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V I P Industries Ltd
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Ladies and gentlemen, good evening, and welcome to the Q1 FY '24 Earnings Conference Call of VIP Industries Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to [Indiscernible], Investor Relations team. Thank you, and over to you, sir.
Thank you. A very good evening to everyone, and welcome to the Q1 FY '24 earnings call of VIP Industries Limited. From the senior management, we have with us Mr. Anindya Dutta, Managing Director; and Ms. Neetu Kashiramka; Executive Director and Chief Financial Officer. Before we begin the conference call, I would like to mention that some of the statements made during the course of today's call may be forward-looking in nature, including those related to the future financials and operating performances, benefits and synergies of the company's strategy, future opportunities and growth of the market of the company's services. Further, I would like to mention that some of the statements made in today's conference call may involve certain risks and uncertainties. Please take a note of that. Thank you, and over to you, Mr. Dutta.
Thank you, Snider. Good evening, everyone, and thank you for taking out time and joining on this conference call. I hope you have all received a copy of the results published yesterday and the presentation of loaded today. As you would have seen, we had a very challenging quarter 1. The revenue growth for the business overall was at 8% for the quarter. We experienced a significant slowdown of demand growth compared to the past pace growth that we experienced in the last financial year. While travel, especially air travel continued its growth momentum from the data that we got, the differential demand growth in quarter 1 comes from the wedding season and the wedding season apparently was significantly subdued both on account of the number of dates and possibly spends. Also, the demand core could be muted because of the replacement cycle of the category with significant upsurge in luggage going in the previous year when travel opened up fully post-pandemic. In addition to the external environment, we had a very challenging situation at our Bangladesh facility post the loss of one of our large factories unifier. Our alternate arrangements to rectify the supply chain could only partially rectify towards the end of the quarter. And unfortunately, we continue to have headwinds in streamlining our supply situation from Bangladesh. The disruption at Bangladesh not only resulted in short supply of some of our key ranges in soft luggage, which impacted the VIP and Skybags revenues for the quarter, but also the lower production has unfavorably impacted our gross margin, and this is due to the under absorption of the manufacturing overhead [Indiscernible]. Well, coming back to the revenue growth. While it was at 8%, I would like you to note a point that the growth in our trade channels, what we call a state channel both in offline channels, et general trade and modern trade and on online in the e-commerce portals together was at about 16%. These channels contribute to approximately 70% of the business. The balance 30% is CSD, institution and a small part has export business. I'd like to mention, especially the institutional sale in the last year was exceptionally high, owing to a onetime order of much that we've got. We were to let up in like-for-like. I would like to mention about channel, which contributes to 15-odd percentage to the business. And in this quarter over the previous quarter, going to significantly lower orders from CSV. ESG has initiated a very large-scale sent exercise for the category. And we are now replacing 50% of all the approved ranges with new ranges from our existing portfolio. While this has impacted the business in the , this will give a positive flip to the category in CSD and will be an advantage for us in the future. One there were headwinds in terms of overall demand slowdown and as I mentioned, the unfavorable impact of CSD and the state channel. The underlying growth for us could have been better given better supplies. Now coming to the gross margin. The gross margin for the quarter is 49.5%. This is 0.5% compared to last year -- last year same quarter. It's actually lower by about 3% to 4% from our targeted gross margin. And this is largely due to the lower production in Bangladesh and therefore, the unfavorable impact of under absorption of the overheads. And it also -- the lower gross margin is also due to the unfavorable mix. And when I talk about unfavorable mix, this is both in terms of brand and channels. Our value brand, Aristocrat had a very good growth at 26% in this quarter over the same quarter last year. However, the growth in VIP and Skybags was muted, and this possibly is largely due to the short supply in some of the key ranges, as I mentioned earlier. In terms of channel, I mentioned CSD and CSDs are higher has a higher margin impact. And with the lower salience of CSD, it also had an impact on the gross margin. In terms of our fixed overages, we continue to invest behind our brands and channel development. You would have possibly seen the high decile campaign on Skybags, the key pending campaign, which was across social media, across press and outdoor and also our campaigns on VIP and Aristocrat. This significantly higher investment in our brands and strengthening our channel. When I say strengthening our channel like basically in e-commerce, both in the front end as well as in the mid side, there was a significant investment in this quarter. As just said, overall to a lower EBITDA compared to last year and EBITDA was at 13% and a resultant PPD of 12%, the PPT of 12%, which is INR 77 crores includes an exceptional income received of the insurance play market. To sum it up, I think we had a very challenging quarter. And it seems the demand environment might continue to be muted in the immediate future. Also, we have continued challenge in our hands to streamline our supplies. Having said that, I'm quite hopeful about a good festive season coming ahead in Q3, and I feel confident that our focus on building strong fundamentals in our go-to-market, in our brands and in our supply chain will deliver strong and sustained results. Thank you. With that I would open the forum for questions, please.
