Good afternoon, everyone, and a very warm welcome to V2 Retail Limited's quarter one FY '27 earnings conference call. We trust you have had the opportunity to review our financial results.

The earnings presentation and press release are available on the stock exchanges and on the company's website. As we begin FY '27, we do so with strong momentum and a clear sense of purpose.

The company is operating from a position of strength, supported by continued innovation, agile execution, and the deep trust we have built with millions of customers across the country. We delivered an amazing 58% year-on-year revenue growth in the first quarter, while maintaining healthy returns.

This performance reflects the strength of our business model, disciplined execution, and the resilience of customer demand in India's value fashion segment. India's retail landscape continues to undergo a structural transformation, creating significant opportunities for organized value fashion retailers.

Consumption is expanding beyond the metros, organized retail is gaining market share, and consumers in smaller cities are becoming increasingly connected, aware, and willing to spend on better quality products. We believe India's value fashion market still has significant headroom for organized retail penetration.

Our focus remains on continuously improving our product offering, maintaining a compelling price-value proposition, opening stores in the right markets, and building a scalable business without compromising on operational fundamentals. Alongside our strong top-line performance, we continue to make strategic investments that strengthen our ability to scale efficiently within India's value fashion segment.

Our focus on analytics-led merchandising, supply chain responsiveness, technology, and operational discipline is helping us improve productivity, strengthen operating leverage, and capture growth at scale. Customer traction across categories remains healthy, demonstrating the continued relevance of our price-value proposition and product refresh strategy.

A consistent flow of trend-relevant assortments, supported by strong quality standards and competitive pricing, has helped us drive growth across our store network. This validates our approach of combining affordability with fashion relevance and enables us to remain a preferred destination for value-conscious consumers.

Going forward, we will continue to invest in technology, expand our store footprint, strengthen customer engagement, and improve our operating capabilities further. Together with disciplined execution, these initiatives gives us immense confidence in sustaining our growth momentum through FY '27 and beyond.

During the quarter, we continued to expand our store network in a disciplined manner. We added 56 stores on a net basis during the first quarter, taking our store count to 381 as of 30th June 2026.

Subsequently, we crossed the milestone of 400 stores nationwide. Every new store is evaluated carefully with a focus on catchment potential, store economics, and the ability to generate sustainable returns.

Our approach to expansion remains consistent: grow the network, protect store-level economics, manage working capital prudently, and keep return metrics at the center of our decision-making. Now moving on to some key updates: as of 30th June 2026, the company operated 381 stores, covering approximately 40.7 lakh square feet of retail area.

During the first quarter, we opened 57 stores and closed 1 store. The SSG for the first quarter stood at approximately 7.5%.

We delivered robust volume growth of 56% during the quarter. Full-price sales contributed approximately 90% of sales in the first quarter, reflecting healthy demand and disciplined inventory management.

Lastly, due to geopolitical tension, we have increased our safety stock in the warehouse for seamless availability of stock, which has resulted in higher inventory levels. Once the situation normalizes, we will reduce our safety stock.

We are looking to maintain inventory at around 100 days and creditors at around 45 to 50 days. Now moving on to some consolidated performance highlights: revenue grew 58% year-on-year to ₹997 crores.

Gross margin stood at 28.6%, compared with 29.5% in the first quarter. EBITDA stood at ₹139.5 crores, compared to ₹87.2 crores, representing a 60% year-on-year growth.

EBITDA margin improved to 14%, compared with 13.8% in the corresponding quarter last year. Profit after tax stood at ₹41.9 crores, compared with ₹24.7 crores, representing a 70% year-on-year growth.

Overall, the quarter reflects healthy operating leverage, strong revenue growth, and continued improvement in profitability. Now moving on to sir pre-Ind AS performance: revenue stood at ₹997 crores, representing a 58% year-on-year increase.

Gross margin was 28.6%, compared with 29.4% in the corresponding period last year. EBITDA stood at ₹79 crores, representing a 51% year-on-year growth, where as EBITDA margin stood at approximately 8%.

