ladies and gentlemen good day and welcome to the Q4 FY 24 results conference call of Sheila form limited hosted by MK Global Financial Services we have with us today Mr Rahul goam executive chairman Mr tashar goam managing director Mr NES mundar CEO India business and Mr Amit Kumar Gupta group Chief Financial Officer as reminder all participant lines will be in the listen only mode and there will be opportunity for you to ask questions at the end of today's presentation should you need assistance during the conference call be signal an operator by pressing star than zero on your touchone phone please note that this conference is being recorded I now have the conference over to Mr danta bansel from MK Global sanal Services thank you and over to you sir yeah hi good evening everyone I would like to welcome the management and thank them for this opportunity I shall now hand over the call to Mr Amit Kumar Gupta for his opening remarks over to you sir thank you D good afternoon everyone and thank you for joining us for our earnings conference call for the fourth quarter of the financial year 24 I would like to thank our host MK Global Financial Services for hosting this earnings call Financial year 2324 has been a very eventful year for us we acquired Kon this year as well as we took a stake in the furniture rental company for Lano we are delighted to state that both the in acquisition as well as the Investments are moving as per plan to achieve the desired objectives Kon achieved a 7% plus evida margin for the fourth quarter 24 which is the double the margin that we acquired in the third quarter klon is online to achieve our stated goal of 1,000 CR Top Line and 100 CR Abida as a starting point Caron integration is underway and the synergies are in the process of implementation we have already implemented our own Erp in Kon from 1st of April 2024 with this integration all the processes and policies applicable to SFL is now applicable to Kon as well and we derive all the information that we are using using in SFL to better manage the business and understand it much betterly Kon is a very strong brand in south and east of India and is very precious to us we are on our way to launch a brand refresh for Kon on 9th of June with the India Pakistan match in the T20 World Cup forlano has also progressed rapidly post investment and as on date it has been PBT profitable consistently for the last three months for lco has been showing a lot of Promise post our investment it used a large part of the proceeds to repay its debt this reduced a lot of interest burden on the company both on debt reduction and lesser interest cost the company has also moved on to the next level of growth and has added its subscriber base or increased it subscriber Base by more than 50% of what we took over when we made the investment now moving on to some of our internal uh initiative I'm delighted to inform that we have completed the commissioning of our jabble for plant and now it is producing desired qualities which gives us another Competitive Edge this will greatly boost our small town India initiative wherein we want every Indian household to have a modern mix let's talk something about our it initiative Teo is a company which has been performing very well we started it several years ago as an in-house it ring to cater to the needs of the company however it has grown over time and today it not only caters to all the needs of SFL at a much reasonable cost then that can could have been outsourced uh and it serves not only the India business but to all the companies of the group globally it also services to customers outside the group currently it generates around 20 to 25% margin and we hope to grow it to a sizable company very fast however first priority remains Sheila fo group and the group company the year has also been a little bit turbulent for us wherein we took certain bold initiatives like discontinuance of our online brand suex and shifting to sleep fell brand in the online segment this impacted our top line for some period but we are happy to communicate that we have not only regained the online volumes through sleep well brand but have done so profitably online continues to be a critical channel for us and now we have cxo level professionals driving group in this segment the impacts are visible and we aspire to soon become a leading player in this channel as well in spite of impacts of sleep effect and reduction in volumes of exports and Railways we have have still been able to retain our EP levels in absolute terms the Top Line reduction is primarily because of reduction in raw material prices now uh friends let me take you through the quarterly and year and financial highlights for the fourth quarter under review on a Consolidated basis the company reported revenues of 845 CR rupees which increased by around 16% year on year iida for the quarter was 81 CR rupees which grew by about 3% year on year while iida margins were reported at 9.53% for the quarter net profit stood at 65 crores which was up by about 49% for the invest for the financial year ending 2024 our Consolidated revenues were up by 3.8% on a year on-year basis to INR 2982 cres the iida was fettish on the year at around 