Sai Silks (Kalamandir) (NSE:KALAMANDIR) Q2 2027 Earnings Call

0:00 Good morning, ladies and gentlemen. I am Kartik Ayn, moderator for the conference call. Welcome to the Q2 and H1 FY 'twenty seven Earnings Call of Sai Silks (Kalamandir) Limited. As a reminder, all participants will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then 0 on a touch tone telephone. Please note this conference is recorded. I would now like to hand over the floor to miss Karima Singla from Go India Advisors. Thank you, and over to you, ma'am. Thank you. Good morning, all. It's my pleasure to welcome you on behalf of Sai Silks (Kalamandir) Limited. Thank you for joining us today for the q two and h m f y twenty seven earnings conference call. Today on the call, we are joined by Mr. Bharat Rajamandir, CEO and Mr. K. V. Elin Sarma, CFO.

1:01 Please note that today's discussion may include certain forward looking statements. Therefore, they must be viewed in conjunction with the risks that the company faces. I now invite Mr. Bharat Waj to present the company's business outlook and performance, after which we will open the floor for Q and A. Thank you, and over to you, sir. Thank you, everyone, and good morning, ladies and gentlemen, and a very warm welcome to Sai Silks (Kalamandir) Q2 and H1 twenty twenty seven Earnings Conference Call. Before we begin, I would like to extend my warmest wishes to all of you and your families on the occasion of this festive season. May this auspicious period bring happiness, prosperity and good health to everyone. And I hope you had an opportunity to review our financial results and investor presentations available on the stock exchanges as well as on our company's website.

1:50 Over the past two decades, Sai Silks has evolved from a single saree store in Hyderabad into one of the South India's leading organized ethnic wear retail platforms built on customer trust, deep regional understanding and a commitment to preserving India's rich textile heritage. Our focus remains on scalable retail and sustainable growth, building a more productive and profitable retail network through differentiated brands, operation efficiencies and disciplined capital allocation. The first half of FY twenty twenty seven witnessed a challenging discretionary consumption environment, particularly in the wedding and occasion led categories. Q1 was impacted by Adhikama's, while Dashara led Festive Momentum, which had commenced in September last year, shifted to October this year. This calendar shift, coupled with a relatively high base in the corresponding quarter, weighed our on consumer demand and our quarterly performance.

2:50 Against this backdrop, our financial performance demonstrated resilience. Q2 FY twenty twenty seven revenue stood at INR $4.34 crore compared with INR $4.44 crore in Q2 FY twenty twenty six, representing a decline of about 2.3 percentage year on year. Gross profit stood at INR 183 crore, with gross margin improving by 20 basis points to 42.1 percentage. EBITDA stood at INR62 crore with a margin of about 14.2 percentage, while our PAT stood at INR31 crore, translating into a PAT margin of 7.2 percentage. Encouragingly, sequential performance improved with the revenue growing 15.7 percentage and EBITDA increasing 18.8 percentage between quarter one and quarter two, with EBITDA margin expanding by about 37 basis points over Q1 FY twenty twenty seven.

3:52 For the half year FY twenty twenty seven H1, revenue stood at INR809 crores compared with INR823 crores in H1 FY twenty twenty six, representing a decline of about 1.7 percentage. Gross profit stood at INR340 crore with gross margin maintained at 42 percentage. EBITDA stood at INR113 crore with an EBITDA margin of about 14 percentage, while KALAMANDIRD 57 crore translating into a PAT margin of about 7%. The impact of subdued demand in the festive calendar shift was more pronounced in the same store sales with an SSFC decline of about 10.6 percentage in Q2 FY twenty twenty seven and 9.2 percentage during the H1 FY twenty twenty seven.

4:45 Nevertheless, our ability to sustain gross margin reflects the strength of our sourcing capabilities, pricing discipline and merchandise mix management. In preparation for the ongoing festive and wedding season, we have maintained higher inventory levels, ensuring adequate merchandise availability and a wider assortment to capture anticipated demand. Most importantly, we remain net debt negative with a healthy cash balance of approximately $2.49 crore, providing financial flexibility to support seasonal working capital requirements and aggressive planned expansion. A key strength of our business is our diversified five brand portfolio, serving consumers across all segments and all occasions.

