Ladies and gentlemen, good day and welcome to the Q4 FY 2025 Earnings Conference Call of TTK Prestige Ltd, hosted by Ambit Capital Pvt Ltd. 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, then 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, everybody. Hello everyone, welcome to TTK Prestige 4Q FY 2025 Earnings Call. From the management side, today we have Mr. Venkatesh Vijayaraghavan, Managing Director and CEO, Mr. Shankaran, Advisor to the Board, and Mr. Saranyan Rajagopalan, Wholet ime Director and CFO. Thank you, and over to you, sir, for your opening remarks.
Very good evening, this is Saranyan here. Welcome you all to the Earnings Call Q4 FY 2025 of TTK Prestige. Before I hand over the proceedings to our Managing Director, I just want to remind the participants about 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 of 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, I hand it over to Mr. Venkatesh.
Good evening and a warm welcome to all of you in this call. Let me start with a little bit of the industry background and then get on to specifics of the company. Overall, at an economy level, we see it being positive, a stable economy, and I think it's favoring the industry as it moves into a positive phase of growth. There have been certain disturbances around the recent developments of tariff rates between U.S. and Indian markets, but I think at large it's been a more stable market for us from an industry perspective. We do see, after a prolonged period of time, the industry moving into a positive stage of growth, driven by a lot more premiumization in the urban markets, an expansion of the markets into Tier- 2, Tier- 3 towns, and a lot more aggressive demand generation being fueled by the e-commerce channels as well.
Overall, after a long period of time, we believe that the market is coming back, like we've been mentioning in the last few quarters. The market has started to be now stabilized at a positive growth level, and that augurs well for the overall industry across both kitchenware and appliances as well. From our company's perspective, we see a positive growth as we move forward. As we had mentioned earlier, we had challenges around the MFI channel, the rural channels, and the CSD channels, but we continue to grow well in general trade. We continue to grow well in our e-commerce and large- format stores as we move forward. This positive growth augurs well as we move forward.
We've also seen that there have been pressures on the raw material pricing, which have continued to be sustained through the quarters, and we see it sort of stabilizing as we enter into the new year. At an overall level, the pressures of raw material pricing have been through the quarters, sort of stabilizing as we move into the new year. Exports have started to now become more robust during the quarter. From an overall quarter perspective, therefore we grew at around 3%. Our domestic sales grew at around 3%, total sales at around 4%, including exports, and our EBITDA at around INR 72.5 crore against a previous year of INR 100 crore.
What we see is that, as I said, as the market starts moving up, we are leveraging the growth in the market, and we are on a positive trajectory as far as the consumer demand is concerned and fulfilling that consumer demand across various channels and various opportunities that we face. From a year perspective, we've reported a 1.4% growth, around INR 67 crore of exports and around INR 2,400 crore of domestic sales, a total growth of 1.2% for the company, and EBITDA of around INR 339 crore against INR 386 crore of last year. Our margins, as we speak, stands at 13.4% for the full year and an operating margin of 10.7%. Like we had mentioned before, we've started also some of the investments into our new cycle in terms of both CapEx and in terms of building capabilities for the future.
That would sort of reflect in the operating EBITDA as well as in the overall EBITDA as we look at it. In general, therefore we see a robust demand coming back to the market, and we've been able to sort of leverage that through various channels, including our own stores as well. As we speak, our current overall number of stores is around 667, and we are on the consistent mode of expansion across different geographies in a very targeted manner. We've introduced close to around 44 SKUs in the quarter and overall around 191 new SKUs during the year. These new SKU introductions have also started helping us gain significant counter presence and sort of growth in the channels we mentioned, and that's been one of the levers that's helping us grow.
We've also been able to sort of close the gap in terms of some of the portfolios that we had earlier, and I think today as we speak, we probably would be leading in most of the portfolios in terms of the products as well, in terms of new product launches as well. The Judge brand post its repositioning, we've been able to sort of stabilize the brand, and the brand continues to grow well. It continues to be one of our growth levers, and we would sharpen the focus on Judge as we move forward as well.
So overall, I think we would look forward to positive growth as we move, leveraging some of the channel strengths and our position in the market, continue to invest into some of the futuristic opportunities which we believe are available both in terms of internal capability building and also to strengthen our manufacturing capabilities enough so that we are able to leverage the demand generation as it continues to happen. The growth is equally poised between kitchenware and appliances, and we are quite confident about both the categories and sharpen the focus on some of our core categories where we are leaders. And that's one focus that we believe would sort of help us strengthen our position in the market as we move forward. We are healthy on the cash that we have.
Over the year, we had some payments that we had done in terms of CapEx, dividends, and buyback of equity shares as well. Post that, we're still in a comfortable cash position. We also made some investments into Gramya Haat, one of the rural startups which we believe would help us understand the rural markets in this category much better and service some of the demand that comes from deep rural markets beyond the top 500, 600 towns. And that, I think, would sort of be one of the investments that we would continue to be looking upon to see how synergistic it can be with us. Overall, I think it's been a sort of a turn that we expect for both the market as well as for the company.
