Stove Kraft Limited (STOVEKRAFT) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Stove Kraft Limited Q4 and FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rajendra Gandhi, Managing Director of Stove Kraft Limited. Thank you, and over to you, Mr. Gandhi.

Thank you. Good evening, everyone. On behalf of Stove Kraft Limited, I extend a warm welcome to all participants to the Q4 FY '24 Financial Results Earnings Call. We also have Orient Capital with us on the call who are our advisers on Investor Relations. Along with me are Mr. Ramakrishna Pendyala, our CFO; and Mr. Hemant Kothari, our Chief Business Analyst. We have uploaded our investor's deck and earnings press release on the stock exchange and the company's website. I hope everybody had an opportunity to go through them. In the face of challenging market dynamics, our steadfast commitment to excellence has not only sustained us but propelled us forward showcasing robust growth and resilience. In the fourth quarter of FY '24, which is generally a soft quarter for the industry, our revenues stood at INR 325 crores registering a significant growth of 17% in revenue on a Y-o-Y basis with improved gross margins of 37.1%. Furthermore, the recent quarter, witnessed a paradigm shift in our growth trajectory marked by significant emphasis on volume-driven expansion across various product categories. The fiscal year '24 is a testament to our unwavering dedication in pursuit of leadership as we navigated through a landscape of fluctuating demands, emerging with a notable 6.3% increase in revenue, a vigorous growth of 21.4% in volume and a commendable 20% growth in EBITDA. Moreover, our foray into direct retail to company-owned stores has registered promising results, exemplifying a superior brand experience for our consumers. It gives me immense satisfaction to share that the company has added 117 stores in FY '24, far exceeding our initial target of adding 7 to 8 stores per month. We concluded the year with a strong network of 171 stores in 50 cities across 8 states. These stores will not only enhance our brand salience, but also contribute to the lucrative margins for the company. We will continue to expand our retail presence across multiple strategic and diversified locations across the country. It is our constant endeavor to unveil a range of groundbreaking products that predefine the art and convenience of cooking and elevate culinary experiences for our consumers, introducing the Pigeon Healthifry Air Fryer, an appliance that combines cutting-edge technology and unmatched esthetics for health-conscious customers -- consumers of our country. We also launched a range of Pigeon cast iron cookware in the current quarter for our customers to experience superior heat retention, unmatched versatility, unparalleled durability and the health benefits of iron enrichment. This range combines global cookware design standards and local craftsmanship ensuring an exceptional cooking experience with every use. Our other product launches include multi-purpose kettles, dough makers, copper coated double walled stainless steel water bottles and hobs. Our unwavering focus on in-house manufacturing and enhanced backward integration, ensures superior quality, agility and cost efficiency reinforcing our position as pioneers in the industry. As we progress through the 2024, we remain committed to continue our growth trajectory while taking cognizance of the volatility and challenges of the market environment. We are steadfast in our focus on broadening our product portfolio, bolstering current distribution channels and intensifying accessibility for our consumers. These efforts are geared towards propelling Stove Kraft towards sustained growth fostering long-term value for all stakeholders involved. On to our Q4 FY '24 financial performance. The consolidated revenues stood at INR 325 crores for Q4 FY '24 against INR 278 crores in the Q4 of FY '23, registering a growth of 17% on Y-o-Y basis. Gross profit for the quarter stood at INR 121 crores against INR 89 crores in Q4 of FY '23, registering a growth of 35% year-on-year basis. While gross profit margin for the current year stood at 37.1% reflecting an increase of 490 basis points year-on-year basis. EBITDA for Q4 FY '24 stood at INR 25 crores versus INR 6 crores in Q4 FY '23, recording a sharp growth of compared to same quarter in the previous year. The EBITDA margin for the current quarter stood at 7.6% versus 2.1% in Q4 FY '23, improving by 550 basis points year-on-year. Profit after tax for Q4 FY '24 stood at INR 3 crores versus a negative of INR 6 crores in Q4 FY '23. Now coming to the full year FY '24 financial performance. The consolidated revenue stood at INR 1,364 crores for FY '24 versus INR 1,284 crores for FY '23, hence reducing a growth of 6.3% on a year-on-year basis. Gross profit for FY '24 stood at INR 504 crores versus INR 420 crores in FY '23, registering a growth of 19.9% year-on-year basis. Gross profit margin stood at 36.9%, that is an increase of 420 basis points year-on-year basis. EBITDA for FY '24 stood at INR 119 crores versus INR 99 crores in FY '23, recording a growth of 20% Y-o-Y basis. The EBITDA margin for FY '24 stood at 8.7% versus 7.7% in FY '23. Profit after tax for FY '24 was at INR 34.1 crores versus INR 35.8 crores for FY '23. I'm also pleased to share that our Board has recommended our first maiden dividend of INR 2.5 per share. I now request the moderator to open the floor for questions. Thank you.

