Bata India Limited (NSE: BATAINDIA) Q4 2025 Earnings Call dated Jun. 02, 2025
Corporate Participants:
Unidentified Speaker
Gunjan Shah — Managing Director and Chief Executive Officer
Nitin Bagaria — Company Secretary
Nitin Bagaria — Company Secretary
Amit Aggarwal — Director Finance and Chief Financial Officer
Analysts:
Unidentified Participant
Sameer Gupta — Analyst
Videesha Sheth — Analyst
Gaurav Chugani — Analyst
Ankit Kedia — Analyst
Rahul Agarwal — Analyst
Rajiv Bharati — Analyst
Presentation:
operator
. Ladies and gentlemen, you’re connected to Vata India Limited Q4FY25 earnings conference call. The conference call will begin shortly. Please stay connected. Ladies and gentlemen, you’re connected to Vata India Limited Q4FY25 earnings conference call. The call will begin shortly. Please stay connected. Ladies and gentlemen, good day and welcome to Barter India Limited Q4FY25 Earnings Conference Call. Hosted by GM Financial Institution securities Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference has been recorded. I now hand the conference over to Mr. Gaurav Javani. Thank you. And Overdose. Sir.
Unidentified Participant
Thank you. Hello everyone. On behalf of GM Financial, it’s my pleasure to welcome you all to Barta India’s Q4 and FY25 earnings conference call. From the management we have with us today. Mr. Gunjan Shah, Managing Director and CEO. Mr. Amit Agarwal, Director, Finance and Chief Financial Officer. And Mr. Nitin Bagadia, EVP and Company Secretary. I would now like to hand over the call to the management. Thank you. And over to you, Nitin.
Nitin Bagaria — Company Secretary
Thank you Gaurav. And thank you JM Financial team for putting this together. Very warm welcome to all of you. I have with me,Guardian MD and CEO and also Amit Agarwal, Director, Finance and CFO. We have shared the presentation with the stock exchanges last week. We’ll be taking you through the theme. The we’ll navigate the slides as well as the page numbers to stay synchronized. On page number two you have the disclaimer. I’m sure you have gone through the same. I’ll now request Bunjan to take over. And thank you once again for joining.
Gunjan Shah — Managing Director and Chief Executive Officer
Hi everyone. Good morning. Welcome to the call. I will jump to the presentation slide number three. As and also in line with the previous presentations over the last couple of quarters, I will focus on a few focus levers that we are consistently driving amongst the overall strategy of driving growth profitably. Okay, so the three levers just for refresh driving same store growth portfolio evolution on a few focused portfolio levers and the last one being inventory agility complexity. We try and update you on the various initiatives and how that’s been progressing. Within the store growth there is zero based merchandising.
We made obviously Some decent progress post the last quarter where we were scaling up the pilot and the second one was on driving value proposition in the stores. If you can move to slide number five, you will see where we have tried to picturize what is the kind of change that we are trying to do through zero based merchandising visually Besides obviously the numbers that I will talk about subsequently. I have also spoken about the numerical part. But this will pictorially tell you how the stores look different. Just to give you the objective is to make the stores more inviting.
Gunjan Shah — Managing Director and Chief Executive Officer
As you can see in this example of one of the stores. The barriers to visibility inside depth into the store, the number of fixtures that were on the store that have been reduced while simultaneously increasing seating which helps and aids conversion, especially on the busy weekends etc. When there is a surplus of consumers in the store. It also enables us to make the store more clutter free while the picture does not show that. But I will move you to slide number six which shows on the left side what are the key inputs that go into on measurable numerical manner onto zero based merchandising.
We are now to about 146 stores. So it’s obviously a very large expansion from less than 40 or so last quarter. The pace has obviously gone up as we have learned to do this much faster. Obviously we want to keep on doing this much faster. This quarter also used to be a very large focus area associated with this is that the number of lines in the store have dropped by almost 40%. The inventories have dropped by about 25%. What we measure as availability of various size sets and articles has gone up significantly versus net of control by about 300 basis points.
And the retrieval time is a key measure for customers experience. And success is reduced to less than a minute at 45 seconds, which is what the pilot was also. So it’s been done now at scale versus more than one and a half minutes for the rest of the network. What this shows is that despite the muted demand etc. That these stores do deliver significant key success factors. The ones that we measure for this NBM is that how are they doing versus control stores in the same city? And they are all in the positive as the numbers show to you both in terms of consumer experience as well as in terms of financial outcomes.
