Relaxo Footwears Limited (530517) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Relaxo Footwears Limited Q2 FY '24 Conference Call hosted by IDBI Capital Markets & Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Archana Gude from IDBI Capital Markets & Securities Limited. Thank you, and over to you, ma'am.

Thank you so much. Good evening, everyone. On behalf of IDBI Capital Markets & Securities Limited, I'd like to welcome you all to the Q2 FY '24 Post-Results Conference Call of Relaxo Footwears Limited. From the management side, we have with us Mr. Ramesh Kumar Dua, Managing Director; Mr. Gaurav Dua, Whole-Time Director; Mr. Ritesh Dua, Executive Vice President, Finance; Mr. Sushil Batra, Chief Financial Officer; and Mr. Ankit Jain, Company Secretary. We begin the call with a brief discussion from the management, and then we can open the floor for Q&A. Thank you, and over to Sushil sir.

Thank you, Archana. Good evening, everyone, and thank you for joining us on our Q2 FY '24 earnings call to discuss the financial and operational performance of the company. We have already uploaded the earnings press release and investor presentation on the stock exchange as well as at our website, and hope you have had the opportunity to go through those. Before we begin the question-and-answer session, let me give some highlights on Q2 and H1 FY '24 financial performance of the company, beginning with Q2. Revenue in Q2 FY '24 was at INR 715 crores, up 7% from INR 670 crores in Q2 FY '23. We witnessed strong demand during the quarter, which has led to a strong recovery in volume driven by open footwear. EBITDA recorded a strong 54% Y-o-Y growth at INR 92 crores as against INR 59 crores in the corresponding quarter of last year. Softening of raw material prices and better operational efficiency due to economies of scale enabled us to enhance our EBITDA margin by 392 basis points in this quarter. EBITDA margin was at 12.8% in Q2 FY '24 as against 8.9% in Q2 FY '23. PAT almost doubled in this quarter at INR 44 crores as against INR 22 crores in Q2 FY '23. PAT margin stood at 6.2%, up 283 basis points from 3.3% in Q2 FY '23. In H1 FY '24, we recorded a revenue of INR 1,454 crores vis-à-vis INR 1,337 crores in H1 FY '23, an increase of 9% year-on-year basis. EBITDA was at INR 199 crores from INR 146 crores in the same period of last year, up by 37%. EBITDA margin was at 13.7% as compared to 10.9% in H1 FY '23, an expansion of 280 basis points. PAT for H1 FY '24 at INR 101 crores against INR 65 crores (sic) [ INR 61 crores ] in H1 FY '23, grew by 65%. PAT margin was at 6.9% as compared to 4.6% in H1 FY '23. The company incurred a CapEx of INR 56 crores as on 31st September '23. We remain a net debt-free company with positive cash from operations. We remain committed to provide quality product as per evolving customer needs with focus on premium and innovative products. We continue to expand our strong distribution network with a special emphasis on new channel and e-commerce. Thank you. Now we can open the floor for questions.

[Operator Instructions] The first question is from the line of [ Onkar Ghugardare ] from Shree Investments.

My question is regarding -- last year, you were talking about premiumization of...

Onkar, your audio is sounding a bit distant.

Am I clear?

Yes. Please go ahead.

Yes, I was asking about, last year, you were talking about premiumization of the entire product category. But since last year, you have taken price corrections. So exactly what kind of strategy you are looking at, higher number of pairs to be sold and with less value or other way around? That's the first question.

This is Ramesh Kumar Dua. Last year, we did some price correction. Before that, we had lost some market share to competition. After price correction, we are regained our market share. So our volume growth has been more than 20%. As far as premiumization is concerned, focus is there in Sparx, in Bahamas. And already, we are having a good traction of these premium articles. So that focus is there, and it will continue.

But the loss of market share was due to higher prices of your products? Or was there any other reason for that?

