V-Mart Retail Limited (VMART) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 FY '21 Earnings Conference Call of V-Mart Retail hosted by Kotak Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Garima Mishra from Kotak Securities. Thank you, and over to you.

Thank you, Ritija, and good afternoon, everyone. On behalf of Kotak Securities, I welcome you to the 3Q FY '21 earnings call of V-Mart Retail Limited. From the management team, we have with us Mr. Lalit Agarwal, Chairman and Managing Director; and Mr. Anand Agarwal, Chief Financial Officer. I now hand over the call to the management team for their opening comments, following which there will be a Q&A session. Over to you.

Hi, good afternoon, everyone. Thank you so much for coming on to the call. It's a good time to be here, and certainly, post Q3, as we all know, which is the strongest quarter for V-Mart and strongest quarter for fashion industry. We have seen the economy, the whole COVID situation, even the industry situation, gradiently improving at all angles. We have seen in the markets, in this particular quarter, much -- very good improvements post the second quarter. We saw people being excited about the festival. We also saw some celebrations happening. Definitely, it was not year as usual. So celebrations, gatherings, occasions, social events, they all were not in great numbers, and they were all in maybe a dampened mode definitely because of COVID. And largely, we saw -- definite-- these are need-based buying, which happens in small town. So we saw a good amount of excitement in customer coming in. They came in at lesser frequency but they bought a little extra. And that is what we saw in the market happening. People were a little -- had a little fear, definitely came out of their home, but did not come out in huge numbers. We had fewer members of family coming into the store. But yes, converting more and buying a little more than usual is what phenomena we saw. Overall, economy, I think, yes, both rural as well as urban has been improving. Especially, rural has been -- has improved a lot because of the crop has been very good. The income in the hands of the farmer is good. But yes, the spendings have been reduced. We are seeing they having a little more fear about what will happen in the future. Will this be retained, that's the question mark that they all ask. Their feel-good factors are not so great because the future doesn't seem very secure. Their asset prices are not increasing. So definitely, there is a concern on those feel-good factors. But yes, largely, we see rural income, which is supported by farmer income for farm income. That is one good side, which is a positive news, which we have seen, and that has got transferred into other businesses and other parts of the economy, which exist in these particular territories. And we also saw a little betterment in the urban side, even in the towns and cities where we operate. We saw even business coming back to -- little bit to normalcy. We saw even customers coming back to normalcy. We also started seeing people from villages coming to the cities to shop. We also started seeing people coming out from work from home and going to offices. So there is a change which is happening, but it is still taking more time. There was a large winter onset that we saw during the festival, which also gave us good demand, led by the seasonality, which also came in. Definitely, marriages were there in these particular months. We saw marriages happening in large numbers. But yes, the gathering and the number of people, attendees in the marriages were less. Largely, V-Mart's business is to cater to the attendees in the event, the [Foreign Language] of the event, not actually the [Foreign Language] and [Foreign Language]. So we have seen response, but not to that standard, not to that level because the number of attendees have drastically got reduced to maybe 20% of what it was usually. But yes, largely, there was excitement in the market, and we saw a very good November coming in. And I think even the industry has performed similarly, a little up and down. There has been, in the industry, multiple type of reaction that we have seen with large -- with the mom-and-pop retailers, with the regional retailers and with the organized or the nationalized retailers or the e-commerce. What we saw is the mom-and-pop retailers have normally been a little fearful. They have not been able to give that kind of experience to the customer. They have not been able to plan their product and purchases very well because they could not go to the bigger cities and towns, to the manufacturer to source their products, normally what they do. They did not had a confidence on their supply chain, and they did not -- were not able to also handle supply chain. They also had an impact because of the social distancing norm because their store sizes were small and are small. So social distancing norm could not be maintained in those kind of stores. So that is why customers also preferred lesser to go into those stores. That is what we saw. So overall, we've seen them -- their liquidity also going down, their ability to provide fresh fashion and fresh product were also little down, and their ability to attract customers and give those kind of social distancing or hygiene environment was also a little low. So overall, they have not been able to give out as big opportunity in the market, followed by regional retailers, there had been few regional retailers who are -- who looks at being in trouble, both from inventory management and their cash flow management. There are also other side of some regional retailers who have been consistent in their approach and who have relied and banked heavily on their purchases, new purchases, and have been able to maintain some part of their sales. From the national retailers point of view, we have seen introduction of many more retailers and many more outlets of those retailers coming in. We have also seen them spreading their wings and growing. We have seen them not doing a very good plan. They were not able to -- in especially the winter wear seasonal zone, we have not seen them planning as great as they could have done. So they also acted a little more in fear and a little more in the probability manner. So they did not do as great as they could have done. But yes, there is definitely a lot of focus in opening in smaller towns that they have done. We've also seen the big bang from e-commerce marketplace players. But yes, their ability to convince the customer in fashion business has not been that good. They have been certainly focusing very highly in giving huge discounts to the customer and attracting footfalls, which they have relatively also done better. But yes, conversion over fashion has not been great, is what we -- our learning has been. So that's the overall market industry situation. At V-Mart, we have continued believing in our philosophy, our theory of giving the value to our customers, stakeholders in an ethical manner, in a sustainable manner, in a honest manner. And that is what has been our key, which we have done in whatever way our team has done. And huge kudos to our team who has really done a great job in both keeping our people, customer, stakeholder, vendor community happy, contributing towards them and also able to handle their inventory and their expenses very well. So kudos to the team. They've done a great job, which brings a lot of confidence for me in the team, and which we should be able to see a lot of good things coming out of the team in the future. That's how I place it. Anand, if you have some detailed commentary about the numbers and how did the quarter go, please go ahead.

