TTK Prestige Limited (517506) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to TTK Prestige Limited Q3 FY '21 Earnings Conference Call, hosted by Ambit Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain of Ambit Capital. Thank you, and over to you, sir.

Thanks, Aman. Good afternoon, everyone. Welcome to TTK Prestige's 3Q FY '21 Earnings Conference Call. We have with us the management of TTK Prestige represented by Mr. Jagannathan, the Chairman; Mr. Chandru Kalro, Managing Director; Mr. Shankaran, the Whole Time Director; and Mr. Saranyan, the CFO. Thank you, and over to you, sir, for your opening remarks.

Yes. Good afternoon, everybody, and thank you for being here. We've had an excellent quarter, our best quarter actually as ever. We've reported all-time high sales and all-time high bottom line for any quarter ever. We expected Q3 to be good as we told you on earlier as well because we've expected all channels to be active only from this quarter. And luckily, the festival sales were excellent for our category of products. And we're seeing good traction for the brand. The brand has made good strides in markets where we wanted to make good strides. We've not done any drastic reduction in any of our normal expenditure. And this bottom line is clean after all that because we've decided to keep our advertising in full flow. Our new products are doing extremely well, and we're looking good for the future. Over for any questions. Thank you.

[Operator Instructions] The first question is from the line of Sameer Gupta from IIFL Securities.

Congratulations on a very good set of numbers. Sir, 2 questions from my side. One is that there is steep inflation in almost all commodities, steel, aluminum. Even crude prices have now started to move up. And there is also a disruption from Chinese imports. So in all this context, how do you look at your gross margins and EBITDA margin in tandem? So I know you have clocked around 15% this quarter, which is actually very good -- 17% this quarter. But for a sustainable basis, what kind of EBITDA margin are you targeting? And should there be a very steep inflation in commodities, how do you plan to manage that? That is my first question, sir.

Well, we pass on all cost increases. So if there's any inflation in steel, aluminum, crude oil, whatever you said, we pass them on. The EBITDA margin depends upon what top line growth is. If the top line growth is good, you will have a good EBITDA margin. If it is poor, you will have a lower EBITDA margin. But the gross margin will remain intact.

And just a clarification, sir. So let's say, the aluminum prices are up 50%, you can't really pass on 50% price increases, right? Probably absolute amounts we may still be able to pass on, and gross margin to that extent will see a contraction. Is that understanding correct?

No, that understanding is wrong. Margin -- if cost goes up by 50%, we pass on that and the margin on that.

Got it, sir. Agreed. Okay. That's very clear. Secondly, sir, looking at our working capital, 75 days of inventory, 50 days of receivables. Just trying to understand, is this part of our business model and things will not change? Or is there a plan to reduce this business mix? Any lever sort of which will result in lower working capital going forward?

In my view, this is probably the lowest.

By the way, your numbers on the working capital are wrong.

Because our receivable days has come down because there is the third quarter number, but you may be talking about second quarter number. Third quarter numbers are far better.

Sir, I'm looking at FY '20. Sorry.

Thank you.

Okay. So that is not comparable at this point in time.

Yes. Yes.

The next question is from the line of Achal Lohade from JM Financial.

Congratulations for the great performance. My first question is, you've kind of highlighted that in the press release with respect to supply disruption. So, a, if you could talk about which particular categories did you face the supply chain, where are we in terms of normalization? And, b, is in terms of the supply disruption for the peers and what is the extent of revenue loss or lost sales according to us because of this supply disruption for us.

Chandru?

Yes. So you know that we took a unilateral decision to stop Chinese imports of finished goods way back in May of this financial year. And we've been working very hard to move those supply chains into India, and we've been successful in doing a lot of it, in fact. But we would have still lost some sales because some products could not be tooled up fresh on time. So my estimate is that the Chinese products that we couldn't move enough to India in terms of supply chain, we would have lost about INR 20 crores to INR 30 crores in turnover for the quarter. And the other supply chain disruptions were not really disruptions because in the Q3 we had good supply chain. But the problem was the accumulated deficits of the Q1 and Q2, which meant that we did not have a surge stock available for this kind of a surge demand, which is what caused the problem. We will have no such problems in the going quarters, going forward. The Chinese imports that have come in here, even those models, largely by the end of Q4 of this year, we would have stabilized on most of those products.