Gunjan Shah — Managing Director and Chief Executive Officer
Okay, moving to slide number seven. The other lever was driving value proposition. We made again significant progress on this. Now it’s spread all across the network. We would also have started seeing some impact of this from a volume growth objective. But still a Long way to go in my view of what would define success for this. As you can see now, especially on the ladies. But essentials that we call right the price points have been already discovered. Last time I shared this. Now it is spread across almost about the full network simultaneously we have also introduced and launched the whole Power Mood plus collection which is starting at a very attractive price point with some very cutting edge designs that we have developed along with some of our China partners.
We will expand this much much larger. There are some exciting results in the latter part of the previous quarter, but we will see this going larger even towards the second half of this calendar year. Obviously parallel we are also expanding this across the network. This kind of a price point deserves to be there across the network. So it will go to all Barta stores. Hopefully that should also drive volumes for us and therefore volume driven. Getting growth slide number nine and moving to the next lever which is on basically on certain focus portfolios. First one is floats and therefore the volume category.
It continues its attractive growth trajectory as you can see here now at pretty large volumes. It is also continues its growth rate of almost 40% plus as you can see out here, it’s almost more than doubled in the last two years backed by solid volumes. And obviously as I mentioned that it comes at a. In most stores it comes at a premiumized price ast. As you can also see that we are also trying to use some amount of science behind how we are trying to display it with a silhouette like with the range now expanding but simultaneously trying to bring out a story as you can see in the pre and post photographs that have been done.
Gunjan Shah — Managing Director and Chief Executive Officer
We are also investing big time in this portfolio behind collabs which we see is one of the key drivers for consumer interest, especially in the youngsters, both kids as well as below 10 as well as 10 to 15 or 10 to 16. And we will increase collabs we are downloaded. This Marvel Donald goes Live has actually gone live already in stores, right? And we will have obviously some more campaigns coming across going forward. So we hope that this growth rate continues on this part of the portfolio. Moving to slide number 10. Another piece that has actually taken a lot of our effort has been Power Portfolio.
Besides the Move plus which was a price point driver, we have also introduced two new technologies. Easy Slide has been there for some time now. It’s getting scaled up now we are taking it to $1200. We are also resetting the price point on this to make it even more attractive. And also the stamina plus collection which is at a premium end at about 4000 MRP and that has shown some good results in the first launch last quarter and that’s being taken to almost $400. So the technology as well as the premium objective on power continues while we do the power move plus that I talked about in value propositions.
Continuing forward to slide number 11, Hushpupi’s continued expansion on the premium side, as you can see, consistent quarter on quarter store expansion and that journey continues both through the franchise model as well as the Coco model. We have also associated, as I shared with you last time, with Vieridas and Saiba Bali and they were the centerpiece of the office sneaker campaign, the ESP that you see and that has given us some very good results. It’s also burnished our credentials on taking the comfort premium credentials of Hushpuppies into a semi formal space and we expect that to unlock revenue growth for us going forward.
Gunjan Shah — Managing Director and Chief Executive Officer
On slide number 12 moving on to the inventory agility lever. So obviously a whole bunch of numbers that are flowing in the next couple of slides, as you can see they are continuation of the updates that I’ve shared with you all in the previous presentations for the last couple of quarters. So on slide number 13 if we can move there. So the number of lines overall across the network, while I talked about the ZBN stores overall across the network also reduced by almost about 30% year on year. The top articles the way we look at it is that why we reduce the whole success of this is that while we reduce inventory and complexity, we keep on increasing our price fulfillment as well as ability to satisfy consumers in store.
So it’s a dual balance objective. We deliver both well it’s excellence on this front. So that has gone up. As you can see on the numbers it’s 12% better than where it was last year despite significant reduction of availability and 7% better on overall the clutter at stores. So basically the objective is that the total net lines, including any discontinued lines at stores are what is clutter at store and that lines for store is the active lines that we are sending into the stores. So both of them are significantly reduced. The next chart on 14 on inventory agility is more talking.
On financial terms, the inventory is a significant drop 16%. This is over a continuing drop over the last almost five quarters that we have managed to do that has shown up in terms of terms also we still see some more meat going forward on this entire piece, not only in total quantity but also on the quality of inventory which is what you see in the aged inventory that’s about 30%, 35% lower. So in that line and the potential that we see on this, we will take you through the slide number 15. We have launched off a large transformation project with an external partner on what we call as customer first on how are we able to make sure that everything that we are doing through the organization comes through the value chain and impacts the consumer.
