As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Yash Jain from Ambit Capital. Thank you, and over to you, sir.
Thank you, Sarthak. Hello everyone, welcome to TTK Prestige Q2 FY 2026 earnings call. From the management side today, we have Mr. Venkatesh Vijayar aghavan, Managing Director and CEO, Mr. Shankaran, Advisor to the Board, and Mr. Saranyan, the Whole Time Director and CFO. Thank you, and over to you, sir, for your opening remarks.
Good evening. This is Saranyan, Whole Time Director and CFO. Before I hand over the proceedings to our Managing Director, I just want to remind our participants on the safe harbor clause. The discussion today may contain certain statements which are futuristic in nature. Such statements represent the intentions of the management and the efforts being put in by them to realize certain goals. The success in realizing these goals depends on various factors, both internal and external. Therefore, the investors are requested to make their own independent judgments by considering all relevant factors before taking any investment decision. Thank you, over to you, Venkatesh.
Okay, hi, good afternoon. This is Venkatesh. Let me start with the external environment, probably a view on the overall economy, and then probably get on to specifics around the business for the quarter. Like we've all seen, I think the overall economy seems to be on a robust direction, backed up by sort of statistical numbers coming in from various quarters, a good projected GDP growth from an overall economy perspective. This is backed by a lot more vibrant demand that we're seeing on the ground, followed with a lot of policy changes, including the recent GST-related changes that have happened, which seem to be positive to the overall consumption scenario per se. So overall, the external environment in the domestic market seems to be sort of on a positive track, enabling therefore the right set of business levers for most of the business and categories across the country.
The turbulence around the outside of India scenario continues to be there, with a little bit of uncertainty around tariffs and also a little bit of impact because of some of the war scenarios across some of the geographies. So the domestic market seems to be on a robust growth path in our view, while there has been a little bit of turbulence in terms of the external environment, which we do believe at some point of time should stabilize. With regards to the environment impacting costs, there have been continued pressures on raw material. We see that there is a sustained pressure on the raw material pricing, very specific to our category as well. So that's an overview that I would say from an overall perspective, a robust demand scenario being projected across most key categories.
We do believe that it's in a good phase of growth, and that can be capitalized upon as we move forward. Specific to our company and our categories, I think the quarter has been a very good quarter. Overall, we've done around 11% top-line growth, followed by a robust operating EBITDA growth as well. This has been, the last few quarters have been a journey of a transition, as we know, in terms of management, in terms of some of our on-the-ground strategies that we have deployed. We're quite happy to see the starting of this fructifying a little bit, and we're quite confident as we move forward, things will move in the right direction. From a quarter perspective, the demand has been robust across categories, across channels, and that sort of has helped us leverage the growth forward.
We've seen a significant growth in the appliances, along with kitchenware as well. Some of our earlier drags that we had in terms of our MFI channel still continue to be a challenge, and I think that's one thing that probably sort of is still to be seen. While we do see that most of the other channels have started bouncing back again, including general trade, e-commerce, we also see a little bit of a growth coming back on the CSD channels as well, as we mentioned in our reports as well. The pressure on pricing continues to be there. The category sees a lot more intensive action across competition, particularly in the mass end, while the premium end is sort of consolidating and seeing a lot of good growth happening in the premium end as well.
Exports continue to be subdued, driven by a lot of challenges around the global scenario, like I mentioned before. In our view, exports would be a subdued scenario till the global scenario sort of gets altered, and then probably we could see some shoot-ups coming in from there. From an overall quarter perspective, we believe that it's been a good quarter, driven by a robust top-line growth backed by demand and also go-to-market corrective actions that we've taken in the last few quarters. We've also initiated a lot of strategic initiatives which have helped us save, helped us sort of optimize the costs as well, and that's a parallel track that we've been running.
Overall, it is a good quarter, and we're quite happy about that, and the market demand seems to give us the positive vibes that we should be able to continue in a positive direction as we move forward. I take questions from here on.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aniruddha Joshi from ICICI. Please go ahead.
Yeah, thanks for the opportunity. Really great set of numbers this quarter. So just wanted to understand, was there any one-off in terms of the margins or any growth, like some of the channel had seen some inventory buildup or like that? Or do you see now there is a structural change in terms of the way the growth rates are looking at for the company? Because we have seen growth across all the three segments, so in a way, it's an encouraging result. So is it a sustainable numbers, or how should we look at the numbers now?