5:38 KALAMANDIR catering to the middle class and upper middle class income segments, BARAMALAXNI focused on traditional silk and wedding wear, Mandir serves the premium ethnic wear segment, KLM Fashion Mall as ethnic value fashion segment, and Vali Silks offers affordable traditional ethnic wear. This differentiated positioning is enabling us to address a broad customer base while maintaining disciplined store economics. Our expansion strategy continues to be a cluster led with Karnataka remaining an important growth market this year. During H1 FY twenty twenty seven, we opened six new stores, adding close to 56,000 square feet of retail space, while rationalizing our portfolio through the closure of one of one KLM Fashion Mall store measuring about 20,000 square feet.

6:32 This stands to be the first store ever shifted from the current location to a different location. As of September twenty thirty twenty twenty six, our store network comprises of about 86 stores, spanning 820,000 square feet of retail area. Our 100% company owned, company operated model provides direct control over merchandising, inventory, and customer experience, while relationships with more than 4,000 viewers, artisans, and vendors support differentiated assortments and sourcing efficiency. Guided by our PQRS philosophy, which is pricing, quality, range and service, we remain focused on merchandise planning, inventory efficiencies and improving productivity across our retail network.

7:25 As demand improves and recently opened stores mature, we expected higher store productivity and better fixed cost absorption to support the operating leverages. Turning to our outlook. The festive season has been considerably brighter with improving consumer sentiment and stronger traction across markets. The shift in Dasara into October coupled with favorable waiting calendar extending through the year end, and we are expecting a stronger demand in quarter three, particularly all the format including KLM Fashion Mall as well as Varamaharaks Silks. We expected business momentum to normalize in the second half with a return to positive and double digit same store sales growth supporting our expectation of double digit revenue growth for the full year.

8:22 Alongside the anticipated recovery in demand, our continued focus on operational efficiencies, inventory optimizations and improved store productivity should drive better operating leverage and support sustainable profitability. India is largely a fragmented ethnic wear market and continues to offer significant long term opportunities for organized retailers like us. This, when supported by rising consumer aspirants and increasing preferences for customer trusted brands. With a strong foundation built over two decades, our diversified brand portfolio and disciplined expansion strategy, we believe we are well positioned to capture these opportunities while creating lasting value for our stakeholders.

9:10 Before concluding, I would like to express my sincere gratitude to all our customers for their continued trust and loyalty. Our weavers and artisans are vendor partners for preserving the craftsmanship and quality that define our brands and our employees for their dedication and commitment. I would also like to thank our shareholders and investors for their continued confidence and support. With that, we can now open the floor for questions. Thank you. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you would like to withdraw your request, you may do so by pressing star and 1 again.

10:00 Ladies and gentlemen, if you have a question, please press star and 1 on a telephone keypad. We'll wait for a moment while the question queue assembles. Ladies and gentlemen, if you have a question, please press star and 1 on a telephone keypad. We have the first question from the line of Madhu Rathi from Counter Cyclical Investments. Sir, thank you for the opportunity. Sir, if I look at our business from a longer term view, sir, we used to do closer to our inventory terms of three times during FY eighteen to twenty period.

10:53 That has reduced to closer to one and a half, two times right now. And so the strategy of foregoing the margin like for higher margins, we were we've taken a hit on our balance sheet. So if you can help us understand that how should we look at our business going forward? And what kind of inventory turns do we expect we can achieve in the medium term? If you look at the inventory turn, the three time turnover was even before our IPO times because at that time, we had a completely different arrangement with a different company. And during the listing, we have merged those two companies into one as per the PRLMs request. And considering all of that, our inventory remained in the similar fashion of where it is currently.

