Honasa Consumer Ltd (NSE: HONASA) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Sumanyu Saraf — Investor Relations
Varun Alagh — Chief Executive Officer
Raman Sohi — Chief Financial Officer
Analysts:
Dhiraj Mistry — Analyst
Nitin Gupta — Analyst
Mehul Desai — Analyst
Percy Panthaki — Analyst
Mudit Minocha — Analyst
Unidentified Participant
Kimberly Paes — Analyst
Pooja Kubadia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Q3 and Nine Months FY ’25 Earnings Conference Call of Honasa Consumer Limited, hosted by JM Financial Institutional Securities Limited. [Operator Instructions] I now hand the conference over to Mr Sara from JM Financial Institutional Securities Limited. Thank you, and over to you.
Sumanyu Saraf — Investor Relations
Yeah, thank you. Good evening, everyone. On behalf of JM Financial, I welcome you all to Honasa Consumer Limited’s Q3 and 9M FY ’25 earnings conference call. From the management, we have Mr Varun, Co-Founder, Chairman and CEO of the company; Ms Gazal, Co-Founder and Chief Innovation Officer; and Mr Sohi, Chief Financial Officer. I will hand over the call to the moderator and we can start with the Q&A. Thank you.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] We’ll take our first question from the line of Diraj Mistry from Antique. Please go-ahead.
Dhiraj Mistry
Yeah, hi, sir. Good evening. So one question is on our — where are we in our journey with our inventory correction in general trade channel? And when do we see that in how many quarters it should be done and we can see normalized growth going ahead?
Varun Alagh
Hi,. Thank you for asking my question. And hello, everyone. Welcome to the quarterly call for Consumer. To answer your question, the inventory correction that is happening, it’s happening in our distribution system, not in the retail system. And you know, like we had said last-time, the majority of the direction, almost 85% plus was already taken care of in the last quarter itself. And now the journey has been to gradually scale-up the new distribution system which is something that we have been actively doing and our view is this is the quarter where we have at least been able to in top-50 cities get to the distributor sort of appointments, the Tier-1 distributors that are appointing 100% of that sort of task has been done. And we’re also seeing direct distribution scale-up starting to sort of happen in the — over the next couple of quarters, we believe that the full effect of this transition will start coming into play and the GT system should start coming back into the year.
Dhiraj Mistry
Got it. Got it. And sir, second question, if you can split your growth, I understand that the Mama is one of the brand which has been largely impacted because of this transition. What kind of growth we have witnessed in non-Mamar brandmaco and all and how is the growth rate compared to the previous quarter, whether — where other FMCG companies been reporting there has been very muted demand in the urban market and how do you see that panning out for your brands for the non-Mamar brands?
Varun Alagh
So for non-Mamar brands, the growth continue to be solid and in fact, we have talked about that in our presentation as well that the younger brands continue to grow at 30% plus growth at a YTD level and that’s — and that’s the kind of growth that we’ve seen during Q3 as well and these brands have continued to also gain on contribution more than 40% of the company’s revenue is contributed by the younger brands, right now and we are quite happy with the both the execution and scale-up of these brands.
Dhiraj Mistry
Okay. So 30% growth rate continues for non-Mamar brand during the quarter as well. Is my understanding right?
Varun Alagh
Yes.
Dhiraj Mistry
Yeah. And third and last question from my end that other FMCG companies been reporting that there has been slowdown in the urban market and it may take some couple of quarters for them to recover in terms of urban market demand coming back. Have you witnessed similar thing or anything different for your brands?
Varun Alagh
See, this is — because we are going through our internal transitions and I wouldn’t sort of comment as much on the demand scenario. And of course, the metros have been affected by both the combination of wage inflation gaps as well as because of the distribution change driven by, etc. And we are all watching that out. But I would rather not sort of attribute some of the actions that are happening internally to that partner. What we are doing is largely absolutely by design from a long-term play and fundamentals perspectiveness and we are focusing on just getting our playbooks right and if for us share gain is the big agenda and we believe that with the right fundamentals, we honor or continue doing that for years to come. Does that answer your question?
Dhiraj Mistry
Thank you.
Operator
[Operator Instructions] Next question is from the line of Nitin from MK. Please go-ahead.
Nitin Gupta
Hi, thanks for the opportunity. I just want to check like what I can see is like under Project Need, we have achieved 100% distributor appointment in top-50 cities, which is actually reshoring. Can you please help me with the distributor count now in top-50 cities? Also how many have been appointed in last one year and wanted to gauge your comment like that if the growth remains slow, do you see any risk of attrition here.
