Ladies and gentlemen, good day and welcome to the Campus Activewear Limited Q4 and FY 2022 Earnings Conference Call. 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. Before we proceed on this call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risk, uncertainties, and other factors. It must be viewed in conjunction with our businesses that could cause future results, performance, or achievements to differ significantly from what is expressed or implied by such forward-looking statements. The Campus Activewear's management team is represented by Mr. Nikhil Aggarwal, Whole Time Director and CEO; Mr. Raman Chawla, CFO; and Mr.
Piyush Singh, Chief Strategy Officer. I now hand the conference over to Mr. Nikhil Aggarwal, Whole Time Director and CEO, for his opening remarks. Thank you, and over to you, sir.
Thanks, Nikhil. Welcome, and thanks everyone for joining our quarter four and FY 2022 earnings call today. In our maiden earnings call post-listing, I would like to express my gratitude to our esteemed stakeholders for making Campus Activewear Limited one of the most oversubscribed IPO of calendar year 2022 during a challenging macro environment. We appreciate and deeply acknowledge your trust in our vision to create India's leading sports athleisure footwear brand. We would like to take a few minutes to give you a brief overview and business dynamics of the company. Campus Activewear is India's largest sports athleisure footwear brand in terms of value and volume, enjoying approximately 17% market share in the Indian-branded sports athleisure footwear industry. Our flagship brand, Campus, was introduced in 2005 as a lifestyle-oriented sports athleisure brand that offers a diverse product portfolio for the entire family.
The brand offers multiple choices across styles, color palettes, price points, and an attractive product value proposition. We are a pan-India brand covering over 85% of the total addressable market for sports athleisure footwear in India. As Campus, we continuously innovate to satiate our end consumers' aspirations while being cognizant of the affordability metrics and solving for the accessibility or distribution link challenges. Our USP lies in the fact that we could bring global designs, trends, and color palettes adapted as per local taste to the Indian market in the fastest lead time possible. This has been made possible by virtue of our highly trained research and design setup, our vertically integrated manufacturing ecosystem, and our integrated and highly indigenized supply chain, and an omnichannel chain of distribution network focused on agility and digitization, so now I'll move to highlighting our manufacturing and distribution reach.
Campus Activewear owns and operates five manufacturing facilities across India. Installed annual capacity for assembly is pegged at 28.8 million pairs as on FY 2022. The company, as of March 2022, has more than 425 distributors directly servicing and fulfilling orders of over 20,000 geographically mapped retailers in more than 650 cities at a pan-India level. In addition, our expansive product portfolio has been made available through third-party pure-play marketplaces, third-party managed marketplaces, and online-to-offline B2B platforms such as Flipkart, Amazon, Ajio, Myntra, Fynd, and Udaan, among others, as well as our own e-commerce website. During FY 2022, we have sold more than 5.5 million pairs through online channels. The e-commerce platform sees registered and impressive year-on-year growth of over 160% during FY 2022.
While disseminating information pertaining to our fourth quarter annual FY 2022 business results, I'm delighted to share that Campus Activewear has delivered a consolidated revenue of more than INR 352 crores for the quarter, a year-on-year increase of 28% for the quarter, and an INR 1,194 crores for the year, an increase of 68% over FY 2021. Just to highlight, we sold highest-ever volume in the history of Campus at 19.3 million pairs, while registering the highest-ever average selling price for the company at INR 620 rupees per pair in FY 2022. Balance sheet demonstrates a position of strength with robust return ratios such as ROCE and ROE of 29.7% and 32.9%, respectively. We are sincerely thankful to our end consumers, our channel partners, and our passionate team, which have helped us in delivering this performance, which earmarks the underlying strength and resilience of the brand.
As always, we thank you for your indelible support and investment. I will now hand over to our Chief Strategy Officer, Piyush Singh, for his remarks. Thank you.
Thank you, Nikhil, and greetings everyone. Adding on to what Nikhil just said, FY 2022 has been an exciting year for all our stakeholders, both from an operational and financial performance standpoint. All our distribution channels, product categories, and geographical cohorts have demonstrated robust growth both in terms of volume and value amidst a challenging operating environment marked by frequent supply chain disruptions and inflationary trends. Our sales trends over the years have exhibited favorable traits such as sustained premiumization, reduced discounting, industry-leading ASP growth profile, and growing volume uptake. As a result, we registered the highest quarter four and full-year performance in the history of Campus Activewear, both from revenue and profitability viewpoint. Despite facing COVID-related, COVID-19-related sales and supply chain disruptions, we registered our highest full-year revenue, highest EBITDA, and highest PAT, both in amount and in percentage, in FY 2022.
While our trade distribution channel has demonstrated resilience with a year-on-year FY 2022 growth of 39%, our D2C is on a robust growth trajectory, exhibiting more than 150% year-on-year growth in FY 2022. In terms of trend line, our revenue has grown at a CAGR of 26% over the last three years, with volume growth at 16% and ASP growth at 9% over the same period. On the supply chain front, we anticipate a challenging inflationary environment in the near-medium term. Acting proactively on the same since the beginning of the calendar year, we started locking in long-term forward contracts for critical raw material categories and undertook inventory build-up based on empirical data analysis with an objective to maximize our sales and gross margins in the coming quarters.
Our quarter-over-performance is an early reflection of our efforts undertaken by the entire team towards cost optimization, which allows us some latitude in terms of cost control and price escalations. We continue to monitor our input costs with a hawk eye for the viability of our in-house manufacturing setup and for the benefit of our expansive ancillary vendor ecosystem as well. Now, as an outcome of such interventions, both on the supply side and on the demand side, we are pleased with the consumer sentiment and the demand profile witnessed so far in the current quarter and are confident of maintaining our trend line growth trajectory and margin profile in the near to medium term. I will now hand over to our CFO, Mr. Raman Chawla, to take you through more details on the quarter and the yearly performance.
Thank you so much, Piyush. Good afternoon, everyone, and welcome to quarter four earnings call of Campus Activewear Limited. During the quarter under review, brand Campus demonstrated a lot of resilience and clocked an impressive revenue run rate across all our distribution channels despite an adverse impact of COVID-19, which was witnessed in the month of January and February, early across our trade distribution and the D2C offline channels. Campus delivered its best fourth quarter, both in terms of top-line and bottom-line growth. Here is a quick snapshot of financial performance of Campus Activewear Limited. First, I'll take you through the quarter four FY 2022 results for consolidated entity. The revenue from operations increased by 28.1% year-on-year to INR 352 crores during the quarter, while encountering tailwinds such as COVID-19 third-wave impact witnessed during January and mid-February 2022. EBITDA was INR 78 crores as compared to INR 65 crores in quarter four 2021.
