PNGS Gargi Fashion Jewellery Limited (543709) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Investor Call to discuss financial results for the quarter and 9 months ended December 31, 2024 Conference Call, hosted by PNGS Gargi Fashion Jewelery Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Neha Boid, Company Secretary. Thank you, and over to you, Ms. Neha.

Thank you. Good afternoon, everyone. This is Neha, Company Secretary and Compliance Officer of PNGS Gargi Fashion Jewelery Limited. A very warm welcome to you all. For discussion we have here with us today, Mr. Amit Modak, our Director; and Mr. Vishwas Honrao, our Chief Financial Officer. Welcome, everyone. We wish to start by qualifying that during the call, we may make some forward-looking statements. PNGS Gargi does not provide any specific revenue or new guidance. Anything which is said during this call, which may reflect our outlook for the future or which may be more construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. These statements are considering the business environment we see as of today and therefore there could be a risk and uncertainties that could cause actual results to materially from what we are discussing on this call today. An audio link and transcript of this call will be shortly available on the Investors section of our website, that is www.gargibypng.com. With this, we are now ready to begin with the opening statements and the performance of the company. And post that, we will be available for the question-and-answer session. I now request Mr. Amit Modak sir to take over. Over to you, sir. Thank you.

Thank you, everyone, for joining the call. Very good afternoon. Valentine day is coming near. Our industry's most popular sector is coming near so we all are happy. In every call earlier to this call everyone was asking about INR 100 crore, INR 100 crore and INR 100 crores. Sometimes I utter that word when we were not listed and we were not regulated, but that word was taken on record by all investors as my some like a commitment. I'm happy to see that I have delivered that INR 100 crores. But along with that INR 100 crores completed turnover, I had given you all the explanatory statement also to what extent it is actually B2C and to what extent it is B2B that gives us franchisee operated franchise owned modeled franchises. If you go through our all performance, which is there till the time of 31st December 2024, you will find and you will be happy to see that company is performing well. I myself is happy with the performance, you all must be happy with the performance and we will continue with the same gist and same progress in the near future. We are in the expansion mode right now, we are in the growth status. Just 30 years -- 30 months old company is there. And so we are growing step by step, we are expanding step by step. As at the end of 31st January, we have got [ studios ] of 10. Then we have got PNGS locations 31. We have got SIS on the FOCO basis. Then we have got Shopper Stop SIS 38 and one more location, which is in 1 museum, which is also on the FOCO basis and that is a 1 unit. So total location if we sum up there are 39 plus 1 that is 40, 30, 70 -- 80 locations are there right now, which are carrying out the business. And from those locations we are getting all these outputs. I had in earlier meeting also said that we are going to open certain locations during the AGM or during the investor call I said and 2 out of that, those are coming up in the next 15 days' time, at Gurgaon, which is Haryana state and one is at [Technical Difficulty] Aurangabad, Sambhaji Nagar. Then we are expanding our Laxmi road brand shop, [Technical Difficulty].

Speaker, your voice is breaking. Just a moment. Ladies and gentlemen, we'll just disconnect the management in some time. Thank you. Ladies and gentlemen, the management line is reconnected. Please go ahead.

Am I audible now?

Loud and clear. Go ahead.

