Brand Concepts Ltd (NSE: BCONCEPTS) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
Abhinav Kumar — Chief Executive Officer
Vinay Pandit — Investor Relations
Analysts:
Unidentified Participant
Naysar Parikh — Analyst
Resha Mehta — Analyst
Jatinder Agarwal — Analyst
Amit K — Analyst
Yashowardhan Agarwal — Analyst
Aman Jain — Analyst
Presentation:
Vinay Pandit — Investor Relations
Ladies and gentlemen, on behalf of Captify Consulting investor relations team I welcome you all to the Q1FY26 post earnings conference call of Brand Concepts Limited. Today on the call from the management team we have with us Mr. Abhinav Kumar, Whole Time Director and CEO, Mr. Navendu Chakravarti, COO and Mr. Manish Peshwani, VP Commercial. As a disclaimer I would like to inform all of you that this call may contain forward looking statements which may involve risk and uncertainties. Also a reminder that this call is being recorded. I would now request the management to brief us about the business and performance highlights for the quarter that went by and the plans and vision for the coming year post which we will open the floor for Q A over to you.
Abhinav Kumar — Chief Executive Officer
Hi, very good afternoon everyone and thanks for joining post running calls. See there were a lot of positive developments in the quarter. We had, you know, we signed a good brand, a marquee brand in our portfolio which had promised that we would be signing a few brands in this year. So first quarter we’ve, we’ve signed off white very very proud moment for us because it is a very marquee brand recognized for its street wear, fashion. It’s into the luxury space and that masks are foray into the luxury space. It’s a, it’s a franchisee agreement so it’s not a license agreement where we’ll be designing, developing the products.
It’s gonna be more on the import model and hence we’ll be opening stores here and obviously also distributing the brand across various channels. So that’s off white for us. It opens up a whole lot of possibilities for us from a future perspective then you know, in terms of again new brands. We launched Juicy Couture primarily the launch campaign and everything happened in, in this quarter. So we’ve launched Juicy Couture which we had signed last year and Touchwood. I’m happy to say that the response that we are getting in Juicy Couture as a brand is, is very, very encouraging.
We’re getting a very good response line both online as well as offline. Then you know we’ve also expanded our footprint so, so we’ve opened more stores, we are taking marquee locations. We also launched our first Airport store. We launched our first Airport store in Bangalore and the Bangalore Airport T1 and as recent as last weekend as in this week rather, we’ve opened Combat T2 as well. So we’ve opened a store in Combat T2. We’ve expanded our footprint in Bombay. So we also opened the Oberoi store in Bombay that also operational. So we’re securing these marquee locations, we’re getting good locations and we’ve expanded our footprint over there.
Then Q1 also marked the successful trial of, of the hard leverage manufacturing facility. So all trials were successful, even our, the lab for our quality control that also is completely functional, fully operational and we have a state of the art facility even for our quality internal quality control. So all that became operational and we’ve commenced on full fledged production in the month of July. So full fledged production has commenced though we’ve not yet reached our maximum capacity. We might take another couple of months to recharge our optimum capacity, but we’ve begun well. So and then of course reflecting on the results, I think after Covid, this is the first quarter where we showed losses and part of it was already budgeted.
We had expected the quarter to be a little slow. Looking at the overall market sentiments. So just answering on the result, I think it has been on two or three counts. One, obviously sales, taking a diplomat your and there are margin pressures as well. So and cost of operations on the count of, you know, new stores, new high ends, strengthening the talent pool, further marketing, all of this. Obviously the costs have gone up and the revenue has come down and that’s the primary reason for the losses that you see. We also experienced that in April and May.
You know, we were still sort of holding on to our pricing and you know, the pricing strategy of the competitors in the market continuing to operate at a very low price point. The price points did not sort of come back. And generally what happens is we took this call and informed everybody that we’re taking this call of not participating, getting in this. So we waited. But what happens is this entire thing had started in September 2023, right? So this September, October will be almost two years when such kind of pricing has prevailed in the market.
And you know, one and a half, two years of time is a good enough time for, for the consumers to start sort of relating to a certain price point of the product. And hence in the month of June we said we will also have to rationalize our pricing. And from June onwards we’ve rationalized our pricing, we’ve corrected certain prices in the market and we’ve started seeing an uptick. We started seeing in fact, just to share a figure that June alone contributed to more than 40% of the entire quarter sales. Right. So and we saw a jump from last year June to this year June.
So it was a positive open. So while we were de growing in April and May overall at a company level also we grew in June and I’m very happy to share that we have continued to grow even in July and hopefully we should be able to continue to grow now at a healthy pace and we should be able to sort of bounce back and overcome whatever the dip in performance that has happened in Q1. So the team remains very optimistic that we should be able to sort of annualize. We should be able to come back on on a growth trajectory.
Having said that, if I remove Trolley’s luggage per se from the picture, we also see that we’ve grown in all other categories including you know, one hero which has come out is probably backpack with manufacturing come coming as a backward integration. Our supply chain improved, our margin intake also has improved and because of which we’ve seen a very, very good jump in our backpack business in terms of the overall sales volume, both volume wise as well as value wise. Apart from that, from a channel perspective, I think it’s the traditional trade which still sort of is really under pressure.
However, all the other channels have shown a positive trend. So we’ve grown in all the other channels, right. From E Commerce to modern trade to our own stores, we’ve grown over there. So overall from June onwards, I think the trajectories have changed and I hope that we are able to, you know, sort of post good numbers from Q2 onwards. Yeah, that’s it. I think we’ll have a lot of questions so we’ll open the session for Q and A.
Questions and Answers:
operator
Thank you. Whoever wishes to ask the question, please. Raise your hand or put your request. In the chat box. We’ll take the first question from Nyser Parikh.
Naysar Parikh
Hi Abhinav. My first question is that, you know, till like you mentioned, I think till last quarter we were very adamant on pricing and we were hopeful that pricing will correct to where we are. So what do you think looking back, was it a mistake that we made? Was it a, you know, error on the error on part of judgment to say that maybe prices will correct and we didn’t bother to change our assortment to kind of match the pricing that was prevalent and now that we have to reduce the prices and we have to take a hit on the margins as well.
So how do you look at this whole situation?
Abhinav Kumar
I would say partly yes and no. Partly I would say yes, probably it was a You know, what I had expected was that such kind of pricing will not last for too long. So we were expecting that probably, you know, once, you know, players who had unsold inventory and we wanted to sort of clear out all those inventories and once that scenario sort of eases out, things will start looking better. How long can you continue on on such kind of pricing? But so partly because of that, yes, it was. I had expected that it will bounce back earlier, it didn’t matter.