EBITDA margin stood at 22.3% in quarter four FY 2022. Net profit for the quarter stood at INR 39.6 crores with a PAT margin of 11.2%. In terms of our full-year results for consolidated, revenue from operations increased by 67.9% year-on-year to INR 1194 crores in fiscal 2022 despite a COVID-19-related adverse impact witnessed from April to May 2021 and then again in January and February 2022. Our full-year EBITDA stood at INR 243.9 crores as compared to INR 119 crores in fiscal 2021, demonstrating a 103% year-on-year growth in EBITDA. Fiscal 2022 EBITDA margins stood at 20.4% versus 16.8% in fiscal 2021. Net profit for the year fiscal 2022 stood at INR 124.4 crores with a PAT margin of 10.4% as against the PAT of INR 26.8 crores in fiscal 2021, which had a PAT margin of 3.8%.
Fiscal 2022 sales volume registered at 19.3 million pairs as against 13 million pairs in fiscal 2021, thereby generating a 48% year-on-year volume growth. Our fiscal 2022 aggregate average selling prices, ASPs, stood at 620 per pair versus INR 547 per pair in fiscal 2021, thereby resulting in a 13.3% year-on-year ASP growth. Finally, our net debt to EBITDA ratio has improved from 1.1x in fiscal 2021 to 0.7x in fiscal 2022, and while our return on capital employed has also gone up from 18.5% in fiscal 2021 to approximately 30% in fiscal 2022, and our return on equity has also gone up from 9% in fiscal 2021 to 33% in fiscal 2022. With this, I'll conclude and hand over to the operator for questions and answers. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to withdraw 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'll wait for a moment while the question queue assembles. Participants who wish to ask a question may press star and one now. We'll wait for a moment while the question queue assembles. We have the first question from the line of Priyam Khimawat from ASK Investment Managers. Please go ahead.
Yeah, hi sir. Thanks for the opportunity. You reported a direct-to-consumer channel sales of around INR 444 crores for FY 2022. Can you help me with the breakup of this between online and offline channel?
Yeah, hi. Piyush Singh, I'll take this question up. So while we typically look at this as our D2C channel, direct-to-consumer channel, in terms of breakup, our D2C online is close to INR 390 crores, and our D2C offline is the remaining INR 53 crores for the fiscal year 2022.
Okay. Sir, and with regards to our margins, we've done an exceptionally great margin in both quarter four and FY 2022. How should we look at this going forward? Because in FY 2023, I think there would be some pressure on cost inflation as well. So going forward in the medium term, what will be your margin guidance?
So no, great question. See, while we cannot give you a firm guidance, unfortunately, but what we'd like to say is that we've performed remarkably well historically. If you look at our trend over the last three, four years, five years, or even ten years, we've grown at a CAGR of 27%. And our margins have sustainably grown. Both the EBITDA and PAT margins have grown 1%-1.5% year-on-year for the last three years continuously since FY 2019. So we'd just like to say that we'll be continuing with the momentum that the company has demonstrated.
And.
Piyush, you?
Yes, you must have noticed that we have taken some proactive steps, as you have mentioned, inflation and all the other transient aspects, so as a company, as a franchise, we have taken some proactive steps of locking in our key raw material prices with longer-term forward contracts and some of the cost optimization related levers along with sustained price pass-through to our end consumers in a regulated manner. With all these interventions, both on the supply side and the demand side, we are fairly confident that we'll maintain our empirical growth trajectory while maintaining our baseline margins, both at EBITDA and PAT levels.
Okay. Sir, and we talked during our IPO meet that we'll be focusing on expanding our sneaker range as well as getting into newer geographies for this. Can you let us know what is our current contribution from this sneakers part of the portfolio, and how do we see growth going forward in this?
In what? Sorry, geographies?
In geographical space. So on a directional basis, whatever we have communicated during our roadshow meeting, we are on the right track. We have seen great promise coming in from our emerging and frontier markets in terms of geographical space. On a ballpark level, our core markets are contributing 50%-55% of our revenue, while the remaining is coming from our emerging and frontier markets at 45%. And we envisage this kind of a mix to sustain in the near-medium term.
My question was more pertaining to our sneaker portfolio, which I think was around 7%-8% of total sales. How do we see this going forward?
So we are currently still working on that portfolio. It's a major focus area for the company, like we told you last time. So while I cannot share concrete numbers, but I can tell you that we have a very, very good lineup of this portfolio for this year planned. So we are expecting some good numbers out of that.
There is a very thin line of demarcation between sports and athleisure footwear and casual footwear, which we interchangeably call as sneakers. Overall, this is the only portfolio that we are focused on from a larger perspective standpoint and from a market outlook standpoint. We are, again, very confident of the product profile and the portfolio that we have launched in the market so far. We have seen good customer sentiment and response to our products, which has kind of translated into our quarterly numbers and full-year numbers. We expect the same kind of response coming in from our end consumers in the forthcoming quarters as well.
Okay. Perfect. All the best going forward. Thanks.
Thank you.
Thank you. Participants who wish to ask a question may press star and one at this time. We take the next question from the line of Ankit Kedia from Phillip Capital. Please go ahead.
Sir, my first question was on your net debt. We still have around INR 175 crores of debt, and while our debt has actually increased despite significant top-line and bottom-line growth, while our working capital has significantly been impacted. So I just wanted to understand what is the roadmap to be debt-free and what is the sustainable working capital we should model?
Yeah. So great question, Ankit. So Ankit, as you must have noticed, during our opening remarks, we have shared part of our strategy that we are proactively investing into our inventory buildup because we foresee some inflationary challenges coming our way. More than inflationary, we anticipate supply chain disruptions to continue. And that's why we have taken a proactive step of building up the inventory, which in order to gain some incremental revenue growth and in order to sustain our margin profile. So from that perspective, so whatever increment in working capital you see, almost 20%-25% of that has gone into working capital buildup. In addition to that, in the inventory buildup, I'm sorry.
In addition to that, you'll also notice that FY 2021 was kind of a stretched year from a payables standpoint in terms of days sales outstanding because the company was trying to conserve cash in adverse operating environment. Now, since we have gone back to our regular payable days, which is in line with our FY 2020 numbers, we have kind of released payments to our vendors in order to ensure that they are in great health so that they can support us during the coming quarters when FY 2023 key performance is to be adjusted. Now, based on these two factors, almost 25% of our incremental working capital has gone into inventory and remaining 70% has gone into the normalization of our payables.