Okay. So all these 4 locations will take place before 31st March. Subsequently also, we will be growing because P. N. Gadgil & Sons will have 2 additional locations, 1 at Thane road, Gokhale road and 1 at Laxmi road. Recently, we have started P. N. Gadgil & Sons location at Koregaon, which is [indiscernible]. And all these locations will start contributing mainly during next year because current year's last 2, 3 months, it has started. Seasons Mall recently opened 3 days back. Earlier to that, there was a Pimple Saudagar which was opened and so recently opened showrooms are there, and so those showrooms will contribute to the business in the coming near future. This industry that is a fashion jewelry industry is growing almost at 25% to 30% CAGR. And if you look our turnover right now this year, it has surpassed the thing, but yes, all days are not same days forever, but I can promise you or I can foresee that we will perform as per the market growth potential that is 25% to 30% CAGR. Secondly, every year, P. N. Gadgil & Sons will also keep on adding locations to their -- of their showroom. So we will get that additional showrooms year after year available for the SIS with the P. N. Gadgil & Son. But that is a passive thing because it is not within our control. So whatever they will expand will definitely but on our own, at least another 10 locations will get added in FY '26. I'm talking about FY '26 because current year 4 remaining locations, I have already explained, which are going to be completed by March '25. New products are added 14-carat gold plus diamond already added in last Diwali. 5, 6 days back, we have launched our new product range, which is called as Utssav, which is a costume jewelry -- purely costume jewelry made out of copper and brass and for that, it's only right now available on the online. The top line contribution from that segment is not yet materialized in our top line, it will get mainly contributed in FY '26. This year, for the last 2 months, it will contribute, but we are not knowing exactly what is the potential -- market potential is there, but acceptance to our product and our pricing range will be seen in next 2 months' time, and we will accommodate accordingly if any changes are required to be done. We see that P. N. Gadgil & Sons, apart from P. N. Gadgil & Sons without depending on them, we will complete at least 100 locations by end of FY '26 that is during FY '26, we will have count of 100. Right now, we have count of 18. So another 20 locations, it may be a brand store, it maybe SIS of the Shopper Stop or it may be in some or other forms with some or other brands as hand-in-hand locations further selling our product. Strong backing is there from the P. N. Gadgil & Sons, the company, which has got more than INR 8,000 crores turnout. And we really required to thank them for their support in our entire journey and creating market for us. Shopper Stop in FY '25, I think, we have got almost 38 right now, and we will close around 40 by end of the year. And there are 4 to 7 locations will get minimum added in next financial year because we have almost completed all their good performing locations. They have got more locations or more than 100 or 150 locations but we cannot go at their every location because it requires to be good for us to sell our product range. This time in this call, I will say that by 2027 that is FY '28, not INR 2027 FY, it is FY '28, we can see our top line reaching around INR 200 crore or INR 200-plus crores. If everything goes smoothly and if everything progress smoothly. I generally promise and deliver. I give you promise and deliver more and that is the experience of the investor as well as my all associates, they always say [Foreign Language]. Yes, I want to deliver that way only. So you may find me conservative, while speaking but I'm very aggressive, while executing my business, and we have seen that in the figure number of FY '25 first 9 months as well as FY '24 ending. That's the time when we entered the market in FY '22 -- sorry, FY '23 that was December '22, that time our entire balance sheet was of INR 30 crores and this year, in the first 9 months, we have achieved profit after tax of INR 23 crores so that you can compare it. We made one preferential allotment in September 2024 at the rate of some INR 565, I'm not remembering the exact rate, but it was near to INR 565 per share. And amount collected was around INR 47 crores to INR 48 crores. And that amount was mainly for the expansion purpose, inventory investment purpose and marketing purpose. Now, we are trading Pan India, Indore is in Madhya Pradesh, Gurgaon is in Haryana, Delhi is there. Then we are there in Telangana, we are there in Karnataka. So we will need to require more funds for the marketing spend and in that preferential allotment, I had explained to all investors that out of their total contribution, I will spend at least INR 10 crores out of that on the marketing on Pan India basis, and I can tell you that around INR 1.5 crores I have spent on the marketing, and that is giving me good returns as far as sales figures are concerned. Yes, for purpose of utilization of those funds, those funds are getting utilized, but I'm very conservative, and I'm [Foreign Language] you can say, for utilizing the money. But yes, when it is given by the investor, I will use it but very carefully because I want to give them returns on their money and not just use their money because they have contributed to me. I can promise you that your company will never be in red and it will always give all figures in black and never give a cash burning, always gave profit making and creating a profit. As I always say, I'm not in a hurry in the number, but yes, I have proved that by fluke whatever number I told you in some news items, I completed that same way I can tell you that FY '28, you will see minimum INR 200 crores or more, and that will be a commitment. And at any point of time, you will find that number is going to happen and going to be on the paper in black again, without a loss. We are there in a growth mode, and you will see a good progressing company and a good company with good investors, their hard earned money will be used very carefully by the management for only and only for the purpose of business. This time, I'm giving you more time for the question answer because question answer means a lot because whatever I will say, it will be a one-sided rather than if I get questions from you, I can answer your precise inquiry or the query and that will deliver you more information and which is sought by you. Thank you for listening. And you can continue with raising your question one by one. Moderator will release the question, and you can ask the question. Thank you.

[Operator Instructions] The first question comes from the line of Kiran Paranjpe an Individual Investor.

This is Kiran Paranjpe. Can you hear me? Okay. Congratulations for a great set of numbers. As an investor, we are really pleased with the progress PNGS has done in the last 6 months with your guidance and support from Mr. Gargi and PNG & Sons. So we thank as an investor, we thank PNG and Sons for their support. I have a couple of questions. My first question is related to your material cost as a percentage to sales. If I see last year or last quarter or before that, it was about first -- last year, it was about 60%. Now it is about 57%. So is that driven by the product mix, which is diamond-studded jewelry sales? Or is there some other reason for that?

It is a product mix plus the size of operation because economies always works, higher procurement, lowering of the cost, direct indirect costs and getting good deals in the market that may be the major reason, and that is the main reason.

Okay. So can we assume that this percentage would roughly remain the same going forward or may reduce further?

There are 2, 3 chances that silver jewelry getting many times imported that accessory is getting imported and then fabricated in India as a jewelry. So if any import policy change and if any additional tariff is levied on those imported items, which are mainly coming from China, Thailand, Indonesia. Then that may impact to a certain extent to the price and to the cost. But I don't think that it will be a major impact, and we will try to see that it will get maintained or near by 1% or 2% plus or minus.

Our next question is related to your finance and depreciation for this quarter as compared to last quarter. The depreciation has jumped about 50% and finance costs have jumped by about 3x. So just wanted to know what was the reason for that?

I don't get how you are calculating that 3x from INR 7 crores -- INR 7 lakhs to INR 20 lakhs.

Just give me a minute, I'll tell you.

Up to H1, it was INR 782,000.

No, I'm seeing September quarter versus December quarter, the finance cost October quarter was as December quarter is 12.26 so it's about 4x roughly. And September quarter.

