Q1 21/22

Jul 28, 2021

Q1 FY 'twenty two Earnings Conference Call. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Saket Thodi, Executive Director from Luxe Industries Limited. Thank you. And over to you, sir. Good evening, and thank you, everyone, for joining for the earnings conference call for the quarter ended 30th June 2021, along with me, I have Mr. Uddit Todi, Executive Director our CFO, Saurabh Kumar Badolia and SGA, our Investor Relations Advisors. I hope you have received our quarterly results and investor presentation by now. For those who have not, you can view them on our website. I hope you and your family are keeping safe amid of the ongoing COVID-nineteen wave. And I'm happy to share That despite facing a challenging environmental caused by the second wave of COVID-nineteen pandemic, Our company has delivered robust revenue growth of 32% in Q1 FY 'twenty two. We at Lux Industries have been proactive to understand the Significance of the guidelines issued by the authorities and their adhered to all the necessary COVID-nineteen protocols. During this challenging situation, we at Lux have extended all possible support to all our employees and have rolled out marked vaccination drive for them, Including the family members and this vaccination drive will create a safe and healthy working environment for all our stakeholders. In the current quarter of COVID-nineteen, the curve is flattening, and we are operating at our optimum capacity and have started our regular manufacturing activities. Given the recovery of the economy in Q2 FY 2022, the resilient industry growth over the last few quarters, better availability of vaccines and declining cases, we're optimistic of the upward trajectory to continue and expect a further revival of demand and consumption in the economy. Now coming to our performance for the quarter ended 30th June 2021, We are pleased to report our resilient performance that was mainly driven by the increased consumption of our products in the semi urban and the rural market, where we have a strong presence. In addition, we are witnessing a structural shift of consumer preference in the use of the innovative products from unorganized sector to the organized sector and sustained traction for our mid premium and premium categories. We have also been We see positive momentum in our Online and Export segment. For Q1 FY 'twenty two, we witnessed Healthy revenue growth from our economy segment, which registered a growth of 32% and stood at INR 4.21 crores as compared to INR 3.1 INR 4.21 crores as compared to INR 3.19 crores in Q1 FY 2021. This was led by Approximately 9% growth in volumes, while the ASP saw a growth of 24%, which was well above the industry average. We have also been able to increase our share of pie, where Lux enjoys approximately 15% of the market share in the organized men In a wear category, we at Lux have been catering to a large part of consumption basket and have product pricing from ranging from INR 24 to INR 1790. Our mid premium segment registered a growth of 30%, And the volume growth here was at 12%, where the ASP growth was 20%. In our premium category, The growth registered is at 136%. We expect a revenue share of INR 500 crores From a premium well category by FY 2025. For the Q1, our advertising expense INR 26 crores, which is approximately 6% of our Q1 revenue. As guided earlier, For FY 'twenty two, we will gradually be reinstating our headwind back to 7% to 8% of our revenue. But seeing the pandemic situation of the current year, we might even divide it back to 6% to 7%. Advertising and marketing has been one of the key pillars in building our brand equity. Starting FY 'seventeen till quarter 1 FY 'twenty two, we have invested INR667 crores, which is approximately 8% of our revenues, And we have been able to generate INR 16.47 on every rupee ad spent. With this, I will now ask Mr. Udit Todi to share his thoughts. Hello. Good afternoon and a very warm welcome to everyone. I hope everyone is keeping safe and healthy during this situation. The results of the Q1 FY 2022 demonstrate the resilience of the company's diversified portfolio that cater to large parts of the consumption basket. We have achieved better than expected performance for the quarter ended 30th June 2021, not only from a top line point of view, but also from the profitability point of view. Despite being present in an industry Where there are a large number of unorganized and small scale manufacturing units, we have been able to establish and leverage our parent brand Lux in a way that we have not only been able to gain market share from the unorganized sector, but also penetrate in the organized sector space. Today, LUS is present across various market segments, which has led to risk mitigation, higher growth and increased penetration across various market segments. We also have plans to explore categories like women's innerwear, women's athleisure, t shirts, pajamas, track pants, etcetera. The merged entity will not only provide us greater financial agility, but also