Understood. And if you could talk about -- so in terms of the growth in the e-commerce segment, what is the growth Y-o-Y and the mix for us, for third quarter FY '21, sir?

See, we must -- you must remember that e-com has grown 50% to 60% even in Q3. But clearly we did not -- we could have grown even more had we supplied more to the e-com channel. But we did not want to do it at the expense of the other channels, which we're just flipping back to normalcy. And hence we played a more equitable role in making sure all channels were fair.

Understood. And what is the mix, sir, for the third quarter out of the total revenues?

E-com came to around 16%, which was very much higher in the other 2 quarters of the beginning of the year. And it could have been better, as I said, but it would have been at the expense of other channels, which we didn't want.

Fair point. And just last question, sir. Given our 24% growth in the domestic market, what is the underlying industry growth? I know it is hard to say, but is there a pent-up demand angle? Is there a onetime buying which has played out? What I'm trying to look at is more of a medium-term growth. How do we look at this growth in the cooker, cookware in the appliances segment, sir?

You see, we told that Q2 results -- our Q2 results were good and everybody said it's pent-up demand. And Q3 is also good. And you can't keep on having pent-up demand for 25 years.

Yes. But if I have to just see the industry growth, what is the growth one should look at in terms of cookers, cookware and appliances in general?

See, you are looking at a situation of a double-digit growth in most categories, as we speak. But however if you look at the next few quarters, it's all worked because last year we did not have a full quarter because of the lockdown. So it's not strictly comparable. You will have a much better growth on that because you would not have a disrupted March. Similarly, in the Q1 of the next financial year, you have a disturbed Q1 of this financial year, so growth is not comparable. Only after that will we be able to say whether growth is comparable or not. Currently, I don't think we should bother about it. There is good demand. Even though -- we are seeing, even the month of January, we've had a good demand. So therefore I think we should say that the market is doing well and it is going towards good brands.

So -- and after this budget, which is a very growth-oriented budget, I believe that the market will grow.

So is it fair -- like earlier, I remembered, sir, you talking about cooker, cookware are more of mid-single-digit growth categories while appliances is double digits. Would that assumption change given what sales happened in last 3, 4 months or what we are currently seeing?

It will change. It is not, because what has happened in last 3, 4 months. Because we have launched new products, which have got very good traction in the market, so we've got good gains.

We'll move to the next question. That is from the line of Simran Bhatia from SMC Global Securities Limited.

First of all, congrats to you management for posting such an excellent result. Sir, there are 2, 3 questions which I want to ask. First of all, if TTK Prestige is taking any advantage from this PLI scheme which is announced by the government a few months back? And secondly, I want to understand, what's your percentage of the total revenue from the non-South India? And third, what is the percentage of the e-commerce in the total revenue, if you can give some figure?

Shankar, do you know what the PLI scheme is?

The PLI scheme doesn't apply to our category. It doesn't apply to pressure cookers and cookware or kitchen appliances. It's largely related to pharma and other sectors.

And in electronics.

Electronics.

Okay. Okay. And sir, what's your percentage of your total revenue from the non-South of the country, if you can give some perspective?

Right now it's at about 48-52 kind of thing, South, non-South.

It moves between 48 to 52 depending upon the quarter.

Yes. Yes.

Okay. And sir, third will be percentage of e-commerce in the total revenue, it is approximately 16%, if I'm not wrong?

Yes, around that, yes.

Okay. And sir, my last question is, what's the succession planning in the company going on in the future? Is it -- are you looking forward to something like that?

There is a robust plan always there. You can see our annual report this year. It will give much more details there.

The next question is from the line of Kunal Sheth from B&K Securities.

Congratulations on a really good set of numbers. Sir, my first question is if you can give us some sense on what would be the 9 months growth in each of our categories? And what would be our market share currently versus last year?

