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Dollar Industries Ltd
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Ladies and gentlemen, good day, and welcome to Dollar Industries Limited Q2 and H1 FY '23 Earnings Conference Call hosted by SMIFS Limited. [Operator Instructions] I now hand the conference over to Mr. Saurabh Ginodia from SMIFS Limited. Thank you, and over to you, Saurabh.
Yes. Good evening everyone present on the call today. On behalf of SMIFS Limited, I welcome you all to quarter 2 and H1 FY '23 post-results earnings call of Dollar Industries Limited. We are pleased to host the top management of the company. Today, we have with us on the call Mr. Ankit Gupta, President, Marketing; and Mr. Ajay Patodia, Chief Financial Officer of Dollar Industries Limited. We will start the call with some initial comments on the results from the management, post which we will open the floor for Q&A.
I will now hand over the call to the management. Over to you, sir.
Good evening, ladies and gentlemen. On behalf of the entire management team at Dollar Industries Limited, I welcome you all to the second quarter FY '23 Post Results Conference Call. Currently, the entire Indian [ holder ] sector is facing the impact of price volatility in cotton and yarn prices. In last quarter and half year ended September 2022, there has been substantial inventory losses due to continuous falling of cotton and yarn prices. However, such losses are temporary in nature and seems to have an end as the cotton and yarn prices have stabilized at sustainable level. In spite of these challenges, [ comfy ] showed the revenue growth of 18% in terms of total revenue for the 6 months ended 2022. Our Q2 FY '23 total revenue was down by 12% as compared to same period last year. Our domestic sales showed a growth of 10 -- a growth of 10% in terms of volume, while modern trade and e-commerce sales showed a growth of 67% in terms of volume on a 6-month basis as compared to same period last year.
For the 6 months ended FY '23 company generated positive cash flow from the operating activities to the tune of approximately INR 40 crores. As promised, the company has opened [ 8 EBO to date ] and plans to open more by the end of the fiscal to touch the target of 25 to 30 EBOs. Further, our flagship project, project Lakshya is going in the right path while increasing the number of distributors, reach and range of the products. Currently, we are sitting with 189 distributors until 30th September 2022, which is increasing on a month-on-month basis. We have also planned to start this particular project into 2 new states, [ Tamil Nadu and Kerala ].
In this tough time, where the whole Indian industry is experiencing a slow demand and price volatility, we saw an increase in volume and value of our products of Lakshya distributors as compared on 6-month basis of last financial year to the tune of approximately 43% and 46%. We are sure of this idea of [ further ] constraint will help us in the long run to reach our FY '25 vision of INR 2,000 crores revenue. Our efforts towards channel financing arrangements for our dealers continues to see good acceptance.
We have received positive response of 225 dealers out of which 165 distributors have already been voted under the particular scheme. We expect to onboard several more every quarter, which will continue to improve our receivable days and also helps us move towards our overall working capital improvement efforts. The company has recently added the new PVC for our thermal brand, partnering with Mr. Akshay Kumar and Ms. Yami Gautam as the brand ambassador to give an extra mile to the winter sales, this fiscal we have [ earmarked ] 5.5% to 6% for our advertisement expenses.
Further, the company has planned to launch the new product, product range in women athleisure segment and men's activewear in sports brands and it will be available in the market by late Q4 FY '23. We are sure that we'll be able to maintain the revenue guidance of 14% to 15% on the full-year basis while maintaining the EBITDA level of 13% to 14%. Thank you all.
Now I will hand over the call to our CFO, Mr. Ajay Patodia.
Thank you, Ankit. Good afternoon to everyone. Our revenue for the quarter 2 FY '23 stood at INR 342 crores against INR 391 crores. And revenue for the 6 months FY '23 to INR 76 crores against INR 596 crores in 6 months FY '22. In this quarter, we have a degrowth of around 12%. But in overall 6 months FY '23, we had a growth of 18.41%. Our EBITDA for quarter 2 FY '23 issued at INR 31 crores against INR 52.1 crores, reaching a degrowth of 50%. In 6 months FY '23, our EBITDA is around INR 70.48 crores, against 6 months FY '22 advertised around INR [ 9.26 ] crore, raising a degrowth of 28.7%. Our profit before tax for quarter 2 FY '23 stood at INR 2.51 crores, against INR 56.4 crores.