Right. The consumer sentiment also remained tepid and hence it did not really help the overall cause. So partly, yes, I admit that it was, it was probably adjustment error as well. But at the same time, we also feel that, you know, like right now, once we’ve reduced our pricing, it has created a margin pressure. But now I’m very, very hopeful with my manufacturing kicking in that we’ll be able to negate these margin pressures in the very near future. Right. Once your plant is fully operational and things start happening and you start, you know, localizing your production, we should be able to offset this.
Marin Krishna. So taking this call one year back or six months back would have not been very easy for us considering the fact that we did not have our own manufacturing. You know, so now with the back of that and where we’re looking at further expanding also in terms of manufacturing, PC is, is the one that I told you about that we’ve done the successful trial and everything. We’ve already ordered a people machine also. So we sort of very soon, you know, another few months. And I’m very hopeful that you should be able to start PP manufacturing as well.
So as we are strengthening the backend, taking such calls become lot more easier.
Naysar Parikh
Right. So I mean just are we doing anything bottoms up level from design and sourcing and ensuring that we are able to fit into this pricing and still get back to our 11 12% margins. Manufacturing is one thing, but, but, but the hope with manufacturing was we’ll push our margins even up. So my point is that that added benefit of manufacturing still should come through, but other than that also shouldn’t we be doing something so that our blended margins actually get to a 14, 15% level where that we were thinking after in house manufacturing?
Abhinav Kumar
You’re absolutely right and we are working towards that. However, you know, it takes a little time. When we set up a manufacturing in house, it’s not only that you bought the machine and you have the workers and now, you know, you have the mold and you start manufacturing. There are at least 40 different components which go into A bag. Right. So setting up the entire component base, the supply chain, getting those components directly. What happened was earlier when you were going to a manufacturer, a lot of these components were sourced by those manufacturers. Right. So you never knew what kind of pricing they have, what kind of margins would they have.
So now when we are setting up the entire supply chain ourselves, for example, we’d be probably the first factory in the country to get into a direct sort of an arrangement with you know, one wheel supplier, which is Hinomoto wheels. We were the first ones to use Imamoto wheels. It’s a Japanese patented technology today. New age brands, for example, advertises, you know, moto beans a lot. So we are the first ones who now have a direct tie up with right to us. So they opened a canopy, they opened a mold for us and now those shipments are starting to come in.
So you know, to, to sum it up, yes, bottom level grounds of work is happening and you will see these, these things bearing fruit in the next six to eight months. Six, six to nine months.
Naysar Parikh
But you know, you know we’ve been hopeful for this since like two years. And every time we are hoping that next six months it’ll be different. Now versus that you look at Safari, they grew at 17% this quarter with 15% margin at a 500cr base. So I, I mean the success that we had initially, I’m just hoping that that is not, you know, coloring us or keep making us overconfident where we are not making fundamental changes which should be necessary in this environment and just being more hopeful then I don’t know. But given our base is so small and given we are adding so many brands, we are adding so many stores and after that also when we are not able to show growth, when leader is growing at 17% at a 500 crore base, I think that there is maybe something is wrong which we should kind of try and accept and find some real solution to it rather than, you know, hoping that markets will get better.
Abhinav Kumar
No, see, if you talk about Safari, one thing is very clear that you know, if you look at any sort of segment, you will realize that segment at the bottom end of the pyramid the is the biggest pie. Right. So comparing ourselves to them probably might not be the right sort of parlance. Right. You have to look at it from a price perspective. Like for example if I talk about certain other premium brands, you know, one of the largest brands in the country and they have DeGrow and they’ve De. By. By a mile. Right. And I’m not saying Something which is.
Which is not common knowledge. It’s. It’s been published, it’s been in the papers, interviews happened and all of that. Right. So considering then, if you look at our performance, I think we’ve still fared well. This is the first quarter where we sort of degr. Right. And as an. As we speak, from June onwards itself, we are back on a growth path and we are very, very, you know, I have to say a word. Hopeful. No, because I can’t say that. Okay, we will do this much. You know, we are all trying for that. But at the end of the year, I think we should be on a good growth.
Naysar Parikh
Okay, thanks. I’ll. I’ll come back in the queue.
operator
We’ll take the next question from Rea. You can ask.
Resha Mehta
Thanks. Good afternoon. So, you know, the first question is that, you know, most categories, if we see they essentially the premium end, the premium segment of, you know, different categories are growing, have been growing, you know, much faster than the mass side. Right. For most categories. While luggage is something that has bucked this trend over the last two years, especially post Covid. Right. And that’s why we see the likes of Safari, you know, they’ve probably done better versus, you know, more premium players in this space. So why is it that, you know, luggage. In luggage, you know, the premium segment has not grown unlike, you know, a lot of other categories.
Is it that, you know, we’ve not done a lot of product innovation or given reasons to consumers to upgrade or what is the problem? Because premiumization otherwise is a trend across.
Abhinav Kumar
Correct. So this is a very, very relevant question because we being in this premium segment, we keep asking ourselves these questions. See, if you look at whether it is apparel, whether it is watches, whether it is footwear, whether it is whatever, there we seeing a trend that it’s not. That mass is not growing over there. Zudio is a, is a, is a great example over there of what they’ve done. But at the same time, you know, premium end of the market, it’s. It’s sort of growing. Right. Where. So you have to understand why is the premium end of that fashion market growing? The, the acceptance of branded and the aspiration level of that branded merchandise and owning a premium brand and.
Or wearing a premium brand, that aspiration level is pretty high. Right. When it comes to luggage specifically, while we say that okay, yes, people are brand becoming brand conscious, but luggage you’re not carrying every day with you to your office, right. You’re only carrying it while. While traveling. More often than not, you check in the luggage. Right. So the acceptance of brands over there or the aspiration level of carrying a premium branded luggage is. The acceptance level is a little lower than the other categories. One day it will be probably, you know, eventually it has to, but and on top of it.
So one as it is, the acceptance level was lower on top of it. You know, suddenly with this price war, the gap between the premium and the entry was almost three folds. Right. So three years back the gap difference between various different players was to the tune of somebody being higher by 10, 15% then the next player being higher by another 15%, another 15% and we were probably at a 40% jump to our, the next, the next player. Today we suppose we had during the period of time we moved to say a 9,000 rupee average ASP.
So last year my luggage ASP was 9,000, okay, 8,700 to be precise. Now the consumer perception now is that you get a cabin luggage or you get a luggage for 15002000 rupees which two years back the average pricing was 4000 5000. Right. So 3000 extra, two and a half thousand rupees extra. You paid and you purchased. Now if you’re getting a luggage for 15002000 rupees and then you’re getting something for 9000 rupees, the price gap is so much that the consumer today, that’s the only answer that you can come across with. Okay, it’s not that I’m not saying I’m right, wrong, whatever, but my perception is that for the consumer to trade off, you know, this price gap is too huge.