Yes. Thank you, Lalit. It has been a good recovery in the past few months. And as we look forward to more normalization, let me just take you through some of the key highlights from this quarter. And then we can open the session for questions. As Lalit mentioned, quarter 3 is not only the biggest but also the most profitable quarter for us historically. And with the backdrop of COVID, the anticipation for us also in this quarter was very, very high. We were very apprehensive on how the whole situation was going to flow, especially given the fact that November saw some of the highest number of COVID cases that the country has seen. Although we have seen improvements in business sentiments throughout and the customers started to come out to shop, albeit only when they had a need. As such, whenever there was a social occasion to celebrate, like a festival or a marriage or any social get together, we did see demand getting picked up. But in times where there has been no need for the customer to wear new fashion or to go out, the demand has remained constrained. The smaller markets of Tier 2, Tier 3 towns have seen slightly better recovery versus the -- with the metros, in line with the COVID spread and also the fear apprehension that has been much higher in the bigger markets and concentrated urban areas. While almost 100% of these stores remained opened, there were also slight disturbances for periods of time in Gujarat and Uttarakhand where we saw curfews and even night curfews for some weeks, apart from restrictions of early closure of stores in the peak festival period, even in October and November. The festive period of Durga Puja also did not see a huge turnout as pandals and celebrations were muted significantly, minimizing the requirements of customers to wear more fashion and also gift, as is the usual norm. As a result, we saw a very muted festive period, especially in October. However, with Diwali celebrations in full sway and also Chhath in Eastern part of the country, Bihar, Jharkhand, we saw a very strong momentum getting build up and also very ably aided by a good marriage season. As we recall, May, June marriage season was definitely extremely muted because of the COVID fear and a lot of marriages were postponed for the November marriage calendar. And that gave rise to a very good amount of demand recovery in most of the markets. We saw a very good turnout of customers in November across almost all geographies and most of the markets saw growth over last year during this period. Early winters in North and East India also aided the strong growth momentum. But post the marriage season, I think, in December, again, we are seeing some bit of a slowdown in footfalls, and they still remain slightly subdued. As far as the sales are concerned, I think the sales achievement for the quarter climbed up to 84% versus the same quarter last year on the back of a strong demand in almost all parts of our markets. And also very strongly aided by a very good and fresh product lineup at these stores. If I could relate to the inventory levels compared to last year, we went into quarter 3 last year with almost INR 550 crores of inventory as at the end of September. And this year, we went into quarter 3 with a level -- with only around INR 360 crores of inventory. So there was a huge downsizing of inventory. But despite that, the quality of the inventory and the quality of the product that our teams were able to source and place very timely at all these stores made sure that we had a very strong pickup from customers. And we were able to reduce also our discounting or achieve very high sell-throughs for the inventory during the quarter. The footfalls for the quarter remained in the range of around 70% versus last year. As I mentioned, discounting definitely remained low. Deliberately, we did not push any kind of discounting during the quarter. In any case, normally, quarter 3 is usually a full sales month but our promotions also remained low. We did run advertising and promotion campaigns. But compared to last year, we refrained from giving out too much price offers to the customers. As a result, our ASPs went up by 2%. The average billing size also went up by 16%. Both of the KPIs indicate a very strong feedback of the customers on the product and the strength and the loyalty that the customer has with the brand. Lalit already spoke about the competitive scenario in the market, but I think the numbers speak for themselves. We were able to definitely get a much better