Raman Sohi
Yeah. Hi, hi, Nitin. So I think in the top-50 towns, we’ve appointed plus 150 distributors in the last six to seven months.
Varun Alagh
And Nitin, since there’s new partners and the quality of business in terms of our inventory in terms of our margin being more lucrative compared to.
Operator
I’m sorry to interrupt, sir. We lost your voice for a few minutes. Can you just repeat the answer, please?
Varun Alagh
Sure. You would like us to repeat from the beginning.
Operator
Nitin.
Nitin Gupta
So like with a new partner comment you had provided, can you start from there?
Varun Alagh
Yeah, sure. So Nitin, like mentioned in the more than 150 distribution partners who are all FMCG distributors have been appointed in these top-50 cities right now. They’ve been appointed over the — largely over the last six to nine months. So we can assume almost 80% plus of them would be new partners for us. And these partners, the ROI mechanisms that we have, right, are actually a fairly strong brand because of both the margins and now the inventory levels as well as the credit by the company. So and we are making sure that we continue to focus on scaling businesses with them quarter-on-quarter and which will give them the comfort of both growth and a strong returns on their investments. We — we are going to closely watch and ensure that these partners grow along with us.
Nitin Gupta
Thank you. Sure. Thank you. Next question is again offline channel. So I just wanted to gauge like how much of our revenue is coming from premium beauty outlets. So this is supposed to be a big channel where like we had or we have been having BAs to drive growth faster. So in this lens, I want to check how are we strategizing to drive growth and profitability in this channel and plus wanted to gauge how big is premium channel for us.
Varun Alagh
So if I understand correctly sir, by premium beauty, you largely talking about the fancy cosmetic counters?
Nitin Gupta
Yeah, the counter where we have our Beauty advisors.
Varun Alagh
Yeah. So actually, you know in GT BA channel is not a very large sort of channel for us. We only have close to you know actually less than 500 you count to be counters which exist and they contribute to less than 20% of the GT sales rest of the sales comes from — so chemist is a very important channel for us new modern trade of for us right now. And we are focusing on all of these channels. Of course, modern trade is again an important channel for us. And so the growth in action is fairly distributed across. And of course, our focus from a next three to four quarters perspective is on-top 200,000 stores in India and of which also 20,000 are far more critical from a premium skin and hair-care battle perspective. So we have — we’ll be watching and focusing on them closely in ensuring that we end-up gaining share in all of them.
Nitin Gupta
Yeah, thank you. And last question is with respect to quick commerce. So last quarter you had highlighted 4% to 5% of sales coming from quick commerce. So I just want to know like how much is the contribution now given the fast-growth happening in this channel? And by any measure, we have any market-share data, like how much of the market-share we command in the coal commerce space? Thank you.
Varun Alagh
Maybe, sir, now this is last quarter, we could say that it’s grown to about 7% to 8% of our business. It’s the fastest-growing you know channel for us as we speakness. The market-share data we have, but they’re more internally measured and account share. So largely sorry, sir, we lost your voice. Inflation. But that’s a metric that we are very closely chasing. On-market share, the data that we have is based on our internal relationships and hence it’s a non-disclosure data. We cannot share that. That said, we very closely are watching that data. And our goal is that our QuickCommerce market-share should be higher than our e-commerce market-share and that’s the vision in which we are sort of approaching.
Nitin Gupta
Thanks for the opportunity. I’ll join back-in the queue.
Operator
Thank you. We’ll take our next question from the line of Mehul Desai from JM Financial. Please go-ahead.
Mehul Desai
Yeah. Hi, sir. First question, obviously, last quarter you did mention that several initiatives will be taken as far as changing the brand strategy as far as Mamath is concerned. Any — I know it’s a short period since then, but anything that you would like to call-out as to if you have done any test marketing or any SKU changes or any initiatives that have been taken as far as-is concerned? And if any kind of results or qualitative comments that you would like to give in terms of the output that is coming from those changes.
Varun Alagh
Thanks for asking questions. That’s absolutely an area of very, very strong focus for us in Q4. And the three areas where we are sorry, executing those changes have been areas of messaging, media mix and I’m sorry, sir. These areas require you know some to sort of you know, come up with the.
Operator
We are unable to hear you? Yeah, now it is fine, sir. Please go-ahead.
