Language] brand would take the faster growth pace and the priority? And what are the strategic actions required in each of the brands to be done?

[Foreign Language] Still today the Killer is the flagship brand of the company. So our major focus is on Killer. [Foreign Language] Integriti [Foreign Language]. So all put together [Foreign Language]. So all put together Killer Junior [Foreign Language]. So all put together [Foreign Language] INR 1,500 crores, and we will going to achieve that. The focus is on growth. [Foreign Language]

Sure, sir. We understand that. If it's possible, [Foreign Language] broadly, any comments on how Killer or Integriti or Lawman has worked out in the whole year would be great.

The brand, okay, it contributes more than 60% is what I can give you.

The next question is from the line of Surya Narayan Nayak from Sunidhi Securities.

Am I audible, sir?

Yes.

So sir, I was just looking at the realization [ pattern ] and where we are seeing that we are actually chasing more of the growth on the value side. So resultantly, the gross margin is not inching upwards [ nor ] downwards. And as you said, the Killer is in autopilot mode, but if you derive the jeans volume, let's say, in the revenue stream, so it is nearly remaining stagnant. And trouser segment is actually rising. So in this context, what I understand is, are we facing competition from the value retail so that now we are more focusing on the Integritis and all the value brands rather than the premium brands like Easies and Killer. And when can we expect the upward trajectory in the gross margin, maybe up to 45% or so or, let's say, 43% has been the highest. So is there any chance in a couple of years?

Okay. Current year, if you see, there has been a shift in consumer preferences and the preferences was more towards cargos and athleisure. And that's the reason denim was facing that pressure. But I feel it has normalized now, and denim should perform better in the current year perspective. Comparing it with the value format, I would not say there has been a shift over in the category because of the price bracket. Since there has been a shift in the category mix, that's one of the reasons where the gross margins have got impacted. If there has been -- if the category mix definitely improves on the better side in terms of denim wear, there will be a better off in terms of gross margins, but not to the extent of 45% or 46% growth. Close to around 42%, 43% is a reasonable number, which we'll like to estimate at.

And especially when -- there has been some realignment with the admin expenses versus the staff cost? So can you just clarify on that point?

I didn't get your last question. What did you ask?

So there has been some changed alignment with the -- I believe there is a change between the staff cost and admin expenses, whereas admin expenses has dropped whereas staff expenses rise. So is there any alignment change or the...

No change in alignment. There's not been any change in alignment. The admin expenses have gone down majorly because there were recovery of some old debtors and some legal expenses and professional fees compared to the last year.

And sir, when we are actually planning from 609 EBOs to 900-plus EBOs by '28, so obviously, we will be more of [ FOCO ] heavy. So obviously. So obviously, the ROU assets will be rising. So suffice to...

But if you look at the number structure, Killer was increasing on an overall basis. But the strategy is not yet planned in that way there will be more COCO. We will still focus to have [ FOFOs ]. In case, if we have to go more mall-driven structure, it will be more COCO driven. Because of COCO, the return value on the assets will decrease, I would not put it as a statement.

Because we are not getting the geographical presence as of now because from the presentation. So can I conclude or, let's say, infer that the share of premium goods is not available or, let's say, we are not present heavily, and that is why we are able to push more of the value retail goods. So that is why we are suffering the realization?

I wouldn't agree to that also. Killer being a more denim wear, its core competition lies around most of the Indians and international brands. And it has been growing as well as the contribution of it is more than 60%. So I don't think the inference which you are making is absolutely true.

Because the...

[Foreign Language] The demand is that only. [Foreign Language].

Now I don't want to name the competitors, but a lot of value retailers have come and because that is the reason why we could be facing difficulty in pushing the premium products. So that is why the sales mix is getting adverse. That is my inference. And secondly, sir...

We are the mid-price segment brand -- mid-premium brand, available all over India. [Foreign Language]

And I would agree with them that, yes, the value players have done better this season, and that's the reason we have also realigned our strategy for one of the brands of ours. We have not changed any strategy for Killer.