Right. And, and hence considering all of this we’ve also sort of lowered our pricing taking hits and all of that. So yes, that’s where it is. At the same time I would also say that we launched a new product which is priced at almost 33,000 rupees for a set of three. Right. 32,33,000 rupees for a Set of three which is almost 11,000 rupee product. We have not reduced also the pricing over there. It was launched and surprisingly it is, it is, it features in one of our best sellers for, for last month. So really hard to pinpoint on, on one thing, Rishabh, but that would be the, the reason that I would believe why this is happening.
Resha Mehta
Yeah. You know, what has happened at the same time to let’s say you know, product innovation or you know, added new funky, attractive, appealing features. Is that something that’s a focus area for us especially with Tommy and how do we go about it like, do we have a team or how does it work here? Because see, ultimately consumers would want to premiumize if they see some added, you know, value in the product as well.
Abhinav Kumar
Yeah, for sure. And we also. So, for example, very recently we’ve launched the lightest luggage yet. Right. So it’s a very, very lightweight luggage. So we launched the lightest luggage yet. You know, we keep innovating in terms of design, in terms of consumer experiences, in terms of the inner construction, these trolleys, wheels, all of that. So while we have all that approach, there was another factor that, you know, once, once we saw that the overall market conditions were not so favorable. We had also last year, for example, we had slowed down on new product launches.
You know, looking at the predatory pricing which was being operated, we had slowed down on our product launches, which this year we’ve. And we had to, you know, again, work on a grounds of approach, tweak things here and there so that, you know, we get a better pricing. So we’ve done that. And this year, almost every month we would be having new launches, you know, so we coming up with. With a good. We have a pipeline of good. Eight new launches. Only in Tommy. In luggage. Yes.
Resha Mehta
Right. And you know, our channel salience is, you know, getting more and more skewed towards modern trade and E commerce. So where do we see this settling and what does that do to our margins?
Abhinav Kumar
See distribution, which is the traditional trade. As I said, it still continues to. Because these are small mom and pop stores. You know, we, we were sort of making a very, very good headway. But with this kind of pricing, it is very difficult for us to sort of sustain that. So I would say that that’s a channel which would continue to be a little struggling. Okay. Under pressure for the next couple of quarters. But we’ve seen a very, very good uptick when it comes to modern trade, when it comes to E commerce, our own stores.
So net net will be able to negate that entire, you know, that pressure from the other channels.
Resha Mehta
And any impact on margins overall, the margin structure gets.
Abhinav Kumar
Impacted because of the traditional trading.
Resha Mehta
Yeah, yeah, because we. Yeah, because traditional trade reducing and modern trade, E commerce, you know, increasing at an EBITDA level. Does that materially change our margin structure?
Abhinav Kumar
Yeah, it actually, you know, when it comes to E commerce, it actually betters it. You know, so anything is increasing in modern trade also would better our budget because somewhere your cost of operation in modern trade is also sort of fixed. Right. So a secondary sales growth over there is gonna better your margins. Similar Is with E Commerce it’s gonna better your margins. Distribution would from a margin perspective, I think the only factor over there would be that your sales to your fixed overheads. If your sales are not growing as much, it will create some pressure.
But from an overall perspective I don’t think it will impact so much.
Resha Mehta
Right. And you know, on the manufacturing side, so do we. So what is our sourcing for, you know the small leather goods or ladies handbags and the other products basically for all the brands like including Tommy, UCB and Juicy and you know, all these brands.
Abhinav Kumar
So small leather goods is 100 India and we have contract manufacturing facilities with various factories in India which manufacture for us. And so that is completely India. Women handbag is I would say 90, 95. It is China. Juicy for example is 100 China. We’ve got a few brands. We will be doing some programs. We’ve started doing some programs in India. But women handbag continues to be a product category segment where we sort of still rely on China.
Resha Mehta
Right. And the. Are we expecting more talent addition, headcount addition? Basically just trying to understand, you know, the employee costs that was, you know, 12 crores for this quarter. Can this be assumed to be the quarterly run rate? Of course, inflation will keep adding over a period of time, but broadly talent addition is behind us.
Abhinav Kumar
Yes. So a few people here and there, but majorly our team is in place now and I think yeah, 12 crores a quarter. I think you can safely assume that it’s gonna remain in this sort of vicinity.
Resha Mehta
This is the last one. So you know, on the marketing spend, so we were at 3, 4%, we were planning to ramp it up to 5, 6% but you know, on already subdued margins or you know, what would that do to our margins? So do we have actually enough room to kind of expand the marketing spends?
Abhinav Kumar
See we have in Q1 also we have expanded our marketing and we are seeing green shoots of marketing also Asia. So see as a, as a company I think marketing is something that I would say that you don’t have a choice of not spending over there. Right. So there are new age brands which are coming in every day. People are setting a lot of funding money to be burned and all of this ultimately creates a pressure on, on for that share of voice. So marketing is something that I think we are taking it very, very seriously.
We would continue to invest but as I said from a margin pressure we will have to negate all of this with sales, you know, with the top line growth and hence we gearing up as I Said, you know, be June or be July, we’ve done a good growth.
Resha Mehta
Just on the margins front again. So at least by the end of Q4, do we expect to touch a 10% or double digit kind of a margin or. That looks difficult for this financial year.
Abhinav Kumar
You’re talking standalone quarter or for the year?
Resha Mehta
For the year. So the Q4 exit margin. So at least Q4 exit margin, can that reach that, can that touch 10% or do you think for the full year also can we do 10% considering Q1 was 4%?
Abhinav Kumar
I think for the full year. I wouldn’t be able to comment right now. I’ll be definitely working towards it. But exit, yes, 10% for sure. Probably we should be able to hit that in Q3 itself, right? If not. Yeah.
Resha Mehta
Thank you so much. I’ll join back with you.
Abhinav Kumar
Thanks. Thank you.
operator
We’ll take the next few requests from the chat window. I request you to unmute and ask your question.
Jatinder Agarwal
Hi, Abina.
Abhinav Kumar
Hi. Hi.
Jatinder Agarwal
Okay, I have a couple of questions I may take some time. The first is of this revenue. Is it possible to share how much is just luggage and how much is all other categories?
Abhinav Kumar
Yeah. So surely is of 25, 26 is 22.29 CI. Sorry, 22.29.
Jatinder Agarwal
Okay, perfect.
Abhinav Kumar
And which is a. A 30% degrowth from last year.
