Monte Carlo Fashions Ltd
NSE:MONTECARLO
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
Abbvie Inc
NYSE:ABBV
|
Biotechnology
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Realty Income Corp
NYSE:O
|
Real Estate
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
585.25
840.95
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
Abbvie Inc
NYSE:ABBV
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Realty Income Corp
NYSE:O
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
Monte Carlo Fashions Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Q4 and FY '24 Earnings Conference Call of Monte Carlo Fashions Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Ms. [indiscernible] from Valiram Advisors. Thank you, and over to you, ma'am.
Warm welcome to you all. My name is [indiscernible] from [indiscernible] . We represent the Investor Relations of Monte Carlo Fashions Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year 2024. Before we begin a quick cautionary statement. Some of the statements made in today's con call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements. in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review.
Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Sandeep Jain, Executive Director; Mr. R.K. Sharma, Chief Financial Officer; and Mr. Ankur Gaba, Company Secretary.
Without any further delay, I request Mr. Sandeep Jain to start with his opening demand on the financial highlights. Thank you, and over to you, sir.
Very good. Good morning to everyone, and thank you all for joining us for today's earnings call to discuss the quarterly performance for fourth quarter and financial year ending 2024. Let me start by sharing the financial and operational highlights. For the fourth quarter under review, the company reported revenue of INR 207 crores, representing a decline of 13% year-on-year. We had EBITDA loss for this quarter INR 10 crores, while net loss stood at INR 19 crores for this quarter.
Unfortunately, this quarter was one of the worst we have seen in a long, long time. Due to depressed retail sentiment resulting in overall high returns and also higher discounts being given, resulted in the loss for this quarter. For the financial year ending 2024, the company reported revenue of INR 1,062 crores on a consolidated basis, representing a degrowth of 5% year-on-year. EBITDA for this year stood at INR 143 crores, which declined by 34% year-on-year, and EBITDA margins were reported at 13.46. Net profit for the year stood at INR 61 crores. Monte Carlo session continues with this in lever to build a leading branded apparel company with continued effort to increase this distribution network. The company has added 55 new [indiscernible] FY '24, the total number of EBO now has reached 411. Overall, financial '24 has not been a good year as per our initial estimates. This is a result of poor retail sentiments and the purchasing power that you may have witnessed across companies in the similar sectors. Our strategy to diversify our players have started bearing fruit, our online sales have picked up. Home tester sales will continue to show good growth rates brand bucket has also performed well and has been widely accepted by market. Premium brand [indiscernible] has also started contributing to the overall sales. For the coming year, we are again committed to open 45 to 50 EBOs across India, including West and South. With this now, we open the floor for a question-and-answer session.
[Operator Instructions] The first question is from the line of Sakshi Sharma from ICIC Bank. The line for the current participant seems to have been disconnected. The next question is from the line of Venkat Subramanian from Organic Capital.
Historically, traction of. [Technical Difficulty]
there, the companies you had probably the least amount of sales -- and we have said in multiple conversations and con calls that will be a fundamental strength of the company. [indiscernible], unfortunately, seems to be actually reversing, which is 1. And there too is the strength of the company in cash conversion and therefore, lower finance costs, which also seems to worse because our current finance almost about 3x of above. Is there a trend here? Or is it
[Technical Difficulty]
Your voice is not audible. It is actually [indiscernible]. Can you please repeat the question?
Okay. Now basically, just 2. One, I think we had a lot of sales return, which has never been the case. And our strength previously was that our business model basically ensured that we didn't have the kind of sales returns that we're currently having. That's question one. Is it -- is anything changing fundamentally. And the second question is regarding our finance cost. Since we've had very good cash conversions in the past, all of us have were the impression that, that will continue, while our finance costs have kind of tripled in the last 2 years or so. Is anything changing fundamentally or do you want to actually [indiscernible] on in anyway?
Yes. Thank you. So the first question is basically the higher sales returns. So there is the only reason is that as from last 2 years, we have been aggressively pushing our brand to large format stores, online sales and also we're opening our EBOs. So the business of MBO sales and sales are actually gone down. So MBO sale is one area where the returns are not there. But otherwise, all the areas now, including large [indiscernible] stores and if what we're opening. So we are having more retrans. But this year is definitely something -- what happened in this year was because if you see that in the last 2 years before this year, we grew by around 33% from INR 624 crores, we reached to around INR 1,100 crores. So the trade show was also good, and the booking was also good, and we make more merchandise also to support the growth for the -- going ahead.