Okay. But in going forward, this kind of value growth chasing or, let's say, volume chasing will be there for couple of years, can we expect, at the sacrifice of the price?

We are chasing. See, it depends. Discounting is an end result of the sales season carried forward, so anything which gets left over. So if the market sentiments are low scenario, our discounting percentage goes higher, which impacts your realization. We have definitely been chasing volume growth and which we have been able to achieve this year also.

So can we expect improvement in the realization this year?

We are hopeful for that, and we have -- we have seen that April and May, the sentiments were better. So definitely, you can estimate that it should be better.

And sir, progressively, we are adding more of the FOFO stores, so the right-of-use assets are also rising and so is the depreciation. So what kind of, let's say, depreciation figure we can expect for FY '26-'27?

Depreciation is mostly because of the amortization of the goodwill value.

Okay. So it is not due to the right-of-use assets?

No, no, it's not.

Because the net block has also increased and the others -- I believe the right-of-use assets might have also have risen.

Sorry, I didn't get your last question again.

Hello, am I audible?

Yes.

Yes. The net block also increased. So I believe one of the -- along with the manufacturing capabilities, the right-of-use assets also have increased. So that has led to some kind of depreciation. Maybe some amortization part from the goodwill part also could be there.

It is majorly because of amortization. And yes, we have opened a little bit of FOCO stores and that fixed assets have added in the net block.

The next question is from the line of Vaishnavi from Anand Rathi.

I wanted to understand how is the competitive scenario now in the mid-premium denim segment so with the other branded players such as Pepe, Lee, Wrangler, et cetera. So how is the competitive scenario for those players as well now?

I won't be able to comment how they have been doing, but I have not seen much of the price decrease in the current season also.

So have they also been adding more aggressive EBOs? Or has there been any change or exit in any of these players, or how have -- more from that scenario?

None of the players have exited. Everyone is reworking on their strategy. And I don't feel that we have been facing too much of competition. If that would have been the case, [indiscernible] growth for the current quarter would not have been around 13%.

And also, you mentioned that we will look for any inorganic growth opportunities as well. So any wide gaps in the portfolio that you see that you want to fill or what's your [ view ] on that.

So if you look at the vision statement, there will be a lot of vacuums there.

So can you please elaborate on a few of those categories, if possible?

If you look, we have given a statement or a chart where it shows menswear, [ womenswear ], kidswear in boys and girls. Somewhere we are already present, and somewhere we are already pivoting and where there is a vacuum. So anything which falls on the pivot or maybe on the vacuum side, definitely, we'll be happy to explore.

The next question is from the line of Keshav Garg from Counter Cyclical PMS.

Sir, I'm trying to understand that out of the breakup of various denim and garments and accessories, et cetera, which all categories are we manufacturing in-house, and which are we outsourcing?

So 85% -- on the apparel side, 85% of the business, we are manufacturing in-house. Winterwear and knitwear as a category, we export -- we trade. That's one. All the accessories categories, we are just trading.

So basically, winterwear and accessories we are buying from outside, rest everything in-house.

And knitwear.

And?

And knitwear.

Okay. Knitwear.

Yes.

Sir, also I wanted to understand that, sir, if we see then over the past 2 years, from FY '23, the realizations have gone down from INR 700 to INR 595 per piece. Now sir, going forward, sir, you think, again, we can go up to near INR 700, or it will stay at this level or this trend will continue?

Saying the realization is a mix of everything, which includes apparel as well as accessories. That's one. It's a mix of category mix and a brand mix. So all 3 aspects impact the absolute realization.

Right, sir. So what is your expectation that, what sales mix are you expecting?

Going forward, realization should definitely improve. That's our estimate for the current year.