We will now begin the question-and-answer session. [Operator Instructions] Our first question is from the line of Rupin Shah from InCred.
Three questions from my side. First, on growth challenges. You also kind of said that the subdued performance had also an embedded reason of supply challenges also. So as per your assumption, how much incremental growth we would have lost because of Bangladesh fire disruption that we witnessed this quarter?
I would say it's difficult to put a number to it, but a very rough estimate would be about 3% to 4%.
Okay. And sir, would you say that demand sentiment also kind of disappointed you? Or was it largely our internal challenges supply side, which kind of made us with commotion developing number?
So definitely, the demand environment did give us a surprise. We were expecting a better demand environment. And as I said, I think it is more the wedding demand cohort, which significantly was muted compared to where what it usually would be. And I noticed that across other companies who are largely dependent on wedding-based revenues. So I think that -- and this also corroborates that we saw lower growth in Hindi Atlas, where in the summer season, we get a huge -- we get -- usually get an upsurge of demand because of wedding. So that part was a surprise where we thought the demand was significantly lower than what it could have been or should have been.
Sure. Sir, my second question pertains to gross margin. So if I see it not only for this quarter, but if I compare our share of in-house manufacturing versus pre-COVID, which has improved from 50% to 70%. But our gross margin continues to be lower than our pre-COVID period. So ideally, it should actually tend to print higher than the pre-COVID number. So just wanted to understand why is it still low and where do you see it settling now once we have full control on in-house manufacturing?
Yes. So one, the full benefit of in-house manufacturing is yet to come on to the business. But the larger point here is that -- and said that we have bought because of enough functioning is, in a way, plowed back to make ourselves more competitive in the value end of the segment. And that's how you see it and possibly our ability to take share in that has increased. So if you see the Aristocrat share from pre-COVID, 35%, now has gone to almost 42%. And the gross margin is at the same level as what it was before. So I think the part that we have got till now in terms of the benefit has been plowed back to in competitiveness.
And sir, third and last one. Was there any one-off in other expenditure this time? And after this quarter's performance, how would you revisit your guidance on both growth and margins for FY '24?
Sorry, what was the first question?
So there is no one-off further. However, we have spent more in advertising. That is what you see in the other expenses, and there is the legal and profession fees. And there is some warehousing costs because of higher revenue projections, we have taken additional warehouses.
There are some one-offs, very minor ones, about but because we -- as part of strengthening our supply chain and fulfillment for e-commerce, we are reorganizing our warehouses to make it more intel with what the channel or the business needs. And that could have been the slight one-off that has happened in this quarter, which will not be consistent in every quarter going ahead.
Sure. And would you revisit your guidance on margins and growth for the year?
It's very difficult to right now pinpoint this. And we will be on the lookout in the coming months to see how it pans out. But I think I'm still hopeful that we should be able to get to 12% to 15% revenue growth for the year. But while I say it a lot depends on how the demand environment really unfolds going at, especially in the festive season.
Sure. And sir, any range for margin similarly?
Well, on margins, I think we stand committed to a 52%, 53% gross margin. And I think that is something that we should be able to get it back. There are several things right now happening, which was more a quarter 1 thing. As I said, the under absorption of manufacturing overhead because of the conditioning once it's streamlined, and we are in the work in progress to make it happen. It should come back to that.
