S.P. Apparels Limited (SPAL) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I'm Pavitra, moderator for the conference call. Welcome to S.P. Apparels' 3Q FY '20 Post Results Conference Call hosted by Batlivala & Karani Securities India Pvt. Ltd. [Operator Instructions] Please note this conference is recorded. I would now like to hand over the floor to Ms. Prerna Jhunjhunwala. Thank you. And over to you, ma'am.

Thank you, Pavitra. Good afternoon, everyone. On behalf of B&K Securities, I would like to welcome you all to 3Q FY '20 Post Results Conference Call of S.P. Apparels Limited. From the company, we have with us the senior management, including Mr. P. Sundararajan, Chairman and Managing Director; Mrs. S. Latha, Executive Director; Mr. S. Chenduran, Director of Operations; Mrs. P.V. Jeeva, CEO, Garment Division; and Mr. V. Balaji, Chief Financial Officer. I would now like to hand over the call to Mr. P. Sundararajan for their initial comments. Thank you. And over to you, sir.

Thank you. Good afternoon, everyone. Thanks for the participation in the call. This quarter has been very tough because of both revenue degrowth and PAT margins coming down on account of withdrawal of MEIS retrospectively effective from March 2019 by the Central Government. Now let's talk about the review of the performance of each division. Garment division. With regard to the customers, we are growing steady with our existing customers. However, unfortunately, there has been a setback from customers, Mothercare and Kmart, who have gone to [ administration ]. Due to this reason, there has been a reasonable decline in our revenue for this quarter. This came suddenly, and it was too short a period for us to make up from other customers. We have been able to manage this setback by increasing our exposures with new customers like Carter's and H&M, in addition to Primark. So the sales will be restored from Q1 of FY 2020/'21. Going forward, we should be able to grow at the pace we have already indicated. One of the new customers has committed to grow the business in India considerably, and we are one of the new preferred business partners for them. They have offered more capacity, and we are expecting them to complete the audit of few factories this month, and then the production should commence soon. Another new customer has also planned for 40% growth of kids wear business in India and has given an indication that they will increase their business with us. They have also approved one big factory for future business. The current order book is INR 220 crores. With regard to the capacity, our current capacity is 5,100, and our capacity utilization is around 59%. Financial performance. Garment division adjusted revenues stood at INR 146 crores, which degrew by 20% on year-on-year, and the adjusted EBITDA stood at 17.4% for this quarter. The margins comparing last quarter decreased by 70 bps, major reason being for the revenue coming down was due to 2 of our customers, namely Mothercare and Kmart, went into administration, and orders booked by them during the current quarter was not able to be delivered. Due to government's recent -- point #2 is due to the government's recent decision to roll back incentives given to the textile exporters -- garment exporters under MEIS scheme, we have taken a revenue loss of INR 4 crores during this quarter. The above MEIS, which was on a retrospective basis effective from March 2019, which we had to take a write-off of INR 9.7 crores, which also hit our bottom line. With regard to the Retail, the store retails were, we have 32 COCO stores and 12 FOFO stores as on December 2019. We had 362 large-format stores' doors as on December 2019. The financial performance of Retail. Total revenue for this quarter stood at INR 22 crore as against the sale of INR 25 crores year-on-year. EBITDA for Retail stood at 10.6% for the current year. Retail division hiving off. The company's management and the Board has extensively reviewed the comments of the Retail division, and the said division's return of capital employed is relatively low. And hence, the Board of Directors has concluded to hive-off the division. The decision was taken due to the requirement of continuous growth capital for Retail division towards creating a larger distribution network, investment in brand awareness, investment in new brands and additional working capital requirements. Considering the amount of capital employed and capital requirement, the Board of Directors of the company at their meeting held on 23rd of January 2020, decided to sell/transfer its Retail division as a going concern on a slump sale basis to M/s S.P. Retail Brands Limited. The buyer has interest in acquiring the business of the company, subject to such approvals as may be required. Scheme of settlement of this hiving off. The amount of capital employed in Retail till December 2019 is INR 84 crores, including an intangible value of INR 3 crores. The total consideration of the deal will be INR 81 crores. The total consideration will be settled by S.P. Retail Brands Limited, partly by cash and the portion by way of compulsory convertible preference shares in S.P. Retail Brands Limited. The cash portion will be INR 56 crores. And after cash settlement portion will be INR 31 crores, which will be paid immediately and INR 28 crores by deferred payment with the interest at 8%. Equity holding in that company has been planned to share any upside of the valuation in the future of S.P. Retail Brands Limited. Let's go to the SPUK business operations. SPUK financial performances. The revenue of SPUK for quarter ended was GBP 1.4 million, which as against the last quarter performance of GBP 1.2 million revenue, and margins are at 3.4% and this division is promising and we grow at better rates. The future outlook of SPUK operations. The business model continued to grow steadily, and the retailers are looking to increase the sourcing through full service vendors that is imported in order to source efficiently by having proper mix of direct sourcing and landed deliveries. We continue to increase the customer base globally and planning to mitigate the currency risk by sourcing from various countries. Thank you. Now CFO will brief you on the financial performance of the company of each division. Thank you.