300 CR rupees the theida margins reported at 10% the net profit was reported at 184 cres which declined by about 8.4% year on year fat margin is standing at 6.17% on a standalone basis our revenues were 487 cres which decreased by around 6% year on year iida for the quarter stood at 50 cres down by about 14% year on year iida margins were reported at 10.31% for the quarter net profit stood at 56 gr which was up by 35% year only for the financial year ending 2024 our Standalone revenues were down by 7.8% year on year at 1880 cres the iida however was flattish at around 210 crores with the marges reported at 11.2% net profit declined by 1.7% on a uh on the on year to on year basis to 168 cres with fet margins at 8.95% on the operational front we saw a strong volume growth in both sleel and Kon brand in the quarter our Flagship brand sleepwell Matrix registered a volume growth of 31% while Kon brand Matrix registered a volume growth of 17% in q424 the form business witnessed strong volume growth across geographies stain business also clogged higher volumes in financial year 24 however lower Revenue because of lower raw material prices with this we conclude our opening remarks and open the floor for question and answers open over to you D thank you ladies and gentlemen we will now begin for the question and answer session anyone wishing to ask a question may please present star in one on your tone telephone you the star and two while asking a question ladies and gentlemen we will wait for a moment while the question ke assembles the first question is from the line of bavani from investtech please go ahead hi sir thank you for the opportunity uh my first question is related to volume growth sir volumes we have reported in ppds approximately 6ak 75,000 pieces in Q4 uh can you please provide corresponding comparable number for previous year we believe 6 675 for Kon as well sorry to interrup uh uh members of the management team does slight disturbance from your line uh actually there is no nothing happening here I don't know if the connection issue uh can you hear us yes sir we able to hear you hello yes Mr abani please go ahead with your question sir hi sir my first question is related to volume growth uh sir in our PP we have mentioned our volume is approximately 6 lak 5,000 PES in Q4 uh can you provide corresponding comparable number for previous year we believe this 675000 for current year also includes for numbers you uh thank you Mr n MAA will take that question please yeah having corresponding numbers for Mattress uh on the previous quarter 4 will be 6 lakh 65,000 uh sir is it possible to break it up between Shila and for both the quarters forar and previous quarter uh no we would generally give a combined number but as far as the brand Kon and ke well is concerned Amit just now shared those volume growth so for Lew mattress our volume growth has been 31% and for klon Mattress the growth has been 177% the decline that you would see is because of the other ancillary brand that we would have which you spoke about of sleepx fed form Starlite Etc all right sir sir so as you said slip brand reported volume growth of 31% uh can you please tell us which all brands are included under it does it include Starlite fed foam so sleep well only includes sleep well feather foam star light sleepx Etc are what I'm calling as the other anary brand so the two Flagship brands of the portfolio which is s and Kon one has grown by 31% which is slew only slew brand and and klon has grown by 177% which is the klon flagship brand mattress all right I got it and uh is it possible for you to provide what is the proportion of total uh volume that has seen 31% volume growth sorry could you repeat that b didn't get that What proportion of Sheila forms total volume reported so I want the actual absolute number which saw 31% volume growth which so Sheila for's previous year number and current years number is it possible to ble so B see uh these are two detailed information what we have already given you is the total number of matrices that were produced in the last year and the current year we have also given you what is the percentage growth in the respective TR and this uh reflects basically our intent and our strategy to ultimately shift to our Flagship brand so that we can focus on those Brands and uh that is uh something which look we look into the future to invest into and to develop do I answer that bin can you hear us so the for the Gard participant has dropped off participants if you wish to ask a question you may please press star in one we'll move on to the next question that is from the line of aniket Kulkarni from bmsl Capital please go ahead yeah good afternoon and thank you for the opportunity hello yes an please proceed yeah thank you for the opportunity so the first question is uh can you tell me where the 117 C of other income is coming from and how sustainable is this so I mean what will be the St stade number that we can see from 525 adate The Voice reaching us is uh not very clear um so I'm asking um is there is there way to connect up or is there another way um that we can communicate uh not coming through soive me a minute hello yes anik please uh uh repeat your