Gunjan Shah — Managing Director and Chief Executive Officer
So consumer centricity, making sure that we are agile enough to adapt to trends, the pipeline is kept efficient enough so that we are able to react fast, driving it through operational excellence. So making sure leakages are, how do you say, tightened up. And last but not the least making sure data is at the core of all the decisions that we take, including innovation. So it’s going to result in tangible outcomes that we foresee over the next several quarters. The project has already been kicked off and we are looking at great benefits furthering already some initial signs that we have seen on this front that I shared with you in the last previous slides.
Slide number 16 A few other highlights. Now franchise stores stand at about 625 for the first time. After a long time we have started seeing some revival and contribution from the less than 1000 price point which shows up in our volume growth though we would have desired much more so that we can also result that into revenue growth which we are hopeful for going forward. Overall NPX stands at a high of 85. Efficiency parameters in the stores have gone up. We are also in our distribution business expanding out key retail outlets which are our activation program for the MBOs to now almost about 1400 outlets.
We installed our largest saver Capex in the back end in Bhattanagar in the PUDIP machine. This backs our commercialization of the IAM EEGA machine that we did last year. These are all in line with what we feel is the right strategy for manufacturing which is automated, apex technology intensive and IT driven is what we want to own. While we use contract packers for the manual labor intensive pieces, Fashion driven we were also recognized for some awards. We ran a few campaigns as you can see out here during the quarter and also collabs with fashion designers.
With that I will take you to the last slide which is slide number 18 and I will invite Amit to talk on this.
Amit Aggarwal — Director Finance and Chief Financial Officer
Good morning everyone. From a financial slides perspective the overall revenue from operations stood at 788 crore which is a value decline of about 1.2% compared to the previous year. Same quarter the gross margin were at about 455 crores while there is a erosion of about 230 bits versus the last year same quarter EBITDA margin reported is at about 25.5. The change versus last year is about 14 bits lower. Now in the EBITDA margin there is a change in accounting for one of the licensed brand based on the India’s like to like EBITDA margin versus last year would have been about 23.5.
From a PAD perspective overall PACT stood at about 46 crores which is a decline of about 215bps versus last year same quarter. Over to you Baurav.
Questions and Answers:
operator
Yes, thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question press star and one on the touchstone telephone. If you wish to remove yourself from the question queue you may Press Star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Sameer Gupta from India Info line. Please go ahead.
Sameer Gupta
Hi sir. Good morning and thanks for taking my question. Sir. Firstly on the gross margin contraction this quarter. Now I understand that increased franchising operations will also lead to some gross margin dilution. So if you can maybe quantify the impact of that and rest if there is any gross margin contraction the reasons for that.
Gunjan Shah
Okay, so couple of factors that contributed to it. One is obviously the mix with obviously franchise and E Commerce does as I mentioned in the past does have a different implication on the way it flows through from a gross margin to EBIT level. But also the fact that we have been consciously providing value proposition while we are parallel working towards resetting the cost structures for some of our lead products. Like the kind of example that I mentioned Sameer in my presentation and that should pan out over the next. So both of these I think have contributed to the gross margin that you see.
Sameer Gupta
Got it sir. Second is a more bookkeeping question. If you can help me with the channel mix in terms of revenues for this year, Coco franchisee, multi brand distribution and E Commerce.
Gunjan Shah
Should be basically about for the year. Can I have it handy? Retail would be about 70%. Coco you will have franchise at about 7.5%. E commerce at about 10% and you will have ind at about 12 to 30%. I hope that’s.
Gunjan Shah
Yeah, Sameer.
Sameer Gupta
Great sir. I’ll come back in the giver follow up.
Gunjan Shah
Thank you.
operator
Thank you. The next question is from the line of Vidisha Sheth from Ambed Capital. Please go ahead.
Videesha Sheth
Yes, hi Morning. Thank you for the opportunity. The first question was that you ended the year with hundred odd stocks being added. So how should we think of tolling issuing momentum going forward?
Gunjan Shah
Yeah, it should be a little higher going forward. Vibisha. Right now as we look at it, obviously as I mentioned we would want to continue and we’ve largely retained, which is about an 80:20 ratio between franchise and Cocoa, but it should be a little higher next year compared to the previous year that we’ve seen.
Videesha Sheth
Got it. And if you could just help with the revenue contribution or the revenue mix from the key brands that you operate being Power, hash, puppies, comfort, etc.