So EBITDA, it can help? Hello?
Sorry, I didn't get your last question.
Sir, EBITDA margin, it can help? You spoke on gross?
Okay. So EBITDA margin, we should be looking at a 16% to 17%.
[Operator Instructions] Our next question is from the line of Jinesh Joshi from Prabhudas Lilladher Private Ltd.
If I look at this quarter, our volume growth is about 10.5%, whereas the value growth is about 8%. Does that mean we have taken any price cut in this quarter? And also any specific reason as to why we were not able to get the institutional order this time around, which has pressed the top line growth a bit?
So let me answer your first question. The -- there is a mix deterioration, as I said, with the differential of Aristocrat versus VIP Skybags and VIP Skybags had -- I would believe a temporary issue in quarter 1 because of supply. So that's one. Also, the market has -- with the demand slow down as positive, and there is more pricing and discount interventions that is happening, and we are matching it as and when it is coming up. So on that account, I think the volume and value difference is coming from there. On the institution order, as I said, the last year base had an institutional order of a very onetime nature, which was for the pilgrimage that was happening. It was a very large order that was executed within quarter 1 of last year. So it was an exceptional order that came in last year.
Sure. And in response to the previous participant's question, we mentioned that this time around we spent more on A&P. So can you share the number, what it was in this quarter, what it is in this quarter?
INR 51 crores versus 32% last year.
Okay. So I was just trying to link the E&C growth and the top line growth, which we have reported. So the E&P spends are quite high in nature, yet the revenue growth is in single digits. So any particular reason as to why the top line growth has failed to catch up despite such sharp price in the spend? And also if I recollect properly, this time around, we launched quite a few offers to kind of promote sales and CMP appears that it has not pad out well. So your thoughts on this.
I think you're right. The investment on the brand was high as the numbers are showing, but that's coming from our decision of that will continue to feed the brand, especially in the quarter where the demand environment is more contextual to travel. So that it's a more salient quarter for us to leverage any brand investment. And as far as investment and promotion is concerned, this was completely competitive in nature. There is -- with the slowdown, there is, as I said, the intensity in terms of what competition is doing. And therefore, it was important for us to also be there with the right amount of promotions and all that. It's the investment not resulting into the revenue. I think it's the crux of it, which is where is the world demand situation possibly is the unfavorable situation which has not resulted in the coincident revenue growth.
So is the growth -- just one follow-up and I'll get out of the queue. So if the growth fails to pick up, will the A&P spend come down? And secondly, with the slowdown which we have seen, does that keep it guidance for INR 200 crores remains intact.
So yes, going forward, we are going to do our tight road work because now that we have to experience the right kind of demand in government to come back with that level of advertising and brand investment. However, any kind of channel investment will continue to be there because that's for the year and also for long term. So we will recalibrate our A&P spend looking at the demand that we are expecting, and it won't be similar what we had in quarter 1. As of right now, our CapEx spends are linked to what we are looking at demand for this year and next year to see that we are revisiting it. It may not be -- we may not cancel it, but we will reschedule or postpone the investment for some time and come back to it. So I can't give you a guidance on the CapEx that we will do for the year. But at overarching level, we are committed to the long term. So we'll keep -- we'll make sure that our capacity is growing in line with our expected demand in the next 2 years.
You can postpone by 1 or 2 quarters. So that's what we're using for the year.
Our next question is from the line of [Indiscernible] from Axis Securities Limited.
So one quick question for me. So can you give a time line as in what -- how long will it take us to normalize the supply situation so that we can return that to the gross margin target that you have?
As of now, I think it's going to take about maybe 2 to 3 months to get the supplies, right. But this has also resulted in an inventory situation, which is slightly lopsided or high depending on what kind of demand is there. That optimization on the inventory may take a longer time. But in terms of supplies to cater to the demand and revenues, we should be able to streamline it by the end of this quarter.
So for Q3 demand, we might have -- we can see the better margins that of 50% gross margin. Is that what you can integrate?
Yes.