And sir, also, sir, I'm trying to understand the wisdom of running multiple brands. Sir, because if you see then, for example, Jockey has just one mother brand, and then they have multiple categories, but they sell everything under Jockey brand. Sir, whereas sir, my guess is that had we -- Killer brand would be having far more margins versus your other Lawman, Integriti, et cetera. And I feel the working capital days also might be lower for Killer versus the other noncore brands. Sir, so why not just focus on this Killer brand and make it big rather than run multiple brands, keep multiple SKUs, inventory, and then the pricing is also lower since those are not as well established brands as Killer. So what are your thoughts on that?

We are trying to establish KKCL as a house of brands, okay? Killer catering to a premium segment scenario, Easies catering to a semi-formal brand, Lawman we're trying to make it more D2C, Integriti mid-price bracket, Kraus would be more womenswear focused. So every brand focused to either one of the gender structure or the price structure.

And sir, all of these brands are profit making?

Yes.

And sir, in our consolidated balance sheet, there is a INR 131 crores approx. other intangible assets. So I'm not able to understand that we acquired 50% of this Kraus, this company. And so then how come -- sir, so it is showing as goodwill over the net worth. Sir, so now what is this other intangible asset?

It's the difference between the value paid against the net assets.

Right, sir. So that is goodwill of INR 119 crores. Then what is other intangible asset?

So other intangible assets includes lease rights, brand and trademarks, manufacturing agreement, and software.

And sir, any plans to acquire the remaining 50% of this Kraus?

Nothing for first 5 years.

Okay. And sir, property, plant, and equipment has also increased from INR 97 crores to INR 172 crores. I mean, it's almost double. So what have we spent this money on?

The current asset which we have acquired, a land parcel, which is close to the head office scenario to shift the head office and monetize the current property where the head office is.

Sir, so what kind of expectation the current monetization of the current property, any ballpark number?

See, we are exploring that possibility of what number can actually be arrived at on the negotiations also.

And sir, what's the size of the property?

Which one?

Your current head office that you are planning to monetize.

[Foreign Language] If all put together is around 7,000 meters [Foreign Language], and we have I think [Foreign Language]

5.5 lakh square feet. And sir, by when are we expecting this?

It's too early to say anything, boss. [Foreign Language] Office will shift over there, then we will think. [Foreign Language]

[Foreign Language]

Sorry to interrupt you, sir, but may I request you to rejoin the question queue?

Yes, thank you.

[Operator Instructions] The next question is from the line of Deepak Lalwani from Unifi Capital.

Sir, first question on your long-term margin target. So where do we see to spend these extra margins that you're earning today? Is it going to be through extra discounts and schemes? Or is it going to be investing in channel like EBO expansion? Or is it going to be on advertisements?

What extra margin are you talking about?

What extra margin [Foreign Language]?

Sir, so today, we are making 19%. Our endeavor is to spend 100, 200 basis points extra. So going forward, we'll be doing 17%, 18%. So that I'm talking about.

It's an estimate which we have given, if anything which adds value, which we'll spend on marketing. And marketing can be in both aspects, ATL, BTL or maybe in terms of COCO stores.

And sir, secondly, on the finance cost, is there any measures that we're taking to maybe bring down the loan that we have on the books because we also have a lot of cash. So do we plan to bring down the book -- the loans on the books? And also the other income piece has been quite volatile. So any plans to monetize the shares of the listed company that we own?

We already did about the cost value structure. Looking at the market scenarios, as it feels feasible, we'll try to explore that. That's one. Two, it's been volatile only because, it is right now currently M2M, because the company got listed.

And on the finance cost, sir? Any plans to reduce finance costs, reduce loans?

If you look at the figure last year, 2 aspects. The inventory levels have doubled almost as compared to our last year scenario, and there was an acquisition. So 2 aspects it led to an increase. We don't feel forward it will keep on increasing. And we'll be reducing in a phased out manner.

And last question on your revenue acceleration. The standalone business has grown by 7%. So assuming that the production issues are over, we still see that the jeans and the MBO segment growth was on the lower side. So what gives you the confidence to grow at double-digit going forward?