September was 3.28. It is a finance cost includes that credit card commission. And during festival season, there is many digital credit cards are coming in and larger the sales, larger the card users, the usage -- those costs are going up. Those costs are not going up because we are borrowing or anything. We have got ample resources lying in the bank. If you are looking to my other income, you can make it out.

But I have a query about that. Since now we are moving mostly on a FOFO model, which is Franchise Owned Franchise Operated. That means that we are transferring the goods to our franchisee and franchisee is selling good to the individual retailers. So in that case, I was wondering how come the credit cost impact is borne by us.

But it is almost 50-50, sir.

I'm not clear about that.

P. N. Gadgil & Sons locations are transferred to -- on the FOFO basis. Other are still on my company's size?

Okay. Okay. That's the reason. And what about depreciation, it has jumped it was 15.64%.

There are certain assets which we create at our franchisee location. Plus there is a back-end office expansion is there due to that diamond and increasing inventory management due to additional locations so that back-end expansion has happened in Q2 and Q3 and that depreciation IS charged there. It's a very asset-light model. If you go and see the total block fixed asset block. It is very low. It is just INR 1.5 crores.

Okay. Another question is related to the diamond, which we buy. Now we take pride that we use only natural diamond. My question was related to how do we ensure that these are not conflict diamonds?

No, those are getting certified by GIA, IGI.

Okay. They follow the Kimberly Process certification?

No, that technicality, I don't know, IGI is following certain processes, which are market accepted around that this is only we are taking their certification and Gargi is regularly enrolled with the IGI for certification.

Next question was related to during AGM, you mentioned about hiring of CEO and COO, we are updating any progress on that?

I will address you. We are already appointed 2 persons, one for exclusively looking to North India and expansion there because many Shopper Stops happen there, then Delhi had happened 2 months back, then Gurgaon is happening right now, then Indore is happening right now. We have appointed one person as an assistant manager for the franchisees and SIS servicing. Plus we have appointed 1 in-charge manager at the head office who is looking and taking care of entire distribution and the retailer channels and he's taking care. We have already appointed 2 people. And by me, we will have CEO or GM in the place.

Okay. By May '25.

Yes. Yes.

Okay. Okay. My last question is related to another thing which we discussed during AGM was about 9-karat gold hallmarking and the possibility of us selling those 9-karat gold jewelry. Can you please update us on that?

No. Still government has not approved that request from the industry for adding 9 karat in the list of the BIS approved hallmark karatage. As on date, it is only 14, 18, 20, 22 and to some extent, 24 karat.

Okay. It's still pending with the government, yes?

It is still pending. Once it is clear, then we can create a bank of the designs and start thinking about the filling. But with the increasing price of gold, it is very likely that very shortly, government may think about it.

Yes. That's the exactly reason I was wondering because gold prices keep going up, so 9 karat would be very affordable for everybody.

Yes.

Next question comes from the line of Sameer, an Individual Investor.

Congratulations on the performance so far. My question is more strategic. If you consider the number of stores that we have. So far, we have done a great job because large revenue was coming from the PNG SIS, where we were getting the inbound customers or PNG store itself. And then now we are expanding. And without Reliance you said that you will expand to 20 stores by FY -- 20 additional stores by FY '26. So my question was what would be the growth from these 20 new stores to the top line of, let's say, FY '25. And what will be the sales store sales growth from the current lot of SIS stores and because Shopper Stop and franchisee stores would be lesser, right, in terms of revenue per store.

Predicting the additional stay from the upcoming store, is a very tricky thing. But we cannot predict hard and fast. I can predict top line for my entire entity, but I cannot predict top line for that specific additional number of stores and new stores, which are upcoming. And Shopper Stop, yes, it is a very small contribution, but it is a very cost-effective contribution for the business. And their locations earlier period like the last year period, it was less than INR 1 crores contribution. This year, in the first 9 months, they have contributed more than INR 2 crores. So their contribution will increase as days will pass. And I'm confident that Shopper Stop will have a sizable contribution in total fee. 20 locations you said out of that as I said 10 will be the branch store and 10 will be the SIS with some or other [indiscernible] PNGS mainly with the Shopper Stop or likewise other brand stores, multi-brand store. So that will come from them. So exact targeting or predicting '26 top line with including these 20 new locations, it is a little bit difficult task for me as such. It may be possible for others. For me, it is a little bit difficult task and I don't want to promise anything, which is not known to myself. So how I can promise you something [Foreign Language] from these 20 new locations.

Understood. And what would be like the current set of PNG SIS stores, which is driving the significant -- I mean, which contributes a large chunk of revenue, what percentage would you see them growing in the future? And what percentage they have grown in the last 1 year say?

Right now, the percentage wise if you see that PNGS their store, they have got 31 locations and I got B2C sell if you -- I have got B2B sell to them. But I will say a B2C sale on -- in B2C sale, they are contributing around 83% to 85%.

And about the growth -- from the growth aspect, do you see them growing at least 10%, 15%.

They are growing at more than 20%.

And you expect them to grow at 15%, 20%, maybe in 1 or 2...