No. Last year, because of higher, we had a lot of old stock, what you call it, costly inventory in the system because our industry operates on a lot of imported materials. We have to have a supply chain of around 6 months of that material. So that is why it took some time to consume. Meanwhile, market rate has fallen. But now we have our inventory in the system, now it is comfortable.

Sir, the second question is on the revenue of the company. So what kind of revenue you are expecting in the second half?

We're expecting a double-digit growth in the second half.

Okay. Just a last question on ROE and ROCE, which has been falling from last 2, 3 years. What's your strategy on that front?

Sadly, because our margins are under pressure. So once things will settle, definitely ROE and ROI will be better because then capacity utilization and more earning will be there. So that percentage will improve with the performance.

So regarding that, what kind of margins are sustainable now you have clarity on this?

For the next half, 14%-plus EBITDA.

EBITDA, 14-plus-percent?

Yes.

So you are expecting this margin in the upcoming quarters or like because the current margin is less than the margin which you are projecting?

You're right. But when the volumes go up, our sales go up, then H2 is going to be better than H1. So things will improve.

Yes. Due to operating leverage, you will gain the margin, right?

Automatically because of operating leverage, our EBITDA will improve.

Okay. So what's the capacity utilization you are working at currently until -- at Q2, what was it? And what do you expect it to be?

Currently, it is at 63% utilization.

That is for Q2 you are talking, right?

It's H1 we are talking about, it is around 63%.

Okay. So what kind of capacity utilization you see will work with going forward?

It will remain around 65%.

The next question is from the line of Aliasgar Shakir from Motilal Oswal.

I had a question on your closed footwear. So we had a very good trade show, I think, a couple of months back where we had displayed the entire range of our closed sportswear. So I just wanted to understand a couple of things. First is, I mean, Q3 typically is your large quarter for sportswear. So how is the initial response? And I mean, what is the kind of demand and growth that we are seeing? Our composition of sportswear, I think, correct me if I'm wrong, is somewhere about INR 250 crores, INR 300 crores. So what kind of growth we expect? And I mean, our competitor has had a significant size, and I think we've also had aspiration to grow significantly. So do you think that this is a category which can be somewhere close to like a INR 1,000 crore contributor to you in probably a few years? I'll stop here.

This is Gaurav Dua. And you are right that this category has huge potential to grow. And what you're saying, INR 1,000 crores, maybe in 2, 3 years, we will definitely plan to grow to that level. And regarding the market situation, as you know, the market has still not picked up what we were expecting. So we have done a lot of retail meets across India and distributor meets. So the initial response, because of this Pitru Paksha and untimely rains, has not -- market has still not given some good feedback until now in terms of uptake in the market. So it's too early. Diwali is in November, so we are expecting November should be better.

Got it. So I mean our base would be very low. So of course, from that base, we should see a very good performance even in Q3. And just a follow-up over there is that one feedback on the ground is that the margins in the sportswear is not very compelling and, therefore, Relaxo sportswear is not very well received by the distributors and retailers. So have we made any changes over there? And do you think we have addressed the issues at the distributor level?

No. So we have made no changes since last 4, 5 years. And regarding distributors, they always complain about margin. That is their trade habit, they need more margins. So we're having the fixed margin, which we have not changed from last 5 years.

Even in the sportswear?

Yes, yes, it's same. The same, we have not changed.

Got it. Okay. And in Q3, from the last year's base, do you think this quarter will -- I mean, considering the kind of market weaknesses there, we should expect things to only recover after a couple of quarters? You think Q3, because of a low base, we can expect strong growth from sportswear?

So we are keeping our fingers crossed, and the last 7 months has not been so encouraging in terms of the uptake of this sports footwear. The market is still a little challenging. So we are just hoping for the best that this should now pick up. It's been 7 months like market is not responding.

[Operator Instructions] The next question is from the line of [ Yash More ] from RV Investments.

Sir, my first question is regarding the market share. You said we have gained the lost market share. So what's the current market share?