We, however, would continue to keep invested upon in both our capacity building as well as the capability building for the next few quarters, and we do believe that that would help us sort of strengthen our position in the next two, three years in terms of innovation, in terms of design, in terms of capacity building for our own manufacturing capabilities, and that in turn would sort of help us strengthen our position in the market as we stand today. So overall, that would be my sort of brief, and look forward to your questions.
Thank you, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, please press star and two. Participants are requested to use handsets while asking a question. We will wait for a moment while the question queue assembles. The first question comes from the line of Sameer Gupta from IIFL Capital. Please go ahead.
Hi, can you hear me?
Yeah, yes.
Thanks for taking my question, sir. Sir, firstly, I noticed in the presentation that you have mentioned growth in the traditional channels is 10%, and the impact on MFI channels, as I may recollect, is going to materialize from the next quarter onwards or 1Q FY 20 26. So would it be a correct implication then that TTK Prestige growth as a whole should revive more towards the double-digit mark from the next quarter itself?
I would be happy to answer that. I would say I don't want to sort of look forward from that perspective, but suffice it to say that it would be much more positive in terms of growth. We don't want to give guidance in terms of growth, but it would definitely be positive, as we had mentioned, because we are seeing this offtake happening quarter on quarter now.
So another way to ask this question is that, is there any demand that has been lapped up by the traditional channels which otherwise would have got captured in the MFI channel had that disruption not been there?
No, the MFI channel is quite independent of the traditional channel because that's a very different business model altogether, and it addresses a very different segment of consumers. That is more a slightly deep rural consumer, which I don't think the current traditional channels or the distribution channels are addressing at this point of time. So it's an independent opportunity that has been created in the past, which probably for structural and policy reasons today is not available for us to sort of cater to the demand.
Got it. This is very clear, sir. Second question is on the consultancy expense that we have booked or sort of operational expense, as we are calling it. Even if you exclude the INR 16.3 crore, this other expense line item is up 20%, and overall EBITDA is still down 8% on a standalone basis. Now, just some color, are there any other one-offs in these other expenses? Because EBITDA decline of 8% doesn't suggest a very rosy picture, right?
See, Saranyan, here. I f you look at your one-off expenses, which is for the long-term growth, that's almost 2% during the quarter. So if you add that, I think we are almost at 11.9% against last year's 12.7% of operating EBITDA. So the primary is a one-off, which is pulling down your EBITDA margin. That said, I think there is some cost increases that's been happening because some of the escalations, what has been happening for the long-term growth, that is also coming into the expenses. As we are mentioning, the next eight quarters, you will be seeing a small dip in this EBITDA, but post that, once we achieve whatever we are planning, we should be able to see the improvement in the EBITDA.
Okay, and this INR 16.3 crore or INR 20 crore-INR 30 crore around for the full year expense, this is a one-time expense that we do not expect to repeat in the coming quarters, or there is still some more left?
Which you are talking about the impairment number? What is there in the [crosstalk]?
The long-term strategy expense, the INR 30 crore.
Yeah, that will be there for next 8- 10 quarters. You will continue to see some expenses incurred around that. That we have already indicated in January itself.
Okay, so this particular number, full year basis, will continue for the next two years, is what you are saying?
It should be more up and down. We are not saying, because we have indicated that close to INR 200 crore will be incurring on soft expenses for a period of three years. That is what we have indicated in the stock exchange release as well, that we did in the last quarter, so I won't say it is only INR 30 crore. It's overall INR 200 crore we are expecting in the next three years.
Just to put in and Shankaran here. T he whole expenses is to ensure that the company gets a top-line growth more rapidly than it was. It is important to gain market share, so we need to make some investments which are soft, and we also make some investments in factories or other places which are hard. So we have made a communication already. We'll be investing close to INR 500 crore. Some will be appearing in the, as you know, exceptional items. We'll also add to savings outcomes. Those savings will be reflected in the EBITDA margin growth. Ideally, we should assess the company post about six quarters once we may complete all the investments.
Got it, sir. I'll come back in the queue for any follow-ups.
Thank you. The next question comes from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Yeah, good afternoon, sir. Thank you so much for the opportunity. Sir, first question, you've mentioned a couple of times in the opening remarks with respect to the growth, positive growth for the industry and for us as well. So is it possible to get some more sense in terms of any particular channel, region, or a category which is driving this?
Sir, at a broad level, I think all categories have now started coming back to growth. As has been the trend, appliances are actually growing faster than kitchenware, and within kitchenware, cookware is growing faster than cookers. I think in the order of magnitude, that would be appliances followed by cookware, followed by cookers. There is a resurgence of cookers that we are seeing for sure. So I think driven by premiumization as well. So I think that's the first one from a category perspective. We are seeing a revival of all categories. All our core categories are reviving. I think that augurs well for us from a growth perspective. In terms of geographies, there is a little bit of a faster growth that we would be expecting in the South markets.
