We will now begin the question-and-answer session. We take the first question from the line of Sakshi Pratap from Pratap Securities. Please proceed.

Thanks for the question. Are you seeing any early signs of improvement in discretionary consumption? Or is it just the current environment still largely dependent on the festive season was my first question.

Sakshi, hi. We certainly see some positive sig nals from the renovated new stores and the new retail identity that we have created in the new stores. But it's a little too early to be able to extrapolate them and put any kind of projections on this. We would refrain from doing that. But as of now, certainly, we are seeing positive signals, and we will continue to make these changes to our stores, renovate our stores and open new stores and shut some of the underperforming stores.

Understood, sir. Sir, my second question would be what woul d be the key milestones over the next 12 to 18 months that we can see and say that MUFTI 2.0 is working successfully?

Like I said, Sakshi, this is going to be a long-drawn process. The environment is changing. The competition is intense. A nd at this point, we are going through a transformation phase, and it

may not immediately translate into visible numbers within the next few quarters. But we've seen these times in the past, people come, people go, but you have to build a sustainable brand, which can grow profitably. And that is what we are looking to do and to do that, we are making changes in our product. We are making changes in our retail identity. We are making changes in our customer experience and improving that, and we are making changes in our brand communication to the consumers. And all of these changes will surely impact the brand positively, but it's going to be a longer drawn impact and not something that will be seen in a couple of quarters or 2, 3 quarters like that and difficult to extrapolate it to that. I'd mentioned earlier also that for the next 2-odd years, it's going to be very difficult for us to say what exactly the numbers will pan out.

Understood, sir. Thank you so much for the detailed answer.

We take the next question from the line of Jay Jain from JJ Capital. Please proceed.

Hi sir. Thanks for the opportunity. Sir, I have 2 questions. First is with around 59% of the store network located in Tier 2 and 3 cities, do you see the premiumization strategy working equally well across this market? Or will premium stores be concentrated more towards Tier 1 high street mall locations?

Great question, Jay. So premiumization is happening all across India. It's not somethin g that is isolated to the Tier 1 cities. However, premiumization is relative. What we are doing is we are tooth combing through all our stores and looking at each one of them and looking at the competitor environment in each market and accordingly making t he changes to stand ahead of the competition proactively. So the point I'm making is that the store that we renovate on Linking Road or we open on Linking Road would have a certain different level of premiumization and expenditure that we would incur. And a store, for example, if we do in a small town, there the ex penditure and the relatability of premiumization would be given to that market and the environment in that market and what we expect it to be in the next few years.

Thanks for this. Sir, the second question would be, do we believe the current investment is primarily strengthening brand recall among existing customers or helping Mufti acquire a younger new customer base?

So it's both. We intend to do both. See, as a brand to remain healthy and sustainable through its growth journey, what we need to do is we need to retain our customers and we need to acquire new customers, because there's a certain level of retention that every brand can do in its cycle of year-on-year growth and progress. So it's both ways to improve retention and to increase new footfalls into the stores.

Thank you, sir, for the detailed answer.

Thank you. We take the next question from the line of Jay Kothari from Kothari Capital. Please go ahead.

Yes. Good afternoon, sir. So my question was, the presentation indicates average annual revenue per EBO of around INR75 lakhs in FY26. So what level of revenue do you believe the new premium format stores can achieve once they mature?

Okay. The a verage annual revenue per EBO is reflected as INR75 lakhs. And see what we're looking to do this year, we are looking to increase the same-store revenue in the mid-single-digit numbers. That's what we are aiming to do for this year.

Okay. Understood, sir. And sir, my follow -up question was, does the premiumization strategy require carrying a larger or more diverse inventory? And could this put additional pressure on working capital?

No. That's not something that we're looking to do. In fact, we are looking to sharpen our inventory, and it will not be a larger inventory base. It's just going to be a change in the merchandise mix. That's what we are looking to do.

Okay. Understood. Thank you for the detailed answer. Wish you all the best.

Thank you.

Thank you. We take the next question from the line of Rishab h, an Individual Investor. Please proceed.

Hi, sir, good afternoon. Am I audible?

Yes.

Sir, actually, let me give you some context. I'm a business analyst in a pharma retailing company as well. So, I do have some business insights in what we do. And I have tried to suggest you some modifications over the past year as well I have joined the con-call and try to give you some insights and obviously, you have tried to work on those as well. Kamal sir, just small feedback. I have gone through your Instagram advertisement as well. You are doing a good job in that. I would like to provide small feedbac k which would be - to use some Hindi advertisements as well because English is not the primary language for connecting with people. All the primary advertisement which you do, the collaborations which you do with the people around, I think Hindi would be a proper way to communicate for the audience connection plus interaction. I think that whatever the advertisement over the past 6 months you have done , are primarily your interaction with the users, but users interaction with the brand is missing. So that is another suggestion that you could work on. And third thing would be just a strategic move to bring some people for the strategy for that expansion.

Sir, I was referring to the retail expansion that you do for the stores every year, which has remained relatively flat for the last few years. I also understand that recently, you are trying to relocate the old stores or underperforming ones, into some of the high street locations as well,

where they will get a good traction. But I believe some sort of new markets or, locations where you currently don't have a presence, you can try to expand out there as well. So, you can generate additional revenue. That was the suggestion from my side.

Thank you for your suggestion, Rishab h. All the time, we are looking at the newer markets wherever we are not present and in the way in which the market emerges, we proactively do end up opening stores here. However, at this time, we are going through a transformation of the brand and we are consolidating the brand. So, at this time, we are not only in favour of increasing our store count, we are in favo ur of improving the performance and improving the brand resilience.