In volume, if you talk about at the company level, last year, if you see, we lost around 20%, 25% in volume, drop was there in open footwear, which caused Hawaii and Flite, that only we have regained it back. So there is a 27% in H1 growth in volume, you can see that. What share we lost, last year, we had gained it back.

Okay. And regarding the FTA, do we see any benefit from the U.K. FTA?

Can you repeat the question? It's not clear.

I was asking about the U.K. FTA. What's the position -- what's our position? And what are we doing regarding the FTA? What benefits do we see?

Sorry, I'm not able to understand your question, but you're saying FDI, U.K. FDI, what's this? Can you please -- can you repeat the question?

Yes, sure. What I'm asking is what are our benefits with relation to FTA, the U.K. FTA?

Talking about the free trade agreement with U.K.?

Yes, yes.

Not much. Not much. These European markets or the U.K. market had been more, in footwear sense, could be more for leather footwear. But we are moving to non-leather footwear. So that's why it may not be...

Not any impact on us or effect.

The next question is from the line of Abhishek Getam from Alpha Invesco.

Am I audible?

Slightly there's a background disturbance, Abhishek. Please move closer to the mic and then speak.

Yes. Is it better?

Yes, go ahead please. Yes.

Yes. Sir, my question was regarding premiumization strategy. So largely, our open footwear are sub-INR 200 ASP. So what are our plans going ahead to bring whole portfolio level or footwear level to a higher ASP? I mean, sort of the whole company portfolio in the range of INR 500-plus ASP. And what strategy would we go for, I mean, Tier 1 or Tier 2, 3?

So if you remember, we have taken the last price cut of rationalized price in September. So since then, the prices were less. Now if you see October, that ASP has increased. And regarding the premiumization, we have for brands like in Flite, we have launched Urban Basics, which is again INR 400-plus MRP. And we are working on the portfolio of Sparx, which is more than INR 1,000 to INR 1,500 MRP. So we are continuously working on our portfolio to increase or make it -- increase the ASP and improve on premiumization.

Understood. So what part would be INR 500-plus ASP contributing to our revenues?

20%? 10%?

10%.

It's roughly around 10%.

10%. And sir, where do we see this to achieve or evolved in terms? And do we see this to improve this 50% sort of in a longer-term horizon, 5-year plus?

No, no. Our 80% as on day business comes from open footwear. Company is focused on serving masses. 20% is coming from our closed footwear. So that is why average comes out low. But our focus is there on premiumization, whether it is Bahamas, Flite or Sparx. So maybe 20% of that, that will ultimately build up premium.

Right, right. So down the line, like for 4, 5 years down the line, we can expect it to 30%, 35% sort of contributor?

So we have to see how the thing -- I mean, what kind of traction we get from these categories.

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

There's an observation where your volumes have remained flat over the quarter since COVID at an average of 45 million, 50 million pairs per quarter. And this has been the trend for the sector also. It's not only pertaining to Relaxo as such. Can you help us understand why this is -- why the volumes haven't picked at the consumer level? What are the key factors, I mean, that's driving such a muted demand?

See, there was an up and down since COVID, the first wave, second wave, third wave. So things have not stabilized, and then the price increase was there in 2022, '23 because of war. So it's been -- like the last 3, 4 years, the industry has been facing a lot of turmoils. Now this year, we were expecting that the industry will grow, but last 6, 7 months are not that -- there's no sign of huge uptake in the market because of, again, untimely rains, inflation pressure in rural India. So that's why the industry is struggling to grow to that level.

So if I have to, again, summarize, the price increases that you saw in FY '23 led to a poor demand in volume. And then again, in FY '24, the volume pickup hasn't been seen yet.

Yes, yes, you're right. That's why we are able to get that volume back of 30% growth.

Got it. So there has been a BIS standard that has been implemented in the footwear. If you can help us, what would be the implication for us as well as for the industry? How do you see this shaping up for the industry as well?