So can you come back with the question? I didn't understand. What is the -- growth?

Nine months market growth for the cooker, cookware and appliances categories that we are in. And what would be our market share in each of these segments versus last year?

Difficult to give you actual category growth because of the COVID. It's a bit difficult to estimate these, so we don't have those numbers. Neither do we have the latest market share numbers because they haven't yet come in for the first 3 quarters. I can tell you for -- up to Q2, we have gained share significantly.

Okay. So basically what I wanted to understand is that this large part of the growth, is it -- I mean market share -- as you're saying that you've gained significant market share, do you think this will be sticky or once this supply disruption and unorganized part of the business comes back, part of it might not sustain?

Our gain in market share happens when we have innovative products and which is exactly how we gain market share and that is sticky.

Okay. Okay. And sir, could you give us some sense on the export side of the business? Are we seeing increased inquiries? Because we're targeting very ambitious INR 500 crores from exports, so how are things shaping up there?

Shaping up very well. We have grown quite significantly in the first 9 months of this year.

Actually, it would've grown more but we were not able to get containers.

But are we seeing increased inquiries for exports, sir?

Yes.

And sir, my last question is, we are -- in appliances segment, we've almost now INR 1,000 crores worth of revenue on an annual basis. So what is the kind of growth that we can assume sustainably for the next 5 years? Is a 15% CAGR possible in this category?

That's what we would like to achieve.

The next question is from the line of Naveen Trivedi from HDFC Securities.

Congrats to the team for strong numbers. Sir, is it possible for you to share what sort of price hike you have taken in the third quarter? Or any sort of price hike in Jan also?

So we've taken on a weighted average basis close to 9% price hikes in the third quarter. That was over 2 tranches in some categories. And we -- I don't see any price hikes happening in Q4 because we've seen -- we have -- we're quite happy with the price we're getting.

Fair point. And any sort of like channel inventory level because lots of cities and metros we have seen a gradual revival in the 3Q. So what sort of channel inventory you have seen?

Channel inventories are at normal levels of under a month or a month because we have been supplying to that extent also. So they're very comfortable, which is why our receivables are also very comfortable. All of that is in good shape.

Fair point. And when -- you also talked about that 20% sort of a growth in Jan, so this growth basically, like you also talked about, the categories are also improving. So it can be a combination of both your market share gain and the categories are also improving. So do you think the thesis which you were talking about, the work from home and the convenience where people are spending money, so that will even -- that thesis will be there even in the near- to medium-term time frame?

I think so because people now also, please remember that they have been saving money on other avenues. And they would -- they have been spending money on the home and home improvement and kitchen improvement. So I think this trend should continue for a while as we go along.

And work from home is here to stay. All big companies have now decided that a large part of their staff will work from home.

Fair part. And just lastly, also like your gross margin on a Y-o-Y basis is down. But are you seeing any sort of premiumization in your categories? Because if I look at your new launches, they all are in the premium segment. And you are saying that you're seeing a good traction for even new launches side. So are you seeing a broader level premiumization in your categories?

So where did you get this gross margin is down from?

Yes, exactly. Where did you get that information from?

Because my material cost as a percentage of sales is roughly the same as last year Q3, and it is better than Q2.

No, I'm saying on a Y-o-Y basis, your margin is slightly down by around 30 bps at a gross margin level.

50 point ...

[ 58.01 to 58.05 ] is only the difference between products or channel. It's nothing in that sense.

Yes. Yes. So that's what I'm asking that is the premiumization trend in your categories are like -- that's what I'm more curious to know about the premiumization trend in the market?

No. No, the margin is not because of premiumization. If I sell more mixies, the margin will come down. If I sell more cookware, margin goes up. It's all about the products. If I sell more to e-commerce, margin will come down. If I sell more to the retail trade, margin will go up.

So if products channel mix does have a big say, and I think these are quite stable. We are -- we have a very widely segmented brand across our categories. And we operate in a wide segment of brands -- price points. So I don't see any problem there. It's quite stable.

The next question is from the line of Manish Poddar from Nippon India AIF.