response on the inventory, the fresh inventory and the product that we were able to showcase. And as a result, achieve much better margins across categories. The conversion rates remained high at 62% in general across towns and, in particular, the core markets of North India and UP. East also did significantly better than previous years, along with UP, which remains our flagship market. If I look at the margins, we improved our margins by 40 basis points in the quarter. On the back of lower ASPs in the previous quarters and the apprehension that customers will buy lower-priced goods, and there will be -- there might have been discounting, I think the improvement in the margins definitely outscores the quality of inventory that the company holds. And that has led to much better pricing power that we were able to get from the customers. Inventory also is lowest as -- if I compare it to many, many quarters in the past. Per store -- at a per store inventory level, we have reduced the inventory by almost 35%, 40% in the quarter. There was no distress sales. There was no liquidation required. We downstocked the inventory 37% year-on-year and by almost INR 170 crores since March. Inventory days also at 106 days in the quarter, as of the quarter end versus 72 last year, although looked high, but at an absolute level, the inventory remains extremely healthy. And it will also help us in making sure that as we get into fresh seasons going forward, we need to rely less on discounting or liquidation. The shrinkage also reduced to 0.9%. And on a YTD basis, it is at 2.3%, which is as compared to 1.6% last year. But this is on the base of a lower sales YTD this year. But at an absolute level, this remains absolutely in a comfortable range and comparable range as in the previous years. We remain very comfortable on the overall inventory situation and also on the working capital cycle. And also happy to reiterate, just like last quarter, we also have currently one of our lowest payables outstanding because, as a result of robust sales and very efficient inventory planning by the team, we were able to see very, very good cash flows for the quarter. While the CapEx for the quarter was at around INR 11 crores, on a full year YTD basis, we have spent around INR 17 crores on CapEx. Good news is that we ended the quarter with almost INR 100 crores plus of cash in bank, which has been a very welcome change compared to past many, many years. Because this being a peak season, we have normally relied on having some working capital utilization during this time. But robust sales and efficient inventory planning led us to reach to this target pretty early on. On the expenses side, we have restarted our normalization of expenses as we expect customers also to normalize theirs. And while the overall expense level still is down by 21% for the quarter versus last year, owing to the strong corrections that we took in quarter 1 and quarter 2, on a YTD basis, we still are down at around 41% versus last year on the expense line. The rental savings so far for the year have been around INR 21 crores, which would roughly translate to around 20% for the full year. We had done INR 19 crores -- we have reflected INR 19 crores till quarter 2, and INR 2 crores addition has happened in this quarter. There is no major more addition expected for the fourth quarter because most of the agreements and documentation has already been completed. On the EBITDA side, owing to all these cost reduction efforts and the impact of the rental savings, we stand at an EBITDA of INR 104 crores, which is only down by around 11% since last year, and as we continue to build the base for more efficient structure going forward. On the new stores, we opened 11 new stores during the quarter, closed 1 and net tally stands at 274 stores, and as we continue to look forward to add more. On the online business, we continue to build and scale up the operations. We have not spent too much of marketing dollars behind the online business. This business still is a promising business. We are still streamlining operations. We are still not present on marketplace. We're still fine-tuning our operations and logistics because we have a very strong belief in the overall trajectory of this business, and this will become an important business as we move forward in the years to come. As of now, this still remains less than 1% of our overall sales mix. So that's all from my side. I now request the moderator to open the house for questions. Thank you.