Gunjan Shah
Okay, we don’t share that, but basically I would say that the second and the third largest brands after Butter, which is the largest by far, is Hushpakis and Power. They would be in the strong double digits in the range of about 20%.
Videesha Sheth
Noted, noted. And just two small clarifications from my end in slide number six. When you’re talking about the output of the zero based or, sorry of the value proposition date, I just wanted to check that is it fair to interpret that the opening price points are currently available only in 600 stores out of the entire network?
Gunjan Shah
Okay, you’re talking on slide number seven.
Videesha Sheth
Slide number. Sorry, slide number seven on the left hand side.
Gunjan Shah
Yeah, yeah, yeah. No, so this is basically trying to talk about that overall universe which is the price point that you see. So let’s say for example the core price point of 799vidisha. Right. Would be a core in let’s say for example about 800 stores. What is the opening price point for the balance? 600 stores. So from a full portfolio on the table we have an opening price point and that’s basically suitable as the opening price point in the store for let’s say about 600 stores which have been taken to 800 as part of driving the value.
Videesha Sheth
Understood. And on the slide earlier to that, which is on the zero based merchandising, the input or the output that is being showcased in this slide, that would be for all the 146 stores. Or again it would be a sample out of 146 stores.
Gunjan Shah
No, no, this is for all 146 stores.
Videesha Sheth
Got it. But I’ll get back in the case for the question. Thank you.
Gunjan Shah
Thank you.
operator
Yeah, thank you. Ladies and gentlemen, before we take the next question, we would like to remind that you may press chart and one to ask a question. The next question is from the line of core of Chugani From GM financial institution securities. Please go ahead.
Gaurav Chugani
Thank you. So my question is with regards to this, the lower other expenses this quarter. So you did, I think mentioned that there is some adjustment with regards to the license rights. So if you can explain that a bit in detail and what exactly it is.
Gunjan Shah
Yeah, I summit to do this.
Amit Aggarwal
Yeah. In terms of. See there is a change in the construct of one of our license brands and in line with the earlier like royalty, what we were paying towards the usage of the brand was being charged as a other expenses. However, in line with the India’s requirement due to change in the structuring of the agreement, the same has been led to creation of an intangible asset which you will see in the balance sheet side also. Therefore, once I create an intangible asset, the amortization and the financial liability of the same gets charged in the form of my depreciation and finance cost.
Okay. On a life basis. Yeah. So my question, would this be a recurring in nature? I mean every quarter now this. Yes, it will be a recurring. So we will have three more quarters where there will be numbers may not be comparable with reference to the previous year. Once we reach quarter 4 of 26 financial year then numbers start becoming like to like so. And that explains the reason why the other expenses have declined so much on a yoy basis. Yeah. Apart from that also there is an improvement or underlying initiatives which we have run which has led to improvement in overall other expenses.
If you look at purely from a PNN perspective, if I exclude the gross margin impact, the overall cost structure which is including your employee expenses, finance cost, depreciation and other expenses, overall the spend is marginally lower versus last year in terms of percentage of revenue it is marginally gone up by 30 basis points. Which also includes one exception, one of exceptions of about let’s say 100 basis point in terms of my employee cost. So. So you’re saying the. The employee cost is higher by 100 waips approximately this quarter. Right. Because the run rate was around 100 crores a quarter basis.
Roughly. Yeah, yeah. Okay.
Gaurav Chugani
Okay. And sir, my next question, you know is with regards to the overall demand conditions. So you know, you didn’t highlight that in the 146 tool where you have implemented the 0 there you were able to see revenue conversion volumes etc. But what about the remaining. Is it largely because of the muted demand environment? Exactly. Or there is some other issue as well because of this the overall performance has not been.
Gunjan Shah
Yeah, yeah, no. So obviously we know that the demand conditions are having tight however within that, what we see is that our ability to do two, three things right. One is provide the right kind of portfolio to consumers which they are looking for. And many of them are, that we see very clearly are looking for, you know, some kind of a relief from the overall information that they’ve seen and therefore value for money. The second piece is our ability to showcase that to the consumers in a tangible way which is, you know, are you able to showcase them in a non cluttered way? Are you able to showcase them in a full set manner which is all sizes, et cetera.
Our ability to make sure that they are served well and those are the ones which are resulting in the delta performance that we see and which we are measuring for. So which is why we are looking at it very aggressively across the various levers that I’ve talked about and hopefully that should result in the overall network getting impacted over a period of time.
