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Page Industries Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '23 Earnings Conference Call of Page Industries Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. V.S. Ganesh, Managing Director, Page Industries Limited. Thank you, and over to you, sir.
Thank you. Thank you so much, and good evening, everyone. Thank you all for joining us on the call this evening. Well, we ended the year well, and we clocked a healthy growth, though we had a [ 17 Q4 ] as expected, the demand is subdued. Q4 performance was also covered by the impact of ARS implementation. As you would remember, we had fast ARS during the pandemic and reintroduced ARS during the second half of this year. Given the scale and complexity, the 4,800-plus distributor accounts, we know this is going to take some more time to make this transformation shift from push-based to pull-based auto-replenishment system. We believe this is the most important transformation which will pave the way for years to come. While the OS may not optimally absorb in Q4. We have taken aggregate measures to control cost as we move forward. We are very, very optimistic about the long-term view of the business, given the consumption industry and economic drivers. And we continue to focus on intensifying [indiscernible] distribution, modern trade expansion, including rapid expansion of exclusive brand outlets, growing online business, improving our customer experience, strengthening our product portfolio and ensuring a very robust supply chain, which is [indiscernible]. Let me take you to some Q4 highlights before our CFO details the financial performance for the quarter and for the full year. Our full-year revenue has grown by 23.2%, whereas the volume has grown by 13.1%. Q4 revenues have been down by 2.8% year-on-year and 20.8% quarter-on-quarter. Whereas volumes be grew by 14.6% and 19.2% respectively. EBITDA margin growth for the quarter can be attributed to higher product costs and under-absorption of other overheads. And as I told you before, we are taking measures to control all our expenses as we move forward. As we reinstated normal advertising expenses this year, a good share of that was invested during Q4. As of March end, we have present in 120,000-plus in MBOs, [ 1,000 to 89 EBOs ] and 3,000-plus LFS. Our channel expansion continues to be in line with our plans. And we are also happy to inform you that our e-commerce business has grown by 41% in Q3 and 34% in Q4.I will now let our CFO, Mr. K. Chandrasekar to give a detailed view on our financial performance. After which, we would be happy to take your questions. As usual, on our panel today, we have our CFO, and I'm also joined by Mr. Gagan Sehgal, our Chief Operating Officer; and Mr. Rahul Shukla, President and Chief Officer. They will be more than happy to answer any questions that you may have in their respective domains. Thank you once again for joining the call today, and over to Chandrasekar.
Thank you, Mr. Ganesh. I welcome you to the Q4 earnings call. FY '23 results were good. We crossed [ INR 478 million ] compared to [ INR 386 million ] as some of you would have noted. This is a growth of 22%. The volumes had a 13% growth to nearly [ INR 2,671 million ]. EBITDA showed a growth of about 10% to [ INR 86 ] million. The margins are at 18% EBITDA margin that are taking percent which compares with about 20.3% in the previous year due to sales-related expenses and advertisement investments. The FY '23 PAT is at INR 572 million, which is a 6.5% growth over the previous year. The PAT percentage is 11.9% compared to 13.8%. The quarterly Q4 performance has not been up to our expectations due to the external environment and that we did not achieve the revenues we were planning. So we ended up at INR 961 million, which is a degrowth of about 13%. Quarter-on-quarter, there is also a degrowth of about 21%. The EBITDA reported at INR 1,345 million compares with the INR 2,671 million year-on-year, and this is a big growth of 50%. Quarter-on-quarter, there is a degrowth in EBITDA of 30%. EBITDA margins are at 17.9%.
Mr. Chandrasekar, we are unable to hear you.
Are you able to hear me now?
Yes, sir.
Sorry, the EBITDA margins are at 17.9%, and it compares to 24% year-on-year and 16% quarter-on-quarter. As explained by [ LD ] in the opening remarks, our margins are impacted due to comps of 2.6% and 7.6% OpEx because we could not achieve the revenues, the absorption as being while we have not stopped investing in advertisement, but the absorption of all the OpEx has been [ similar ]. If we had achieved the revenues like year-on-year, we would have been at about [indiscernible] EBITDA. The Q3 PAT profit after tax is at INR 784 million, growth of 59%, and year-on-year and quarter-on-quarter, it is a growth of 37%. The PAT margin, therefore, are 8.1% compared to year-on-year, 17.1% and quarter-on-quarter, 10.1%. Inventory has also been at all-time high so far. So we are close to almost INR 15,950 million. And quarter-on-quarter, it is about INR 14,963 million. Inventory margins are 129 [indiscernible] of the previous year. And of course, due to the lower revenues and volume, the inventory is taking much longer. As you know, we had done advanced inventory. We plan for advancing the anticipation of growth, which didn't happen. So, therefore, the inventory will take longer [indiscernible] today. The net working capital is at INR 7,710 million compares with about INR 8,034 million quarter-on-quarter. There are working capital days that had tokens are generally in line with the previous year.So with this, I hand over for the Q&A session, please.