Sir, congrats on a great set of numbers. So just wanted to understand, so let's say, in 4Q, would it be a fair assumption that this INR 200 crore of revenue run rate which you are having on a monthly basis should easily sustain given that there can be some sort of channel selling which can also happen at the year-end?

We ensure that we do not fill the channel the way others do. And I don't think that we would like to give a guidance on whether this INR 200 crores will continue at this point in time.

Online channel is doing about INR 100 crores sales on a quarterly basis. So any sort of data which you are collecting, just to understand, is this sales to a completely new set of customers? Or are these just existing customers buying for another channel?

Sorry, come again with that question?

Sir, I'm trying to understand, let's say, now online, you all are doing about INR 100 crores of sales on a quarter basis for the last 2 quarters easily. So what I'm trying to understand is, are these new customers altogether for TTK? Or these are existing customers just buying through another channel in the interim?

It will be a mix of both.

We don't have the data.

The next question is from the line of Prashant Kutty from Sundaram Mutual Fund.

Congrats on a good set of numbers. The first question is on the margin. Apologies if this was answered before. You always highlighted that you would not want to cut back on the expenses or on your employee spend. But this time you've actually seen some of the best EBITDA margin in the last -- for a very long period of time. How much of this do you think would be sustainable going forward?

That all depends upon the growth. If the growth -- market growth is very good, then we will sustain the margins.

Okay. Sure. Got your point. But what I'm trying to understand is, are we trying to say that if you kind of -- are we more confident of getting a 20% kind of a growth rate now looking at the overall market scenario? Because if that is the case, then you're obviously looking at a higher-margin structure as well.

That is true. If we get to 20%, we are looking at higher margin structure. That is true.

Okay. But is the market growth moving towards the direction because...

For this quarter we will certainly beat 20%.

No, I'm asking on the market growth. Is the overall market itself growing at such a high rate?

Yes. As I said, it's difficult to say. I mean every time you've said is this pent-up demand or it is this or it is that, I think we're taking it as it comes. The brand is strong. As I said, we did not reduce expenditure on advertising. We wanted to make sure that the brand was as strong as ever. We've been feeding all channels so that we are available wherever the customer goes. That's been the philosophy. And if the market is growing, we will get that growth or better.

Any channel where maybe growth is still not up to your standards or where you probably would want to catch up?

So the large-format stores, some of them hasn't yet come back fully. For example, Future Retail used to be our big customer; you know where it is. So some of these things. For Future Retail, some of that sale has been compensated with the other large-format stores. Those are some things that wouldn't have come back fully.

And the rural market has not yet come back fully.

And some of the MFI sales hasn't come back fully.

Okay, the MFI sales have not yet come back fully. Sure. And last point, sir, on the supply chain, you used to highlight about that in the past. How is that situation at this point of time as far as your supply chain is concerned?

Now it is quite stable.

Okay, so you've not been facing challenges in that.

Yes.

The next question is from the line of Sanjaya Satapathy from Ampersand Capital.

Sir, congratulations on a good set of numbers. Two things, I just wanted to know that for the last 5, 6 years we have seen that while we have always aspired for this 15%, 20% kind of growth annually, it has been pretty volatile. I don't know whether that volatility is going to go away or not. But is there any way that your product range will be so better that that volatility will be far lesser going ahead?

Well, the volatility has got nothing to do exactly with the product range. And if anybody can predict this, then we must go to him as an astrologer. I mean whether it is Apple or Ford Motors or Toyota or Samsung, nobody can predict volatility.

I'm not talking about that. I'm talking about...

We can advertise. We can ensure that our pipeline of innovation is full. We can ensure that our distribution is maximized. We can ensure that our brand is built to its level. We can ensure continuously investing in that brand. Beyond that, if there are market factors which are beyond our control, there will be volatility. And what can be volatile, I don't think we can -- anybody can predict.

And COVID for instance, COVID destroyed the market for 3 months.

So my other question relating to that is, is there any big product gap or some category that you are really targeting going ahead? And my last question will be on the China sourcing shift that you were doing. Is that happening at similar cost or not?