11:44 In fact, for the last three years onwards, we have continuously improved the inventory days by twenty, thirty days. And currently, as we speak, our average inventory holding in each and every store is much lesser than what we used to have last three years ago. So that is on account of the structural change that we have done with respect to company restructuring. But the business, this business, if you look at, is a wedding based business and festive led business. And in this kind of industry, it is always optimal to keep a larger number of inventory for us to be able to deliver such high revenue per square feet numbers.

12:33 Therefore, the inventory seems to be a little bit higher. But then at the same point of time, we are also delivering the industry's best revenue per square feet. Looking ahead, there is still possibilities and provisions for us to normalize. But specifically, when you look at Q2, because that is where we are, we will generally and naturally have an inventory built up by the end of September '30 and December 30. Again, in Q3 and also we will have an inventory buildup. This is on account of preparing for our festival and waiting calendar. Dushra, as you know, it fell in second week or third week of October. And therefore, by September 30, we naturally had all of our inventories readily available in the store so that we are well prepared for Dushra.

13:24 In a similar fashion, we will also have the inventory prepared in our stores for at the end of December because of Sankranti and Pongal season. Because inventory as a number, we take it at the end of the quarter. The number might look a little bit on the higher end, but broadly, inventory is a number that where we need to look at year on year. And when you look at a year on year number, this is a number that will slowly get normalized. That's right. Got it. So you, if I want to think, sir, so what I understand is that we follow the strategy of taking cash discount. For the cash discount, we pay our vendors ahead of time, and that has led to higher inventory. So so so I'm just understanding that the inventory... Two times inventory turns is not an ideal for a retail business. So if you can help us understand that, is there a possibility of or have you thought about increasing the payables so that we can make a leaner balance sheet and therefore maybe foregoing a few bits of margin, but that should make our balance sheet much leaner?

14:40 Yeah. We will take all effective steps to improve the balance sheet by the year end. But during the course of the year, since the seasonality is the major factor where we have to achieve better productivities, better profitability, etcetera, the changes on a month to month basis, year to year basis will occur. But definitely, there will be an effort to improve the balance sheet by the margin. Got it. And sir, we were we were trying to get into the silver jewelry in our store. So what is the status of that? And how has that been played out?

15:28 So the silver jewelry part, just to give you a brief on the entire business. The silver jewelry business is a part of our existing store network. We have identified some service area in our current existing bigger size stores, and we wanted to experiment that silver jewelry as a category and see if this category is growing. But our initial reports whenever we have seen whatever we have been having for the last year, year and a half, didn't seem to have such great growth potential. These this business is something that we are okay to keep it in the existing stores itself, but we don't plan to expand majorly on the silver jewelry business because what has happened in the last one year basically is the silver prices fluctuating too much and the entire business is actually taking a nose dive at it. And secondly, one more interesting category emerging in the jewelry space, which is the fashion jewelry aspect.

16:33 Suddenly customers are choosing between fashion jewelry or a gold jewelry and silver jewelry stand somewhere in between is something which is not giving us such exciting results as ideally we would want to have to help us take an aggressive decisions to opening a store. With that, our investments in silver jewelry is very, very, very less. I think we have invested close to INR 6 crores to 7 crores in terms of the overall inventory. And even if you look at just the metal prices itself, it is appreciated by a word more than 50% to 60% from where we have initially started. The business is self sustainable so far. And I think for us to be able to expand aggressively on that business, we are trying to take it a little bit on a slower end. But in terms of absolute inventory level, we are net positive, and the business is doing decently fine.

17:27 It should be seen as an effective utilization of this story area where we have some small excess space and all that. And then specific source where there is a customer demand. Customers are inquiring about these things are there. So it's not part of the main business line, but for the experiment said that we place it as also to utilize the space option. Yep. Got it. And, sir, have you thought about doing the shop in shop type of modern that shopper shop that are jewelry... Specifically jewelry brands so that although the inventory risk is passed on to customers, Sai Silk can just benefit for whatever incremental demand comes from our customers? Because, sir, there seems to be a very adjacent area, sarees and jewelry going together. So is that a possibility? Or have you thought on that?

