Vedant Fashions Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gaurav Jogani - JM Financial - Analyst : Thank you. And congratulations on a strong set of numbers. My first question is with regards to, you know, how the Q3 has started for you, given, you know, there has been a mix of feedback in terms of demand from most of the consumer companies. So any sense of how the effective season has started for you and how the the season is looking ahead?

Question: Gaurav Jogani - JM Financial - Analyst : Okay. Sure, thanks. And the next question is with regards to, you know, the network expansion. So I do understand, you know that the network expansion has been a bit noted in H1, but you also highlighted that, you know, you expect a different store opening. So any any guidance on that would be helpful, given that, you know, you can open 15%-16% network add additional every year.

Question: Gaurav Jogani - JM Financial - Analyst : And the last question, you know, is with regards to any sense that you can give us the competitive intensity because we have been, you know, hearing that there have been now store closers not only by a few large players but also some small regional players given that the last year was being muted. So any sense here, how, how the last six months have found out on this front?

Question: Gaurav Jogani - JM Financial - Analyst : Thanks Vedant for answering my question and happy Diwali to you and the entire team.

Question: Sameer Gupta - India Infoline - Analyst : Hi, good evening, everyone. Congrats on a good set of numbers and thanks for taking my question. Vedant, Just on the context of strong and spread out wedding calendar that is there in the second half. Just wanted your thoughts as to what is that level of growth maybe overall or even SSS whichever way you track, which would let's say make. It like you'll be satisfied or happy that yes, the the brand is in good shape and we don't need to really recalibrate or re access our strategy as to our brand. This is also given the context that last two years have not been as per expectations. So just I would be happy to know your thoughts on that.

Question: Sameer Gupta - India Infoline - Analyst : So you don't want to share a number where you'll be happy.

Question: Sameer Gupta - India Infoline - Analyst : Mm Fair enough. I was not actually looking for a guidance, but that's okay. I'll take that as an answer. Second is the retail area. I understand Gaurav also asked this but this year especially might see a lower than your normal run rate of 15%. But all said and done, we are back on track and this 15% retail area growth should continue FY26-FY27 or you think there is a recalibration here because you're also exiting a lot of cities.

Question: Sameer Gupta - India Infoline - Analyst : Got it. Thanks, thanks for taking these questions and answering elaborately. Wish you all a very happy Diwali. Come back in the queue if I have any follow ups.

Question: Ankit Kedia - Philip Capital - Analyst : Hi. My first question is on the cash flow generation. You know, for the first time we have seen negative OCF three index basis, our inventory days and receivable days both have increased substantially, especially the receivable days. So just wanted to understand you know, for the full year, what is the target on inventory and receivable days and what's happened in this quarter which led to the higher inventory and receivables days at the same time.

Question: Ankit Kedia - Philip Capital - Analyst : But why should the receivable days increase? And I can understand inventory at your warehouse level being higher for the upcoming season given that the franchise partners pay you twice a week. We are seeing even on last year Q2 to this year, nearly 15-16 days, increasing the days. So.

Question: Ankit Kedia - Philip Capital - Analyst : Okay. Second question is on Diwas. Given that the price points are very sharp. For the D two C, how are the grows margin zero being, you know, modeled and from a two year perspective, where do you see this brand shaping up in the portfolio? Given that, you know, you stop giving us a revenue breakup across brands. So you know, two years out will become a big than your third men's wear brand, which we have for the MBO market.

Question: Ankit Kedia - Philip Capital - Analyst : Yes.

Question: Ankit Kedia - Philip Capital - Analyst : So is it fair to assume that Manthan time will not exist? And even in the MBO channels Diwas will push was going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 10:30AM, VEDN.NS - Q2 2025 Vedant Fashions Ltd Earnings Call

Question: Ankit Kedia - Philip Capital - Analyst : So both online and MBO channels because currently it's only on D two C and not in the MBO.

Question: Ankit Kedia - Philip Capital - Analyst : Sure. That's it from my side. I'll come back in line. Happy Diwali to you and the team.

Question: Tejas Shah - Awenda Park - Analyst : Hi Vedant, Hi Rahul Ji. Thanks for the opportunity. Yeah, like the previous few quarters were unprecedented in terms of slow down. And you know, we also called out multiple times on the call, previous calls also. So something likely unfamiliar to our franchise partner also, right, the, the way we saw the first time, that kind of slow down franchise partners also would have witnessed it for the first time. So we usually, we have seen the franchise is a very close knit community and then the word spreads around fast. So are you currently facing any challenge in the grouping new franchise or how are the inquiries going on that?