Varun Alagh
I’m sorry, I’ll check with business, did you end-up missing what I was saying?
Mehul Desai
Yeah, you said about the three — I mean three, four focus area about product mix and all. And then after that we will see.
Varun Alagh
Yeah, actually that is where I was. That’s the last thing that I stated. So the three focus areas, like I said was on product messaging and media mix and we recognize these areas as well as specific actions that we need to take-in quarter three and then started work on development of newer differentiated communications started work on further improvement of our formulations to deliver live test winning chartis and as well as to design the right media mix experiments, which can only be done once the messaging, etc is ready. And all of that pre-work has been done over the last sort of 90 days and it’s only in the last couple of weeks that we have now started mounting these pilots. So very early the outcomes of the same. I think when we meet next time and if we would have more structured learnings that we will be able to share with you.
Mehul Desai
Sure. And lastly on the margin side, obviously, one of the strategy is also to increase spends obviously and increase more focused spends on and on HKUs. Do you think A&P spends will increase in coming quarters because now the pre-work is done and now maybe you will — the A&P spends might go up in coming quarters or you think this 5% EBITDA margin that we have registered in this quarter, this is the base-case. I mean, it should not go below this in case of in the coming quarters.
Varun Alagh
So maybe in Q4 specifically because we are doing a lot of experimentation and the experimentation will involve some wastages, because that’s what you’re trying to check, what does not work and what works. And so in Q4, we do expect the marketing spends to be higher and more aggressive in the — and then Q1 onwards, it will again start to normalize. And so Q4, it should be seen as a in a quarter where we will be doing slightly increased investments to ensure that we are able to learn. I mean, and in Q1 onwards, we should be sort of back to the starting.
Mehul Desai
And lastly, a bookkeeping question. Raman, what is the tax-rate that one should look for FY ’25 and FY ’26 going ahead?
Raman Sohi
Yeah. So I think this quarter we have an exception. We’ve actually taken — made a deferred tax asset of about INR5 crores, which is basically coming in from our subsidiary Fusion Cosma Cosmetics, which is basically we are — that subsidiary is actually merging with our business, but we’re expecting that to come through by April, May of next year and also given the reasonable certainty of profits on that subsidiary. So we’ll be able to set-off the accumulated losses against the future. That number has come in the quarter, but otherwise, we’ll move back to normal tax rates that you witnessed so-far in the previous quarters.
Mehul Desai
Okay. Got it. Okay. That’s it from me there. Thank you. Yeah, yeah, that answers my thank you so much and good luck for the coming quarter. Yeah, thank you.
Operator
We’ll take our next question from the line of Percy Panthaki from IIFL Securities. Please go-ahead.
Percy Panthaki
Hi, team. I’m sorry, I joined late. So apologies if this has been repeated. But can you throw some light on the Mama Hearth brand in terms of the sort of performance Y-o-Y, is it in the same ballpark as what we saw in Q2 adjusted for the one-off?
Varun Alagh
Hi,. Yes, Percy, it’s in the same ballpark, right, because no different actions were taken in Q3. This was a time when we understood and analyzed both from a consumer and our internal investment perspective, what was happening and what was going wrong. And based on which the pilots and the revised strategies have been built into Q4 and where we are testing some of those to understand what the scale and hence over the after Q4 and Q1 is when we’ll be able to sort of we believe we’ll be able to come back on a sustainable sort of trajectory based on the refined playbooks that we learned from this. So Q3 is very much similar to the expansion.
Percy Panthaki
And within the brand, again, the different channels are also at a similar level like GT, for example, was the main issue last quarter in Mamath, which saw a big decline, whereas modern trade had seen a decent growth. Online was maybe approximately flattish or something like that. So do those trends channel-wise also remain the same?
Varun Alagh
Very similar. And so I mean, online continues to be flattishness, while modern trade, we have grown in offtakes as well as in NGT continues to be the place where we decline most.
Percy Panthaki
Okay, understood. And distributors that you have, have you seen any attrition in the distributors or any of the distributors sort of have given up their distributorship or anything of that sort.
Varun Alagh
So I mean business-as-usual, right? There is no major sort of attrition impact like I was mentioning earlier and our terms of trade with our distributors, be it in terms of the credit extended or the margins is actually much better than industry, isn’t — and we are confident that as we scale this system and our partners will end-up making much better return on investments on the industry.