Yes, it is going to become mandatory from January, this January '24. So whatever products we are making, specifications of that, government has a number of times revised. Now we are working on that, making the specification. And we are quite ready to follow these government regulations from January.

Does this mean, sir, that a lot of China footwear imports will get reduced? And if you can help us quantify how much would be China imports in footwear, which would not fall under this BIS standard?

No, no, no. Even whatever goods will be coming to our country, everything has to be as per BIS standards. Nothing will come out of this.

Got it. Got it. So would this mean that a lot of unorganized players who would not be able to cater these standards would lose out market share and in turn be beneficial for brands like you?

We think so.

Okay, okay. Sir, just a bookkeeping question on the Sparx brand sales, if you can help us on an annualized basis, what would be the Sparx brand sales? And yes, that's the question.

Around 37% -- between 35% to 40% share will go to Sparx brand.

And within that, what would be the closed and open sandals and sportswear breakup roughly?

Overall, 20% is our closed footwear and 80% is our open footwear.

And in Sparx, it is 50-50: 50 open, 50 closed.

50 is our closed footwear. All right.

The next question is from the line of Manan Madlani from KamayaKya Wealth Management.

Sir, my question is around our raw material side. So what kind of scenario are you seeing?

At the moment, for the last few months, prices have stabilized, by and large.

Okay. So going forward, do we expect a gradual gross margin improvement from here onwards?

Yes. Ultimately, always we have to be watchful of the market conditions, competition, how it is. So -- and keep our prices competitive. And we keep on watching this every quarter by quarter. And when the volume grows, automatically, our margin also grows along with it. At the moment, for the past 6 months or so, situation has been quite challenging; sentiments are low, particularly from rural markets, mass segment. But with the volume growth, our margin will definitely improve further.

Okay. And sir, we were doing some channel check, and we realized that there is some price difference across majorly all categories between our EBOs and our website. So what is the strategy behind that?

No, no, we have one price only across all channels.

Okay. So we might have to check again because we were doing some channel checks and there was some...

One article, we have one price throughout India across all channels.

The next question is from the line of Ankit Kedia from PhillipCapital.

Sir, my first question is regarding the price action. Given that the underlying demand in mass segment is currently subdued and given that the RM cost is on a declining or stable trajectory, can we say that price action, be it upwards or downwards, is not behind and this price stability will come in the market? Or in next 2 quarters, if the demand doesn't revive, you could take some price correction as well to gain market share?

So we are not going to take any more price correction because raw material prices have been stabilized. And there is a -- we don't see that there is an increase in any raw material price. So our focus is on distribution expansion.

Sure. And sir, on distribution expansion, we are going for direct reach now. So if you can just give some color today where we are. And in the next 1 year, 2 years, what is the target, what we are looking at?

So like there's quite -- in India, we have a lot of white spaces across the country. So we are going to have a secondary focus, secondary-driven sales approach rather than like a primary push. So there is a whole strategy working behind it how to increase our footprint across India.

Sir, can you elaborate on this strategy? It will help us understand the business better.

So like we have discussed earlier also that there are 1 lakh outlets, MBO outlets in India. So currently, we are at 65,000 outlets. So every year, we're going to add more and more outlets to grow.

Sure. Sir, my second question is regarding EVA and PU. Are you seeing both these products seeing some pressure or EVA is doing better than PU and PU is where there is some impact of demand?

No, no, we are seeing both are growing equally. And I think both have a good future. So it's not like one is growing, one is not good.

Sure. And sir, my last question is color Hawaii versus noncolor Hawaii. Color Hawaii, we have seen more competition from Aqualite, Walkaroo and others. While in non-colored, you are pretty much the market leader. So anything we are doing on color Hawaii to gain market share?

So as you know, we have a brand called Bahamas, which is in colored Hawaii. So -- and we are growing well in that category. Last year, there was a struggle because of huge MRP. Now it has been cleared, our old stock has been cleared, and we are able to get the market share back.