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen, we will wait for a moment for the question queue assembles. We have our first question from the line of Tejash Shah from Spark Capital.
Sir, first question produced to the growth side. So despite Omicron be, if I see Y-o-Y, the growth looks a bit loud in numbers. So just wanted to understand if you can give some more read on the slowdown that we are witnessing and how -- in your assessment, how early you see this demand sentiment turning around for us.
Okay. Thanks. Thanks for asking this question, Tejash. And there are 2 parts to your question because for us, this is part of this [indiscernible] market. And second part is because we also knew what we are getting into when we are implementing the auto-management system. So if you look at our Q4 performance, yes, the market has been subdued. And we actually expected Q4 to be from a market segment point of view, much better than what we thought it is what actually turned out to be. So that did impact. And we also were bracing also for some initial effect as far as ARS is concerned because during the pandemic, the distributor inventory became very lopsided because they were buying based on what is available rather than what is required by the market. And the demand also developed a huge demand shift with the market business. So both of it didn't help. This is also one reason we thought we would rather take that bite and accelerate the implementation because the faster we do, the better. And this is a very complex and the sheer size of this transformation is so big that we were expecting a few quarters of tightness, but the market did not need to bind also didn't help us. I see no changes, we have 4,800 plus distributor comps, and we know that this is going to take time. And we need to go at a SKU basis because what will have -- what actually happened during the [indiscernible] was that core size, they were having extra inventory, and that was coming down, but it was [indiscernible] order. And the other sides, which are potential winners for us, which were not actually purchased. And this is also to do with the liquidity in the market and other space. Now that we have got some help on these, we are able to push it further. But this is a very, very important transformation project for our company, which will help us for quarters to come. So it is good if we tighten ourselves for 1 or 2 quarters more to cross the bridge, and we are taking all necessary actions to protect our margins as we move forward and implement this flawlessly.
Is the peak phase of this transition behind us? Or you believe, as you said, 2 quarters more? So should we expect that the peak will actually be in the coming quarter of this transition?
It is a tough question to answer because it is very difficult to dissect how much is because of this ARS transformation and how much is because of the market, which is not buoyant. If we think by latter half of Q1 of the – in fact, by June, if things will start moving around, we will definitely see huge improvements. So in fact, we already see some improvements. But this would be much better than what we are thinking. So we are basing ourselves when market improves, we will be the first guys to bounce back. We are all ready for it. So first [indiscernible] I think we have seen the bottom of it.
Perfect. Second, if you can give some color on the current slowdown in terms of qualitatively, are you seeing it much higher in certain category or channel
It is across the channel off-line basically because as you see, we had a pretty healthy growth in the online channel. So we are trying to understand why this is happening. But if you see across it is across, and we think the consumers are postponing the band, and it's consumer time because [indiscernible] the discretion we pay. So we will be the first one to recover. That's how we read it.
Sure. And sir, last one, if I may, would you take any pricing intervention to revive demand in terms of cutting or offering some...
We are fairly priced. I think we are a [ many-core ] brand, and we don't see any immediate need for a price interventions because if you see, despite all this, we have performed better than many other brands, so price is not a barrier for us. We don't see an immediate need for intervention.
Thank you. We have our next question from the line of Gaurav Jogani from Axis Capital.
Thank you for the opportunity, sir. So my first question is with regards to the high-priced inventory of cotton. So is it now over or because of the subdued sales, we do see still the high-price inventory being carried in the inventory?
Gaurav, yes, since we were carrying a lot of inventory the high pit of cotton, we did have that impact in Q4, but the benefit has started flowing in, and I can say even as late as March of Q4, we have started seeing the benefit. So we have cross-abridge.
Okay, sir. So my next question is with regards to the demand pattern only. We have seen some demand volatility over the past couple of years with some sharp demand across the industry due to the COVID pent-up demand. And now this demand seems to be normalizing either by way of lower customer demand or [indiscernible] implementation. So on a basis, do you think that would be the right metric to look at the demand? Or do you see this impact is temporary and we might see the old demand coming back?