[Operator Instructions] First question is from the line of Khush Gosrani from InCred Asset Management.

Sir, what was the volume growth for the full year...

Khush, sorry to irrupt you, your voice is coming a little muffled.

Is this better now?

Slightly better?

Sir, what is the volume growth?

Yes, for the quarter, comparative quarter of the last year, we were at 28.6% volume growth for our core categories of cookware and appliances. And for the year, we were at 21.4% growth on volume for the whole year versus the last year. And this is a consolidated category for cookware and appliances.

[Operator Instructions] Next question is from the line of Resha Mehta from GreenEdge Wealth.

Sir, my first question is on the Q4 growth. Sir, we have registered a very good growth in Q4, so can you just talk about where this growth is coming from in terms of which regions, which channels?

Channel wise also I can give you. For the quarter, our general trade has been flattish, but e-com is -- the bigger growth have come in our corporate sales in our own retail. These 2 channels have given higher growth, both our corporate sales and our retail.

And any specific region where...

For the year, we've grown about 25%, our modern trade. We've also grown our exports -- our brand exports have grown substantially.

Right. The reason why I'm asking this question is because markets -- I mean the market -- the demand -- overall demand is generally subdued while we have grown at a very healthy rate. So I was just trying to understand the color of this growth?

Fundamentally, of course, while our existing categories, we have performed, there are several categories that we are getting to leadership. We are expanding our product portfolio, more particularly for the products that we are manufacturing within our facilities. And those products that we are able to get to manufacturing within our facilities, we are seeing very high market share growth. We are getting a lot of -- acquiring a lot of market share from these products. And that is where I think that's the differentiator.

And also, if we see cookers and nonstick cookware for Q4, which is almost 45% of our revenues in terms of value, right? So there -- the volume growth is way ahead of the value growth there. So is it that the growth in this category -- these 2 categories, cooker and nonstick cookware has specifically come from a lot of heavy discounting?

So I will give you a little more insight that will -- to better understand the growth in volume versus value. Particularly, these 2 items, aluminum is a major contributor in the manufacture of these products. There has been a huge, I can say, input cost growth, which as a policy of the company will pass on the benefits to the consumer. So by -- in value terms, we are not seeing growth, but volume, of course, we are growing.

And going ahead in FY '25, what is the kind of guidance that you want to give in terms of top line growth as well as margins and top line growth, if you can split between what would be the volume growth and the overall value growth?

So we believe we'll continue to grow at the current levels, particularly on the volume growth because value sometimes see -- if you will see a CAGR of the last 5 years, we have been growing at 19% but this year, it was a different year for us, particularly on the value because we have seen a correction in most of the input costs during the year. And so the -- on value growth, we have seen not in line with what we used to be. On the gross margins, we have been particularly working on this, and it is -- it was -- we could also register a good growth on our gross margins. We are very close to where we want to be now, and I think we will further improve our gross margins this year.

Sir, just to clarify here, the revenue growth that you're talking for FY '25, if you were to quantify the value growth that is you are saying the past figure has been 19%. So we look at the 19% kind of growth top line growth?

Yes.

And the volume growth would be at the run rate of the Q4 volume growth level?

If not the Q4, at the run rate of the last year.

Which is 9%?

The volume growth, we have been able to grow at 19% -- 21.4% for the year.

Okay. And value growth you are saying would be as per the past...