And in 6 months FY '23, our profit before tax is around INR 55.04 crores against INR 87.39 crores, resting at the growth of 37% for 6 months FY '23. Profit after tax for quarter 2 FY '23 stood at INR 17.95 crores against INR 41.24 crores and profit after tax for 6 months FY '23 stood at INR 45.82 crores against INR 64.65 crores, [ estimate ] growth of 29% for 6 months FY '23. Now moving on to brand-wise contribution. For 6 months FY '23, our brand Big Boss contributed around 43%. Our Missy women segment contribute around 9.42%.and our Economic segment Dollar range contribute around 36.27%. Other than this, in premium segment, we have a contribution of around from 4 and 3% and for [ 4.5% ]. And from thermal, we have the confusion of around 6% in this quarter.
I now open the forum for question and answer.
[Operator Instructions] The first question is from the line of Bajrang Bafna from Sunidhi Securities.
Yes. Ankit, just to begin with -- we are also seen this quarter is not the way have been precisely thinking of. So definitely, there is some amount of inventory loss that has happened during the quarter. So if you could guide broadly that we -- when the quarter was starting, we were the rates of [ rupees ] was going close to INR 1 lakh and then we have seen that constantly declining and now stabilizing around, let's say, INR 60,000 to INR 65,000. So what loss that has occurred, which perhaps is there to some extent in the numbers? And to my mind and my judgment that most of your distributors, when they are anticipating that the prices are constantly declining.
The inventory in the system is not expected to build up because nobody is interested to buy high-cost inventory and then when the constantly the cotton prices are declining. So in that parlance, if you can guide us in both senses that what inventory losses that has been incurred during the quarter? And what is the quantum of inventory that is there in the system vis-a-vis in the normal circumstances when in cotton trade at more stable levels? So if you could guide on that sense, it would be helpful.
Sir, you are very perfectly analyzed the situation currently – in current market situation, the same is applicable our inverter industry. With respect to your first question regarding our inventory loss, we have high inventory cost in this quarter because there is -- our inventory procurement in the first quarter around is, at that time, cotton rate is around INR 1 lakh per candy. Now, it is reduced to around INR 65,000 to 70,000 per candy. Due to this, our gross margin is down by 3.5% to 4%. In absolute terms, it is around INR 12 crores to INR 13 crores rupees.
And in this quarter, in last quarter Q2, we have expected a good growth in our winter products, which is shifted in quarter 3. If our projection is weakened target is achieved, then this margin is also adjusted with our high-margin product that is winter thermal products. And we hope that in current quarter, we achieved the winter sale as we have projected in current year as winter are in coming delay in this time. And we hope that from next week, there is a winter requirement has increased. With respect to your second question, can you please repeat the same?
The channel inventory because since the prices are constantly declining, so what channel inventory that you are visualizing vis-a-vis the normal inventory, which remains in the system?
So obviously, in this tough times like when the prices of raw materials start decreasing, what happened is the channel partners, whether it be the distributor retailers, this start refilling the growth only on the cut size basis. And the bulk orders are -- they're very skeptical to clear bulk orders in a normal circumstance. So obviously, there has been a depletion in terms of channel inventory levels. But to what extent? It would be very difficult to say because we don't have a visibility to track data.
But obviously, seeing some degrowth in Q2 has already proved the point that it is already happening in the market. It's not that the demand from the consumer side is low because if you see any industry who has a detailed – proper retail business who is into EBO channels there sales have not grown much because they are directly served to the consumers. So from the consumer point of view, the demand is -- it's not that the demand is low from that side. But obviously, the -- there's a depletion in the inventory levels that are in the channel. Whether it be the distributor point or the retail.