So the last question I'll answer, it is similar cost.

Yes. And the product pipeline, we can't disclose, obviously, for competitive reasons. But I can tell you, we are working on several new products.

Okay. So essentially, the costing is not really an issue, it is just a matter of making it available in right quantity. That is what this kind of strategy is all about.

Correct.

The next question is from the line of Nirav Vasa from Anand Rathi.

Sir, my question pertains to the price hike that we have taken. So you informed that you have taken a price hike of around 9% in 2 tranches. So would it be possible for you to bifurcate these price hikes into categories like pressure cookers and kitchenware, those kind of segmentations, that would you be willing to share?

We've taken -- in pressure cookers and cookware, we've taken price hikes of 5%. In some electrical appliances like mixer grinders, it is as high as 20%. In gas stove, it's about 12% so on and so forth. So it's a cost base increase.

Get your point. So effectively, you're trying to say that the entire cost has been passed on, entire commodity inflation has been passed on to the channel partners? Am I right?

So far, yes.

Yes.

The next question is from the line of Koundinya from JM Financial.

Sir, just a couple of questions. So firstly, on the rural line and modern format retail side. So I just want to understand, a few quarters back we had problems on the rural side and also the modern retail format side. So can you speak a little bit about what we have done exactly to diversify our channel? And what's the current status on? What is the revenue mix from these channels?

So in terms of large format, we've obviously broad based the number of accounts we are handling, which has happened. So our -- but some of that sale which was lost in the first 2 quarters because the stores were not opened is lost. Same is the case with the MFI-based business because there was a moratorium and you know that collections weren't happening, and only after the moratorium was lifted that they start lending again. And only after they lend will the MFI base business come to us. That business has started now. And it is coming up. It's getting to be a stable business as we are speaking. But there's no growth yet. So we are still at about 60%, 70% of the overall pre-COVID level of MFI business that is there. And that also has moved from one category to the other, so on and so forth. Even there, what we are doing is trying to get more accounts so that we can come back to the same pre-COVID levels of the rural MFI sales.

Sir, in the press release you did say that the retail channel is doing fairly well. So you mean the other channels other than the MFI distribution, right?

Yes. The other channels -- sorry, come again? What is the last bit?

So in the press release, you did mention that the direct retail channel is recovering well. So is it a case where the MFI is lagging behind but the rural channel has recovered completely?

See, the regular rural channel through our general trade has come back into a good result.

Okay. Sir, my second question is a little bit on the market share. So if we were to compare ourselves with the other listed players in the cookers and cookware, since 2Q FY '18, we are a little bit lagging behind them. And of course, we did well in the current quarter. So what is it that we are doing differently currently to tap the lost market share over here?

We launched a new product

Sorry, sir. Please go ahead, sir.

We launched new products in the segment, which has received very good response.

And you believe that traction would sustain going ahead, sir?

Yes.

Understood. Sir, if I can ask one more -- one last question. Going ahead in the existing categories that we are there, are there any specific product categories where you think we are doing really well and specific categories where we are lagging behind? And if yes, what is the strategy in these categories? And can you speak a little bit about the new categories that we intend to enter as well?

So we're doing extremely well in pressure cookers and cookware and gas stoves. We're doing very well in some more electrical appliances like mixer grinders in the open market.

Induction cooktops.

And we're doing extremely well in induction cooktops. So these are things that we are doing very well. Can we do better? Yes, we could do better in kitchen hoods, for example; we would like to do better. We would like to do better in some more categories like rice cookers where there -- but there our supply chain was disrupted. So that is why this has happened.

Okay. Sir, if I were to ask you to pick 2 or 3 product categories which are going to be the growth drivers for us, say, in the next 5 years, what would that be?

I wouldn't want to tell you.

The next question is from the line of Gagan Thareja from Kotak Bank.

Yes. Am I audible?

Yes.

You are, sir.

Yes. Sir, first question is around the working capital in the e-commerce channel. Is it similar to the aggregate working capital or different?

It's similar.