Good afternoon, everybody. Q3 performance of S.P. Apparels has shown a revenue of INR 181 crores for this current quarter as against INR 218 crores of revenue of the previous quarter, year-on-year basis. Garment division showed a revenue of INR 145 crores as against a revenue of INR 182 crores. Retail division clocked a revenue of INR 22 crores as against INR 25 crores of revenue same time last year. And SPUK revenue was at INR 13.4 crores as against INR 11 crores of last year. Our adjusted EBITDA margin stood at 17.4% for the current quarter on a year-on-year basis, as against a year-on-year basis of 18.1 percentage. Retail division EBITDA margin stood at 10.6 percentage, as against a year-on-year basis of 3.3 percentage. SPUK margin stood at 3.4 percentage, as against a year-on-year of 7.1 percentage. And on the 9-month performance, revenue stood at INR 661 crores, as against INR 595 crores of year-on-year, which is a 9% revenue growth. Garment division stood at INR 557 crores, as against INR 495 crores, which is 12.5 percentage growth year-on-year for 9 months. Retail stood at INR 65 crores, as against INR 61 crores, which is 6.3 percentage year on -- as against 9 months of last year. Garment division EBITDA stood at 15.6 percentage as against last year same time, 9 months, 18.1 percentage. Retail division margin stood at 6 percentage as against 5.8 percentage of last year 9 months. SPUK stood at 3.8% for the current 9 months as against 7.2 percentage of last year. The operations has -- the performance of each division has been explained by Chairman, and I would like to give you details on the gross debt. Today, current gross debt is INR 164 crores and my net debt is INR 147 crores. My current working capital is INR 250 crores, that is including stock, receivables, minus my payables, the net working capital is INR 250 crores. Same March 2019, our net working capital was INR 273 crores. I'll just brief you on the Retail hive-off, where the Retail hive-off will have a rather significant improvement in the ROCE of the garment division. The ROE will improve. The working capital cycle will come down drastically due to Retail hive-off, and there's no pledge of shares by the promoter for the Retail hive-off. Rest other data is available in the presentation. We can go to the questions and answers.

[Operator Instructions] We have first question from Riddhesh Gandhi from Discovery Capital.

Can you give us an indication of the level of confidence you have of gaining back and replacing the orders from the 2 clients that have gone into bankruptcy? And effectively speaking, also the -- if the overall profitability of those new orders will be in line with what the old orders were?

Yes, exactly. So the new customers means they are the -- I mean, recent customers. We are already working with them, just recently started everything. We are doing for 2 seasons. So they're in the growth mode, just started in 2 seasons. So they were waiting for the performance of us for them to increase the business. So overall, it will not have any impact on the margins by adding these new businesses from the new customers. There will not be an impact on the margins.

Got -- and how long -- and effectively, because you've already been with them for a couple of seasons, and your -- and each of facilities are audited, you expect this ramp-up to happen reasonably quickly?

Exactly. See they have been doing as I told you for 2 seasons, just they are working with one factory each customer, just as a trial for both of us. And now everything has been mutually satisfied. So they have approved more than -- another 1 or 2 factories, and we are getting ready for this. So it will ramp up quickly from, let's say, before the end of Q1. The production will start from additional quantities, maybe, in May/June and it'll improve.

Got it. And how long before it becomes completely normalized? Or you're saying by April/May, we'd expect all of the demand, which we would have lost to be again on similar lines? What would...

Yes. They have determined -- they have decided to -- yes, to increase the business. Already they have decided. So straight away, the business will start coming.