That's quite visible, and that being driven a lot more by premiumization of the category, and some of the big categories are getting premiumized faster. So that, I think, would be the way I would look at. As far as channels are concerned, we've seen quick commerce growing faster, followed by e-commerce, followed by large- format stores, and general trade is sort of bouncing back right now. I think so that's the way I would put it up.
Understood. And any particular reason for if I look at the growth number, the non-stick cookware has grown 14%, while cooker and electrical appliances have grown at 2% and 1% respectively. So any particular reason which you want to highlight, and how sustainable is this?
No. So the numbers that you would probably see are total numbers which includes the impact of MFI or the rural channel, as we said. Cookers and electrical appliances were key product categories that went into that particular channel disproportionately. So if you were to take that out and look at it, I think it would be reasonable. Of course, like I said, cookware leads the growth, but suffice to say that the numbers that you're looking at from our perspective is including the channel. If you were to take that off and look at it, it would be a significant growth for both cookers and appliances as well.
Would it be possible to get a sense how large was cooker and electricals in the MFI for the quarter or for the full year?
I think we'll probably refrain from that at this point of time. Those are some internal numbers that we work at, but the impact has been significant for both cookers and appliances.
Just to clarify, if you remove these recent channels which now have died from both last year and this year, our growth will be more than 7% or 8%, which is exactly equal to the industrial, little better than industrial.
Sorry, I'm not able to hear you clearly, sir. Could you please repeat?
Netting off for the MFI channel, if you were to look at our growth, our growth would be hovering around 7%, which is reasonably good growth in our view.
7% for the company as a whole, right, at the standalone level?
Yes.
Understood. That's very helpful, sir. And one more question I had. In terms of the market share, is it possible to get some sense, let's say, prior to COVID, because COVID did create a swing in terms of positive and afterwards negative in terms of kitchen appliance? But if I were to compare you on your key categories: cooker, cookware, mixers, the gas cooktops, how much fall in the market share we would have seen across these categories? Could that be more of a 100 basis points, or could that be 200- 500 basis points? And what kind of market share gain would we look at over the next 3-4 years as you implement your strategy, sir?
So we've sort of lost market share. I wouldn't be able to put a number to it. We did lose market share over the few quarters, but suffice to say that we started regaining market share. And we do believe as we move into the next few quarters with these sort of investments that we're talking also, we should be able to gain market share as we move forward. So we are on a path of regaining the market share. There have been lots of market shares in the past, not quantifiable in the call, but probably we would like to convince you, and we would like to place it on record that we are moving ahead with regaining the market shares now, particularly in our core categories.
Perfect, sir. Just one more question, if I may, sir. In terms of new category, you would like to highlight anything which we could imagine or we could see over the next, say, 2-4 quarters, or it's still some time away?
No, absolutely new categories are still some time away. Like I said, I think we're focusing on our core categories. We've also identified a few categories in the appliance segment that would sort of grow. Air fryers is one, for example, and there are a couple of more categories that would start scaling up as we look at it. Absolutely new category entry is something that probably you would see only after a couple of more quarters.
Quarters, you mean, right, sir? Not years, right?
You could take a time frame of two years.
Two years.
I think our announcement in the past, we have very clearly said that we are going to stay strong with the core, and any new product will be adjacent to that. We are not trying to get into totally new categories like fans or something at this point in time. What we wanted to do is gaps within existing portfolio, all those gaps in terms of products and markets or whatever we'll be able to plug in. In fact, we have started seeing these results the last two quarters, and we are happy to say that we have plugged in quite a few in the distribution area and gained market share as compared to what we were last year.
Understood. Understood. This is very helpful, sir. I'll fall back in the queue. Thank you so much.
Thank you. Participants, please restrict yourselves to two questions so that the management can address the rest of the participants as well. In case if you have any more questions, kindly rejoin the queue. The next question comes from the line of Resha Mehta from GreenEdge Wealth Services. Please go ahead.
Yes, thank you. So just one question. This CapEx of INR 300 crore that we are planning over the next 2 odd years, so if you could specifically highlight, this would be for which product categories? That would be helpful.
So like we mentioned, this would be across our core categories. Strengthening our capacities in aluminum are quite strong. There are alternate materials like stainless steel, tri-ply, which are actually growing much faster at 15%-20% growth and would require CapEx investment as we move. Also, in some of our appliance categories, we would like to invest as well. So a combination of appliances as well as some of the stainless steel, tri-ply capacities that we need to build is where the CapEx would sort of go in. Also, in terms of some of the modernization that we would like to bring in, including automation of plants, that would help us gain far more significant cost efficiencies as well. So it's a combination of automation, capacity expansion across new material, and also in, say, kitchenware and appliances, both.
Also including renewable energy as well.
We are also substantially increasing our renewable energy footprint, so that would also sort of help us leverage the CapEx deployment to help us get more benefits on power and fuel.
Last time, we had mentioned that we had some product gaps in cookware and a few other categories. Have we kind of launched products to fill this product gap? For example, cast iron and those kind of things we did not have in our portfolio.