The PAT stood at ₹50 crores, representing a 64% year-on-year growth. The underlying business continues to strengthen, supported by healthy customer demand, network expansion, improving operational capabilities, and disciplined execution.

As we look ahead, our priorities remain firmly focused on profitable growth, capital efficiency, and disciplined execution. We remain committed to expanding our store network in a calibrated manner, improving merchandise productivity, strengthening our supply chain, enhancing customer engagement, and leveraging technology and analytics across the business.

We believe the long-term opportunity in India's value fashion segment remains significant, with a growing organized retail market, increasing consumption in smaller cities, and rising customer aspirations. We are well positioned to participate in this structural growth opportunity.

Our objective is not simply to build a larger company, but to build a stronger, more efficient, and more sustainable business that consistently creates value for our customers and all stakeholders. The foundation is stronger than ever, and we remain confident about the opportunities ahead.

With this, I would like to open the floor for questions.

Hi. Am I audible?

Sir. You're audible.

Hi, Akash. Congratulations on good set of results.

I have three questions. First will be on the realization side.

Because of the recent geopolitical tensions, we have taken some price hikes, right? Going forward, do we have any chance, because we played kind of a volume game mostly, do you think that we going forward increase our products prices going forward?

Yes, we are seeing some rise in raw material prices. I think we will see that come into effect around the third quarter, because most of the orders till the end of second quarter were already placed, and the yarns and the fabric pipeline was already in place.

I think we'll start seeing that impact from the third quarter onwards. It will be an increase of about, I would say, 4 to 5% increase in the overall garment cost, which we'll have to pass on to the consumer.

Because in the past few years commodity prices are at a stable level. Do we have any kind of a data when there is a price increase, what kind of impact we face, or these 3 or 4 5% increase in the prices will not affect our demand?

[unclear]

Historically, what we have seen is it might impact the volumes a little bit, but it is completely offset by the increase in the ASP. In terms of value growth, it doesn't have a huge impact.

Okay. For this year I think 170 to 200 stores, we're still on track to do so?

Yes, we are on track to open 170 to 200 stores this year.

For next year because 170 to 200 stores, are we going to raise another QIP for that? Because of the cash on the balance sheet, I think we require more capital too.

No, I think the internal accruals will be enough. Currently, we are using a lot of our cash in prepaying our vendors.

Once we want to use that money for expansion plans, we just get the creditor days back to normal. I think that releases almost ₹150 to ₹200 crores of capital, plus the EBITDA we'll generate this year.

We are in talks with the bank to increase the limits also, because our debt-to-equity ratio is still pretty low. We have some headroom there also.

Okay. That's all from my side.

All the best for future. Thank you.

Thank you.

Good afternoon. My first question is just want to understand forward guidance beyond the regular outlook.

What are the top two to three execution priorities you're focusing on in the immediate quarters? Alongside that, what do you see as the biggest risk in consumer demand shifts, competitive pricing, or regulatory changes?

How are you preparing to mitigate them while strengthening the company's position in value retailing? That's my first question.

I'll ask the second after this. Thank you.

Can you repeat your first question, please? There was a disturbance on the line.

Sure. Just want to understand, beyond the regular outlook, what are the top two to three execution priorities you are focusing on in the next few quarters?

Alongside that, what do you see as the biggest risk in consumer demand shifts, competitive pricing, or regulatory changes? How are you preparing to manage them while strengthening the company's position in value retailing space?

That's my first question. I'll ask the second after this.

Thank you.

Sure. In terms of priorities as a business, I think I mentioned it in my con-call starting speech also.

The first and foremost has always been product-driven, of course. What we've started now doing is consolidating a lot of fabric purchases and tying up with mills and trying to nominate the fabrics and giving the tech packs to our vendors.

That is already showing a lot of promise and a lot of benefits to us in terms of quality standardization and as well as also economies of scale because of higher volumes and delta in cost price. I think one of the biggest focuses for us has been nominating the fabrics now and making the product even better, and assortment offering even better.