18:28 So yes, I think you're right on the fact that sarees and jewelries are categories which are quite adjacent to each other, and both of them actually help each other out. That was the reason why we have started the silver jewelry business on the whole. But to your answer to your question, if you are interested on the SIS category on our existing stores, see all our existing stores, the average square store size is around 6,000, 7,000 square feet. This is only possible when the store sizes are much bigger and that there is a lot lot of space for us to offer to the SIS player in that category. And at this juncture, our SAARI inventory and the SAARI throughputs are much better than these players. And two, when we have a larger size stores, we can focus and we can figure out that this is a category worth exploring.

19:18 But when your store sales are compact and when you need that minimum store size possible, we don't have a possibility for us to extend anything to the SIS players such as jewelry categories. We have explored one or two options in the past to have a lab grown jeweler be a part of our existing network. But then the challenge was the store fit outs and the store outlook, however it is being placed, we could not accommodate a comfortable space for him. And therefore, we had to like, you know, go back into our traditional business plan. But moving down, I think down the line, I think once the stores sizes, average store size is increased, Select stores, we can open and look at certain opportunities like that. But majority of our stores currently speaking are optimally planned to have the inventories at adequate levels, So that there is no space for players like this to give them the visibility.

20:18 And players in SIS, need the visibility for them because as soon as they walk inside the store, the the the the opening area or the welcoming area is where they ideally want their setup to be put. And that is where the difference is coming at. We have planned and positioned our stores only around Sarees, and therefore, is a limitation. Moving down the line, I think if there is an opportunity worth exploring, we would definitely consider it. Got it. And sir, just one follow-up. Sorry to interrupt, Mr. Raji. Just a final just a final question, sir. Sai Silks has allowed an open market share buyback. And sir, since our share is trading at less than our book value, sir, I would just suggest the management if they can look at the share buyback either through open market route or so that it can be helpful for all our shareholders and the promoter shareholding can increase to 75%.

21:10 So that's just a suggestion. Thank you so much and all the best. Even now, share price is that... Share is operating at $7.80. Buyback of shares is not an appropriate option by investing substantial funds into the share buyback. Instead, if we deploy these funds into the business itself, it will give much more results. So that's how we have worked out it. And, broadly, I would consider that if the PE is above the industry average, then sales by record may be a... An advantage thing. But at the current level, the PE, the board discussed and decided that it is not an appropriate time for us to consider the share buyback options from the company.

22:10 Thank you, sir. We request the participants to restrict yourself to two questions in the initial round and join back the queue for more questions. The next question comes from the line of Sankit Klaskar from three sixty one. Please go ahead with your question. Thank you for the opportunity, sir. Sir, as you were mentioning that in h one, there has been certain challenges that were added mass and shift in the festivals. So can you quantify, sir, like, how was the demand in this, Nava, three versus last year same period? Also, if you can provide us SSG for the same period with respect to all the branch format we operate in. That's it. For the future, I mean, it's too should be highly encouraging because everything in the wedding season and the festival season has come into the h two only.

23:07 So we can confidently say that we will speak to our original predictions that we have given at the beginning despite the small spread setback in the HR. So to elaborate on this, since Navratri season has ended and we are in the Diwali season, the last year, Navratri was a this year festive growth. So I think we have grown by more than 27 to 30 percentage in the overall festive to festive business last year to this year. So so you can understand that whatever the numbers that we are declaring right now because of in negative SSSDs is primarily on account of the festive shift in terms of the calendar because last year, q two, Dushra has moved to q three, Dushra.

24:05 This is a technical change between one month and the other. But broadly, if you have you have to paint a picture on how this Navaratri is so far gone, it is not just about having a recovering footfalls. I think we have seen all KPIs grow. Your ASPs, ABVs in all metrics, in all formats, showed considerable growth. And we we believe that this is going to continue because after Dasara, Diwali, and after Diwali also, there is a continued wedding calendar that is being there. So therefore, with all of these factors considered, we are quite optimistic about not just recovering the lost SSSJ, but also be able to deliver the initial target of our overall growth.

