Monte Carlo Fashions Limited ($MONTECARLO)

Ladies and gentlemen, good day, and welcome to the Monte Carlo Fashions Limited Q4 FY '26 Earnings Conference Call hosted by Emkay Global Financial Services Limited. [Operator Instructions] Please note that this call is being recorded. I now hand the conference call over to [ Raj Kanwar ], Emkay Global Financial Services Limited. Thank you, and over to you.

Good morning, everyone. I would like to welcome the management and thank them for this opportunity. We have with us Mr. Rishabh Oswal, Executive Director; Mr. Sandeep Jain, Executive Director; Mr. Dinesh Gogna, Director; Mr. R.K. Sharma, Chief Financial Officer; and Mr. Ankur Gauba, Chief Company Secretary. I shall now hand over the call to the management for the opening remarks. Over to you, gentlemen.

A very good morning to everyone. I'm Sandeep, and thank you all for joining us for today's earnings call to discuss the performance for fourth quarter and full year of financial year 2026. Let me start by sharing the financial highlights and then operational highlights. For the fourth quarter under review, the company reported revenue of around INR 280 crores, reflecting a strong year-on-year growth of 36%. EBITDA for the quarter stood at INR 26 crores, registering a growth of 353% year-on-year and EBITDA margin of 9.2%. Profit after tax of INR 5 crores as compared to a loss of INR 10 crores in the same quarter last year with a PAT margin of 1.78%. Now coming to the financial performance for the full year ended financial '26. Revenue from operations stood at INR 1,276 crores, reflecting a year-on-year growth of 16%, EBITDA stood at around INR 227 crores, witnessing a growth of around 22% year-on-year, and with EBITDA margin reported at 17.81% without other income. The company reported a profit after tax of INR 112 crores, which is increased by 38% year-on-year with a profit after tax margins at 8.79%. We are pleased to share that the company has successfully achieved its stated guidance of financial '26, delivering a revenue growth of 16% along with EBITDA achieved of 20%. This reflects the strength of our business fundamentals, execution capabilities and our brand positioning across categories. Going forward as well, we remain committed to sustain this growth momentum and endeavor to continue deliver performance in line with our stated guidance. Coming to the operational performance for the period under review. We saw a strong rebound in the sales across most categories. Our Rock it brand delivered another quarter of consistent performance, registering an impressive 86% growth in gross sales during this year. The Home Textile segment also maintained its robust growth trajectory, supported by healthy demand across all categories. For the Footwear, gross sales soared 149% compared to financial '25, and the growth momentum is expected to continue in the coming quarters as well. Online net sales continue to show a strong momentum, recording a robust growth of 38% compared to financial '25 through our own website and external portals, reflecting the growing customer preferences for our digital channels. We remain strongly focused on expanding our retail footprint and formally committed to open around 40 to 45 EBOs across India, which a strategic emphasis on Western and Southern regions. During the quarter, our retail presence was further strengthened with addition of 2 new Cloak & Decker brand EBOs, taking the total count to 24 stores. The company continued to pursue its expansion strategy through stores ranging between 500 to 1,000 square feet. To enhance customer convenience and reach, we have partnered with quick commerce platforms such as Blinkit, Swiggy, Zepto to enable express deliveries within 30 minutes. Additionally, our strategy collaboration with Salesforce is helping us streamlining the operations. elevating customer experience and build long-term brand loyalty through digital transformation. The company has successfully organized for the order booking for a pre-winter collection in February '26 and winter collection in March '26. Further, we have expanded into overseas e-commerce platforms for direct and indirect export through Joom.com and Stylishop.com and broadening our global presence. With this, we now open the floor for question-and-answer session. Thank you.

[Operator Instructions] The first question comes from the line of Gunit Singh with Counter Cyclical PMS.

In the current quarter, revenues grew by about 20%. So I want to understand how much was volume growth out of this.

The revenue growth was approximately 36%.

Yes, 36%. So how much was volume growth in this quarter?

So we consider an annual basis, and we have achieved 12% increase in volume.

The annual growth in the volume is around 12%. And this quarter, I need to check, it should be around 80% to 20%, I think.

