V I P Industries Ltd
NSE:VIPIND
| 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 |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| 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 |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
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 |
432.1
609.95
|
| 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 |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
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 |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
V I P Industries 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 VIP Industries Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Pratik Patel from Adfactors PR. Investor Relations team.
Thank you, and over to you, sir.
Thank you, Robin.
A very good evening to everyone, and welcome to the Q4 and FY '24 earnings call of VIP Industries Limited.
From the senior management, we have with us Mr. Neetu Kashiramka, Managing Director; and Mr. Manish Desai, 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 risks and uncertainties.
Thank you, and over to you, Ms. Neetu Kashiramka.
Good evening, everyone. Thank you for joining the call. As you all know, we have announced our quarter 4 results today. And I'm very happy to say that after a long time, we have grown by 15% revenue, and it's -- so whatever I promised that we'll be doing a double-digit growth, I think we have done. And volume growth here is 14%. Secondary sales is also healthy, same as primary.
If I have to talk about channels, e-commerce channel continued in the growth trajectory, it actually grew more than 9 months. So we grew 143% in the quarter 4 for e-commerce. Even offline channels like general trade started growth. International business also paid growth in this quarter. We opened 14 EBOs during the quarter. The total count now stands at 507 with few not making outlets closed during the year. Overall penetration, 1,300 towns today -- we have 1,300 towns overall. And our distribution strategy, as mentioned earlier, will be focusing on the stores and leveraging the existing distribution instead of expanding further because I think there's a lot of room to expand the throughout in their existing stores. And we have also done some connects with the consumers by doing a successful dealer distributor needs. We also did backpack road show during this period.
And overall, if I have to summarize for the year, we grew by 8%. Volume growth was 11%. International business, which for 9 months was lagging behind also started uptick in quarter 4.
Value segment. Aristocrat actually touched INR 1,000 crores club in this year. Premiumization of Carlton did very well, it grew. However, VIP and Skybags, I think, some more work to do. And with new launches, which we did in April, I think quarter 1 should see some results on VIP and Skybags. And Aristocrat, as we said, will definitely serve at the lower end of the pyramid. Caprese also grew this quarter very well. It crossed INR 100 crore mark for the year. And I think what FY '25 -- base for FY '25 has set well, we are looking at growing FY '25 better than the market.
For Caprese, we have also signed up Kiara Advani. We're also looking at extending our VTM for backpacks. Backpacks and duffels are other 2 categories, which I mentioned earlier also that we are looking to expand to utilize Bangladesh better.
Gross margin for this quarter was 50%. I know it's not encouraging, but there is no discounting in this. What has happened actually is the share of business from Bangladesh has reduced and 5% of the impact on gross margin is mainly because of that. EBITDA 2.3%. There are some one-offs, close to INR 15 crore is mainly because of one-offs, which will not be there as we move going forward. Fundamental demand indicators, air passenger traffic, hotel occupancy seems to be positive. Also, FY '25 will be the year of transformation for the company. As I promised, that first revenue will start and then profitability. I still stand on that statement, and H2 onwards, you will start to see profitability improvement -- meaningful profitability improvement. And yes, internally, we all know that some changes have happened in the team, and they're all geared up now to make VIP as a transformed organization starting now.
Yes, I think with that, I open the floor for questions.
[Operator Instructions] The first question is from the line of Rajan Shah from First Water Capital.
I have a couple of questions. Our first question is with a 50% gross margin. How do you plan to achieve your EBITDA margin guidance to reach 18% to 20% over the next 12 to 18 months? And my second question is around your inventory level, which is in excess of INR 900 crores as of FY '24, what are the plans that you have in place to reduce these inventory levels?
