Studds Accessories (NSE:STUDDS) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Studds Accessories Limited Q1 FY 'twenty seven Earnings Conference Call. 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. Siddharth Khurana, Managing Director, STUDDS Accessories Limited. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining STUDDS Accessories Limited's Q1 FY 'twenty seven Earnings Conference Call. I hope you have had an opportunity to go through our financial results and investor presentation, which are available on the company's website and on the stock exchanges.

0:54 I am joined today by Mr. Bharat Gwal, Chief Financial Officer of the company. I'm also joined by SGA, our Investor Relations Advisers. Let me start with the broader environment. The global economic environment remains challenging with geopolitical and trade related uncertainties creating volatility across markets. India, however, continues to remain relatively well placed, supported by strong domestic consumption and infrastructure spending. For our industry, we believe the structural opportunity remains strong, supported by the growing two wheeler ecosystem, increasing adoption of premium motorcycles, adventure touring and motorsports and rising consumer awareness around safety. At the same time, stronger regulatory enforcement and premiumization are accelerating the shift from an unorganized price driven market towards a more organized branded and safety focused market.

1:49 We believe this is a positive development for STUDDS given our strong brands, distribution network, manufacturing capabilities and product portfolio. Coming to our performance. We delivered a healthy 13.7% year on year growth in revenue to INR169.7 crores in Q1 FY twenty twenty seven. The underlying demand environment continues to remain stable across our key markets. However, the quarter has was impacted by a very sharp increase in styrene based raw material prices. Just to give you some perspective, the average styrene based raw material price was around INR 135 at the beginning of Q4 FY 'twenty six, which increased at its peak to approximately INR $2.25 in Q1 FY 'twenty seven. That's almost a 65% increase in prices.

2:40 This was an exceptional movement in raw material prices over such a short period of time. However, we did not face any issue with sourcing or availability of raw materials. The issue was purely the magnitude and the speed at which the raw material prices increased. On the pricing front, we have taken the necessary actions to address the increase in raw material costs. However, the benefit of these price increases takes some time to fully reflect. In exports, some of the orders executed during Q1 were contracted before the price increase and therefore continued at the earlier prices. New export orders, however, are now being booked at the revised prices. On the OEM side, the revised pricing has become effective from Q2 onwards for some of the customers. As a result, we saw an effective price realization of around 5% in Q1.

3:28 From Q2 onwards, we expect the full price increase of approximately 9% to be reflected at the earlier price orders as the earlier price orders progressively roll off and the revised OEM pricing starts flowing through. Further raw material prices have also started moderating from July onwards as lower cost material progressively flows through our inventory and the higher pricing gets reflected in the business, we expect margins to improve over the coming quarters. Accordingly, we expect EBITDA margins to improve to between 14% to 15% in Q2 FY 'twenty seven and reach the normal state of 18% to 20% on a run rate basis by Q4 twenty twenty seven, subject to raw material prices remaining broadly stable. The important part is what we are doing today.

4:15 What is important for us is that we have not been sitting back and waiting for the commodity cycle to normalize. We have been actively working on multiple initiatives across capacity, customers, international markets, new products and technologies. A large part of these initiatives will start contributing meaningfully from the second half of the year. First is capacity. Our first phase of 1,500,000 elements of additional annual capacity is progressing as planned and is expected to become operational beginning October and September. This is important because our existing facilities are already operating at relatively high utilization levels. In Q1 FY 'twenty seven, our two wheeler helmet and boxes production was around 1,950,000 units with a utilization of 81%. The additional capacity gives us the necessary headroom to cater incremental demand without putting pressure on our existing manufacturing infrastructure.

5:08 And as we have said earlier, our manufacturing setup is highly fungible. Depending on the product mix, we can optimize throughput between different products and brands. So this capacity addition is not only adding volumes, it also gives us flexibility to respond much faster to changes in the market demand. Second is Decathlon. Our engagement with Decathlon is progressing well and commercial production is expected to commence from October. This is strategically important for us because it gives us an opportunity to participate more meaningfully in the organized and institutional segment. We also see this as an opportunity to build capabilities that can be leveraged for other international institutional customers going forward. The third initiative is our Italian operations. We believe Italy can become an important platform for European growth. The objective is not simply to establish a warehouse. Today, when we supply customers in Europe, the shipping lead can be lead time can be forty five to sixty days. This means the distributors have to carry relatively higher inventory levels to ensure product availability.