question yeah yeah I repeat my question so my first question was uh the 117 crores of other income which we can see on the Consolidated numbers uh can you tell me where it is coming from and how sustainable this is I mean what will be the statistic number we can see in F525 okay Amit you that is 170 crores of other income 17 170 and the question is that how suain Su what is the breakup of that and how sustainable that is so an 117 cres is the income from our investment uh so at the beginning of of the year we had an investment of around 750 CR we used a part of it for our Acquisitions and as on date our investment stands between 500 to 550 so this income has been coming in the past as well and with the investments in tax we hope this income to continue in the future also okay okay and secondly in the Q2 call if I'm not wrong you guided an overall revenue of about 4,000 to 4,300 CR so if I give a 11% margin I get to about 500 crores of aita and from that if I take 400 crores of ebit that sorry to interrupt anik your audio is breaking up hello is it better now yes hello yes sir please proceed yeah yeah yeah so in the Q2 call I think you had guided an overall revenue of about uh 4,000 to 4,300 cres for fi25 and if I give a 11% margin 11 12% I get to around 500 CR of Abit and if I take 400 crores of ebit from that I think it you I think we arrive at 12% of rocce so you know to get to your target roc's of about 18 to 20% I think you'll have to almost double your double your AIT from the fi25 numbers so uh how fast do you expect this to happen and you know what will be your plan to achieve this numbers going forward so anik like you're right last time we had said that uh we will grow we anticipate to grow by around 15% cadr uh for the company as a whole especially India business and that is what we stick to uh if you look at Capital employed I think the business is sufficiently capitalized as of now and fully geared up to Creer to the volume growth or the business growth which is there for the next two to three years uh so I think 15% growth would in the next three years should take us to the level that you are looking at and the margins that are being mentioned at 11 12% is something which is for financial year 25 as we as we grow by 15% perom we anticipate these margins also to improve uh in line we are a 40% contribution business so our higher growth leads to better profitability at the bottom line so I won't guide you to anything but broadly broadly with these parameters you can calculate as to where we would be looking in the next two to three years understood understood and one last question uh so you have about 1,00 cres of debt I mean uh after leaving out the these liabilities so if I get uh if I put an 8% interest on that that's around 100 close to 100 cres of uh uh interest cost so is this assumption correct or it is at a lower rate or at a higher R so uh the breakup of this dat is around 800 uh 20 725 crores is the NCD that we raised for the acquisition which is at around 8.45% uh there is foreign debt of around 250 to 300 crores which would be at a lower cost since it is uor link currently would be at around 5 wat per but yes as interest rate moves it should move but not higher than this and the residual will be the debt in ICT which we took for jabalpur plant and which will now come to Shea which is at around five and a half to 6% so I would say somewhere around 7 and a half to 8% a interest would be a reasonable number on 11 11 okay okay understood all right thank you so much for detailed answers and best of luck for thank you thank you we'll move on to the next question that is on the line of Arjun Kanna from kotak Mahindra Asset Management please go ahead uh thank you for taking my question uh the first one is regarding uh the volumes that you mentioned sir U uh the the number for fourth quarter fi23 uh like to like would be five uh sorry uh 655k is that the right uh number I got sir yes yes are right if we consider full volume of gon for the right so so essentially we have grown on about 3% volumes does that include Tang yes it does sure uh so sorry go ahead no please go ahead sir no no no that's right yeah it does include s uh whatever mat we are selling it includes everything sure so uh essentially in terms of market shares I'm sure we would be tracking uh if you could comment how do we uh look at our market shares uh in the organized space and what do we feel uh that number could uh land up at being over the next two three years yeah you're talking of organized mattress market share right sir yes sir so our estimate is that we will be approximately be around 29 to 30% uh and our own assessment of the market from whatever information we have at least of the leading brand uh the the it has either been flattish or uh the volumes have actually decreased uh of some of the leading Brands who are there in the industry uh the only segment which uh which keeps on doing comparatively better is the online e-commerce space uh which is in the region of about 9 to 10% of the industry uh but otherwise the offline space would have been either flattish or would have been marginally gone down sure so when we envisage a growth of maybe uh 10 to 15% essentially we