I find, Gaurav, the market looks very subdued. So I think it will take some more time for the old demand to come back. We are actually patiently watching as we be ready to bounce back the moment the market recovers. So it is -- because generally, across trade, the inventory is very high. The inventory levels are very high. There is tightness as far as liquidity, [indiscernible]. So I think it will take some more time for recovery to be seen.
Thank you. We have our next question from the line of Ashish Kanodia from Citi.
The first question is in our inventories. So when we ended 3Q, our inventory level was already very high and given that the demand scenario doesn't look very buoyant, what take to the mental built up even quarter-on-quarter in 4Q?
There are 2 reasons, Ashish. One is, of course, the demand was not as we anticipated. But the second part is, we had a high level of raw material inventory. This is because as you saw, it's one, the demand was so high and the market was so buoyant, and nobody predicted this drop. And therefore, the supply side was gearing up for a high operating level and they had [indiscernible]. During the pandemic call so as [ K. Chandraseka ] said in his opening remarks, during the pandemic also, we build inventory because the supply chain was so disrupted, we did build inventory. So what we did was we converted this raw material to finished goods because we have to keep our operating costs at an optimum level, we need to utilize our capacities. So we made sure that this inventory buildup is healthy, and we make sure that what we are producing our core sites so that we don't have the threat of slow-moving or non-moving inventory at a data point all the time. So it was a balancing act of utilizing our inventory to utilize the capacities we have built and thereby manage the operating cost and also have a healthy inventory at finished goods. So this year, we are very optimistic will normalize as we move forward because we have tuned our supply chain in [indiscernible] that the supplies going forward are going to be lower than what we are able to sell so that we can build the inventory levels down. So you will see quarter-on-quarter improvements as far as the inventories are concerned.
Sure, sir. And the next question is on the demand front side. So while I understand there is some impact coming from ARS and the channel inventory being high. So I just want to understand from [indiscernible]. First, if you can give some sense on how the like-for-like sales for EBOS has been [indiscernible] because that gives a much clearer picture in terms of the real consumer demand? And the second thing is, if you can qualitatively state between the categories in [indiscernible] relative to which category from an overall company perspective, suffered more volume decline and relatively better.
Okay. So to answer your first question, Ashish, the EBO growth was in line with our overall growth. And that's the true reflection of the demand. But we did see some softening in the last couple of months, say, March and April, and that actually is a very true collection of what is happening in the market. That is the best way we can pin it. So that's where I told you before that the market is not on the bond. Coming to that and we -- of course, we can see this happening across categories, even though some of our premium products seem to be flaring, et cetera. But it is across categories. And there is also some shift in the consumption pattern as far as outerwear is concerned. So it is moving more outerwear at home, where [indiscernible] so there is a shift which we can see. And that has actually caused some disruption across the market. I'm not just talking about [indiscernible]. Across the market, we can see that. But that is something which costs enough time before it normalizes. But definitely a demand shift or a consumption shift in the outerwear space.
Last question, if I may ask, is on the margin front. I think in the opening remarks, there was some discussion that there was some impact of 2.6% on cost and 7.6% on OpEx. If you can elaborate on that and also looking into FY '24, do you still maintain the margin guidance of 20% to 21% or any change in that? Thank you.
KC, you want to take that?
Yes. I explained earlier, we pinning it out as in [indiscernible]. So due to that, we had impact on the margin. At the same time on the OpEx, while we haven't overspent in terms of the OpEx, particularly in Q4. We have about 2% more on advertisement, actually, 1.4%, we send more amount of pricing for the respective quarter year-on-year. Also on selling overhead, we had expected about 2.3%. That is largely due to the trade [indiscernible] and the commission in [indiscernible] for the e-com market since we can't deliver the growth, the market conditions are more than last year. So these are 2 of the significant items. We also had higher and absolute terms, the factory is not too high in Q4. We also had about 2% more on the cost [indiscernible]. So these are largely explaining the 7.6%. So your other question as to the guidance. So in terms of -- you know that while we do not [indiscernible]. What I can tell you is that if we had -- we did 9,691 revenues for the quarter which it was 11,111 which led last year before we would have put an EBITDA percentage of about 17% [indiscernible]. So definitely, our aim is to get back into 18% to 20% EBITDA margin. And that also is supported by the inventory costs will be coming in lower in Q1 and more so in Q2. So that would be rather than increasing the price [indiscernible]. Our approach would be to tighten the cost and improve the [indiscernible] so we will definitely give back to that range. This is something we look at as a [indiscernible] products to Q4 and a bit of degree [indiscernible].