It depends if there is inflationary growth, of course, we believe maybe it's not exactly that the volume growth will be in the same. Overall, we see to grow at the same rate that we've been growing the last 4, 5 years.

[Operator Instructions] Next question is from the line of is Khush Gosrani from InCred Asset Management.

Sorry, sir I got dropped out. Is my voice better now?

Yes, yes, I'm able to hear. I hope it is audible to you.

Yes, yes, yes. Sir, this quarter, we have seen increase in our allowance for ECL to INR 4.7 crores, which used to be around INR 1.5 crores, INR 1.6 crores. So could you please help us what has happened over here?

So there were some reconciliation items that were pending from the previous year for which we have provided in our ECL. They're continuing for a long time, and in the process of cleaning up our receivables, we have brought in the ECL.

And so for FY '25, this will continue as well at around INR 9.5 crores?

I think it is an extraordinary provision that we have made. And in fact, that has given us I mean more comfort on our receivables. Wherever we have exceeded the number of days as per our provision policy, we have provided in our ECL.

Sure. So -- and sir, our depreciation has also increased to 14.6% and interest cost as well. So is this because of the Ind AS impact of 116 accounting?

Ram?

Yes. Talking about leases.

So could you -- do you have the breakup right now between what would be the actual and what would be the due to -- for Ind AS?

Are you talking about depreciation or?

Both, both depreciation and finance costs both, sir.

Yes.

It's okay. If you are going to give me for the full year, that's also fine.

Yes. In the interest, I think about INR 6 crores to INR 7 crores was there -- related to leases. I think in the depreciation, also would be more or less the same amount, about INR 9 crores to INR 10 crores.

Yes. Got it, sir. Got it. And sir, if you could highlight FY '25. I missed your guidance number, what kind of growth are you targeting? So this year, we have been single digit due to, I think, sir very high pricing pressure that we have seen. But full year, how are you seeing FY '25 panning out?

We believe that we will continue to grow at the pace that we've been growing the last 5 years.

And margins have improved to 8.7% from 7.7% for the full year. So we have earlier guided for a 10% to 11% number. So is that achievable in FY '25. And how it will...

That is our endeavor for this year. We believe that everything is in place. So our endeavor is that we should get to our aspired EBITDA number.

Next question is from the line of Pritesh Chheda from Lucky Investment Managers.

Last 2 years, I'm seeing that you're utilizing your cash flow for assets. In the last 2 years of INR 200 crore investment that you have made, if you would highlight where it is made and incrementally will the asset intensity or the pace at which you're expanding come down, go up, if you could give us some comments there.

So this is not from last year. We started this CapEx cycle middle of the COVID times. This is in FY '21. And we are at the fag end of our CapEx cycle. We are -- this year, FY '25, you will see a lot of concluding CapEx. There is no new CapEx planned. So there will be a decline in the overall CapEx, but there's only concluding CapEx that we are doing. And this will put the company in a very -- in terms of manufacturing in a very strong position in all the categories that we are currently operating. To give you -- I mean to answer to your question, yes, the CapEx cycle is coming to an end. So you'll see this overall cash flow to CapEx declining, both this year and the years following.

So then incrementally, will your CapEx be equal to depreciation, more than depreciation, less than depreciation?

This year itself will be well within the depreciation. Our depreciation number would have definitely gone up, is also going up. And the CapEx for the current year, the plan is -- with the plan that we have, it will be much below the depreciation number.

Okay. So on -- so basically, will the surplus cash flows then bring us financial leverage because you can have the ability to repay your debt, bring down your interest costs. We will see that journey starting?

This year, hopefully, before the end of the year, we should be very close or aspirationally we should be debt free.

Okay. And on the lease liability creation, and also the CapEx, which you have spent of about INR 200 crores in the last 2 years, more than INR 200 crores. How much of it has gone in retail that -- the store creation and is this lease liability because of the store creation?

So On an average, about INR 18,00,000 is what we spend on the retail. Overall, it's not for the year. For the year, it's INR 117 crores, which will be about INR 15 crores, INR 16 crores. But overall, CapEx in the retail is about INR 31 crores.

INR 30 crores, yes.

So then why is the lease liability such a big number, INR 100 crores?