Yeah, so like I mentioned, I think two things that have worked for us. One, of course, the distribution expansion and plugging of the gaps. The second is we've sort of plugged the gaps in terms of our product portfolio, particularly in cookware, and like you had mentioned, cast iron, across the category, we're seeing multiple material alternatives that are emerging right now. We are actually plugging all the gaps, and more or less, the gaps have been plugged. So I think by this quarter, we would have seen a full-fledged portfolio of cast iron, stainless steel, tri-ply, and all other traditional material as well as far as cookware is concerned. As far as cookers are concerned, we need the category, and we've been able to plug. We've been able to launch a couple of new products as well. Appliances, we continue to sort of focus on small domestic appliances.
Air fryers, for example, is one that I mentioned. The range of air fryers has increased. So overall, we've done close to around 191 SKUs that we've launched in the last one year. So we've sort of completed our portfolio. That having been said, we will consistently invest upon new products to be launched in the future as well.
And just lastly, with this INR 200 crore investment that we are planning over the next eight quarters, would that mean that our EBITDA margins would also reflect to more like a single-digit kind of margin?
We wouldn't want to give some guidance on that, but it suffices to say that it will be a little diluted than in the past because of these investments coming in in the form of OpEx nature. However, progressively, we will see the benefits of that also accruing to us through top-line growth as well as cost efficiencies getting built in. So I think you would have to look at it from a perspective where it would remain diluted from the past highs that we have sort of achieved, but those are into investments that will sort of progressively come back again.
All right. Thank you.
Thank you. The next question comes from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Yeah. Thanks for the opportunity. So in terms of all the investments that we are doing in terms of CapEx as well as OpEx, both the investments, so these are material investments, and obviously, we would have done the consultancy. So what are the kind of benefits that we are looking in terms of, let's say, structural improvement in the sales or market shares or in margins? So whatever you can share, if you share, it will be really helpful.
Okay. I shall put it very simply in 360-degree when we are looking at it. So there will lag between what we spend now, what we benefit now. That's why you said that by the time the benefits overgrow the cost, it will take at least 4-5 quarters. That's why we said that we will be probably diluting on margin, but we'll be not diluting on growth of the company as such. But our intention is to not go below what we are declared for this year.
Okay. And diluting means how much diluting we are looking at? Let's say 200 basis points, 300 basis points, if you can indicate in terms of EBITDA margin.
What I would say is that please watch for our next two, three, four quarters result and the explanations we give. That will give you, rather than trying to say something futuristic at this point in time.
Okay.
We are very positive that the directions we are going in terms of engaging experts from outside to help us out 360 degrees of the directional improvement. The results will come out very quickly, and we are very positive about what we are doing at this point in time.
So the way you could look at it is we will definitely start to look at good growth as far as top-line is concerned, follow that up with cost efficiencies, and I think over a period of time, it would start then showing up in the results as well.
Okay. Sure, sir. Understood. And what is the total CapEx plus OpEx that you would be incurring? I guess I missed that number. Additionally, total three years?
No, we have put a total of INR 500 crore to be spent over three years, starting from the last quarter of last financial year. So they'll spread out as well as we get into the threshold of investing something, we'll invest and get back to you with our disclosures.
Okay. Sure, sir. Understood. Thank you.
Thank you. The next question comes from the line of Praneet, an individual investor. Please go ahead.
Hello, management. Thank you for the opportunity. So I was wondering regarding the Judge plan, how are we planning on scaling it up? Because I understand that is one of the growth levers we want to pull when we want to grow our overall revenues. And you mentioned about the repositioning of a particular brand. Can you tell me what exactly did you do in terms of repositioning it? And in terms of scaling the brand, how are we planning on scaling it in terms of distribution or product range?
No. So the Judge brand has a certain target audience, which we believe is an extension to the core of what Prestige brand is today. That brand has been clearly positioned in terms of product portfolio and in terms of the distribution approach that we have taken for the brand in particular, the Judge brand in particular. Over the last one year, the portfolios have got very clearly defined for the brand, and we're seeing a good offtake, therefore, from cookware and from cookers for the brand. It will continue to grow with a different target audience and a focus on the Tier-2 , Tier-3 towns. The brand largely would be Tier-2 , Tier-3 led.
It would have a distribution reach towards those set of geographies, and that, I think, would be the key lever for the growth for the brand, and that's what we've been seeing in the last few quarters of the focus that we put on the brand. So it would complement the Prestige brand as far as the consumer segment is concerned and expand the reach into Tier-2 , Tier-3 towns for the company.
Understood. So the Prestige brand is consciously making a choice of making Prestige brand in the urban focus and Judge brand into a rural focus Tier- 2, Tier- 3 places, right? And basically, how?
It wouldn't be so clearly defined, but we do have different consumers in the urban markets as well, but predominantly Tier-2 , Tier-3 , yes.
It's basically income segment [crosstalk].
It's basically income segment- based. Geographically, it might have a skew towards Tier- 2, Tier- 3.
But the distribution still goes through general trade and Prestige Xclusive stores, or has it been changed a little? What is the split in terms of distribution channel?
No. The distribution channel will be largely general trade.
Understood.
Our Prestige Xclusive Stores sell, but they don't sell too much of Judge. Judge would be largely focused upon general trade and e-commerce.