But what happened was -- so there was disturbance in the -- basically a winter season, it started very late. And secondly, the merchandise was more. And thirdly, when it started. So at that time, the time was very less. So we have to go for higher discounts. So all these 3 factors basically resulted in higher returns and higher discounts and a [indiscernible] EBITDA. So this is the only reason that the sale runs and higher discounts are because of the delayed winter season. And as far as Finance cost is concerned, yes, because there was higher inventory in the system as compared to last year and also the interest rates have gone up as compared to the last 2 years. So that is also actually -- the interest scores have gone up because of these 2 reasons.
And even also when we're opening new showroom that also adds to the financial cost because of the [indiscernible] further give you some details about the finance cost, which has we entered highest compared to last year.
So whenever the new stores are open, the lease on due to the lease accounting as per India all the rental part is capitalized and depreciation and finance cost is in corporate. So in this year, you can see there is an increase in [indiscernible] due to the 4 focus approximately.
Now, Sandeep, my question is not regarding what happened in '24, but we just wanted a larger actually forward-looking guidance. Are we now in for much higher sales return structurally based on the change in business model now, then we've had, let's say, in the early '20s, early 2020 and '21 et cetera? That's question one. And two, what is your broad estimate with respect to finance costs going forward? I'm not talking about just what happened in 2024.
I understand. I understand. So going forward, the first and foremost focus for the company is, as already we have taken a lot of action on the returns, and we have allocated stocks also where to sell the stock also in the existing channels. And secondly, this year, we have decided to put more focus on the profitability as profitability as -- that came down from the historic level of [ 21 ] EBITDA, which we have been maintaining in the last 50, 20 years, which has come down to around 14% this year. . So our focus of this year is basically to improve our profitability. For that, we have taken a few actions so that I'll just let all the investors know. So one of the action is that we are shutting down some of the stores which are unprofitable. And there have been some shopping shops also where we have more discounts and more returns that also we have shut down. At the same time, we have increased the price around 7% to 8% in this financial year to counter the effect of discount, which happens in the discount season. So with all these, I'm pretty sure that we'll be having much better profitability as what we had in this financial year, but we are forecasting a flat revenue guidance as there will be addition of around 40 to 45 stores. But at the same time, some of the unprofitable stores and some of the [indiscernible] and some of the channels where returns were on still shutting it down. So the revenue will remain flat, but definitely, there will be significant improvement in the profitability going forward.
And you didn't touch upon the finance cost angle. What is your outlook for -- what the cash conversion will be and the inventory carrying costs and broadly finance costs?
The finance costs will come down in this financial year as we are liquidating some old stope also. So 1 thing I'm pretty sure about that. It will be down 100 to 200 basis points. .
The next question is from the line of Kiran Gage from Kingstone Capital Management. LLP.
Please correct me if I'm wrong. The only channel leading sales rate is the issue is BOFOFO, wherein 5,000 to 10,000 sales written in allowed [indiscernible] . Even though sales, even though sales through this channel as a percentage did not increase in the can. Why was the issue of sales return this year, particularly.
Can you please speak a little louder because your voice was very -- was not able to hear you.
[indiscernible], can you take the us closer to you and speak louder?
Yes. Yes. So the only channel where in return is an issue, is EBO FOFO wherein sales return is allowed for 5% to 10% and NCS. Even though sales through this channel as a percent did not increase significantly. Why was there issue of sales written this year?
No. There are 2 kind of EBOs. One is, which is [indiscernible], where the correction is around 5%. But second is company-owned EBOs and also the company-owned franchise-operated where the return is down 14% to 15%. So basically, this year, because of more merchandise, the return came from these channels as well as from [indiscernible] stores. So large commerce stores this year, the return has increased tremendously. So we have been placed at many counters in the reliance in shopper stope and in lifestyle also.
So altogether, all the channels basically when the [indiscernible] delayed, time was less for selling the goods. So we have to go for quickly higher discounts. So -- but when the season is ending, we have to place the summer goods also. So we have to take that goods also. So that's the reason because I would admit that there have been some of the miss planning from our end and also because we planned more goods as compared to last financial year to grow our sales, but it backfired because of the season because of -- when you hire merchandise at store, the only thing you think at that point of time as to how to get rid of this inventory.