Gaurav Chugani
Okay, sure. And sir, just lastly, I mean on the the float side, your floats have been really doing well for you. Has this now been expanded across all the stores or still it, you know, remains in terms of the presence limited to most of the metro towns or you know, certain kiosk that you, you were trying to open earlier.
Gunjan Shah
It is across stores. It is across stores. It is now in some stores. It is now, you know, resulting in basically some of the places where we have open kiosks etc and which is to cater to basically where we might not have the right kind of store footprint or we want to have a point of sale which shows up consumers. The floats proposition.
Gaurav Chugani
Sure. I think last time you did mention, you know that this is already crossed, I think 1 billion plus in revenues for us. Any number that you would, you know, want to put out for this brand.
Gunjan Shah
At the run rate. In fact, it cost out by a handsome margin. I’m assuming 1 billion is 100 crores. Right. So it by a handsome margin last year and this year. My sense is if this continues momentum right. We should be in the range of about 200 crores.
Gaurav Chugani
Okay sir, sure. Thanks. I will come back in a bit more questions.
Gunjan Shah
Thank you.
operator
Thank you. The next question is from the line of Ankit Kedia from Philip Capital. Please go ahead.
Ankit Kedia
So my first question is on the inventory. You know, we are introducing more of the power products in the store which could be at a higher asp. Who we are reducing inventory in the stores of other products floats. Two years back was not there. Apple was not there. You know, two years back in the store. So what kind of the inventory are we reducing in the store. So I understand the clutter getting reduced, but what are these new products replacing in the store?
Gunjan Shah
Okay, so there are two, three pivots that are there on this bankit then I mean obviously we can speak a long time because there’s a lot of effort that’s gone in.
The results are now being seen but it’s been in the works for almost about a year. So the first thing that there is, the one that I’m sure you can tangibly see is reducing the aged inventory which is basically to do with on two fronts, right? One is reacting fast on a slow moving product and the second one is to make sure that we are also ordering in the right manner right now the technology of Gluyonda that we’ve implemented some of the processes and governance that has been put in place etc. Etc. Leading up to that.
So reduction of aged inventory, which is redundant inventory does not provide proposition we don’t market it to consumers is one big lever. The second one is basically making sure that we are able to have sharpish collection for the new products. Now making a new, let’s say for example a new sandal or a new loafer just by itself does not at least we believe does not basically lead to great success or great probability of success. We need to present a collection to consumers and which is what let’s say this entire power move plus is it’s a collection of articles which are basically sitting in a certain proposition of let’s say in this case value at a certain technology, at a certain democratized price and therefore leads to pitching a story to the consumers and hopefully a good chance of success that we’ve seen.
Gunjan Shah
Or floats for that matter. Or let’s say the office sneakers from Hushpuppies. So that’s the second piece that has also forced the teams to be far more choiceful in the new products that we bring in. The last piece that’s there and which is I think the one that is going to result in a lot more work going forward is cannibalization. Is there a distinct reason for a product to be on the shelf? I mean if it’s another sandal with the same black color, if it’s the same slip on with the same brown color, are you offering enough reason for the consumer to be able to see it differently versus another one against it right on the shelf.
So are the price points enough different etc. And this is also resulted in. That is what I have talked about in ladies value proposition that one is the value proposition of opening price points, etc. But the other one is the collapse price point and then that results in questioning that. Do you need the same sandal which was at, let’s say, for example 799 and you had another one at 899. Now they might not necessarily need to coexist together. Either one of them will serve the proposition to the consumer. So these are three broad levers. Obviously results in a lot more work, but effectively that’s what is resulting in this.
Ankit Kedia
Excellent. And so in a lean demand environment, what we have seen in the last two or three quarters, if the demand doesn’t play out, do we see higher discounting? How does the supply chain at the back end work given that, you know, you’re more sharper in the inventory today?
Gunjan Shah
Yeah. So it does result in that it comes with a lag and which is what I answered to someone else who was talking about it, that we are now also making sure that the products that we are looking for value proposition, we want to reset the cost price, the volumes go up on a per article basis, my ability to amortize cost and therefore get cost down, goes up etc.
So they do result in that. What it also helps is that because you’ve got conscious, limited conscious choices of new products, your ability to react is far better. If a product is selling well in one part of the geography versus another, we move that stock out. Obviously it slows you down if you want more and more clutter in the pipeline. So yeah, it does result in much better efficiency, therefore lower intensity of markdown. So the last question is on the focus product scheme announced in the budget. We haven’t seen the hype print of that from the ministry side.