Owing to that, part of our operating cash flow has gone into, and you can do the numbers and we can connect offline on what concrete numbers are, has gone into our working capital enhancement. And part of this has been funded by our drawdown. While this number looks transitory in nature, in the near-medium term, in the coming years, while we come back to our normalized working capital days, you'll see our OCF to our EBITDA to OCF conversion to come back to our normalized levels of 50%-60%, almost 55%-60% levels to start with.
Sure. My second question is on the ASP increase. For the full year, we have had around 13%-14% ASP increase. On a runway basis, could you talk of quarter four, how has been the ASP growth? And incrementally, are we covered for the raw material, or do we need to take more price increases in the first half of the financial year?
Great question. Yeah, in terms of ASP increase for quarter four, also, we have done almost 10% of ASP increase from INR 568 to INR 627 for quarter four. And similarly, going forward, we don't see much of price increase right now because we've already taken two major price increases in the last two years. So we are in a comfortable spot that way to maintain our margins.
Just to add on, hi, this is Raman here, Ankit. We continue to monitor our cost inflation, right, on a virtually month-on-month basis, right, and then directionally take a view saying that we need to go ahead and take a price increase or anything like that.
Ankit, just to add on an empirical basis, if you'll notice, while FY 2022 is a great year for us, we have demonstrated more than 13% ASP increase, which is a mix of both change in sales mix and the cost escalations or the price escalations that we have taken. On a slightly longer-term basis, our ASP growth has been in the zip code of almost 8%- 8.5%. We expect this ballpark ASP increase to continue in the near-medium term, both on account of largely on account of change in product mix and premiumization that we have witnessed across our overall product portfolio.
Last question, if I may ask, in the D2C sales, what is the percentage of B2B from Udaan and Ajio? And incrementally, what are the contracts with these guys if they are doing price war and our distributors are getting impacted because of that?
So, Ankit, while we are not sharing the exact spreads, but let me just assure you, the percentage coming in from our B2B sales overall as a vertical is very small compared to our overall online sales. It's in low double digits, low double digits right now. So far as price war and all that for kind of a situation is concerned in terms of territory pricing, let me assure you that over the last one and a half, two years, we have maintained a hawk-eye view on how the business operations are being conducted. We have the requisite technology infrastructure in place to understand and to figure out who has kind of done price undercutting and territory infringement. And based on that, we have taken proactive measures across all our partners, be it our distributors, trade distributors, or be it our B2B partners.
So far, they have maintained harmonious operations across territories that they have been assigned, and this is something that we have witnessed over the last six to 12 months, and we don't foresee any kind of disruptions coming our way because of this channel. And overall, the trend that we have seen lately is they have taken a backseat in terms of cash burn so far as our segment is concerned, which has, again, assuaged our concerns to a larger extent.
Yeah. Ankit, hi, Nikhil here. So just want to add that while for us, all the channels are extremely important, especially the legacy channel of distribution, where we have worked very hard to create this kind of distribution network, India's largest distribution network over the last three decades. So there is no reason why we would be looking to sabotage that in any way.
So we are very clear with the strategy that we will not be growing other channels at the expense of distribution business, right? So I just want to assure you that. And this business is anyways only 10% of our overall D2C online portfolio. So it's very small comparatively.
Sure. That helps. I'll come back in the queue for more questions. Thank you.
Thank you, Ankit.
Thank you. We take the next question from the line of Tejas Shah from Spark Capital. Please go ahead.
Hi. Thanks for the opportunity. My first question is kind of repetitive of the earlier participant, which is around margins. So we have actually a very healthy set of margins in FY 2022. That was also considering the difficulty here that we had across on raw material part. So just wanted to understand what is our margin philosophy. Is margin a goal-seeked number around which we build the business model or business plan for the year, or is it an output dependent on growth that we chase for the year?
So hi, Tejas Piyush this side. So Tejas, our objective primarily is to so financials are just an outcome of how we strategize and how we operate our business and execute our strategies. So the idea here is to continuously offer the best-in-class product profile to our consumers, to our target consumers. And at the same time, the endeavor is to continuously premiumize the portfolio while not leaving gaps in the pricing spectrum that we operate in. So that's the overall philosophy that we operate with. Now, with that philosophy, as we premiumize over the years, we see both kind of margin expansion. We have seen both kind of margin expansion, both at the material margin and the gross margin level on account of change in product mix and because of premiumization.
Again, between gross margin to EBITDA because of the operating leverage that we have generated, given the kind of franchise we have created over the years, not just limited to the asset-light piece, but also because of rationalization of our fixed costs. So whatever margin expansion we have witnessed over the last three, four years, it is broadly equally divided between the product mix and the premiumization bit and the operating leverage bit. We believe that this is how we'll be continuing in the near-medium term from here on.
Yeah. No, and I'd also like to add, Tejas, Nikhil here, that we are also extremely dedicated and committed towards growing the brand equity much stronger.
So we are continuously investing behind the brand in terms of our marketing spend, which has gone north of about INR 100 crores over the last two years. That is what we've spent in pure ATL spends. So looking at with these kind of best-in-class marketing spends and by virtue of growing the brand, we're also looking to grow our margins. We always endeavor to do that. And at the same time, operating leverage is now sort of kicking in as well as we are growing the revenues beyond the fixed expenses base.
And just to close the loop on your question, it's neither a goal-seeked nor a top-line chase that we incur. It's actually a balanced approach that we follow with the philosophy that we have just underlined. If we execute, see, the idea is very, very simple.
If we execute what we conceptualize in a very dedicated manner and in a very disciplined manner, both gross margin expansion and operating leverage are bound to kick in, and this is something that we have witnessed over the last three, four, five years.
Fair enough. So I'll just partly answer the question has been answered at least for me. I'll just rephrase the part which still was unanswered at least for me again. Is that, see, there are companies which specifically have in a larger lifestyle retail space who specifically mentioned that they don't want to operate beyond 22% and not below 20%. And any alteration in that, they need intervention to protect that range. So I just wanted to understand margin philosophy from the perspective that beyond what level you are not comfortable, you believe that you'll attract unwanted competition, and below which level you will actually make aggressive pricing intervention if need be to protect that kind of profitability. That was the main crux of the question.