6:06 Once our Italy operations become fully functional in October 2026, we will be much closer to the customer. This means that distributors can potentially order closer to their actual requirement and carry lower inventory. So rather than asking a distributor to forecast demand several months in advance, we can increasingly move towards a more responsive and just in time supply model. At the same time, it will allow us to explore near markets directly where we currently do not have adequate presence. As we have said earlier, we are already looking deeper presence in markets such as Turkey, Colombia, Mexico, USA, Indonesia, Philippines and Sri Lanka. The Italian platform therefore gives us another tool to expand our international business, improve our responsiveness and deepen our relationship with the dealers. The fourth area is product innovation. We have always believed that the long term opportunity for Studds is not restricted to helmets.

6:57 The rider safety and rider accessories ecosystem is much larger. During Q1, we launched two new helmet models, ARRIS and RADAR U. We have another four to five products in the pipeline, which we expect to launch progressively during the year. Our focus will continue to be on refreshing the product portfolio, bringing new designs and features to the market and addressing changing consumer preferences. Bluetooth communication systems. We are currently working on two different products. The first is more standard Bluetooth product, which allows riders to listen to music, use turn by turn navigation and connect with their mobile devices. The second product is more advanced. This is a mesh Bluetooth communication system where a group of riders can connect with each other and communicate while riding.

7:44 The prototype is already ready, and we expect the first commercial production to commence Q3 FY 'twenty seven. We see this as an interesting category because it takes us beyond the traditional helmet business and into a broader connected riding ecosystem with standalone Bluetooth devices. Riding jackets. In parallel, our riding jacket product is also progressing well, and we expect this to become commercially available around Q2 FY twenty twenty seven. Overall, our core business continues to provide scale and stability. SMK is driving premiumization and international growth. Our private label business is opening up opportunities with global customers. Our export business continues to gain importance, and now we are adding new growth platforms to Decathlon, Italian operations, additional manufacturing capacity and Bluetooth communication system and riding accessories.

8:34 So we are increasingly building a business with multiple growth engines rather than being dependent on any one product or market. Now moving on to our consolidated financial performance. Our two wheeler helmet and voxel volume stood at INR 1,950,000. Consolidated revenue stood at INR 1 INR169.7 crores. EBITDA for the quarter stood at INR19.6 crores with margin EBITDA margin of 11.5. PAT for the quarter stood at INR12.3 crores with a PAT margin of 7.2%. Capacity utilization for two wheeler inmates and boxes stood at approximately 81% for Q1 FY twenty twenty seven. Helmet ASP for Q1 FY twenty twenty seven stood at INR $8.45 as compared to INR $80.02 in quarter one financial year 'twenty six.

9:27 With this, now I open the floor for questions. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer Anyone who wishes to ask a question may enter star followed by one on the touch tone telephones. If you wish to remove yourself from the question queue, you may enter star and two. Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. The first question is from the line of Rahul Deshmo from Antique Stock Broking. Please go ahead.

10:15 Hello, sir. Thanks for the opportunity. I just wanted to understand the contribution of styrene based raw materials to the total bill of material in terms of percentage? Yes, that's my first question. Rahul. I think so the two main products, which is ABS and EPS are the main contributors. Then there are some indirect materials like paint, where also styrene manufacturing is involved. But to give you an idea, I think the styrene based direct raw material consumption is about 36% and another about 15% could be indirect. 26% is direct and another 15% is indirect. Right?

11:04 36. 36% is direct. 3036% is direct. Yeah. Correct? Yes. Yes. Thank you. Thank you. Participants with questions, please enter star followed by one. The next question is from the line of Manav Jain from MJ Investments. Please go ahead. Thank you for the opportunity, sir. So my question is, like, you are setting up actually primarily to go dealer direct and improve penetration. But today, a significant portion of European business is already being served through distributors. So when you move from distributor to dealer direct, are you actually capturing the distributor margin, or are the additional warehousing, inventory, and logistics and selling cost going to be absorbed most of that benefit?