Second biggest area of focus has been technology. We are using a lot of AI workflows, and we, in fact, just moved our complete data lake on a AI-enabled platform.

That is really helping us get data faster. It's also enabled us to give prompt-based analysis to a lot of our business leaders.

I think we're going to continue on that path, and over the next one year, a lot of workflows within the organization will be automated. Third area of focus, I would say, is the team.

We've just, in fact, announced two president-level hirings. That is one of our areas of focus, getting the team in place, because we want to grow at 50% CAGR for the next 2 to 3 years at least.

We need that foundation. Talking about geopolitical risks or consumer demand risk, I think we feel the segment that we are in, the demand is quite inelastic.

We think we're selling necessity to the consumers. For example, kids wear is 25% of our sales.

You have to buy new clothes for your kids every year. You have to buy winter clothes for the family every year.

That's why we don't feel any challenge or any risks per se in terms of consumer demand. It's just about getting as much market share as we can with the right execution and the right product offering.

Thank you. My second question: is Mr.

Pratik also on the call today?

No, he's not here on the call.

Okay. My question again from a financial point of view is, along the same lines, what key risks or challenges do you anticipate in the coming quarters?

What specific measures have been taken to manage margins, cash flow, and balance sheet strength, especially in areas pertaining to cost pressures, receivables, and compliances? Thank you.

In terms of balance sheet, we don't have a lot of receivables. We sell everything on cash.

In fact, like I already mentioned, our working capital cycle should come back to a stable 55 50 to 55 days. Currently, it looks inflated because we do a lot of prepayments.

We are one of the best paymasters in the industry. Whatever and whenever we have cash on the books, we give our vendors the facility to get cash payments of any of their bills, and they offer us a discount on that.

I think in terms of balance sheet preparation, we are looking to target inventory of 90 to 100 days and creditor cycle of 45 to 50 days. That should cover all the requirements of the business.

Thank you, and best wishes.

Thank you.

Hi Akash. Hope you're doing well, and congratulations on a great set of numbers.

V2 Retail has been continuously growing at a very high speed, the asset is growing bigger and bigger. Akash, if tomorrow, say, another big corporate house plans to put in thousands of crores and set up a value fashion retail after seeing the growth and return ratios, follow the exact same model, they would have the money, people, and the resources.

My question is, what qualitative aspect will you allude to that the system is not only growing bigger, but also getting better every day? What part would take them to learn and understand a long time, which money and resource alone would not do?

See, what you're talking about is basically culture and DNA of an organization. I always tell people this that any fashion company in the world, it's about creating an ecosystem where you're churning out designs that are, I would say, significantly or marginally better than your competitors' offerings, and that translates to higher profitability and higher SPSF.

Because there is no secret process or secret USP in terms of what we do, because everybody knows how the complete design pipeline works. It's more about how we do it, and it's more about the kind of results we get after the whole process.

I think that's a risk that's there in any business, and we always welcome competition. Even today, I would say, 80% of our stores already have at least three to four other value fashion retailers operating in exactly the same space.

We don't shy away from competition. The performance, the growth has been in spite of competition.

We like to focus on our own strengths. I think if we keep making that ecosystem stronger, then we don't need to be worried about any big house getting into this space or more competition.

That's helpful. One last thing, Akash, I had requested last quarter to add the people in the presentation who work closely with you and we would love to see the same.

Just a request if you can.

Sure, I'll get that added.

Thank you so much and best of luck.

Thanks.

Hi Akash. I was just wondering this quarter we have seen our gross margins compact a bit YoY.

Is there something to read about it? Because I think last quarter we had stocked up our inventory in anticipation of say the geopolitical disruptions.

Ideally, that should have provided some cushion in terms of gross margins to us during the quarter. Just trying to understand what is happening.

There was a 30-day period of Adhik Maas in quarter one. I think because of that, we saw our full-price sale go down from 92% to 90%.

Again, the gross margins, we always guide for 28 to 30%. It completely depends on that particular season's sell-through performance.