Our focus is not to cannibalize Prestige brand, which is a lot more premium than this one. The idea is to address those markets which we have not addressed so far in the last 50 years.
Understood. So that I understood. And one more thing we've noticed that general trade's muted performance. So e-commerce has been growing significantly. How has it affected the overall company's situation? And quick commerce also played a huge role in terms of developing the overall market of e-commerce or online commerce yet. What is the percentage of sales that the company might receive from quick commerce and quick commerce specifically, and how do we plan on seeing that grow in terms of that? And in terms of market share also?
Sorry. Carry on, please.
So yeah, I was curious about was quick commerce the reason that we lost a little bit of market share previously, and which segment did we lose and gain it back already? So which product SKUs?
No, I think loss of market share had nothing to do with quick commerce or e-commerce. That was more a little bit of the competitive scenario that probably changed over the last few years, particularly post-COVID, and our response to that way. See, our response to multi-channel approach is quite clear. Each channel has got a very clear performance role in our portfolio, and we are quite clear and strong in all the channels. We do very well in e-comm. We do well in large- format stores. We do well in general trade as well. As an industry, general trade is of slow growth given the cannibalization that's happening at an industry level with e-commerce in particular, but I think that's something that's to stay.
E-commerce will continue to grow faster than the other channels, and it would have a little bit of a cannibalization effect as far as the industry is concerned. As far as the company is concerned, we equally focus on all the channels because we believe that each channel has its own growth path that needs to be addressed. The only thing that we make sure is there are no pricing arbitrage that is available between different channels. So as a company, we exercise control on pricing across channels so that each of the channels is available. At the end of the day, wherever the consumer goes and buys, the brand is available, and the brand is available to be serviced. I think that's our philosophy. So we're quite aggressive on e-comm.
We're quite aggressive on quick commerce, quite aggressive on large- format stores, and equally invested upon in terms of the general trade market as well. So I think that's the way we would leave it to. The dynamics of various channels is something that we will see play out as it evolves. Quick commerce currently is on a growth path. A lot of investments have gone into quick commerce, and therefore, that growth is definitely higher. But I think it is only adding to the growth of the categories and the industry. It's not sort of cannibalizing each other at this point of time.
And this is so what you say [crosstalk].
It's increasing the distribution reach for the categories.
But would you say that there has been a cannibalization?
Praneet, those were your questions. Could you please fall back in the queue?
Yeah, sure. Thank you.
Thank you. The next question comes from the line of Tom Kadavil from Geojit Financial Services. Please go ahead.
Hello. Hi. I would like to know the outlook of MFI channel and the current mix of it in the overall channels?
No. So we believe that the MFI channel, as far as our categories are concerned, probably would continue to remain subdued. Our exposure to this channel has become very limited today and is of immaterial consequence as we move forward. So from our perspective, I think we've taken the hit last year. So to that extent, it's of immaterial consequence to us as we move forward. The channel per se has got structural changes and policies that have been implemented, which we believe probably would continue to remain, would make the category remain subdued as far as we are concerned, our industry is concerned.
Okay. So could you give me a sense of the current mix of the channel?
In our perspective, it's very limited. It's less than five. It would be less than [crosstalk].
It was always 3%-4%. It is now.
It is immaterial, right?
It's slowing down up here. See, the MFI was a channel which became very active from 2017, 2018 onwards. It was the first mover we made an effort to indulge into that, but it stopped because of two reasons. One, the credit delinquency is happening there. That's why MFIs are not giving return . There are policy changes in the regulation. Therefore, they are unable to extend loans. It's fortunate that we have exposed ourselves to close to INR 140 crore in the past. We collected each one of them. There was no delinquency in the way we dealt with the MFI channels. So it will take a lot more time. If you look at the rural consumers, there are some people who are dependent on loans. That demand will not come back until the refinance happens. There are rural channels which does not depend on this one.
They always go to next cycle down and buy, or they do online also. So therefore, the customers who are otherwise suppliers will always come back to us. But we don't know whether they're coming to online or offline. We would not know.
Okay. Could you give a hello?
Yes.
Yeah. Could you give a revenue growth guidance for the next two years?
No. As a matter of policy, we don't do that. So I think we'll refrain from that.
We said we'll give a reasonably good growth. That's what you mentioned in the director's report also.
Okay. Okay. Thank you. Thank you so much.
Thank you. The next question comes from the line of Nikhat Koor from Dolat Capital. Please go ahead.
Hello. Thank you for the opportunity. So currently, our store count stands at 667. So what is the target for the next two, three years with respect to store expansion? And this expansion will be into which markets? That is question number one. And question number two is with regards to our contribution of new products. What is the contribution of new products in FY 2025 now that we have introduced 191 new SKUs versus FY 2024?
So the first question on store expansion, I think we would continue to be aggressive on store expansion. While I don't want to put a number to it, my aspiration would be 1,000 stores over the next few years across the country. And it would be largely skewed towards the top 500, 600 towns. So I think that's the model that we would follow. We are on track for that. And I wouldn't say a three-year or a four-year window, but I think 1,000 would be a good number or a good business model from a store expansion perspective. And that's a doable number over a period of time, sustainable number. As far as NPD is concerned, we have a significant portion of our growth coming in from NPDs today.