12:03 And at steady state, what EBITDA margin differential do you expect from the equity model versus the existing distribution model? So to answer your question on the Italian operations, we are planning to go direct in Italy, Germany and France. So these are not the strongholds for us. We don't have a direct distributor in Italy and Germany. So we're kind of entering vacant markets for us. Although these markets are being fed through different distributors in other countries, but the volumes are very small. For countries where we have strong distributors like Spain, Holland, Portugal, we would not be entering directly. So the plan is to serve those markets through the distributors and enter these three big markets, such as Italy, Germany and France with a dealer direct model. And these three countries will be one of the top five, all the three. So these are fairly large markets. So that's the thought behind going dealer direct in these markets. It's a big volume that will come from these markets.

13:09 Secondly, to answer your question about EBITDA margins. So at the moment, it's a start up, so we don't expect margins in the first year or the second year. The profits will start flowing in from the third year. And I would assume the EBITDA margin surplus EBITDA margins, I would say. So whatever we're gaining right now, on top of that, the surplus EBITDA margins could be anywhere between 10% to 12% from the Italian subsidiary. Okay, sir. Got it. That was very helpful. Thank you and all the best. Thanks. Thank you. The next question is from the line of Preet Bhutani from Incred AMC. Please go ahead. Sir, my first question will be on the line of raw material cost.

14:01 Like, we have told that the major gross... We have a gross margin compression and EBITDA compression because of raw material cost. But if I see, there is a 600 basis point impact due to material costs and 200 basis points impact due to other expense. If you could highlight what was the rising order expense as well? Yes, sure, Praveen. So as you rightly mentioned, 600 bps is because of material and 200 bps is because of other items, but that other items actually is just one item, which is manpower cost. So the manpower cost has gone up by 200 bps. And the main reason for that is that there was a change in the minimum wages in Haryana from April 1. There was an increase of 35%. So the minimum wage for unskilled person was between 11,000 and 12,000 earlier. Now it has become 15,000 and 16,000.

14:52 So that is the main reason of increase in the manpower cost. And I think going forward, it will not be 2%, it will be slightly lower because we have just realized 5% of increase in our sales cost from the price increase that we have done. We expect it to go to 9% realization on increase of the sales price. So in the first quarter, we could only realize 5%. In this quarter, it will be higher. So you'll see this impact softening, but it is right that the manpower cost has gone up and it is going to sustain. We can only offset it by better product mix or by increasing the prices. And just a follow-up on this. Do we have a contractual agreement with OEM for this manpower pass through as well?

15:43 Yes. So we have received some increases. In fact, we have received from we see increases from all the OEM customers, except one, which we are expecting in next one week. So all these costs will be passed through to the OEMs. And just on the price, I think you mentioned 9%. So is this 9% from the base from the last year base price or is it 5% in q one and another 9% in q two? If you could just clarify that. I mean, if you could just clarify exact raw material price hike in quarter one and quarter two and also our product price hike in quarter one and quarter two? Okay. So our product pricing hike is 9% from the base of FY 2026, so March 26. From there, we have taken a price hike of 9%.

16:31 But for three channels, which is OEMs, which is Hero, Honda, Suzuki, other customers, then government channels like CSD, CPC and some of the export customers, the price hike takes some time to realize. So for example, for exports, we had some old orders in the system, which we executed. So the exports have been completely now in this quarter. The realization is all on new prices. For OEMs, I think most of the realization will come in this quarter, full quarter, but some realization will only be impacted in the half of this quarter. There are some price hikes we are expecting in this week from one big customer. For CSD CPC also, we expect the price hike to come in this quarter, mid of the quarter. So I would say where we got a 5% pricing hike last quarter, we expect this quarter could be anywhere between 8% to 9% and the next quarter could be 9% realization.

17:31 So that's on the sales price side. On the raw material side, we had an impact, as you said, was 600 bps for Q1. We expect this to soften to about 300 bps close to 300 bps in this quarter. And then as material prices soften, we expect Q3 and Q4 to be better. And we will see how the styrene prices and other raw material prices go from there. But for sure, we see Q2, have already softened a little bit. Got it, sir. And on this, we have around top line growth of 13.7. So is it fair to assume that 7%, 8% would be volume growth and 5% be the pricing realization growth? Yeah. I think the volume growth is... Give me a second. The volume growth is close to about 8%.