And sir, what will be our Bahamas contribution? If you can give us growth between the brands, it would be helpful, between what was the Sparx growth for the quarter or half year versus Bahamas and Flite?

So if I talk about volume, in Hawaii and Bahamas, both is upward of 20%, the volume growth we have done.

Sir, so even the company volume growth is pretty much in the same trajectory. So where is the pressure coming from because at the company level, we have done 23% volume growth odd?

Pressure is coming from -- it's more of like a Sparx brand, the closed footwear because season has just started. The last 6 months, it was a more of open footwear. Now the season has started for closed footwear. So let us see how this quarter and next quarter goes.

And sir, with the new capacity coming in now on stream and with the new product, the response being good, where do you think -- what changes, assuming the market stays where they are, what is in your hands to drive demand in the market from closed footwear perspective? Is it the competitive intensity is very strong? Will you add or do more promotional activities on the ground, spend more on brand ambassadors to gain market share, because assuming the market stays the way it is for the next 6 months to 9 months?

So whatever you have said, all activities we are in the process of doing, be it spend on BTL, ATL, driving mode, launching more articles, doing NPD meets, distributor meets, retailer meets. So everything is like -- because Q3 is a season for closed footwear. So all activities are aligned to get the growth in this quarter and next.

Sir, but for -- winter is just around the corner, so your primary push would have happened in the month of October. So if you can just share how has been the October month's progress for closed footwear, it will just help us understand how the underlying growth is coming for the season.

Since we have mentioned before that there is a lot of competition, unorganized and organized have entered in this category. So we are facing -- we are seeing like a lot of discounts are being offered by unorganized and other players who have entered in the market. So it's not going to be too easy to win this market. So let us see how this 2, 3 months goes.

The next question is from the line of Harsh from Marcellus.

So I see that there has been some changes in the top management, and Mr. Shravan Kumar Singh ceases to be the KMP of the company. So just wanted to ask, like does he continue to be an employee at Relaxo? What really happened? And have you identified a replacement for him?

He has come, he's not KMP. He is in senior management list. So he joined as a New Product Development Head.

So someone else has joined as the New Product Development Head?

It is with us. He has joined as a New Product Development Head. He is part of senior management.

This is Ankiit Jain, Company Secretary. I just want to update that due to some internal change in role and responsibility, Mr. Shravan Kumar Singh has stepped down under the senior management category, but he will be continuing as NPD Head of the Company. This is the internal decision of the management, but he is continuing as VP NPD.

Okay. So does the role of VP NPD has been shifted from being a senior management role?

Yes, yes. He's not in senior management list, but he is a part of company only. He is the Head of the NPD.

Okay, got it. Got it. And sir, after taking the price cuts last year, we have seen that you have gained market share, especially in the Flite and Bahamas category. Do you reckon this market share gain story will continue in the ensuing quarters as well?

Yes, definitely it will continue. And we'll gain market share, correct.

So to that extent, the volume growth will keep on coming, right, I mean, in the next quarter as well in spite of the industry being a bit tepid right now?

See, whatever -- like I have mentioned before also, last price cut rationalization was in September. So this kind of volume will not be there. Now value growth will be there. So volume growth is 27% is, I don't think, say, in next few quarters...

15%.

Maybe 15%. Not that much high because the gap was in first 6 months.

The next question is from the line of Akhil Parekh from Centrum Broking.

Sir, my first question is, what could be the possible reasons for the demand weakness now given that we have already taken price correction and it's almost 2 quarters now? So if you can highlight like broader reasons probably why the demand continues to be weak in [ RFP ]?

So consumer sentiment has been sluggish in the mass segment, and that we are witnessing across the country. And our whole footwear category, we are seeing that the sentiments are not that great. So that's why if the industry does not grow, then there will be a little challenge. And we are seeing this because of monsoon, inflation, that rural market is definitely not responding.

Okay. Okay. So that I understand that the sluggishness is there in mass segment. But unfortunately, none of the companies have been able to clarify like what are the clear reasons why we are seeing this pressure given that the inflation has already started to decrease.