And if I can add on what KC said, we have made a conservative budget and have tuned the expenses to be balanced with gross budgets. And we also done enough work in a supply team so that we cannot actually take care of the [indiscernible] process back. So we did have -- as KC said, we raised the margin -- tremendous margin recovery as we move forward. There is no question about that. And on the spend, KC was also speaking about advertisement, and that is something which we are going to stick to because we are very bullish on the long term, and we are not going to cut those costs because these are necessary because we have a very big product portfolio. The consumer will be excited to discover them and we need to facilitate it. So we are going to go all out on those aspects because we are -- our long-term outlook is bullish. And what we are going to do is to control all the other expenses, which may not be customer-centric [indiscernible] to have a long-term growth of the company, which we will do when things recover, we'll go address your interest in those options.
Thank you. [Operator Instructions] We have a next question from the line of Avi Mehta from Macquarie.
Sir, I just wanted to...
Mr. Mehta, we cannot hear you.
Sorry, am I inaudible? Hello?
Yes, please go ahead.
I just wanted to better understand the demand environment of this. Without necessary by you, you are not able to give [indiscernible] understanding the demand trend would have weakened further from third quarter levels in this quarter? And should I read that comment on recovery of the sense of tax changes as we go into the first quarter? That would be the first part.
You're right, Mr. Mehta, according to our read the demand has flattened further in Q4. In fact, we were thinking it will be as bad as Q3. We never expected a further flat. And that is what gave us a price, but now we have reached ourselves to the reality and taken necessary correct to answer that you are right, the Q4 demand seems to [flatten] further. And when I see the numbers across retail, it is further, making it clear for us that demand seems to be most subdue in Q4.
Did that change in [ past purposes ]?
We are seeing some improvements. Definitely, we have seen some improvement. But again, it may not be comparable to last year Q1 because that was a record year for us. And Q1 was so good last year. So it may not be comparable. But if I compare to Q4, I can definitely see [indiscernible] synergy.
Okay. And sir, the ARS impact is going to be there for 2 more quarters. That's what you also said.
Yes, yes, it is going to be. But we are [ prepared ] for it. We will be managing this very, very carefully. So from an overall numbers point of view, I think we have seen the bottom of it. But ARS has 2 more [ quarters ] is going to be the transitional period as we read it. It can be shortened, if the demand picks up, and if we evenly start flowing out of the system, it can be taken. So I'm talking about the worst-case.
Okay, sir. And sir, sorry, if you can give us a sense on the pricing because we understand from the channel, there is some hit that he has done, which is our annual high. Is that understanding it? And if you could just clarify that question?
We did a price hike last year, 3.6% nothing beyond that we don't see an immediate need for an interaction.
Okay. Perfect. And that's all from my head, congratulations to the [indiscernible].
Thank you, Mehta, for attending that in [indiscernible] this occasion on behalf of the Board and the senior management of [indiscernible] which he has done and wishing very happy retired line.
We have our next question from the line of Nihal Mahesh Jham from Nuvama.
Sir, one clarification on the ARS discussion, but isn't it possible to get the strength of the impact are looking at a certain [indiscernible] because that, in a way would be in terms of how the market demand has been and obviously, the lower replenishment would innovative us the sense of ARS. Would that be the right way to look at it?
Absolutely, it would be the right way to look at it. But our visibility as regards to treasury will be a bit louder because we don't -- we can't get a real-time and the extract visibility on that. Secondary, we get a very clear visibility. So that is, as you rightly said, one way of looking at it. And the second is since we get good end-to-end visibility on our EBO side, that is a good indicator. And that's where I said if you look at last 2 months, there seem to be an enhanced subduedness.
If I could follow up on that in earlier calls, you have given an indication how [indiscernible] possibly give a sense of how that number was for Q4.
Well, our secondary, when you implement ARS secondary are bound to be a bit more higher than primaries because you are actually pushing away inventory, and that is the trend, which is happening. And that's why we said they'll be immediate here because the secondary have outpaced [indiscernible] in the immediate until the distributor inventory comes normalizes. And from there, you will take [indiscernible]. So across the year, if you look at it, the secondaries and primaries have matched up. Our secondaries are in line with primaries.
So, just to add with the project coming, the secondary in quarter 4, they are actually marginally higher compared to last year [indiscernible] the market was get replenished with the distributor [indiscernible].
No, I think that was helpful. I have another question on the [indiscernible]. Lastly, you did highlight that there was a tragedy which has been growing in the year-end and in check as well as a lot of other comments at the category is pacing pressure, we have a late conversion for that is [indiscernible]. From RFI going forward, what are the initiatives that we are taking to see to [indiscernible] category continues its long-term growth? And maybe at least matter the [indiscernible] is over the last 2 years just highlight some of this...