So we went for higher discount and early discounting. And whatever discounting after discounting still merchandise was there to clear the store and to [indiscernible] summer sales, we have to take back the inventory also. But I think this was one of the few years where I think the planning was a little wrong because of higher merchandise being planned. But this year, we have taken corrective activation. So some of the merchandise, which came back is already being allocated to respective stores for USS to save ourselves.
At the same time, some of the production is planned as per the last year's level. So I don't see any increase in revenues going forward in this financial year, and we would be sticking into the same revenues. But one thing I'm -- again, I'm reiterating that the profitability will be significantly higher what we achieved in this financial year.
[Operator Instructions] The next question is from the line of Kaushik Java from AK Investment.
What would be the revenue guidance going forward? Because I remember you have said that we are targeting INR 2,000 crores of revenue coming 3 to 4 years. So where do you see that when can we achieve that?
Yes, I think it all depends on the economy and the discretionary spending also definitely, this is what we planned, and we were aggressively opening our stores also. But we're seeing this year where there is a lot of inflationary impacts on the consumers and the discretionary spending is down. And overall, as far as [indiscernible] concerned, it has not rebounded. So as far as this year is concerned, definitely very [indiscernible] because we have been hit hard by the profitability in last financial years. So the company has decided to stick to the -- maintain the profitability. So this year, we are forecasting a flat revenue guidance and to improve our profitability. But definitely, the targets which you are saying is definitely on our chart, and we will again come back in the second quarter once we see that the market is improving, and we may revise our guidance also just for the information of the [indiscernible].
Okay. Okay. Sir, in quarter 3, you did not anticipate this much sales return because you said that we would be doing much better and much good margins. But I see the numbers are not reflecting that.
Yes. If you remember in last year was in con call, we always maintained that guidance is flat. We never said that it will be growing. But because of higher sales return, actually, if you give room revenues because when you get higher returns, it is minus of your sales. So that is why the revenue has gone down 5%. But otherwise, whatever we have stated in our conference call, we achieved our guidance.
But at the margin trend, I understand [indiscernible] .
Definitely, we admit that we apologize for that. We are your margin funds. We never expected that we have to go for such higher discounts at [indiscernible] discount as being a very heavy quarter for us, the third quarter contributes almost 55% of the revenues. And we need only have 15 to 20 days or 1 month of window to get rid of the inventory. So we went for aggressive discount, which we never got in any of the earlier years. So that has resulted in the [indiscernible] margin.
Okay. I understand, basically, this is 1 of the years where everything has gone other way around. So in the coming years, when do you see we get back to the previous margins, I mean, 20% or so. Next year should be possible not because we are cleaning up for all the non-stores right? So basically, whichever stores are not generating as much profitability. So we are closing them down. So I think the better profitability, like better margin above than 20% is possible in next year.
No . Sorry, I can't say that -- but the 1 thing I'm very, very clear is that we will definitely improve from here onwards. The margin will have a significant jump. But whether we'll be able to maintain 20% or not that I can only comment by I think second quarter conference call. Then I'll be having more clear in as far as our retail level is on; stores are concerned.
So even though if we have a good jump in profitability this year, we had roughly around INR 60-odd crores of profit. And last 3, 4 year, we had INR 130 crores of profit. Still, we are down 50%. So when you say much growth, what should we think about the growth? In the profitability.
As of now, as we have just been this year I can't have a statement, which is not put on my side to give you exact process figure. But I think by the end of second quarter, I'll be able to give you some more information about the profitability front. But 1 thing which, again, we are saying again and again is a definitely, it will be better as compared to what we achieved in this financial year. .
Right. So when you said you are closing down on some of the stores, these are what EBOs or these are retails to NCS stores, what are the stores you're talking about? Where do you see there is no much traffic or [indiscernible].
So let me -- let me give you some information on this. So it's a mix of some large commerce stores where our returns are very high and discounting was very high. So some of the large performance stores. Some of the [indiscernible] shopping stores business where the MRP tiers were very less and the returns was more high. And there are 3 to 4 stores also where we have the same issues because the low footfalls and returns for mods. So those actions company have already taken, and we are again adding around INR 40 crores to INR 45 crores, so that will compensate the loss of sales having at these places.
So that is why I'm not giving any increase in revenue [indiscernible]. But yes, in second quarter, if we see that the market has improved because to produce more goods to sell again in the [indiscernible] is not an issue. We can produce in September, October also some of the goods like basically more of sweatshirt and jackets. So it is difficult to make in a pure short notice. So in that case, if we see the scenario that the economy has moderated, discretionary spending is improving, we can revise our rate and we can come back with revised guidance of growth also. But that's only in the second quarter conference call.