It is also shown in our current quarter working, sir. During this quarter, our -- in our project Lakshya, the volume growth is doubled by -- increased by 43% in the last 6 months. And the total amount of revenue is increased to 500%. In last year, around -- in full year, we have the total contribution from the project Lakshya around INR 100 crores. But this time, we achieve in this 6 months from April to September only. So in our project, we targeted the retailer outlet. And from that point of view, the consumer demand is already there, but the demand is stuck due to orders not met by the dealer itself. So there is demand. Our focus there is demand at the market is already there. But it is shifted from quarter 2 to quarter 3 due to order not placed by the dealer itself.
Yes. Got it. And if you see the cotton prices, which are stabilizing, do you still feel that the cotton prices even might go lower and still the dealers are postponing to place bulk orders because we are already in November and last 1 month, at least we are seeing that the prices are getting stabilized between the 60,000 to 70,000 [ band ], which is -- which looks slightly realistic and hopefully, the dealers will start placing bulk orders. So is there any difference that we have witnessed in the month of November vis-a-vis what the last quarter gone by?
So what is happening is -- see, the third quarter is and attributed by the thermal sales. And we are looking for a good winter and from past 2 to 3 years, we are seeing that the winter is coming late to India. So maybe in a week's time, the weather conditions will change across India, mainly in eastern and the northern part of India.
Apart from that, we have from a few weeks, we are seeing that the cotton prices have stabilized, and it seems to be getting at a sustainable level. In near future, we don't see the cotton prices coming down because the forward rate also is somewhere near 65,000 only for [ candy ]. But from the retailer point of view, the thought versus the psychology with which they work, they are -- the channel partners are still skeptical. But yes, there is a positive -- there's a positive feedback also in the market. There are some areas which have started taking good purchasing growth. And we are very sure that this quarter should be much, much better than what we saw in Q2.
The next question is from the line of Vaibhav Agarwal from Basant Maheshwari Wealth Advisers.
Firstly, I would like to ask you about what has been the industry growth rate for the last 3 months, how has been the experience? And how have we fared compared to the industry?
So whether the thing is that none of the peers have come up with the results, and it is very difficult to tell what has been the industry growth rate in the past 3 months. So there are a few players who have come up with services. But based on that and extrapolating on that would be will not justify the exact industry growth rate that we are looking forward to. But yes, the industry has been in distance in the last quarter because it isn’t mainly because of the raw material prices movement.
And from past 2 years, what we have been seeing that it's too volatile. Initially 1.5 years, we saw the growth in the cotton and the yarn prices. There was a revision in our selling prices also every couple of months. But now the things are getting reversed. And from June onwards, we are seeing that the prices are declining. There was a surge in the month of August or September in terms of cotton prices, but again, it has come down to INR 65,000 to 70,000 per candy. So I think a few more industry players are yet to come up with their [ diesels ]. And maybe later, we can actually determine what has been the industry overall.
But what is the sense that has the market share been intact? Or any thoughts on that?
So we don't see any reduction in the market share or change in the market share during the quarter. We are not seeing that traction in the market. It's intact.
Right. Coming to your second question is on this project Lakshya. So you said that we had a 43% growth in terms of volumes. But if I look at the total number of distributors, it has almost doubled from 91% last year to around INR 189 this year. And if I look at the share of revenue, also, it has almost increased more than doubled. So what is the sales that you are getting? Is the distributors whom we have tied up under this project Lakshya? Are we seeing better traction? And can you give some more color on that?
So the major difference is that these distributors who have been enrolled in Lakshya, they don't have much of a baggage of inventory sitting at their warehouse first. Secondly, then as the rationalization of inventory at channel level or at a distributor level. So due to the price reduction of raw materials, the people are getting skeptical because they already have new inventory as they place in our traditional channel. And they are just ordering the cut size or they are just refilling the inventory. That's it. So that's why we are seeing a downfall or a degrowth in terms of volume for this particular quarter. But in Lakshya, what is happening that we are replenishing whatever is getting sold from their end to the retailers.