So on the first question with 50% gross margin. I think gross margin is down mainly because of underutilization of Bangladesh. In H2, the utilization will start improving. And my guidance for the current year is 15% for EBITDA. And for next year, it is around 18%. So I think we still go with our guidance of 15%. So H2 will see a substantial upliftment on the profits. And what was the second question? Yes, inventory. So out of the INR 900 crores of inventory close to INR 300-odd crore is mainly soft luggage. And we have stopped producing soft luggage upright. And every month, I think we are selling around INR 50 crores worth of soft luggage inventory. So it is a 6 months of inventory. So I'm not in a hurry because this is not an old inventory, and we'll not be doing too much of discounting to sell this. And I think by end of the year, we are looking at reducing our inventory close to INR 200 crores by end of the year.
Okay. And I believe that you had also outlined in one of our analysts meet a strategy change to focus more on the premium segment, that the premium segment of the Carlton, VIP and Skybag on the price model INR 6,000, INR 7,000 for a cabin bag, it's a very small market, so do you have estimates on how large the market is and what percentage of that market share do you want to capture?
So today, 55% of our business is coming from other than Aristocrat, which is mid-premium and premium. Overall market in India is close to INR 1,000 crores, maybe 20% market is premium. So my idea is that if overall, today, we are at 55%, how can we make this 55%, 60%. That will definitely give us an uptick on the improvement in margins. And today, we are very small, like my Carlton share of business is just 6% in the overall portfolio. That can definitely become 10%. And we have done quite a few launches during this period, like in April. We have done launches in lightweight. We have done launches in sustainability. We have done launches in premium hard luggages.
The next question comes from the line of Jigar Jani from B&K Securities.
So elaborating on this gross margin impact. So basically, the Bangladesh capacity utilization was low, which has impacted gross margin is what you are saying. Is that understanding correct?
Correct.
And what would be your guidance for gross margin then for FY '25 overall?
FY '25, should be 52% to 53%.
Okay. And now, this employee expenses would include a one-off, sorry, I missed the one-off numbers that you have mentioned in your opening comments. Can you just...
Overall that number is INR 15 crores and INR 5 crores out of that is the employee cost.
And what would be the rest, ma'am?
This is in the other expenses, basically legal and professional fees.
Okay. And the one-off that we had to take that INR 5 crore is related to the employees that we let go on the Bangladesh.
Yes, yes.
So that is fully taken in this quarter?
Correct.
Right. And ma'am, just looking at VIP this quarter, there is a sharp degrowth even on a year-on-year as well as a quarter-on-quarter basis. Any specific reason why VIP has kind of so much sharp degrowth?
VIP brand?
Yes.
There is no sharp degrowth. So for the quarter, there is a 7% growth. And for the year, it's a 1% growth. So there is no degrowth at all. I don't know from where...
Okay, okay. There might be some number issue. Okay. And just lastly, on expansion strategy. How many EVOs are we planning to add, say, next year in FY '25?
So in FY '25, we are not going to add too many EVOs, we are looking at only close to...
Close to 35 to 40 EVOs, but more strategy will be to leverage on the existing strength what we have and to optimize the throughput so that we can convert or we can premiumize our brand or the throughput from there.
Okay, understood. And just last question, tax rate, what would be the steady state tax rate that you would see for FY '25?
So generally, we go -- what you're saying the ETR on a conservable on a higher side because of the unabsorbed loss of the subsidiary. However, on a stand-alone basis, it will be driven by the normal tax rate what we have, just 25%.
25%.
So stand-alone basis, 25%, right?
Yes, yes, yes.
And any update on the insurance refund for the [Indiscernible].
The efforts are on, and we are really hopeful that it should resulting to it. There are specific permission required being the unit in the [Indiscernible] unit or kind of [Indiscernible] unit, which is export oriented one. So that's getting more time, but we -- all focus is there to get to [Indiscernible] at the earliest.
I should see something around quarter 2.
Quarter 2, okay.
The next question is from the line of Shobit from Anand Rathi.
Ma'am 2 questions from my side. So first quarter, I think it's running below expectation for the industry due to [Indiscernible], so what matters are you confident of achieving double-digit growth in FY '25? And second question is, so how are we replacing this underutilization from the Bangladesh unit?