Okay. Second question, Stovekraft's DRHP had Frost & Sullivan and Euromonitor data, more or less covered all the categories you are present in and they seem to have given the 5-year category growth rate nearing between 8% to 10% on an average. Do you concur with that assessment of category growth rates, in your element category?

I'd like to think it'd be better than that.

Okay. And since you aspire to north of that, probably 15% odd, that figure and aspiration is well taken. But what would drive that, if you could give some idea how we want to actualize that aspiration?

As I said, do the basics right: get the innovative products in, build your brand, get the distribution at the right place and make sure that the customer is on your side.

Okay. And new products that you indicated contributed to growth in this quarter, if you could give the addressable market size of those products and some relevant competition if you could...?

Sorry, come again? What was the question?

You indicated that you've launched new products which has helped growth in this quarter. If you could give some idea of the addressable market size of these products?

So we launched some new casseroles, as I said, which was thermoware casseroles in stainless steel. We believe that that's a reasonably good market which can give us about INR 30 crores, INR 40 crores of turnover in a year. In the next 6 or 8 months, we should be at that kind of run rate. And then we've launched new stainless steel cookware, which is a larger market, and the addressable market there could be INR 200 crores, INR 300 crores.

Okay. And I think earlier in the year, we also entered the dishwashers category, and you also started out a distribution outlet in Bangalore for chimneys and built-in hobs and dishwashers. If you could give some idea of how that -- those categories are panning out for you?

So these are new store formats which is -- where we tried our hand at seeing how we can premiumize Prestige through high-end appliances through specific stores like this, in this format. So work in progress. Right now, we're just testing the concept out. We've only done it in Bangalore. We have done it only in the last few months. We need some more time to come back on that.

Okay. And Horwood has discontinued its JV -- I don't remember the name of the company with whom the JV was. But you indicated, I think, in a press release that it would lead to significant overhead savings. If you could quantify that number.

Shankar?

Yes. Sir, it was crossing a dip of close to minus 3% on our EBITDA level. Our EBITDA level dropped to 5% from the earlier 14% because of this particular line. Now we will get back to...

For Horwood.

For Horwood. So the Horwood EBITDA is now closer to 9%. After this JV, it will be closer to 12%, at Horwood.

Okay. So that's material savings. Finally, the cleaning products category, if you could give us some idea of how it's evolving. How the growth has been YTD? And what are your aspirations there?

So cleaning, we have done exceedingly well. We've been, what, 70%, 75% growth YTD, though I think in the last couple of months it has slowed down a bit. It's coming down to more stable levels. As soon as the lockdown opened, it was a very good unlock category. Going forward, we expect it to give us significant growth from here also because the base is still small and we are still adding new products there.

The next question is from the line of Sanket Goradia from VEC Investments.

Team, congratulations for a great set of number. It would be helpful if you could give us what has been the volume growth category-wise? And secondly, you've mentioned that some of the new categories have done really well for us. Could you elaborate a little bit more on that? And at which pace they lie? And what is really [ seen ] in terms of the product launch?

In terms of volume growth, I wouldn't want to give you the exact numbers on growth, but I can tell you they're significantly high in the double digits.

The value growth are in the list.

Yes. The value growth you are seeing in the list. So you can see that it's given quite clearly there.

Value growth is 24%, and average price increase of 8% to 9%, the volume growth should be around 16% on an average base.

No, no, even the 9% growth was towards the end of the quarter. So volume could be very close to the value growth in terms of -- so those numbers are there, indicated there.

Yes. So you actually mentioned that some of the volume growth is led by new product launches. Could you speak a little more on what products picked for us this quarter?

So we've launched Svachh range of pressure cookers, which was not done in this quarter. But we obviously started getting traction in almost all channels because of that. We've launched new stainless steel cookware. We've launched the new gas stoves and some new mixer grinder models and a couple of wet grinder models.

And casseroles.

And casseroles.

The next question is from the line of Ekta Sanghvi from Vallum Capital.

Sir, what -- could you give the number on the contribution of MFI sales to the total revenue currently?

Very small. I think it's between 3 and...