Again, I'm at the same size. Predicting something which is fantastic, I can say, yes, they can grow around 10% next year. But that you will take as a negative thing because earlier they have grown at 20%. Next year they may grow at 25% also. But predicting something, it is very difficult, what will the growth. I have been predicting on the long-term basis. So I have predicted on FY '28 we will see INR 200-plus crores top line. And accordingly, that bottom line will be in the proportion growth will be there. So on that basis, you can see what growth I am expecting. But I cannot give you any precise commitment at what growth will be there.

Sir. And my last question is on margin profile for SIS PNG business. And the EBO/let's say, EBO business. What would be the margin profile in both these segments?

It is near to each other. There is no large difference.

Understood. So total EBITDA margin would be, let's say, similar kind of profile for both the segments.

Yes, yes.

Next question comes from the line of [indiscernible] an individual investor.

Am I audible?

Yes, you are audible.

Yes. First of all, congratulations for an excellent set of numbers. These are actually kind of one of the best industry benchmark numbers. My first question is that can we expect that you would maintain the margin that you had reported in the last quarter, both at an EBITDA level as -- both at a gross margin, EBITDA and PAT level. So you had reported gross margin of 43%, I believe, PAT of 25% and EBITDA 32%. Can we expect these kind of numbers in the future also?

Hardly 1% or 2% plus/minus will be there.

Okay. My next question is, can you give a sales mix from your PNG SIS, Shopper Stop SIS, your own website and Amazon. What is your current sales mix in the last quarter?

Online sale is 4%, 0 cash burn.

And what about Shopper Shop SIS?

Shopper Stop SIS is almost 4% of the total sales. Again, there is a very cost-effective model is there. I'm getting certain fixed margin because I'm transferring stock to them. I'm getting space and marketing everything free from them and there is a targeted TV customer, which is coming inside the Shopper Stop is my customer only because it's the mainly Shopper Stop sell, woman-centric commodities, the articles or the fashion. And my product is matching to it. And I need to spend only the HR cost in Shopper Stop.

Understood. And what is your current sales mix from your own stores?

Means other than PNGS and Shopper Stop and all these things.

Yes, yes, from your own branded store.

It is 12%.

12%. Okay. So my question is, see, let's -- do you have PNG -- so from the strategic point of view, from the next year onwards, as we have almost, I think, done the SIS agreement for all the PNG stores. The only lever of growth that I see is adding up own stores, right? And the 10 number of stores that you have pointed out from the own stores, that looks to be the main source of organic kind of a growth other than the -- if there are any increase in the same-store sales growth because we are probably not adding any products that you have said, we have already added Utssav and [indiscernible]. So what is our strategy of -- I'm not able to understand the utilization of INR 45 crores. We have raised INR 45 crores, but I do not see that being utilized for the growth right now. Correct me if I'm wrong.

See, own stores, I need to expand on my own funds if franchisee is not coming there for the brand store. Then I need to invest almost INR 3 to INR 5 crores per store, including the diamond jewelry inventory. Secondly, I need to invest more on the back-end inventory as number of stores will go on growing. And this money, I will see that utilization will be completed in the next 18 months' time and will start yielding for the business of the company. But at the same time, I will not recklessly start investing money just because it is in my hands.

So you may not -- I'm not saying that you should recklessly start spending money, but the guidance that you have given of INR 200 crores for FY '28, that means you are factoring only some 30% growth year-on-year, which is almost in line with the industry growth. Whereas you have reported kind of 100% growth for the 2 years. So are you saying that you are going to do much, much worse off than you have done in the past 3 -- 2 years? And you would be not gaining market share, you would be just maintaining market share?

I cannot quantify it. I cannot quantify it. But I have given you the minimum number, which I'm likely to achieve in FY '28. You may see that earlier also or you may see very large number, higher number in FY '28 than committed number. And how that growth will come, it depends on what the opportunities will come to me. If some good opportunity is coming through the franchising model, I will not unnecessarily invest the money just because I have got that money in my hand because I'm there for doing the business. If the opportunity is good and giving me good returns without investing money, I will prefer that. Just because money is there, I will not invest it. And I will -- I'm not in a hurry to -- I'm getting franchisees. So simultaneously, I will go for my own store also and start investing that money because money is there, I can start additional store. The location is required, good marketplace is required, then only I can start my franchisee there or the store there. You can see that my -- all the stores are [ happy ] stores and making money for me, money for the company, money for your company and your money. So I want that to be maintained, just opening the store and if it is not performing, it doesn't mean anything.

And what is your current ratio of this 14 carat gold studded with diamond of your overall sales?

Overall sales for studded with the silver jewelry, silver jewelry is 48% and 43% is diamond.

And what is the gross margin of silver jewelry and the studded jewelry?

We are not calculating. We are taking it as a one single segment.

So that is okay. But the product is different. So [Foreign Language]

Product is different, but [ P&L ] is the same. It is not segment-wise. Then only I can segregate on diamond, how much I'm making, on silver, how much I'm making, but segment is same.

Okay, 2 quarters back, you had given some numbers around the industry, right? And you had said that we are -- the organized share is around 3 to 5 percentage of the overall fashion industry. Can you throw some light on what would be our share of this organized jewelry market right now?

Our share in total organized sector?

Yes. In jewelry, share of organized jewelry sector.