Lease liability is not INR 100 crores.

Not only the retail stores, we also have our foundry, which was...

So some of our CapEx has been funded through lease and buyback model. So we have some lease liability even in our investment on the manufacturing facilities.

Okay. And are you through your store creation or you're going to add more stores?

We will be adding more stores, but the overall format of this is changing. We have -- at the end of last year -- 171 stores at the end of FY '24. And these will continue to be overall in the scheme of our future retail 171 stores will be company-owned company operated. All the future stores that including the existing stores will be actually company owned and finance -- I mean, franchise operated. In a way, it facilitates that there is no cash outflow into the investment in these stores.

Current stores were company-owned company operated, 150?

171.

Future stores will be?

Will be company-owned and franchise operated.

So there will be CapEx, right?

There will be CapEx, will be funded by the deposits that the franchise will give us. There will be no cash outflow from the company.

And my last question is, in the year of FY '24, what was your A&P spend?

What is our A&P spend? It's INR 45 crores, A&P spend.

This includes both...

So for us, when you say A&P is all advertising spend, and this is INR 45 crores.

Versus last year's of?

We were in the similar range.

Okay. INR 45 crores. Okay.

[Operator Instructions] Next question is from line of Praneeth from Samatva Investments.

Yes. I'm curious about the product development cycle. We have been developing a lot of new products last year and the year before that. I'm curious if there's a specific development cycle? And can we expect the product every month or every week or what is it -- how can we expect the product launches to be?

First of all, we are in the various categories, and these are all led by individuals as product heads and each one of them are focused on bringing more convenience to our consumers and better products and also to get into the cycle of indigenizing these products. So a different -- we are in the cookware. We are on the cooktop and also in the various appliances that we want to offer to our consumers. There's not exactly a number that it comes every week or every month. But overall, we keep -- that is the business that we operate. It is a business of products and channels. Whenever we introduce these products, this goes into each of this channel. And whenever we add a new channel, all these products also go into this channel. And innovation is the key -- both innovation and indigenization is what is helping us.

Understood. As you mentioned about channels, another player in this industry also mentioned about channel harmony that they want to limit to specific channels because they do not want to create any distance between channels. So as we're expanding our company on company operated stores and franchise stores, do we see any like disharmony between channels such as general trade, modern trade because of the varying amount of discounting or promotions?

We would want to be available to our consumers wherever they would want to buy our products. And we will explore all possibilities on expanding our channels, particularly domestically and then, of course, internationally. For our product managers, this is a constant endeavor to manage the channel conflict. We will try and ensure that this is minimized, but that is the nature of the business and different channels operate differently. There could be sometimes disruption, but we would try our best to maintain harmony within the channels.

I'm more curious because between general trade and company-owned and company-operated stores. They're usually in the same vicinity of the sorts. Are the general trade facing any cannibalization of sales because of company-owned stores or franchise stores that have been operating?

To give you an insight wherever we have opened our stores, whichever city, our general sales contribution has gone up. It's because the consumer is able to now touch-feel a wider range of products, hitherto which were not necessarily available with all these stores -- multi-brand stores. Our consumer is now exposed to the whole range of our products. And we have no such -- it's not a very big challenge, maybe sometimes whenever the dealers have found that they've been -- it's not related to discount, but overall, the feeling was that there is another seller in the vicinity of the store. But ultimately, what is our experience is whichever cities we have these retail stores, we have seen growth in our general trade.

Understood. One more thing about franchises. It is our expectation that we maintain the company on an operated stores at 170 to 180 and we'll onboard franchisees to continue future expansion. I'm curious are franchisees willing to adapt or take up this new franchisee model to onboard new franchisees? And how is the adoption of these franchisees and conversion of company-owned stores to franchisee stores?

So it is not limited to only the new stores. The existing stores will also move to the franchisee model. Wherever we see the stores are performing well, we offer this to our franchisees. On the demand side or interest from franchisees, we anyway have already a pipeline. With the plan that we have for this current quarter, every quarter we would ideally want to open between 25 to 30 stores. If you want to know for us -- for this quarter, the pipeline is full. And we believe that with the kind of interest that we are seeing from franchisees, that should not be a challenge.