Percy Panthaki
Sure. And just dwving a little more deeper into this, the GT decline that we are seeing, is it a significantly higher on a primary sales basis rather than a secondary sales basis in the sense that are the distributor days coming down and that is why we are seeing this sharp decline or is it that even on a secondary sales basis, the decline is the same as the primary.
Varun Alagh
Secondary is better than primary.
Percy Panthaki
Okay, but still at a decline Y-o-Y, right.
Varun Alagh
Actually that very sort of — the problem is because project need was instituted largely from Q4 onwards, which is when the DMS implementation was rolled-out right across the system. And hence the secondary sales data and for the systems is not comparable.
Percy Panthaki
Got it. Got it. The other way, if I look at it, which is the number of distributor days that you have in the system as of December, how many — how many days is that? And is it different from what you had at September end?
Varun Alagh
It has gone down. It is now in the range of anywhere between 30 to 50 okay.
Percy Panthaki
Okay. Yeah, that’s it from me. Thank you very much.
Operator
Thank you. We’ll take our next question from the line of Modit M from M3 Investment. Please go-ahead.
Mudit Minocha
Hi, thanks for the opportunity. I wanted to understand what’s your quick commerce strategy given your earlier e-com strategy was to play long-tail and keep innovating for new products, whereas is more of a limited SKU business model where repeat purchases are the drive sales. So how are you going to play this and what’s your take on that? And correct me if I’m wrong.
Varun Alagh
If e-commerce is a more focused assortment play and that said e-commerce is also a platform where consumers are discovering new brands, right? And we have very strong and healthy relationships with our commerce partners. We still continue to strongly believe that brands are built-in the minds of consumers and purchased on our platforms and I think our focus continues to be on the consumer and using the right mediums to build our brands in their minds and on platforms, our focus is to ensure that our — our market-share continues to sort of be strong and increase the — on quick commerce as they also continue.
Mudit Minocha
Sorry to harp on the group again. Just wanted to understand if your rest of the business has grown by 30%, what exactly is the growth rate means in ballpark figure and how do you see that shaping up?
Varun Alagh
So like I mentioned, it continues to be in the same zone as H1. It’s on a decline, not a growth rate for the nine months ITD. And over the next couple of quarters, we are refining the strategy. We are very confident that we will be able to unlock the right investment allocation, media and messaging combinations in it, which will help us sort of get the brand back to sort of low-growth levels and but it will take a couple of quarters for us to sort of right.
Mudit Minocha
And continuing on previous participants question on the distributor level inventory and we — please share some qualitative colors on have — are there been reorders and the quantum of reorders from the distributor, which gives you reassurance that, yes, the secondaries are happening. And could you show some colors on reorders and repeat purchase eventually by end-customers.
Varun Alagh
I think the best indicator of end-customer demand from retail would be the Nielsen share data that we have provided. No. If you look at the Nielsen share data, I mean, we in our core categories, we continue to gain share, right now. As well as if you look at the STO, which is the sales turnover ratio, actually it is lower than the category and has further declined and which means that our stock rotation is faster than the category average and our stock pressure is lower than the category average and which is again a healthy sign from a brand perspective of course, the distributors continue to order you know on a regular basis.
Mudit Minocha
Thanks, sir. I’ll join back-in the queue. Thanks for the answers.
Operator
Thank you. [Operator Instructions] We’ll take our next question from the line of Venkat from Financials. Please go-ahead.
Unidentified Participant
Yeah. Thanks for the opportunity and a good set of numbers, at least in this challenging market for all other FMCGs. So my question is, in the last call, you mentioned that the sales organization is going to be kind of like revamped. And you just mentioned that the trials are happening and you are evaluating. So at the end of this particular, what you call execution, would we see — are we going to see some improvement in EBITDA and PBT?. And what — can you quantify those numbers?
Varun Alagh
Hi,, thanks for — hi,. Thanks for the question. So all the efforts that we are sort of doing is in — is lines with our long-term plans and we genuinely believe that these pains that we are taking are going to pay-off handsomely in the long-term and are the benefits of this, of course, will take time to show you but on channel EBITDAs, on profitability, etc., the impact of these should be fairly vast.
Unidentified Participant
Okay, great. My next question is on — I’m hearing that there was a Nielsen report recently that the rural sales have started improving. So are you seeing any improvement in sales or if we compare with urban rural sales mix, are you seeing any uptick in that or is it like flat similar to what it used to happen?