So I don't want to make a very futuristic statement on that. I think I would definitely say that there are no one-times here, both in terms of any financial numbers or in terms of margins. There are no one-timers. I think it's a sustained effort, and it's driven by both seasonality and, like I said, a lot of strategic initiative changes that we have brought in. I wouldn't want to put a number to it, but we would definitely be in the positive direction of growth.
Okay, so in a way, I mean, so any new product that is driving the growth or any particular region that is driving the growth, east, west, north, south, or rural-urban, if you can share any breakup on that?
So the way the construct, I'm sorry, you were asking a question, sorry.
No, no, no, sir, please go ahead. Please go ahead.
So the way I would see the construct is the demand is being driven at a channel level. The demand is being driven by e-commerce and quick commerce, which has been the case for the last couple of years, I would say. So it is being driven by e-com, quick com, followed by the large format stores and a lot of standalone large outlets to say. In the stack of growth, if you were to see, general trade sort of has been flattish, and that's the change that we have brought in. Our general trade growth is around 2%-3% now. So that's the change that we have brought in, given the efficiency drives and some of the strategic changes that we have made at a channel level.
From an industry perspective and a category perspective, I would say the growth is being driven by e-com, quick com very aggressively. I think that's point number one. And in terms of categories, across categories, we are seeing this growth, or we're seeing the demand, regional rejuvenation across categories. I would call out probably small domestic appliances as one category where there's been a robust growth. It could be in terms of air fryers. It could be in terms of kettles. A lot of small domestic appliances, we are seeing as a portfolio growth, a very strong growth, which is under our appliances category today, so categories also, we've seen sort of a uniform growth happening across the segments. We do see there's a lot more thrust or movement happening towards higher price points as well.
So I think from a trend perspective, I would say premiumization backed with the value growth, aggressive channel push that's happening through e-commerce and quick commerce as well. And the third I would say is call out one category, if not, that's a small domestic appliances category, which seems to have a disproportionate growth. I would also say that over the last few quarters, we've also sort of ramped up our portfolios in terms of cookware as well as in terms of appliances, and that portfolio addition is also helping us grow. So I think that's the overall growth story that I would say. Geographically, we don't see too much of difference. We see the entire country sort of growing. There might be a little east, probably slightly slower growth, but the growth is actually uniform across the country. We're not seeing very visible differences across the country.
Sure, sir, this is very, very helpful. Just last question, should we consider that we would have gained market shares across the key segments or products, or we would have largely grown with the market?
I would probably wait for the numbers to come in. Probably next time, I could talk to you with some firm numbers on that. But I would suffice to say that I would say that in the last few quarters, we have gained market share. This quarter specifically, I wouldn't be able to answer that question, but directionally, we have been gaining market shares in our core categories.
Oh, sure, sir. This is very helpful, and many thanks.
Thank you.
Thank you. Our next question is from the line of Sameer Gupta from India Infoline. Please go ahead.
Hi, good evening, sir. Congratulations on a good set of numbers, and thanks for taking my question. Firstly, sir, I see you mentioned the term seasonality in Aniruddha's question. So just wanted to understand, there is an early festive this year, and typically in categories where we operate, there is an initial sell-in to the channel. So that could have led to some positive impact. Just if you could quantify, if you have the numbers as to what kind of impact that would have had positive, so that it's easier to model for us.
No, I think it would be difficult to estimate from that perspective, but I would just put in a sort of number to you that there has been a period when there's been a little bit of change because of the GST change that happened. There's been a period of lower sales that happened. So I would say that this number captures the seasonality as well.
Got it. You're saying the disruption due to the GST change?
Yeah, there was a significant disruption. There is a significant disruption in this month.
Got it, sir. That's fair. So that comes to the second question then. So if you could just quantify the proportion of sales which have benefited due to the GST rate reduction in our company, is it largely the cookware division, which is 17% of sales? And is the reduction blindly just 12%-5%, or are there categories where there have been a larger reduction as well?
See, this GST reduction is primarily in the kitchenware, which includes both cookware. The reduction is across the similar percentage. It used to be at around 12% for the cookware. It has now brought down to 5%.
So that would mean that overall, it's around 50% of your portfolio, which would have really benefited out of this.