So I'm thinking that I might be somewhere 0.25% of the organized sector in the fashion jewelry because we are treating CaratLane, treating Mia, treating BlueStone, all these people as fashion jewelry people, then my share may be very low. Fashion jewelry is growing, fashion jewelry will grow. And as many people will have more and more money in their hand for the disposable income due to lowering of the income tax that first INR 12 lakh is tax-free, that is giving almost INR 70,000 crores additional cash flow in the common man's hand and that will definitely come in the fashion and lifestyle. And since our industry is in there in the fashion and lifestyle, we will also get some slice out of that. And that is may be the growth engine for our industry. That is a fashion jewelry industry. And increasing gold prices, fine gold prices and compared to the fashion jewelry prices. So fashion jewelry will be more popular in the common man's mind or for the common man's hand. And so they will come more and more towards the fashion jewelry, and they will -- the market will grow at a faster rate than what we are expecting. So that I'm saying that I'm not going to quantify anything right now because all these effects are yet to come in the market, yet to come into the picture.

Okay. And what is the inventory days that we expect?

Inventory days, I'm expecting around 180 to 200. That is including inventory line with my FOFO. I'm not talking only at my back end, so...

No, no, no. I'm talking about inventory in your balance sheet because FOFO...

Inventory in balance sheet, you may see 3x stock turn.

Next question comes from the line of Rajesh Singla with VTG Capital.

Sir, can you hear me?

Yes, yes.

I think very good for -- congratulations for a very good set of numbers. I would like to revisit the assumptions which you have given so far and how they turn out in terms of the numbers. [Technical Difficulty]

Sir, your voice is cracking.

Yes. So my first question is like how are we connected with P. N. Gadgil Jewellers Limited, which is another listed entity. And [Technical Difficulty] to them? And what kind of growth are we going to see in our parent business because that has been a major driver of growth for us? Like they currently have 30 stores. And if I heard you correctly, you're saying we will be adding 2 to 3 or maybe 4 stores every year for next few years.

Yes. First of all, P. N. Gadgil Jewellers, we are not connected with it at all in any nature, neither cross transaction, no cross holding, not a single paisa financial transaction with each other. It's just a Gadgil to Gadgil. Second to your question regarding the parent business, yes, since I am there working as a CEO also, I can comment on that. They are likely to add 2 to 3 stores every year here and after. This year also, they have added one at [indiscernible] 3 days back. In next 2 weeks, it is adding at Thane. Another 2 weeks, it will add Laxmi Road. So this year, that FY '25, 3 stores will be over. And if we go at your question that FY '30, you are talking about FY 2030. Yes, by FY 2030, we will have definitely at least 45 stores in the fold of P. N. Gadgil & Sons Limited. 50 is a little bit higher figure for me. But 45, that is another 12 stores in the next 4 years, that is 3 stores each year FY '26, '27, '28, '29, yes. And we are adding FY '30 also. So 12 stores, from this to 45 stores, it will be there.

Right, right. So in a way, we will be adding around...

And [indiscernible] correctly said, yes, that is going to be a main growth engine for us. We are not shy in saying that they are growth engine for us because it's their baby only and they have nurtured it. They have given the brand value to our company. And without checking any confidence of any investor or we as a company in Gargi, we are getting their full support. Even the trade name, which is Gargi by P.N. Gadgil & Sons. That is also very same company's name, not in the P.N. Gadgil & Sons company's name or any owner's name. So they are giving wholeheartedly support to us.

Right. Right. So in a way, we are saying that the main parent business, the area growth will be 8% to 10% every year, right? 3 to 4 stores, we are adding [indiscernible] stores currently we are adding. So 8% to 10% will be the space area growth for the main parent business, right, every year?

Yes.

Okay. And so on top of that, so we are also saying that we have 10 exclusive -- I think we will have around 14 exclusive brand store by the end of this year [Technical Difficulty] every year [Technical Difficulty] So that is also...

Next, so we are planning another 10.

Yes, another 10. So that is also a very strong growth over routine exclusive brand stores, adding more around 8% store -- exclusive brand store growth. So the space area growth in your exclusive brand store is also to grow by 80% in your exclusive brand store. POS shopper store could be like muted, actually a very small business. Anyway, that [Technical Difficulty] Your area growth is like [Technical Difficulty] grow very strongly, also growing and your exclusive brand store is also going to grow by around 70%, 80% from the area side of the business. And if I remember correctly, you also mentioned that your growth could be on your parent business 10% to 20%. It would be 20%, it could be [indiscernible], right? So [Technical Difficulty] area plus...

Your voice is cutting, Rajesh.

Mr. Singla, sorry for interrupting. Please come closer to the phone and speak because we are -- we cannot hear you, Mr. Singla.

Is it fine now, hello?

Yes, please go by it.

Yes. So I think you [Technical Difficulty]

Mr. Singla, sorry for interrupting. We cannot hear you.

Singlaji, should I reply to your question to the extent of what I have heard from you?

Yes, sir. Yes, sir. Sure.