Got it. So according to you, what were the main drivers of this 20%, 30% growth? Did we take any price hikes? Or I mean, what were the main drivers of this growth? I want to understand if this 20%, 30% kind of growth should continue in the coming quarters as well.

See, whenever we give a guidance, we give annual guidance. And the reason for this growth is that increase in summer category sales, so which is increasing every year. So as we go ahead also, so as we told earlier also that the summer categories are growing faster than the winter wear categories. So the growth are more in summer categories. And last year, we suggested that we should be achieving a revenue growth of 15%. And accordingly, we achieved this year a 16% growth in our sales.

Got it. So basically, Q1 is also summer clothing. So I want to understand what is driving the growth in summer clothing. Is it that we have increased our collections or more trendy designs? Or is it because we are entering different channels? What are the main reasons? And should we expect a similar growth trend in the coming quarters for the summer at least? If you can let us know.

See, there are two reasons for that. One is that the penetration is happening across a number categories, across regions. So another reason is that the loyalty customer base, which we're having in our winter wear category are increasing -- are in summer sales. So that we have witnessed in our reviews. So both factors are helping us in growing summer [indiscernible].

Got it. And have you seen any impact of lower spending because of the higher inflation, so lower spending on, say, clothing and any slowdown in the previous 30 to 45 days of Q1?

To be very honest, we don't see any major, I would say, cut down in the spending from the consumers. But we see that as some hike has been taken by the government for the petroleum and diesel, so it may affect the consumer spending as it may give rise to some inflation. So that is the concern, which everyone has, I think, in the Indian industry. But it's too early to say about how much effect it can be for coming quarter or next quarter. So that, we need to see. But definitely, if the further price goes up in case of petrol and diesel and if inflation goes up in the coming quarters, it may cut down some consumer spending.

Got it. And would you like to give some guidance for FY '27 in terms of store expansion, in terms of top line, bottom line or any plans...

In terms of guidelines, already we have given that. 40 to 45 stores will be opened this financial year also. So as far as guidance is concerned, that the company is positioned to grow in this financial year also. But to give you an accurate guidance, we would do it in quarter 2 con call so that exact guidance will be given to all our stakeholders. There are some geopolitical issues, so because of that, it will be right on our part to give the guidance when we have more clarity as far as ground reality is concerned.

Got it. And we were entering some different segments like renewable energy, some project. So do we have any updates on that?

So I'll ask Mr. Rishabh to comment on that.

Yes. So we have around 40 megawatts of PPA signed with Madhya Pradesh government. We're just in the final stages of finalizing the commissioning and the vendors for this. So I think in the next 12 months, it should be operational maximum in closing. In this financial year, we will start billing from that unit.

Got it. So what should be the revenue and the EBITDA margins from this? And as soon as we start commercialization, would we be running at full capacity? I mean...

Yes. As soon as we run, it will be run on full capacity from day 1. I don't have the accurate -- I'll share the revenue figures with you. [Foreign Language] The generated revenue was around INR 15 crores to INR 16 crores depending on the generation of the modules, and the CapEx will be around INR 130 crores to INR 140 crores of the total project.

INR 15 crores to INR 16 crores, sir, annual revenue.

Annual revenue, yes.

Got it. And what about the EBITDA margins for these?

It's almost -- you can -- the net operating income is 90% of the top line in this. The O&M cost is around 10%.

Got it. So this is basically an IRR of about 10%.

No, no, no. It will be around 15%.

You mentioned that the CapEx was around INR 140 cr, right?

Yes. So we will share the exact working of the project. But we are commissioning the project at a projected IRR of 15% to 16% over a period of 25 years.

All right. Got it. So I mean, for that, the EBITDA should be around INR 20 crores to INR 22 crores to have a 15% IRR on...

This will be highly leveraged also. I don't have the exact financials working with me right now. So if you want, we can share it with you over e-mail.

But one thing which you can note down is that IRR should be excess of 15%. So 15% is a base figure. So it can be excess of that also.

So currently, how much of CapEx has been incurred? And out of the total CapEx, how much debt are we taking?

In solar?

No, no. Still we have to finalize in the next 7 to 10 days. So accordingly, we take the debt there.