That's right. Yeah, close to 50%. Yeah, that's correct.
Got it, sir. One more question, if I could squeeze in.
Yeah, please go ahead.
So, sir, we have seen a gross margin expansion now for the last four quarters, around average of 120 basis points. This is the reported number, the sales minus the COGS line, which I'm looking at. Now, given that this is the fourth consecutive quarter, do you see this anniversarizing from next quarter onwards, or there are some structural tailwinds to GM expansion, which may continue in future, let's say, mix or some structural things that you have changed on the ground? Your thoughts on this, sir.
So two things. One, I think a good observation that the gross margin is moving up for us. There have been some changes that we have been able to do on our portfolio. And like I said, we've been sort of filling our portfolio with some products that we did not have in the past, which are reasonably good margin products. Having said that, I think there are a little bit of challenges in that as the cost of input keeps rising, and we do expect the second half of the year to be impacted by the cost increase that would happen from the input prices, input metal prices. So that would sort of put pressure on the margins as we move forward.
But you would offset that by some price increases as you have done in the past?
Directionally, we always done it, but I think that's a call that we take based on the market scenario. Over the past, we have done that, so we should be looking at that as we look at the market, we'll take that call.
There could be some lag between our prices.
And there will definitely be a lag between the cost impact and the price impact.
Yep, got it, sir. That's all from me. Thanks, and again, congratulations on a good set of numbers.
Thank you.
Thank you. Our next question is from the line of Naitik Mutha from NV Alpha Fund. Please go ahead.
Hi, sir. Thanks for taking my question, and congratulations on a very good set of numbers. So my first question is, you mentioned that in the last couple of quarters, you have taken some strategic initiatives and made some certain changes, which has actually given you the benefit of the growth now. So can you highlight or mention a couple of them so that we can better appreciate the effect of these changes over the coming quarters?
So we've had two tracks that we've looked at. We looked at our cost base, and we've also looked at our channel efficiencies as well. From a go-to-market perspective, we've implemented a couple of initiatives that have direct bearing on the way our efficiencies in general trade work. We've also enhanced our focus on large format stores and e-commerce, quick commerce channels as well. These are two big levers, I would say, and we've also been able to sort of start ramping up our own retail stores. These are three big things that I would say, or callouts that I would say that we're working on consistently. The company has always worked on these, and I think we're just accelerating this process right now. From a cost perspective, we are looking at optimizing our cost base. Very early shoots.
I think we are more focused on making some structural changes that would help us leverage our cost base. I do believe that over the next few quarters, it would start to see fruition as well. So that's probably the structure. The third one that's helping us is the Judge brand. Judge brand continues to grow at 50%. So that is one lever that seems to be working for us.
Got it, sir. Actually, my second question is, if you could give us our channel split for the quarter, that would be helpful.
See, the channel split will be between large format and e-commerce will be around 32%. Then the general trade will be close to around 40%. Our retail, exclusive retail will have around 15%. The rest comes from CSD and the other institutional sales.
Nice. And sir, when you mentioned LFS, is it different from GT, or it should be a part of GT? How is it different from GT?
No, it is a large format stores for us as part of the modern trade format.
Okay, got it, sir. Got it.
Very important.
Got it, got it. That's it from my side, sir. Thank you.
Thank you. Our next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Hi, very good evening, sir. Sir, I just wanted to understand the sales growth better. You mentioned there is seasonality. You mentioned there was certain GST disruption. Despite that, you've shown double-digit growth. 50% of the portfolio got changed onto GST rate reduction. So my sense was because of that, there would be deferment, but appliances and other segments would have not seen disruption. From a value versus volume growth perspective, because you also mentioned that this growth looks sustainable as of now, broadly speaking, from a value versus volume growth and more from an industry perspective, kitchenware, because SBA has not been a very great category because too much competition, I think, over the last few years post-COVID. So could you just give some more color on how could this 10%-11% double-digit growth look? It is a positive surprise, but just wanted to understand this number better.
Okay, so I'll split this conversation in two parts. This growth is largely being led at this point by volume growth. We haven't taken too many price hikes in the last few quarters. So I would say 70% of this impact would be from volume. The balance coming in from price. Second, like you said, the disruption has been there because of billing-related issues and other stuff, which possibly would sort of get, which is what neutralized the seasonal benefit that we should have sort of got fully. The growth remains robust, and I would hazard a guess that it's same for the industry as well, because I think we do see that there's a demand coming in. One, and two, very clearly, there are specific initiatives that we have taken at a company level.