18:20 One second. Yeah. So the volume growth is about 1.4 lakh units on a base of 17.56 lakh units. So that's about 8.5%. And what would be our volume growth estimate for full year? So the volume growth estimate for full year would be close to between 810%, I think, minimum. More actually, it will be between closer to 10%, closer to 10%. So 10% volume growth and blended 7% to 8% realization growth. This is what we can assume, right? That's why in my last call, had said high teens growth on the revenue side.

19:11 And now if we take full time, like, of English, so what can we expect in FY twenty eight on volume and utilization basis? Because you would be starting your operations immediately and other few other countries which you mentioned. So what kind of growth in terms of volume and in terms of utilization due to change in product mix can we assume in FY '8? FY 'twenty seven, you mean? 'twenty eight. 'twenty seven, you mentioned, right? FY 'twenty. Yeah. So FY 'twenty eight, we expect growth of, again, mid to high teens. And if you could just bifurcate this into volume and realization? So the it will be more from, I would say, volume.

20:00 Just give me a second. I'll give you the approximate number. Yes. So roughly 13% to 14% should come from volume and three percent to 4% should come from price realization for the next year. Got it. And sir, one last question. Like you mentioned that we are starting this policy plan, and this will not be profitable from year one, and we could see step up profits from third year. So what if you could just give some cost in quantifiable terms, what kind of cost like INR 20 crores, INR 40 crores, 50 crores would you expect for onetime expense to start all these things?

20:50 No, the cost will not be that high. We expect the losses to be maybe 2 crores to INR 3 crores to start with. And next year, it could go up to maybe INR 4 crores, but it will not be substantially higher than this. Okay. So what we are expecting is? Yes, you can continue this one. I said because we are starting our operation in October 2026. At the moment, whatever salaries are going out there, just expense, there is no revenue also for this quarter. From October onwards, we'll have the sales. So we don't expect big losses after that. And next year also, it will not be profitable for sure because we'll have to expand our team. But the losses will be not substantial or materialize.

21:45 So what we expect is INR 2 crores to 3 crores of loss on PAT level for this year and INR 4 crores to INR 6 crores 4 crores to 5 crores of loss on PAT level in FY 'twenty eight. Is my understanding correct? Can you give me a second? One second. So for financial year 2728, we are also looking at a loss between INR 2 crores to INR 2.5 crores, not 4 crores, I'm sorry. I just looked at the numbers. It will INR 2 crores to 2.5 crores. For FY 'twenty seven? FY 2027, yes. And FY 2028, 4 crores, which you mentioned that for expansion we would require new team, that is FY 2028? No, FY twenty twenty eight also will be about INR 2 crores, not 4 crores. Okay.

22:31 And on our internal calculation, what would be our top line from these 300? Sorry, I'm moving to the next. One second. So this year, we expect the revenues to be anywhere between EUR 100,000 to EUR 125,000. So because it's just a start up year. Next year, we expect the revenues to be close to about EUR 1,000,000. And are we considering this on our mid teens growth which we are guiding or this is over and above? No. This is included on a consolidated. Sure. I'll join back in the queue. Thank you so much for answering all the questions.

23:20 You. The next question is from the line of Rishab Agarwal from Surab Capital. Please go ahead. Sir. So what was the reception of the price increase in the GT channel? Because I assume that has been fully baked in. Right? Yes. So the price reception has been quite normal. I mean, we didn't find any resistance in the GT channel in terms of prices increase. And that has been completely passed on, you're right, in the GT channel. Other channels, it had not been passed on in the last quarter entirely. Got it. And do you expect any sort of a volume impact in the GT channel because of price increase? Or do you expect this to be pretty price inelastic?

24:09 Would be helpful to get more nuance? Think last quarter numbers are showing that we had a volume increase of 8.5%. So that's not across only OEMs and other channels. Also in the GT channel, we had a good volume growth. So I don't see volume growth as a challenge in the GT channel because this pricing impact is there for everybody, it's not only for us. That's true. And similarly, sir, in the OEM, do you... Have you seen any sort of reluctance on the OEM part of not accepting this price increase, or are the other competitors trying to increase the market share? What's the dynamic there? So we haven't seen any major shift because we have received from all the OEMs the price increase except one, which we're expecting this week.