[Operator Instructions] The first question is from the line of Tejash Shah from Spark Capital.

Sir, considering the pent-up demand of 2 quarters, festive season, bunching up of marriages also and timely winter and above all, for us, rural demand tailwinds also, so does -- should one read 84% recovery as a good number? Or it also tells you sign of still underlying weakness and fear in the market, and it should be seen as a distant recovery, full recovery some time away?

Yes, Tejash. Definitely, what you are saying is true. And full recovery is definitely away, it's not there right now. And as I said, there are lesser number of gatherings, lesser number of events, lesser number of participant attendants, no outings, no holidays, no even offices for a lot of locations and a lot of people. So it is definitely not actually the same environment for at least the fashion consumption. And fashion, you only buy when you want to show off. When you don't want to show off, why will you buy fashion? So it is definitely not 100% normal for fashion business.

Sure. So sir, do you expect by mid-calendar year...

Mr. Shah, may I request you to please rejoin the queue because we have the participants waiting.

I've just asked 1 question. So I'm eligible for 1 more, right?

No, sir. There is only one...

Okay, Tejash. Yes, just a moment. So I don't want to give you an expectation. You also know what I know. And we are also aware of -- we are also waiting because we are seeing all sorts of news coming in from multiple countries and multiple locations. But definitely, position in India is improving. And it has really come up to a very good level. So we should see a faster recovery coming in.

Sure. And sir, any update on fundraise plan if -- that's the last one from my side.

Look, we definitely have an enabling resolution. But today, we don't want to take any question on those, and we will not be able to answer any of those questions. We still wait for our Board meeting to get decided and Board to get decided.

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

Yes. In fact, you gave a very, very detailed explanation on the market trends and the current situation on ground. I just want to, I mean, kind of try to compare this with other discretionary categories. You just mentioned that customer is doing a lot of need-based buying. But honestly, when you compare with other discretionary categories, a lot of other results of other companies have come, I mean, consumer is willing to buy consumer durable products, the paint companies have done good. But somehow, I mean, it seems as if apparel is one product where consumer is not really kind of keen to buy. I understand a point you mentioned that weddings have been low. But do you think, sir, there is anything else to read in this? I mean, do you think there is any signs of customers' receptiveness to online growing too fast for us to kind of have impact? And this is not specifically just to V-Mart, but honestly, all apparel retailers, companies are seeing this issue. And I see even you becoming far more aggressive online. So just from that point of view, do you think that retail apparel is seeing some kind of impact because of those reasons?

No, Ali, I definitely want to make you very clear that, definitely, people who have stayed in home are trying to make their home better, are definitely not going out to eat, so want to bring in a lot of equipment in their kitchen and their home, have definitely a lot of work from home, kids studying from home, you -- and the parents watching televisions and need various equipment for various people if they are living more in home. Definitely, they are able to see their paints coming out and they want to improve the look and feel of their house. And that is what is happening. So home, everything related to home equipment, home appliances and maybe vehicles, if they require, will definitely grow, which is, once again, a need right now. I don't think there is a long-term impact on any of apparel buying or apparel -- the ways of apparel buying. As I said in my opening remarks also, even in the online business, the apparel consumption and apparel sales have not grown to that degree. And it is only about the other things which has grown. So I don't think there is any other challenge, but yes, definitely, digitalization is something which is more and which is definitely a part of the life and has really accelerated post the pandemic. So that is going to be broader and broader and bigger and bigger. So one needs to keep thinking about the strategy of as an opportunity, not as a defensive strategy. One should always keep focusing more on how to better the digital option of the customer.

Your next question is from the line of Percy Panthaki from IIFL.

My question is on the regional competition. There are a few chains such as V-Bazaar, 1-India Family Mart, et cetera, whose -- if I look at their operating and financial metrics, they are very similar to yours in terms of sales per store, margin, ROIC, et cetera. So 2 questions regarding this. One is basically, what is it -- what is in your business model which is unique compared to these 2 or 3 other chains which are operating in the same area as yours. And secondly, now with COVID impact ebbing and capital markets being easy to access, do you think -- do you see on the ground that there could be some increase in their aggressiveness in terms of store additions, et cetera, which will obviously affect your opportunity size, which you plan to target over the next few years?