I think going forward, that we should be able to maintain the gross margins from last year.

Okay. I think last year, because we had done this QIC, we had a lot of cash, and thus we were able to offer a lot of prepayments to our creditors, and thus that had led to some benefits on the gross margins.

Going ahead, since we will need a lot of cash to open stores, and we might not be in a position to offer that. The 30% gross margin that we saw in FY '26, do you think that we will be able to get to that level for the coming years, or that's the base of a higher number?

Again, it completely depends on the full-price sales, and you can only predict that to a certain degree. I would say the gross margin should be between 29 to 30%, completely dependent on the sell-throughs and the season's performance.

Okay. Any comment on the throughput of new stores?

Is it still running at that 70%

or any win? The new stores' per square feet sale is about 34% less than our mature stores.

More than 2-years-old stores are already performing at a very high level of almost ₹1,070 to ₹1,100 per square feet of sale. I think in 3 to 4 years, we'll see the journey of the maturity, and then we'll be able to comment better.

It's at a very respectable level. All the new stores that we've opened, they're already operating more than ₹730, ₹740 per square feet of sale.

Got it. That was helpful.

Thank you.

Hi, thanks for the opportunity. Congratulations, Akash, on a very steady set.

We are used to this. Akash, a couple of queries, I think taking it from the previous participant.

Our full-price sell-through is normally 92 to 90 93% in Q1. Is it because of the Adhik Maas only that we had to give certain discounting that it has dropped to 90%, or was there any other factor that we are seeing some slowness in the market, etc.?

I think both are related. Because of the Adhik Maas, we saw a slowness in the market, and also there were less wedding dates.

Wedding is a huge impact for us, especially in tier 2, tier 3 towns. That's why we saw there was a slight lag in demand.

I think that's why you saw the full-price sales come down a little bit.

No, I meant that in July, August, whenever we had the sale period also, I think the trend is normalized in terms of demand, right?

Yes, correct. Again, quarter two, all the festivals are shifting to quarter three, we'll have to look at quarter two and quarter three together, cumulative, only then because bulk of the sales happens during the festive season.

It's very hard to call out the demand side progress just by looking at July and August.

Okay. Akash, on the inventory part, on the product part, have we taken any price escalations because of the geopolitical crisis and all that stuff?

Have we taken any price escalation also?

Whatever raw material prices have increased, and whatever future POs we're giving for the third quarter, we are increasing the MRPs 4 to 5%, because we want to maintain our gross margin percentage. Whatever prices have been increased, we are passing on to the consumer.

Okay. Akash, you earlier pointed out that we would be having faster drops at the stores, right, to reduce the inventory in the stores so that we have a quicker turnaround time with inventory.

Any benefit we are seeing that the drops have increased at the store, and we are able to utilize the store space in a better way rather than putting the stock in the warehouse? Any idea, any color on that?

More than inventory days or inventory quantity at the store, it was more about being able to react much faster. For example, earlier, we had to forecast an article sale and send almost 10 to 12 days of sales cover.

If that article did not sell at that speed, then we were left with 20 to 25 days of inventory. Now, because of faster replenishment, we only send 2 to 3 days of sales cover.

That inventory risk has definitely reduced. Whatever area we used for store warehouse at the stores, we converted that into retail area.

In terms of total inventory, it hasn't come down, but in terms of efficiency, it's become better.

Understood. On the new store openings, are we seeing any inflationary pressure on the capex and all that, or it remains at a similar level what we used to have earlier?

Yes, definitely. Earlier, the capex used to be about ₹1.1 crores.

I think it is the BOM, and because of the prices rising, it has moved up to ₹1.2, ₹1.22 crores. There has been a 10% jump.

Okay. Are we taking any measures in terms of that we would slow down the pace?

Nothing of that sort is happening, right? We would be going ahead with our initial plan only of 170 to 200 stores?

Correct.

Understood. One final question, Akash.