24:54 That's good to hear, sir. So my second question, as you had as you are expecting double digit SLG in second half as well as double digit revenue growth. So can you lease down all the factors which will provide? And what are the initiatives which you have taken that will show such kind of SLG growth in second half? See, I think fundamentally, the majority of what we do is only that, you know, the festive shift has happened. And secondly, we are also trying to reconsider our pricing strategies to see if we are... We there is a possibility there because of the increased pricing and because of the raw material increase, our overall product value is getting increased. And wherever it is impossible to pass the benefit to the customer, we are trying to see how much we can absorb.

25:44 This is on the undercurrent that we are trying to continuously do in the last quarter onwards. Secondly, I think the major factor fundamentally boils down to just Adhikama's and the festive calendar moving from H1 to H2. These two factors is something that will enable. If you look at our our new stores also, I think our new stores are in Tamil Nadu and Karnataka, and these stores also do perform well during the Diwali season. And the fortunate... I mean, unfortunately, it is not a similar quarter to quarter comparison, and therefore, that is the reason why we are saying that we will be able to move this business to h two. And at Dashara festive demand growth compared to what we have done last year to this year is a testament to the analogy that we will still be able to recover this loss because a 30% growth from last year to this year is quite good.

26:39 And this is a similar trend in when you take all the formats put together. Our KLM fashion mall format also did deliver a much higher growth number compared to last year number. So with all of these things, in fact, we believe the customer sentiment is also getting back, and this will be able to continue at least till, January, February. And that is where majority of the festivals are actually positioned as well. And also on the first, in this peak season, we have analyzed the areas where the productivities are lower and made an effort to reach out to the customers through advertisements, direct channels, etcetera. So that the visibility is created much better and then the productivity is in those areas, particularly in terminal area where in some parts of the terminal area where we thought we would need further visibility.

27:38 We have made an effort on that and through advertisements, etcetera. And then expecting that this year, coming out of productivity to improve on account of these efforts. Thank you, sir. We have the next question from the line of Kwanil Desai from Turtle Capital. Please go ahead. Hi, good morning, everyone. So my first question is, you talked about very good ASP that you're expecting with double digit asset fee. At the start... Sorry to repeat your question. I think I lost you in between.

28:25 Yes. Sir, I think you talked about a very strong SG with double digit SSSP coming through. At the start of the year, we were expecting 15% kind of a growth for the full year considering that 45% will come from SSS and 10% will come from the credit addition. So are we on course to that? And in order to do that, you have to grow in actually by 25%, 30% on a non GAAP basis. How feasible it is given the scenario that you are seeing today? We need to execute double digit growth in SSDs because we have to update the negative SSDs in the first half and then give the desired overall SSDs around 5% on an annual basis.

29:21 So we are confident that second half, we'll see a better SSDs, which will meet the company's overall annual price. So we are still thinking around, you know, $1,900 of top line with nine nine and a half percent fat margin. Is that a fair way to look at it? So anywhere... See, last time when we mentioned, we mentioned that somewhere between $18.50 and 1,900 is where we should end up at, and we're sticking to that. We... There's no changes. Eighteen fifty to 1,900. It's the overall turnover that we are... Sorry. It's not bad. I meant overall turnover that we have we have mentioned, and we will we will stick to that.

30:09 There is no changes, and we believe that it's quite possible from where we currently stand. Got it, sir. And I think we were looking at some margin improvement at EBITDA level and slightly better improvement in PAT margins. So that also will come through with the scale and growth coming back. Right? See, half yearly because of negative SSLGs, you are seeing these kind of numbers. But I think in the second half, we should considerably improve. Okay. Because you would naturally expect in a double digit. Sorry. Yes. You were saying? Expect around 17 and a half, 18% margin, you know, in h two. K. Even last year also, we were achieving those those kind of EBITDA margins. And with this, yeah, I think the activity and increasing results, so we should expect that in the second part.