Anand, you want to take it?

Yes, yes, sure. So Percy, very loaded question. But fundamentally, what I can say is that what differentiates us from any of our peers or competitors has always been our consistency and our discipline on growth. I will not say that we are better than others or somebody is doing this and we are not doing that. But I would just want to say that we have our own operating principles, and we have sort of perfected something that we have believed in and we continue to believe in. And we still see that the market is very strong, very big, and there is enough opportunity for us to keep growing in this very, very opportunistic market. As far as the growth objectives and growth possibilities of, let's say, competition is concerned, I think in the last 9 months or 10 months, what we have seen on the ground is slightly a different story. There are players who have definitely been impacted because of liquidity pressures, because of quality of inventory, and they continue to remain impacted. We have seen more store closures of peers and competitors than we have heard about new stores opening. We will be cautious. We will still keep looking at how the market evolves, but our feet are very firmly on the ground. And we still look forward to make sure that we are able to make the most of the opportunity and the business because we still fully believe that the market is still extremely large, and we are still a very, very small player in this large space.

The next question is from the line of Nihal Jham from Edelweiss.

Yes. Sir, I wanted to check, this is, I think, the first time in many years that you've had 2 continuous good farm seasons that have come in. So once COVID normalizes, is it that this trend of better spending that can ideally happen sustain for a longer time? Or it is just up to the next kharif season post which there is a reset again? What is it that you've seen in your past experience?

It's difficult to forecast. And I think the worst is over and we are in the back of it. We should see betterment coming in. Definitely, when people have not done a full-fledged consumption in the past 1 year because of pandemic and any other factor and also last 2 years, where we have not seen a lot of farm income betterment. So I definitely feel we should get more benefit, and we should see more aspiration rolling out in form of consumption in the future times.

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

Sir, in your presentation, you have alluded to 2 new store formats, one is Fashion Dial-Up and one is Value Dial-Up. So going forward, how would the 3 formats move, the existing format, the 2 new formats? And how does the store economics move? Because for one format, you said that ASP is going to be much higher. So can you just throw some light on the 2 new formats and the store economics?

So the 2 new formats are -- have been works in progress for the last 1.5 years, and these have been pilots that we've been running at 6 or 7 different locations for almost a year. And the differentiation is not so much in the ASPs only. It is more about the look and feel and how we look -- make the transition into a fresher and a leaner look for the customer. So what we have done is, and what we plan to do is, to make sure that all the new stores that we open, we open in these new formats, depending on the city or the geography. So typically, the Value Dial-Up format is largely limited to the Tier 4 towns or smaller towns where there will be a small cap, a little bit cap on the pricing of the inventory that we keep in the store. But otherwise, the look and feel and everything else will remain very fresh, very lean, very inviting for the customer. The Fashion Dial-Up is, again, a look change. The inventory and everything remains exactly the same as of today. There is no change in the merchandise, there's no change in the category. There is no change in the customer proposition. The only change is in the look and feel how the customer is able to connect, how fresh and how young we are able to project the image of the brand and to -- and the merchandise to the customer. So it -- this transition has already started. We will not overhaul or makeover all these stores at one go in this new format. This is a gradual process. In any case, we do a refurbishment of our stores every 4 to 5 years. And as and when the older store comes into the refurbishment cycle, they will get refurbished under the new format. As far as the spend on this new format is concerned, this will largely remain in line with the existing CapEx spend that we have historically been doing. There is no major substantial change to the CapEx number per store. While in the pilot stage, there was marginally 5%, 10%, 15% slight increase in the CapEx cost, but we will be able to contain it within the same cost lines as of the earlier stores going forward.

Sure. And sir, if I can ask one more question on the employee cost. While most of the costs have gone back to pre-COVID levels or near those levels, have we -- the salary cost is still 20% down year-on-year. So has the salaries for the front level staff back to pre-COVID and from quarter 4, we can see a normalized employee cost? Or this will be the run rate going forward as well?