So what is the breakup of the franchisees stores and company-owned stores out of the 171?

All the 171 stores as of the end of last year belong were -- company-owned company operated. We started this journey of franchisee stores at the beginning of this year. I think we have signed up about 30, 35 franchisees, of which 15 to 18 stores have been handed over to them. This also includes the existing COCO stores. The whole guideline to our retail team is, we will retain -- at any point of time, the number of company-owned company-operated stores will not exceed 171. The newer and increasing number of these stores will be through the franchisee route.

Understood. One more curious thing about the geographical expansion. We are mostly present in South like most of the players. So you've guided to the expansion to North regions. How is the expansion going? How is the revenue contribution going from the Northern and Eastern and Western states of India.

So we've operated through various channels. If at all, if you've heard us on the expansion on the retail. Yes, we are now there across -- we are opening more and more stores in the Delhi region. Going forward, you'll see more expansion coming up in the West, particularly in the Gujarat state. And overall, in the general trade, we are there across the country and our opportunity for growth in North and the East is much larger than the South and the West. In the modern trade, wherever the modern -- the established modern retailers are there, we are available. E-commerce has given us an opportunity to reach the consumer in every pin code of the country.

Understood. One last question from my side. One of the previous -- highest only producer of oil marketing companies for us. So how -- what is the revenue contribution from that segment of our business and what's the capacity in Himachal Pradesh was especially meant for oil marketing companies? How is the capacity utilization for that plant like at the moment?

We have moved away from the co-branded sales with the oil companies a few years back, maybe you're not tracking us. We don't do any co-branded business and our Himachal Facility, which was established to manufacture gas stoves and which were catering to the requirement of the co-branded stoves when we were operating this is now a complete facility to manufacture pressure cookers -- the variety of pressure cookers that we manufacture, there is inner lid pressure cookers, which have a larger market, mostly in the North and the East. Of course, we sell them across the country, but majority of the sales are in the North and the East, and 100% of our inner lid pressure cookers are manufactured at the Himachal Facility, and it is one type of pressure cooker where we are acquiring the highest market share. We are growing the fastest in the inner lid pressure cooker category when you compare with any other brand in the country.

Understood. Sorry, one last question about -- you mentioned the CapEx cycle has come to an end and we do not have much CapEx going forward. What can be the annual CapEx -- maintenance CapEx we can expect?

For this year, we have a budget of INR 50 crores. That includes the concluding CapEx. And a normal ongoing CapEx will be about INR 25 crores.

[Operator Instructions] Next question is from the line of Achal Lohade from JM Financial.

Congratulations for the great numbers. What I wanted to check was, with respect to [ AB ] e-com channel growth, sorry, I missed the beginning part of the call, if you have already mentioned, what is the growth in the e-com channel and the export channel for FY '24?

Last year, e-com, we grew -- first of all, good evening Achal. Last year, e-com we grew by 9%, and our exports, we grew by 26%.

Understood. And is it possible to get our revenue mix in terms of general trade, e-com, modern trade, exports for FY '24?

Yes, INR 540 crores for general trade, e-com was INR 440 crores, modern trade was INR 165 crores, export was INR 160 crores. We have our corporate sales, which is at INR 77 crores, and our retail contributed INR 242 crores.

Understood. So is it possible to get some sense what is the growth in each of these for FY '24 or if you could give me the absolute number for FY '23 also, that would be helpful?

I think it's there on our investor presentation now.

Okay. I'll take a look. It's come at a very short notice. Okay. The second question I had, can you update us on the other initiatives with respect to your modular kitchen, the Black & Decker, SKAVA. Any update on that, how they have done in FY '24? And what is the outlook there? What is the strategy there?

Our bigger focus has been on our Pigeon brand and the various channels that we operate in the country. And the second I can say the channel that we have been focusing on is our export. So these are the 2 primary contributors to our business. Of course, we have the kitchen business. We have made a little changes in the way we do the kitchen business. We have let gone our manufacturing facility. We have sold it to our vendor who takes care of the manufacturing part. The need base, we buy and then we sell it only through our retail outlets. The SKAVA business has got merged with LED business. And LED business stays where it is and it has got defocused in the overall scheme of our growth plans.