Varun Alagh
Well, unfortunately, where urban or only business largely business more than 80% of our sales comes from the top 100 cities, top 200 cities and hence we would not be able to comment on the rural route scenarios.
Unidentified Participant
Yeah, I was interested more from like e-commerce, you don’t see those pink happening actually from rural, you don’t see that demand coming, right?
Varun Alagh
Yeah, I mean what is defined as rural in SEC and NCCS, that’s actually a very deep import place the contribution from those imports for our business is very less and hence you know, I don’t think we should be sort of used as a benchmark for growth there.
Unidentified Participant
Okay, great. Thanks very much. Thanks. Thank you.
Operator
Thank you. [Operator Instructions] We’ll take our next question from the line of Agam Shah, an Individual Investor. Please go-ahead.
Unidentified Participant
Yeah. So I just missed your opening question. So majority of my questions have been answered. But just a quick maybe follow-up you might have answered. But on the distribution front, on the various strategies and whatever steps we have taken from last quarter. So where are we there? I mean, can we say you’re seeing a crude — green shoots and are we done with it? Will we be done with it or maybe another couple of quarters more?
Varun Alagh
So from a setting up of the fundamentals and is what I’d say, yes, we are there. But from a scale-up perspective is what we are seeing happening over Q4 and Q1. And so it will be right to say that it will take a couple of quarters for us to sort of get into growth mode in that channel.
Unidentified Participant
Okay. So when you say growth modes, in your presentation, when you said when the margins are from 8% down to 85%, so when this strategy, everything is over, should that time we should reach the 8% levels with operating leverage or is it fair to assume that or no?
Varun Alagh
So the timing is something that I would not be able to comment, but fair to assume that within FY ’26 itself probably toward H2, we will be able to hit those levels.
Unidentified Participant
Okay, okay. And also on the breakup, so how much is of the contribution of the INR500 crores?
Varun Alagh
Like I mentioned, younger brands are now contributing more than 40% to our business. So that’s how you can only tell.
Unidentified Participant
And what was this number Y-o-Y?
Varun Alagh
Okay. So last year this number would be in the 35% zone.
Unidentified Participant
Okay. Thanks a lot. Thank you.
Operator
Thank You. We’ll take our next question from the line of Modit M from M3 Investment. Please go-ahead.
Mudit Minocha
Hi, thanks for allowing for follow-up. I wanted to understand when your direct competitor inactive has been acquired by global giant. So would you comment about how would you see this competitive intensity shaping up? And in general, how is the competitive intensity shaping over the younger on e-com guys and because I have seen the heightened competition — competition of like INR1,000 rupees to get eight products and things like that. So could you comment on that, please.
Varun Alagh
Yeah, I firstly, I would like to congratulate minimalist founders for building a great brand that got a very good outcome with the acquisitions. In our case also, has had a phenomenal journey. In fact, is a larger, faster-growing as well as better EBITDA levels compared to sort of where an investors a good performance back with the brands. Apart from that you know, competitive intensity in this category is something which has sort of always remained high that it increases in the cycles of sort of funding and then sort of becomes more and later on. And that’s it. That’s something that we worry less about. Our focus is always-on consumer and because we generally believe that if you do the right things by consumers, they will reward you sort of for your efforts. So I think our focus continues to be on getting our consumer products proposition right?
Mudit Minocha
Yeah. Understood. Also, if you could how do you aspire to grow like in medium and long-term, say five, three, five, 10 years? What’s your aspiration? Because earlier you were tracking growth of like 2x the industry now your — so what’s your long-term aspirations? Keeping — given that you will have a certain portion of our mature brands and you’ll always keep seeding the new brands. So what’s the growth rate that you aspire maybe after fixing all the tiering issues, what’s your medium to long-term for the business and your aspiration.
Varun Alagh
Yeah. Thank you so much for asking that question. It’s rare as we get asked about our long-term goals and our long-term goals remain absolutely intact.. We are very confident that after these transitions and from figuring out the fundamental playbooks and we will get back to the industry-breeping growth that we have talked about. And we are very clear that we need to continue to remain in-market share gain mode, especially for the five core categories that we called out. In our — towards the end-of-the decade, we would like the company to be more than INR4,000 crores in revenue. We would like the company to sort of double from here on. We would also like to see Honasa being national — nationally sort of a top one or two-player in multiple of the focus categories that we have identified and so all those completely remain in that.
Mudit Minocha
So that’s helpful. Thanks. Thanks for your time. Thank you.