Okay. And sir, secondly, any idea on any market share gains? Or are you done any market share update?
No, I don't have that right now.
Our next question is from the line of Karan Khanna from AMBIT Capital.
My first question is on multiple new launches that you've done over the last few quarters. So you've done significant brand back and also new launches, including in VIP Skybags, Island collection, [Indiscernible] collection, et cetera. So could you elaborate more about the ROI from these investments? Because based on my limited understanding about the industry, so the premium segment and the mass premium segment, typically, it's a fast fashion category. So if the products become obsolete, say, more than 6 months, you usually tend to become obsolete and hence, not a lot of demand for these products. If you can elaborate more on that.
So I think there are 2 parts to your question, Karan. One is the fast fashion part of it. And I think since we are manufacturing now most of it or even if you were to procure it, we keep the life cycle of the product in mind depending on what we think is going to be the depth of product, this is the consumer opportunity. And so therefore, obsolescence in terms of inventory is something that we, by design, try and track it and control it. It is a fast fashion. So therefore, you'll have to continuously bring in new products to appease and delight the consumer. And I think we've done a good job in bringing out some of these products right.
So in terms of revenue contribution, if you could quantify what kind of revenue are you typically seeing because of these new launches over the last 1 or 1.5 years?
About 32%, 35% of the revenue comes from typically new designs every year.
Sure. My second question is on market share. So we've seen that from 1Q FY '19 to 1Q FY '23, your revenues has grown at 3%, 3.5% CAGR. So if you could elaborate more in terms of when you talk about the wedding segment -- wedding demand being muted. Is it safe to allow that to listed player and perhaps even [Indiscernible]. Is it safe to assume that for them, the revenue split or contribution from the wedding segment will be relatively lesser or am I wrong in my understanding?
Well, from the wedding season, the demand specifically to the wedding season, the demand was lower. That's quite evident in our industry and allied industries or categories to do with the wedding season. So I think it will be overall impact of the muted wedding season.
Sure. And talking about the institutional order that you mentioned in the base quarter, which you've referred to as one time. So if you could elaborate more in terms of -- am I correct in my understanding that this was in first quarter of last year. And was that order taken up by competition this quarter? Or is that order not rolled out? So if you can elaborate more on that one?
It's not rolled out controls.
Our next question is from the line of Bhargav Buddhadev from Kotak Mutual Funds.
My first question is on your supply issues, which you highlighted. So I was under an impression that you had fast tracked your new facility at Bangladesh in order to meet the production loss from your factories, which got destroyed in the fire. So was it the case that the new factory did not sort of come up with production as envisaged or what happened?
So Bhargav multiple things. The fast tracking wasn't fast enough in terms of a lot of other let's say, procedural things that was to be taken care in Bangladesh. Also, it was not entirely dependent on that because it was a large factory. We had our 2, 3 different parts to the Plan B that we created. One was Bangladesh fast tracking the new facility. The other was, even in Bangladesh to start a second shift, which is quite against the grain of how ready-made government or swing based operations happens in Bangladesh and other parts of the world. Third, there were imports from China. And fourth, there were also some developments that we did in new vendors in India. I think we tried doing it all for a large part of it worked. I mean a part of it worked in the large part of it did not work within the quarter, and that's something -- and there are many other factors that came in the heat wave, the other disruptions in Bangladesh that we have had caused some of the delays in this whole thing.
Okay. So given that we were anticipating production issues, was it rational enough to spend a lot on advertising because essentially, if you advertise and orders get generated, but if you are not able to supply, how does that advertisement help?
So it was not to the magnitude that it was completely out. I mean we are talking about a slice of the brand of the portfolio, which were to come, which did not come on time. And we did try to time it to that extent possible, but advertising goes beyond, I think, having some ranges into the market at that point of time because we're not out of the market. Skybags and VIP brands are big. And it needs to be invested upon on a continuous basis for the equity to continue to develop. So I think that was a call taken at -- during the quarter.
And lastly, your e-commerce vertical seems to be doing very well, growth of almost 40%, and you had hired a consultant as well for advising. So if you can share some thoughts on how is the project with the consultant approaching? What is the expense you are paying, et cetera, et cetera. And that would be my last question.