And retailer is also purchasing whatever is getting sold from their point to the consumer. So it is based on complete replenishment model – sorry constraint. And that is why we are seeing such a good traction because -- and that is what true that there is no decline in the consumer demand for the product or in this particular sector. So this is a very good point for us. Secondly, it also gives us a sense and a strong conviction that this particular project is the way to go ahead. And in the next 2, 2.5 years, this particular project, combined with IT infrastructure, it will take us to the next level.
And we are very sure about it. Because if we take the number of distributors who have -- who were there in the last year, second quarter and who are here in the second quarter. If you compare their sales, so their volume growth has been around 15%. But in -- just for the Q2 sales and only taking those distributors who are present in the second quarter last year and are present who are continuing with us and are there in the second quarter this year. Also to point out one more thing that apart from the DFS, the [ Lakshya scheme ], the overall debtor days in our Lakshya project is very low.
So our overall 1/3 of our distributors are in DFS, Lakshya distributors RNDFS, dealer financing scheme. And the overall data days for Lakshya distributors like the 189 distributors that we have. The data days are coming to around 60, 65 days. So compared to 100 days what we are having on the overall business and Lakshya distributors are being at around 60 days. So it clearly shows that we are on the right path, and we'll be able to achieve 2 most important things. The one is the reach and range in the market, increasing the visibility at the retailer level. And second is the improvement in the working capital cycle, which will help us reduce our short-term borrowings or the working capital loans that we have.
[ Other than this ], I want to also point out that in calculating 43% volume increase for taking the actual comparison, we also taken the traditional sales in that area in which the project Lak was implemented. So we compare the total sale at that area before Lakshya project. And after that -- after implementing the Lakshya dealer belong to project list. So there will be increase in the volume, 43% from the normal also normal dealer, which are included in this comparison. Otherwise, the 1% growth in the total sales of the project Lak from last year to current year.
Right. Okay. Once again, I was just asking that if revenue has even dropped, if we look at them from last year, but still that there has been growth. So actually, this is getting more traction, I would say because even though the revenue has gone down around from INR 390 to – INR 380 crores to INR 342 crores or the contribution from project Lakshya distributors has gone up.
Yes. Correct.
The next question is from the line of Dhiral from PhillipCapital.
Yes. Just to reconfirm, you said that your revenue from project Lakshya is around INR 100 crores.
Yes. In last financial year.
And what about H1?
In H1 FY '23, it is around INR 98 crores. We already achieved the same amount in the within 6 months.
Okay. And sir, generally, the thermal sales largely happens in Q2.
So it's 50% happen – 50% to 55% sale happens in Q2 and the rate happens in Q3. But since last year was a bad winter season for the industry. So there's a huge stock pile of which happened at the distributor level as well. So that's why in Q2, the major [ shortage ] because of the [ cranes ] last year Q2, we had a 12% contribution coming from thermal in Q2. And this year, it has been 6% only.
Okay. So we have seen a degrowth in thermal in this quarter.
This quarter. And that's why the overall profitability also took a bit of a hit and our inventory days is also on a higher side.
Okay. And sir, as on H1 FY '23, what is our working capital base? And how much is the receivable days?
So receivable days have been flattish. It has been somewhere around 9,900 days only. The only cash point is our inventory days. So if we compare our inventory days with respect to March, like March FY '21 -- sorry, March FY '22, it has increased from 109 sales to 123 sales. But if you compare H1 to H1, like H1 last year versus H1 this fiscal, it has been at a similar 122, 123 sales.
Okay. So this inventory that we are holding that is of a high-cost inventory or maybe -- or is it a current level price so that we can get...
So it is a mix of both high-cost inventory plus the terminal stock that we have.
Okay. So even in Q3, we may see an inventory loss?
It's around very minimum INR 2 crores to INR 3 crores [indiscernible].