So one, at this point of time, Bangladesh will be underutilized for some time because soft luggage is upright, we have enough stocks. We are looking at expanding our business for backpack and duffels, but that will take some time. So a large part of utilization of Bangladesh improvement, you will start to see from quarter 3. Yes, Q1. So confidence of doing a double-digit growth for the year is behind 2, 3 things. One, we feel that by doing right, we will start to gain market share. And if the industry is growing and most of the people are saying that the industry will grow 12%, and that is the confidence I'm getting. I should do 1% or 2% better than industry. And that's how I'm saying that we should do another digit growth.
And travel is doing well, like travel, if you look at airline data, if you look at hotel industry travel, I think at this point of time, it is giving positive signals.
The next question is from the line of Jinesh Joshi from Prabhudas Liladher.
Madam, I have a question on our pricing strategies with respect to Skybag. I just observed on 1 e-com channel that entry-level CPs hard luggage of Skybags priced similarly to one of peers, which basically caters to the market. So I just wanted to understand our pricing strategy in Skybags given the fact that the brand positioning is more on the economy side, so when we were paying the discounting gain, why did we not use Aristocrat? And why did we go ahead with Skybags?
So Skybags strategy is definitely more with mid-premium and not opening price point. This particular range, what you are seeing, I know why. And that was mainly because the channel partners sold at lower than what price we sold them. So that was their investment and not and we have actually asked them to increase the price because that's also hurting my brand. And secondly, it's also hurting my other channels.
So the quote correction has happened, right?
Happen if you go today, you will not find it.
Sure. And Madam my second question is on gross margin. I know quite a bit of discussion has happened surrounding it. We are seeing that the gross margin has declined due to reduced share of the Bangladesh operations. But I believe we typically manufacture the soft luggage in Bangladesh and in which way the share of soft luggage have been declining because currently, the trend is more towards hard luggage. So in that case, how come a swing in Bangladesh can essentially impact our gross margins by 500 basis points.
So actually, your question has answered. If you see overall Bangladesh used to add, let's assume last year same quarter, Bangladesh added INR 36 crores to my gross margin, okay? Sorry, INR 72 crores. And for this, it is less than INR 30 crores. So that gap is what is changing the gross margin. So overall share of business of Bangladesh has come down. So Bangladesh stand-alone PnL, if I have to tell you the quarter, the revenue is INR 89 crores versus INR 175 crores. And the corresponding gross margin.
Got it. One last question from my side. The borrowings on our balance sheet have increased to about INR 530-odd crores, and I think that would predominantly be due to higher working capital given the signs that we have INR 900 crores of inventory on balance sheet. You have mentioned that we are aiming for a INR 200 crore reduction by FY '25. So correspondingly, should we expect the debt levels to also go down, or how should we look at it?
Yes, definitely. We are looking at debt to be around INR 250 crores.
The next question is from the line of Tejas Shah from Avendus Park.
Congrats on good revenue growth momentum. Now in the recent past, we have seen how industry like ours, which rely heavily on wedding travel, where there is no syndicated reliable data to understand demand forecast. And then it happened actually paid out in the last 6 months on making demand it still for many industries, which is associated with are associated with wedding-related demand. We have seen in our company also a source of demand forecasting going wrong. And in past, we have survived such a pursuit because of very strong balance sheet and cash on books. But now with very high inventory in the debt point, which was raised in the earlier question, do you still -- like first, what are the measures that you have taken so that this 12% demand that you spoke about, we are very sure of that coming through because I'm assuming that your inventory ordering also will be based on that kind of forecast. And second, one of the questions, let's say, for whatever reason if the demand doesn't come through, how are we trying to protect inventory balance sheet PnL, in case if macros are not enough in FY '25?
So one, at this point of time, we are very, very cautious on ordering RM for soft luggage especially. See hard luggage actually we are not having much inventory. It's generally 15 days -- even 15 days of inventory is not there today as we speak. And soft luggage now any RM ordering actually requires a signature from CFO or MD, as it's [Indiscernible] clear, zero ordering. Unless this inventory of soft luggage comes down to the level of 2 lakh to 3 lakh pieces, we are very cautious. And we understand we have a high inventory and high debt, both go hand in hand. And all our efforts are on to make this reduce, reduce both borrowings as well as reduced inventory.