Tejas, while we are not giving out explicit guardrails out there, but yes, we also do follow guardrails in terms of margin protection. And there are guardrails in place within the system which ensure that at every single extreme or every single extreme of the ambit, we take corrective actions more on the proactive side rather than on the reactive side. This is something that our finance department and our CFO monitors on a very, very dedicated, in a very, very dedicated fashion, wherein any leading indicators, both in terms of our demand forecasting, our volume uptakes, in terms of sales velocity and things like that, it's a very detailed and, you can say, exhaustive exercise that we undertake. But we rely more on leading indicators and go by the guardrail principles while we are not at liberty to share those guardrails over this call.
But Prime Office, that's the mechanism that we follow in order to ensure that we have an optimum mix of both revenue growth and at the same time, a healthy margin profile. So it's a balanced approach end of the day that we take in order to ensure that we kind of meet both the objectives.
Sure. Sure. Thanks. Second question pertains to on growth side, how should we, so I believe, we must be over-indexed in some of the regions and we are under-indexed in some of the regions. So in terms of clarity of regional growth, how should we think about coming two, three years where you'll be putting more focus and where it will be relatively on autopilot for you?
You mean in terms of regions, right? Yeah.
Yeah, regions, yeah.
Yeah, so see, we basically have a very clear strategy. We are very so in our core markets like North and East, Northeast, and even Central to that extent, which contributes to about 55% of the overall top line. We are almost monopolizing these markets in a way, and we will continue to do so. We are very, very strong in these markets, then when it comes to our frontier and emerging markets, which is basically West and South India, we have a two-pronged approach there where we are expanding both in both the channels quite rapidly, be it offline distribution or be it D2C online. D2C online has significantly actually helped us enter the territory of, let's say, South India, for example, where the distribution has historically been not that strong. It's become a major focus area because of that.
And D2C online is complementing our distribution channels now to enter these new frontier territories. Similarly, West India, where we have been very strong, and now we have entered with our own EBO outlets as well, with our COCO stores and franchisee-owned franchisee-operated stores. Both the models are doing extremely well along with distribution and D2C online. So all three channels are present there. So the approach is quite simple that we need to maintain our growth and market share and grow that in the core territories. And at the same time, both in frontier and emerging markets, we are taking those markets head-on to grow in line with the, let's say, the entire sports shoe market segment share that these markets command. I hope that answers your question.
Yes, it does. Thanks. That's all from my side and all the best for coming quarters.
Thanks, Tejas. Thank you.
Thank you.
Thank you. We take the next question from the line of Akshen Thakkar from Fidelity. Please go ahead.
Hi guys. Congratulations on a good set of numbers and a good debut. Two questions. One was going back to the earlier question on working capital. So I understand last year was not steady state. Again, this year you might have had compulsions on inventory, on how you're paying payables. If you could just help us understand going ahead, what's the kind of working capital levels or the cash flow conversion level that you'd want to work with, that'd be helpful. That is question one. Question two was if you could help us in your business. June quarter, last two years, obviously, I'm guessing you would have had an impact. This year should be a normal quarter. So just trying to understand how much of delta growth that adds to full year to the extent possible to discuss that.
The third was around gross margins, not to nitpick, but some volatility quarterly. Last quarter was the gross margins were higher, this quarter are lower. I mean, is gross margin also cyclical, or we should take Q4 numbers as a starting base and then pricing and sourcing interventions kick in? Those three questions from my side. Thank you.
Yeah. Hi. Thanks for all the three questions, Piyush Desai. So I'll take one by one, starting with the first question around working capital. So see, the thing to understand here is what was we have taken this two-pronged approach, one around the inventory as a proactive approach, and the other is around the payables. Now, I'll start with payables first. FY 2021 for us was slightly stretched in terms of payables because we were in a cash conservation mode due to COVID-19 and the uncertainties regarding it. So typically, our payable days in terms of days sales outstanding are in the ballpark of 60-65 days of days sales outstanding in terms of sales so far as payables are concerned. Last year, they got stretched to almost 88 days.
Now, in order to ensure, as you are aware that we have a very expansive base of ancillary network, and we need to ensure that they are in good health in order to support us for future growth and from a margin conservation standpoint also, needless to say, from an agility standpoint also. So we have kind of normalized that stretched payables from 88 days to almost back to our normal levels of 60 days in terms of day sales outstanding on payables. Now, that has led to almost 80% of our operating cash flow consumption or 75%-80% of our operating cash flow consumption because we've kind of funded almost INR 90 crores towards normalizing those payables in a way. Now, the second thing, which was more around inventory, we have done slight buildup on our RM and SFG because we see this inflationary trend coming in.
We have not only started locking in long-term forward contracts, but we have also started building the requisite inventory for fungible inventory elements such as matches, raw materials, PU, PVC, and some bit of SFG. Now, that has consumed another 20% of our operating cash flow, which was expected in FY 2022, and that translates to almost INR 30 crores-35 crores of incremental inventory buildup at our side. Now, once we normalize all these elements, our typical and another, you can say, INR 17 crores-18 crores of our working capital got stuck into our IPO expenses, which is transitory in nature. Now, it has been refunded to the company, to the selling shareholders.
Selling shareholders.
Because it was an OCF, it was an offer for sale to FS. But at 31st March, it was locked in from our working capital. All that has come back. So in a steady state scenario, our EBITDA to OCF conversion is expected to be in the ballpark of around 55%-60%. And this is something that we expect once this entire thing normalizes in the next three, four quarters. So that's the outlook on the working capital side. Now, coming to your sorry, coming to your second question around or rather your third question around what is the normalized June quarter, while we are not giving any concrete guidances around it. But if we take the empirical evidence into play over the last five years, our first quarter has typically contributed around 17%-18% in terms of our overall annual top line.
This trend has kind of sustained over the last five years. This is not transitory in nature. We expect our June quarter to perform on similar lines going forward as well because of the seasonality element involved. The seasonality element also plays into your third question around gross margin because typically, open portfolio has lower gross margin compared to our closed portfolio. First two quarters of financial year are heavy on open, have some meaningful contribution. No, they're not heavy, but they have some meaningful contribution coming in our overall sales mix from open portfolio. The best way to look at it is on a year-on-year basis, we should look at the gross margin profile for a quarterly performance rather than doing a preceding quarter analysis as a base rate.
Okay.
I mean, margin expansion is a very, very key priority. I mean, if you look at from 2019 to now, we've increased steadily from 46% to almost about touching 50% for this year.