And we leverage up to 75%.

75% would be debt and 25% would be equity.

The next question comes from the line of Manan Shah at Moneybee Investment Advisers.

Sir, in the current quarter, we were anticipating lower returns, which was looking to elevate the margins. However, it seems it is lower discounts which has helped us with the margins. So are the returns as per your expectations? Or I believe you were expecting lower returns in the current quarter.

See, returns depends on the market conditions. We did expect the return will be a little less, but I think it has come little more than our expectation. But is in the line as far as market trends are concerned. So overall, I think we have performed well above our expectation in this quarter.

Okay, okay. Sir, then can you share what sort of growth in the bookings you have seen in the pre-winter and the winter shows that you've recently concluded?

So that is still continuing. There are some areas which we still have not booked. So we can give it in the next quarter. .

Okay. Okay, sure. And I believe there have been some raw material hikes also in terms of cotton, and I believe in wool as well. So have we taken any hikes? And how are we looking to take any hikes? And in the current year, we were expecting to close the year at around 18% to 19%. We've hit the lower level. So in the coming year, are we expecting to hit the 19% sort of margins?

No, no. We stated earlier also in, I think, the last con call that margin should be around 21%, including other income EBITDA, and we have achieved that figure. So we expect to be in this range only. Yes, there have been increase in the raw material prices. But we have already covered before we went through our trade show, and we have already taken a hike of around 7% to 8% in our prices also. So we are fully covered as far as raw material hike is concerned.

Okay, okay. Got it. And how are the sales for the summer wear going in the current season given the summer has been much harsher this year?

It has just picked up as summer is a very long season as it starts in March and goes until August this year. So very early to say about. But as of now, that sales have been good. Let us see. The next 4 months are very important for us, like June, July ,August. The major sales happen in these months. But we hope that, that trend will continue, and we have good sales in summers as well.

Okay. And on the footwear side, this year was a great performance. So anything that you're looking into the following year? Like how should the performance go from here on?

Yes. So since the base is still very small, we are looking at doubling this turnover from footwear category. Currently, we were focusing only on online channels, and that will remain the primary driver of this category business. However, we are also experimenting and we placed ourselves in around 15 large format stores of Reliance, and we are speaking with other chains as well. Also, we have identified around 30 to 35 of our larger EBOs, where we're retrofitting the store to house footwear, and we are experimenting with those. So I think in a couple of quarters, we'll have a better feedback in terms of the off-line performance. However, the online performance of footwear will continue to grow. And even with just online, we are looking at doubling our turnover in footwear.

Okay. And on the export side, we had exported some goods to Middle East. Any update on that? How has that performed? And what are we planning for the coming year?

Yes. So Middle East, we had exported very negligible quantity, around 2,500 to 3,000 pieces. Out of that, 70% of that has been sold in the secondary market. This is only online. This is not off-line. And this was an experimental stage. We are very optimistic about this vertical. However, due to the uncertainty in the Middle East, right now buyers are not ready to place orders for us. So we expect a delay of 2 to 3 months before we can get repeat orders.

Okay. Got it. And in terms of the cash that we have on the balance sheet, you mentioned that out of that INR 140 crore CapEx, around 25% would be equity balances debt. So the surplus cash that is there then, how do we plan to then use it over time?

Already, the company is giving a dividend every year. And this year also, I think the company has announced INR 0.20 dividends. So the balance, I think we are also looking for the good projects in BESS also, in solar also. So those projects -- some of the projects, we think that will come in this financial year as well or maybe we can get order in this financial year and can be executed in next financial year. So some cash will be used in those projects. And we will not go for any tender where the IRR is less than 15% to 17% even in the future as well.

On the BESS side, you said we are exploring some projects. So are these on the EPC side or IPP?

IPP side.

The next question comes from the line of [ Raj Parekh ] from Carnelian Asset Management.

Apologies, I joined the call a little late, so if I'm repeating a question. First, I think I heard you're not giving an annual guidance right now, giving it in Q2. But is it possible for you to help us understand what is the channel inventory situation right now, channel stocking in terms of this how we're entering into summer and winter this year?