But at the same time, you have also identified the problem statement, there's the freshness of the brand and inventory. So how would you manage this contracting objective where we have to add freshness to the inventory also. And at the same time, we have to reduce inventory also.
So business in production in the inventory will be on a soft luggage because that's a bottleneck, what we have, where if you look into hard luggage, what MD rightly said, we are hand-to-mouth kind of situations and Indian being done in such a way that we can go to the market and fill the requirement. More importantly, our objective is to go more localization, and that's why it becomes more -- supply can also become more robustic and more kind of technical in order to fulfill those kind of requirement. But yes, the challenge in terms of the new product launches and everything is still around, but I'm sure we'll work as we move forward in future.
Also about the new launches in hard luggage and all because that's the market's need on demand.
Perfect. And then second and last question on Bangladesh being the cause for not achieving our goal on gross margin trend, what will lead to this under recovery in second half as you called out. What are we seeing that will change from today, which will lead to this under recovery and Bangladesh utilization?
So one we're foreseeing our soft luggage inventory to deplete in next 6 months by September, and therefore, Bangladesh will start producing soft luggage. So earlier, we had a capacity of 2.2 lakh of soft luggage upright in Bangladesh. We have reduced it to 75,000. And today we don't produce at all. So once this inventory is over, there's an actual demand at least of 75,000 to 80,000. And we have already cut costs of 4,000 people to take care of only the relevant demand. But I don't want to reduce further because then I will not get the skilled labor, which I need to manufacture this 75,000 pieces.
Perfect. So this 15% margin, will it be much more back-ended in the sense? Should I -- should we expect that second half will be way above 15% so that weighted average will be 15%?
Correct. This is what I said in my statement also that H2 will see much higher profit as compared to the first half.
The next question is from the line of Bhavin Rupani from Investec.
I had 1 question related to raw materials. Sir my understanding, one the major proportion of cost in manufacturing hard luggage is the aluminum trolley, please correct me if I'm wrong. However, aluminum costs have increased almost 10% to 15% in the recent past. Do you think this will have a bearing on margins going ahead?
Not really 50% of our trolleys have actually have already become MST. We -- it's become fungible now. And overall, trolley cost as a percentage of the luggage is not substantial to make a dent into the profitability.
Okay. Clear, ma'am. And my second question is related to channel economics. Can you please provide the breakup of margins across different channels.
So I cannot give you the margins. What I can give you is range. So retail trade is the best margin contributor followed by BT. Modern trade and e-commerce as well. CMD is also close to retail. So MT and e-commerce go hand-in-hand with lower margins.
Okay, ma'am. And is it possible for you to give some sense on how much higher and lower the margins are considering maybe EPO as the base?
I don't think that much detail we can give.
You're asking for too much, sir.
All right.
I mean we are keeping it confidential because that's what we would like to keep the interest of our general partners also being intact with us and associates [Indiscernible], that's the prime reason nothing else.
Okay. And when you say retail is the best, it includes EBOs and MBOs? So both of them are equal?
No. So this includes only the -- overall EBOs. MBO is part of general trade.
Okay. Got it, ma'am. And then as far as capacity is concerned, last time you mentioned the 10 lakh pieces is around on hard luggage capacity, 7 lakh is around soft luggage. And as you have mentioned that we'll be taking it to 20 lakhs. So how should one understand that? What should be the group size now?
So 10 lakh and 7 lakh for soft luggage, 2 lakh to 3 lakh we are going to increase in hard luggage at this point of time.
So 20 lakh will be the hard luggage capacity and 7 lakh will be soft luggage capacity?
Yes, by end of the year.
[Operator Instructions] The next question is from the line of Deepak Saha from DR Toxins Private Limited.
Congrats on good set of [Indiscernible]. Just one question, if the industry is growing at 10%, 12% and you're targeting...