Understood. Understood. Sorry, I missed the part. FY '25, you said -- what is the volume growth and what is the revenue growth?

So FY -- we believe that we've been growing at the same steady state at what we've been doing last 5 years. Basically, the CAGR for the last 5 years, we have been at about 19%. But this year has been an exceptional different year. We have had good volume growth, but the value growth has actually come down. So if -- in a normal circumstance, we'll continue to grow at the same pace that we've been doing last 5 years.

And the margins, you said we aspire to reach to our previous guidance, but can you help with the absolute margin? Is it 11% to 13%, 12% to 14%, 10%, 11%, what is the...

Yes, we have been successful in increasing our gross margins and the rest will automatically follow, we believe. And with the growth that we aspire, we -- I think the first target is to first get to that -- between 10% to 11%, and we believe this is the year to perform.

Understood. Understood. And just one more question. Historically, we've seen that we've been investing heavily and that kind of impacted the margins in terms of EBITDA margin. Now incrementally, where the investments will go, are you looking at substantial increase in the manufacturing? But you said CapEx is going to be limited. We're already almost done with. So what kind of cost increase can we look at the employee cost in the other expense assuming your revenue growth?

We had a substantial increase on the employee cost. Also on account of various new facilities that we are putting up -- we have been putting up for our manufacturing. All these investments, both in people and the manufacturing facility will start contributing to our revenue and EBITDA now. I don't think there is a substantial increase in our people costs compared to the FY '24. I mean, in this current year, there is not going to be a substantial increase. On investment that we have made on CapEx is all that will start delivering. Some of it, particularly the cast iron is just about to begin whereas we have already started incurring both people end costs through lease finance and [ depreciation ]. Not depreciation through the lease finance. So there is a cost that is already in our P&L. And at the moment they start contributing, it will also get to improving EBITDA.

Understood. Any percentage you want to give for manufacturing percentage, how much was that for FY '24, '23 and going forward?

I do not have an exact number. 90%?

92%.

We have -- we're currently between 91% and 92%. The total contribution from our revenue is coming from the manufactured products within the factories of Stove Kraft.

[Operator Instructions] Next follow-up question is from the line of Khush Gosrani from InCred Asset Management.

Could you help us to understand how is the market demand as of now? And how has been the pricing situation going on in this summer season as of now? And what is your outlook for the full year in terms of pricing? Because last 2 years, as you highlighted, pricing has been a challenge for us. So if you could help us with understanding. What's your outlook over there, that would be helpful.

We did not have a challenge this year. Last year, there was unprecedented disruption in the input costs. And while we were able to pass on the difference in our cost, but while we were implementing the cost increase itself, again, before even the quarter ended, we were experiencing that there was again a disruption and increase in the input cost, which was leading to erosion of our margins. This year, we have not experienced that. And we believe that there's a lot of learning that has happened, and we will be cautious enough to protect our margins at the gross margin level. On the current times, I can tell you that on the demand, particularly we are not in the summer products like fans or coolers. But overall, the business is going through not great demand times. So we believe that if we could perform -- I mean, with the addition of these new channels and bringing new products to our consumers, we are able to grow at the current rate. If the times are very -- I mean if the demand scenario improves from here, it can be a positive to our revenue.

Are you seeing increased competition from the peers as well, such as TTK Judge brand or Hawkins, et cetera, in the -- especially in the pressure cooker side?

So we are operating in a different segment. We are addressing the largest consumer base in this country, the value consumer. And in the category that we operate, we are leaders. And we are continuing to grow in all these categories. We have not seen a single year where we are. So in this current year, we have degrown in pressure cooker by value terms by 2%, but our volume growth is 18%. We continue to grow in the pressure cooker category also. But it is not the only category that we operate. There are several categories, and we are seeing growth in each of these categories.

[Operator Instructions] Next question is from the line of [ Sahil Vora from MNS Associates ].

Can you provide more insights into the factors that drove the 17% revenue growth in this quarter? I wanted to understand that if there are any specific product lines or markets that contributed significantly?

You wanted revenue growth from categories or from channels.

From category.