[indiscernible] I think you're asking about attrition, right?
Yes. So my question was on at least is that the market is subdued at this point in time. What are the initiatives from our side we are taking to see to it that the growth sustained even post the COVID bump that we've seen over the last 24 months?
Okay. So if I look at it from a long-term respect to, as a country, this is one category which is going to grow tremendously because there is the nice pricing, there's a high fitness awareness. And therefore, this is one category, which if you see any commentary, everybody [indiscernible] is saying that it's one of the emerging categories, which is going to see accelerated growth. Now what we have seen is a temporary bump. This is also because [indiscernible] during the pandemic, the consumption was high. In fact, many brands, including us, what would have taken 3 years to grow, we achieved in 1 year. And when you compare against that, you obviously will hit a bump when there is a correction. So our long-term view is very bullish, and therefore, we are leaving no stone unturned as far as product innovation is concerned on the new products. We are going to go all out and giving all the necessary attention to this category. And we are having more exciting products in the pipeline. We are looking at upgrading our existing product portfolio, so that there is much [indiscernible] for many of our consumers and the consumers defer that. And we are also going to come with more exciting products, which were [indiscernible] to the cross-section of our consumers, in the lower end to the premium side. So we are looking at the prospects of it and to launch more products, which are going to be more friendly for all the category of people.
We have a next question from the line of Manish Poddar from Motilal Oswal.
Final quick questions. One is in terms of market share you have, let's say, in the demand [indiscernible].
Well, Manish, as you know, there is no syndicated study on the market share as well as market share official numbers are concerned. So what we do is, I can say we can talk about the penetration, looking at our PEG. And if you look at it that way, we are in the high teens, around 17%, 18% market share on the [indiscernible]. And that's where we keep saying there's so much hero for us to grow. And as far as other categories are concerned, even though we are the most dominant players in most of the categories, we [indiscernible].
[indiscernible] Have you gained market share by your paychecks you'll be doing [indiscernible] through the channel and like that? I'm just trying to understand any sense where your market share is in the category remains [indiscernible] largely.
So that's as I told you as far as when [ lever ] is concerned, we are at around 17%, 18%...
Has that improved is what I'm trying to understand for the full year.
No, we are in that zone. So if you're asking whether compared to last year, it has improved, I can say we have grown more or less in the same zone.
Okay. And just the second part. So how much is the inventory in the trade? If you can just help me understand that in terms of number of deals in charter[indiscernible].
KC, you want to take that?
Thanks for the question. Are the inventory levels at the distribution level or the [indiscernible]?
[indiscernible] you mentioned to optimize the capacity, you've put in some inventory in the trade. Now that is relatively higher. So I'm just trying to understand what is digital means.
So we typically operate at around 50, 55-day inventory at the trade.
And what is that number right now?
So currently, also maintaining, as per our information right now, we are maintaining at around 48 to 50 days of trading.
So would that be fair to understand if the inventory in the trade is at normal level? It's not high, just that demand is uplifted.
The inventory trade level in terms of placement of our products, we are [indiscernible] to impact for all our product lines. There is [indiscernible] that the inventory has come down. We are still maintaining interest in. When it's a reflection of pressure in terms of replenishment by the distributor.
So okay. And just one last one for the full year '23, any broad sales cut by category, just broad headline, let's say, 30% to 37%. Any follow-up [indiscernible] on our cross-categories? That is all. Thank you.
And more or less, the growth that we have mentioned for the year has been all the categories have always grown at the same level as well. There's not [indiscernible].
So can I fit in one more?
Yes.
So just an initial comment then, is the channel increase in [indiscernible] mentioned [indiscernible]?
See, what happens is that at the trade level, the inventory is at the right place with the NBO, whatever the NBOs want, they are supplied. But when there was a supply issue at that point of time, the distributor got a lot of inventory, maybe that was not relevant at that point of time. So that has not gone to the trade. That remains with the distributor. So it's a distributor inventory levels [indiscernible] so with the implement with the implementation of ARS, the distributed inventory is getting corrected as per the market demand because then we will only keep at the retailer wants, so rather than the inventory level of the distributor going up. So this is the reason where the distributed inventory levels have come down. There is a correction. And this only through ARs is really getting what actually the market really needs. So it is not at the retail value was under distributor.
And sorry, just the same number 50, 55 days, what is the same number at distributor level last quarter also this quarter. And let's say, what is the optimum number versus now?
So normally, at the distributor level, it depends category-wise. But overall, we maintain a 45 to 60-day inventory [indiscernible].