Sure, sir. Sir, I had a suggestion regarding your product expansion strategy. Now that you have entered the footwear category , what other categories you are trying to expand into? I ask this because some of the few competitors which I compare your brand with, such as Cantabil and other brands have diverse multiple product categories. So, they do have a women's section as well, which helps diversify their business and provides a hedge against weakness in any single category, so people would obviously buy products for women as well. I know, over the past few quarters, you have stated that you do not plan to enter women’s category, but I believe that is a diversification strategy plus an additional revenue stream, which would involve some incremental cost s, but the poten tial revenue opportunity could outweigh those costs.

Okay. Thank you, Rishabh. We will keep it in mind.

Sir, I was asking about, what other categories you are plan ning to explore in the future ., Now that you have launched footwear, are there any additional categories that you are considering as part of your growth strategy?

Now, we are focusing on improving and transforming this brand.

Sure, sir. Thank you, sir.

Thank you. We take the next question from the line of Nilesh Doshi from Prospero Tree AMC. Please proceed.

Thank you. Thanks for the opportunity. Sir, there was a INR5 crores increase in the revenue on a Y-o-Y basis. And at the same time, there was a INR5 crores extra marketing spend. Generally, the ratio of revenue growth must be higher than the marketing spend, but it is equal. So, in that context, I would like to ask, is th e management sure about by spending the higher amount on advertisement and marketing spend, we will achieve our target of higher revenue growth.

See, Nilesh, I agree with you that, that is what it has to eventually translate to. But as on date, remaining status quo and not doing anything about it is not what is right for the brand. For the long-term interest and sustainable profitable growth of the brand, looking at the changing environment and changing aspirations of India, we have transformed the brand. Now that we

have transformed this brand, it's also important to communicate to existing customers because we have been existent for more than 28 years now. It's important that people realize and their perception about the brand changes, and we drive new footfalls into the stores. The competition, etcetera, is very intense at this time. And in fact, some of them even spend more than 8% to 10% in terms of advertising. They spend close to 15% and even higher. We are spending roughly 8% to 10%, and we intend to continue doing that. And this is for the longer-term growth and sustainability of the brand and to arouse the salience of the brand. We are not just doing performance marketing, which is, you know, driving immediate sales today.

So, within 1 year, can we expect that there will be some revenue growth, which is higher than our ad spend?

No. I'm unable to say that today, Nilesh.

So, can we consider we are in a surviving mode rather than the growth mode? Because of the higher competition of the other brands, say, Zara or anyone, any Indian or foreign brands.

Every brand in its , you know, point in time in its life cycle is at a different stage. We are at a stage where we are transfor ming the brand to stay influential and relevant in the future. Now you can look at it the way we want, but this is what we believe very strongly that we are well positioned to be able to look at the opportunity that lies ahead in terms of the aspirations of the Indian consumer. And we are sure we'll be able to stay relevant and influential even in the future. So , these are investments we are doing, keeping that in mind. How you want to call it survival mode or whatever you want to call it, I really don't know.

No, no, no. That was not the meaning because I understand that, sir, our GP margin is very good. Can we reduce a little bit on the GP side and increase our revenue growth at the same time, we are increasing our ad spend. So, there was two engines, we are reducing the little bit margin at the GP level and increase the awareness of our brand and creating our brand presence. can we do it like that?

These are things that we constantly keep evaluating, Nilesh. And these are always things that we look at every season, every inflationary cycle. At every point in time, we look at our GP accordingly and accordingly price our products. We've always been at a certain mid-premium segment in the market, and we will continue to remain there.

Is the demand is lower or the competition is very high. What is the market condition?

It's both. See, the demand condition is also muted. The discretionary spend is soft in consumer segment. But at the same time, the competition also is intense.

So, when we will achieve our previous growth glory two , three years back because when the IPO has come, it was a very nice picture. So , no doubt there was some dullness in the market,

but you are taking the enough steps. Can we expect within one , two years, we will achieve our growth trajectory?

We will certainly and we plan to do that. But however, for the next couple of years, I'm unable to extrapolate and give any numbers as to what is the growth numbers that we will achieve. We are evaluating. We are seeing positive signals from the changes that we are making in the brand, and we are certain about it that we will be able to get back on track.

Okay. And lastly, sir, our new stores are opening at an optimum level? Or is it not still generating the enough revenue?

No, no. All the new stores we have opened are generating good revenue.

Thank you and all the best sir for the future. Thank you, sir.

Thank you Nilesh.

Thank you. We take the next question from the line of Jay Jain from JJ Capital.

Hi sir, thanks for taking my follow up. I have a question on inventory. Sir, our inventory days stood at 74 in the quarter. Do you believe to hold it steady in the coming quarters or a reduction is anticipated?

So Jay, there should be some reduction in the inventory days. That is always the endeavour to.

This is cyclical, Jay , that’s the way we operate the business model. One season, it coul d be a little higher, one season, it could be a little lower. But at the end of it, whatever we have made, as long as we can sell everything at a profit and not make a loss, we are good. So, our company needs to evaluate more on those lines. Whatever we c reate we produce, we're able to sell tha t. We have not had any write -off in the history of our company on account of inventory.

Thank you, sir. Thank you for the details, all the best.

Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for their closing comments.

Thank you, Anushka. I'd like to thank everyone for being a part of this call. We hope we've answered your questions. If you need more information, please feel free to contact us or SGA, our Investor Relations advisers. Thank you, and have a good day, everyone.

Thank you. On behalf of Credo Brands Marketing Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. ________________________