Yes, yes. But the demand at rural markets should also be there. We are seeing that walk-ins of consumers are not that, which was before. So maybe the discretionary spend at rural level is not there. We can assume that.

Okay. Has that started to improve now given the festival already started? Do we see that improvement now in the month of October?

See, it's too early to comment upon it. We are waiting for this season. This is important -- maybe November, December, things may improve.

Okay. Okay, sure. Second is if you could just update on the DMS 2.0 implementation, which we have been talking about since last few quarters. Have we seen any -- I mean, how far we have reached in terms of implementation? And are we seeing any positive impact? Because one common feedback we were getting is the wholesaler were undercutting on pricing basically. And if you can just highlight something on DMS 2.0.

So DMS 2.0, now 50% of our distributors, we have implemented this 2.0. And our plan is in the next 3 months, we'll make it 100%. Now regarding price cut, price cut by distributor, it is -- we have not seen that, but maybe it's not in the DMS that they can cut the price. DMS is just to get the inventory and how we can do secondary with them and align our schemes accordingly. DMS is not implemented to control the distributor discount to the retailer. Yes, it is maybe to drive the secondary and have the control of how things are going.

The next question is from the line of Onkar from Shree Investments.

I just wanted to know, what are the export percentages of the revenue currently? And what kind of scope do you think you have and the margin profile over there?

Yes. In this quarter also, in H1, if you say around -- we have around 4% contribution, and we expect to have this kind of percentage maintenance in future as well. Maybe a little bit we can have more because the growth is a little better compared to other channels. So we will be able to get a little better percentage as a contribution.

So just wanted to know, what is the margin profile over there as compared to the domestic market?

It is in line of same, like what domestic we are earning, in the same lines, the margins in exports as well.

So they are same, right?

Yes.

Okay. Maybe given the capacity utilization at 63%, 64%, isn't it possible to push exports a little bit given the push of the government to the sector as well?

We have been doing that because whenever we have started the exports, we have been doing in our own brand. So wherever we are putting our products in whichever markets, and we are getting good traction, and we are able to get sustained growth in consumer pool as well.

And what's the percentage of online sales currently?

So we are doing roughly around 12%, the contribution of online and new channel.

Okay. And how it has gone up or gone down since COVID?

So if we compare with the last year, it is same. As what I was talking earlier also that industry is not going -- they're also feeling the pressure. So the growth is same, it's not that we are able to grow more. So however, we are adopting a cautious approach also in this e-commerce because it's a very important channel for us to drive future growth.

The next question is from the line of Jasdeep Walia from Clockvine.

Sir, what has been the growth in Sparx brand in the first half of FY '24?

It is mostly -- hello? Sparx brand has not grown. It is just because our competition intensity was there. Some of the segments like SFG category has grown. And now festival season is starting, but delayed also. Now November onward, we are optimistic that this will grow.

First half sales are broadly flat, 0 growth Y-o-Y.

Nominal, maybe 3%, 4%.

Okay. Got it, sir. And what are the plans to increase the number of EBOs in the second half of FY '24?

We are having a little cautious approach. Things are -- we are doing to improve our planogram, improve the consumer friendliness, training the staff and also trying to find out how to improve efficiency of our retail outlets. And then we plan for expanding the network, the retail outlets.

The next question is from the line of Archana Gude from IDBI Capital Markets.

Just one question from my side. So what is the revenue on the geographic basis? And what are the efforts you are putting in to increase our market share in South?

So if you see, we are doing 45% coming from North zone, followed by East zone of 22%, then West 20% and 15% is South. So in South market, there is a challenge of growth because the demand is subdued, specifically in South market.

So that would be for both the categories, open and closed?

Yes. Yes, correct.

The next question is from the line of Sachee Trivedi from Trident Capital.