Okay. And sir, what was the ad spend during the quarter?
So ad spend for H1, we have spent somewhere around INR 60 crores. And during the quarter, it was INR 25 crores vis-a-vis last year, second quarter, INR 18 crores.
Okay. And sir, last 2 questions. So what is our target for the receivable days for full year FY '23 that we want to bring it down?
So on the -- see, overall working capital cycle for this particular fiscal should be somewhere around 145 days. That's what we are targeting.
And sir, what will be the receivable days in that? So last year, it was around 99, 99 days?
Yes. So there will [ be a leader ]. We hope that we'll be able to reduce it by 7 to 8 days further by the end of the fiscal and another 3, 4 days improvement in our inventory days.
Okay. And sir, lastly, what is the category growth is the category-wise growth in Q2?
Okay. Overall, on a half-year basis, if you wanted on a Q2 basis or a half-yearly basis?
Q2. For the Q2, sir, particularly.
So for the Q2, there has been an overall volume degrowth of somewhere around 16%, 16.5% and a value growth of 4%.
And sir, across the category? Dollar Man, Women category, [ Leisure ].
So in Big Boss, we saw overall degrowth of 21% this quarter. In regular, which is the economy range of products, it's somewhere around 15%. Thermal was somewhere around 30%. Missy [ rooming ] segment was 7%. And in premium segment, it was somewhere around 25%, 30%.
And sir, athleisure wear?
In athleisure, H1 '22 versus H1 '23, the overall revenue contribution has increased from 12% to 13%. So a leisure where we are seeing good traction. Although -- yes, so overall, the previous segment is doing good, and we are coming out with the [ new ] segment also in the month of February and or March starting.
Okay. And so what was the export contribution in H1 overall? And what growth we have seen over them?
So export was 7% during H1. The contribution coming from exports was 7%. Domestic was 90 and modern trade increased from 3% to 4%. So overall, in absolute terms, export has been flattish as compared to H1 last year. And this year, I think we'll be able to maintain the similar level what we did last year.
Okay. So flattish growth.
Focusing on is on the domestic sales that we have and the modern trade, the last formats towards that.
[Operator Instructions] The next question is from the line of [ Shri ] from Sameeksha Capital.
Am I inaudible?
It is not that clear, sir.
Just a minute. Yes. Now?
Yes, please go ahead.
Yes. Just I wanted to know brand-wise advertisement spend. Your advertisement but has increased. I think in your comments, you said now [ EBITDA budget ] is 7.5% of revenue for the full year. Can you just [ give me ] the brand-wise advertisement for H1?
Sorry, sir, we are unable to understand. Your voice is a bit muffled. I think you think something about advertisement expenditure, which has increased this particular fiscal. Is that correct, sir?
No. Yes. Have you already [ heard ] what I am asking is about brand was advertisement spend?
So majorly, 60% of our advertisement spend happens for the Man product, Big Boss Man. Another 15% is for Missy, Dollar Woman, 15% for thermal, the seasonal product that we have. And the rest is for the in-shop branding and the detailed brandings that we have and plus the [ 4 ], plus the digital media.
Okay. Got it. Just one question, I mean follow-up lesion. Are you going to maintain this ratio? Or will it went for, say, next fiscal year or 2 years on the line?
So given the target that we have for this particular fiscal, what we are aiming is 5.5%, 6% a spend on the advertisement, this particular fiscal. And going ahead, we will try to maintain 5.5%, 6% based on the projected sales for the particular fiscal.
Okay. And just one question, if I can please, how you review has progressed so far? Particularly for [indiscernible] Indian in June. If you can just give a color on that?
Sorry, progress of what?
EBO, how we – yes, there is typically [ a review ]. [indiscernible].