are looking at the End Market growing or is it more in terms ter of uh uh volumes growing or you expect pricing to move up just want to uh gauge your understanding and for us to learn so you're unable to hear can I please request the coordinator to ensure that there is better connectivity uh forgive me a minute uh ladies and gentlemen uh we'll be resolving the audio ISS and getting back to you we request you to stay connected [Music] ladies and gentlemen thank you for Patiently holding we now have the line for the management reconnected over to you sir uh sure uh I'll repeat my question sir my question was uh we did indicate we are looking at a cagr growth of around 15% just wanted to understand do we envisage the End Market growing uh at what pace and uh is our growth largely going to be led by volumes or would it be led by pricing yeah so uh Arjun yes you are right we are we have enar and planed for the growth of 15% cadr which is a which is a value cadr that we are talking of but our estimate is that the volume growth rate is going to be higher as compared to this because what we are finding is that uh the market segments which are growing faster as the penetration of the category grows in this country will be more there in perhaps the economy end of the segment and there for the volume growth rates for us would probably be higher than the value growth rate sure uh so this question is in the context of us vacating some of the lower end Brands uh and moving more towards a fighter brand of Kon and uh sleep well given that the lower Brands were uh more in the economy segment uh I'm just trying to understand the two uh if you could help so yeah sure so we just need to understand that both klon as well as he well will straddle all the price points it will settle the price point at the economy end as well as at the higher end of the market because for us what we need to be clear that strategically what we have decided is that we will focus on the b2c space and within that the Branded uh mattress space now I'm sure you will appreciate that in the country when I have to establish a brand it will require us to invest significantly behind them and that's what we are doing with both sleepwell and Kon that there will be a significant amount of brand investment that will be behind both of them and they will both stradle all the price segments so the economy end of the market that you are talking of will be catered under the sleep well brand as well as under the current on brand uh and we are making our portfolio Etc according to that so for example the small town initiative that we have been talking of tarang is actually currently under the sleep well brand we have also introduced an equivalent model of that under Kon also which is just got launched last month which will also cater to the economy end of the market so that is how we will be able to uh cater to all the different segments in the market sure very helpful and thank you for that uh Second question is generally when we have seen lower uh law material costs we have seen significantly higher a beta margins uh this quarter too we saw gross margin expansion uh just wanted to understand while margins are lower partly the uh addition of Kon but if one looks at Sheila forms itself margins aren't at the 12 to 14% range that we nsar so if you could help us understand why is that the case yeah so uh so if you look at Chila form Standalone level uh uh sorry Arjun uh broadly you would uh though the gross margins have expanded a part of it has been utilized for investing back into the brand so if you see our advertising or marketing cost has gone up by 1% so broadly broadly for a standalone level it would be 12 w% margin if you normalize that now said that I understand your 12 to 14% range uh but as we have direct like indicated earlier also there are a lot of initiatives which we are already working on both on the variable uh side of the cost structure as well as on the fixed side for example with the coming of Kon into this gamut there is a lot ofo we don't need to run two parallel organization at the fixed cost level so there is a lot of opportunities there in which has been identified and put into implementation and also on the variable side of it I think there are lots of synergies of scales and negotiating ability which is available which will get into this and all this should lead us to a comfortable position wherein we say that we will lead to 3% incremental margin over the next 2 to three years sure wishing you all the best thank you thank you thank you a reminder to the participants anyone wishing to ask a question may please press star in one the next question is on the line of bav Rani from investtech please go ahead B your line is unmuted please go ahead yeah hi am I audible yes sir please proceed yes sir I'll continue with my previous question sir when you say 31% volume growth it's actually very difficult to comprehend the numbers over here so this 31% volume growth is on what base if you can quantify that it will be very so having the volume growth that we are sharing are of all the mattres which we sell under our Flagship branding of either fleetw or klon so the 31% growth number that we are sharing