Okay.
The thing is, just to add one last line on the seasonality bit, our first half empirically has contributed 38%-40% of our top line. And our second half typically contributes another 60%-62% of our top line. We've been kind of smoothing the curve over the years. We have changed it from 30-70 to almost 40-60 now. And we expect this to smoothen a little bit going forward as well. But this is what the trend line looks like as of now, and hence the impact on the margin profile as well.
Okay. Great. But if I look at margins this year and I adjust for the IPO expenses, clearly not. Should I take that as a base when you say you aim to maintain or increase, or should I take the reporting?
Sorry to interject. The IPO expenses were not a part of P&L. It was just a balancing to cash flow routing.
About recovery of shareholders.
Okay. So it has no impact on our P&L or our margin profile.
Only a cash flow impact.
You've not yet written recognized in books of accounts. So you've not recognized through P&L, you've done it directly through the balance sheet, is it?
Yes. Yes. To the balance sheet directly.
Because this is not a company expense, actually. The IPO expenses are to the selling shareholders, which was completely over.
It was just an advance given on behalf of selling shareholders, and now it has been recovered. Correct.
Thanks.
Thank you.
Thank you, Akshen.
We take the next question from the line of Jaspreet Arora from Equentis PMS. Please go ahead.
Yeah. Hi. Thanks for greeting, gentlemen. Congratulations on a great listing end of the quarter and thank you so much for all the disclosures and consultations. My first.
Sorry, Jaspreet, can you come a little closer to the mic?
Be a bit louder.
Yeah. Is it better?
Yes.
Yes. Far better. Thank you.
Yeah. I'm so sorry about that. So yeah, great quarter. And listening and thanks for all the disclosures. My first question was around the slide 30, three zero, right, where you've given the price segmentation and the three buckets, the entry, semi-premium, and premium. So as per my quick calculation, wanted to check if by volume, would it be right that 70% is coming from the entry and the next 30% between the semi and the premium segment?
So, Jaspreet, while I can give you some directional sense out there, it's not 70, 30, but it's more like 45, 55. Yeah. 45 or 55 coming in.
What's 45?
You can say 45 coming in from our entry segment and remaining 55% coming in from semi-premium and premium.
Okay. Okay. Okay. Got it. So related to that was our premium segment where we are competing, where the pricing is about INR 1,500-INR 3,000 and around that segment. When we are pricing in that, so one is obviously the cost structure margins that we are trying to get here because obviously it's premium product. And the second is the price proposition or the value proposition that we're offering to the client. And last, obviously being the closer we're getting to that border where we cross and the likes of Puma and Adidas likely become more attractive. So just wanted some color or thoughts in this bracket, what exactly goes into or whatever you can share into the pricing of this particular bracket.
Four to five x. Jaspreet, what we typically do is we follow a cost MRP kind of matrix, starting with our economy to our semi-premium to our premium portfolio. The differentiating factor around our premium segment, which essentially where the belly of our volume offtake lies. It lies between INR 1,500 to almost INR 2,200 rupees-INR 2,300 rupees. That's the belly in this segment so far as volume offtake is concerned. Now, how we have differentiated from other brands is one, on the basis of our cost leadership advantage that we have by virtue of our vertically integrated manufacturing setup. We are one of the lowest cost producers for the same kind of product that our competitors have to offer in this market.
Second, of late, over the last three to five years, we have done a lot of ATL spending, a lot of advertisement spend towards creating that aspiration in our target audience. So if you look at our last two years' performance only, we have spent more than INR 100 crores towards brand building alone. And this has gone a long way towards creating that aspiration in our target audiences. So if you do a like-for-like product comparison, you'll get your answers as well. What is something that we are offering as a product vis-à-vis what the competition is offering? That's the push.
Yeah. At the same time, you see whatever value proposition that you're giving, like you mentioned, it's significantly higher than any other competition, be it domestic or an MNC brand.
So generally, any of our portfolio prices are at least four to five X cheaper than the similar, let's say, comparable MNC brand product. So that's how we operate. And that's the biggest USP for us as a brand and as a product company, right? So I hope that answers your question. So basically, from INR 2,000-INR 3,000 segment, this is a key focus area for the company going forward as well. And the kind of products that they're putting into in that range are being sold by the MNC brands at not less than INR 8,000-INR 10,000.
Okay. Okay. Okay. Got it. Got it. And basis, the last couple of years' history or whatever, ex-COVID, let's say, what percentage of sales would be during so-called sale versus the full price, whatever that you've been able to track? Even on the MNC, it's much larger during those cases.
Yeah. Aggregate discount.
Aggregate discount.
Yeah. We can tell you.
See, 60% of our sales even now is coming from trade distribution channel. 60% of our sales comes from our direct-to-consumer channels. Just to give you some color on the online channel, which contributes roughly 35% of our sales, our aggregate discount on this channel has always stayed below 20% since inception.
Okay.
This is the best in the class, by the way. You will not find any other footwear brand who's operating in lesser aggregate discounting than this.
Okay. Okay. Okay.
That's it.
And trade distribution, which is a B2B format. So it's not that relevant because the matrix is more relevant on the retail side.
Got it. Got it. And just lastly, one of the vectors you mentioned on slide 25 was product diversification via extensions into light categories. If you talk a bit more here, what exactly are we referring to?
So by allied categories, we mean the range of sneakers, for example, similar to just to give you an illustration, like how Adidas has a Stan Smith range. So those kind of shoes is what we call casual shoes range as well, right? So that is something that also we are focusing on. But apart from that, in terms of allied categories, we are not looking to diversify anytime soon into, let's say, apparels or any of such accessories, given that there's a massive opportunity in the segment that we're currently operating. We are the market leaders here, and we don't want to divert our focus or take our focus away from the core segment. So we are very clear with that. And until we have a very sizable market share and are comfortable in this position, we would not be looking to expand into any other allied categories.
Understood, and that's helpful. Great going. Thanks so much, and all the best.
Thank you.
Thank you.
Thank you. We take the next question from the line of Akhil from Centrum. Please go ahead.
Hi. Thanks for the opportunity. My first question is on the B2C online part. I think in the previous question, you mentioned that we are using that channel to penetrate into our emerging and frontier markets. Would you be able to bifurcate how much of B2C online sales coming from our emerging and frontier markets, and how much is coming from the established markets?