help us gear for the next leg of growth. On the supply chain aspect, we have one of the largest distribution networks in this industry, having a strong presence in North, East and Western parts of the country. Our distribution network of approximately 11 70 distributors, 12 people and 2 lakh plus retail outlets across India has helped us in the last mile delivery of our products also during this pandemic. Going ahead, it will be our effort to further invest and improve our distribution and expand presence in the South India market. We have a fill rate of 95% against the industry average of 80%. We continue to endeavor healthy profitability ratios by focusing on better product mix and rational cost optimization. Over the last few quarters, we have been able to continuously optimize our working capital cycle. Our working capital days as of 30 June 2021 stood at 165 days, which is lower by 13 days as compared to 30 June 2020. As the business is very much seasonal in nature, so in the near term, we expect it to be in the similar range of March 21, which was approximately 120 days. We expect healthy growth in our revenues in FY 2022 As we are placed to capitalize on the ongoing upturn in the Hosiery industry and going forward, we will continue to provide newer products that are fashionable with the best quality and comfort. With this, I would now request Mr. Bhujulya to take you through the financial performance. Thank you, Deepje. Our company reported a strong performance for the quarter 30th June 2021. Our revenues for Q1 FY 2022 stood at INR421.09 crores versus INR 319.25 crores, registering a stellar growth of 32%. Contribution from premium brands Stood at INR 57 crores, while mid premium and economic category contributed a revenue of INR195 crores and INR165 crores respectively. Our well thought business acumen has helped us deliver consistent profitability and margins without compromising on our growth. Our EBITDA for the quarter stood at INR 91 crores as compared to INR 57 crores in Q1 FY 2021, A strong growth of 59%. Our EBITDA margin has shown a significant improvement Of 373 basis points, which stood at 21.6 percent. Our PAG For the quarter, it stood at INR63.72 crores versus INR 37 crores in quarter 1 FY 2021, which registered a growth of 73%. PAT margin for the quarter stood at 15%, showing an improvement of are 3 60 basis points compared to 11.5% in the same period last year. Our revenue contribution from export sales is at 9%, while domestic sales contribute to 91%. We have a strong export presence in around 46 plus countries. The reason why the revenue split is as follows, led by Northern India and Eastern India with 27% share, followed by Western India 25% and Central India 19%. While revenue split from segment is stood as follows: mid premium 47%, economic 39% and premium 14%. We have sufficient cash reserve, which will not only be utilized to meet the company's growth requirement, but also to reward our shareholders on a timely basis. Over the years, our prudent financial decisions have not only helped us reduce debt, but also become a net cash company. Please note the numbers highlighted in the speech and the presentation are consolidated numbers post completion of merger with our group companies. On the CSR front, for the quarter, the company has still now contributed around L17.2 lakhs, While we are expecting a budgeted number of CSR for the complete year should be in the range of INR 4.5 crores. Out of which company has already given a commitment to support Tata Medical Center for RUBH 2.5 ROE for 1 operation theater, including infrastructure and medical equipments. With this, we will now open the floor for question and answer. Thank you very much. We will now begin the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shalini Gupta from sorry, Ashika Securities. Please go ahead. Yes, good afternoon, everybody. Sir, I had a couple of questions. One is like, I believe GenX is your only is your main athleisure brand, and that is a 21 crore brand in the quarter. So I mean, if you could just say what has been the growth in the brand in Gen X And therefore, athleisure. To see, our athleisure is not only Genex. In our mass men's wear category, Genex As a major part in the men's athleisurewear, then in our women's wear, we supply athleisure to the brand, Lyra. And in the men's premium wear, we supply athleisure to the in the brand ON. So there are 3 brands, so we We do not have at present the athleisure wise breakup of all these three brands constituted together. But yes, we are seeing a very good traction in athleisurewear and the overall growth in athleisure is above the average growth rate of the company. Okay. And sir, my second question is that in the 2 category Lux premium, It's a INR 38 INR 38 INR and I think that is almost entirely exported. So I mean, net of that, we have a very small premium portfolio as in like for the quarter, it was just INR 30 crores. So we have been talking the payment category for the As in we have been saying that, that is going to focus area for