Operator
Thank you. [Operator Instrucions] We’ll take our next question from the line of Kimberly from Envision Capital. Please go-ahead.
Kimberly Paes
Yeah, thank you for taking my question. So just a follow-up on the margins. Like you said that next quarter, we expect some aggressive marketing spend. But just what is the longer-term outlook or aspiration on the margins say for FY ’26, ’27 once most of the playbook reinventing is sort of done.
Varun Alagh
So from a hi,, from a ’26 perspective, we believe we should be back to the ’24 levels in the — if you look at the overall year and then from ’27 onwards, we should start sort of improving on that base as we had sort of called out in the.
Kimberly Paes
This INR4,000 crore kind of aspiration — revenue aspiration that you have, do you think that we could get to a double-digit margin by then?
Varun Alagh
Yes, Kimal, that will be the — that will be the planned ambition.
Kimberly Paes
Just one more question. What would the ARR on the makeup brand Phase B right now? I think last quarter you mentioned it was around INR25 crores.
Varun Alagh
That continues to be in the same zone it’s a PMF stage brand. So we’re still sort of tweaking what part of the brand, which subcategories and what model because it’s also a lower-priced brand and hence it’s a newer play for us and newer category for us. So we are still sort of establishing a from.
Kimberly Paes
Thank you.
Operator
Thank you. We’ll take our next question from the line of Binoy from Sunidhi Securities and Finance Limited. Please go-ahead.
Unidentified Participant
Yes, sir. Thank you for the opportunity. Am I audible?
Varun Alagh
Yes, Binoy. Please speak a bit louder?
Unidentified Participant
Sure. Yeah. Thank you for the opportunity. Very good evening. Can you just help me with the sales mix between the offline and the online channels? And within the offline channel, how much does GT contribute?
Varun Alagh
So actually the mix varies for different brands and for younger brands, of course, the contribution of online is more than 90% and for, the contribution of offline is almost 45% and of which you know 40% is modern trade institutions and 60% is reserved.Okay does that answer your question?
Unidentified Participant
Yeah. I have a follow-up between the channels online as well as offline? So are you at a say EBITDA breakeven in the offline channel or is there some you know burn?
Varun Alagh
So actually our EBITDA for offline channels is actually a very good business. It’s in — it’s actually better than the online business because the allocation of digital marketing media happens largely on your online business. So it’s actually better than business.
Unidentified Participant
Okay. Thank you so much and all you.
Operator
We’ll take our next question from the line of Puja Kubadia from JM Financial. Please go-ahead. Puja. Puja, we are unable to hear you.
Pooja Kubadia
Hello. Am I audible?
Varun Alagh
Yes. Please go-ahead.
Pooja Kubadia
Yeah. Hi, thanks for taking my question. I just wanted to understand what were the margin levers for the gross margin expansion we saw this quarter? Was it driven by the transition that’s happening in the distribution channel or are there any additional levers?
Varun Alagh
So it’s actually largely the brand mix change, right, because the younger brands which are growing faster and also have a better gross margin given we are focused in skincare category. So that’s the largest lever of gross margin expansion.
Pooja Kubadia
All right. So okay. Okay. Thank you.
Operator
Thank you. We’ll take our next question from the line of Bhavia, an individual investor. Please go-ahead. Bhavia, please check if your line is on-mute mode. We have been unable to hear you there is no response from the current participant. [Operator Instructions] We’ll take our follow-up question from the line of Bin from Sunidhi Securities and Finance Limited. Please go-ahead.
Unidentified Participant
Yes, fine. Once your distribution-related changes settle down and the sales are back to normal, which is related changes, right? Where do you think the EBITDA margin in offline channel would settle?
Varun Alagh
I think better to look at some of those things from a overall company more perspective,, like we have talked about how that journey should be starting next year to the long-term journey over the next five years to get to double-digit margins. I think that’s what we would like to focus on. In general, like I mentioned, offline is better from sort of margin channel comparatively better. So growth in that should be one of the levers which will lead to improvement in overall.
Unidentified Participant
Okay. Okay, fair enough. Thanks. That’s all.
Operator
Thank you. [Operator Instructions] As there are no further questions, I now hand over the call to management for closing comments. Over to you.
Varun Alagh
Thank you so much for patiently asking questions and listening to our responses. We’ll continue to work on our fundamental levers and make sure we are able to sort of long-term vision. Thank you. Thank you so much.
Operator
[Operator Closing Remarks]