Yeah. While I can give you a directional sense, Akhil, around that, as an anecdote, South India, especially the three South Indian states, are frontier markets for us. So we, as a management, decided that as a strategy, let's B2C online be the spearheading channel for these markets because rolling out physical trade distribution network is, one, time-consuming. And second, you need to identify your demand micro-markets, your cohorts, and your customer persona before entering into any market. So it's time-consuming as well. So it's resource-intensive as well. So as a result, we have successfully penetrated in our South India market. So for example, if South India is contributing roughly 10%-12% of our overall top line, 80% plus of that is coming from our D2C online channels. Similarly, West is an emerging market for us.
Here we had followed a similar strategy, and then we did a very optimized entry into this market using trade distribution as a network. So now, while trade distribution contributes the lion's share, almost 30-35% of our emerging market sales is coming from B2C online network. So directionally, see, on a company level, 60% of our sales come from trade distribution, 35% comes from B2C online, and remaining 5% comes from B2C offline.
Which is our own stores.
Got it. Got it. And just from a brand equity perspective, right, given that in a trade channel, we are more established in North markets, how does that differ when we sell through the online channel? I mean, I'm assuming not just the effort required to put trade channel in South and West on our higher side, but also the brand equity might be slightly weaker as compared to our North market. So anything you can highlight, how does it differ, basically, if we sell through online channel versus the trade channel?
Yeah. So see, like I told you earlier, we have one of the highest marketing spends amongst all of the peers. And in sports shoe segment, I can tell you that there is nobody even close to this kind of ATL spend that we are doing. Now, we are, again, the only company who are investing proportionately higher, disproportionately higher, actually, in our online in our digital channels, in our online channels as a marketing spend. I cannot give you a number, but it's significantly higher than any other competition. So that has also significantly helped the company gain market share and create brand equity through the online medium into our frontier markets where traditionally the brand has not been present.
So using that as an advantage to our strategy, we've been able to now successfully, on the back of online channel in these frontier markets, we've been able to start and expand our distribution channel as well, distribution reach, by appointing very well-managed distributors and retailers. So that's how we have played on the strategy. So basically, our marketing spend on the online channel is quite high. And that's how we're managing the operations.
And just to add to it, Akhil, see, in terms of market size and our revenue contribution on a geographical perspective, we are fairly indexed at par so far as North India, Central India, East India, and West India markets are concerned. So if, for example, 20% of the overall sports and athleisure footwear market is based out of West India, we are more or less at par with that market sizing so far as our own revenue contribution is concerned. The markets which are left are frontier markets for us, where we have taken a very differentiated approach, wherein B2C online has been used as a spearheading channel to establish the beachhead. And then trade distribution would follow suit once customer persona and demand micro-markets are identified.
Got it. Got it. This is helpful, and the last question about the increase spends. You mentioned that we spent around INR 100 crores on brand building for the last two years. Would it be possible to share as a percentage of sales, say, average FY 2018 over FY 2020, how much you spend as a percentage of sales in A&P versus FY 2022?
Sure, Akhil. So we are spending close to 6%-6.5% of our revenues, of our overall revenues in our ATL spends for both the channels put together, for basically all the channels put together.
How much that was historically, let's say, FY 2018-2020, if I have to compare, exclude 2021 because of pandemic, but 2018-2020?
Sure. So pre-COVID times, this was generally in the range of 4%-4.5%. We've increased it by 200 basis points, basically because we've pulled back a lot of the operating leverage that has come into the company in the last two years. We've pulled that back into the marketing spend without impacting the margins, right, because we have had other levers to sort of grow the margins alongside the operating leverage. So that's how we have come to this number of 6%-6.5%. And while I don't want to give you guidance, but I can tell you that as the top line is growing, the revenue base is growing. The absolute quantum of this ATL spend is now material enough for us to sustain any kind of campaign, how intensive it might be.
See, Akhil, our philosophy is very simple.
We are trying to accentuate the experience of our end consumers around a trifecta of aspiration, affordability, and accessibility. Over the last decade, we have already solved the problem. We believe we have, to a larger extent, solved the problem of affordability by offering the best product value proposition and accessibility by rolling out the most expansive distribution network, be it online or offline. Now we are spending more and more money towards enhancing or elevating your experience towards the aspirational part of the trifecta. That's why we have upped the ante so far as our ATL spends are concerned and taken it up by two percentage points from 4.5 to 6.5 percentage points.
We believe in the near medium term, as Nikhil has rightly mentioned, we'll be maintaining this kind of a trajectory in order to elevate the brand experience and the overall aspiration and halo around it.
Sure. Sure. This is helpful. Let's talk to Akhil and wish him the best luck for coming forward.
Thank you.
Thank you.
Thank you. We take the next question from the line of Zubair. Please go ahead.
Hi. Congratulations on a wonderful set of results. A couple of questions from my side. One of them was on the gross margin, please. So appreciate that it has been somewhat lower than the previous quarter, but the EBITDA was still up. So if you could just discuss the potential levers that you've got in place to make sure or kind of how you ensure the bottom line profitability. For instance, the other expenses have come down or the employee benefit expenses have been also moving around a bit. So could you just discuss the levers that you have in place to make sure that EBITDA kind of stays where you would want it to stay despite the bit of weakness on the gross margin?
Sure, Zubair. So good question. So while on a year-on-year basis, we have done really well compared to FY 2021 by increasing both the gross margins, EBITDA and PAT. On a quarter-four basis, if you compare to quarter-four FY 2021, yes, we have taken a slight dip in the margin in terms of less than 1% in terms of PAT, mainly on account of two reasons. One is the annualization has kicked in for our employee cost, where significant hiring had been done in FY 2021 and FY 2022. So the annualization of that happened in FY 2022 for fourth quarter. The other impact that we have seen, which was largely transient in nature, again, was due to the increase in freight and power and fuel cost, which has led to somewhat a temporary blip in the margin.
But we did not really have time in quarter four to pass on this increased freight cost immediately to the distribution channel and to the channel partners in online. So going forward, we see it coming back to normalized rates as the crude rates have gone back down again. They're not as high as they were in the beginning of quarter four. So given those scenarios, we are quite hopeful and optimistic that we'll continue to maintain our margins going forward the way historically we have.
So far, Zubair, just to add to it, if you really dissect it, our material margins for quarter four in FY 2022 and quarter four in FY 2021 are more or less in the same ballpark at 48.4% versus 48.8% last year. The transient blip that Nikhil just spoke about shaved off another 60 basis points because we had just taken a price increase in December 2021, which was quarter three. There was a certain, in addition to this power and fuel and freight spike because of the crude spike happening in January, there was a reset of GST rate from 5% to 12%, which was announced by the government overnight in January. That has also contributed to a large extent towards this gross margin dip of almost 1% on a year-on-year basis for the fourth quarter.