The biggest growth for us has come in from appliances, which is 33%. On the nonstick cookware, which -- the growth has been 33% again or the cookware category -- it's not exactly nonstick. Overall, the cookware category has grown by 33% for us. And in the quarter, our induction cooktop, we have grown by 63%.

Okay, sir. My next question was about the geographical region. So we have more than 100 company-owned retail stores in FY '24, like addition value. So how do we plan to leverage this increased presence to enhance customer engagement and brand visibility. Specifically, are there any regions or demographics that you are targeting?

We have been very successful in opening the stores in the south, and we have now moved to Delhi region. Currently, in Delhi region, we have already 11 stores. We plan to expand this region of NCR Delhi. And we are getting -- we have started signing stores in the West that is in Gujarat. They are also opening stores in UP now.

Next question is from the line of Natasha Jain from Nirmal Bang Securities.

Sir, 2 questions.

Natasha, if you can speak a little louder please?

Yes. Am I audible now?

Yes, yes, Natasha.

Yes. My first question is, is it possible if you can give me the breakdown of the volume numbers across category for FY '24? Absolute volume numbers.

That will be very difficult to give you a number on -- but I can tell you in terms of percentage.

Sure.

Do you want the growth on the category volume for the year?

Sir, no volume growth I had, I mean, it's there in your PPT. Sir never mind, I was actually looking for absolute...

And even in our PPT, we have given you revenue contribution from each category.

Okay. So then the chart which says growth volume year-on-year, would that not be a volume growth number?

Yes, you have both the volume growth and the value growth for the quarter.

No problem. Understood that, sir. So basically, absolute number is not possible, right?

I don't think we'll share this number.

Okay. Sir, second question is, sir, in terms of the 171 stores that you said those are company-owned and operated. Sir, can you help us first in terms of the additional run rate in terms of increasing the store? And then you said 50 to 55 per month is our conversion to a franchisee model. So would that mean -- so first, if you could help with the run rate, then probably I'll ask you the follow-up.

No, I think I'll run this whole strategy. We have 171 stores at the end of March FY '24. We would retain these 171 stores as a number to be company-owned and company-operated. Any additional stores, overall, the new stores or from the existing stores, we'll move to a COFO model, company-owned franchisee-operated model. And the run rate we have been able to do is about 25 to 30 stores a quarter, and we believe we'll continue at the same rate.

The 25 to 30 you meant probably conversion of your existing model to your COFO model, right?

Yes. So we believe that we'll be able to expand our number of stores by 25 to 30 every quarter since we have capped the number of company-owned company-operated stores at 171, all the incremental number will also have to be the company-owned franchisee-operated. So the number of new stores and the company -- and the number of company-owned franchise-operated model will remain the same.

[Operator Instructions] Next question is from the line of Anand Mundra from Soar Wealth Managers.

[indiscernible].

Sir, the line for the participant dropped. We'll move to the next participant. Next question is from Praneeth from Samatva Investments.

So I have one last question about the resignation of the CTO and Human Resource Officer. They were fairly recent onboarding people. So I'm curious on why did they resign or like what is the change, any idea of the CXO suite you are planning to do?

We have a dynamic situation. We are embarking on several initiatives. Some of the initiatives, of course, we are broad-basing our management team. And some things frucitfy based on our plans and some not necessarily. And individuals will have their own personal, professional aspirations. Sometimes, they do not match. And it should be a win-win for the professional and the company when somebody wants to contribute to the company. And in this process, we may have people sometimes who may not -- will have to let go our people will want to pursue their other professional goals. So I think it falls in one of them.

Thank you very much. Ladies and gentlemen, in the interest of time, that will be our last question. I'll now hand the conference over to Mr. Rajendra Gandhi for closing comments.

Thank you all. It was wonderful answering all queries and questions that you had. But if any of your queries or you have any more questions, you can always reach us out. You can also reach us through our Investor Relations team at Orient Capital. Thank you again. Good evening. And we did not -- we did also share with you that this -- we are extremely excited to share that this is our first maiden dividend payout, and I hope this gives you a little more joy to all of our investors. Thank you.

Thank you very much. On behalf of Stove Kraft Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.