us. But are you satisfied with the kind of figures that you are seeing as in a premium Premium product of TRYCA rose in the quarter versus your overall figure overall sales figure? Salini, there are let's allow us to split the question in 2 different parts. You were right that we were having only 3 brands, 1 is ON and Lux Premium, which is nothing but mainly the export business what we do have. Expectations. So the idea over here is like OneIT and OWN, Both are very much a growing brand and definitely companies looking for that in the near future both the brands will become a 3 digit number. On is almost reached to INR 80 crores to INR 90 crores and we are very much sure that over a period of 2 to 3 years, it will become around INR 150 crores brand. But apart from this category, as this categorization has been done, this is by keeping in the mind that what kind of customer we are going to service the product. But in case we bifurcate the brand, this is my margin structure, then around 5 brands, which is a very high potential margin driver, Which is 1.8 lux premium on inferno and Lyra. So this will become a kind of my margin driver brand falls under the premium category. So if you'll refer to my Slide number 9, then it will give you a realistic picture that apart from the Customer servicing, if we are going with the margin structure, then out of total same brands, out of same brands, 5 brands are coming under premium, balanced pipes Coming mid premium and the economy. Okay. Sir, can you just repeat the Sorry, your voice is breaking in between. Clearly, my question on Slide number 9, you can just have a look at Slide 9 and it will be quite visible to you. Okay. And My other question was that, I mean, so like we are seeing Am I clear now? Am I clear now? Hello? Yes. You are clear. Okay. So my question was that we have seen a lot of growth coming to us from the unorganized sector And which I would assume is because of the unorganized sector facing a lot of liquidity problems due to COVID. But now for how long do you expect this kind of growth to continue? Because I think probably in the next 4 or 5 months, The liquidity issues for the unorganized sector are going to ease. So if you could just share your thoughts on this? No, see, there are 2 things. 1 is the demand in the rural market and the other thing is the liquidity issue. So regarding the demand, as we are seeing, the demand is pretty much stable in the rural market. But now the production or the supply or the service from the unorganized sector Due to COVID, it's not been taking place properly, due to which the whole demand is being shifted to the organized sectors who can supply the products in the At the time of COVID. So that is why we are seeing the very good traction in the rural market, where we are seeing the shift going from the unorganized sector to the organized sector. Now coming to the liquidity issue, yes, there is a liquidity issue in the rural market. And in the next 4 to 5 months, it is assumed That it will ease out very well. But as we are seeing, as our brand is being demandly unorganized in the rural market, The first payment from our retailers to the distributors or from the distributors to the company is coming to us. So we aren't facing as much Liquidity or payment issues from our dealers and distributors, as of now, might be better payers. But yes, there is a liquidity issue, which will get solved in the next few months. Okay. And so my last question, I mean, I'm sorry. I would like to come back in the queue, please. Yes. All right. Okay. Yes. Thank you. The next question is from the line of Vaishnavi Mandania from Anandradi. Please go ahead. Hi. So basically, can you provide us with the The reason for why the gross margin expansion was so high in this quarter? So there are multiple reasons associated to it. First thing is definitely There is a change in the mix. So if you'll see my high margin portfolio from the number perspective has grown from like with a growth rate of around 136%. So that is the primarily is one of the reasons which is contributing me the higher rate of the gross margin. Expectations. 2nd is the price hike. Between last year, this year, around 2 to 3 times, we have already taken the price hike. And by keeping the Things in mind that inventory or the raw material price is going up. We have already taken an exposure quite a bit early to stock the raw material stock in our go down. So we got a dual advantage that we got a raw material at a lower cost visavis we have increased the price. So we were in a position to sell the goods at a higher price in the Okay. So what would be the split between the impact of both of these? As to how much would you attribute the gross margin expansion to the change in mix So approximately, because of the mix change, there will be an increase of around 200 to 250 basis points From the mix change, the gross margin level, whereas the remaining 400 basis points would be coming from the increase in the price. Okay. Also, our other cost items, right, like the ad spend, employee