So there has been no reduction in salaries, if I were to take this or flip it slightly differently. So there's no reduction in salaries since almost last 3, 4 months. The reduction that you see is because we did not fill up some of the positions in some of these stores where the store staff had moved back to their villages or had migrated out of the cities where they were riding in. Due to the COVID impact and the ongoing uncertainty, we did not fill those positions. But as we move forward, people -- we are and we will continue to fill these positions and get the manpower strength back to, I would not say normal, but there would be a marginal improvement in the payroll piece going forward, but it may not be as drastic as 20% that you have seen for this quarter.

The next question is from the line of Aaron Armstrong from Ashmore.

Sorry, similar to the last point, in terms of savings that we've seen in the last couple of months on the cost side, so across the line items, and then also on the inventory side as well, being able to operate with a lower amount of inventory. Can you talk about the extent to which those are short-term and they'll reverse over the next couple of quarters? Or where, you've highlighted some salary savings as one, where you can see savings that will last a little bit longer-term than just 1 or 2 quarters?

So thank you, Aaron. Fundamentally, we are not looking at any significant shift in the economic business model that we have sort of perfected over the last many years. There have been short-term impacts because of COVID and improvements in the operating cycle and efficiencies because of COVID. Some of these will get retained, but these will not lead to any significant or landslide changes in the cost structures as we move forward. As business situation on the ground remains -- gets to normal levels, we will also want to, in fact, up the expenditures, up the investment in the market, up the investment in our stores. So we will want to come out back strongly in the market. Also, there will be -- we anticipate there will be, as we move forward, there is going to be higher cost pressure because of raw material cost, because of land prices, which have been going up. There is going to be some pressure that will be built up into the system. There is also increments, et cetera, which have not happened for 1 year, and there will be more investments required in the people strength as we start to build the next phase for V-Mart. So I'm not anticipating a significant retention of cost savings as we move forward. If at all, it will be at the similar levels as in the previous years, if not more. On the inventory side, I think, definitely, the team has been able to achieve a very, very lean and mean inventory level. Again, I would want, as a finance person, to retain most of these efficiencies into the system. But my sense is that we have also slightly underinvested in the inventory as of now. We will want to rebuild it back to a reasonable level. May not be as high as last year, but I think we will settle for something in between. There will be improvements versus last year, but may not be at such a lean level as we are at December end.

That's great. Could I just tag on the outlook for store additions, please?

Historically, we have been adding stores at around 20%, 25% year-on-year in terms of retail area. And that is what we will maintain the long-term trajectory at. There is no shift in our strategy or stand.

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

I just wanted to -- sorry if this was actually answered before, but just trying to understand over here how the COVID has spread and obviously, it's been less prevalent as far as the Tier 2, Tier 3 markets are concerned, where we are actually more present. So when we're talking about consumption getting back on track, I presume the rural part of the business or the, let's say, Tier 2, Tier 3 part of the business across interiors, we are hearing the demand has been good. Has above effect not probably worked out on, let's say, your part of the business as well because I presume over there, it has been business as normal as far as the Tier 2, Tier 3 markets have been.

Prashant, I think we have already answered that question. And as you rightly said, definitely, I mean, it is coming back. And out of the lot, Tier 2, Tier 3 markets have been better, especially rural market has been better. But still, there are travel restrictions. There are travel mindset restrictions also which is there, and people are not traveling right now. People are not using public mode of transports very, very often. There are not regular public mode of transports, which are available. There are still a lot of internal restrictions within families and within the community which is happening, which is still not normal. And it is 80% normal is what I would say, leading to these kind of numbers.

Okay. No, the reason for asking this is because if you look at -- I mean, while you spoke about the travel restrictions part, but we're now hearing about wedding season and all kind of -- actually kind of getting back on track in the last 2, 3 months, can we at least say that our month-on-month recoveries, which you're hearing, which is there, is kind of at least -- let's say, for example, is like a December probably closer to the 100% mark or something of that sort? Can it be kind of put it up in that fashion when you're talking about...

No, I would not want you to feel good about it. There are no special good news right now. We still see similar levels what we have reported in Q3. That's the level or even something below than that is something which is right now being witnessed. And that is what we still feel this quarter should continue. We should see some hope, now vaccine has started coming in. We should see some betterment coming in from the next quarter when the festival season starts.

The next question is from the line of Anish Jobalia from Banyan Capital.