So in EBO, we have seen a good traction. So in the modern retail vertical that we have, 6% of our revenue is contributed by EBO, 54 by e-commerce sales and 40% is large format stores. And in EBO, we have opened 8 EBOs out of which EBOs opened in the month of September end and October. So we are yet to see the results. But overall, the traction has been good. The consumer footfall in the store is exciting, we are getting 7 to 10 consumers every day in the stores and throughput is also good. Overall, what we are seeing is that apart from the sales factor also, the consumer is getting to know the brand in a much better manner, and they are able to see what are product Dollar industries deal yield. So they are able to touch and feel the product, they are able to keep the entire category that we have, whether it be case men's, women's, premium segment [ for snacks ] or the so that we have. So the entire segment has been showcased to the consumer, and we are seeing a good excitement at the consumer level as well.
The next question is from the line of Vishal Bagadia from Roha Asset Managers.
So my question is on the CapEx front. The last time we spoke on our spending capacity in our warehouse, we were expecting that both of them would commission somewhere in October, November. But now when we see the presentation, it has been postponed to March and May 2023. So can you just throw some light on the same?
Yes. We already makes good progress. Our warehousing project is already 90% is completed. But due to some -- there is a requirement from the government side, there is some problem from the electric connection in the electric distribution. Some part of it is spending on the -- from the government front only. Our construction is already ready, but without power distribution, we are not able to commence our production. For this reason, our -- we take the maximum time that by March, [ government ] is completed, that the power distribution [ tetris ] is properly implemented.
So because there is a delay due to some official government delay in the distribution of electric. And with regard to our expansion in [ spinning ] project at [ Diebold Tamilnadu ]. We are on the way. We already constructed the sale were to be machine to be stored, but there is some from the -- some imported machines there, which only to be seen in the month of [indiscernible]. So it is installed by end of March or 15th of [indiscernible]. So we take 1 month [ tougher ] for giving the launch in [indiscernible]. So the entire INR 115 crores has been spent for the CapEx. That is the right understanding?
Yes, correct. So apart from that, what would be the CapEx guidance for the current year?
Currently, we have no any other than these 2 only. Other than this, in ‘23, ‘24, ‘25, there is only FY '24, FY '25. There is only some minimum repair maintenance required due, which is around INR 8 crores to INR 10 crores only.
Okay. That would be great. And sir, my second question is on the EBO front. So if you could explain what is the cost metrics or the average size when you open an EBO? So what would be the average store size of the initial investment? And what is the inventory that the franchise owner needs to put? And what would be the breakeven time for an EBO that we estimate? And by FY '25, since you are targeting that you'd be opening 125 EBO stores. So how much that could be as a percentage of our top line as a target? Those are my questions.
So our EBO is completely franchisee of model, franchisee under and operated. And what we do is we have 2 particular models which we work upon. One is the complete outright basis, wherein the franchisee purchases the entire stock, and he gets a different margin over there. And the other model is the rent plus margin model. So initial investments on the company side is just on the poll system that we have and some branding activities that we do over there. Apart from that, it's all franchisees investment. The store size is typically somewhere around 750 showcase and the entire product rains that we have, we require such space. So that entity is somewhere around 6 to 8 per square feet. So that is the density we are working upon. So the overall investment on the franchisee side, including the security deposit and everything, it's somewhere around INR 20, INR 22 lakhs.
Okay. And by when do we expect them to break even? And how much -- what would the time duration?
It generally takes 2 to 3 months -- sorry, 3 to 4 months to stabilize the particular EPO. Apart from that, what happened is in north, 60% of the sales -- or 70% of the sales that happens in any EBO is contributed by the winter section only because the ASP is very high over there. So it really depends on the region to retail, like zone-by-zone. So we have yet to discover as to what a sales figure would come in from a particular EBO on a monthly basis. But just to estimate, I think -- so we -- I think by FY '25, we'll be able to garner somewhere around INR 40 crores, INR 45 crores a business coming in from EBO itself from 125 EBOs.
The next question is from the line of Chirag from RatnaTraya Capital.
Just one clarification question. The margin guidance is for the entire year or the second half? That was the first question that I had.