I think we have opened close to 100 stores or 120 stores over the last one year, which have already seen one year of operations. Do you see any red flags in the new stores, or everything is sorted?

We are running at 70% efficiency of our mature stores? Just some color on that.

I think we've opened almost 260, 270 stores in the last two years. The whole cohort is performing at a respectable level and well within the benchmark of where we say it's a red flag.

There are about 10, 12 stores that are performing below ₹600 per square feet of sale. Again, it's too short a time to conclude on those stores.

We are doing some measures in terms of marketing, in terms of better assortment, in terms of more freshness. Overall, if you look at new stores cohort, they are at a very respectable level of about ₹730 to ₹740 per square feet of sale.

Understood. I think that's it from my end, Akash.

Wish you and the team the very best. Thank you.

Thank you.

Hi. Congratulations on good set of numbers.

I have one questions on the same store sales growth, which is decreased in Q1 to around 7.5%. Is this a new normal growth rate, or how we should look?

How our more than one year operational stores are growing, and how new stores are growing at what rate?

Our base of per square feet sale has increased from about ₹650 to almost ₹1,070 for the old cohort of stores. The guidance for SSG has always been 8 to 10%.

Because of, I think, the Adhik Maas, it had a slight impact, but I think for the whole year, we're still targeting a 8 to 10% SSG.

Okay. On the inventory side, I wanted to ask one thing: the stores that we are going to open in the coming period, we store the inventory before it, or how it will happen?

I want to understand that part.

Yes, we need to have that inventory at least two months prior to the opening of the store. That's how you make the variety of 3,000 options in a store, because every week we get about 300-odd options.

About two months before, we need to start getting the inventory in-house, and it's kept in the distribution center before the store opens. If every quarter we want to open 55 or 50 stores, about ₹100, ₹150 crores of inventory pertaining to those stores will already be in the system.

One more question on the acquisition of RK Retail: so is it consolidated in this Q1?

I think it happened around the end of June, you'll see that impact more from quarter two.

Is there any guidance, formal guidance on the revenue growth rate, EBITDA margins, and gross margins?

I think revenue guidance remains the same. It will be at least 50%.

The gross margins should be between 29 to 30%. We will try to maintain the EBITDA margins even after opening so much new area.

Okay. How much time we have took to receive the payback of the new stores, in what period it gets to the operationally profitable?

They are break-even and profitable from the first month itself, but if you talk about payback period, it's about 2.5 to 3 years.

Okay. Good, got it.

Thank you so much for the answers.

Thank you.

Congrats, all the best.

Sir, congratulation on a wonderful set of numbers. I don't have anything to ask on the quantitative front, as management has always been very consistent on that part.

However, I have one question on the qualitative front, specifically around customer experience at your stores. I did some research and checked around 100 V2 stores across 11 to 12 states on Google, and I tried to focus on stores with the highest number of reviews.

The average rating is about 3.6 compared to over 4.1 to 4.2 for most organized value retail peers, someone like V-Mart or Zudio. Around 85% of the negative reviews seem to be related to two things: it is either rude staff behavior or long billing queues due to understaffing.

These complaints are generally not about products, pricing, or quality. Sir, since repeat customers are important for driving same-store sales growth, I have two questions.

First, do we track customer experience at store level through NPS, Google rating, or any other KPI? Second, is this already under management's radar?

If yes, what are the steps being taken to improve customer experience? Should we expect these improvements to contribute to higher same-store sales growth in FY '27 and FY '28?

Yes, that's a very good question. In fact, we don't focus on Google review.

What we've started doing is we're sending an NPS link after every billing is done at our stores. We've started the pilot with sending about 40% of the customers with the NPS link, and we've linked the stores' team's incentives with their NPS score.

We are getting a lot of feedback about huge lines in some of the high throughput stores. What we did is now we've already tied up with a company that has put a layer of AI on our CCTV cameras.

It sends an automatic notification. We've made a yellow line, or you can just say it's becomes a benchmark of how long a line can be in front of a cash counter.