So you are saying 10% to 20% growth will come from our parent company's shop or the location, which is at current 33 locations at the end of this year. Out of that, 3 will contribute next year full year. And next 3 years, addition will contribute partially for the next year and partially for the subsequent year. Even if we go that 20% growth, that substantial contribution from their side to the top line will be definitely there. And we are confident and we are not shy to say thank you to them or to accept that they're giving us boost in our top line. Secondly, you said that we are doubling our number in our own store from 10 store current 4 additional coming up, so 14 and another 8 to 10 stores getting added in next FY. Yes, that also will add substantial top line to our company. As far as percentage distribution for own stores and PNGS, SIS and Shoppers Stop, instead of that, I will prefer to talk about the company as a whole. And as a company as a whole, yes, I am confident that we will keep minimum to minimum 30% growth rate, which is there in the market, plus that additional cash flow, which is going to remain in the hands of the investor due to change in the income tax rate, which is to the tune of INR 70,000 crores, plus state commission is also coming in the next 15 to 18 months and government is expecting to INR 225,000 crores to be pumped in the market through the increased salary. All that is going to boost this jewelry market and fashion jewelry market at very large. And we are there ready to take advantage of all these things. We will be nowhere back and we will be at the front end only, and we'll be taking all the opportunities and all the benefits, which are coming out of this increasing customer base, increasing customer demand, and we will see that company will get benefited out of that.

[Technical Difficulty]

Mr. Singla, sorry for interrupting. We cannot hear you. I would request you to disconnect your line and reconnect and fall back in the queue. Our next question comes from the line of Nimish Kala, an industrial investor.

Congratulations for your excellent set of numbers. I would like ask a question that you -- as you have mentioned that you are looking for a growth of 30% for the next 3 years. So are you saying it to be extremely conservative target or you can grow much faster than that?

As I said, this is our normal target. I'm again and again repeating that INR 70,000 crores, which is going to remain in hands of people due to reduction in tax. Secondly, increasing gold prices, which is creating more and more attraction for the fashion jewelry. And third is the state commission, which is coming with INR 225,000 yearly cash inflow in the [ system ]. All these factors, I'm not discounting in this 30%. This 30% will be normal. And over and above, all these positive factors, which is there for our industry may push that 30% to a substantial respected higher figures.

Yes, sir. And sir, what do you think about the sub-brand that we have recently launched, which is called Utssav? What do you think this contribution will be in the coming years? How do you see it unfolding?

Generally, I [ won't ] comment on such things because it is launched just 7 days back, I am not having any idea what it will contribute in the first 2 months' time. But yes, I know that this industry is very big and people want branded and good quality product for this event-based jewelry because nowadays, more and more events are coming like mehndi, sangeet and all these things, even in the middle class people also. And for all these events, these people require this kind of jewelry, which is just almost a onetime use kind of jewelry. But they want some branded, some good quality. Even though it's a onetime use, they want it to be multiple time use -- usable. And for that, they depend on the brand and the quality providers like PNGS Gargi Fashion Jewellery. And so we have entered in that market. Presently, we are entering that market only on an online basis. Subsequently, our exclusive brand stores, which are not in the PNGS [indiscernible]. There also, we are going to start presence of this jewelry.

Yes, sir. And sir, my last question is, what do you think the online contribution will be in the coming years?

It has gone up from 2% to almost 4.25%. That has doubled in last 1 year time. And I'm expecting in percentage-wise, it should reach to 6% to 6.5%. Again and again, I'm telling you this is with 0 cash burning.

Next question comes from the line of Rahul Kumar Paliwal from Shefa Family Office.

Yes. Congratulations, sir, for consistently delivering the surprises for every stakeholder from earning to the category innovation like Utssav. So I think you've articulated a little bit about Utssav. Can you share a little more about what is the inspiration behind Utssav? Is it like a new category where you want to club? And how is it driven? Is it like through consumer feedback or identifying market gaps or desire to create a new category? Or is it reflecting Gargi's ROI strength in terms of competency? So a little more on Utssav and how you envisage it evolving?

In your question, you have given all the [indiscernible] that what Gargi purchases. And that only has induced us to introduce this Utssav also. And yes, we have got ability to deliver, we have our ability to create ROI. And we have got ability to crack the market with good analysis about the market. And yes, we have analyzed the market. Market is demanding this kind of jewelry, and this kind of jewelry is there very well received by the market from various supplier or the various chain stores. And we have seen the growth of those stores, and we thought that with the customer inquiry, which is coming repeatedly that why this kind of jewelry you are not keeping, you have got good brand, you are giving good quality, good finishing. We expect this kind of jewelry also to come with us for our purpose. So we decided to introduce this jewelry. The only thing we have researched and find out the good suppliers and good assemblers who can create a quality finished jewelry. We are giving good commitment regarding the polish and the finish. And then we started it, not only even we decided to launch it on 1st January, but for some -- our internal purposes that we were not satisfied with certain things. We delayed it and we launched it on 1st February because we don't want to compromise on any front. And that's why we launched it on 1st February. And yes, we are confident that it will give us good returns and good top line. And as you said, regarding ROI, yes, it will contribute good ROI to the company's bottom line, even though top line contribution will be low as compared to the diamond jewelry or the silver jewelry. But bottom line percentage contribution will be higher.