So see, what is was that prices have been very volatile this particular fiscal, the first half of it. The second half, we think it all sense that the prices have stabilized as of now. But we will really aspire to be somewhere around 14% an EBITDA level. 13% to 14% is what we think is achievable in the second half.
So that is for the second half, not in the full year. That's what you... That's what I wanted to clarify. That's where you decide to be in the second half of the year.
So on a full-year basis, it would be somewhere around 13%. We really want to be there, yes.
Understood. My second question is on the number of dealers that got added in this quarter in the Lakshya project. That seems to be around 15-odd dealers. I understand quarter-on-quarter, obviously, these kinds of things can vary, but is this what you would have aspired to be and also, as time passes along, does this numbers tend to increase a lot exponentially because one of our starts going in, it has become easier to get traction. Is that the right expectation? Could you just throw a little bit more light on that?
So what happened is when you think of starting a particular new state, so there's a lot of – what to say. The people are not very much convinced about the program. When we start rolling out in a particular state, which is very new. So we get a lot of -- what do we say -- so what happened is the people are not convinced when we start a particular state. And it is the early take. So the lead time increases in the starting point. But once we have 2 to 3 success stories in that particular area. So the rollout happens in a much faster manner. So we have [ Irma Samanage in Kerala ], 2 new states to get enrolled into this particular project.
We are in the world of completion of [ Rajasthan and Karnataka ] because there was some wholesale market, which was yet to be tapped and closed down, and it was a huge chunk. Apart from that, Gujarat -- Mumbai and surroundings, we have already completed. In Maharashtra, we have also completed the Vidarbha area. In Gujarat -- we are seeing a good traction in Gujarat as well, and we'll be able to complete by the year-end, by the end of the fiscal. Apart from that, we have started Northeast all the 7 states and Orissa, Bihar, Telangana, Andhra and Tamil Nadu and Kerala will start off in a month's time in.
Other than this, I want to also point out one important thing that in our project Lakshya, we have an SOP agreement with the distributor that distributor has to follow our SOP then they get the required minimum ROE as per our target. So if any distributor will not follow the SOP system, then we have to remove this because we have to -- if we implement project successfully in any area, then should it is within our extenders. So sometime in this quarter, the total addition is in only because there is addition of [ 30, 34 ] dealer.
But due to some of the dealers which are not performed well or which are not serviced to the retailer as per our SOP that the products will be reached between within the 8 hours retailers rumor the payment is made within 45 days. So some of the [ Dule ] to renew from the less project because they are not performing well and for our criteria. So therefore, in this period, the total net -- but actually, the [ AGs ] is 34, but some of the dealers which are not performing are removed from our Lak project. So we have the target of 12 to 15 dealer monthly, actually.
Totally. I understand, sir. Just one last question. So how many dealers would have joined and let us in project Lakshya if you can just help us understand that?
Currently, we have the total number of 189 active dealer in our Luk project.
But how many would you have e guide but let down approximately -- what is the number if you have that handy?
Total number of dealer date, I don't have the accurate number, but it is around INR 225 crore to INR 230 million.
The next question is from the line of Pallavi Deshpande from Sameeksha.
I just wanted to understand a little better on the EBO front. So when the numbers you spoke about INR 45 crores from 125 stores. So that looks good. Given that our competition has had a much faster rollout of EBO [ sadding ] 100 to a has done well with it. Why haven't we chosen the strategy to be more aggressive on the EBO front? Is it because it might disturb the relationship with the Lakshya lot?
So nothing of that so what we think is that go colors operate in a very different segment as well as the base industries, [ joke ]. So they have always been into this particular industry. They have always been into the retail sector, I would say. But the industry, the retail sector, wherein they open EBOs or they are in modern retail, large format stores. And after that, the project come into offline market, which is the traditional channels. I think cotton is still not there in the traditional cost? So they have always been there, their concept of their brand or brand enables towards -- more towards the retail part. And we have always been like from past 49, 50 years, we have been working in the traditional channel and the modern retail vertical also opened is 4 to 5 years back. So for us, this particular place, the retail space is very new as a concept also because we have never been into that a thing.