is all mattresses that we have sold in quarter 4 under sleep well Flagship brand and 177% is all that we have sold under the Cur on uh Flagship branding uh sir is it possible for you to quantify the number what is the total number in our total volumes total separately if that helps because we won't have the exact break up num right now broad this is Amit here see broadly I think too much detailing we have never been uh giving uh that as an as a guidance and and if you look at our current structure uh our focus is on increasing the overall volumes uh so like we told mentioned earlier also that sleep till now has been selling only through Evo but going forward it will be selling to a mixed structure of ebos and mbos wherein uh it will be present along with other brands including Kon so whether a dealer sells a Kon brand or a sleep brand that is less material for us what is more important for us is what they sell together so I think what what uh we will be focused on going forward as well currently because these companies are only are recently acquired uh they are as you know they are also under a process of merger uh but going forward we will be focusing simply on what is the uh category that we are looking at and how much growth is coming in that category whether it is coming in sleep SP or whether it is coming on Kon is immaterial but for your under satisfaction at this point since this question is repeated every time I would mention that they both have grown like the numbers that they both have shown are almost proportional so it is not that one has lost and the other has gained tremendously but they are almost in the same line with each other all right got it sir uh my second question is related to fando Sir can you provide the revenue ABA pack for FY 24 and how do you see that ramping up in fi25 so I can tell you for the period that we have held because that was the period under our control and relevant to us uh we acquired this company in August uh as soon as we acquired this company the uh losses that they were doing because earlier there was a lot of debt on the company which was paid out of the equity proceeds that we had put into the company uh so from August till January uh the debt reduced gradually the interest cost reduced gradually and the losses kept coming down from February onwards the company is fully PBT positive uh it is covering all its costs including lease rentals interest depreciations and all its operating costs the revenue which was at around 10 10 and a half CR to 11 crores Post August has now increased to around 15 crores and this I'm not referring to March it was around 13 and a half 14 crores now but current uh we have already crossed the 15 CR Mark and we are plated to cross 20 crores in the next 6 months this is a 40 to 50% contribution business I think that that data would give you whatever you were looking for all right got it sir and any timelines over here to increase the St sorry I again missed what you are saying your line is not very good hello yeah am audible now yeah better yeah uh sir any timelines here to increase the stake so we already have an option to increase 9% stake at the same price uh you know at the time of acquisition we declared but that is a matter being currently debated internally and we will come back to you as soon as we reach any decision on that all right got uh so next question is related to synergist uh is it uh so is it possible for you to quantify any Synergy games that we have in Q4 this is the okay I'm going to take this go here uh you are talking about the synergies of the Cur on acquisition is that correct correct sir so I think uh the guidance has already been provided last time that you would have an at least of 3% increasing and we are on track for that actual Quantum I mean we can easily derive what 3% of the of the uh entire sales Sal value is but uh I mean if I was to make a guess I would say a 100 150 or something like that happening quickly all right got it sir thank you so much thank you the next question is from the line of par from inarm Holdings please go ahead yeah uh hi sir can you hear me yes yeah uh uh sir uh one point which uh I think most of the participants have asked and uh it is slightly confusing that if your Premier most of most your coron as well as sleep well has grown by 31% and 177% how come the overall volume growth is just 1% if I if I compare the 675 T versus 675 versus the number that you given of 665 hence it is slightly difficult for us to understand the overall picture why the sales hasn't grown in spite of your two uh uh major Flagship brand going by 31% and 177% Sir so Paris thank you for bringing this out and uh even in the previous discussions I could see that there was difficulty in appreciating or understanding that let's uh just step back a little bit and we go to the strategy that the company is following number one we will grow our market share and our presence in the mattress segment that we do as you know the company does matter segment it also does comfort segment it also does B2B businesses does whole lot of other businesses so strategy number one point is we will grow our presence in mattress that is the b2c part and that is where we believe