I think I'm pleased to share that we are in a very comfortable position as far as our inventories are concerned, not even at our level, even at a store level also, even at a general partner level also. And that's why we have been guiding like even this year, we will have a very good growth. But what I'm saying is that the actual growth numbers or actual guidance we can only share in quarter 2 because there have been some disturbances in the market. Even though we have been very optimistic as we [indiscernible], we have a strong order book as far as winter season is concerned. But the only thing we have to be as far as near to the upper guidance, so we'll give it in quarter 2 so that we see exactly how these 2 quarters fare, if there is some inflation which happens because of increase in the oil prices and all.

Sir, is it possible for you to give us a direction in which the '27 pans out? Can it be at par, better than '26, how it has gone based on the inventory situation and already the winter booking which has concluded -- part of it which is concluded. Just a direction. I'm not asking the exact number.

We'll be having a good growth in this financial year also. The only thing I'm saying is that the actual growth guidance -- like last year, we gave at 15%, we will achieve. And we achieved 16%. So I would like to be very near to the accurate guidance. So that I can only give you in quarter 2. But there will be definitely a growth in this financial year. A double-digit growth is definitely on the cards.

Sir, in last year also, we were looking to open 40, 45 EBOs. If I look at our numbers, we have opened only 26 this year, 471 to 497 net. I'm saying net we've opened. So when you say 40 to 45 new stores next year as well, is that a gross sum or the net number?

No, it's a gross number. Actually, what happened is that we didn't take any correction in the last 3, 4 years. So we took a correction of around 14, 15 stores which were unprofitable. So we closed those stores. But otherwise, we opened 43 stores. But that was a one-off correction, which we took it last year because it was long pending. As we could not sustain those showrooms in the last 3 years so we thought of closing it and making a company more profitable. So that's why we've taken a decision of closing 14 stores last year. Otherwise, the gross addition was the same what we indicated. And this year, I think the gross and net would be almost near to 90% as I don't see any correction or any closing of stores in this financial year because that decision already we have taken last year.

Sir, the stores we are opening as on date, can you help me understand this average size per store?

It ranges from 1,000 square feet to 500 square feet, the average size.

And this is reduced from earlier stores which we are opening up, right? I think earlier [indiscernible] stores.

No, no, no. I'm talking about the average. Some stores are 1,000, some are 2,000, 1,500. But the average size 1,000 to 1,500 square feet. And sometimes, we do get a good location but the size is only 700, 800 also. And there are some stores which are 2,200, 2,500. So average, I'm talking about this number. Just for example, we got a good location in Noida Mall of India, but the store size is only 650 square feet. But the sales we are achieving is INR 4 crores. But I cannot leave that location just because it is 650 square feet. So there are some good malls or some locations which are having high footfalls but the square feet size is small. And there are some stores we are getting where the store size is bigger, but the average, I'm talking about it, 1,000, 1,500 square feet.

Sir, the stores in which we showcase our footwear collection as well, those will be bigger, I'm assuming, right, 2,000 square feet plus?

Yes. Yes, you're right.

Sir, how many of those stores you have as on date out of the network of 495.

Around 50, I think. So those stores above 2,000 square feet, we have home also and we have footwear also. So those are bigger stores and, I think, around 50 in the total count.

The last question, I'll get back in queue. I think our inventory is approximately INR 570 crores. I think the numbers despite -- any kind of understanding of how we're going to maintain the inventory levels or days, you can say, over the next 2 years? Because I think despite having a good channel correction and decent growth, the inventory number of the number of days or the value of it is still quite high for us.

It has come down to INR 144 crores this year as compared to INR 169 crores last year. And as we're doing business more in SIS and more large former stores and online, I don't see that inventory level comes down because only we take the end sales. So when you only take the end sales and the inventory is lying in our account only at our channel partners, so. It will remain at this level only.

The next question comes from the line of [ Shiva ] from [ Purnartha Investment Advisers ].

Am I audible?

Yes. Yes, you're audible.

My first question is the solar plant. It was said that according to CRISIl, there's a 30% subsidy are we eligible for that subsidiary? And is it included into the estimates of IRR?