2% to 3%.

It's about 4%.

So this was before COVID, almost 4% last year.

Yes.

This was pre-COVID?

Yes. It's around 4% to 5% of our total turnover, which is similar to what we had before pre-COVID.

Okay. And so now that your MFI issues have been resolved and it has started picking up again, would you expect -- like what level can you expect this to go at in the next 2 years?

One sec. One sec. We had no issue with MFIs to resolve.

No, sorry, sir. I mean, sir, you said, right, that it has -- the MFI channel has just started and because of the moratorium there was...

That is correct. Not issues with us.

No, no, I'm sorry for the words. So what level could we expect this to go at in the next 2 years?

That would really depend upon our risk there.

Okay. We had been talking about direct rural in the past, which we are going through partly through MFI and other channels also. We believe there is a good future in this particular direct rural sale given that the government is going to spend a lot of money in the rural sector as per the budget. So it is going to be one of the growth drivers going forward.

And currently, sir, what would be the contribution of our revenue from urban and rural, could you give a breakup?

We cannot give you that breakup.

Direct rural is 5%, balance 95% can come...

Yes, exactly. And I don't know how much of e-commerce is going into the rural area. So how much of the Tier 4 towns sale is going into the rural areas. I'll never know that.

The next question is from the line of Shrinidhi Karlekar from HSBC.

Congratulations on great set of numbers. Sir, just a couple of questions from my end on e-commerce. Sir, you touched that about 16%-odd the company's revenue comes from e-commerce channel. Sir, do you get to know which area eventually a product is going, like at least pin code level? Or it's just that you're selling it to Amazon or Flipkart and that's the only information that you get?

No, no. See, we have 3 ways of selling on the platforms. One is we ourselves as a marketplace account; second, from our website directly to customer; and the third is through the platform through their firms. What they sell through their firms, they give us a broad outlook. We will not get an exact outlook. What we get through the marketplace, we again get some details there. But it is safe to say that the smaller towns have grown faster this year than the bigger towns.

Okay. Fair enough, sir. And the second related question, sir, you have a large presence in e-commerce channel. So just wondering, how do you see is the consumer behavior of an online buyer and an off-line buyer different? I want more answer from a two perspective in terms of product buying, is online more mass affordable product while the offline is more premium? And is the brand loyalty less of a concern for online buyer compared to offline buyer, if you could answer that?

In fact, I believe that the online buyer and the offline buyer are 2 same people. It all depends on comfort levels. Today, what is happening is most of the product research is not happening by browsing in the store, in the offline store. That browsing is happening on the platform. If they are happy with the information they have and they don't need to touch and feel, they will buy it on the online platform.

I'm buying both online and offline personally.

Exactly. So if you want to say that, no, no, I need a touch and feel, I won't buy a shoe without seeing whether it fits my foot correctly, then you're not the kind of guy who'd buy online. So I mean it's all about personal habits. A lot of people buy online and offline depending on the category that we are talking about. So really I think it's the same customer. And these habits are starting to stick now because COVID has lasted for so long.

My question is if you see reviews and some of the ratings, some of the brands which are quite small on the offline channel but appears to be get lot of good reviews as well as a number of reviews are quite significantly disproportionately higher compared to a national player like TTK. So just I wanted to understand is the buyer extremely price-sensitive on e-commerce? But you would say it's not that way.

So it depends again on the customer, right? I mean if there's a very price-sensitive customer who doesn't care what the product is and he says, I'll buy it as long as it's functionally okay, then that person will go there.

See, the reviews also keeps changing.

And you and I both know how reviews are managed.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing remarks. Thank you, and over to you.

Ladies and gentlemen, thank you very much for the keen interest shown in the company. We've genuinely had a good quarter. We're seeing good trends going forward. The brand is strong, and we've got many new products coming forward. So hopefully, we'll keep up the good work as we've done in the last few quarters. Thank you so much.

Thank you.

Thank you very much. Ladies and gentlemen, on behalf of Ambit Capital, that concludes today's call. Thank you all for joining us, and you may now disconnect your lines. Thank you.