expenses, other expenses, etcetera, Well, significantly higher this quarter on a YOY basis, right? So should we expect a similar run rate going forward for the rest of the year as well? Yes, definitely. So this quarter, like my ad expenditure is standing at around 6%, which we are expecting to continue. If you'll see my last few quarters and the year's performance, generally, we carry our ad expenditure at a rate of 7% to 8%, but this year, we are expecting it should continue at a 6%. So everything has been factored and we the company is very much expecting that this is the best possible cost at which company should run. Okay. And so then EBITDA margin at 20% to 21% is sustainable going forward? Yes, definitely it is very much sustainable. Even if you see my EBITDA margin of March 21, it is in the similar line. So since last two quarters, I think We are very much delivering the number in the similar range and we do expect that for coming few quarters, this number should continue in the similar range. But then if the price hikes come into the base, if we took the price hike last year, then it's only premiumization that will drive the margin as No, see, the price hike, the actual effect of the price hike was from the quarter 4 of the last financial year. So for the 1st three quarters, there will be a high ASP growth in comparison to the last 1st three quarters of the last financial year. But if The cost of the product has increased by, for example, if the cost of the product has increased by 10%, then we have increased, we have tried to increase the price by 11% to 12%. So there has been an incremental increase in price above the cost of a product. So that is the gain which we are gaining in our gross margin, plus there's a mix change. Okay. Okay. So 20% to 21% EBITDA margin is sustainable? Yes, very much. Expectations. The next question is from the line of Himanshu Iyer from ES Securities. Yes. Hi, team. Congratulations on a great performance. So firstly, just a clarification. This 20% to 20 4% price hike pricing growth that you're talking about, are these actual increase in realizations or Price size that you have taken or is there some mix impact here as well that within the mid premium you have sold the higher realization products more? So Himanshu, as you see the product, maybe we have already stated this previously also that the mix has changed. And when the mix changes, so for example, last year this time, say ON as a premium wear brand or Lyra as a ladies wear brand Was not selling much because of the lockdown scenario. The urban areas was not much open, which in this current lockdown, we saw that as soon as the lockdown was lifted, Ladies wear, men's premium wear, everything started to sell. So obviously, the product mix changed. So earlier, Outerwear was not selling much whereas this year Outerwear is also selling much. So yes, when the product changes, there is a change in ASP as well. And at the same time, there has also been an increase throughout the range of products because of the increase in raw material prices. Okay. So but if you can give a number as to what would be the price hike, say, versus last year on the same product? It is difficult to put an exact number to it, but just to give you a sense about in the 24%, I'm believing about 15% Should have been due to the price hike, whereas about 10% should be due to change in products. Understood, understood. Got it. 2nd question would be to understand your philosophy with regards to gross margin. Like in the current environment, we've grown well gross margins. I mean, over the last couple of years, we've seen a significant expansion. So do you think we are at the risk of losing out on some growth prospects or market share going Given that we are running at a much higher gross margin level now or I mean, do you think you could have taken a slightly lesser price hike and maybe driven growth. So just wanted to understand whether your aggressive price hikes in your view are impacting growth in any way or not? So Himanshu, if you see, even if you look at the growth figure, this quarter we've achieved about 32% top line growth. And even if you look at the overall industry growth, we are pretty sure that the industry will not be growing at this higher rate. So we are definitely gaining market share. There is no two ways about that. And even despite the price hike, we've always Get this at the back of our head that at no point of time are we willing to lose out on market share. So whatever price hikes are taken are Are always taken keeping in mind that market share is something which you have to gain, not lose. And we have consistently done that over the past few quarters. So I mean, we can be rest assured from that point of view that all the price hikes which are taken are taken the decisions are taken after seeing the market situation. And keeping in mind the fact that we should not lose out on our growth. And we've I mean, overall, if you even look at the current quarter, the growth Has come in quite well only. Understood. Understood. And