The line is muffled. If you could may use the handset, it should be helpful.
Hello? Is it audible now?
Yes.
This is much better. Please go ahead.
Sorry for inconvenience. So ma'am, the first question is, if the industry is growing at 10%, 12% and when we are targeting to 15% and plus, so it means we are definitely targeting the higher market share gain. So correct me if I'm wrong, that my understanding is probably we're targeting, as you highlighted earlier, also the premium segment. So is it the right understanding that you trying to gain more market share on the premium side?
I think it will be all because I don't want to leave even the lower end. And the good part is that VIP as an organization had brand across categories. So focus will be on all. However, if you see last 3, 4 years, in not grown in our premium and mid premium. So that is where we want that the growth in premium and mid premium should also be there also be reasonable. And not -- growth should not only be there in Aristocrat.
You calibrate our strategy to be considering the marketing front, right? So you can't behave differently than what market is asking for.
Yes, exactly. So on that side, again, now if you see on the premium side, typically, the perception that is built around VIP on the brand side. So what kind of improvements we are doing to align that perception regarding VIP towards the premium side? Because I think we will do certain sudden work there to get the alignment on the premium side as far as the brands are concerned, especially on the VIP side.
So mainly we'll be focusing on coming out with better products. So there is a 3-pronged strategy here. One is a lightweight product. The second is using technology, which is tech-enabled luggages and the third will be on luxury. Now under all these 3 strategies, we have launched something or the other in the month of April. I would request if you can go to our store now, you will find all of them. In fact, in the presentation also, we have mentioned what are the new launches in all the 3 themes.
Okay. Okay. That's helpful. And then one last thing. In one of the earlier con calls, you mentioned that you want to become a travel solution company. So by that. I mean if you can kind of share some picture on is there some additional products or something that you're coming up with, or something is on the plan? What exactly you are directing towards?
Strategy is in next 5 years' time, I think in FY '25 and '26, more focus will be on the existing getting back to our profitability and then look at additional growth. One or 2 things I can give you the example. We are looking to launch accessories in the second half of this year in a meaningful way. and some such things. So basically, when a customer needs anything and everything for a travel, he should be able to get into my store. But that's a long-term plan. My first focus is to get to 15% to 18% of EBITDA margin, post that, we will focus on the second piece.
Okay, okay. And just before I wrap up, I mean, just one last thing. What's your borrowing number? I think you said I kind of missed it. What would be the borrowing number for the year ahead?
So my net borrowing today is 485, which we are looking to make it half of what it is. So around INR 250 crores.
The next question is from the line of Dishant Rakesh Jain from Kohsar Capital.
Yes. Am I audible enough, ma'am?
Yes. Go ahead.
Yes. So I just wanted to ask another repeat question. So how much inventory we'll be able to sell by the end of -- reduced by the end of FY '25, you said, INR 200 cores, right?
Yes.
And this does not include the soft luggage inventory, right, so that's INR 300 crore plus INR 200 crores get to INR 500 crores.
So no. So today, we have INR 900 crores of inventory, which includes around INR 300 crores of soft luggage inventory. Out of this INR 300 crores, we are saying INR 200 crores will go down.
So by end of FY '25, INR 200 crores will go down?
Yes.
The next question is from the line of Subrata Sarkar from Mount Intra Finance.
Hello?
Yes. Please go ahead.
So just 2 clarifications I want to understand on the margin, what you are guiding when you are talking about 15% kind of EBITDA margin, is it little bit margin for Q4 FY '25 you are talking or you are talking about the full year EBITDA margins, this is number one. And number two, same clarification, like when you are guiding for only 2% improvement in gross margin, like how -- what is the method behind like reaching to 15% EBITDA from 2%?