So I think to that extent, while I don't want to comment on the sustenance of the number per se or a commitment on that, I would suffice to say that I think backed by specific company initiatives, backed by a robust demand from the category perspective, kitchenware seems to be driven by volume, and that seems to be a good story at this point of time.
Got it. Did early festival season also help positively?
It did help, but like I mentioned, it got neutralized by a little bit of the disturbance that happened from a calendar perspective.
Got it. Perfect. And just secondly, when I look at cash flow, I think the CapEx investment, which we have been talking about, I think OPEX is already running at about INR 17-INR 20 crores a quarter, but I think the CapEx investments have still not started. Just a few comments on that. And secondly, on the cash conversion cycle itself, looks like there is some bit of inventory build-up which has happened on the balance sheet. Could you please clarify? How do you look at the cycle?
See, the CapEx, we have been started incurring. I think we have already incurred close to INR 30 crores in the second half. Sorry, first half. So that will start continuing as we move forward. With respect to your query on the cash flow, yes, there are certain because the prices of aluminum have been going up, we have been investing on strategic buying of some of the aluminum to help us to mitigate some of the cost increases. So because of that, I think there has been a drop in the cash accrual as well.
Got it. So very clear on the convergence. Just to follow up on the CapEx, so you said so INR 30 crores, I think INR 50 crores, INR 60 crores is anyway the annual number which we spend. I was talking more to do with the additional allocation which the company has given.
On the capacity expansion, the first INR 30 crores have been deployed, which we reported last month or so, which is an expansion of our cookware unit in Karjan, Baroda. The rest of it will follow with a series of actions over the next few quarters.
See, the number what we are given is for a period of three years, the CapEx deployment what we had mentioned.
Got it, sir. Thank you so much, and best wishes for the balance of the year.
Thank you.
Thank you. Our next question is from the line of Resha Mehta from Green Edge Wealth. Please go ahead.
Thank you. So the first question is on the channels, basically. So I think to one of the previous participants, you had called out that you had given the revenue mix by channels. So does that broadly hold true even from an annualized level perspective?
Yeah, more or less, it will be similar even on the annualized basis.
And so CSD has seen a double-digit growth, but I think it was undergoing inventory rationalization. So is all of that behind? And from here on, structurally, do we think that all those problems with the channels specifically are behind, and probably it is poised for growth from here on?
So I would say the rural what we had mentioned about MFI, we are behind that. We are behind that in the sense the impact is gone, but we don't see the channel coming back robustly as it used to be in the past. The structural issues continue. Our impact is minimized. As we move forward, that's more of a time-based issue. CSD, I would wait and watch. We are not too confident that it's fully come back again yet. That's something that I would take a wait-and-watch approach as far as that specific channel is concerned.
Okay. And after a very, very long time, have seen some very healthy addition for the PSK stores, almost 25 stores added sequentially. Anything specific to read here? Because otherwise, the GT and the PSK channels have largely been very low single-digit growth kind of channels. So anything specific to read here?
So we are quite bullish about our exclusive stores, and expansion of stores is one specific initiative that we have called out, and we would continue to be aggressive on expanding the stores in a more, I would say, in a more planned manner. We would continue to expand. The company has been doing this for a long time. So I think that's one lever that we would continue to be using aggressively. So these numbers would continue to grow.
But the new store addition, would it be safe to assume would be largely outside the south, or would it be in the existing southern markets largely?
It's a combination of both. So we don't look at it as south, non-south. We look at it more as the top cities versus the smaller cities. I think if I were to take a national view, the top cities seem to be giving us more demand, more geographical gaps emerging because of the city expansions that are happening right now. So I wouldn't say it's purely a south-based phenomenon. It is more to plug the gaps in the top cities and also expansion that's happening to tier two, tier three. It's an equal bet that I would lay on both new town expansion as well as filling the gaps in the existing towns.
So the modern trade, e-com, quick com, salience was at around 32%, as called out. Can you break this up between these three sub-channels?
So these information are a little confidential, so we don't want to share it in the open forum.