I can tell you about how the project is progressing. But at a high level, I think it was absolutely the right thing to do, and it is starting to show green shoots in terms of results, but we are significantly focused on making the foundation on the fundamental strong, whether it is in the product portfolio, whether it is how we show up on the portals in terms of our content or whether it is supply chain, including from demand forecasting to really making sure how are we designed in to fulfill the orders on time and have a very high fill rate. So it is across the 360-degree. And the project is progressing well, and I'm quite confident about it being a game changer for us in the long term.
And sir, any quantification on what's the fee structure like?
No, I don't think that is worthy to share on this forum.
Our next question is from the line of Prerna Jhunjhunwala from Elara Capital.
Most of my questions have been answered, but I just wanted to understand your market share in the e-comm channel. The share of revenue is definitely increasing on that front. How do you see this progress in line with your expectations? And how is your market share shaping up in -- on this channel?
So we are progressing well, as I said, on our expectation on strengthening our sale to have a much, much stronger play in overall e-commerce and in the future. Yes, it is aimed at the long term -- in long term to gain market share. I want our quantification on market share as we are just about started. But definitely, the objective of this whole thing is to really grow scale. The output of this project has to be about growing scale and market share within the channel. And as I said, that possibly as of right now, we can only say that we are definitely seeing early good signs of results also coming in. And we are feeling very good about the progress that we have made from within the organization.
Okay. And the second question is on penetration. One slide of your points out on the number of towns that you are penetrated. It's around 1,300 today. So could you just help us understand how this penetration helps in your volume growth and your revenue growth? And what is the possible number of towns that you can enter in the next 5 years as an opportunity?
So Prerna, at an overarching level, the big purpose of this is to be where the future long-term growth will be, right? India is growing in smaller towns and down prop data, and it's very important to take our direct distribution to all these terms. So we took an aim of looking at every town, which is above 30,000 population, right? We don't -- can't tell you for 5 years, but by 2025, we wanted to reach to about 80% of this population of all these towns, which is above 30k population. And that's the objective on which we are on. We have added about 70-odd towns in this quarter alone. The target is to reach up to about 250 additional towns, which should take us to about 1,500 plus or thereabouts for this year -- by the end of this year.
This will help on revenue growth? I mean the presence will be EBO driven and driven...
These are largely MBO driven, right? This is increasing direct reach to outlets which are there, which are selling bags. And a large part of this is also bag back. So it will help definitely help in revenue growth and capture the demand, but it will be a slightly more longer-term investment that we are doing. And as we see the next 2 to 3 years, where in India, the growth at the bottom end will happen definitely in smaller towns. So that's where this is going to result in to.
I have one more question, but maybe I can join in the queue on this part only.
Please go ahead.
I just wanted to understand because the number of cities are so large, do you see any concern on receivable days or inventory getting older in the towns because we expect so large now, like 1,300 cities is one of the best penetration across many retail.
No, we are also changing our route-to-market model for this, and it is a distributor-led team that we have created. And therefore, we had distributors for very large geographies. So maybe a distributor for a whole state. Now we are kind of going in to get this kind of extensiveness in our distribution. We are getting into slightly smaller geography for a distributor and therefore, the deeper penetration. So our receivables and all that depend on our distributors. And therefore, the kind of distributors we appoint will make sure that the money is safe. And they are the one who is going to go into the towns and create the distribution. So it's not a -- it won't have a receivables issue.
But there is no direct?
There's no direct distribution into outlets directly by us for -- in the smaller towns.
Our next question is from the line of Nihal Jham from Nuvama.
Sir, my first question was, you did highlight about the wedding season being muted. Would it be post to this for our understanding to get a ballpark sense of what would be the approximate revenue out the normal under the wedding for this past quarter?
No, I'm sorry. That's something very difficult to put a number to it and split it. I won't be able to give you that guidance.