So the next question is from the line of Param from investor.
Am I audible? .
Yes, you're audible.
So I have 2 questions. First 1 is that in the Q1 also, we had a lot of sales return. And it was -- management said that this is a one-off and we don't expect this to happen again. And in the con call of Q3, as late as in February, we were expecting a decent Q4. All of a sudden, last 45 days, we see a tsunami of the sales return, drastic sales returns -- so this kind of -- is this a roller coaster kind of profitability scenario is going to continue because it's very difficult for investors and analysts to project. We have a good quarter and then all of a sudden in the next -- we booked the sales in next quarter, there is a return. So it's very tough. So this is 1 of the remarks and I wanted to understand what happened in the last -- because I've seen the results of Ramonds and other companies. This thing economy was down. It was subdued, but not to the quantum of what we have performed. So I think that is a one point which has to be noted. The second point is, do you think that it's not an issue of our brand pool or product positioning wherein in the market, the customers are not ready to buy our stuff, is that a gap or you expect -- you are seeing that it is entirely due to the economic scenario where in discretionary environment, spending is not there. So people are not taking our garments and stuff. So this is question number one.
I understand your points. So if you see that in last 10 years, this is a one-off year where this thing has happened. Otherwise, I think the -- you might be having tracking this company from last 10 years. You must have noticed how many times we have failed in our guidances. So this is 1 year where definitely we admit that there happens miscalculation as far as inventory merchandise was concerned. As we normally don't get data from our SAS and NPUs. We get online data from our EPOS and from our LFS.
But in [indiscernible] front, we could not get -- I said that we only get up to 15 days. So that is how where we fail to plug that gap. But that, again, we have taken action in there, and we are installing one app at our go store also to get the live data from our customer representative so that these things should not happen in the future, and we should know that we is going to come back and how many -- how much merchandise is lying at go store also. But again, there is no excuse for the failures. Definitely, whatever we have committed, we committed for the flat guidance and for margins. So margins be paid. But I think there is a lesson to learn from here, and we know that from which are the areas where basically we got these leakages and where we got more returns and more higher discounts. So company is taking appropriate action. And I don't want to say again and again, I think the coming quarters, rather myself to speak, I would ask -- I would see that my result speaks for ourselves.
Okay. The second question is on the summer sales. .
Please come in the queue for the follow-up.
So just to answer, again, 1 part is there. So -- he was asking about whether the customer is the brand pool is less or more. See, this is evident from the fact that our volume has grown. So there is no fall in the volume, even though some of the companies have [indiscernible] the volume, but our volumes have grown, but our volumes have grown but only because of higher discount, the revenue has gone down. And because of higher returns, the sale has [indiscernible] impacted when we have to take better goods, we reduce that from the sale. Otherwise, our revenue was up. So the volume growth was -- I just give you some information on the volume growth. In case of [indiscernible], it was from INR 19 lakh to INR 21, 46,000 in case of cotton category, it was INR 7,400,000 to INR 760 6,000. So volume growth was there, but only because of higher discounts and revenues. Revenue has to be reduced as returns are more. Hope that answers your questions also. .
And the next question is from the line of Dhiral from Phillip Capital.
Are these higher discounts are still there in the current scenario? .
Pardon? Can you please repeat it.
Hello audible sir.
Yes, yes. Now, please. .
The higher discounts are still that is the current scenario?
Higher discount are? What are you saying?
Are still there in the market .
No, no, no. Right now, it is summer season. The winter season is already over. But yes, the summer season is also -- the consumption is not picking up. So as far as retail sales are concerned, it is almost flat. So we -- I think all the companies in India are planning for discount starting from next week. So this is our latest information I get from our marketing team. So we have to follow the same .
So in Q1, we will be investing from the higher discounts and again, margins maybe on the operating side, would be much lower?
See, I can't give quarter-to-quarter guidance. I can give you yearly guidance. And yearly guidance we are sticking on the flat revenues and improving our margins.
Okay. And sir, on the home secto side, what is the strategy overall because last year what we have seen the home textile has not grown as compared to the other business. So [indiscernible] you are saying that we have seen the improved demand. So what is the overall guidance for the [indiscernible].
Home industrial, I think it is 1 of the silver lining in all the product category, and we anticipate a growth of minimum 15% to 20% going forward in the financial segment also in this financial year. .