24:59 So I think we are beyond that, but there's any resistance because the price hike is so substantial that none of the competitors can also absorb it. So we don't see that as a challenge for OEMs, which already happened actually. Understood. The other one question, could you also just help me understand the journey of the pricing? It seems to me that December, January was, you know, when it sort of peaked, and then it has come down significantly. Oh, sorry. Rather, April was the time when it peaked, and now it has come down. And maybe because of this renewed war concerns, it has jumped up a little bit. But just wanted to actually see, like, were we in this quarter at the worst end of styrene prices, and has it cooled off now?

25:47 So the worst of styrene was April. So what happens is that India imports 98% of its styrene through China through, sorry, Gulf. Now that completely stopped, and India had to go to other places to find styrene. And there is a premium. So there is obviously a futures price that you see of styrene versus if you see spot prices, there are sometimes differences, right? So we see that though it has softened, but it is not completely in line with the oil prices, right? Oil prices have softened more right now. So we expect the moment the Gulf opens, mean, the hubbub opens, we will see more softening of the styrene prices than the oil prices. Oil prices actually are kind of being they have softened more than the other byproducts of oil.

26:38 Got it. Just last question, sir. Do you expect at all in any of the channels for prices for your final element prices to be reduced just because the raw material price will, at some point, hopefully reduce? The only time that it might have an effect is OEM, but other channels, we don't think so there'll be any price decrease. And once the prices soften, we might have a slight decrease there in the OEM side. Got it. Understood. So this is very helpful. Sure. Thank you. The next question is from the line of Jay Jen from JJ Capital.

27:28 Sir, our exports are now around 21% of revenue in Q1. Version, it was around 20% for the full year FY 'twenty six. And you have already indicated an ambition to take this towards 30%. Given that export carries significantly higher EBITDA margins, theoretically, every 100 bps increase in export mix should be margin accretive. How should we look at margins in midterm? So you're right, that exports are higher margin business and our focus is on growing exports. As you said, it's about 21% of sales and we intend to take it to closer to 30%. And obviously, I can't exactly give you a number that if it goes to 30%, how much that EBITDA will increase because it depends on the product mix what you're selling also across SMK, we have ranged from 4,000 to INR 15,000 helmets.

28:25 But I can give you a ballpark figure that exports on SMK is more between 30% to 35% EBITDA. And on the strategy level, if you see on the domestic side, it will be more like seventeen sixteen Right now, it's much lower. Was talking about FY 2026. So that was about 17%, 18%. So you can imagine when the exports go higher, you'll see improvement in EBITDA depending on what is the share of exports. But yes, I would say, if I was to put a number at it, I would not say that if exports were to go at 30%, our PAT margins from 26% could go up by 200 bps to 300 bps at least. Got it. Thank you for the detailed answer. Thank you. The next question is from the line of Pankaj Agarwal from Transparent Value. Please go ahead.

29:20 Hi,. Thanks for the opportunity. So a couple of questions from my side. So first question is that the is being bullish and I get important started with. But is this business primarily? How could we look at the some of you Hello? Hello? I can't hear you properly. Can you say that again, please? Yeah. So the platform is being positioned as an important strategic relationship. And... But the business is, like, primary institution. How should we look at the ASP side for... Mean, I don't know if you can... I'm not portfolio. I could hear that you're talking about some institutional relationship with Decathlon. Right? Yes. How that is going to impact?

30:05 So Decathlon, you can see exactly like an OEM. Right? How we work with OEMs for motor vehicle helmet, whether it's Honda or Hero. So Decathlon will exactly work like that. The ASPs for bicycle helmets are lower than motorcycle helmets by about 15%, 20%. So but we will never consider ASP across helmets as one category. We'll always consider motorcycle helmets ASP separate and bicycle helmets ASP separate. Okay, okay. One more question to how much revenue contribution are we expecting from the Bluetooth and Bluetooth product in? And are you making it in house or contract manufacturing? Which products are you talking about? Bluetooth and.

30:54 So in the current financial, we expect the volume revenue from these two categories to be anywhere between INR 15 crores to INR 20 crores. But going forward, it will increase from next year. Okay. And are we producing it? And how are doing contract manufacturing? So a couple of products we are doing in house and a couple of products we are doing contract manufacturing. Okay. Thank you. Understood, sir. Thank you. Thank you. The next question is from the line of Preet Bhilani from Incred AMC. Please go ahead.