that our Destin lies as far as future is concerned of course the other parts continue and they grow as they grow but we will grow the mattress segment then within the mattress segment to respond or to address the various uh channels the various different kinds of um consumers that we have we had different brands or multiple Brands like sleepx like Starlight like feedo and of course we had sleep well but we recognized that to to promote to advertise we can do that very well with one brand and that's our Flagship brand sleep well so the entire effort of the company has been it's not closing down the other brands but we are growing the sleeper brand and somewhere down the line let's say another year time we would have sleep well as the mattress brand existing straddling the entire Arena of places where it can be sold and therefore the primary function that we measure or the metric that we measure is that what is happening in sleep well which is growing and 31% is the number at which the sleep well segment has grown over the previous one now something would have gone down and that would have been fopo would have gone down Starlight would have gone down but those are the less remunerative areas and areas that do not have future with us and therefore that's what however what what I'm going to do is um IIT just uh make out a sheet and share it offline or if you will reach out to Amit uh he will share with you that what does the what does exactly 31% mean actually it means growing the spple brand but you're trying to correlate it with the overall volume growth and there would be some mismatch on that got it so my other question is on the other income uh I am sure that on a 117 CR other income on a average investment of 750 CR before and 500 CR now uh uh it doesn't seem that it the whole of other income is from Investments so if you could understand if there is any operational other income or any other uh uh part of the uh any Forex gain or something like that which is part of the other income because this quarter also it is uh on a Consolidated basis 37 crores on an U if you have an hour considering our investment B 500 crores for this quarter it is slightly on a higher side so wanted some color on the other income also so this is here so operational income is not there because had there been any operational income like waste or we sell any other thing we don't do that most of our waste Etc are recycled and used in our matri so mostly these 117 crores are investment income uh for the for the first half of the year on 750 cres and for the second half of the year on around 500 to 550 uh there is no other f as well as as far as Forex income or expense are concerned uh they are not any material for us I think there would be a crow or so of Forex gain that would have accumulated on on on something would be primarily on the Forex movie Forex movie right so that's yeah that's insignificant so this is um primarily income of on the Investments only got it and sir my last question is on the Tang brand uh how is the traction that we have seen on the brand and where where are we positioned for that if you could give some color on on this sir yeah so um Mr n MAA will take that yeah so par tarang is doing well we have now uh as we speak we have extended it to almost half the country uh as I mentioned that what we have also done along with tarang tarang was under the sleep well brand we have also introduced a similar model to cater to the same segment under Kon uh so that we are able to Leverage The Kon brand strength also in different parts of the country to uh able to cater to the cotton mat refuser so it's doing well the the structure has got rolled out in half of the country the distri ution is picking up quite well and we are quite bullish around that category as we move ahead got it thank you sir thank you thank you the next question is on the line of Karan ban from IC Securities please go ahead thank you for taking my question I just wanted to understand this 1 sorry can you speak a bit louder your audio is running very soft sure sure is this fine uh slightly better please proceed yeah yeah so I just wanted to understand the 17% volume growth in the Kon brand that seems very good just wanted to understand what is led to that because as you mentioned right the demand environment and the overall Market situation still seems to be subdued you mentioned that the offline Market volumes have largely remain flattish or decline so just wanted to know what what what has different happened in on this quarter for the 177% Bing yeah thanks Karan see as far as Kon is concerned what we are able to do for both the brands is to extend Kon on to the network in the other parts of the country where they were not present in number one number two uh there is a fair amount of positivity and bullishness with the channel That now is happening around with the brand as we have as now they have seen us taking over uh there have been a several set of initiatives that we have taken around Kon for example uh some of the economy end models that were there which had become uh price uncompetitive we have uh rationalized those prices uh there have been reintroduction of couple of uh faster moving models