No, but what I'm asking is that we would have lost customers, which are about 7% to 8% of revenues. We'd expect to get all of that back by April/May? Or that might take slightly longer?

No, no, no. I think they'll start placing the orders during the month of May/June -- sorry, in the -- during the month of April, for production, May/June, and shipments in July/August.

Got it. So then we should be at that point we have actually filled up the idle capacity that we have?

Exactly. Very much. So as I told you, it was too short time for us to make it up from the business of Mothercare and Kmart what we lost because the way of working...

So do you have enough clients looking to increase business in a way?

Exactly. But they take some time because they close their order placing well ahead of -- so suddenly if we go back to them, they will only wait for the next season to come. Because they completed all the orders placed. And Mothercare -- it's also in Mothercare, I should mention here that Mothercare although they have gone to administration immediately, within a week's time, they have started another company called Mothercare Global. Actually, the Mothercare business model is like in -- they were based at the U.K. U.K. business, they were declining, there was a degrowth, but their international business was very strong. They have been very strong even now. So they did not want to lose the opportunity. So what they did is they started another company called Mothercare Global, and wherein they are going to start placing the orders against the LC terms, safely, against LC terms for international business. And we have very good hopes for those business to grow because they're our business partners for many years and our products are very much liked by the international brand business partner. So that will be another additional business, and they will also take some of the stocks of what they produce for Mothercare U.K. That will also be gradually taken by them.

Got it. Got it. Got it. And the last question was with regards to your new book facility. You all had teething issues for the initial -- actually in a couple of quarters, which I guess is always the case as well -- I think you're ramping up of your revenue capacity. Is that now behind us? Or it's still...

Yes, one second. Can you say it again, please?

No, I'm saying, in your new facility which you have started, right, effectively speaking, as I recall, there were initially a few teething issues a few quarters back, where we had to airship a few products and that effectively, because they were the new employees, the productivity was overall lower, which is why EBITDA was lower than expected in terms of the new facilities. This was, I mean, a couple of quarters ago. Just wanted to understand whether now that is normalizing.

Yes, exactly. You are right. So last quarter, the drop in margin was one of the main reasons was the air pricing due to less of the workforce, which we could not manage against the orders what we booked. Now everything -- that's on track. I think, in this quarter, hardly, we had any air freight in this Q3, and Q4 is going to be 0 air freight. So that's all back on track now.

I just thought effectively speaking -- got it. And so effectively speaking, actually, without much increment of CapEx, because all of that is already through, as our new customers, as our existing customers already had a ramp-up of products, we expect effectively a reasonable degree of growth that we can see going into FY '21?

Yes, definitely.

We have next question from Vikas Jain from Equirus Securities.

Sir, my first question, as you said, that the new customers, they will be ramping up their orders. So that will start flowing from -- probably from 2Q. So for the next 4Q and 1Q, you are signaling that it will continue to remain subdued. Is that understanding correct?

So Vikas in terms of Q4 and Q1, we expect revenues to be close to the previous year. Comparing previous year, we feel that there should be some 10% reduction, not 20%, what we are looking at here.

Right. Correct. And sir, just one question about one of the customers, that is Kmart. So I had read in earlier articles as well that Kmart was facing issues for, say, long period of time. So means -- so was it not the case that we were knowing it that the customer is facing issues, and hence, we would have done something about it? Or just wanted to have an understanding about this.

No. There -- we have an agreement of the payments against the documents and some were unhealthy. So we are protected, anyway. So that was not the case now. Suddenly, there was a drop because they filed the bankruptcy. So what we were affected is only the order inflow, but not on the profit for what we have booked. And now we are taking against the payment -- the order what they placed, now we are taking them against the payments.

Right. And sir, when you said -- mentioned the reasons about the decline in revenues, you said that some of the orders were not being able to deliver. So is there any reason for that?

Yes. See. Yes, this is what exactly we are saying. See when we were producing against their orders, Mothercare and Kmart, and suddenly, they both had filed the administration, so naturally we -- they're not taking the orders what they'd booked. We are not shipping them neither. So that's -- we are just holding those stocks, and now they're clearing everything against the payments or LC terms. That is also one of the reasons why these -- the orders are pushed to subsequent quarters. Still we are holding the stocks of Mothercare and Kmart, but gradually they're taking them.