Right, and so since the last few quarters, we had lost some market share, then we tried to fill in the product gaps that we had, and now we're seeing that we are gaining market share, but on a net-net basis, would it be safe to say that we've recouped all the market share that was lost in the last couple of two years or so?
Yeah, I would say let's take this as the time flies. I don't want to now sort of put a number to it, but directionally, we are gaining market share. So I don't want to sort of put a number to say I've gained fully halfway through. But I think the job remains to be done, and we are quite confident about it. Directionally, we are gaining market share, and that I think would be a bold position that we would take right now.
The last one, if I may, basically on our U.K. business. So it seems to be range-bound and marginal or maybe marginally loss-making. So what are our thoughts then? Do we want to continue the business or eventually take a call that if it does not turn around or let's say does not meaningfully look at contributing to the bottom line, then maybe we would want to exit that business? And also on a similar line as far as Ultrafresh is concerned. So what is the thought process there? Because it's also been subscale after so many years. So just your thoughts on these two parts of the business.
These two occasionally may have certain objectives in mind. The U.K., unfortunately, went through a very bad phase. We invested in the U.K. It was bouncing. Had to invest funds, then Brexit came through and everything came back. I think basically it's a country-specific issue, not the business. It is robust. Because I would remind the top seller there, let's take a call. We can have counsel on the phone what the strategy is about what we want to do there. We have a long-term view on all these reasons. We are continuously reviewing that. It may look like an eyesore. It's not a millstone. It's not drawing our energy or money anywhere. We'll give a little extra time, then see what we need to do.
Ultrafresh, we can't do.
Similar Ultrafresh, I think it is like a startup. I think they are in the investment mode. This will be like that for a couple of years, then they should start stabilizing that. I think it's too early to comment anything on Ultrafresh at this point of time.
We don't want to be impatient. The market has to be patient.
But generally, how much time would we want to give to the businesses that we have?
Mostly in the manner my management activities can do, it is not so. It is independently managed. They are not drawing on our resources. They are very minuscule in terms of this one. How it is managing its own cash flows? There's nothing alarming at this point in time.
So we would give them the time. We are not time-bound on these decisions right now.
We don't want to get immediate reaction because it may appear certain distractions from the investor point of view. From the company point of view, they are being run independently. They don't distract our time on the domestic market.
Sure. Thank you, and all the best.
Thank you. Our next question is from the line of Madhav from SKP Securities. Please go ahead.
Yeah, hi. Thanks for the opportunity. So sorry if I missed this. What is your top-line guidance for the second half? Firstly and secondly, I wanted to know that in your overall revenue, how much is the contribution from this white-label sales? So if there is any, so yeah, these two questions.
So the white-label sales or exports, as you called it, is very insignificant. It is less than 1% of our total sale, I would say. With respect to a forward projection, we wouldn't want to do that. We wouldn't want to do a forward projection on either growth or profit.
But just directionally, is it going to be higher than the first half? Or if you can just directionally, if you can give a picture based on what you are seeing currently, based on the October sales and all?
See, we are seeing growth in the last two quarters. We will continue to see growth, and we don't want to contribute anything in your guidance at this point in time.
Okay.
Thank you. Our next question is from the line of Praneet, who is an investor. Please go ahead.
Yeah, hello. Thank you for the opportunity and congratulations on the great performance. So I was wondering, we had a substantial performance in both the Judge brand and in terms of the exports. Could you give some more light on what exactly happened in both of these to have the supernormal growth compared to the rest of the overall company? And Judge, you mentioned that you're doing specific activities that are causing you to grow higher. Could you explain what are those specific activities? And in terms of exports, how much is the white-label? Are we onboarding new customers? And could you explain more something on that also?
No, exports, like we said, exports is based on some of the demand generation that happened in Q1, but the demand could not be sort of serviced because of logistics issues that we had from external environment. On a very small base, we seem to be doing business on exports, largely white-label. So I think I would take a cautious note on that as we move forward when the external disturbances in the global market from a white-label perspective. The other question, I think we did mention about the initiatives that you said. I think we've had substantial initiatives in both go-to-market as well as cost saving that is helping us sort of put some sort of a thrust area into the growth, which we believe will get sustained.
So could you explain what exactly is the go-to-market strategy? Because to understand some perspective on how it.