Jatinder Agarwal
Okay. This is luggage, you said?
Abhinav Kumar
Yes.
Jatinder Agarwal
Okay. And this is only Tommy or this is all other. All brands included?
Abhinav Kumar
All brands included.
Jatinder Agarwal
Okay. And one thing I want to understand on unit economics, right? So now, at least for the time being, it seems like the dust has settled. Right. I last week checked Safari, whatever pack of three was available, anywhere between the range of six to eight thousand rupees. Right. And when I checked our prices, we were in the range of 14, 15,000 plus all the way to about 18 is what I could see. Right. So I’m just trying to understand unit economics from the retail price point word. So if I assume that retail margins or dealership margins at a blended basis, not category wise, is, let’s say about a third.
Right. So your realization would be, let’s say what, 10,000 then for a by. For a set of three.
Abhinav Kumar
So you’ll have to sort of for a. At a general, this thing, you’ll have to assume a 50% realization. So the mar, as you rightly said, is. Is anywhere between 32, 34, 35%. And then you have to take into account 18% GST on. On top of it.
Jatinder Agarwal
Okay. Okay, got it. Perfect. So you’re saying so the 15, 16,000 that sells then at a company level, we should have a realization of about 8,000, right?
Abhinav Kumar
Yes.
Jatinder Agarwal
And now because this moves in house, right. In terms of production, if not today, but over a period of time, let’s say 18, 24 months.
Abhinav Kumar
Yes.
Jatinder Agarwal
What should be your normalized cost of production for this that you realize? 8,000 rupees.
Abhinav Kumar
So it really depend from style to style. I can tell you that on an average, okay. We would be able to produce a three piece set, okay. From say 5000 rupees around. Okay. 5000 rupees going up to 5000. Let’s not go below 5000. I think it’ll be around 5000 with all overheads and everything taken into account. And then it can go up to 7 and a half, 8000 rupees also depending on what kind of material, what kind of endowments for your add ons you are putting on to that particular luggage.
Jatinder Agarwal
So in this business, right, the way I understand is the brand commands a huge premium. Right. And the commodity then sells at a 10, 12, 15% margin. Right. So the gross margins in your business would ideally be much higher than someone who sells the same product as a commodity business.
Abhinav Kumar
Right?
Jatinder Agarwal
Right. If that is true, then where is, where will the leakage happen? One is the leakage that you will actually pay out as royalty, which is about 10 odd percent.
Abhinav Kumar
Right. Slightly higher in case of Tommy.
Jatinder Agarwal
Perfect. Yeah. 10 12%. Would that still not compensate for your higher gross margins that you shift the production inside?
Abhinav Kumar
Yeah, it would. That’s the reason I said right now probably for say the last quarter or at best till this quarter. You know, even lowering the pricing, we might have a margin pressure. But the day, you know, as and when we move more and more products into our own manufacturing will negate this. Hence I’m pretty confident that we will negate this entire margin pressure.
Jatinder Agarwal
What I am trying to understand is now it is more like an Apples to Apples because we will. I’m not saying today, but I’m saying on a normalized basis it is more like an Apples to Apples because we will have production in house and then we are just selling it again at the store level. My retail selling price is almost 2x of someone who’s already earning a 15% margin. Right. And I pay a 10% royalty. Right. So what I’m trying to understand, theoretically your operating margin should be way beyond 10% which was the previous high that we used to have.
Right. On a normalized basis.
Abhinav Kumar
No, I think 14%, 13, 14% of a beta as well.
Unidentified Participant
Example, which is Taking say to me 15,000 which is an entry price point. 15,000. Compare 67,000 670,000 in house manufacturing and 15,000 retail price to 8,000 realization hours realization and house question is lower GP, so 15,000. So. So what is the question? Explain. I’ll be able to answer it better.
Abhinav Kumar
No, so basically earlier, right, there was a. So what you call as someone else sharing your margin, right? Because you were sourcing the product from someone else.
Jatinder Agarwal
Right. So the manufacturer is having his own margin that is sitting outside your company margins. We still posted at that time in very good year quarters, whatever, something like 13, 14% margin, correct. Now production has moved inside, right? So for my cost of production, let’s assume if I was having a gross exactly like you said on 100 rupees. If 50 is my realization, then on 50 there was some margin that I’ve left for the manufacturer. So let’s hypothetically assume that was five rupees. That five rupees has to move in house, right? Because now it is internal.
So what I’m trying to understand is why can this margin now not move in a very blue sky scenario to 18 to 20% because production has moved inside or is it because that we don’t have the scale benefits because of which we will never get to those margins.
Abhinav Kumar
So see what we are actually comparing over here are two different things. One is we’re talking about EBITDA margins, right?
Jatinder Agarwal
Yes.
Abhinav Kumar
Is a function of G GP less your operating expenses. Correct. So the product pricing you need to understand at the GP level. Okay? So at the GP level, suppose if I was making for example 50% gross margin, right? Now I have reduced my pricing by say 10%, 15% whatever. So now it’s, instead of making a 50% GP, I am probably making say a 45% GP. Okay. However, my cost of production earlier, because I was procuring from some other factory, right? So there and bringing it to my own factory, I will get a 15% sort of a benefit, right?
Jatinder Agarwal
Okay.
Abhinav Kumar
Now earlier what we were calculating is this 15% benefit, ideally in a blue sky kind of a scenario should be additional to my current margin, right?
Jatinder Agarwal
Correct.
Abhinav Kumar
Whereas in the current market scenario what has happened is because of that pricing pressure. Okay. If we have also corrected our pricing, right, for probably one quarter, you might see a 1% dip or a 10 dip in your gross margin. When it comes to the luggage business, you see a 10 dip in your gross margin. But as, and then you move most of your production in house, you gain back that 10% or 15%. So, so net net it remains same. Now over the period of time your economies of scale also comes into picture. Inflation also comes into the picture again.
Pricing going a little up. Premization also comes into the picture. So over the period of time you’ll be able to gain this back as well. This we are talking only at a gross margin level, right? Correct. Now moment we come to an EBITA level. Your operating expenses today are at a certain level where it is more like a hygiene level. Right. It’s not. We’re not over inflated cost any, any cost scenario. We are not overinflated. Right. Where we have an overinflated employee remuneration or we have a overinflated marketing. No, everything is. Is within the standard parameters. A percentage or 2. Here and there. Correct.
Jatinder Agarwal
Okay.
Abhinav Kumar
So this should pan out. The moment you are again we are back into that whole sales and growth and everything you will automatically start seeing goodness over here. Right.
Jatinder Agarwal
So okay.