While I wouldn't be able to spell a number specifically in the call, it would be in the high double digits.
Okay. And the store rationalization would continue?
Sorry?
The store rationalization would continue going ahead also?
No. So over the last few quarters, we've rationalized our stores. To that extent, I think as we move forward, it would be more of additions being predominant. However, there would be a little bit of churn that keeps happening as in normal business. But in terms of rationalization of stores is more or less completed, we would be on a far more aggressive growth track as we move forward.
Okay, so thank you and all the best.
Thank you. The next question comes from the line of Sameer Gupta from IIFL Capital. Please go ahead.
Hi again. Thanks for giving me the opportunity again. On the Judge brand, if you can just help us quantify what is the kind of sales that we achieved in FY 2025, and how do you look at it, outlook going forward? I'm not looking for any particular guidance, but just the growth trajectory of this business.
No. So like I mentioned, there are two different segments, and we believe that the value for money segment is equally growing faster in the country today. I think we've sort of leveraged that opportunity, and we do believe that will be a high-growth opportunity for us. It still remains to be a small portion of our top line, but we believe as we move forward, the growth will be significant and continue to be significant.
Okay, but if you can give a number, it would be great.
Sorry. Just to add, I think currently our sales is around INR 68 crore last year, which is almost 43% jump over the 2023-2024.
Okay. Got it, sir. This is helpful. Secondly, sir, just wanted to understand this nature of the soft operational expenses that you have incurred this quarter and going forward that you plan to incur that will hit the P&L. Is it ad spend? What is the nature of these expenses?
So the soft expenses is a combination of investment into R&D capability, into human resources both across brand innovation, as well as into some of the technical capabilities that we want, and of course, an increased marketing spend as well as the brand gears up from an overall perspective. So it's a combination of investment into capability, like I said, investment into some amount of automation processes, also go to market. So it's a combination of all three put together.
Sir, is there any guardrail here? Let's say the top line doesn't come for whatever reasons. Are we then to go slow here, or this is irrespective of whatever growth we are achieving in the coming quarters?
Believe we are futuristic in nature. We would not sort of want to do, but it's a dynamic decision. However, 100% of this is not something that we would sort of commit to, save the top line doesn't happen. We would exercise our sort of decision on that basis, the growth. Some part of this would definitely be futuristic investments because some of these, like I said, have to be invested. For example, R&D capability, right, or bringing in talent. Some of these or some of the GTM initiatives in terms of distribution expansion. These will have to be done because I think they will definitely bear fruit over a period of time.
There might be some areas which probably we would exercise that choice, but I think directionally, we should say that it is in our confidence that we will drive the top line growth and a very clear evaluation of the future impact of these investments that we're making today.
Got it, sir. Very clear. One last question, if I may squeeze in. Your contribution from the e-commerce channel, e-commerce plus quick commerce, if you can tell me for FY 2025?
It's roughly around 19%-20% for the last year.
Great. That's all from me, sir. Thanks.
Thank you. A reminder to all participants, please restrict yourselves to two questions. If you have any more, kindly rejoin the queue. The next question comes from the line of Mustafa Khedwala from Cube Investments. Please go ahead.
Thank you for the opportunity. So you mentioned 19%-20% was the revenue contribution from online this year. Sir, what was it last year?
It's always anywhere between 15%, s ee, almost 30% will come between modern format and the e-commerce. So one year, the e-commerce will do better. Another year, the modern format. But between them, it's always around 30%- 32%. So last year, I think e-commerce was doing better. It was closer to 19%- 20%.
Sir, it isn't so that our e-commerce is lesser margin or we have to pass through more? Or t here's nothing of those sorts?
No. No. No. No. So there are no rare things as far as margins are concerned. I think it's a high-growth channel which needs to be played in a very disciplined controlled manner, which is what we do.
Okay. And sir, that cookware segment saw around 13.8% growth for the quarter. So sir, can you just shed some light on what led to this? Is it a one-off, or are we seeing some structural demand increase?
Cookware, definitely, as I said, is growing faster. Now, this might be sort of a slightly higher number to look at, but among the categories, cookware would definitely grow. I would say from an industry perspective, it would probably grow in the region of 10%+ .
Sir, why is it so that [crosstalk]?
Sorry. Mr. Mustafa, those were your questions. Could you please rejoin the queue?
Okay.
Thank you. The next question comes from the line of Rahul Agarwal from Ikigai Asset Management. Please go ahead.
Hi sir. Very good evening. Thank you for the opportunity. A couple of questions. Firstly, on the cookware side, you said we are ramping up stainless steel tri-ply capacity. Just wanted to know what's the revenue mix between tri-ply and aluminum right now, and how many cookers did we sell in fiscal 2025?
We are very competitive. What we can say is we are increasingly selling more of tri-ply than normal stainless steel. That is where the market is heading for. Giving numbers would not be in our interest.