We just had.
Yeah.
We just had some conversations. Probably, I think we could pick it up a little later. I think we had. I just sort of briefed the same thing over the last few questions, actually.
See, the go-to-market in a hundred aspects of it. And since some are very, very competitively sensitive in nature, don't want to because what we did in the go-to-market is we got several ways we did it. We don't want to reveal to the whole globe what we are doing. The result is there. That means directly we are right in taking the right kind of strategies.
Understood. And in terms of the stores, do we have any growth, minimum amount of stores you want to put up in a year, or what is the forecast, and how do we want to put up the stores? What's the strategy? Would it be four or four?
We want to keep expanding EBOs. That has been our basic philosophy because the brand is very well recognized. The brand itself will certainly get more traction than a central store. Secondly, it is need-based. We have got a lot of analytics, which place do we want to open? Because putting a number around 100 stores, it may be not a right thing to do. What we want to do, we don't want to lose an opportunity where the opportunity is to have a store, whether it is within the existing town or emerging towns. Because towns are expanding, so we may lose some expanded place even in Bangalore or Chennai, but we put their stores. It will be an urban phenomenon. Similarly, tier two, tier three, there are things that are becoming better towns now. We're looking for opportunities.
What we have to say is that there will be positive additions because there will be additions as a delivery, depending upon the geography we are talking about. There will be net additions, which could be significant as compared to what it was in the past.
Understood. Thank you for your answers.
Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, please limit the questions to two per participant. Should you have follow-up questions, please rejoin the queue. Our next question comes from Anubhav Goel from Cosma Capital. Please go ahead.
Yeah, hi, sir. Sir, I just have one question. Sir, has BIS been any factor this year? Has it impacted the supply chain for other smaller players? Because I read that the implementation got pushed to next year.
No, so BIS has been aggressive. The standard of BIS has been aggressive over years in terms of both finished goods as well as some of the source goods. Source components. I think directionally, most categories in the appliances in which we work are coming under the purview of BIS, and therefore there's a little bit of stranglehold in terms of imports that's happening. We do, and in the past, we've taken a very conscious call that most of our appliance business, we do it domestically. Our production is more domestic-oriented than import-oriented. We are safeguarded in that respect, and we do believe that's the right direction from a country perspective. There is a little bit of pressure. Therefore, for the industry, we are a relatively better place in that position right now.
Okay, got it, sir, and sir, just wanted your thoughts on the vendor ecosystem in India currently for our range of products, so do you see it aggressively developing to sort of replace imports from China?
No, the vendor ecosystem, so kitchenware, I think we are fully equipped. In terms of appliances, we have a long way to go as far as the vendor ecosystem is concerned. The scale of China will not be replicated in India overnight. That's going to take some time. Having said that, I think there is a lot of effort that is now being put in to make sure that the scale-up starts happening now. BIS is one enabler to that. There are other areas around incentive schemes that are coming up. So we are seeing offshoots of appliance ecosystem developing in India. To completely replicate that to the scale of what China is doing today will take time.
Sir, last question, if you can share any color on how October has been?
No, the demand has been consistent. We've been not seeing sort of demand reduction or it's not sort of a one-off, like I said. There has been a consistent demand generation in the market as well. Different channels will have different dynamics in terms of inventory pile-up, but if I were to look at it from a demand perspective, there is consistency of demand that is now coming in across the months now.
All right, sir, got it. Thank you so much.
Thank you. Our next question comes from the line of Natasha Jain from PhillipCapital. Please go ahead.
Thank you for the opportunity, sir. I have just one question. First of all, congratulations on a good set of numbers. Now, I want to understand you mentioned in your opening remarks that you've done well, mainly because 50% of your portfolio is aligned to the GST rate cut, but if we see hardly 7-10 days were there in a month wherein this could have been improvised, and then we must have even lost sales in that five-week period prior to this implementation happening. Second, you said that a lot of sales did come through from e-comm as well. Now, what I understand is e-com is again a low-margin business, so I'm trying to understand where exactly did we do a lot of cost savings which led to such a sharp improvement in our EBITDA, or for that matter, even gross margin?