Right. And sir, about the -- sir, you said that as you had backed up by the LCs and all, so I believe there won't be any hit in terms of receivables from these 2 customers, right?

No. In terms of receivables, the Mothercare business did face -- we are facing some $200,000 of outstanding with the Mothercare, which, I guess, we should be in a position to know the outcome once the administrator takes control of all the stocks and the business. I think we are stuck with just $200,000, just close to INR 1.5 crores of receivables.

Right. So there's fair visibility that this will be recovered? Or what is your understanding on that?

Yes. The administrators are saying that they will be in a position to come back to us only when they have some -- complete control on all the data. So we are yet to share from the liquidators.

So $200,000 is at risk. That's all.

$200,000. We are yet to know what is the status of this receivables of $200,000, which is due only in the month of February.

Correct. Correct. And sir, about -- talking about the Retail division. Sir, you said that -- so the capital employed in this was close to INR 84 crores, out of which, INR 81 crores was -- INR 3 crores was the intangible. Sir, so this INR 81 crores includes our stores, our inventories, everything? Means, you mentioned that there were 22 (sic) [ 32 ] COCO stores.

Yes, all put together, including the investment that we have made in the Crocodile Products Private Limited, a subsidiary company where we hold 70%, all put together, you see INR 84 crores of capital employed.

Right. Sir, so just a last question. Means just like promoters have also done in the past, where promoters have infused capital in the form of preferential shares. So why this time the same route was not, means -- the question was about requiring capital for the Retail business, right? So...

Correct. Right. Correct.

Sir, what is your thought process behind this? Why it was, like, completely sold off?

So like -- Vikas, we have already said that there was a growth plan that was presented by the Retail division to the Board in the month of August, where they wanted couple of more brands that needs to be in their portfolio for bringing more competitiveness in the products, and they wanted to invest more into working capital, more into opening up doors. So like the requirement was on the higher side. Since there are new brands that needs to be -- I mean, needs to be clubbed with the Retail brands, we both decided that more investment of money into the Retail brands will put the capital allocation into a question because the Retail division requiring more capital, and decisions, which are going forward, where there is requirement on the working capital is also on the higher side, considering the amount of capital employed and return on capital employed and the revenue ratio, the risk ratios, the reward ratios didn't favor more investment into Retail division. So that is why the hive-off happened.

Can I just -- yes, we cannot continue with just one brand for Retail. It needs to have more than one brand. So that is one of the reasons. So if they want to scale up their business, then they need more than one brand. If that's the case, then additional working capital requirement and continuous growth capital requirement, so then Board decided just not to sign the core business, so let them do it on their own, so we can hive it off.

Correct. Correct. And sir, just last question. When will the financial numbers be adds up retail? When will you start reporting that means?

When we do expect the transaction to complete.

So we have to get the shareholders' approval. I think the ballots will be posted on Monday. So we are expecting the voting process to be completed by 31st -- before 31st of March. And I guess, the transaction should happen on 31st of March -- before 31st March.

We have next question from Vivek Ganguly from Nine Rivers Capital.

I have a couple of questions. Now one is on the hive-off that is happening. Post the conversion of the CCPS, what would be the company's holding in the retail -- in the new retail business?

Post CCP, you're talking about -- see current -- currently, we are not in a position to value the retail brand, S.P. Retail Brands. So what the Board decided is that current moment we will have a convertible -- compulsory convertible preference shares in the retail brand. And whenever there is a fundraising process that happens in the Retail division, then at that point of time there will be a valuation, which will happen, and we will definitely look at the time of converting equity at that point of time. So that is how we have done it. Now currently, there will be only preference share where we will not hold any equity base.

No, no. So the way is -- if I can come back on that. You all have valued this at INR 81 crores. Of that, INR 56 crores you'll receive in tranches. But first, what is the tranche which you all are going to receive? Secondly, the remaining INR 25-odd crores that is there that remains to be received, so there must be a time line or some -- because otherwise, as equity investors in S.P. Apparel, we are kind of left in out in the dark as to how this whole thing will happen. Basically, if we look at most of the companies that are in the retail business and have a brand in place, while they might not be making too much of a profit, there is significant equity value that is attached to it. And usually, sales historically has happened in the 2 to 3x range. So we are wondering how this came about to be, the valuation of INR 21-odd crores? And also it is being sold to S.P. Retail Limited. So who is the owner of this company? And was it actually shopped out and other options explored? We'd would also like to understand that, please.