Abhinav Kumar
If we are able to for example this year from a 270. If you are able to grow at annualized. If I say that if I If we cross a 20 kind for growth.
Jatinder Agarwal
Okay.
Abhinav Kumar
You know you will start seeing those kind of numbers happening in the bottom line.
Jatinder Agarwal
Perfect. I will come back in the queue. Thank you.
operator
We’ll take the next request from Amit K. Amit, you can unmute and ask.
Amit K
Am I audible? Yes. Yes. Yeah. So just is it possible if you can provide some color on the demand from the owned stores and franchisee stores how it has been in the past quarter and in the first 10 days and. And the last for July month.
Abhinav Kumar
So I think as I said see April and May were not very good months for us. But from June onwards we’ve started seeing an update. We are in fact you know, like to like also there was a healthy growth. We grew up once of 10% in terms of like to like. If I come to retail sales, for example our large format stores, Q1 as in the first quarter our secondary sales is much higher than our primary sales. You know. So that goes on to prove that you know there is a strong secondary momentum. Q2 you will fill that space up.
So we seeing a good positive uptick from June onwards and hope that it continues.
Amit K
And I mean is the same for matured stores as well as the new stores. How. How has been the demand panning out?
Abhinav Kumar
Actually see the new stores which are, which are your marquee locations. Like for example an airport. Right. It will not be right to compare Airport store with any other store. The numbers over There touch mode are, are amazing you know but it’s our first airport store. Now it’ll be worthwhile to see whether how is the Bangalore store doing and how is now the Bombay airport store doing. But if you compare an airport store to any small city store, you know the numbers will not be sort of justified.
Amit K
So I mean new store. I. I mean to say the stores which opened in the past six months to 18 months. That what I mean to say.
Abhinav Kumar
Yeah so. So the way we practice Amit is one is like to like. So any store which was operational in the same month of previous year we will track a like to like number on that. So we seen a strong momentum in the, in the past two months and it continues in August as well till now.
Amit K
And secondly on, on the production. I mean you commenced the production so how much is the utilization levels as of now and what would be the incremental margin increase we may see in this year and next year?
Abhinav Kumar
See till now we’ve come to almost a 50 to 60% sort of utilization but we commenced only in July. So basically you can support three lines over there with a. Depending on the style to style but on an average basis this particular time can give us about 25000 units a month. We’ve come to a run rate of about 14 to 15,000. But I’m. By next month we should start crossing 20,000 upward.
Amit K
It has 40k capacity, right?
Abhinav Kumar
No 25k. Okay.
Amit K
And about the margin, I mean how the margin would increase or, or in this year or next year from this.
Abhinav Kumar
So from a gross margin perspective, you know for example one of the programs that we shifted to our factory we saw almost 27, 28% betterment in, in terms of margins. You know so from another factory that we were buying and once we shifted it over here it was almost a 27% kind of a difference. So. But I wouldn’t benchmark that. I wouldn’t benchmark that. My expectation is that if we are able to get anything better than 15% it’s good. I hope I’ve answered your question. Yeah.
Amit K
And any, any store expansion plan down the line. Yes. The next one to a year. Including. The, the first store of JCU opened it.
Abhinav Kumar
Yeah. We are very, very, very strong on our retail footprint. So as I said we opening more stores and we’re very keen on opening market locations and touchwood now we are getting such kind of locations as well. We are also increasing our store size. So you know our first we. We’ve revamped our identity as an Identity backline Identity has been dream banned. So reopening our first new identity store pretty soon. By the end of this year, by the end of this month, we should open our first new identity store. And that’s going to be almost a 1200, 1300, 1200 square feet carpet kind of a store there.
As typically our store sizes till date has been around 500, 600 in that kind of price point, that kind of store size. So this is Gonadiya, 1200 square feet. We are also looking at opening one flagship store this year which will be near around 2,000 square feet kind of a store. So we didn’t want to double down on that because the overall experiential kind of sale which happens over there, it’s, it’s giving us that positive signals to go ahead and sort of invest into it.
Amit K
So. So in this financial year, I mean we are currently at 56 stores.
Abhinav Kumar
Right, right.
Amit K
So, so what’s the target? I mean any number if you can put.
Abhinav Kumar
I think we started the year with some 40. 41 stores. No, 43. It’s 44. 44. We started. Yeah, sorry. So we started the. So yeah, I was calculating backline. So 44 in totality. Yes, is what we started off with and I think we should be able to cross a 60 store mark. 60 between 60. 65. So attempting to open about 15 to 20 stores within this year.
Amit K
Okay, so remain at four.
Abhinav Kumar
Yes. Tommy primarily could remain at four. Probably they might add one more of.
Amit K
It only bag line and JC you would add.
Abhinav Kumar
Yes.
Amit K
Okay. Okay, thank you so much.
operator
Thank you. We’ll take the next question from Yash. Hi, A.B. g. Hi. Hi. Hello.
Yashowardhan Agarwal
Yeah, hi. Just wanted your thoughts on the industry competitiveness. If we look at 6 months number for the industry, there has been no growth. Right. And thus it is also difficult for us to grow. So what are your thoughts on it and what are the steps that we are taking to drive our sales? So if you can explain that in detail.
Abhinav Kumar
Right. See you’re right. When we talk about industry, we are generally, you know, in our this thing we are always focused more on the, on the luggage as a segment. Right. Whereas we are also there in, in other categories like small, other goods. We are now there in women handbags. If you ask me from a category perspective, I think we’ve grown overall in terms of the category. Can you show me the category? So if I look at. We’ll have a good growth happening across all the other categories. Right. And our focus also is that even if one category is probably not at Its prime right now.
That doesn’t you know, sort of stop us from growing in the other categories. Right. So if I look at for example you know our bells wallets, our small in the goods business has grown by almost 24% in Q1 alone. Right. The women handbag, it’s, it’s wrong to say it’s grown by 155 because the base itself was small. But we’re seeing a very, very strong growth over there. Right. Even in travel here. If I talk about except for luggage which there is a, there is a degrowth backpack, there is a very, very healthy growth big grown by almost more than 50% over there.
So there are, there are particular categories which have probably sort of pulled us down. There is also a fact that you know, overall so when it comes to regular business, retail business, Q1 also we’ve grown, you know, but it’s the institutional business where we sort of degrowth. So and if I can quote figures, the degrowth is almost of 10 crores. You know, so if I take that off in our retail channels we’ve grown, right? So it’s not that we are not growing now predatory pricing up corporate channels. If everybody is seeing online so then gifting then they also could want a particular pricing.