which were there demanded in the market uh so there is a fair degree of positivity around with the brand and as we move ahead uh there is a completely new brand identity that we have now created and uh we will also be seeing a complete uh integrated marketing campaign uh which will backup uh klon as we move ahead uh there is a complete new set of models which we are launching uh in the current quarter which is actually already underway uh so several initiatives uh on channel on brand as well as on on the team uh has happened and that's what is actually uh giving us uh this positive uh bump up in FS got I just wanted to understand is there a shift in terms of how's the growth of klon br is the online business because we see that you know sleeper is also doing well online now right so is there a uh disproportionate growth in the online channel for K also for this quarter or is it let the offline there is a disproportionate growth is happening for Kon also kon's presence online uh was uh limited so we have the portfolio uh we have managed to address lot of the uh typical online offline conflict and therefore taken care of that so klon also on the e-commerce space is seen a fair amount of growth which is happening however the ratio still is lesser as uh in in terms of the percentage uh and the offline is going to be the biggest contributor to the for the brand F got it thank you thank you for thank you a reminder to the participants anyone wishing to ask a question may please press star in one the next question is on the line of Deepak motra from cap grow please go ahead yeah hello am I audable uh sir your audio is very soft okay uh most of my questions have been answered I'll just have two followup questions uh all the initiatives which are being taken I mean once you have now this uh mget going ahead in terms of consolidation rather I should say in terms of both Ste and Cur on you know in your product Bou what kind of market share games are you really targeting and what kind of competitive intensity are you witnessing in the marketpl good question I think market share will be an end result of whatever we do uh so we are more focused on currently doing the right things with both the brands and uh market share will be a resultant so uh I don't think we would want to predict what what will happen because as a market leader our primary responsibility is also to grow the market uh having said that the competition intensity Deepak that you are talking of is largely today in the industry being only seen in one space which is in the e-commerce space uh with certain specific Brands uh uh who for them the d2c and the e-commerce platforms are an easy route to reach across the market so that is where we are seeing large amount of competition intensity uh some of them are trying to make foray into the offline space also uh but the presence is still uh limited so as we move go ahead the offline space is still dominated by threee brand and the rest of the intensity that we are seeing are largely in the e-commerce platform do you see the e-commerce uh platform sales uh picking up much more you know as we you know move into you know short to medium term or long term and becoming a larger part of the market uh so uh we this in I think in also our previous quarters we have G shared our uh understanding of the e-commerce platform that yes e-commerce is going to stay uh but our own uh thinking is that over the next two to three years the contribution of e-commerce would probably be in the region of anywhere between let's say 10 to 12% or let's say 10 to 15% maximum and the reason is as follows if you look at internationally what is happening in the e-commerce space for during covid the contribution of e-commerce really went up because uh that became a far more convenient method of buying uh for most categories including mattress so at that time the contribution of e-commerce had gone up but subsequently it has tapered down in most of the developed countries so it is anywhere between 17 to 18% maximum uh and therefore if we were to Benchmark against that uh we see the in India also uh the contribution staying somewhere thereabouts number one number two what sells on e-commerce is largely the low price mattress which is sub say 10,000 or maybe even 8,000 that's what contributes to almost 70 75% of the sale because as far as the mattress as a category is concerned the moment a consumer wants to buy a mattress which say 15 20,000 you will they will want to touch and feel the mattress because this category does not gets sold by specifications it gets sold by a touch and feel and therefore a customer would want to visit an offline shop in order to experience the product but having said that what we must uh take cognizance of is that digital marketing will play a significant amount of role in this cat category and we will as Brands need to invest on that because lot of information surge around the category and Brands will happen digitally and that is what uh we will need to invest in as we move ahead okay thank you one more question I have is in terms of the underlying raw material prices I think over the last few quarters that has kind of been the trend which is also been reflected in