Great. Great. My other question is about industry trends. So what do you see the most significant upcoming challenge in the fashion jewelry industry? One thing is like the space is getting crowded with the deep pockets coming in. Another line I can add is like about -- are you giving a rethought upon lab-grown diamond category given [indiscernible] and Tata getting entered into the space? Maybe you can consider lab-grown not as a diamond, let's say, as a stone in a fashion category space, similar to what you're doing with the brass, silver and other material. So how do you look at this category and challenges in the industries which envisage?

I cannot take names of the companies just like you because I have got certain limitation, but whoever is introducing lab-grown diamond, just now you referred, they have got their own very label-friendly ready-made garment store as well as very premium quality garment store also. So they have got both the ends. So same way that house has got real diamond, real gold as well as right now, as you said, the lab-grown diamond. In our basic thing, as P.N. Gadgil & Sons, we are never thinking about the lab-grown diamond. Lab-grown diamond and the category where we are building like small diamond studded in the gold, which are ranging from $0.01 to $0.15. In that category, lab-grown diamond cannot compete with the natural diamond because price difference is not much. Secondly, the cost of taking of these diamonds, irrespective whether it is a lab-grown or the natural, that is not differing. So lab-grown can make impact on the loose diamond, right, like 1 carat, 2 carat, 3 carat, bigger size diamond. But they cannot impact on the smaller size natural diamond as far as pricing is concerned. So why to give lab-grown when at same price or nearby price, natural diamonds are available. So we are never going for lab-grown. And in case of that Utssav versus silver jewelry or the real gold jewelry, that Utssav jewelry are altogether a different track and we are right now catering copper and brass jewelry in our brand stores. But this Utssav jewelry is something bulky jewelry, which is like a temple kind of jewelry or the south kind of pattern, which is a bulky jewelry mainly. And that is not right now in our fold or in our catalog, in our design. So we are adding that. That is not something which we don't have. Right now, we are dealing in copper and brass jewelry, but it is a dedicated smaller sizes tops or the smaller chains that we are dealing. Now it will be a bulky jewelry, which is used for the events like mehndi, sangeet and all these things.

Got it. Got it. I would club my last 2 questions together. Can you share any experience where a significant setback or unexpected challenge reshaped your leadership approach and overall business strategy since the beginning of the Gargi? That is one. And second is about in line of impressive growth in sales and profit, how is this growth influencing your working capital management, including the liquidity specifically to during the period of expansion. Of course, we have the cash which we collected to [indiscernible]. And including with that is a question about in the jewelry space, creative artistry meets the commercial pressure. So how do you navigate the balance between fostering creative aspiration and meeting the financial imperative of running a business?

Very really speaking, I don't get your question.

Okay. So...

You make it some simple. You must be a finance person, but make it simple for me.

Surely, surely, surely. So more -- I'm talking about the kind of growth we have, it has happened.

I will take 2 line answer and then you can continue with your sub questions. Continue with the first part.

Okay. So my first question is about since the beginning of Gargi, have you experienced any significant setback or unexpected challenge, which has caused you to change...

I'm getting very positive surprises day after day. But I have not seen any setback or anything till date.

Okay. And the credit goes to the legacy and the...

Credit goes to all my investors and customers. Second part? Okay.

Next question comes from the line of Vibhor Halan, an individual investor.

My question is what is your expansion strategy for the next 3 years? Is it going to be led by own store expansion and [indiscernible] SIS expansion? Or is there anything -- will there be anything more to it?

No, these are the only 2 options right now in the market. Either I have to go through SIS or through my own brand store or the franchisee brand store. SIS, yes, [indiscernible] will expand, I will have SIS there at every place. And that will definitely contribute me good contribution in my top line. Regarding the stand-alone store or the brand store or the franchisee brand store, I will go with that selectively. I need to survey the location. I will see the market, I will see the potential. And then I will decide where to set up these stores. Right now, we are in mode to expand Pan-India. So we are trying to expand everywhere. Right now, my -- as I told you in my earlier question and answer that we have appointed 2 exclusive people -- persons just to look after the distribution channel. Either it will be through our own store or the SIS or the own franchisees, whatever it may be. And they are tapping out the potential people who can take the franchisees in different states, in different locations. I cannot spell out to you the exact location or the city name and all these things for 2 reasons because if that doesn't happen, I'm giving you wrong promise. And second, if I tell you, this is going to be a public document on the exchange website. So my confidentiality will get threat. And so I'm not in a position to explain to you the exact locations or the cities of the area where, right now, we are serving, we are tapping the market and finding out the potential. But yes, we will find our potential, pan-India, and it will be the mix, SIS with PNGS and SIS with other options and standalone store, either it will be a brand store of own companies that we run or franchisee runs.

So out of the current 14 of the brand stores that we have, how much is our own and how much is franchisee?

5 are our own.

All are our own, right?

5.

5 are our own and the balance 9 is franchisee, right?

Franchisees.

Okay. And can you tell me, what is the standard square feet of our own stores versus the PNG SIS?

No, I don't get your question.

What is the standard square feet size of the store?

Standard square feet size of store for franchisees is around 400 square feet. Minimum size is 250 square feet, which is required only for silver and brass jewelry. If you want to go with the diamond jewelry, then you require 450 to 500 square feet.

Okay. And what about PNG?