Right? So all those are factors. Yes. But having said that, you know, when it comes to our retail channels, we growing in all those channels in the future also I think, you know, we need to why we need to uplift luggage for sure. On which I noted down all the, on the points on which we are working building up grants up, getting our pricing better, being a little more competitive, increasing our spending marketing so that we are relevant to the the new age consumer. So while we are doing all of this we are focusing also on the other categories of small other goods.
How can we sort of take it to the next level? Women handbag. It is a brilliant category all across all brands. Everybody that I speak to and everybody is saying that women handbag is like surprising them. It is, it’s going really well. Touchpod. Our margins are also good over there. So we are very, very hopeful of, of you know, exploding in that category as well. If I talk about for example I had spoken about this that we are also making a shift or in our E commerce where we are going, you know, more marketplace driven.
So while our B2B business also continues to grow stronger, marketplace business has really strong sort of started taking this thing last month. July is the month that I’m quoting. We’ve done the highest ever in, in our marketplace business. So it’s really been a good, good month for us.
Yashowardhan Agarwal
Okay, sir. And the pricing that we are currently seeing in the industry, which we thought that won’t sustain to has our assumption team that this is the new norm since we have taken a price cut currently or what are your thoughts on it?
Abhinav Kumar
I think it’s the new normal now. You know, I think this is the new normal. I wouldn’t make the mistake of again saying that it’ll get corrected. I think we need to correct ourselves. This is the new normal because if there is a certain pricing which prevails for two years, then it becomes very difficult for consumer to, you know, sort of that the price perception is made. So as our friend was also saying that Safari has come to a 6,000, 8,600 set is looking like, okay, they’ve come back to their pricing. Right. Their average sale price was around 10 to 12,000 rupees.
So it’s not that suddenly from here we can again sort of jump back to that kind of a pricing. So yes, in my mind now this is the new normal.
Yashowardhan Agarwal
Okay, so since we have taken price cut and we think that this is the new normal, is it fair to assume that the burst is behind us? And since we are also looking at the seeds growing in the month of June and July is also going well, so can we assume that from here on things are going to get better?
Abhinav Kumar
Yes. 100.
Yashowardhan Agarwal
In terms of price cut, can you please quantify that how much price that we have taken on an average and how is that going to impact our margins?
Abhinav Kumar
So I think we have taken a price cut off. So for example, you know, it’s not only the price cut of existing styles. So for example, in offline generally our starting price point for a set of three was about 22 and a half thousand rupees. Right. 23, 500. Actually that was our starting price point in offline. So from only 3500 we now have models starting at 18 000. Even in the offline. Right. In terms of online, we are now available at a 14 and a half. 15. 15 and a half. We are also populating models at 19,000, 22,000.
They’re gonna take a little bit of a time to get populated, but I’m sure those kind of price points will also get populated. So this is about, you can say roughly 10 to 15, 20. In certain cases where we’ve gone down from a margin perspective. Yes, on certain existing models, definitely it will impact our margins. But as I said, we are as we speak we are moving lot of these to our own factory and the moment we have that at least that the dip will get negated. It, it might not give us additional benefit for the time being, but at least the dip will get negate.
Yashowardhan Agarwal
Got it, sir. And so in the initial remarks you talked about we are strengthening our team and that is the reason why employee costs have also increased. So is it on the manufacturing side, marketing side, designing? And what are the benefits that we’re expecting from it?
Abhinav Kumar
See, we signing new brands and new brands would also require some set of new teams. Not again to the same extent of what’s there, but some new members required. Manufacturing is as you see the new plant and everything, it’s all, all fresh. So hence costs are going towards that as well. Plus, you know, existing plant also, you know, the, the backpack division there also we’ve sort of put in a few good resources. So it’s a combined effort of, it’s a combined effect of all of this. Every new store that you build, you then have staff over there.
So it’s a, it’s ongoing process. But as I had answered in one of my previous questions, whatever the level that you see right now in this quarter, it’s gonna remain sort of flattish or remain in the same vicinity for this entire year.
Yashowardhan Agarwal
Okay, so answer. In terms of brands, we had high expectation from UC and currently also we have signed one another brand. Right. So in terms of building brands, what is the thought process that we are still open to new opportunities or now we feel that we have certain grants, we want to scale them first and later on when the opportunity will come, then we can think on it because that will also require more capital. Right. What are your thoughts on it?
Abhinav Kumar
No. So Benetton, I would say that is now contributing almost more than 10% of our overall sales. So I think we sort of happy with, with the way Benetton business is going and in fact the parent company also is giving us a lot of confidence. So Benetton, I don’t have a new listing. I have a good expectation from the brand in the future and we are going in the right direction. Aeropostale, to be honest, we’ve not been able to crack, you know, it’s not, it’s not a brand that has done well for us. The contribution and everything is also really minuscule.
So Aero Poster is something that you’re gonna take one more attempt. We’re trying to build it online. We’ve failed in Aeropostale, to be honest. We’ve not done that. But are we still trying to, not that I had. I’ve never said that it’s gonna, it’s not a heavyweight brand. So it was always a lightweight brand for us. But having said that still I think there is a lot of this thing that we need to do in our hospital. We’re trying for one more time. If the bank doesn’t work then as you know, as I said that being in licensing, the advantage is that you’re not married to one brand, you don’t break to that.
So if we have to consolidate, get out of a few brands, we’ll do that.
Yashowardhan Agarwal
Got it. But are we still looking to sign more banks or like we are happy with the current portfolio that we are having?
Abhinav Kumar
There are a couple of ones in which I had mentioned earlier also we are in advanced stages but we stop at them so there could be one or two more which might get converted and then we stop.
Yashowardhan Agarwal
Okay, sir, and sir, on the similar.
operator
I request you to join the queue again.
Yashowardhan Agarwal
Thank you. Thank you.
operator
We’ll take the next question from Amanj.
Aman Jain
Good afternoon sir. So the question is that given the acquisition of VIP Industries, what changes do you foresee in the competitive landscape and how this might affect brand concepts, limited growth strategy, brand partnerships and the channel expansion over the next 12 to 18 months?
Abhinav Kumar
I think with, you know, with VIPs acquisition and I think it’s, it’s a good news for the industry overall because now they’ll be on a path to reset the brand. They’ll be on a path to course. Correct. Right. And you know, the management going in hands of, of new age people, I think it’s going to be good for the, the overall industry and likewise for us. I, I sincerely hope that you know, VIP at one point of time was a brand to reckon with and not an entry level sort of a player. So if they start course correcting, they start correcting their sort of pricing, their imagery and everything, if they could correct that, I think it’s going to benefit all of us and we for sure are gonna be benefited one of the most.
Thank you sir.
Aman Jain
Thank you.
operator
We’ll take the follow up question from nicer Parek. Thank you.