then just a follow-up on that growth that you're talking about for the current quarter. I mean, we've seen a lot of companies talking about the stress in the month of especially in the month of May, Where semi urban and rural markets also were impacted by the pandemic. So what explains this strong growth? I mean, do you think that We could have done even better than this if not for this pandemic because your numbers don't seem to be impacted by this to a large extent. So, Sophie, there are 2 ways to look at that. A, definitely had the pandemic not been there, the top line would have been considerably higher. We have lost out on a good number of working days. And B, if you also look at that fact that last year, again, during the lockdown, the flavor of the lockdown was very different. Last year in the lockdown, Urban cities were not quite open. Whereas in the current lockdown scenario, we've seen demand coming in from the urban side as well. So due to a low base effect also in the premium air category, if you see, there has been a kind of a low base effect due to which As you can see, significant amount of growth coming in on the premium side. Understood. Just my final question would be on the expectations. Again, we have seen a very strong improvement out there. So just wanted to understand, I mean, are there any structural Changes that you have done in the way you work with your dealers, etcetera, in terms of receivables? And are you, I mean, working with a much lesser level of inventory? So just wanted to understand how much improvement Over the long term, we can see, I mean, what's a steady state number for you on this side? So Himanshu, as you will see, like in the market itself, we have achieved the working capital days of around 122 days. And still, like, we are very much I think that similar kind of number we should deliver in the current year. Yes, definitely, there is some level of the scope to improve the Working capital further, but it will take a long time. Immediately, if you'll ask me between 12 to 15 months, any kind of working capital further Improvement, it's very difficult or just challenging. Understood. All right, sir. That's it from me. Thanks and all the best to you. Thank you. The next question is from the line of Ankit Kedia from Philip Capital. Please go ahead. So I have two questions. First is on the inventory. You mentioned you're sitting on the low cost inventory, which would have helped in margin expansion. So how much more inventory do we have in the system? And have you started to buy the high cost inventory now? So still Ankit, So, see, still we have a similar level of the inventory which we are carrying. So, it is a kind of business cycle. Like We are always buying the inventory at the lower price, whereas we are increasing the price of our products. So once we take the high so once we buy the inventory, this is that we decide How much is the price hike we are going to do for the future, right? So on a continuous basis, my consumption will be at a lower cost as compared to the price at which I'm selling the product in the market. Sure. But I just wanted to understand yarn sizes are up by 20%, 30% in the last 6 months. So currently, are we what is the old cost of December or January inventory still there in the system? Because we have taken a price hike in the month So, March, incrementally now, as you all alluded, already the price hike is much more than the raw material price increase we are taking. So I believe the next price hike will come after 5, 6 months and not immediately the raw material prices stabilizes from here on. And hence, I just wanted to know what is the low cost inventory in the system? Just to add on to it, for the next two quarters, majority of our sales come from the Winterwear products. And in the winter where we start the manufacturing from December last year. So whatever yarn which we have procured for manufacturing in December was at low cost. In January, the cost increased more than sequentially, it has increased more over the next 6 months from December. So and but the product of the winterwear product, which we are selling right now, is at the cost. It's at the price, which is currently prevailing in the market. So we'll get that advantage over the next two quarters in the Winterwear segment at least that our cost of production will be very low. And in In comparison to that, our gross margins would increase. And similarly, now coming to the Innerwear segment, yes, Innerwear segment for the next Next 2 to 3 months, we would easily assume that we will be able to consume all our yarns at a lower price And the pricing in the market is being done according to the current market price. Sure. That's helpful. My second question is on the premium products. What is the strategy there? We are setting up a distributor network instead of a wholesale channel for the premium portfolio. So which market are we targeting? Are the counters similar to our entry level product counters? Or what in next 3 years From the South market or from