So in terms of the valuation what you get on a retail company, like, we have taken a valuation from category A merchant banker, Central. And based upon that valuation only, we have come to a conclusion of INR 81 crores of consideration. And on the second point, the split between INR 81 crores of -- INR 81 crores is that INR 56 crores is cash and INR 25 crores is compulsory convertible preference shares. Of this INR 56 crores, INR 31 crores will be paid immediately, and INR 25 crores will be a deferred payment of 3 years, which will be paid over a period of 3 years, at the rate of -- interest rate of 8 percentage. In terms of your question, the whole process, the S.P. Retail Brand is held by the promoter group company only.

No, no. So when I said retail brand, did we have -- the merchant banker was given the option to look out for any other structure where we could have tied this up into the company, brought in an...

Yes, yes, yes. We have looked at many options here. We had been looking for so many options to -- we're engaged a couple of people on this. And they've come out with -- because the retail brand is a brand which we -- actually, we are the licensee brand owners. And even though it is a perpetual brand, so the buyer who is investing INR 100 crores or INR 150 crores of money into the retail, would like to look at it in terms of so many other things, where the person whom we've appointed, [ ComStock Advisors ] has advised us that it could go into a special purpose vehicle and where there can be a possibility of raising funds there. That is how it has been -- the transaction has come to close now.

Sir, so if we -- we are -- we believe that we cannot support this business, and the business has better prospects and they've been hived off, then why do we still have to have a CCPS in it? If it has been hived, first of all, there is only 31%, which is coming in -- INR 31 crores, which is coming in as cash. The remaining is going to -- is deferred...

Sorry, not INR 31 crores. It is INR 56 crores.

Yes, it's coming in immediate cash. INR 31 crores is...

Yes, immediate cash.

Right? INR 25 crores, which is, again, not a very large number is coming as deferred payment. And then we have an uncertain upside from an equity conversion of INR 25-odd crores. So if we were not certain about it, then why have the equity option still available? Why not just make sure that INR 80 crores -- the entire value of INR 80 crores, INR 81 crores is given to the company? And there is [indiscernible] that happens?

See today, if we need to invest more INR 40 crores, INR 50 crores of money into the Retail division by buying out 2 more brands, I think there are concerns on the decision of investing more money into the retail brands by the Board. So considering all the pros and cons and all the future growth that needs to be looked at, actually that is how the Board has decided that it'll be hived off.

No, sir. I agree. If -- yes, the Board has decided in to hive it off, and we agree with that. But our question, largely, then why do we still have the CCPS conversion option, which is there still in equity umbilical cord linking to the Retail business while we could have had a clean separation?

See while INR 25 crores of CCPS is that we still feel that there is a good potential for us in the retail sector, whenever there is a prior equity that comes or an investment that happens in the retail. Any future valuation that could give us more...

What I should say is that once -- if it is a stand-alone business, so it has got a great potential because they will go into multiple brands, more brands and things. So they already have a good network and good connections and contacts and presence. So we could -- they've -- when they have shown us the business model, I am saying it was definitely impressive. So only problem is it was -- in the manufacturing, it could not go well because 2 different mindsets and there's always growth capital investment. So manufacturing, we did not want to continue that one. So as a stand-alone with some private equity, they raised some money. So we could definitely still see that there's a good potential in that business. So why not we see the upside of it?

So you all could have very well -- just I will just make this point and then let the conversation carry on. Sir, if you all still had -- saw the potential upside, you all could have subsidiarized it and look to bring in an PE investor, which you all just said you are all looking out, if there is a potential instead of just going to a promoter instead and when -- how did you all not...

Mr. Ganguly, first of all, there is no uncertainty that we will raise money there. If somebody wanted to invest money into that company, we would ask more capital to be involved -- also and/or more or equal amount of capital to be invested in that company by S.P. Apparels, the holding company also. There, again, tomorrow, I have to -- whenever there is an investment that is happening, that will -- that should also go through the internal process where we need to take the Board approval to invest more money into a subsidiary company. The second also is that the process of hiving off as a subsidiary company will take at least 2.5 years' time because of the NCLT process, which needs to be considered.

That's the main thing. NCLT process is the key thing here.

Overall, the way it looks is that you all have -- is that the thought process is somewhere in the middle, it's neither a decisive cut nor is it -- anyway, thank you.