Naysar Parikh
I just want to understand off white what is going to be our strategy especially given that the categories are also expanding. So if you can just talk about, you know, it’s in your presence you mentioned even apparel. So if you can just talk a bit about that.
Abhinav Kumar
Yes. So off white we signed as a full brand. Right? Right. From apparel to footwear to everything, all the categories and we’re going to be opening. So it’s obviously because it is a, it is a luxury brand. So it have a limited sort of this thing. But we expecting that the stores that we’re looking at opening of off white, they’re going to be very, very high throughput stores, you know, very high throughput stores. So the idea was to explore, you know, other categories as well, explore other markets as well. And I believe whenever you have to explore or experiment or whatever, you know, expand, it’s always good to sort of explore the niche category so that you’re not suddenly saddled up with, with a lot of things to be done, you know.
So off white, the way we see it, two to three years, three years down the line, five stores in the country. That’s it, that’s all about it. So it’s gonna have a limited.
Naysar Parikh
Will it be cocoa or fufo?
Abhinav Kumar
Cocos. These all would be cocos. Okay.
Naysar Parikh
And is the economics like significantly different here versus other because it’s a distribution. So just financially, how does it work? Do we book revenue? Not book revenue. Like do we just book commission?
Abhinav Kumar
So we’ve, sorry, we would be booking revenue and it’s a, it’s an import model. So we’ll be buying from the international line and selling over here. So it’s gonna be a booking of revenue in terms of, in terms of gross margins. In terms of margins, I think it’s a fairly lucrative sort of a business. So it should give us a decent sort of margin. But our contract starts from 1st of January 2026. So 26 is when, you know, beginning of 26 is when we’ll be opening our first store. As of now, the mathematics look good.
We wouldn’t sign anything where you know, the commercial is not good.
Naysar Parikh
A retail channel you mentioned. Okay, can you just mention the lfl growth in retail and you also said the traditional. You lost some 10 crores institutional. Business. So. I know there would be bulk orders. But just on the institutional side, how is this year looking and you know, if you can talk about that.
Abhinav Kumar
So I think Navendu would be able to answer this question better. Yes.
Unidentified Speaker
Okay. So this year in the, so the institutional businesses predominantly in starting from month of April, May and then it goes to the, the festive period of Diwali, the Puja and Diwali period. So we have been able to garner some good business this year again in the second quarter of the year. So which you will see the reflection of it in this class. So we have already started delivering them. So there is a, there is, there is a positive uptake from the month of July itself.
Naysar Parikh
Okay, got it. And retail LFL growth.
Abhinav Kumar
So I think till. Till July if you’ll see or if I have to answer, for example, even for Q1ebos there is a growth of almost. This is the primary numbers correct. At a primary level probably might not be exactly comparable. But yes, at a primary level. If you see we would have grown in EVO at almost a 12% kind of growth. Right. To like in terms of LFR in terms of your secondaries again if I talk about it would again be in a double digit sort of a growth that we’ve been able to achieve. And dnv of course we’ve as I said we’ve gone down.
Even in our government business we see a. We see a good growth. We’ve grown by almost 12% over there as well. So all these sectors have improved. It’s basically the two channels, the distribution and institutional where we’ve sort of seen our dip.
Naysar Parikh
Got it.
operator
And you have this manufacturer we are running over time. We got to quickly give others a chance and close the call.
Naysar Parikh
Okay, sure.
operator
We’ll take the next question quickly from Yashobhardhan. Please go ahead.
Yashowardhan Agarwal
Thanks for the opportunity. Again, the number of stores that we are opening currently is that in the Cocoa model and Coco model and how are the mature source performing?
Abhinav Kumar
So most of the marquee stores or stores which are in your high visibility area of good malls, they’re all going to be Coco stores mostly and are gonna be so hence. And the. The strategy also is to open more marquee stores rather than opening the listing. So to answer your question, I think going forward it will be more of Cocos and less of Cocos. How the stores doing? I think I’ve already answered that that we’re doing well in terms of course.
Yashowardhan Agarwal
Okay sir. And there’s the last question. Bookkeeping field. Can you please give me the revenue breakup from brand as well as category wise?
Abhinav Kumar
Sorry, your voice is not very, very clear. Hello.
Yashowardhan Agarwal
Is it. Is it better?
operator
He wants a revenue breakup brand wise and category wise.
Yashowardhan Agarwal
Yes, sir.
Abhinav Kumar
Okay. Not sure I can give it so personally but yeah, you can roughly say that from a category perspective. I think almost 60% is travel care, 35% is smaller the goods and the balance 6% is handbags.
Yashowardhan Agarwal
Got it. And possible to share on the brand side.
Abhinav Kumar
Brand side I would say Tommy is now almost at 80%. 10% is UCD and rest 10% of the other brands.
Yashowardhan Agarwal
Thank you so much. Thank you.
operator
We’ll take the next Question quickly from Abhijain. Abhi, please go ahead.
Unidentified Participant
Hi, good afternoon Mr. Hope you’re doing well.
Abhinav Kumar
Hi. All good?
Unidentified Participant
Just two questions. I know that we are running out of time. One is that given whatever I’m hearing on the call and given that the market has now shifted to a lower base of price, has your focus as a company also shifted towards introducing or focusing more on the mass brands that you already have in your portfolio as well as in the future looking to tie up with more mass or you know, that the right price range kind of brands because off late, obviously we have collaborated with a lot of premium and luxury brands. But given the market, the price scenario of the market, why are you thinking on those lines?
Abhinav Kumar
Very valid question, Nairavi. Actually we were in very advanced stages with her brand which was more a mass premium kind of a brand. But you know, somehow, you know, things did not go through completely and it is right now it looks more like that may not be going ahead with the license. And to be honest, you know, when we were discussing it internally also earlier, we all read very, very Congo that this is, this is the brand which will take it, take us to the next level and stuff like that. Whereas I’m sort of now feeling relieved, you know, because you know, this scenario is such, and I answered this earlier also that the, the pricing is now, this is the new normal, right? So you really need a very, very strong brand pull, you know, to command that kind of pricing.
For example, for us, we built it over so many years. Again, just, I don’t know if I can say it over here, but I’ll still mention I’ve never hidden anything. We are again, for example, you know, our license was coming over this thing in 2026 and we initiated the entire dialogue with them for renewal of the license as for, you know, their international listing. And now we’re talking about obviously a long term sort of license. So and by long term, I mean at least a 10 year and 4 period. So the moment you have that, then the focus is that, you know, you already have a very, very strong base with this.