And the next question is from the line of Viraj Parekh from Carnelian Asset Management.
Am I audible? .
Yes, yes you're audible.
Just just 1 question. I mean, geographically, if you see North has been more or less the same on last year, and we were trying to concentrate a little bit. You've got some confidence in the previous earnings call and opening some outlets in the West and Central region. So I think it's fair to say that a lot of our returns have come from our core markets, which is North and the East. The first question is how are you seeing the store operability in these regions in terms of opening new stores? Are you opening in the same district, same city, or are you exploring new regions? And the second question is the weaker part of our pan-India presence, which is West South and Central, how are you looking at these regions where probably other brands are much stronger or do we see that FY '25, we still maintain these kind of -- it's like around 12%, 15% kind of contribution from the other 3 regions.
Yes. The high returns are basically exactly from the North and Eastern region where we have a lot of winters. And the returns from South and Western market because there was no more winter, so returns are less on that. But if you see the growth, both the regions have grown. The Western region just for information have grown from INR 69 crores to INR 80 crores, and the South has grown from INR 48 crores to INR 53 crores. So both the reasons have grown even though the North has degrown and East has degrown, but there are no declining sale as far as South and West is concerned. . So last year, I think we opened around 8 EBOs in South and West. And this year, again, the brand is opening 10 EBOs in South and West. So we project that the South and West will keep on growing even in this financial year, we have an ambitious target of out should be crossing around 70 [indiscernible] from existing 52 [indiscernible] and the best could be taking around 90 [indiscernible] from existing 80 [indiscernible].
And sir, the balance of our EBIT, which will be opening in North and East. So will we be concentrating the areas we are existingly present? Or are we exploring new areas in the other in the Eastern markets?
No, no, there are areas where we are not present, like we have a map of each and every region. So there are areas where the potential is there, and we have only MBOs and SIS, but don't have EBOs. But everybody now actually MBO business is becoming very risky as the smaller MBOs are basically shutting down now because they have higher expenses and when they buy outright, they're not able to meet their expenses, whether discounts are there from all the brands. So these smaller MBOs which are driving in the last 10 years and 15 years, they are now closing down. So those are the areas where we have a potential to open our own view. So we are short around around 50, 60 places all across India, basically more in Northern, Eastern and Central region, where we're opening these stores. It's not only -- it's not competing with our own store or SIS. It's only complementing in the area where we are not present. .
The next question is from the line of Deep Citla from Nina Irish.
Sir, my first question is what is the SSG growth and how much revenue came from online sales? This is my first question. And sir, my second question is, are these gross margins sustainable in FY '25? Or are we seeing any improvement going ahead?
Yes. I'll come to the first question, the same-store growth is 0. Even it was minus -- minus 3% in December quarter, but the full year in [indiscernible] the total [indiscernible] zero, there is no growth and no degrowth. And as far as online sale is concerned, it has improved from INR 91 crores to INR 111 crores. In this financial year, and the contribution, which was around 6% to 7% has down to 9% of overall sales. And the margins, I already shared that the margins will be definitely having an improvement as compared to last year's margins. But exact how much EBITDA we can make, we can let you know by second quarter con call. .
And the next question is from the line of Vivek Gupta from Novus Capital.
Is [indiscernible] from Novus Capital. I have 2 questions regarding the other smaller segments. That's the own textiles and the kids. So since the segment is much smaller, are the margins lesser in that business? And given the overall business, these 2 segments are not much contributing to the entire volume and revenues. So what is the strategy around these 2 segments of the company?
Yes, it's definitely a lower margin as compared to Mansanwomens, but this contribute approximately, I think, 8% to 9% of the turnover. And home furnishing margins have improved this year as compared to last financial year. It has reached around adding 20% of EBITDA. It's the silver lining in as far as Monte Carlo is concerned and in home furnishing. Basically, we are even seeing this year a decent growth of 15% to 20% also. So home formation contributed to approximately INR 141 crores in last year's revenues and SIP contributed around INR 92 crores in last year's revenues. .
But the home furnishing has declined, right, on an annual basis from 150 to 140 .
Around 3% -- 4%. SP1.
Okay. And you have set up a new capacity.