the other markets, how are we looking to penetrate the stronghold of some of the other competitors who are there in the distribution network? Yes. Yes, our premium product is majorly sold in a distribution led channel rather than a wholesale led channel. So, the sales team of the The company is responsible for selling the goods in the market rather than the wholesalers wholesaling it. So that is a structural difference in selling the products, number 1. And secondly, we are planning to enter into the South Indian market on a very organized basis. So it is a long term program. And I think so you can see South India getting compared to the other parts of the country in the next 4 to 5 years. So just to take the point ahead, what is the current distributors currently have? And Also from the EVO channel, the strategy which we have, how will that club in with the premiumization? Just to So in 3 years' time, what could be the share of premium products we are looking at predominantly because that mix change will also help in the margin expansion? So, Ankit, currently, we have around 11 70 plus distributor, close to 1200. And over a period of 2 to 3 years, we are expecting that our premium segment should give us a revenue in the range of around INR 500 crores. Sure. That's helpful. Thank you so much and all the best. Thank you. The next question is from the line of Dhruv Bhatia from BOI AXA. Please go ahead. Hi, good evening sir. So first question is, I want to take you to the Slide 9 of your presentation. This presentation of activity margins we have broken out between Certain of the brands, versus the last presentation, it seems to suggest that the PVD margin band, which you have given for brands like 1.8, Lux, You may now know 22% to 26% versus the last quarter where you had mentioned the band to be 18% to 21 Same old, 15 to 21 for Gen X and LuxCozy versus last quarter. So I mean all the 3 brand So, segmentation, you have inked up the margin bag. Could you just talk about why that has been so and why you're not then guiding for better EBITDA margins as well for the company? So, no, this basket has been changed mainly because of the incremental margin because earlier the product which we are delivering said 12%, 13%, 14%, Now it is coming under the 15% basket and similarly about the different other basket from 15% to 21% and 20% to 20 So it is mainly because of the price hike. And my price hike, as just few minutes back, we have explained, it is incremental as compared to my increase in the cost. I mean, does that mean that the price tag that you've taken is more than the raw material cost increase? Yes, yes, definitely. This is what we are saying. The price hike taken in my price hike taken as compared to my cost It's quite incremental in the nature. So does that mean that the EBITDA margin guidance that you are giving that will be a similar 20.5% band is Still a very conservative number that you're working with? No. We think this is the best possible number at which we are running the business because the price hike what we are taking What is the good at which we are buying our raw material? Both has a difference of around 2% to 3%. And this difference we will continue for further few quarters and the similar level of the EBITDA margin we can deliver. Okay. And the second and last question is, if I look at your mid premium segment, last quarter, the revenue was about INR 3.30 crores, this quarter INR 195 crores And then a bit of almost about 38%. Could you break off which brand has actually deeded significantly? Because You did last inferno was a part of last quarter's number and obviously this quarter showing 0 and hence the much the high decline on a sequential basis is in the mid-three So the inferno as a product is a winter wear product. So the sales will come in quarter second and quarter third. So that is why Lust Infono right now is standing at 0. And if I talk about the growth of each individual brand in the mid premium category, So just to give you a flavor that say, because of the as I said, because of the low base effect, you could see Assumptions figures. So for example, Lyra would have grown by about 180% and Genex has been fairly flattish because last And also we did quite a good amount of sales. Lyra has grown quite fast. And talking about Kozy, Kozy has grown by about 17% to 18%. And inferno as because it is not the season for inferno, we do not see any figure for that. I was actually asking from a sequential point of view, what has led to a 48% dip in mid premium segment? I'm sorry, what has led to? The midstreaming segment, if I see, the sequential decline in revenue is about 38%. So which brand has actually led to such a sharp decline in sequential numbers? So I believe you're comparing it with the March quarter numbers. That's right. Yes. So you also have to take into account 2 factors. 