You already have a Benetton in your portfolio which can cater to that mass premium pricing. And specifically now with your own manufacturing kicking in, it gives us more bite, right? We’ve already ordered for the, the PP machine which can further take the cost of goods down and help us, you know, fight a little better in that kind of a price segment. So now do we really need any more brand in this price pattern or rather we should even if we need one Brand we should take something which is higher than pumice. You know, it might not become another 500 crore retail brand but you know you’ll be ready when the market is shifting.
You’ll be ready with those kind of brands and give you a good margin uptake and play in that, in that area. So that’s been the off late contemplation internally. So I think we will not be focusing or I don’t think we’ll be going in for more mass premium brands for at least the travel yet.
Unidentified Participant
Okay, that makes sense. Just wanted to understand in terms of strategy, I mean there is this marketing strategy, right where you have a brand which is highly placed in terms of price so that when the customer walk ins he rationalizes his purchase and buys that mid price level brand. Now in terms of your own branding, so I see currently obviously you have Lucy Couture and others that will be coming in. So currently I see Tommy as the highest priced brand. When you were alluding to having a slightly premium brand than Tommy, was it to just to capture this prize? That’s this consumer psychology of you know, when he walks in he finds a higher price brand but then he settles for a Tommy because you know, he wants to rationalize his decision also.
Are you thinking on those lines or. I mean because I just want to understand how does Tommy get smack from eyeballs or how does people, how do people in this price fight kind of a scenario become comfortable with the pricing of Tommy and accepted that, you know they’re getting the best deal out of it.
Abhinav Kumar
Yeah. So again I think yes, this effect definitely works. A where you go into a store and you see a much higher price and then you look at this and you feel that, you know, let me shift to Atomy and you, you feel it’s a more value for money. So currently yes, when it comes to travel guys specifically, you know Tommy is the most expensive brand at me. Taking a brand higher with a different design sensibility would probably make sense. From two comes one. Somebody again looking at upgrading from Atomy should not go out of our portfolio.
Right. That’s number one. And number two is I think when we are here saying that we want to take Tommy as, as a market leader and even if we had to rationalize the the pricing, we’ve spoken to the brand also and given them the same this thing that earlier we used to occupy the positioning of being premium. Right. With the rest of the market shifting downwards, premium started becoming super premium or bridge to luxury. So we had to course correct and bring Tommy Back to premiums. Right. Then that is something that you will have to do.
Right. Which we’ll do over the period of time. But the pricing strategy has to be that this is premium and not premium or bridge to luxury. So. Sorry. Sorry, when are you saying something? So from that perspective, once you rationalize this pricing then you need somebody or something which is a little higher. Right. So we would fill those gaps. Right, thank you.
Unidentified Participant
That makes sense. And all the best.
Abhinav Kumar
Thanks.
operator
Thanks Abi. We’ll take the last question for the day from Ishpreet. You can go ahead.
Unidentified Participant
Just from the Benetton UCP point of view. So now it will be close to two years for you of launching Benetton.
Abhinav Kumar
Do you think is about one, one and a half years. We signed it two years back.
Unidentified Participant
Okay, but do you think or what are kind of your internal assessments for Benetton in terms of the revenue potential that it can have? Do you think it can scale up to the level of Tommy or would it remain somewhere way much lower?
Abhinav Kumar
No, I think it can, it can for sure scale up, I think. Let’s break down Beniton into three categories again, you know.
Unidentified Participant
Yeah. And also till now where is it that the maximum sales are coming from? The trolley segment for Benton or the backpack segment.
Abhinav Kumar
So, so again as I said, let’s break down Benedon in, in three aspects. All the three categories. Child G, small leather goods and women handbags. Now if I look at, you know, small leather goods across all shop stuff across all large format stores and all of that, you know, our Benetton built in wallet small leather goods is the number two brand. The number one brand is Tom. Right. So we’ve already taken that positioning over there. So small leather goods in UCB is, is really doing video right now when it comes to handbags, I would say that yes, we’ve not been so both in handbags and travel here for various different reasons, we’ve not been able to crack it forward right handbag.
I think it’s our own doings. We need to be. Get better at it. Right. Get at a better strategy in terms of pricing and the styles and designs and all of that even channel. So for a long time we were, we were hoping that, you know, modern trade would be this thing. So we downplayed the E commerce side of it. But now we are, we’re really focusing it digitally and we’re seeing the results of it. So I would say that in the next couple of quarters you will really see handbags slowly and steadily climbing up when it comes to luggage.
We started off really well. We really started off well but I think suddenly this entire pricing bit and all that sort of gave us a, you know, a midair stop. You know, so we sort of stop or we sort of pulled us down. But as I said we’ve not only corrected the pricing in Tommy, we’ve also corrected certain pricings in Beneta and hence now it’s again sort of coming back backpacks. If I see we are in fact at a good growth. So overall if I tell you from, you know a good 45% is coming from travel here, you know and belting wallet is another almost 40 odd percent.
40 to 45% and then 10% is all the rest. So I foresee that there has to be an uptick on all the three categories. So, so bullish. I’m not saying that in the next two years it’ll become as big as Tommy but I think we’ll be, we’ll be on a very, very good path.
Unidentified Participant
Right. And just lastly you had last time mentioned that there were buckets that you see of CSD having a potential of crores. Handbag 100 crores or institutional 100 crores. So do you still hold on to those buckets with similar potentials?
Abhinav Kumar
100, 100. I would still say that canvas is 100 crore bucket for US institution is 100 crore bucket for US government business is 100 crore bucket for US. So very, very clearly these are the buckets that working to and we are working towards all these buckets.
Unidentified Participant
And institutional this year also you see there could be growth or with the Q1 that we’ve seen the overall year could be A degrowth.
Abhinav Kumar
Q1 was A, was a bit of a diaper But I think Q2 will start coming back. There is a lot of other things also in institution that we’re doing. We now inside, you know, that’s the reason you also see some manpower costs and all that happening. We have a, we have a person who’s heading institution now earlier it used to be no head, you know so now we have a, a separate institutional business head, corporate sales head in our organization. He’s building a team under him we have specific distributors now which are which we one we recently appointed, the other we are about to appoint catering only to, you know, so catering to the entire institutional community.
If you see, you know these IT companies there are huge targeted but we’ve never sort of approached them correctly. So now with this entire channel being said getting onto that path so it’s just a matter of time probably few things. Might take a couple of months here and there. But be very, very true to those buckets that I had said.
Unidentified Participant
Great. Sure. Thank you so much. That’s it. From my side. All the best.
Abhinav Kumar
Thanks so much.
Vinay Pandit
Thank you. Thank you. That brings us to the end of today’s conference call. Thank you to the management team for giving us their valuable time, and thank you to all the participants. You may all disconnect now.
operator
Thank you. .