No, I think, see, I wouldn't want you to take an isolated look at the quarter. And I don't want to sort of look at specific numbers to put it either in terms of a band or in terms of commitment. I would say two things directionally. One, over the last few quarters, there have been a lot of portfolio additions that we have done in specific set of kitchenware products which lead to high margins. I think that's one. There's been conscious portfolio adjustments that we have done in terms of our top-line contribution as well. So the gross margins would be a combination of product mix, a combination of specific high-margin products that have got accelerated with portfolio correction. So that, I think, is on the, as we said.
Of course, we are conscious about the fact that e-com continues to grow, and it is a low-margin business, but we balance the channel in such a way that we don't negatively get impacted by the channel. So overall, I would say that's the way we're looking at it. With respect to specific observation on GST, for a period of a week, we had a disruption from a billing perspective, but that sort of then gets equalized over a period of time. So I think that's the way I would put the margin story. So margin story is a combination of portfolio management in particular.
Got it. So now that clearly, I mean, explains the gross margin bit. So now coming to EBITDA, we also must have paid some consultant fee. And even after that, the EBITDA margin improvement is very sharp. So any other thing in the P&L line item that's probably missing?
See, basically, when you see a double-digit growth on the top line, obviously, your EBITDA margin will improve. So one, gross margin is helping us. The additional sales is also helping us to improve the EBITDA.
So basically, it's a productivity improvement. When you think of productivity, it's productivity per person, productivity per utilization of capacity, productivity per initial money put in. It's a combination. Very difficult to calculate the amount. The only thing is our ability to see where cost can be saved, that is being saved. Second, as MD put it, it's a question of mixture of the products. The more we go towards value-added products, our margins will improve. It once again depends upon how the demand cycle is going forward. Ultimately, that balances everything. I cannot sell only high-margin products, and there's a demand for low-margin products also. Basically, we have to look at the robustness and then measure our performance against the capital employed.
Got it, sir. And sir, now can we expect margins to be in the 11%-13% range from this year onwards? Is that a fair statement to make?
Again, I don't want to go for a number perspective, but directionally, we would still continue to invest on some of our capability building in terms of brand building, specific category focuses, so we do believe that we would have soft investments that will continue to happen as we have committed in our five-year plan. Those investments will continue to happen. Parallelly, cost savings would flow in, so I think it's a combination of the two that would happen, but I think the point I would like to say is the investment cycle in terms of soft investments are still not over, and that's something that we will continue to keep invested from a futuristic perspective.
There is some front-end cost that will be incurred. The benefits follow a couple of quarters later. That's certainly.
Understood, sir. Thank you so much and all the best.
Thank you. Our next question is from the line of Mustafa Khedwala from Cube Investment . Please go ahead.
Good evening, sir. Sir, you mentioned in the remarks that the premium end of our portfolio has done well. So sir, can you quantify it in terms of percentage-wise? Normally, I think we grew overall 10%. So did that particular portfolio see a higher growth rate, and how much was it?
No, in our case, like I said, Judge is in the mass portfolio. It continues to grow at 50%. Prestige is continuously getting the premiumization ladder up. So it's a combination of both that worked for us in the last few quarters. Prestige as a brand is very clearly seeing the opportunity of premiumizing the portfolio as well as the category.
See, we have over 1,000 SKUs. Some are high premium, some are low premium, some are mass products. Very difficult for us to quantify this with so many SKUs.
Okay, sir. And sir, Judge brand, sir, can you quantify the amount of sale that we did in the last quarter, sir? It is remarkable that we did 50% growth, although on a lower base. But can you give us a sense about the sales, sir, we have done? Absolute?
It's around INR 30 crores.
At least.
Yeah. It's roughly around INR 25 crores will be the sales around that.
For the quarter.
For the quarter.
Sir, this is sustainable, basically?
Yes.
Yes.
It is sustainable.
Okay. Fair enough. Thank you. Thank you very much, sir.
Thank you. Our next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Hi, thank you for the opportunity. Congratulations to a great set of numbers. As I understand, we are back to double-digit growth as well as margin, and there is no one-off in this quarter. And the softer operational expense, what we are doing, its benefit is here to play out. So it's fair to assume now going forward, at least our growth and margin would be double-digit, and once the softer operational expense is entirely over, we'll be back to mid-teens kind of growth and margin.