So there are a lot of high cost, I think, below EBITDA. One, warehousing cost is today my inventory is an all-time high. We are incurring huge on the warehouses -- warehousing cost. My freight is high because I'm incurring detention charges, some of my warehouses, and there is no space, the truck comes and stands for 5 to 6 days. So all these costs, which are sitting in the other expenses will come down. If you look at FY '23 to '24 numbers, you'll be able to get that there's a huge gap. In fact, I can tell you, my other expenses in last full year was INR 500 crore versus INR 700 crore now. So there is a INR 200 crore delta sitting there. I can definitely get INR 100 crores delta out from their immediately. Immediately, I say H2, and to do a lot of work around it, but that's something which is sitting there. So that's the plan.
Okay. And then you are guiding like 15% of EBITDA margin, is it Q4 EBITDA or for the entire FY '25?
So Q4 EBITDA should be 18% and not 15%.
Okay. H1 also like there should be mark improvement on this 50%, at least?
Yes. Total 50% improvement, you will see, I think, starting from where I was.
Yes. What I was saying, madam, if you are guiding for, let's say, 15% and Q4...
We request you to please rejoin the queue for further questions.
No, I was just asking for a clarification actually. When you are guiding -- yes, when you are guiding for like 15% overall EBITDA for the year and 18% EBITDA for Q4, then your EBITDA should be at the range of at least 10% in H1 also. So is it right to understand that we are in a revision to do that?
Yes, we are.
The next question is from the line of Jigar Jani from B&K Securities.
I just wanted to understand this Bangladesh gross margin in a little bit detail. So ideally, your capacity utilization shouldn't really impact your gross margin, it will be below bottom line in terms of expenses. So just to understand this is because your soft luggage production has stopped in Bangladesh, and you are manufacturing more duffel and backpacks there, where the overall gross margins are lower...
What happened is Bangladesh used to add, I explained also, let's assume INR 75 crores last year was added by Bangladesh gross margin, which has almost become half in this quarter, line to line. And that is the reason for reduction in the gross margin.
Yes. But per unit gross margins in percentage terms will change, right, I mean?
But we are not here the NDS or the accounting standards are not per unit. I have to add 2 PnLs when I add in Bangladesh. So my -- if you look at my standalone results, the gross margin is flat.
Yes. So that's what I'm saying. I suppose you are making stand-alone margins of 50% and Bangladesh was making, say, 40%, just giving numbers, that 40% will only change when you...
I don't think that I can explain this like so easy, in the Excel I can...
I will take it offline. I'll take it offline.
Yes, just contact with Manish and understand from him.
The next question is from the line of Bhavin Rupani from Investec.
So ma'am we have been refurbishing certain stores in India. What changes have you seen post the refurbishments? Can you please share your insights and observations on that?
It's too soon for that because it takes 3 to 4 months for refurbishment. But I can say the stores which we refurbished 6 months ago, definitely has seen a much throughput. But we can't say that is because of refurbishment. It can also be because I have better portfolio, better products. So -- but yes, it's too soon, like some of the refurbishment has just happened.
And what would be the expenses that we incur to refurbish a store?
Not all stores have been refurbished already. I think we have a budget of around INR 10 crores, INR 12 crores for the year to do that.
INR 10 crores to INR 12 crores include how many stores, sir?
It all depends upon what kind of refurbishment [Indiscernible] see if I give the average INR 13 lakh to INR 14 lakh to go into it, that's what the lot of store will get into refurbishment.
And my second question is related to e-commerce, what is our target proportion in e-commerce that increased significantly over the last year, but what will be the target?
E-com is at 22, industry is at 25. I think we will move with the industry.
Ladies and gentlemen, that will be the last question for today. I now hand the conference over to Ms. Neetu Kashiramka from VIP Industries for closing comments. Over to you, ma'am.
Thank you, everybody, for joining the call. As said earlier also, I think me and my team are all here to make VIP successful. Please bear with us for 1 or 2 more quarters. I think starting H2, you will definitely start feeling happy along with revenue, we'll also get bottom line -- meaningful bottom line. And that's what I can say. If you have any other questions, you can connect with Manish, especially on this gross margin thing, maybe he can explain. Otherwise, thank you.
Thanks all of you.
Thank you. On behalf of VIP Industries Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.