Ankit Kedia
Do you think if implemented we’ll see a lot more of the global brands come in the country or exports as opportunity will open up for you to the parent. How should we read that from a budget perspective?
Gunjan Shah
Okay. While we await the fine print in the details, as you rightly said, there is not so much of clarity. However the piece is that, you know, and I think there is already a lot of ecosystem that is developing because of BIS itself Ankit so that we can see evidence of that from a BATA perspective we are obviously consciously working on. I have mentioned this on creating a complete structure within BATA India which can basically cater to BATA globally. And that’s going to be a opportunity which will keep ramping up over a period of time. And as we see tangible progress, I will keep updating it on it.
Thank you so much. And if there is clarity on PLI or any other scheme etc, it will only provide impetus on this going forward.
Ankit Kedia
Understood? Thank you so much. Thank you.
operator
Thank you. Ladies and gentlemen, to ask a question you may press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead.
Rahul Agarwal
Hi, good morning. Thank you so much for the opportunity. Gundan, couple of questions. Firstly on the of the business. That’s the way I’m looking at it. Yeah, sure. Is this better?
Gunjan Shah
Yeah. Yeah.
Rahul Agarwal
Okay. You know I was basically looking at Bata in terms of, you know, the entire resetting of this business. You know, I understand the demand is weak but you know, you’re obviously doing more premium, some automation focus, more efficient inventory management. You know what, from an investor perspective, you know, what would you expect barter to look like, you know, three, five years out when you are tangibly measuring success of these changes? How should we look at it? Specifically talk about financial metrics. Will the barter look very different from what we’re looking at today in terms of growth margins for balance sheet terms, anything would you want to highlight? That’s the first question.
Gunjan Shah
Okay. Why don’t you complete your question in a round?
Rahul Agarwal
Sure. And second was a bit shorter term. Let’s say next two years. You talked about volume growth, consecutive quarters now better. But obviously pricing is playing its own part. The way to look at growth for barter should be more format wise. Which you discussed about retail, cocoa, e commerce, industrial and what it entails when the salience changes, what it entails for the gross margin, operating margin. Because assuming that whatever right now fourth quarter you’ve reported based on that salience and incremental growth outlook, how does this business look like you know, in let’s say two years.
How should we look at growth and ASPs and you know, different format growth, whatever you want to talk about. But related question also was on inventory and working capital. Should we expect more rationalization on inventory which you alluded that we’ll continue to work on that. So this 80 days of inventory of sales which you look at, does it further decline and where this business stabilizes over a two year time frame? Those are my questions.
Gunjan Shah
Thank you. Okay. All right. So they are pretty much linked together, Rahul. So I’ll try and see without. We don’t normally give you give forward looking commentary but however, at least from a trust area and a impetus perspective, I will try and Give you a few markers and more than happy to, you know, see whether the team can connect with you, you know, offline also. One is that we want to make sure BATA is, how do you say, the heart of our consumer base, which is basically the build class engine, is what it remains to be right.
And how do we make sure that we are relevant to that from all the initiatives that either I’m talking about it or the ones that we want to go going forward. So making sure that the product portfolio, our communication strategy, our stores, the way they look, etc. The way the experience for consumers is all connected towards this one larger objective perspective. The second piece that there is that we want over the next not only two years but also five years to make sure maybe it’s a volume driven growth trajectory overall. Right. There might be some quarters up and down, but we want to make sure it’s a volume driven revenue growth trajectory.
Gunjan Shah
The third thing is this should come with the kind of initiatives that I think we’ve already set in place, plus the larger project that I also alluded to in my presentation. It should come with a extremely aggressive objective on inventory engineering overall in general. Now, by the mercy of many assets and which some of them I have talked about, some of them we expand as we roll out this project further in terms of complexity, the agility of bringing in new range, etc. The amount of choices that we make of bringing in the new range, but presented in a coherent manner to the stores, to the consumers in the stores, et cetera.
Last but not the least, we would and our endeavor at all times and I think the amount of work that we have done on the cost efficiencies, et cetera, once we see the revenue growth trajectory, it should result into obviously operating leverage and therefore profitable growth for us.
Rahul Agarwal
So does this also mean we should, we should get back to value equal to volume growth this year or you still think there is time?
Gunjan Shah
I’ll refrain from giving a forward looking statement, but the direction is in the endeavor of what I said.
Rahul Agarwal
Okay. And based on the salience changes, more franchisees, more E Commerce growth, you know, does that entail any meaningful changes on EBITDA margin? So obviously you mentioned that.