No. So that subsidy is for DCR modules. We were fortunate enough to get this tender with the exception of putting up a non-DCR. So that is almost already INR 1.025 cheaper than a DCR model, 30% cheaper. So you're talking about the CFA that the center offers of INR 1.5 crores per megawatt. But non-DCR modules are cheaper by that. That is available for DCR modules.

Okay. So ours is the non-DCR model?

Yes. .

It was one large tenders to be eligible for non-DCR modules. .

Okay. And the entire capacity is in megawatts, sir?

It is 35 megawatts easy. With an overloading of 30%, we'll do anywhere between 42 to 45 megawatts. We are still doing the feasibility study and the technical study, how much overloading we need to do. .

And the PPA is signed at 2.79. What is the -- per unit.

Yes, at 2.79%.

Okay, okay. And could you just help us with respect to what was the annual returns and discounts as a percentage of gross sales for this full year?

Just a second. Wait for a minute. Annual returns?

It is 17% this year.

What is it last year?

Last year, 15%.

So last year, returns were 15% vis-a-vis 17%.

Returns?

Yes. But the discount has gone down.

Discount last year was 10.6%. And this year, it's 9.44%.

Last year, discount percentage was 10.16%, This is 9.44% for the revenues -- of overall revenue.

Understood. And I might have missed it, what is the plan for this year's growth in the EBO network for us?

I mean, I already answered this question, that the growth target, the guidance we will give in quarter 2 conference call. But what we indicated is that there will be double-digit growth. But actual growth, what we can do in this financial year, we will give you in quarter 2 con call.

I'm asking the number of stores expansion.

40 to 45 in this financial year. It may go to 50 also, yes.

The next question comes from the line of Shital Shah, an individual investor.

Am I audible, sir?

Yes, you are audible.

Sir, congratulations on meeting and exceeding your guidance and how heartiest congratulations to you and your team. Sir, I have 2 questions. Sir, company had become profitable in Q4 after gap of many years, I think 3 years. So sir, is it due to some structural change that have made on your time? Or is it due to market dynamics. I just want to know is this sustainable, especially in Q4?

Yes, of course, it is sustainable. And I think the reason is that adequate provisioning has been taken in quarter 3 and the discounts have been less, as I indicated, just 9.44 as compared to 10.16. So that was another factor, which was helping us make it profitable. And thirdly, the summer sales have increased. We have seen that there is a jump in the sales in the fourth quarter. So that also has been improving the profitability of the company this quarter.

Okay. . Okay. And sir, I'm not asking about the guidance as you have told you will speak about it in Q2. But just I wanted to know, sir, what levers will play out in achieving your guidance this year, sir, especially FY '27. And sir, what are the headwinds which you expect not to happen in achieving your guidance? Just a broad view, sir.

To be very honest, I think we are more confident as compared to last financial year because all our categories have shown result. Our Rocket brand is growing a very good growth rate. Our footwear is also contributing a lot. Our home textile is gaining acceptance year-by-year and existing categories are also performing well. So I think all these categories which have shown growth in last financial year would significantly contribute in this financial year as well. So we don't have any doubt on that. But yes, as far as your question exactly, what can be the headwinds, so I think it's definitely the economy. If we see that there has been some inflation caused by some LPG or petrol price, so that may deter some consumers to defer spending for a certain period of time. But that will happen for everyone, not for our brands. So that is the only concern we have right now, the geopolitical tensions and situation should get normalized as soon as it can be so that it doesn't have any effect on Indian economy.

Okay. Very good, sir. And the last one, sir, is about raw material inflation. Sir, is it pass-through with immediate effect? Or it will take a lag to pass through?

Immediately. So we don't wait for a second when the price goes up. So I think let us -- to be very honest, before we go for a trade show, we normally cover all our raw material because we know how much capacity the booking we can have it on our books. So accordingly, the raw material is also covered. And also, we take a hike of 6% to 7% or 8% depending upon like some of the material which is not covered. So to answer your question, yes, we are adequately covered as far as increase in raw material prices is concerned. So it will not affect our margins.

No impact on the margins due to hike in raw materials price?

Yes.

The next question comes from the line of Rohit Arora, an individual investor.

Sir, are we expected to be profitable in Q1 of '27?