See, I think, again, I don't want to commit a number. I would like to emphasize that I think the focus for us is on premiumizing the portfolio, sort of investing in from a future perspective in a couple of categories, also being able to consistently deliver a double-digit top-line growth because the productivity of OpEx goes up as the top line hits the 10% area, right? Are we very focused on a mid-teen profitability? That's not the prime pivot area that we're looking at. We're looking at premiumization of portfolio as the key strategy right now.
Got it. Understood. Last question from my side. One is on whether the gross margin would be hit in upcoming quarter because of rising aluminum prices? And secondly, what sort of expense you have done so far in last three quarters on sort of operational expense, what kind of improvement you are bringing, and when its result will start to play out?
Yeah. On the gross margin, yes, as we had already mentioned in our GIST as well, I think that will have an impact in the margins in the Q3. We have to wait and watch how we are able to manage that. With respect to the cost savings, yes, we are looking at across all the functions, across all the areas in the operations, right from manufacturing, logistics, et cetera. This is where we are working on to look for cost reductions.
Got it. Thank you.
Thank you. Our next question comes from the line of Nikhil from SIMPL. Please go ahead.
Hi, good evening and congratulations on good set of numbers. Just one clarification. During the call, you mentioned that the GT channel was going strong, but for us, because of our specific activities, it's not grown. Can you shed some more light? And is the GST rate impact more on the GT channel versus the e-com and MT channel?
No, no. I think I just want to clarify. We have done reasonably well compared to the past quarters on general trade, backed by a few set of specific initiatives and efficiency drives that we have done in the general trade segment, right? In terms of the GST implementation, general trade has gone through a little bit of a blip, which is very specific to the period of disruption that happened. At an overall level, the industry is still continuing to face pressures on general trade because of e-com, quick commerce-related challenges that the industry is facing. We have sort of been able to overcome that with specific change initiatives that we have brought in the channel. So the overall general trade would be a slow growth channel. E-commerce and quick commerce continue to be hyper-growth channels.
Okay. And secondly, if we look at our growth, it's broad-based across all categories. You mentioned in the appliances, there were multiple new products which have seen a better growth. Can you share some sense on how is this difference between? So is it largely driven on the e-com and MT in the newer products where the growth is taking place?
No, so the channel growth has been uniform in the sense that, like I said, e-commerce and quick commerce have been high-growth channels, followed by regional format stores, followed by general trade. It applies the same for appliances also.
Okay. Fine. Sure. Thanks a lot.
The small domestic appliance category grows much faster in e-commerce.
Okay. Fine. Sure. Thanks.
Thank you. Our next question comes from the line of Praneet, who is an investor. Please go ahead.
Thank you for giving me the chance again. So I was just wondering about the MFI channel. I understand that our exposure has been minimized and there have not been any further issues. But can you just quickly explain how is this particular channel structured and what happened and what has led to the degrowth, and why do you think it might not rebound?
See, the MFI is primarily we were operating through the microfinance institutions where we don't have any setup in the rural. I think they were using their strength in the rural to sell some of our products. But now with the issues that are going around in MFI, they have stopped buying or dealing in these types of products.
When you mean microfinance institutions, how do you sell the product? Do they finance you for the product?
They buy the products. They buy the products from us, and then they sell it to their customers in the rural market. They are aggregators and then find a way to sell to the various markets collecting installments . That has been a pattern. We don't have direct access to the ultimate consumer. They are the intermediaries. The intermediaries had problems on two accounts. One, there was a regulatory issue which they were facing. Second, they are not able to get refinanced from their major banks. Third, why they could not get refinanced? There was delinquency in the rural because rural was suffering from insufficient income till last month. So whatever they had lent, they could not collect money. So then they could not collect money, they could not pay their banks. So there was a structural issue with the whole thing.
We were dependent on it for quite some time for about almost INR 100 crores.
INR 140 crores.
INR 140 crores. Slowly it went down. Therefore, the particular demand is not there. The demand which not dependent upon microfinance institutions, that would have gone into general trade at some point in time. That is back of us because there is no more it was always a waste issue for us. That waste is no more relevant going forward. If it revives, that will be a bonus for us.
Understood. Thank you.
As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you. I think thank you for an interesting set of questions. And we share the palpable excitement in terms of a good quarter and hopefully look forward to sustained initiatives and growth as we move forward. Once again, thank you for your patience hearing as well. Look forward. Thank you.
On behalf of Ambit Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.