31:42 Thank you so much for taking my follow-up question. I just have three questions. One is on the CapEx upfront, if you could just tell FY '27 CapEx and FY '28 and also where where we would be doing this CapEx? Sure. So on the CapEx side, I think the CapEx is happening on the expansion of the new facility. Total CapEx which will happen is not only FY 2027, I'm talking about the total CapEx which will happen till June 30 is about crores, plus another INR10 crores of advances, which were committed to some of the vendors. And I think on the FY 2027 side one second, I'll just check the numbers. So INR58 crores has been spent, which will be mean, which is a complete budget for FY 2027. So some of this would have been spent and some would be spent in next few months.

32:40 I don't have the exact figure of what we have spent in the first quarter of INR 7.5 crores is what we spent in the first quarter. And FY twenty eight remaining INR 28 crores. FY twenty eight, the plan is INR 31 crores. INR 31 We also will be starting the second phase as well, construction. Okay. And is there only 1099% price hike which we have taken on 300 basis, does this does this cover a whole of raw material pass through since we would be back to 6060% gross margin by this 9% price hike if the prices remains at current raw material prices remains at current levels?

33:30 Yes. So if the raw material remains at the current level, which is elevated than before, I would say at the current levels, we were earlier at 13% pack. We would be at current levels close to about 11.5 to 12% pack. So even now, the prices are elevated for styrene, which as I mentioned in my discussions earlier was about INR135 weighted average for some styrene products for us, which is close to about INR185 right now. So it's almost like 30% higher. And we assure that this is going to go down. So we will see that flow back into our profit and we show that by Q4 of this year, we should be back to where we were in FY 2026. Okay. So on a fee basis, it has gone to $2.25, which has again come down and settled to 185.

34:23 At the moment, it's 185, yeah. At the moment, for this quarter, at the moment, it is 185 weighted average. Okay. And lastly, on the guidance which you gave for FY 'twenty eight, 13, 14% volume growth and three, 4% profit growth. But, also, you have mentioned that from from the three direct direct method, you are expecting some... Somewhat around €1,000,000, which itself is around a 100 crores of top line. And if if we add 18, 19% top line to... On FY '26 days, my estimates from that on FY '27, we would be around $7.30, seven forty. So... And then in FY '28, that's... Just to summarize this, the 100 crores entirely, the 40% in top line growth would be coming around 100 crores, which we are planning from this three dealer levels only. So is our guidance very concerned with you, or would you like to update this guidance?

35:20 No, I think we haven't given the guidance completely for '28 considering the Italian subsidiary, it is more on a stand alone volume basis I was saying, right. When you consider Italian subsidiary, the ASP of the Italian subsidiary will be very different than the stand alone basis. Okay. So, I'm getting confused. Last few few minutes, we mentioned that we are expecting on a consult basis 1314% volume growth and 34% utilization growth. Total is 1718% revenue growth for FY twenty eight. Is this correct? This is a stand alone figure. If I said concern, then I think I'm mistaken. I thought I didn't say concern. It's stand alone basis volume growth and 34% price hike is stand alone basis.

36:11 Okay. So dealer EUR 100 crores of from this dealer direct model, this is over and above this 1718%, correct? So some of this yes, some of $10,000,000 will be also distributed from other markets. You should buy some they'll not buy the main quantities. We have in our models, we have incorporated some distributor sales to other markets also from the Italian subsidiary. What happens is when they want some smaller quantities of materials, they will not wait for India to ship them, they'll buy it from Europe itself. Yes, yes. Got it, sir. And sir, one last thing, not any question, just wanted to ask if you are planning to come to Mumbai for any of the conferences or is there any plan that we could easily meet?

37:00 Sure. We'll set up something with SGA. We just had... We came to Mumbai a few days ago, but whenever we are planning to come there next, we'll just get in touch with you, and you can be in contact with SGA for that, please. Sure. Perfect. Thank you so much. Sure. Thank you. Participants with questions may enter star and one. As there are no further questions, I would like to hand the floor back to the management for closing comments. Thank you all for joining us today. We hope we have addressed your questions and provided valuable insights into our performance and strategy. If you have any further queries or need additional information, please feel free to reach out to our team or our Investor Relations advisers at SG and Thank you.

37:53 Thank you. On behalf of Studds Accessories Limited, that concludes this conference call. Thank you all for joining us. You may now disconnect your lines. Thank you.