Rest assured, we have taken enough steps and enough operating leverage has kicked in for us to preserve our operating EBITDA margins, not from a quarter-on-quarter perspective, but from a near medium-term perspective as well.
Yeah. That makes sense. And we're very supportive. And understanding this, how often can you pass on that cost? So for instance, what's the propensity that the business would possess the ability to pass on? So could you go from here and have an extra 10% increase before hurting the demand?
Yeah, Zubair, we have demonstrated this exact scenario very successfully over the last two years post-COVID, where we have had significant inflationary experiences once in 2021 and then again in 2022. Both the times, as you can see the trend of the company, in spite of passing all of that cost to the end consumer, we have actually grown our margins. Not only have we passed it on, right? We have shown and we have demonstrated that experience. Yeah, going forward as well, we are very hopeful of maintaining it.
See, the illustration is very simple, Zubair. Even if there is a once-in-a-lifetime kind of raw material inflation of, say, 15%, our cost-to-MRP matrices are such that it's only one-fourth or one-fifth of the overall MRP, right? That's the kind of spectrum we operate in. And even in that, 60% is raw material cost and 40% is our value addition cost. So if you really look at it, a 15% inflationary impact would only translate into a sub-5% MRP impact. So on a median base of, say, INR 1,500 rupees, that 5% roughly translates to less than INR 100 rupees. That is INR 75 rupees. So we have demonstrated time and again enough price elasticity at our median price point, way higher than this 5% escalation, that we can successfully pass on to our end consumer.
And this is something that we have successfully done over the last two, three years without causing any demand erosion or volume-of-take impact. And we are confident that so long as this stays in the same ballpark, we should be able to handle this well.
Just one final question from our side would be, on the EBITDA side, if you could just share some statistics on what's happening there because I remember I think there was about 100 stores, and I see that balance sheet obviously has somewhat increase in the leases and the right-of-use assets. So do you want to understand that? Do we see more of that coming onto your balance sheet, or are these the flagship locations that the business has now kind of sorted out, and then the rest of them would be taken by the more franchisee side and don't really see more further uptake on these right-of-use or leases?
Sure. So see, as of March end, 2022, we have basically closed it at about 107 odd stores, of which roughly 30.
65, yeah.
About 50 stores are basically 40 stores, sorry, are franchisee-owned, and the balance are basically company-owned, company-operated. Now going forward, this mix was largely because first two-three years, we've taken our time to demonstrate a very robust COCO model for our franchisee partners. Only lately, since the very first year of FY 2022, we've started opening franchisee stores. Going forward as well, the strategy is very clear that we are not firstly a retail brand, right? We are a consumer brand, so we don't want to get into that retail play. For us, EBOs act as a very, very good complementary channel for firstly showcasing the entire breadth of range that we have, the most expansive range in the country that we operate with.
We are able to demonstrate that expansive range very successfully through our EBO channel, not only to the end consumers, but also to our retail partners on ground in various cities where we operate. Also, through our EBO, we've been able to very successfully premiumize our range, where it's much more easier for us to sell a shoe north of INR 2,500 or INR 3,000. Because of these complementary benefits, that's the strategy with which we have taken this approach to open our EBO outlets. Going forward as well, we would be looking to open at least 100 odd stores on a year-on-year. This is just a tentative guidance, but a majority of them would basically be franchisee-owned, franchisee-operated, and very, very few of them would be company-owned. We don't see a major capital expense going forward on account of our EBO outlets.
So Zubair, the strategy is very, very simple. We have perfected the model. We have kind of demonstrated the earnings profile that you can get out of a Campus-owned exclusive brand outlet to our franchisee partners. We have empaneled leading franchisee partners all across the country, and now the idea is, so whatever number of stores we open from here on, 80% of that would be franchisee-owned, and we would only be entering using our company-owned, company-operated stores in the flagship locations. So going forward, we are going to follow a hybrid strategy, more lean towards asset-light compared to asset-heavy.
Perfect. That was my question. So incremental store openings, 80% would be franchisee. That's very helpful.
Absolutely.
Thank you very much, guys. Really appreciate your time.
Thank you.
Thank you. We take the next question from the line of Shashank Agarwal. Please go ahead.
Yeah. Hello, Audible.
Yes. Go ahead, please.
Yeah. My question would be, do you plan to become a B2C player by offering products directly to consumers in the marketplace model? And my next question would be, what is the advertising percentage directly towards the marketplace model?
No, no. So sorry, what's your name again? Shashank.
Shashank.
Shashank, I just want to say that we know the, like I said earlier, all channels are extremely important for the growth of the company, and we are looking at it from an omnichannel perspective. That's the strategy for the company. The strategy is not to focus purely on D2C online, for example, like you said, and as an omnichannel approach, so far, we have given sales in the ratio of 60/40, 60% from distribution, 40% from D2C channels. Again, I cannot give you guidance going forward, but I can just say that this mix would not drastically change, probably, right? So just to assuage some concerns that we would not become an online-only brand, if that's your question.
See, our philosophy is very simple.
All three channels that we operate, be it trade distribution, be it our online, or be it our own D2C offline channel, are complementary to each other. They have complemented each other's growth in a certain way. EBOs have complemented the premiumization of our distribution network. Online has led to the entry of trade distribution into frontier and emerging markets, and similarly, by virtue of our trade distribution, our online channel became so successful because people were already aware of the brand, and they were kind of aware of the size and fit because it's a touch-and-feel category.
So all three channels are equally important to us, and that's why we are focusing on an omnichannel play, where the idea is to offer a seamless purchase experience to our customer, irrespective of the customer journey they follow, whether they become aware of the brand online or offline, whether they kind of, you can say, use or touch or feel the brand online or offline, or they end up purchasing the brand online or offline. We have to be there, present at every single milestone in order to ensure that there are minimum drop-offs, and we end up owning the purchase journey of every single customer. That's the philosophy. It's channel agnostic. We are an omnichannel play for the longest time.
Okay. Thank you for it.
Thank you. We take the next question from the line of Anvit Shah. Please go ahead. Mr. Shah, please go ahead with your question.