Question: Tejas Shah - Awenda Park - Analyst : Okay. Okay. Second, you mentioned, also you mentioned about demand normalization from Q2 onwards. Could you provide some qualitative insights on any brand which is kind of doing better than average or some brand which is still struggling for any, any recent observation if you can share.

Question: Tejas Shah - Awenda Park - Analyst : So the last one, if I may, if I remember correctly, we had some change in our marketing or branding agency recently. So curious to know any anticipated reverse in our brand building approach. Could we see potential increase in branding investment, any insights that you can share?

Question: Tejas Shah - Awenda Park - Analyst : Sure. And just checking from our presentation perspective. Have we do we have still any Bollywood celebrity or Tollywood celebrity for our Manyavar brand?

Question: Tejas Shah - Awenda Park - Analyst : Got it. Thank you. That's all from my side. The best wishes for coming quarters and Happy Diwali to the team. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 10:30AM, VEDN.NS - Q2 2025 Vedant Fashions Ltd Earnings Call

Question: Nihal Mahesh - Ambit Capital - Analyst : Yes, good evening Vedant and Rahul. My first question was in the strong SSC that we seen in for Q2 possible to call out that there was a strong contribution from the scale up of Mohey.

Question: Nihal Mahesh - Ambit Capital - Analyst : Understood. And just a question Vedant now on the brand reference like internally there was obviously as you also highlighted from an MBO and online channel, however, a decent time is obviously executed them. So is it that now in in terms of taking order perspective, what is the thought we have? Because last year, obviously, there was an aggressive campaign in terms of scaling up even some of the other premium brands. And we saw a lot of premium real estate of things happening there. And more obviously been something that we've been working on since the last eight years. So what would be the preferred, taking order in terms of scaling a business.

Question: Nihal Mahesh - Ambit Capital - Analyst : Good, so this is not a brand that you will be spending too much of marketing budget on that will mainly be towards a Manyavar or a Mohey. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 10:30AM, VEDN.NS - Q2 2025 Vedant Fashions Ltd Earnings Call

Question: Nihal Mahesh - Ambit Capital - Analyst : Understood. Just final question on Diwas, that make sure that you, you do, you do look at this is getting up in the channel. Is there a thought about the number of counters you expect this brand to reach over the coming couple of days.

Question: Nihal Mahesh - Ambit Capital - Analyst : Got it. So that is it from my side. Happy Diwali.

Question: Rishi Mody - Marcellus Investment Managers - Analyst : Yeah. Can you hear me?

Question: Rishi Mody - Marcellus Investment Managers - Analyst : Vedant, first question I wanted to understand like recently in the past one year, the cities and you said it's a clean up exercise that you do every 5-6 years. So which kind of cities were these? And what was the pain point here that we have to accept these cities? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 10:30AM, VEDN.NS - Q2 2025 Vedant Fashions Ltd Earnings Call

Question: Rishi Mody - Marcellus Investment Managers - Analyst : Alright, so I understand the rationale of shifting markets and hence shifting stores. So please, I'm quite not understanding you, but I'll take it up later with you on the Diwas piece, right? Of what is the proposition that you all are giving with Diwas? And does it cannibalize money over? To just I was seeing that it was available on commerce as well, right? I think Blinkit or Zepto or someone and it was out of stock. So just wanted to understand what investments are we making on the supply chain for ensuring that product availability as well as the SKU, you know, getting the right SKU because I'm guessing they won't allocate a lot of space for this. So just trying to understand what investments are we making out there.

Question: Rishi Mody - Marcellus Investment Managers - Analyst : Understood. And are they open? Like I'm guessing this would be a proprietary for them to not share what inventory is being placed on? How do they do the inventory management thing? So they're open to you being able to access that data.

Question: Rishi Mody - Marcellus Investment Managers - Analyst : Understood, understood. Also just to, you know, some hash out the Q2 numbers, right? So we have an early Navratri, it started, I think from the 3rd of October this year versus last year, it was around mid October plus, there was a double shot was a single shot. So it's like a favorable Q2 for us. So if you had to, you know, quantify how much of the revenue jump in Q2 is because these specific factors, which is like just a timing difference, how much would you say it has come on for you all this year or this quarter with that?