What is it now?
So the distributor level has got corrected by almost 20, 25 days what it used to be earlier.
But it is still 60-days or is it at 45?
It has now come down to the 45, 50 days, which is the optimum level. And that is the inventory reduction that has happened where the distributors will continue the extra inventory, which was -- it was not as for the market. So the most of the correction has always happened, and there's 20, 25 correction that has happened, the distributor point. And currently, the distributors are at a healthy for 45 to 50 days.
So let me also clarify this even to the number of days might have come down, but the inventory is lopsided. And this is where we are working on the ARS where in a SKU level, there will be a curated description as to what has we bought and that would be system-driven so that the 48 days is healthy inventory, because today, the distributor goes by [ card ] and is by based on historic data, and he doesn't see potential future billers, and he doesn't invest on it. And this is where the SKU comes, and this is where – this is why we said this is one of the most important initiatives for us, especially with the kind of volatility we are seeing in the market, unless we have a cool system and if we keep pushing and when there's demand volatility like what we have seen in the last 2 years, this is going to have so much supply [indiscernible]. And the best way to do it is to have a full system. So yes, 48 days is there, but we still have work to do on this trend.
That's perfect. Because actually, if you take 20 days [ trading ] and you do it say INR 10 crores sales per day, you are in the INR 200 crores to INR 250 crores sales loss. The only facilities just as a comment is, I shall to understand EBO was growing in the last quarter. And now when you're seeing EBOs growing in line with the company. So EBO have also declined materially. So that's the only [indiscernible] but nonetheless, thank you so much.
You are very right. And that definitely on the EBO side that is the indicator of the continued demand.
Thank you. We have our next question from the line of Devanshu Bansal from Emkay Global Financial Services.
So in Q4, we saw launch of [indiscernible]. So just want to understand [indiscernible] and the current distribution for this product.
Rahul, you want to take this?
[indiscernible]
The question was on launch of [indiscernible] category in eBO. So from the point in time, the focus is behind this launch as well as the current distribution of this product.
Launch of women category?
[indiscernible]
Rahul, I got this. I think the question was the launch of [ women ] category.
Okay. So Mr. Bansal, see, this was more of a test which we did. We actually wanted to see the pulse of the market. And we are continuing with it. But as far as the work pace is concerned, we need to be cautiously aggressive when we are embarking on this journey. So we announced this growth product to see how the consumer expectations and how it is evolving. So this is actually to take the category further forward.
So how has been the learning, sir? And what is the plan for distribution expansion for this to [ earn ]?
The earnings -- it is well received. I can say the market is very excited. In fact, the very fact that you are asking this question itself shows that it is positive, and that is the feedback we are getting from the market. And this actually is a great sense of direction to our product development team as to take how to take the category forward.
Got it, sir. And second question was if you could provide the comparable gross margins that we used to reporting the PPTs in this time around, we have not reported.
In the 9 months are [indiscernible]. The comparable gross margins which we used to report in the PPT in this quarter, we have not reported, which is around 40% odd [indiscernible]. We had about 41% Q4. And can you hear me?
Yes, sir. Yes, 41% in Q4.
And last year and this year, we are 38.2%.
And just if you could indicate how has the movement of this gross margin during the quarter as we indicated that the cost highpoint volumes [indiscernible] the new margin started to see the benefit of that. So if you could just throw some light on that.
We are generally [ intern ] to 40% range. Some quarters are an exception. Last year was an exception on the higher side. So the [ 40% ] is largely maintained. And I think going forward is the inventory costs are going to go lower then we would see that in gross margins.
Thank you. We have a next question from the line of Ankit Kedia from Phillip Capital.
Also a few questions from my side. So the old products with the distributor would have bought in the peak over time, which is [indiscernible]. Has those products been taken back by the company or you have liquidated that in the channel in large Q3 purpose?
Sorry, Ankit. We usually don't take it back. So it gets retreated in the deal course of the business in the [ segment ].
So when you say the inventory days and the distributable level has come down so the fast-moving inventory would have only got liquidated. Because the slow-moving inventory would still partially be at the distributor level and create an issue in the ARS ports.
Yes. So that obviously will not trigger a new order. So there will be no top-up happening for those products because it usually works on a [indiscernible], so it would not get an order. And this where I said, as we implement this, these kinds of abrasions won't happen as we move forward because we will be replenishing a bite side. And with all the work which we have done in supply chain on quick turnarounds, we can simply replenish. So they need to be very smart, and we need to create the distributor inventory to the best possible level and have a good presence across SKUs.