Gunjan Shah
Yeah, that would be. Yeah, yeah. That other piece I didn’t comment on. Ideally we would like, you know, we are something that we have mentioned that we want to make sure that this multi channel model remains from a revenue pipeline perspective. And I think each one of them caters to consumer cohorts which are. Yeah, there might be overlaps but they are large enough, you know distinct consumer cohorts within that. So for example franchise allows us to have and markets which otherwise the COCO model did not have till let’s say about four years back in a very profitable way.
And that also we have fine tuned now. So we will expect all of these channels to grow. Cocoa will have its own source of growth driven by same store growth. You will have a lot of franchise more same store growth as well as basically expansion especially in the urbanizing India. A large part of our addition in the last two, three years have come through that and will continue going forward. And E commerce and multi brand outlets obviously have the distinct strategies. So it should basically largely be pronged on all these four with the focus being on retail for sure.
Rahul Agarwal
One follow up because you mentioned number of stores opening should be higher than last year. But are you guys working with some kind of numbers here or it’s more about taking it very opportunistically. Fourfour continues to expand faster than COCO and then you’ll end up doing let’s say 120 stores, something like that or is there a hard number to work around it?
Gunjan Shah
No, there is, there is, there is obviously targets and numbers that people in the teams carry on this role. There are also more importantly there are target areas that we want to be in. Right. So there is a complete census mapping. Now there’s enough and more modules of multiple data integrators that give us the right kind of, you know what we call as PTAs with a potential grade areas which is what we start as a universe. That universe by the way if I last remember is at about 600 locations. Right. So we have managed to successfully economically viable, you know, how do you say commercialize let’s say about 100 last year.
So there will be enough and more opportunities going forward.
Rahul Agarwal
Perfect. Kundan, thank you so much for answering all my questions. All the best.
Gunjan Shah
Thank you Rahul.
operator
Thank you. The next question is from the line of Rajiv Bharti from Nirvama. Please go ahead.
Rajiv Bharati
Good morning sir. Thanks for the opportunity. So I’m slide number 14, the inventory reduction part. So. And, and there you have mentioned that aged part.
Gunjan Shah
Right.
Rajiv Bharati
So is it safe to assume that this 16.5 or the delta between the two is basically largely aged in the inventory reduction?
Gunjan Shah
I can’t mathematically do it but the large part would be which is what I mentioned to another gentleman on this call sometime back which is that there are multiple levers towards this inventory. I think the one that is the Fastest and the most profitable is reduction of agent inventory which is being proactive and slow moving SKUs before it becomes aged as well as trying to be choiceful of what you bring into the stores. Right, but there are other levers that I mentioned about but my sense is yes, some mathematics will show that a large part of this would have been.
Rajiv Bharati
Aged and, and the inventory turn on that Egypt part would be let’s say 0.5 or something like that.
Gunjan Shah
No, no, it’ll be lower. Yeah, it’ll be lower. I don’t know the exact numbers I can offline get back to you but it’ll be lower.
Rajiv Bharati
What I’m implying is looks like you know close to 250 crores is the age inventory out of the 765. And I was just wondering that the inventory turn on rest of the portfolio is upwards of three, three and a half is it?
Gunjan Shah
I don’t think that conclusion is right because I don’t know how you got that 200 but aged inventory is in low single digits.
Rajiv Bharati
How I got it, this 915 -765 is, is 0.37, right?
Gunjan Shah
No, no, no, no, they are very different. That’s total inventory Rajiv. Whereas aged inventory is showing you a reduction of 37% from a starting point of X. Both of them are in low single digits as a percentage of the total inventory which you see on the left top chart.
Rajiv Bharati
And on slide number six which is your sorry, not six mind.
Gunjan Shah
I say the best in class benchmark by the way on that agent inventory is the low mid single digits so it should be in the range of about 2, 3% so less than 4%. So we still have somewhere to go while we have traversed a large part of the reduction but it’s in that range. So it’s nowhere close to the 20, 30% that you are calculating.
Rajiv Bharati
Yeah. And on the overall volume growth in the at the company level, can you specify that number? How much is that?
Gunjan Shah
We don’t share that but as I’ve mentioned in my press release also as well as my commentary the start the second quarter that we’ve seen reasonably broad based volume growth in the mid single digits would be the best.
Rajiv Bharati
Why I’m thinking is because on slide 6, right the DM portfolio is having a volume growth of 8% net of.