Thank you.

We have next question from Hardik Sodha from Crescita Investments.

This is Vijay here from Crescita Investments. Sir, just wanted to get a sense on -- with this Kmart and Mothercare issue being at the highlight. And you said some of the client will start -- will compensate on their account. So what is the overall like kind of the growth that you see in the coming quarter or there can be degrowth on account of these 2 clients? And secondly, you said this client will start or will resume in first quarter. So is there clarity that has emerged on the same? And last, have we got some receivable also stuck with those guys? And if yes, then how much?

So in terms of the new customers, you are asking on the Q3 -- Q4 guidance and Q1 guidance. As Mr. Sundararajan on his opening remarks said that Q4, we are looking at a -- we should look at a flat year-on-year, or there could be a 5%, 6 percentage decrease in Q4. Going forward, in Q1, we see close to 5 percentage increase in Q1. And then on, we should look at 10% to 15% growth from there on onwards.

From Q2, we will be back on track. We will restore the situation. Hello?

Sorry to interrupt, sir. It looks like the participant's line is not active. Should I open the lines for next question?

Yes, yes, please.

Next question comes from Naushad Chaudhary from Naushad Systematix.

Naushad this side from Systematix. Most of the questions have been answered. Only one question I have on inventories, sir. What is the level of inventory currently we have? And what is the average cost?

So currently, we have INR 227 crores of inventory. Average cost, I don't understand your question.

On the cotton trend, I'm asking, sir.

On the cotton trend?

Yes.

Cotton inventory to be close to INR 30 crores. Of this INR 227 crores, cotton inventory will INR 30 crores, and it's closely around INR 47,800 in terms of bale cost.

INR 47,800. And this INR 30 crore would be for how many days, sir?

It's closely around -- since we are in the season time, we are piling up in stock, and by end of March, I think it should go considerably higher side, where today my stock is closely around 110 days stocked.

Okay. And was there any inventory loss in this quarter, sir?

No, we don't -- we -- on the cotton front?

Yes.

No, no, no. No, inventory losses.

Okay. And last thing on the overall growth guidance that we have been talking about INR 70 million this financial year and then 10%, 15% growth again in FY '21. So what is the revised guidance you would like to give for the overall financial year FY '20 and for next year?

So FY '21, we are looking at a guidance where the growth should be anywhere between 14%, 15 percentage. In terms of -- if you are looking at quantities, that quantities cannot be because it would change considerably because of the product mix. So I -- we would stick to value-wise growth guidance, which we will stick to anywhere between 14%, 15 percentage for FY '21.

Okay. And apart from this INR 1.5 crore, which is at risk from Mothercare, is there any other expenses or costs we might see because of these 2 customers going out?

No, see -- if you take the receivables, my receivables are hardly at -- close to 40, 42 days. Beyond that -- beyond Mothercare whatever we have informed, $200,000, we don't foresee any other customer into any risk or anything like that.

Okay. And what will be the due to -- due from the Kmart to us, sir?

Kmart will be close to around $60,000, which is paid off.

And only the stock which are being shift again basically, yes.

We have next question from Gautam Gupta from Nine Rivers Capital.

Just a quick follow-up call -- question on the retail transaction that we have done. On the CCPS component, you explained earlier that there will -- the conversion to equity is going to be linked possibility of future valuation event if a PE investor comes in. But could we get some more detailing on it? Because today, for example, we valued at INR 81 crores. That CCPS at today's valuation would give me a 30 -- give S.P. Apparels Limited a 31% stake in that business. So in the future, if the valuation could be more than INR 81 crores, it could be less than INR 81 crores. In this scenario, how hedged does the conversion work? Do we get at least 31% or better? Or how does it work?

So on the INR 81 crores, we are getting INR 56 crores by way of cash. The INR 25 crores, which is the way of the preferential shares capital. So what happens subsequently, when there is a buyer -- I mean, private equity or any kind of capital coming -- raised there, so we would always take a discount to a valuation there and see that our equity portion is on the higher side. So I -- we cannot predict what will be the valuation that can be taken there now at this point of time. They may add more brands to their portfolio. And if they add more own brands to their portfolio, we find that the valuation will be attractive, and that is why we are keeping INR 25 crores where -- when there is some price hike to enjoy that 20% to 25 percentage.