Sure. And sir, historically, the new launches were not part of the ARS. Now are the new launches part of ARS for the distributors?
Going forward, it will be. And it has to be so that the new product gives an opportunity for the market to decide on how to receive it. So it gets a fair play in the market. So we can be in the ARS.
And sir, last question, sir, Q1 is the best quarter for this historically. Now with demand environment being low and the ARS issues partly getting settled in Q1. Do you see your A&P spend continuing to be higher for the full year or you will contain your spend your efforts to maintain your margins?
Which trend you were talking about Mr. Ankit?
Sorry, advertising test because in quarter 4, despite the low demand, we will continue to spend on advertising and promotion.
Yes. See, Ankit, when you look at it, you have to look at it as a percentage of revenue also because if you just look at quarter-to-quarter what happens during the pandemic, we will send a media dark and we didn't spend much. So it may look very high spend. But if you look at it as a percentage of revenue, we are going back to the old normal assets we used to do expense. And that is absolutely essential because see, these 1 or 2 quarters, we see this is a temperating, but if we have to sustain our growth and move [ business ] to all the products which we offer to our consumers, we can't continue to be media dark and we need to make the necessary expense. So what we are planning to do is to at other costs, which can be passed or can be avoided, but we don't want to subdue any expenses where it matters. There, we want to go all out. We are very, very confident as far as long term is concerned. So we have a very bullish outlook. So we are not going to cut [ one ] as well as the necessary spend are concerned.
Sure. And sir, one last question, if I may ask. From first [indiscernible] set up a new division processes with such a sale structure. So if you can just highlight what is the growth opportunities you are seeing in social strategy? And how should we look at that apart from the innerwear and [indiscernible] category?
So accessories, we created this division because we started doing this a few years back with the introduction of [ cars ], then we had handkerchiefs, socks then we have caps. So all this, we're showing very good traction and it was getting well received. And when it reaches a particular point when we saw the acceptability of these products and the category, we decided that we need to create a division for this because the potential is there. And we can further take the business forward. So we have done this because we can see the huge potential in front of us, especially for socks.
And would the dividend be approximately double-digit revenue contribution for [indiscernible]?
We usually don't give those specific numbers out. It is in your interest and our interest that we don't say that because it will be handy for the competition, so we don't give those tests actually.
Thank you. We have a next question from the line of Akhil Parekh from Centrum Broking.
My first question is in terms of the demand scenario, I mean you've already [indiscernible] gone through that cycle in FY '19, the demand started to [indiscernible] from fourth quarter for FY '19 to longer for the fourth quarter for [indiscernible]. So how similar or different demand situation is [indiscernible] the discretionary slowdown that we have seen during the [indiscernible].
We will have to generally look at the stake of the inflation and the economy and what is happening in the retail space, that is what we are going through. So I don't think we are an extension to it. Otherwise, I think as far as sustained growth is concerned, we don't see any problems. If you see our retail expansion, it has increased so much and we will be able to mark it as we move forward. And we are going to continue to expand, like I told you in starting comments, the EBOs, MBOs, we will have continued growth. And compared to '18, '19, we have much more exciting products to offer to our consumers and be [ NGspot ]. So this is a temporary bump proceed. But if you look at it long term, there is nothing which we see can [ suffice ].
[indiscernible] is that what we are -- where we are right now are largely driven by the macro situation and to some extent the port of the ARS implementation, and there is absolutely more increase in content intensity from any of the regional peers across the [indiscernible].
Absolutely, absolutely. Because the market penetration I spoke about, there is room for competition and for us, that's not saturated wherein we have 60% and the other part of the market as [indiscernible] person. There is so much headroom. And it is also a growing category to [indiscernible] is supposed to grow compounded 10.5%. Women's in that area is nature to grow at 13%. So we need to accelerate and grow faster than that if we have to gain market share. That's the potential which is ahead of us. So if you look at it that way, we should say our competition is [indiscernible].
Second to last question is on the margin trend looking past, historically, we have been confident about maintaining the 21% to 22% of [indiscernible]. By large, we were able to achieve over the last many years. Would you be able to give any color on why benefit, what kind of EBITDA margin we should look at in FY '24?
Well, as Mr. Chandrasekar said is that as a company, as a policy, we don't give guidances, but all that I can tell you is that this is because when you take cost control measures the use doesn't [indiscernible] takes time. So all the actions which we have taken the [indiscernible] materials. So there's a tremendous margin discovery, which we can from us. So we will be in a loan as per our budget, where we are comfortable. So historically, as you rightly said, we always look at 19% to 21% levels. We answer, we can get close to it and with the market coverage in the second half of the year, we've been very comfortable so.