May I ask a few questions to the management? So I just wanted to understand, it almost took us 15, 20 years to reach a INR 1,000 crore revenue number for Campus. So you believe the next INR 1,000 crores will be a lot faster, let's say, in the next three or four years, given that we have a very big push for D2C, be it online, offline? So the next INR 1,000 crores can come in the next three years or so?
So nobody's seen the future, but what I can tell you is that we have grown at 27% CAGR over the last 10 years. So we were a sub-100-crore company in 2010, and we are close to see about INR 1,200 crores FY 2022. So I think that way we have done a very good run rate. We have demonstrated one of the best run rates all over in this entire segment throughout globally, I would say, one of the best performances. So certainly, I cannot comment on the three-year journey, but our endeavor would be to keep on growing the way we have.
Got it. Got it. Got it. Just wanted to understand, let's say when we move to the D2C channel, as our percentage of revenues keep increasing from there, what would be a differential that we would be seeing on the gross margin as well as on the working capital? Because if I see for the last two years, if your working capital has reduced significantly and your margins have improved significantly to 22%, so for every 1% increase in D2C, what's the differential that you would see in your gross margin and your working capital?
Yeah. Hi, it's Piyush here to side. So while we are not, I mean, we are not at liberty to share the exact segmental margin profile across our channels, but directionally, so far, our D2C channel has led to a better margin profile compared to our conventional channels. And that's why, as our mix has changed over the last three, four years, you have seen an incremental improvement in our EBITDA margin and in our PAT margin profiles. So I mean, but that said, we are also leveraging opportunities in our conventional channels. And of late, over the last two, three years, despite COVID, we have managed to kind of sustain and maintain our better margins in those individual channels as well.
As a composite portfolio, we have shown improvement on a sustained basis over the last three, five years in all kind of margin profiles. We expect that going forward, as Nikhil has mentioned, we will kind of not only maintain our growth trend line, but we would also maintain our margin baseline while the endeavor is to better all three aspects from here on.
Got it. And is there a possibility where we can actually drive much faster growth by increasing our ad spend? The ad spend currently at 6%-6.5%, and let's say if you take it 8%-9% because our operating margins are already at 22%. And by increasing the ad spend, can you achieve that you'll be able to improve your competitive edge in the market?
I mean, yeah, that was what I was saying. Yes. And that's the reason why we have accentuated our ad spend by 2 percentage points because we believe that creating aspiration is equally important as offering the best product-value proposition and the best distribution network. So everything goes hand in hand, and that's why we are now focusing more on our ad spend increasing.
Yeah. Also, with ad spend, as we're increasing the demand uptake, we're also working parallelly very aggressively on our supply chain to be able to fulfill all of that demand. So that's a key priority focus going forward as well.
Got it. So what makes Campus a lot different, let's say, from other players? What really keeps the management awake at night in terms of competitive scenarios?
So in terms of competition, see, there would be at least 100 or 200, I would say, private labels in a way. I wouldn't even call them brands. That's the nature of the industry, and they are basically segmented. These are very small regional cohort players. They operate in a very small zone. And Campus is the only one, the largest, and the only company that is a true Pan-India brand in sports and athletic category. So there is no true-blue competition for Campus. There is no single other brand that sort of competes with us in that sense. So honestly, there's nothing really that keeps us awake at night. From a competition perspective in that sense, we see a very good demand, and also the brand equity has only grown stronger, much, much stronger in the last couple of years.
So in terms of competition, we are fairly covered in that sense.
Campus has completely lost.
And so yeah, I don't know what else.
See, I'll just add to what Nikhil just said. We are fully cognizant of the fact that competition always exists, and if there are opportunities, if there are small pockets of higher margin realization opportunities, people would also come in and crowd that space, but at the same time, our endeavor is to strike a fine balance between our trend forecasting, our demand forecasting, our planning function, and sweating out or optimizing our vertically integrated manufacturing ecosystem. At the same time, supplying the right merchandise at the right place, at the right time, and at the right price to our channel partners and end consumers. Keeping that fine balance in place is something that is our endeavor, and so far, I mean, we've been fairly successful in maintaining that, and the endeavor is to always strike that fine balance going forward.
Got it. Got it. And as Campus, as a company, you would be generating close to INR 125 crores-150 crores cash flow every year. So what will your typical reinvestments look like? Would it be going to CapEx, debt repayments, or would it be coming out as cash to shareholders in terms of dividend payouts? What would be the reinvestment plan?
Yeah. I mean, hopefully, as we generate, like we told you earlier, 55%-60% OCF going forward. I mean, certainly, there would be some dividend payouts. We don't need all of that cash to be reinvested into the company. So that is quite likely, but we can't say for certain right now when to generate the cash.
I mean, so long as we have growth opportunities available, we will try to plow it back into growth opportunities and try and optimize the stakeholder returns to that extent. I mean, giving you any guidance around dividend payouts would be premature at this stage because we have so much to do from here on, and everything sounds very exciting from here on from a strategy standpoint. We are not at liberty to share everything at this point in time, but in the coming quarters, we'll be unfolding.
Sure. Sure. So let's say the Campus, what kind of consumer advantage Campus would have? Would it like to be, let's say, a value player, or would it like to be a design player where it's aspirational, but at the same time, the value is also lower in terms of the value aspirational buy for a customer? So where you would continue to keep your margins low and the competition stays away? What would be the proposition that you would have for the customer?
So you've actually nailed it in the question itself. While only one difference is there, we are not going to work on low margins. That's very clear. But besides that, certainly, we want to provide the extremely high value proposition in all of our products alongside being in the segment of, let's say, INR 700 rupees- 3,000 rupees or INR 3,500 rupees, where this is, let's say, 85% of the market, addressable market. That's what we cater to, right? So we certainly want to be. We are the largest, and we will continue to be. That's the endeavor to continue to be the largest player in the segment and gain more and more market share there.
Sure. Sure. Sure. Best of luck. Best of luck. Thank you so much.
Thank you.
Thank you.
Thank you.
As this was the last question, I now hand the conference over to the management from Campus Activewear Limited for closing comments.
Thank you, Diksha. So no, it was an immense pleasure interacting with all of you. Thank you so much for taking our time to be on the call. And this was our first full-year results post-listing. We are very, very excited for this journey and extremely grateful for the response we got during the IPO. All I just want to say is that we will make sure that we don't ever let your confidence and your confidence in the management and the team and the company down, right? So we are very fortunate to be part of this entire setup. So thank you so much for being here and looking forward to interacting with you all again. Thank you.
Thank you. Thank you all for joining us, and you may now disconnect your lines.