the overall Revenue numbers coming down so what is uh the kind of view you have you know on the underlying raw material prices I mean how how is it really going to behave over the next say one to three years please thank you yeah deep good evening this is Rahul Gotham trying to address your question I wish I had some good clean clear answers for you uh in spite of all our hopes and prayers that they should stabilize there should be a a bit of a steady movement upwards um and not spikes and other things um I they still seem to do and um this is because whatever happened and believe it or not whatever happened at covid times the oscillations still continue There are many factories which close down there are many areas where the consumption went down some are starting some are uh not wanting to then there are these issues about the um the the Red Sea and the sus Canal uh issues and problems so going forward I do see fluctuations happening or continuing to happen though I do not see any kind of spikes happening or a certain Free Fall of the raw material the the things that we have witnessed in the past and you know just to overcome these these oscillations was I take you back to a couple of minutes back or half an hour back where we said that we're going to focus our um our um you know our approach and uh our concentration more towards the b2c part of the business where the destiny is far more in control even if there are too many of fluctuation s we are able to take care of it whether it is passing on or whether it is looking at the cost side Etc but on the raw material frankly there is neither does a system exist where you could Book for a year and and close it nor does uh it appear that these um fluctuations will will completely vanish but spikes will probably okay sure thank you so much thank you for the clarification thanks that's all for much thank you the next question is on the line of bavani from invest please go ahead hi sir thank you for the followup uh I had just one question related to our Wares business sir uh Australia and Spain's Revenue as well as margins have been declining over the past few quarters uh can you please provide some of the reasons behind it and uh by when should this business normalize thanks uh so both both are um are independent I mean they they are separate markets and they have separate forces working there let's just look at the Spanish side um on on Spain we are a very small part of that large markets and therefore our effort was to increase capacity even if the market shank a little bit it did not matter we would have a size or we would have the opportunity to increase would be there so we've de bottlenecked we have already um increased our capacities from 14,000 tons to 19,000 tons and slowly ramping that up what you see as a drop in the top line is primarily on account of the raw material prices falling and we have to pass on those pric prices or those drops to the consumer and that's the reason that you see a lower number as far as the B percentages are concerned we are holding up and I don't think that that's that that's an that's an issue as we increase our volumes which now we have the capacity this will keep improving in the next two years time you should see a completely different picture and this I'm talking about Spain uh as far as Australia is concerned the problem or or not the problem let's say the issue is a little different there we have a large share of the market and the market size needs to go up for us to get better on our performance and to have better results uh which we are doing through issues like looking at anti-dumping duties we are looking at sizes of looking at absolutely newer segments like the furniture segment and of bed in a box mattresses that are being imported into Australia and New Zealand we're making some progress on that and we expect uh again in an year's time to for you to see a lot of change that is happening uh we have started both the top line and bottom line Improvement uh projects uh you know which are beyond the the market and the the market size but internally and they are beginning to show some results at the moment but I would give Australia one year's time where you would see climbing back to normal levels and then even going beyond that as far as Spain is concerned uh you would start seeing it from next quarter and probably good results or good healthy ones in about two years time thank you for the brief ANW thank you so much thank you ladies and gentlemen that was the last question I now have the conference so what is the management for the closing comments great uh this is Amit here again so I take this opportunity to thank you all for participating in this signing call and uh asking questions putting us also uh to think about it to answer we I hope we have been able to answer your questions to your satisfaction if you have any further questions or would like to know more about the company we would request you to reach out to our IR managers at gam advisor thank you thank you members of the management team ladies and gentlemen on behalf of MK Global Financial Services that concludes this conference we thank you for joining us and even now disconnect your lines thank you