We have a next question from the line of Varun Singh from ICICI Securities.
Yes. Okay. And my first question is on the macro slowdown in the category. So sir, if you can [indiscernible] to understand, given that the [indiscernible] category and 17% to 18% is the penetration of 10% is the growth rate of the category that we called out. And so like what should be the basic remain on rates for a decline in our revenue minus the software [indiscernible]? So how should we really [indiscernible] technically, if there is an inflation there should be a down trading but even on volume front, et cetera, we see more of an intact. So what are the other possible reason to do [indiscernible] to our current growth number? Do you think the competition over here has a larger room to play? Or you think any other than [indiscernible] there is a brand portion more than 25-year-old brand? So if you can give some more color that why into an essential category to is penetrated very [ purposely ] decline in our top-line growth.
So thanks for asking and let me tell you, I don't think it's a competition because if you see they are not [ expecting ] to what we are going to. Everybody is going through the same parts. So definitely, it is not the competition intensity. It is because if you see the distributors also when the supply was low, we're all trying to get word of stock, [ very pretty everything ] was overpriced. And now we are trying to decorate. There's also a liquidity issue in the market. So everybody [ taking the belt ]. And that's where the path we are going through that part and this is what exactly happened in the U.S. also will be a similar trend. So we are no exception to that. And I don't attribute this to competition intensity. And we're coming to brand it, definitely not. In fact, to date, you'll see the guidance in savings. These are happening to the young consumers and the way and the range is received by our consumers shows that there is no fatigue. And this is backed up by the brand equity studies, which we have done. And we have got very, very positive feedbacks where we are way, way ahead of all the other brands and the difference between us and others is so high that we are very confident that we are going the right direction. And this is true as [indiscernible] and in both categories, in both places, the brand equity study shows that they [indiscernible].
Understood, sir. And sir, my second question is now that doing more than 5 years to launch Jockey [ wear ] and [indiscernible] we are not calling out into continuation separately, and this is fine. But given the smaller base, I also recall that we found out that all the segments have grown at a similar rate during the quarter. I believe you should be expecting a higher growth rate from [indiscernible] and put the potential to see that not many companies are there, which operate in both men and women were with the same brand name but still, how should we read our [indiscernible] category. I understand that during the past comp calls, we did highlight that we have witnessed the related subsidies in this category and would be more than happy to see the [indiscernible] at a much faster rate. So the current growth rate, which is similar to other categories, which as an analysts, I would be expecting to grow at a higher rate, how should we read these things and then our potential activations in both the segments?
Very, very good question, Varun. Actually, you are right. What you are asking is since we are -- we had a lower base on women. We should be growing faster there than we have gone equally across the board, which is true, and this is where we are taking all the necessary actions to have accelerated growth of we -- in fact, if you see the previous year, we did that but this year was an exception, but we are now making all the right interventions to have accelerated growth on the women's in arrear. Juniors actually has grown, and I will say that it's also because of the low days, which we have. And as far as Juniors is concerned, we have kept our own trajectory. We are not trying to conquer and dominate the market. We are present there and we are working to [indiscernible] because that is a very, very, very different category when it comes to the [ time-telling ] go-to-market. So even margin structures vis-a-vis the competition. So we have a sweet spot, we have achieved what we want to achieve there. And in fact, this is a category which will help us to recruit new consumers. We are seeing the objective. And we are looking at a healthy growth on Juniors and it actually is on track. Women's, you are right, but we are taking all the necessary action to have activated growth. And as you watch the market, you will see a lot of action from our side in the front.
Last question, if I may, that [indiscernible] what was the reason for decline in the payables on [indiscernible].
Mr. Varun, I didn't get you.
So our overall rate stable to, so that there is a reduction out there. So is there anything to call out over there or nothing [ as of now ]?
Okay. KC, you want to take that on the [indiscernible] base?
It's not very a significant decline of the days. We have been buying less. Our purchase is a good list. It is more a matter of having more relevant suppliers.
Okay, so I believe, should be roughly 20 to 25 days between that.
Yes, it is about 27% and in the previous quarter, it was 20 days. So it is not very different.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. K. Chandrasekar, CFO, for closing comments. Over to you, sir.
Thank you. Thanks to all of you who have been dialed in and who have been patient to us on the call. And as always, I appreciate your support for the management of these investors. I'm keeping it in all that we do. We wish you all the best. Thank you, bye-bye.
Thank you, sir. On behalf of Page Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.