Sir, I have a question on competition. I missed your initial remarks. So in case my question is repetitive, I'm sorry for that. But sir, I would like to understand, if you can give some more understanding of the reduction of the competitive intensity in our core markets? If you can talk a bit about that, that will be helpful, and give more flavor around this, how many stores would have closed down, in general? How is that helping us, I mean, if you can talk about this a bit?

So I don't think, Anish, we should talk about -- a lot about how did competitors' market or store closed up. And we don't want -- we don't wish they should close up. And no one has closed up and -- in large numbers. I mean, definitely, there are pressures, as I spoke in my opening remarks also, both with unorganized mom-and-pop stores, regional retailers, national retailers, and the e-commerce players. I spoke about everyone. And that's what we feel. There are different reactions coming in. And they also largely depend upon the kind of infrastructure, the kind of analytics, the kind of forecast and the kind of controls and patience they used in terms of handling the situation. Not everyone did a great job. A lot of them did really did a great job in handling it and is doing fine. There are a few retailers who -- where there is a concern. But otherwise, everyone is trying to improve and has come to that level of improvement. So I don't think, uniquely, you would find a lot of difference between the -- within them.

Sir, so can it be said that the reduction in the competitive intensity is not -- has been not massive? Like, I mean, it was like a few here and there, if that's what you think.

Yes, yes, yes.

The next question is from the line of Shirish Pardeshi from Centrum Broking.

Sir, Lalitji and Anandji, I have 2 questions. You mentioned that the sales growth on a Y-o-Y basis was lower, while Diwali and the festive season has done. So I was just trying to look at what kind of -- I mean you said that transaction size has gone up. But would you be able to help us, what kind of volume growth we are seeing, particularly in, say, October, November and December?

So Shirish, the volume growth definitely has been slightly lower, if I were to look at the -- because it's a very logical conclusion. If the average bill size has gone up and the average selling price has gone up and the total sales have come down, so volume growth has to be slightly lower. But having said that, I think, as I mentioned in my remarks earlier on, the customer which is coming to the market is more need based. And when he's coming, he wants to fulfill all his requirements at one go rather than coming more number of times. So therefore, the footfalls also, while they remain low, but the conversion rate is definitely much higher. So whatever is down in terms of volume has been made up by way of higher-priced goods in terms of the average selling price.

Yes. Exactly. That's because of your conversion rate was strong. I was anticipating this question. The other question is that when you compare October, November versus December, and Lalitji is giving some weakness, showing it's not up to the mark, would you be able to indicate hypothetically, if the October month is 100, what kind of decline we have seen post Diwali or maybe December?

Shirish, very difficult to put a number commentary. But definitely, December was slightly weaker. If -- I will not say it was a washout, but slightly weaker than, let's say, October. But November being the peak season of Diwali and Chhath and also marriage season, it was definitely much, much stronger than even October.

Okay. Just last one question for Lalitji here. We have seen some changes in the senior management. Was it planned or it was unplanned?

Shirish, definitely, we have got a new resource as a COO and Chief Operating Officer, who has a very, very good experience in value retail, and has been there in the retail industry for the last 17, 18 years. And definitely, he is someone whom we were chasing and aspiring for. And the earlier COO had some own aspirations and own personal reasons of -- he got some international opportunity. He also wanted to move on and he went into a new opportunity. So we have done with someone whom we can connect more and something -- somewhere -- where we had more conviction. So that is a part of the plan.

Ladies and gentlemen, due to time constraints, that was the last question for today. I would now like to hand the conference over to the management for closing comments.

Thank you, once again, to everyone who participated in the call. You have been there with the trust, and V-Mart has always tried to deliver this trust. We will always try to do our best in driving and giving the -- or creating value for the entire ecosystem, and that has been our philosophy and vision. We will definitely want to beat our own standards, set our own standards and beat them regularly, both in terms of delivering value as well as in terms of creating a discipline and governance structure in our format of doing business and also being sustainable and creating a societal impact. So that's the final word, and that is what we would want ourselves to be more and more and then look towards growing ourselves to a better standard, and we'll try to keep up to your expectations. Thank you so much for being there. Bye.

Thank you. On behalf of Kotak Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.