31:04 Got it. Got it. And the second question is on the KALAM side. So KALAM, you know, generally, over a longer period, I'm not talking about, you know, particular quarter or, you know, half year. But has been a, you know, has been going through a challenging time, you know, for last two, four years, not much growth is happening. We are also not adding store. So... And our positioning, given that, you know, a lot of value retailers have come up, which was only focuses on value. So given that, how how you guys are thinking about KLM? And how do we ensure that, you know, KLM doesn't track the overall company level at SS and P and profitability? This year, KALAM should... I mean, KALAM is on the path of recovery, and then this year this this year, we should see a a market improvement in KALAM performance.

32:02 So once... Perhaps, it would be an appropriate time for us to discuss about KALAM at the end of the third quarter, where there can be a clear path towards the recovery, and we can confidently tell you how it will happen. Okay. But any interventions that you are making to ensure KALAM, you know, continues to at least deliver positive SSSP, you know, what are the things or steps that you are taking? If you can talk about that. When when we are saying it is improving, then, obviously, with our intent... Our interventions only, know, we are making a specific effort to improve the KALAM's operations, thereby, it will contribute better than what it was contributing last year. Yes.

32:53 Okay, sir. And, sir, this this quarter, the presentation was not out. So if you can... Not sure, you know, whether it was kind of delayed, a text, or anything. But if you can put that out, you know, it will be very helpful. It is uploaded on my website, but there's a small transition within the company. So there might be a small delay, but it is right now available on the... Yesterday evening itself, I think we... The PPT is uploaded, I think. But yes, if at all there is any issues, please do let us know. We'll try to share it with you. Yes. I'll come back in. Thank you. Thank you. We have the next question from the line of Resha Mehta from GreenEdge Wealth Services.

33:41 Please go ahead with your question. Yeah. Thank you, Diwali. Wishes to Bharat Raj and the team. I have a couple of questions. So, you know, first on the growth that you spoke about, right, that h two, we are seeing good momentum with Diwali. Right? So what is the, you know, downside risk to this as we go ahead and especially in the context of, you know, poor rainfall, you know, and we do have our footprint in some micro markets, which are agrarian in nature. So just your thoughts on, you know, the poor rainfall impact on demand possibly going ahead? See, I think the downside, honestly speaking, the market is still showing signs of recovery. I think we had one of the best Dasara so far. And the Diwali season is also one of the best Diwali that we've had in the company. So I would I was also having a little bit of a doubt whether the El Nino effect will have a lasting impact on the consumer spends this year. And I was I also thought maybe the MDR charges on The U. Pays also could have some impact in the overall profitability. But fortunately, that all these things have been pushed to later half of the year. So far, I don't see anything materialistic that will that could potentially hamper.

35:11 There are minor issues like you have the cyclone effect in Andhra, we had to like close down stores for a day. These are all some things that took a day off in the overall business. But we don't anticipate anything particularly on that front that there are reasons that I could foresee at this juncture that could help us not receive or not reach the targets as we wanted to have. In fact, our major markets like Andhra Pradesh and Tamil Nadu have an inverse, you know, effect because they had a lot of rain off late. And we would not think that the crop, etcetera, will get affected because of the...

35:59 And then I think these two markets, which are going to be our major markets in the next two or three months. And in terms of the betting calendar, so are the dates adequate versus last year? Or how how do they plan on typically? Yes, ma'am. I think, the dates are adequate. I think, from... I think, wedding date outlook is something that I have given earlier as well. We are having a healthy pipeline of wedding dates. We we we... It is it is evenly spread out as well, which is even... Which is a very positive sign on the overall wedding dates calendar. And we see majority of our wedding dates falling in q three and to a certain extent falling in q four. The only difference that they will... We will anticipate would be in Q4, wherein the Bugatti season, which is in Karnataka is delayed by a couple of days and moves into Q1 of next year.