See, I can't guide you quarter by quarter. But one thing which I can definitely tell you is that we would be better as compared to last financial year. And exact guidance, we we'll give in quarter 2 con call. But one thing which I earlier also indicated is that the double-digit growth is definitely on the table.

Double-digit growth.

Yes.

And sir, are we looking to expand our summer portfolio?

I think over the last many years, it has been growing faster than the winter wear category. And that is why the contribution from summer is also increasing every year as compared to winter wear categories. So there success will continue because being a tropical country and being of 9 months of summer. So this country is definitely going to outgrow winter as well and other categories. If I just give you a range of like this year of winter, we have contributed 45%, nonwinter contributed 42%. Textile contributed around 10.2% and accessory wear and Footwear and contributed 2%. So that indicates that now we are almost equal to a range as far as our products are concerned.

And sir, are we looking to expand our accessories portfolio?

Yes, we are doing it as the number of stores are increasing. So accessories are also growing.

We have accessories of only men or we have accessories of women as well?

Both. Men and women both.

And kids portfolio?

The kids portfolio is doing around INR 100 crores. It has grown to INR 110 cr this year.

Annually?

Annual revenue run rate.

[Operator Instructions] The next question comes from the line of Ankur Gulati from Capital.

Just one question, again, I think, someone has also asked. Q1 growth is similar to..

Can you please speak loudly?

Sir, what I'm trying to understand is Q4 May, we got benefit of our strategy [indiscernible] season brand [indiscernible]. Usual strategy Q1 maybe play out well, right? So the seasonality impact on profitability will go this quarter? Or are you expecting it will not?

But see, in the quarter 1, what happens is that we get returns of winters. So that is why it brings down my revenue. And that happens every year. So we are trying to reduce it, but as you know that the third quarter is very, very heavy. And the returns normally comes in April and May. So that is why it reduces my revenues in that case. And the primaries are also a little less. But as we go to Q2, Q3, it starts increasing. So the Q1 has around 12% to 13% of the revenues, then quarter 2, quarter 3 starts building up.

So the 17% return, which you referred to, that was from which quarter? I mean, INR 280 crore revenue booked in...

For full year, I'm talking about, 17% return.

Okay. And just mentioned the business better. Your INR 600 cr roughly on Q3 May. On average 15% to 16% comes back in Q1. Is that what you meant to say?

No, it is divided between Q4 and Q1. Not everything comes in Q1. So some of the quantity comes in Q4 and some of the quantity comes in Q1.

Okay. Fair enough. So Q4 this year is up, let's say, 35%, 40%, right? And on the net sales basis for Q1, can you at least expect this INR 140 crores of Q1 last year will also have a similar 40% bump because at least the summer season, summer offers, which we have, summer products have started?

I can't see for quarter-to-quarter. I can only give you an annual guidance because there are variations in quarter-to-quarter depending upon the season, depending upon the demand. So it will be prudent for us to give you an annual guidance rather than quarter-to-quarter guidance.

Fair enough. And annual guidance here, the solar business is over and above that? Or is that included in that?

Solar business is above that. I'm talking about our stand-alone business.

The next question comes from the line of [indiscernible], an individual investor.

Firstly, congratulations on a very good set of quarter 4 numbers. Coming to my question, sir, regarding the quick commerce tie-ups that we have, so are they present only in Delhi? Or are we planning to scale this to the rest of India?

Yes. So for now, we started with Blinkit. And since Blinkit is more predominant in the Delhi NCR region, they also started experimenting with the dark stores in that particular region. However, since we've tied up with Swiggy now, our products are available in some dark stores of Bangalore also. Also, we are one of the few brands which have also onboarded Zepto and are in final talks with BigBasket. After we get BigBasket, we will have the entire ecosystem of quick commerce where Monte Carlo products will be available. However, the final decision where the products will be placed geographically lies with the buyers only as with quick commerce players, we work on an outright model. So final call is with them. We are not working in marketplace model with customers because that will involve us taking care of the inventory. So to begin with, we are doing an outright business. So the final call for geographical penetration lies with the buyer as of now.