The question I have is that in a few -- in a previous earnings call, you have indicated that Sparx revenue will go from INR 400 crores to around INR 1,000 crores over the next 2, 3 years, which I think was around FY '26. Is that still something on your -- in your plans? And if yes, then how do you plan to execute towards this goal?

Though this year has been a little challenging, but our focus on premiumization is particularly in Sparx category and particularly on shoes. And we are getting -- this year, there are a lot of premium articles in Sparx, and we are getting a good traction. Based on our experience, we are focusing on this and likely to grow, but not in this year. It is a year of stabilization and improvement and learning. And accordingly then we'll open up our retail outlets also, we will utilize e-commerce also, but things will go accordingly.

Okay. Your other expenses has gone up 24% year-on-year. I'm assuming this is sales and marketing and promotion. Is this to help the Sparx brand? Or is this for everything, all the product categories?

All brands. All brands are being advertised. Our marketing expense spends are in all brands.

Okay. Now in terms of your distribution channels, you have the MBO, you have the EBO and you have the online channel. Do you think you should be looking at a differential pricing across these 3 channels given that the customers that comes to your e-commerce channel is very different from a customer that comes to your MBO channel?

So if you see, instead of having different pricing, we have different brand offerings. So the Sparx is more relevant for EBOs and online because it's more than INR 1,000 MRP. And for the mass market or MBO outlet, which are 1 lakh outlet across India, for them, we have Hawaii and we have Flite and Bahamas brands. So we have segmented brands according to the price rather than giving the different discounts.

Got it. And then one question on your MBO market, particularly in the rural segment. Should we think of it as a consumer discretionary spend? Or is it actually an important spend because if somebody's chappal is broken, then they need to replace it? And then the question is, why are they not buying a Relaxo brand to replace their chappal and going for something else?

See, what we have seen is that because of inflation, see, their visits have been a little reduced. So that's why what we are seeing is that the payments are not coming from the distributor and from the retailers. So because of inflation and their discretionary spend going down, so they are a little selective in buying. That is the trend from last 6 months, but we are hoping that this will improve because of festive season coming and stabilization of prices are there, raw material has been stabilized. So there should be an uptake in the demand.

But that is assuming that this is a consumer discretionary spend. And I'm wondering if in the rural market, this is actually a consumer staple item.

So if you have seen, we have grown in volume. So we have definitely gained the market share there also. But Sparx is a category where we are seeing the spends because it is more of discretionary where this buying has been low.

So Sparx is discretionary, but your Relaxo brand, Bahamas and Flite, particularly where you are selling to the rural and many times in the call, you have mentioned that, that is where you're seeing a slowdown and you are hoping the festival season will see an uptick. And I'm challenging that part and asking if actually a Relaxo chappal is a consumer staple item for that market.

So we agree with that, but overall market share also has been growing. We are growing in that space. But the industry also has to grow. There should be a huge demand from the consumer side. So all categories will grow. We are not facing any challenge in open footwear.

Okay. Okay. All right. And how are you tracking the success of your different programs and initiatives that you have currently put into place? What is the number and what is the metric that you track on a regular basis?

Can you repeat your question, please?

What -- how are you tracking the progress of the various initiatives that you have put in place right now to get back some of that revenue growth? What metrics do you follow very closely?

Through DMS, we are able to know how many retail outlets are being served. So month after month, we see category-wise, region-wise. So that is a parameter we see. The more retailers -- our distributors are able to serve, so that means our reach is increasing.

We keep on monitoring the reach of our SOs, also direct reach we talk about, that they are visiting 60,000 outlets. So that has been monitored every month, how productive the calls are, what are the orders they are taking, how they help by secondary, how we are fulfilling the demand. So it's a monthly process.

[Operator Instructions] Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference back to the management for the closing comments. Thank you, and over to you.

Thank you all for joining the call. This is all from our side. Looking forward to joining you again. Thank you very much.

Thank you very much. Ladies and gentlemen, on behalf of IDBI Capital Markets & Securities Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.