Question: Rishi Mody - Marcellus Investment Managers - Analyst : Okay. And your wedding non-wedding mix is it like it used to be before all of these dates issues started like 2-3 years back or have people also prepone the wedding purchase in Q2?

Question: Rishi Mody - Marcellus Investment Managers - Analyst : Understood. Finally, just bookkeeping question. How many Tvamev and Mohey stores do we have? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 10:30AM, VEDN.NS - Q2 2025 Vedant Fashions Ltd Earnings Call

Question: Rishi Mody - Marcellus Investment Managers - Analyst : Understood. Understood. Thank you. That's it from my end.

Question: Chirag Lodaya - ValueQuest Investment Advisors - Analyst : Thank you for the opportunity. So in terms of retail network is function, you know, you said you have done a lot of store closes and consolidation, which is just keep doing every five years. So is it fair to assume that large part of consolidation is done and going ahead, you know, we should see good amount of additional. Is it fair to assume?

Question: Chirag Lodaya - ValueQuest Investment Advisors - Analyst : Okay. And you also commented that, you know, Tier 2, Tier 3 markets have also picked up very well in the last, you know, few months, it was not the case there, you know, 6-12 months back. So is there more focus on Tier 2, Tier 3 market when it comes to new store opening? Are you seeing any change in trend there?

Question: Chirag Lodaya - ValueQuest Investment Advisors - Analyst : Okay. Which should remain similar more even this year.

Question: Chirag Lodaya - ValueQuest Investment Advisors - Analyst : Right? And because what is the price point? And you know how you think about, you know, Manyavar entry level products versus because what gives you confidence that there would not be any cannibalization between both of them when it comes to entry level product?

Question: Chirag Lodaya - ValueQuest Investment Advisors - Analyst : Got it just one bookkeeping question. This quarter other equities down INR70crores-INR75 crores versus you know, March number. What is led to that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 10:30AM, VEDN.NS - Q2 2025 Vedant Fashions Ltd Earnings Call

Question: Chirag Lodaya - ValueQuest Investment Advisors - Analyst : The dividend payout is INR20crores in the cash flow.

Question: Chirag Lodaya - ValueQuest Investment Advisors - Analyst : INR206 crores. Okay. Got it. Got it. Yeah. Thank you and all the best.

Question: Akhil Parekh - B&K Securities - Analyst : Hi. Thanks for the opportunity and congratulations to (inaudible). My first question is on the G part right? In 2-3 years in a good SAV. And you partly explain that to do with probably some lower grade and higher leg. But apart from that.

Question: Akhil Parekh - B&K Securities - Analyst : Hello?

Question: Akhil Parekh - B&K Securities - Analyst : Sorry, sorry, I didn't catch it. I was saying have we taken any price actions or any other post collective measures during last quarter? Which has also helped us to you know, of the success of double digits.

Question: Akhil Parekh - B&K Securities - Analyst : Yes. The second question is slightly from a Western perspective. So you can look at historically FY18 or FY24 sales are roughly, you know, kind of compounded at 10% tiger. As a brand, do you foresee that Is it possible to maybe grow at a higher pace? It will be a 15%-18% compounding over the next 3 to 5 years. And what possible factors or levers to drive that kind of?

Question: Akhil Parekh - B&K Securities - Analyst : And the last question from channels, we are really hearing that, you know, we are probably possibly launching any accessory items, maybe like the cost and on any plans around on this kind of thing.

Question: Akhil Parekh - B&K Securities - Analyst : No, I was saying accessories like perfumes. Are you planning to launch anything on that side? Because we were hearing something on that front. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 10:30AM, VEDN.NS - Q2 2025 Vedant Fashions Ltd Earnings Call

Question: Akhil Parekh - B&K Securities - Analyst : Is it a soft line or across our store?

Question: Akhil Parekh - B&K Securities - Analyst : And it, it will be under what brand.

Question: Akhil Parekh - B&K Securities - Analyst : And lots of bookkeeping just to crossing that a Net gross and net store opening. I miss that part. Like what is the guidance we are providing for the price?

Question: Akhil Parekh - B&K Securities - Analyst : Okay. Okay. That's all from my side. Happy Diwali to entire team.