The only reason just coming to that is because we saw the similar wedding phenomenon happen even in Q3 of last quarter in October, November, where you had severe impact. But that time, we did end up reporting quite a strong growth. So hence, I was just trying to understand the aberration versus then and now, if there is anything you want to highlight to that.
Last year, quarter 3 was very good.
Yes, yes. But the wedding season was also fine.
So this quarter, there were anyways 10 days less number of days were also less -- but you want to be able to put a number.
I think your question is more about the contrast between quarter 3 and quarter 1 and quarter 3 was a good quarter and the wedding season was also good in that quarter. So I don't see a conflict in the correlation there.
Maybe the data that I had, there was a lower number of wedding dates then also, but I'll take this offline to discuss further.
Fair enough.
The second question was just to understand and clarify. Of the soft luggage that's produced in Bangladesh, do any of the brands have a much higher share or it's equally spread across the thing?
If your question is coming from the quarter 1 and the point that I made, the plant that we lost had a higher index on the IP and Skybag production. This is the plant which is -- was our oldest plant in that, and this was the first one. And therefore, this is where we were making largely the premium ranges and high design intense ranges were done in this particular plant. And therefore, the challenge that we are having to get it streamlined from alternate sources.
Got that. And last point was that on the gross margin side, you did mention about the value segment also in a way compensating for some of the benefits. Is -- from a channel perspective, e-comm also somewhere a drag on the GM or that is not something that is overall relevant from a GM perspective?
No, it's not a drain on the gross margin. But definitely -- I mean, I'm changing -- I'm trying to tell you something different from your question, but it is also an opportunity there to make more premium sales happen, and that's something that we are pursuing simultaneously.
The next question is from the line of Akhil Parekh, Centrum Broking.
My first question is on the premium range, specifically Skybag. If I look at the contribution of Skybag used to be 40% prior to pandemic and has now come down significantly down from that percentage. So any specific challenge, is it to do only with the demand situation where the demand for the mass range continues to be very strong? Or is it to do with the higher competition from likes of American Tourist or Samsonite? That's my first question.
Yes, the combination of 2, 3 factors. One, the demand at the bottom of the pyramid, the value range is -- actually has been higher in the past, and that's how Aristocrat and the value range side up. Second factor, which is more playing in this quarter is a nice part of buyback and VIP, which was the supply issue that we spoke about. These are the 2 larger issues as far as the Skybag performance for this quarter alone. I don't think it is much of a competitive issue because I think the brand Skybag is quite strong and is doing very, very well. So it is the relative growth between mid and were higher in terms of risk or the value end is higher as and our recent issue on supplies, which is passed up by back on this quarter to be muted.
Okay. Second on the EBITDA margin guidance through about 15%, 17% is what we are targeting for this year. But if I look at it historically, for many years, first quarter has been the best quarter for us in terms of sales margins. If you look at contribution of sales and also be range 30% to 32%, and PBT contribution has 35%, 40% for the fourth quarter. So if I just do rough math if you were to achieve 15% of EBITDA margins on blended level for FY '24, you will have to do almost around 17% of EBITDA margin for subsequent 3 quarters. Do you say this is feasible?
Yes, I think it is feasible because it's going to flow in from the margin. So the gross margin is important. And if we were to get a 50% to 53% gross margin in the coming time, we should be able to -- given our -- on the fixed cost and the things that we can do there differently from how it was in quarter 1. I think it's quite feasible here.
Also, if you see from last year, the Q of quarter 1 only is also changing.
Yes. But I think FY '23 was the only exceptional year. Like if I look at the long-term...
I'd say post-COVID things have changed. So we foresee that may not be -- quarter 2, quarter 3 also are equally going to be reasonably bigger. And quarter 3, especially, definitely will be bigger or at least equal to Quarter 2
And last question is on the gross margin for this quarter, how much is because of the interior product mix and how much is this because of the higher discounting which probably have given during the cost?
So mainly mix impact is 2% and discount or realization, 1.6%.
Our next question is from the line of Nitin Gosar from Bank of India Mutual Funds.