2 reasons. One, there has not been too much of inventory in the entire cycle. So we feel the secondary sales have been adequate up to our expectations for the month of April and May. And that's the reason we feel that, okay, the next quarter is going to be good.

And both the issues on jeans and MBO both are improving, the inventory of jeans that we're carrying and MBO...

After the roadshow we have done, we see that there is an increase in the number of denims in terms of orders.

The next question is from the line of Abhijeet Kundu from Antique Stock Broking.

My question was on depreciation and amortization. What would be the ballpark amount going ahead for the next 2 years?

Similar amount, close to around INR 21 crores.

INR 21 crores depreciation and amortization taken together.

Amortization amount.

Sorry?

INR 21 crores is the amortization amount. Balance is depreciation.

The next question is from the line of [ Pramod Dangi ] from [ Ratna Narayani Investments Management LLP ].

[Foreign Language] First of all, congratulations for the integration of Kraus. Hemant bhai, [Foreign Language] which is mainly the men oriented and when we add Kraus which is mainly woman-oriented, [Foreign Language] difference say in terms of the seasonality, in terms of the discounting. Because I believe that womenswear [Foreign Language]. Should we be ready for the more volatility? And is it okay, we should prepare for that?

So I would say that, womenswear category is more dynamic as compared to volatility. Discounting, I again said it's an end result of how your sell-through goes. The average discounting has been lower there. The performance on most of the LFS has been at #1 or #2. So I don't feel there is a problem there -- anything lying down as a problem there.

No, no, not as a problem. I'm just saying that, okay, if quarter-on-quarter, we see a spike in retail volatility compared to the historical, is it okay? We should be prepared for that as investor.

So the category is such that, okay, it is not very seasonal. I have seen the last 3 quarters. It's been almost even out business.

The next question is from the line of Giriraj Daga from Vasaria Family Trust.

My question is related to like FY '26 growth assumption where you mentioned double-digit growth. Just to get bit more...

A little bit loud.

Hello. Is it audible now?

Yes, better.

Yes. So I was saying that on the FY '26 growth assumption of double-digit growth, but just to get a bit granular here. So obviously, 1 quarter of Kraus will be added there, which is roughly about INR 50 crores, INR 55 crores. And last year, 1 quarter was exceptionally weak quarter. So there we will have about INR 20 crores, INR 25 crores just refilling of the quarter revenue. So like on the base, we should take INR 1,000 crores or [indiscernible] about INR 1,050 crores, INR 1,070 crores and 10% growth over there?

Overall number we are saying that, looking at things, looking at the market scenario, overall number, we see that we'll see a double-digit growth.

The next question is from the line of Siddharth Purohit from InvesQ Investment Advisors Pvt Ltd.

A lot of my questions have been answered. Just 2 clarifications. The 15% CAGR that you are like now expecting is mostly volume led, right?

It's a mix of volume and price led.

And sir, when I check the standalone versus consolidated margins, so it seems that the acquired company has a margins of close to 16.5% this quarter. So was there something one-off over there or it's a kind of probably new normal for that [ entity ]?

What numbers were at 16% you said?

If I calculate the EBITDA margin separately versus consolidated and standalone and calculate it separately, then the acquired company's EBITDA margins should be something close to 16.5% to 17%.

Okay. Go ahead.

So is it that 16% to 17% for that entity will be the new normal or there is potential for that to come back to our level of margins at parent level?

When we acquired, we felt that, okay, both the margins could be at similar levels. And currently also this year, it was close to around 18% or 19%, not 16%...

Okay. I'll cross-check it, sir.

Thank you. We will take that as the last question. I would now like to hand the conference over to Mr. Hemant Jain for closing comments.

I would like to thank once again to all of you for joining us on this call today. We hope we have been able to answer your queries. Please feel free to reach out to our IR team for any clarification or feedback. Thank you all. And once again, wishes for a good festive season. Thank you so much.

Thank you. On behalf of Kewal Kiran Clothing Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Okay. Thank you.