Gunjan Shah
Control the way we see it and net of control as you can see in the comments. Right. So it’s not necessarily an absolute, it is how they’re doing relative to the rest of the stores in the same Consumer cohort of city.
Rajiv Bharati
So I got that. The next question is in terms of let’s say this ZBM scale up, we are probably a quarter behind what we initially shot for a 250 by the end of Q4. Are you sharing what is, what is the number you targeting for let’s say 26, 27.
Gunjan Shah
That’s a. Very. Ideally we would like to see and I’ve mentioned this, yeah, we took a little while to scale up but now the scale up is happening at a pretty good pace. So my sense is that we should be covering about ideally my best guess is about 300 or so stores by June end and that should cover us. My sense is about 50% or 45% of our turnover in detail.
Rajiv Bharati
That’s all right. Thanks a lot sir.
Gunjan Shah
Thank you. Thanks.
operator
Thank you. The next question is from the line of Vikirandamani from the Mani family office. Please go ahead.
Unidentified Participant
Hi, good morning. Am I audible?
Gunjan Shah
Yes, Vikram.
Unidentified Participant
Apologies if I’m repeating the question. I.
Gunjan Shah
Now. Your voice will not work. Vikram, can you speak a little louder? You said you are repeating the question. No problem.
Unidentified Participant
Tell us, is it better? Am I audible?
Gunjan Shah
Yeah, so I just wanted to get.
Unidentified Participant
A sense of the opportunity that’s arising from the implementation. Like what implementation of BIS norm.
Gunjan Shah
Your voice is coming and going. Yeah, okay, go on, go on.
Unidentified Participant
Yeah. So the, you know, what percentage of local sales have been a few years.
Gunjan Shah
Ago and going forward, what sort of opportunity that sort of arises for local manufacturers. If you can just give throw some.
operator
Light on that please. Sorry to interrupt. Mr. Vikram, your voice is not that clear. Could you speak a bit louder?
Gunjan Shah
We heard the question, Vikram. We heard the first question.
Unidentified Participant
Yeah, thank you.
Gunjan Shah
Yeah. Okay, Vikram. So basically we are 100% localized. There was a. There was a small amount but I’d given this commentary almost about 4 or 5 quarters back when BIS was under transition. We had a seamless changeover and we had almost no hiccups except for maybe a few niche license brands which also have now been sorted now. So in fact we are looking at this as an opportunity from an exports perspective which is what I commented on earlier to another question. Does that answer your question?
Gunjan Shah
Yes, partly. What I actually wanted to gauges. The. Overall sort of supply. How much was the BI supply to India? 5%, 10% of the overall market and minuscule it wasn’t. It was less than 5% and that’s now being eliminated.
Unidentified Participant
Thank you so much. All the best.
Gunjan Shah
Yeah, thank you.
operator
Thank you. The next question is from the line of Udit Kajiwada. From Air securities, please go ahead.
Unidentified Participant
Yeah, hiding. Thank you for taking up my question. Just one clarification. You know, twice you have mentioned that the focus is on volume growth. If I look 8, 10 quarters back in the on calls, you are mentioning more of a premiumization as a strategy. Is there a shift in strategy or you know, volume growth will come and premiumization will also be with it. If you can just explain a bit on it.
Gunjan Shah
Yeah, yeah. No, so this. I think it’s the. It’s the latter of what you yourself mentioned right now. Right.
Gunjan Shah
So. And that’s what my document or my presentation also was. While you would have heard me at the start that there is a consumer cohort, a large part of our target consumers who are looking for value proposition and therefore how do we make sure that we do it not only in the short term but also in the medium term structurally is what we are working on. Some of the initiatives I have shared with you all. But simultaneously that doesn’t stop us from bringing in technology innovation brand as well as basically premiumization being given through it. And that was the example that I told you from portfolio levers.
Whether it is power, whether it is floats, whether it is Floats is a classic example. Consumers buying that kind of a footwear were buying it at a price point which was less than half of what the asp of floats is. Asp of floats is almost 2x of the parallel products that we had on offer for consumers. So that parallel does do premiumization. Similarly hpe there are a bunch of levers as well as the technology driven offerings from power. So they will continue in parallel. In short.
Unidentified Participant
Thanks. Thank you always thank you.
operator
Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Gunjan Shah
Thank you everyone for joining once again.
operator
It was lovely interacting with you as always. We look forward to connect again. Thank you on behalf of GM Financial Institution securities limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.