Well, team I do appreciate the quarterly challenges that the company is going through. But I fail to understand over the last 6 years, while the absolute revenue growth has been only INR 700 crores for companies like us. And for us, [Indiscernible] within this industry was far smaller, has also done a superior revenue growth, which is more than INR 200 crores over the last 6 years during a similar time period. What's been the progress is over there? Where are we in terms of scaling up the revenue? What are the shortcomings? How are you trying to address that? While quarterly challenges do exist, that's well understood.
Right. No, very interesting question. And I don't see it the last 6 years in a distinct only because I think in between forward and the pandemic and what impact it had on within the industry and for companies and for different companies within the industry has been very different. And I think for VIP, the way I see it is that how the next 3 years is going to pan out and what are the growth levers that we are working on. And our confidence on the long-term prospects basis, the fundamentals that we are making strong in the company. So a very different things has happened post COVID now. This is our manufacturing strength, we are gaining traction in the value segment and which was not the case before. And that, I think, is -- the needle has moved significantly there, right? I think the other part is will be to look at as premier and thereafter, mostly the premium segment where we need to make a big dent in to it's a smaller part. Also look at we are eagerly -- we are poised well to in the longer run to really tap the big opportunity in both backpack as well as the ladies handbag right? So there is -- there are other growth avenues, which are -- which has been worked upon right now to see how we are going to scale up in the future going ahead. So I think that are the ones which are the pivots on which it is going to grow in the future. The explanation on the last 7 years, I think because of the pandemic disruption, the companies that you're talking about within the competitive set has had a very different opportunity and their ability to tap into that opportunity.
I appreciate that. But sir, we also have to acknowledge the fact that as a resource, our size of organization has more resource, we have 4 brands versus [Indiscernible] has only 1 brand. And this industry provides your opportunity in bags because it's a consumer discretionary space. So opportunities will also come in bags and if you feel to concuss this opportunity in bags, then we'll have to again with the cycle.
So you're absolutely right. And I don't think there is a question of failure going ahead in the long term to tap these opportunities that we just spoke about. And yes, you are absolutely right, having a house of brands and the other assets that we have are going to be significantly instrumental in making us tap that opportunity better than others.
Sure. And sir, last observation. I think I also concur with the fact that one of the participants earlier had questioned advertisement spend ahead of supply chain resin. I think we need to also revisit that inclination to spend heavily on the advertisement because in last 5, 6 years, that advertisement spend has been continuously been high. But I think having a 4 brand portfolio will always -- will keep pushing the company to spend more, but ROI needs to be questioned on those investments.
Sure. I mean I'm taking that as a comment. And yes, that's something that we continuously keep a watch on. And it's not a one-quarter decision. I think overall, we will invest in one quarter, and we will not invest in another quarter. These are strategic investments are not tactical for the quarter. And I think it does pay off in the long run.
Our next question is from the line of Nisarg Vakharia from SUD Life.
My question is on Caprese. So we have been very aggressive on that part from past couple of quarters. But this time around, I haven't seeing any slide on Caprese launches or anything else as well. So any comment on that?
The only comment is the slide, and we would send you separately on that. I think we continue to be aggressive. We're not seeing us spending a lot of money in advertising. But once again, I think the more the work that is happening is making sure we get our product right, we get our organizational right on a go-to-market, right? And that's going at a very good -- it's on a very good wicket right now. But we really haven't started investing behind that to grow revenue at a fast pace because the foundation to be created was very, very important. And if you would research or look at the range that we have launched in the spring/summer collection, '23, I think it's got excellent feedback. In fact, we noticed in the online portals and otherwise also our full price sell-through on Caprese range has been far better than the industry standards. But it's still at a very small scale right now. We'll scale it up in the coming year in a big way. I mean, in the next financial year in a big way.
[Operator Instructions] Our next question is from the line of [Indiscernible].
My question was answered.
that was the last question for today. I now hand the conference over to Ms. Neetu Kashiramka, VIP Industries Limited for closing comments.
Thank you, everyone, for taking out time and joining the call. In case you have any other questions, you can call me anytime. Thank you.
Thank you. That concludes this conference call. Thank you for joining us, and you may now disconnect your lines.