Okay. Got that. And the second question was on, t here's some discussion which is happening around the soft spend and the hard spend. You're doing INR 500 crore. Is it possible to give a bit more color on how would you measure the adequate return on these investments? Essentially, the company traditionally has made a good amount of ROCE, but because of weaker demand and current investments, I think those numbers are trending downwards. We just want to regain that confidence that we are looking at at least a 20%-25% ROI on whatever numbers we are spending of INR 500 crore. Would you like to elaborate a bit on how would you measure? And as the earlier participant asked, is there a timeline in your mind in terms of how would you go about analyzing the returns on these investments? That's all.
Okay. Let me give a little bit of background. So look at our company was INR 100 crore, and we became INR 1,000 crore. We became INR 2,000 crore. So we made a lot of investments in terms of people, capacity, everything, and also had some small-time cut at this point in time. But post-COVID and after these startups coming into play and a lot of innovation taking place in and around, we thought that what took us from INR 100 crore to INR 2,800 crore may not take us from INR 2,800 crore to INR 5,000 crore. So if we have to have that objective, we need to do something very differently from what we have been doing so far. That's why we have got expertise being built around everywhere.
The investment is supposed to lead us to faster growth as we see in the past and get back to our mid-teen margins which we have seen till 2019, 2020. So this is the matter of investment. If I'm able to get my faster growth in the top line, which itself by itself will add to my bottom line and some cost savings that is coming through, all these investments should get me back to the growth which is so good, double-digit rate, and the 14%-15% EBITDA margin which we are able to sustain in the last five years back. I think that is the measure we want to do. I can't calculate the ROI on a soft investment, hard investment. I am trying to drive my company to where it was.
Got it, sir. I get that. Thank you so much. I'll get back in the queue.
Thank you. The next question comes from the line of Tanay Shah from DAM Capital. Please go ahead.
Yeah. Hi. Good evening, sir. Just a couple of questions.
Tanay, you're not audible. Please be a little louder. Thank you.
Am I audible now?
Yes.
Yeah, you may carry on.
Yeah. Yeah. Thanks. So first question being, we did mention that CSD has been a little slow for us and subdued in this quarter. So what percentage of our sales would be coming from CSD? And if you could particularly highlight as to why is it causing this pain for us? And it's also a common phenomenon across the industry, across other kitchen players as well. So if you could just kind of give us some more flavor as to what is causing this problem.
It is. Like I said, it's not a very material contribution to the total share, but the absolute growth from the channel has sort of got subdued after years of good high growth. Both MFI and CSD have both been high-growth channels and highly profitable channels, which have sort of slowed down this year. From an overall contribution perspective, not materialistic. And our exposure to them as we move forward is also not too materialistic. So it is a sort of a one-year correction that probably sort of happened. The reason for this happening are different. MFI, like I said, had a different policy-related one. CSD has been more in terms of the internal operations getting rationalized by the department. And that, I think, is an industry-wide phenomenon. It is not very specific to TTK Prestige or very specific to a cookware category.
It's an industry-wide phenomenon where there have been policy-level operational controls that have been put in terms of procurement and in terms of servicing some of these stores. So that, I think, is more it's a sort of a corrective exercise, but it's sort of some corrective exercise that's happened at a government intervention level. So that's the way we would look at it from a CSD perspective.
Sure, sir. And the second question is we're increasingly, obviously, focusing our product portfolio towards appliances, wherein we're seeing stronger growth out there. So could you possibly explain what could our mix be out there in terms of appliances? And could you explain how the competitive intensity is for us in this category, given that there are a lot of brands who are present in this space as well?
So our appliances that we would see 50/50, approximately 50% of our total turnover. And that continues to be sort of a growth lever available. Having said that, among the three categories, appliances are very competitively intensive. But I think we stand our own good in terms of our investment that we have made with some of our partners in terms of manufacturing capabilities, in terms of indigenizing some of our categories. And that, we believe, would be a big strength for us as we move forward. In terms of competitive intensity, though it is competitive, it is price-sensitive, we would like to differentiate ourselves more from a premiumization perspective in this category, like we would like to do with both cookware and cookers as well. So that would be our strategy as we move forward.
Sure, sir. If you could possibly give the mix in appliances, what would the largest channel of sales be for us in appliances?
Appliances as a category generally gets sold more through large-format stores and through regional chains in general. That's a dominant channel. Having said that, like in any business, general trade would be close to 40%-45% of the business. In any category, general trade would be 40%-45%. That applies to appliances as well. Appliances has a little bit of more leaning towards the large-format stores at an industry level.
Got it, sir. Got it. Thank you so much for your answers.
Yeah.
Thank you. The next question comes from the line of Praneet, an individual investor. Please go ahead.
Yeah. Thank you for the opportunity again. So I was wondering about in terms of the same small appliances and pressure cookers. So how are we planning which segments have been the most profitable? And in terms of price, I understand we want to premiumize. So are we going to operate with a specific price bracket in mind in terms of expanding our product range? And to what extent of these small appliances are manufactured domestically and imported? Because recently, I've seen that we started importing back from China. I understand we don't do most of it, but can you give me an idea of what percentage of the small appliances are actually indigenously manufactured or imported? And how is the segment plan growth going to go? And in terms of volumes, how has it changed in the last two, three years?