PNG Sons, we cannot dictate them how much space they should provide to us. They are providing us reasonable space and at a prominent location within their branch.

And what is the approximate revenue per store that we get from our own store and from the PNG SIS store?

I have not calculated because all these -- my own stores are young stores competitively. Then PNGS stores, they are scattered in Tier 2, Tier 3, Tier 1 city. So if I go and just average it, you can say around INR 2 crores per store turnover is from PNGS. But you may find that there one single store is also making INR 5 crores and some other stores might be making only INR 50 lakhs to INR 60 lakhs a year.

Next question comes from the line of Kiran Paranjpe, an individual investor.

Just a quick question related to the preference shares. I believe the approval for trading of the share came on 27th September. And I believe there is a 6-month lock in. So does that mean the 27th March, these shares, which is 729,000 shares would be available for trading, right?

Yes.

Next question comes from the line of Rajesh Singla with VTG Capital.

Sir, can you hear me?

Yes, yes.

So just continuing with the previous question, which I had earlier. So this INR 200 crores sales target, which you are saying by FY '28, that is for the B2C sales, right, that's what you're talking about?

Yes, yes. Definitely.

That is B2C sales. Okay. And also, can you please highlight like the current inventory level probably with the [ FOCO ] franchisee could be around INR 40 crores kind of level. So that inventory level will remain stable or it will grow with the sales growth...

It will grow with their SIS growth. PNGS SIS grows, that inventory level will also grow because more inventory will be required by them.

Right, right. And the standard inventory days you mentioned earlier would be around 180 to 190 days, right?

180 to 190 days, yes, that much required period is there for a turnaround. But if you see, my balance sheet inventory is just INR 20 crores and if you find out that INR 100 crores top line, it is 5x.

Right, right. So the INR 200 crores B2C sales in FY '28 and around maybe INR 50 crores of inventory with the [ FOCO. ] So probably we'll do around INR 250 crores kind of sales in FY '28 on a total basis?

Yes.

Next question comes from...

I think that time is limiting us. So should I conclude the meeting?

We have one question left.

Okay, okay. We will take that.

It's from the line of Sharath Anurag, an individual investor.

Congratulations on the great set of number. I'll just quickly go through the question as the time is limited. Regarding the Utssav jewelry, I want to know what is the estimated market size for this kind of jewelry?

No, I don't hear you properly.

So what is the estimated market size for the kind of the jewelry that Utssav will be entering in?

Utssav that kind of jewelry, there is no organized market as on date, very few players are there, but they are also in the private limited mode. So their accounts and top line figures are also not available. But as rough estimations are there, this fashion jewelry market price is around INR 10,000 crores to INR 12,000 crores.

Okay. Okay. And the margins in this side of jewelry, are they similar to the jewelry you are [ negotiating ]?

Those [indiscernible] with the quality. But for us, it will be around 30% to 40% on the gross level.

Okay, okay. And sir, I wanted to know how are the designs differentiated for the items that are available in the North region in Delhi, Indore? How are they different from the designs that are available in Maharashtra? Are they similar or they are...

They are [ definitely ] similar because temple jewelry is same, Pan-India, Kashmir to Kanyakumari. Our South designs are the same, pan, Kanyakumari to Kashmir. Then Rajkot jewelry is same, Pan-India. So there is no differentiation area-wise. A little bit differentiation is there. But major differentiation is not there when it comes to the even-based fashion jewelry, which is required for the sangeet or the mehndi kind of events or the [Foreign Language] and all these kind of events. [indiscernible] bulky jewelry [indiscernible].

I meant to ask for the Gargi jewelry, sir.

What?

I wanted to ask this question for the Gargi jewelry. Is it same for the Maharashtra and the Delhi region? The designs, are they similar?

Our Gargi designs are pan-India, those are same because it's basically fashion and design, which we are selling. And generally, in this fashion jewelry, there is no bulky designs at all. Those are very delicate designs. So all the designs, which are available from Kashmir to Kanyakumari are the same.

Okay, okay, sir. And just the last question, sir. I wanted to understand the same-store economics a little bit in detail for the EVOs. And I understand that the branded stores are very new. So have you set any target or maybe estimates on what would be the internal target for revenue per store or breakeven period, those kind of metrics?

Yes. As far as store economics are concerned, you can come across my people who are giving you the franchisees and all these things. They can explain the economics in one-to-one basis. Again, as I said, this is going to be a public document on the website. There, I cannot open my business confidentiality. But yes, if you come across my people, they will definitely explain you how -- to what extent you need to invest, in what period you are likely to get your money back and in what period you will start making a [indiscernible] and earnings in that store -- those stores.

Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr. Amit Modak for closing comments.

Sorry, Mr. Jain, I could not take you on the line because of the limitation of the time. I am thankful to all people who have participated in the meeting. And I can commit to you that the company will grow as it was growing earlier and it will deliver as good as numbers and results and performance as it is giving you for the last 30 months, more than 30 months. And I can give you confidence that we are always working hard for giving you good returns and good performance. To that extent, I can commit to you that PNGS Gargi Fashion Jewellery Limited always concerns about their investors and always concerns about the satisfaction of their customers. Thank you.

Thank you. On behalf of PNGS Gargi Fashion Jewellery Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

Thank you.