So we have -- we have started hiring professionals for that, and we are working on this. But to get a conviction on any a particular project, you need to have some data, you need to open some number of stores so that you can give whether this will work for us or not because if you're comparing it with page or [ goals ], they are into a premium segment, the target market is very different from what we are. So we are more into class for a brand. So yes, our consumer target market is very different. The demographic is very different. And that is why the overall process is a bit slow. But yes, it will increase, no doubt by the year end – by the end of there'll be able to open [ 25 to 30 POs ]. And after that by FY '25, we are very positive that we'll cross FY ‘22.
I understand you are the more mass-market brand versus the in premium because we are also seeing a shift. I think you have mentioned in the analyst shift to the outerwear segment more the Missy and the force mix. So if we have to achieve that shift in the like 20%, 30% growth is what you're targeting in the outerwear is that right?
Yes. In the auto segment, whether it would be women athleisure or men athleisure or the legging that we have, the overall ASP is also very high, and we see a huge opportunity down there in the market. And we see a good growth coming out of those segments. Apart from that, we have a natural growth rate in our Big Boss and economy range of products, the regular brand that we have. So overall ASP of the company has also risen from INR 65 crores to INR 70 in past 6 months. So last year, FY ‘22, we closed at somewhere around INR 65 and currently, it is at INR 70. So there has been a price hike in the month of April. But overall, if you see, there has been a change in the overall contribution coming out from the outer segment like a pleasure increased from 12% to 13%. Women....
Sorry, Will the advertising focus more on outerwear now given its higher margins and higher [ ESP ], will that be advertising campaign?
On the digital platform, yes.
Like you said, you have done 3 TVCs. so I understand one is for thermal. The other 2 would they be for outerwear and when will there be the 3 TVCs? We've not seen much [ of airing of them ] when we...
So what is happening is [indiscernible]. The second is Yami Gautam that we have for Missy. [indiscernible]. Apart from that, during the IPL season, we came out a leisure segment, CVC. But only it has been done on a digital platform, social media platform. Our overall spend on digital media from our budget is somewhere around 8% now. So 8% of our total expense, we are doing it on a digital platform that Google ad or Instagram, Facebook, YouTube. We also started taking some media from Moneycontrol, Dailyhunt or online newspapers. So all those activities that we are doing is helping us grow in our outerwear segment and also help us grow in our e-commerce sales as well.
Right. So the INR 60 crore adds that you've done, like how much would be spent towards outerwear versus where in future, will you target more of outerwear spend versus innerwear? I spent like earlier participant asked the breakup between brands, and so I'll put it a different way. Add spend for outerwear versus ad spend for where what will be the ratio? Can we see it go to 50-50 versus right now, maybe more. It's more skewed towards [ invest ]?
Currently, we don't see going into 50-50. But yes, we have started rationalizing our spend on the men [ wear ] vis-a-vis the other out-of-product that we have. So in women's, we are already spending 50-50 of our budget. And apart from that, we have started spending on [ forex ] advertisement as well, which will be mostly out of [ and in over ]. Apart from that, in -- during the IPL, we are focusing mainly on a future segment also because it resolates with – the name resonates with the sports person who are actually paying in the IP and they’re wearing our leisure wear and advertising for it, it really goes well.
And sir, next year at budget, I know it's a little early, but 6% would seem a little lower if you want to close out the style of it. Just any thoughts on that given that some peers are spending up to 9%. And given that if cotton prices come off, can we see the money being spent on ad spend?
So in ad spend, what we are seeing is 5.5% to 6% spend that we are looking forward to on our projected sales. So yes, if we -- for next financial year, like FY '24, it should be somewhere around INR 100-odd crores.
Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for the closing comments.
I take this opportunity to thank everyone for joining this call. I hope we have been able to address all your queries. For any further information or any query, kindly get in touch with us. Thank you once again for joining in. Have a good evening.
On behalf of SMIFS Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.