No, no new capacity, but we are adding new -- a few categories like we have audit added towers, throwers, bathrobes and some of other smaller categories. So that is actually showing a very good growth and also there is a good demand in the market. We have recently -- we had a trade show at our [indiscernible]. So we are normally we collect advance. So the advanced less is more than 15% as compared to last year. So that gives us the confidence of going forward, the growth of 15 to 20 home furnishing segment. There is a data recently, I had just few [indiscernible].
And the kid segment, what is the strategy around that given the sales is also not much and margin also not much?
No, it, think again, there's a lot of competition in that kids. The margins are also less. We'll be sticking to the revenue contribution at this level only. .
Okay. And the sales channels for these 2 segments are similar to the cotton woolen or they are different?
No, they are same. Thet are same. .
Okay. So they do not add on to additional costs?
No, they're the same [indiscernible], which sells cotton and woolens. [indiscernible] Is different. .
Home furnishing, the sales channel is different.
Yes, it's different. Altogether different.
And the next question is from the line of Shekar Mundra from Vivo Commercial Limited.
; For the stores, we are looking to close down, how much are they contributing in revenues?
I think they are contributing around, including SIS, including ABOs and including we less -- it should be around INR 20 crores to INR 25 crores.
INR 20 crores to INR 25 crores , okay. And what are the number of stores we are looking to close down?
The total, I think there are 4 to 5 EBOs, there are 30 SIS. And then again, there are 40 to 50 sales in LSS. So those are already -- we are taking to close it down. And we are adding around 45 to 50 deals. So I would -- so those new additions will definitely compensate the sales, but we are losing from here.
And the reason to close them are basically lower margins or on [indiscernible]
The 2 reasons for that. In case of SAS, basically, we tell them to have at least 35% of MRP sales. And then we have some restrictions on the returns also. So both in credit have been filled in these assays, which we are setting it down. And in ABF, the rentals were more and the footfalls for rest. So there is [indiscernible] coming were more as compared to sales. So those were the reasons for that. Again, in large format stores, it was opening those areas because it was forced by some of the like [indiscernible] supply growth in this area, which we have refused this year this time this year where the fourth quarter was not there -- and also we have to take a lot of returns, probably [ 7 ] in return from those locations. They could not sell it. So that is why we have decided to take action on all these areas to say about us as far as profitability is concerned.
Okay. And which are the geographical areas in which these stores are located? Is there any 1 particular geographical area or .
It's a spread rose and -- and mostly in Northern and Eastern region and central region. .
Okay. And like how do you quantify like how much were these stores making losses on EBITDA level or -- how do you -- how would you quantify the impact of these stores?
We have desired parameters. We see the rental percentage, the employee percentage and the sale tranche and discounts. So when it is more than what we have desired that this is a benchmark, we decided to give it like close it down. given where it is [indiscernible]. Because this year, it has become more important as there have been a lot of interest on the profitability. So we have to take all these actions to save ourselves for the future. .
Okay. So just wanted understand Just compared to the other stores on a company level, I mean, what -- how bad were the numbers of these stores compared to the average of any other store, which is performing well.
No, it's not bad, but discounts were more better than Pacira. I can't say that the stores are performing bad. But because one reason either people prefer to shop and discount these days. And secondly, being a very heavy quarter, most of the goods we had in the December 15, 20. So it was becoming it was evident that if we don't go for early discount, we may left out with a lot of merchandise even though we have already left with a lot of merchandise. Otherwise, if we have not gone for early discounting.
[Foreign Language]
So that is why the company has taken action to go for every discounting and heavy discounting to get rid of these [indiscernible].
So on a company level, are you planning to hire take service on strategic consulting since I mean there has been some -- I would say, some -- I mean, strategic mistakes, I mean, last year, and I mean, are we planning to change the strategy or high on consulting services, if you understand the market better to develop a better strategy?
There is no confusion as per understanding the market is concerned. But yes definitely when you were growing at a 30 CAGR, definitely, you want to grow 15% to 20% next year also. So you plan more inventory, but the season disported you. And it didn't turn out the way we wanted. But again, now you have taken action. So this is the only thing what the company can do. Otherwise, in 2021, we had sale of INR 624 crores. And 2023 at a INR 1,100 crores. So the momentum was built up and the trade show happened. The strong order flow was there. So we planned more merchandise. But when the season sports, what construction will do in that case also. Merchandise is already there. The only thing you can do is that you can save some merchandise, you pulled it back just to send it next year and paste have gone for discounts. So that's what you can do in the circumstances.
Okay. And are we sure that we haven't lost any market share to competitors or any competitor of them better, which has led to this performance?