If there are more people standing beyond that line, the area manager, the regional manager, they all get a notification, and corrective measures are taken right away. Our focus has never been Google reviews.

We use our internal NPS links, where we get detailed feedback from customers, and then the actions are taken.

Sir. Got it.

Sir, is it possible for you to give a bifurcation on the same-store sales growth for, let's say, the mature stores of more than two years versus the newer stores?

The newer stores' SSG, I think it's about 2.3% higher than the old stores in quarter one.

Sir. Got it.

Going forward, if you could put this on the presentation, it would be a great help. It's just a suggestion.

That's it from my side.

Sure, thanks.

Thank you for the opportunity, and congratulations on a good set of numbers. My first question will be on a generalized market notion.

Just want to understand the consumer demand or how is the demand environment largely because of the inflationary pressure and the scenario which is not normal. Especially when you work in tier 2, tier 3 the stores in tier 2, tier 3 cities, how has the demand been keeping aside the festive shift from Q2, Q3, which will impact the numbers a bit?

On a general notion, how has the demand or the consumer behavior been? Again,

I would say the same thing. It's too early to call.

Bulk of your sales happens during the 2-month festive season. I don't want to misguide or, looking at early signals, we don't want to be too optimistic or too pessimistic.

I would just say that July and August are at par with how we see demand and how we forecasted demand. Again, it will completely depend on the October-November period that will have the bulk of the sales.

Probably on the next conference call, I'll be able to answer this better.

Sure. Next question will be a bookkeeping question.

Sequentially, we have seen a depreciation dip from around ₹67 crores to ₹64 crore in spite adding of a 58-odd stores. What is there the accounting change that is happening?

I would have to get into detail. I think you're talking about the lease Ind AS calculations.

That's

why you see the dip. If you should look at pre-Ind AS numbers, because that's what we focus on, you can see it clearly then.

Sure. Okay.

Thank you. That's all from my side.

Thank you.

Hey, hi Akash. Again a good set of numbers.

My question is on some of the previous question regarding repeatability of customers. During last 24 to 30 month 36 months period, have you seen any increase in repeatability, or you see the churn being stagnant there?

I would talk about the last three years. In fact, in the last three years, people who came back to us within the first year has moved up from 40% to almost 55%.

That's why we saw the kind of SSG numbers that we've been seeing and the consistent performance and sales growth.

Right. You think this number can grow more higher from here?

100%, completely limited to our own capability. We have to give them a better experience, a better product.

I think this can go up.

Sure. Second, regarding competition, do you see any pressure coming on older stores due to new competition cropping up or any customer fatigue that is happening in older stores?

No. In fact, the opposite.

We have examples of stores that were already at a very, very high level of almost ₹1,600, ₹1,700 per square feet of sale, and they have grown 18 to 20% SSG. You get all sets of data, we don't see anything that tells us that, oh, we are seeing saturation at older stores.

Of course, if you look at the complete old cohort together, then their SSG is definitely lower than the new cohort of stores, because the newer stores have more headroom for growth.

Understood. The highest-performing stores, are they more in the tier 1 clusters, or they still belong to tier 2, tier 3 clusters?

No, most of them are in tier 2, tier 3 clusters.

Okay. The last one would be that the new stores that are coming up, which states would be more focused on?

We have already signed the MOU of the next 100 stores that we're going to open. They are throughout the geographies we are present in.

We're already there in 26 states now. Every month, when we are getting the data, new data, and seeing what areas, what geographies are giving us good returns, good SPSF, and good customer traction, we open stores there.

Every month, we finalize almost 15 to 20 stores. It completely depends on the data what it's telling us.

Yeah. Last con-call, you spoke about how Karnataka is going.

Just wanted to check the specific geographies that are growing now.

I don't have the exact numbers, but we can share that the next time the stores that are coming up, in what regions they're coming up in.

Sure. Thank you.

Thanks a lot.

Thank you.

Hello, am I audible?

Yes, sir.

Hello? Yeah.

Hi, Akash. Congratulations on a good set of numbers.