Sure, sir. That actually makes sense. Second question, sir, that I have is on the fast fashion brands that are coming up nowadays. How are you planning to sustain the growth that we have in terms of double-digit growth that you do?

See, first of all, these fast fashion brands have not come today. They are there in India from last 10 years. So Zara is here in last -- I think they came around 2009, and Shein came in around 2014, 2015. So we have been competing with them, and we have our own USPs as far as designing and fashion is concerned. And India is a very large market. So it can accommodate brand as well as large fashion brands also. So we don't see any issue as far as our growth is concerned because of these brands.

Okay, sir, sure. And sir, on the online and the e-commerce side, can you just help me understand how much commission we pay to the e-commerce platforms, like Jio, Myntra that we have?

Yes. So see, all our trade agreements that we have with these guys, it won't be fair for me to disclose them here. But it varies because we operate in all different models. It's an SOR marketplace outright, and margins vary depending on category to category. Margins are also a combination of margins plus marketing spend, all of that. So it won't be okay for me to share the exact margin that we are giving these players.

No, sir, that's fine. I don't want a specific number, just a broader structure as to how do we plan these commissions?

So see, the commission, so one thing when we look at our online business is we never want to bleed money when we work online. So the base target that we have, we want to achieve the same profitability as our other verticals do. So all the margins are in line with the other channels. There's not extra margin that is being offered to the online channels, if that can answer your questions.

Okay, sir. Sir, is there any difference in the margins between the distribution channels we have? Can you just throw some light on that?

Yes. There are some differences based on the distribution channels because each distribution channel has their own cost. For example, my MBO SIS business will have an agency cost and a distributor cost, whereas e-commerce and LFS will not have that. My LFS has a lot of manpower cost. My EBOs, which are franchised, do not have that much pressure on the top line. So the margins are limited over there. Our factory outlets have the least margins because they sell products at a discounted rate. So margins vary. But see, margins is not the only cost component for each vertical. But when we look at the expenditure, the total expenditure for each vertical is within plus/minus 5%.

Okay, sir. And just one last question from my side. What sort of revenue contribution are you expecting from your Home Textile segment in FY '27?

I think we will maintain around 13% to 14% to the overall any overall revenue. Actually, it was 12%.

Okay. So you are seeing a growth of around 3% to 4% this year?

We see a growth in the Home Textile segment as recently we had a very good ratio. So we expect that the contribution from home will grow from 12% to 13% to 14%. -- the

The next question comes from [ Shah ], an individual investor.

Sir, the governance is regularly paying a very good dividend, sir. A request from our investor side. At some point, you consider buyback also, sir. The reason being our share prices is languishing in the same range for so many times, and the company has good cash to go for buyback. And we are trading at a very low multiple compared to our peers. It's just a request. Keep a note on this, sir.

Thanks for the suggestion, and we'll pass your suggestion to the Board as well.

The next question comes from Rohit Arora, an individual investor.

Sir, are we looking to do more IPP projects after the completion of our current project?

See, it all depends on the ROI we get. So if IRR is good, definitely, we have been thinking of doing other projects in BESS and other energy areas also. But once we implement this, and it all depends on the IRR we get in these projects. If IRR is good, we definitely go ahead in that also. A separate subsidiary has been made.

Do we have to acquire land on our own to do a project?

Yes. So most of the projects that the government gives land will be acquired by us, but we prefer leasing land instead of buying it because that gives us a better IRR on the invested amount. And to answer your question, aggregation is done by us only.

Aggregation?

Yes, land aggregation and leasing is done by us.

And are we looking to expand our facility, any CapEx in them required?

It's in the normal range of INR 10 crores to INR 15 crores every year, not more than that. We prefer outsourcing recent production. And

Moreover, 85% of the production is outsourced from different vendors across India.

There are no further questions at this time. I would like to hand the conference over to the management for closing comments.

So thank you very much for participating in this con call. And we reiterate that whatever guidance we have given in the past, we have been very consciously giving it, and we have achieved it also. So just to remind everyone, we will give our guidance in quarter 2 con call, but we are confident enough to achieve double-digit growth going forward in this financial year. Thank you very much for your attendance.

Thank you. On behalf of Emkay Global Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.