How do we plan on it changing going forward?
Volumes in appliances is high growth, and so we've done two things. One, there is indigenization happening as far as we are concerned. In our appliances category, indigenizing would be a big sort of strategic lever that we would like to deploy across some of the categories that we would bet upon, so that is something that would be a continuous process. Some of the new categories and some of the new material innovations will sort of come from China, and we replicate that and indigenize the production. That's the idea, so we don't want to be left out in certain opportunities that we get. But having said that, our China exposure in terms of products is not very high. We are consciously ensuring that we have a better indigenization ratio that helps us both in terms of cost as well as in terms of control.
That's something that we would follow as we move forward. That's our small domestic appliances strategy.
In terms of volumes, how have we fared so far? Because I understand there's a lot of competition in this. How was the overall volume growth in terms of these segments? And where do we plan on growing? I understand we have 190 SKUs. We are growing at a high rate. But what percentage of revenue is this right now? And how do we plan on growing? And what percentage is run through exclusive stores? Because I'm curious in understanding most of these happen through e-commerce and retail, right? So what percentage of small appliances? What is the split between both of them? And how are we also planning on scaling this particular exclusive brand outlets? And what is the product that is going to be inside that? And how are the revenues for that also going to scale?
So I think some of the questions wouldn't be appropriate for this call to answer some of these questions because these are related to our internal growth matrices as well and for competitive reasons. All I can say is the category is growing well. The category is highly competitive, but it offers enough space for players to play it if you focus and drive it in a very calculated manner. And that's what we intend doing, and we've been doing as well. It is profitable. At a broad level, it is profitable. So I think that is what I would say as far as these small domestic appliances are concerned. Specific questions, I think it would not be appropriate on my part to answer right now.
Okay. That's understandable. Can you just give me a broad brush in terms of strategy?
Those were your two questions. Kindly rejoin the queue if you have any more. Thank you. The next question comes from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead.
Yeah. Thank you for the opportunity, sir, once again. Sir, one question I had, given whatever we have discussed now, is it fair to say that we will probably look at more of a high single- digit in the year one, which is FY 2026, and maybe double- digit over the next two years as some of these strategies start dealing with us?
You stated what you want to do.
Sorry?
You stated what you want to do.
I would say, like I said, it would be a diluted position, progressively improving.
Understood. And second, just to margin, given the way we are looking at the [crosstalk].
I'm sorry to interrupt, Achal. You're not quite audible.
Yeah. Is it better now?
It's a lot of disturbance.
No, not yet.
Is it better now, by any chance?
Yes, a little better. Yes. Please be on your handset mode.
Yeah. I'm on handset only. Sir, just a second question in terms of the margins. Once you are done with the investment data, you write that you're talking about going back to 15%, the mid-teens kind of a margin what we had prior to FY 2019. Have I heard you right, sir?
No, no. What were you asked? How do you measure the investment? What if you measure the investment directed towards going back to that mid-teen growth you did in the past and getting back to mid-teen margins? That is the measure of success of the investment.
Understood. That's all from my end, sir. Thank you so much.
Thank you. The next question comes from the line of Praneet, an individual investor. Please go ahead.
Yeah. Thank you for giving me the chance. So I was trying to understand the overall strategy in terms of scaling our exclusive brand outlets. So I don't know much. I think you should just say, what are the segments do we operate in? Are they company-owned, company-operated ones, or franchisees? Or which ones do we plan on scaling? And I understand we've reached 1,000. How do we do that right now? I think we're mostly concentrated in Tier- 1 cities. And we want to expand into Tier- 2 and Tier- 3. Are all of these 400 going to be in those segments, or also we're going to do more in Tier- 1 also? And do you think there is a fluctuation in terms of our stores already in the cities? That's why we don't know how to scale there. Can you give me a perspective on this?
No, so I think the way I would put it is I think there are equal opportunities, both given the way the existing markets are expanding, existing cities are expanding, there are enough opportunities for retail expansion in the current cities as well, and also into some of the neighboring smaller towns as we move forward, so store expansion is geographically an opportunity across the country, and given the way the country's economy is moving across, I think that's a reality that we would see expansion across the country. I think that would be our approach as far as expansion is concerned.
What about the franchisee situation? Are we right now mostly franchise-operated? Can you give me a perspective on how these ownership structures run with the EBOs?
No. I think it's a mix of both own and franchisee. I think, like I said, some of these are very pointed questions, probably, which would not be of competitive sensitivity.
If you want to invest in your store, you're welcome. You can share all the details of what your investment is, everything, in a lighter way.
Understood. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
Thank you. I think it's been a quite engaging conversation. We would definitely look forward, interact with things, move forward, and good times ahead. Thank you.
Thank you, sir. Ladies and gentlemen, on behalf of Ambit Capital Pvt Ltd, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.