36:58 But again, coming back to the waiting date analogy here, I think it is evenly spread out and having a healthy calendar. A few more dates come back to what we had last year. And in fact, I signed a report where, next year looks to be more promising. And then there's around 63, 65 waiting dates in a year. Next year, it should have about 98 just as a corollary. But this year, the wedding dates are more even in the second half and are intact with our expectations. And, you know, on the inflation side. Right?

37:43 Meta, could you please join back the queue? One last question. We can take out, KALAMANDIR, just like I think she... Mhmm. She's... Yes, ma'am. Please tell. Okay. Yeah. Thank you. So, you know, just a quick one on the inflation side. I think most, you know, apparel players are seeing inflation in fabric. So how are we seeing inflation in our portfolio? How are we managing that? If price hikes are a blended basis, if any, we have taken. And lastly, you know, the competition, competition, I think last time you spoke about some regional competition in AP and Telangana, which reduced footfalls in our stores. So and, you know, we were seeing consolidation happening. So anything if you could comment on regional competition? These two questions. Yeah. Yeah. So sure. On the regional competition part, let me take that question first. So there is... There are people who are opening stores even even in in the late late of q two also we have seen considerable store openings happen.

38:43 But what the interesting thing that is currently happening in the market is a lot of people are now putting up exhibitions. So they're putting up a small... They're taking a function hall, and they're trying to put up a lot of exhibitions in order to, like, you know, move the sales and bring that differentiated and give... Bring that, like, clearance exhibitions kind of a format is what a lot of people are putting. That is there across AP Telangana in this year, and we are anticipating that this will continue during Q3 and Q4 as well. What we have done is we have countered that by having a very interesting advertisement and marketing strategies to be able to go at a store level. And and and that advertisement efforts actually paid off during the Tashara season, irrespective of the fact that these exhibitions are there out there in the market.

39:33 While on a broader term, competition sometimes will steal a footfall served by a bit. I think this, Sai Silks I think we were able to counter that by having aggressive marketing campaigns that we've had. And therefore, we were able to have a very good festive so far. On the price increases, particularly per se, I think broadly, the raw material prices is has increased quite a bit, I think, close to five, six percentage of raw material prices. And we are trying to price as much as possible and pass the benefit I mean, pass the entire pricing to the customers. While while that's a continued strategy that every store we try and do these activities to ensure that the customers are not walking away from the stores because of increased prices.

40:23 One major element that we would always will focus is, no matter what these price price fluctuations in terms of raw materials move up and down. We are always ensuring that the customers find our products cheaper than what they could find to a nearby or a competition store. That would be the fundamental analogy before we do our pricing strategies. Understood. Thank you so much. Thank you. Thank you. We have the next question from the line of Rahul Jain from Credit Suisse. Please go ahead. Thanks for the opportunity and good set of numbers considering that the data and activities are shipped this way.

41:12 So sir, the first question is with regards to Tamil Nadu. Since we are not able to go through the presentation, I have just now checked. It is there on the website. It wasn't there on the exchanges. But... So I've not been able to go through the entire presentation properly. So, Tamil, I will be the guiding that, you know, the Varimalakshmi stores to scale from about 30,000 per square feet towards 45,000, 48,000 square feet by end of FY twenty twenty seven. So till the half one, how has been the kind of number from Tamil Nadu stores? And how do we expect further productivity gains to come in at Tamil Nadu? And what will drive that?

41:59 See, Tamil Nadu currently in the h one, we reached about 36,000 this past week as of now. We have identified a certain source where the visibility... We got rid of productivity. It's lower where we made an effort to create further visibility to where it sends to other documents and other things. So... But h two, normally, the productivity should increase even subsequent productivity should also increase. And with these efforts that we are making in Tamil Nadu, the oral improvement. There should be a substantial improvement by year end in Tamil Nadu as well. Okay.