Not at all because the volumes have grown. I've just shared [indiscernible] also, the volumes have grown. Only -- I think the area where we need to look at very seriously to planning of merchandise in these winters. There, we have already short distributed locations, which we are shutting it down and there are locations, which we are sending it less and we will sell more in U.S. So now we have to merchandise. So in those stores, where US is more -- so we have some last year goods we sell that. So that will save in our margin front. So we will not sell the fresh goods, particularly in December, January in those areas. So that we decided how we can reduce the inventory in those tools.
And the next question is from the line of Amit Kumar from Determine Investment. .
I just wanted to know exactly how many of the EBOs and [indiscernible] are not meeting your benchmarks, any sort of plan to close this year if you can sort of [indiscernible] .
Those numbers I can't share it right now. Those numbers I can't share it right now. So I can broadly say this is the number which I'm closing it down. .
Yes. So what is broadly in that number listed.
I said 4 to 5 [indiscernible] 30 SIS and 35 LSF stores. .
I'm sorry, or part of LFS only, right? I mean .
Shop into our business, which we do at multi-brand outlets. So bigger multi-brand outlets normally have shopping shop model, where all the brands have a wall where we display our goods and sell from that particular for.
Is part of NBOs and LFS is a separate thing.
That's actually a basically .
Put together about 65 to 70 in?
Locations, yes. .
Okay. And correspondingly, how much on a gross basis, how much of -- in terms of new EBOs and locations we are looking to add during the year?
We have [indiscernible] for 40 to 45 stores. .
But that's EVO specifically.
Yes, pure EVOs, yes. .
But I'm saying that from a -- I mean, you'll be sort of talking to other MBOs and LFS in terms of addition location also -- would we have some.
Sorry, we are not adding any LSS because of higher discounts and high returns. [indiscernible] business is a very, very tricky business. So we are -- it's completely SOR and the turns and margins are less in left business or all the channels we operate.
Okay. And in terms of FIS and NPLs also that also you're not looking there?
No, [indiscernible] yes, definitely, there are some locations, which our marketing team is looking at. If we can get that place because those are the good SIS . So we are trying to have -- particularly in South and West, we are trying to have those stores, but we can let you now only in the second quarter. .
And the next question is from the line of Deep [indiscernible] from Nina Research.
Yes, sir. Sir, my follow-up question is, sir, can you provide me the geographical mix from North West, South and East? That's question one. And sir, my second question is what is the current ASP in quarter 4? And how are we looking at in FY '25? That's my first question.
Yes. Geographical mix, basically, almost 88%, 89% business comes from the northern central and east region and rest from from the western and southern regions. So it is there in the presentation also, which we have shared. .
Sure, sir. Sure, sir. Sir, my second question is, are we looking for improvement in ASP going forward? And what is -- what is the current ASP for this quarter?
Yes. We have raised our prices around 7% to 8% in this financial year and summers also. And also the same hike has been taken place in the winter. So my ASP, which should grow around 7% to 8%, and it should also mitigate the fact of discounting also. So that's why the company has taken this season.
And the next question is from the line of Purvi [indiscernible] an individual investor.
2 questions. First is. In the last con call, it was mentioned that the September breakthrough was good and we were expecting good decent summer garments we ship. So has that sales being accounted the summer sense which you are expecting? Or what is the situation on that? .
Yes, we have grown in volumes, as I said earlier also, but because the winter discounting, it has affected the revenues. Otherwise, summer volumes have grown. .
Okay. The next question is, sir, it's more of a comment plus your suggestion. Is there a possibility of cost rationalization? Because as you said that the consumers are preferring to go for discount sales, wait for discounts and discounts have become norm -- so I think shouldn't we look at discount prices being more of a norm rather than our MRPs and things like that and aligning our business model and cost structure accordingly.
Yes, seeing that only we have raised the price of 7% to 8% normally, it increases 3% to 4%. So to cut down the sector discounting the prices have been raised. And also some other steps have been taken at the [indiscernible] and marketing level also at the business promotion level also to cut down the cost. So that will definitely help us in improving the margins going forward. .
Thank you. I now hand the conference over to management for closing comments.
Thank you all for participating in this earnings con call. I hope we have been able to answer all the questions satisfactory. If you have any further questions or would like to know about the company, please reach out to our IR manager, [indiscernible] or at our investor montecarlocorporate.com email adress. Thank you very much.
On behalf of Monte Carlo Fashions Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.