As you have mentioned earlier, you were positioning on opening stores more in tier 2 and tier 3 cities, but now we are seeing some incremental stores opening in tier 1 cities also like in Bangalore. I want to know why these additional stores in tier 1 cities?

Do you see better margins there, or could you throw some color on that side?

I think there might have been some sort of misunderstanding, because we've always been present in tier 1. We, in fact, have almost 11 stores in Delhi NCR.

Bulk of the stores, of course, they open in tier 2 and tier 3, but the kind of customers that we cater to, they are present in tier 1 towns as well. Even in the future, we would be present in all the tier 1 cities of India also.

Of course, the specific location will depend on where our target customers are, but tier 1 is also our target market.

All right. Thank you so much.

Thanks.

Hi, sir. Thank you for the opportunity.

Sorry, I joined a bit late, this might have already been covered. Could you please share the current trends in SSG for July and August month?

I can't give the exact numbers, but like I already mentioned, it's in line with our expectations. For the whole year, our guidance is still 8 to

10% SSG. Sir.

Thank you.

Yeah. Hi, sir.

Congratulations on a very good set of numbers. See, as what you also mentioned previously, we have seen actually 3 3.5 times growth in our stores from the count of 117 in March '24 to 380 and 400 now.

Still despite that kind of thing, we have grown profitably, so that's absolutely commendable execution. Congrats for that.

A couple of questions on this side: one, how do we do the lease rental deals? I wanted to understand, because I've seen the lease rental deals more in the range of 45-50.

How long are they? Is there any rent escalation that we need to worry, given that we have very profitable in tier 2, tier 3?

One, are they more like standalone or malls? I'm not aware of that, if you can give us flavor there.

Are we the crowd pullers, and hence we get the deals from the mall owners and or standalone stores?

Yeah. The bulk of our stores are standalone buildings, because our model is at least 10 to 12,000 square feet.

It becomes a shopping destination in itself, we don't usually open in malls. To answer your second question, the average lease period ranges anywhere between 9 to 11 years, and the escalation ranges anywhere from 12 to 15% every 3 years.

That's the standard lease format.

Sure. That's interesting.

In terms of focus, this SSG is slightly lower. The question is, how are we kind of then tracking these new stores, where you said we are probably 35% lower than the average?

Given that the growth is very high in last two years, as they mature, there is a good chance of a increase in operating leverage and increasing operating margin. The question is, how are we right now measuring our performance there?

Is it more of still SSG, or average bill value, or sales per square feet, or footfall, just to appreciate, how are you kind of tracking these last two years cohort store, which you said is in line with the expectation and may mature and may add to the profitability?

This is completely based on the store opening year cohort and SPSF basis. Of course, we compare it with that particular state, we compare it with that particular region.

The basic differentiation is you take all the stores that we had at the end of FY '24, and then you have all the new cohort of stores that we opened in FY '25, '26, and now '27. Then you just compare the SPSF, and you see the maturity trend.

The newer store should definitely be growing faster and reaching the old store levels.

Yeah. That number, which is at 886, which was 925, should jump as these new store matures, right?

Correct.

Yeah. Thanks a lot.

Any early indicators of that operating leverage visible? Will it kick in FY '29, or it's too early to talk?

Again, it completely depends on the growth that we're targeting. If we keep opening more than 50% new area and growing this aggressively, then, of course, even after getting that operating leverage, expansion of EBITDA margins becomes tough, because the newer stores operate at about 65 to 70% of old stores.

Once our growth rate normalizes, then you will see that margin expansion and operating leverage kick in.

That helps. Congratulations, and all the best.

Thank you.

Thank you.

Thank you, everyone, for joining us on today's call. We hope we've been able to address your questions and provide greater clarity on our performance and outlook.

Should you require any other information or have additional queries, please feel free to reach out to Marathon Capital, our investor relations advisors, who will be happy to assist you. We appreciate your continued interest, confidence, and support.

Thank you, and we look forward to speaking to you again. Have a nice day.