1 is the seasonality of the business. And second of all, The March quarter was a complete quarter where we got full 90 days of working. Whereas if you look at the current quarter, the number of days of working due to the lockdown scenario About 60 to 70 days. Okay. Got it. All right. Thank you. Sure. Thank you. The next question is from the line of Faizal Hawa from H. C. Hawa and Company. Please go ahead. Do we have a coherent Strategy for selling through our own website or through selling through e commerce channels or even How are we doing with the modern trade? And are we employing any influencers on the social media expectations. So we've just recently off late, we've created a separate vertical for our e commerce sales and a separate vertical for our EBO sales. So these are 2 separate verticals you see company has created With a separate team and a dedicated effort in that direction. So the team is already working both in the EBO direction as well as the e comm direction. E com, we have set an internal target that in the next 3 years, we'll reach a run rate of INR 100 crores per year ex factory sales. I'm not talking about GMV sales. So and given the effort and what the team is already doing, we are pretty sure we should be able to achieve that in the next 3 years. And the response that will be on account of both third party websites such as Flipkart Myntra and at the same time our own website. So that is a strategy which we are doing on that front. And again, modern trade, again, as a channel for us, is a very important channel. And We will be definitely we are already present in the modern trade vertical as well. And that is one area which we need to scale up, which we are looking at. So have you done any special hiring, because this would require totally different skill sets from the traditional Management, Carter and so are we really because a lot of other brands like Devakoop.com and all Are now planning to go into extension this innerwear and stuff that could really you could capture a lot of space there? So as we are speaking, like we have already done we as like we have already created a separate dedicated team, Including a lot of new hirings as well as the combination of the whole team members for the purpose of online and the EVO. So a complete team of around 12 to 15 members Has been deployed or has been this vertical has been created just to focus on the online and the brand outlets business for Lux. Thank you very much, sir. Thank you. The next question is from the line of Shaktish Devani from he is an individual investor. Please go ahead. When can we expect them to be declared as you have reserved the declaration in the March quarter? Hello? Yes. So we are so in our next Board meeting, we are planning to go with the Board and we'll give our proposal and this is a Board direction. We'll go for the we will take the decision for the purpose of dividend. Thank you. Thank you. The next question is from the line of Ankit Kadia from Philip capital. Please go ahead. Then on the cost savings, for the 2 companies we have merged Of the promoter group. So how much of that synergy benefits already there in this quarter? And over the next 2 to 3 quarters, How much mass energy benefits could come in the system? So, Ankit, around 100 basis points to 100 basis points of the cost saving is Already been factored in the P and L, and we believe that this is the range which will continue for the few quarters. So already this quarter, we have seen that benefit of 100 bps in Yes, right. Understood. Thank you so much. Thank you. The next question is from the line of Indrajit Yatav, individual investor. Please go ahead. We have a question from the line of Arpit Shah from Stallion Asset. Please proceed. Hi, congrats Krishnan, for a good set of numbers. I just want a question. What will be your thesis from the voltage channel versus the distribution channel Can you come again with the question? Yes. How much would be the sales coming from distribution channel versus the older side So all our premium web products are majorly sold in the distribution led channel And the semi premium and the economic products are being sold from the wholesale channel. And you have any plans moving the economy products No, actually, All these three categories are being very specific to their selling channel and there is no thoughts of changing the selling channel as of law? Hello. 120. Yes, the working capital was at 120 days and we will try And then you know the volume of activity in source commentary, we have probably Sorry, you are not audible. There is a lot of disturbance from your side. Hello? Yes, your voice is like it's not on Right. Mr. Shah, your voice is muffled. We'd request you to connect back. As there are no further questions, I would now like to hand the over to management for their closing comments. I take this opportunity to thank everyone for joining on the call. I hope we have been able to address all your queries. For any further information, kindly get in touch with us, our strategic growth advisor, our IR advisors. Thank you once again. Thank you very much. On behalf of the Tux Industries Limited, we conclude this conference. Thank you for joining us and you may now disconnect your lines.