42:45 Sure. And, sir, in last few store additions, KALAMANDIR format in Bangalore and Mysore, that has been dominating the square fit addition and the store addition. So typically, you know, are we seeing some kind of, growth which is happening in Karnataka? And there, the store addition has been in Kalamandir, not in Varamalakshmi. So just to understand the strategy behind this part, just to understand what is driving this. Okay. So see, when we try and put up stores, I think the analogy and logic is that we wanted to have multiple formats that we would want to open in one location. Pre this year, I think last year, by the end of last year, if you look at the overall store count in in in statewide store count, KALAMANDIR always operated at a lower store count compared to Andhra and Telangan despite having a huge potential.

43:43 That is what we have activated it this year. And the previous year and before year, Tamil Nadu took a leading front in terms of the overall expansion. While we try and do the expansion, the analogy that once we have expanded with that particular format, we will... After we have our learnings in that specific area on wherever we open, it is time for us to expand with a newer format. So what we would ideally want is, you know, in Bangalore, we have opened... There are only a very few KALAMANDIR stores and even the number of stores overall in Karnataka was much lesser. And therefore, we have actively taken plan to open a Vahramaha Lakshmi Silks stores as well as KALAMANDIR stores as much as possible in these markets.

44:30 Now I think Karnataka, majorly, I think we will slow down a little bit in terms of the Karnataka expansion while we start actively expanding into Tamil Nadu again. So the logic is simple. I think we would we would we would stick to the idea of a cluster led expansion model, wherein we identify one location and we penetrate with one brand. And slowly, once the one brand starts maturing, we will ideally start adding the second brand in play. Therefore, it gives us operation leverage with respect to warehousing and administrative leverage. And that has been the model even if we... Right from the beginning, that is how we have always been working upon. Now currently, what we will ideally be doing is, like, we write... Though we wanted to focus into newer... I mean, the core markets, we are actively exploring newer markets, is outside of these four states that we are currently looking at. Probably very soon you should be able to see us informing or notifying the market that we are opening our stores into newer territories, could be Maharashtra, Kerala and other markets as well. So again, the logic will be that we will open a few stores, look at how the stores are performing, understand the consumer behavior and then slowly start expanding and aggressively adding new store formats.

45:55 So so that is broadly the logic on how we would look at the store expansion front. There is nothing limiting with regards to not opening Varamah, Lakshmi, and opening KALAMANDIR. We have five beautifully designed formats to five different consumer segments. And the goal is to add these formats based on that particular market. With that being said, Varamandir, Lakshmi, Silks continue to open in the next years to come as well. And just to clarify with regards to the margin guidance for the current year, Earlier when we had given a target set around INR $18.50 crores to 1,500 crores of sales, we had mentioned that EBITDA margin for the entire year FY 2027 should be somewhere between 17.5% to 18%.

46:47 So to one of the earlier questions, we did elude that, you know, we will go to that 17.5%, 18% margins. So are we talking that for the whole year as a... Those margins for the year as a whole? I would say that we discuss this at the end of the quarter three. Looking at the current level of operations, we hope to do it, but we will confidently say about this at the end of the quarter. Sure. And just one last question, sir, with regards to Volley. So post the end of the last year, we haven't expanded on the stores and it's almost a year now since opening the Vale store.

47:34 So could you share some details on the unit economics of this particular format with regards to the EBITDA margins, with regards to, you know, the IRRs and the sales per square feet, the payback periods for the Bali format? And going forward now, do we start again putting up some stores only? Only format, we are waiting for it to mature because they were opened in line the last year only. Only format, basically, is designed to be in line with the Kalamandir format. By the... This year end, we would know broadly, whether... Sticking to that. Fair enough.

48:20 Thank you so much, sir, for the insights, and wish you all the best. And I wish you all a very happy Diwali. Thank you. Thank you very much. Thank you. Due to time constraints, that was the last question for the day. Now I hand over the floor to the management for closing comments. Thank you, everybody, for dialing in and being a part of our SSKalamandir) story. From where we currently stand, we are having a very exciting and an encouraging festive quarter and a wedding quarter. Looking forward to connecting with you all in the next quarter earnings call. Thank you so much for connecting and wish you all the season's greetings. Thank you, sir. Ladies and gentlemen, this concludes your conference for today.

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