Stanley Lifestyles Ltd (NSE: STANLEY) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Unidentified Speaker
Sunil Suresh — Managing Director
Pradeep Kumar Mishra — Group Chief Financial Officer
Analysts:
Unidentified Participant
Resha Mehta — Analyst
Arvind Arora — Analyst
Nitin Gandhi — Analyst
Yug Jhaveri — Analyst
Rahil Shah — Analyst
Tanya Sahhu — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Stanley Lifestyles Limited Q3 FY25 Earnings Conference Call hosted by Invested Capital Service, India Pvt. Ltd. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bhailav Gurk from Invested Capital Service, India Pvt. Ltd. Thank you and over to you, sir.
Unidentified Speaker
Thank you. Hi, good afternoon everyone and a very warm welcome to Stainless Lifestyle Limited Q3 FY25 Earnings Call hosted by Invested Capital Service. On the call today, we are representing Stainless Lifestyle Limited, the management team comprising of Mr. Sunil Suresh, Managing Director, Ms. Shobha Sunil, Full-time Director, Mr. Pradeep Kumar Mishra, Group CFO, and Mr. Shri Krishna, CEO, Retail Division. I will hand over the call to management team to make the opening comments and then we will open the floor for questions. Please go ahead, sir.
Sunil Suresh — Managing Director
Good afternoon. My name is Sunil Suresh, Managing Director of Stainless Lifestyle Limited. Welcome to Stainless Lifestyle Limited Earnings Conference Call for the third quarter and nine months ended 31st December, 2024.
We have shared and uploaded the earnings presentation on the exchanges and we hope you have received the material. Stainless Lifestyle continued to grow growth trajectory in Q3 FY25 driven by strong performance across its COCO retail business. The company reported revenues from operation of INR1097 million, reflecting a 6.5% quarter on quarter growth and led by a 10.1% year on year increase in the COCO retail business. Despite challenges in Q2 FY25 with reduced store footfalls due to unusually heavy rainfall and subdued market conditions in key retail markets and a shift in one of our business verticals from credit to cash and carry model, the retail business grew by 6.6% year on year in nine months FY25. On the profitability front, the localization efforts have been progressing well, leading to an improvement in gross margin. The gross margin expanded to 58.1% in Q3 FY25 compared to 54.7% in Q3 FY24. EBITDA for the quarter was INR204 million with a margin of 18.6% while the fat margin expanded to 6% in Q3 FY24. Continuing the expansion strategy, the company added four new stores in Q3 FY25, two under the Stanley Levelnext brand and two under Stanley Sofas and More brand. With this, our total store count is 68 stores comprising 41 COCO stores and 27 FOFO stores.
COCO stores contributed 60% of the total revenue during Q3 FY25. Looking at the broader market, India’s economic transformation continues to create promising opportunities for the premium and luxury furniture segment. The rapid growth in luxury housing is a key driver to our demand.
Sales of apartment prices increased by 46% in Q3 FY24 and have grown nearly for the past five years. Similarly, apartment prices have also increased. This trend is particularly strong in key urban markets such as Delhi NCR, Pune.
As the handover of luxury in the coming years, Stanley Lifestyle is well positioned to cater to the growing demand in this segment. Looking ahead, Stanley Lifestyle remains committed to growth strategy and continues to be on track with its store expansion plan. While some planned store launches for FY25 have been making it challenging to secure Grade A properties at prime locations, these openings have been deferred by.
However, the company remains focused on executing its expansion pipeline while strengthening its brand positioning, constant innovation, and the product portfolio. With a strong foundation, a dedicated team, and the continued trust of our stakeholders, Stanley Lifestyle Limited is well positioned to achieve its growth objective and create lasting value. Thanking you for your attention, that concludes my remarks.
I would like to now open the floor for questions.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the touch-tone telephone.
If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use headsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
First question is from the line of Tanya Miller from Anandati Institutional Equity. Please go ahead.
Unidentified Participant
Hello. Good afternoon, sir. So, congratulations for a good set of numbers.
So, I had two questions. One was, as you mentioned, there is a rental appreciation team in Bangalore and Delhi NCR. So, how are we looking at mitigating those rising rental costs?
Are there any strategic strategies like you are thinking of for both of the regions?
Sunil Suresh
Yes. While post-COVID, there has been a surge of demand from retailers across the country, especially in grade A areas of known retail markets across all the cities. The supply of retail space has been limited, and due to that, the rental expectations are extremely high.
We have been very cautious throughout our journey, and we want to remain that way because we understand that for furniture, we require larger retail spaces, and rent quotient actually plays a big role in how we do our business. Currently, we are aware that in the same markets, there is a lot more supply that is coming up and also demand for retail spaces with the market being subdued for many, many brands. So, we are hoping to sign up.
Having said that, we have signed up various properties. In some areas, we have also enabled what is known as build-to-suit with a lower rental and longer period of agreement, and we want to move cautiously in this area.
Unidentified Participant
Okay. Understood. Thank you.
My second question was in terms of the order book. So, in the last quarter, we mentioned that currently for B2B, we have accounts with, say, Toyota, Ikea, and Vivian Soloway. So, any order book outlook that you could give us looking ahead?
Sunil Suresh
So, the B2B order book has remained flattish throughout the year. While we have ongoing discussions with Williams Sonoma, nothing has materialized issues that are happening in this point. They have put that on hold.
So, while we continue to supply to Ikea and others, we have great opportunities to also support America provided it helps us all.
Unidentified Participant
Yes, sir. Okay. Thank you.
Thank you so much.
Sunil Suresh
Thank you.
Operator
Thank you. The next question is from the line of Resha Mehta from GreenEdge Wealth Services. Please go ahead.
Resha Mehta
Yeah. Thank you. So, if you could, you know, while, you know, in the B2C segment, a 10% revenue growth is still respectable considering the muted demand environment, but if you could just talk about, you know, each of your three segments, B2B, B2C, B2B2C, and how they have done and what is your demand outlook for each of these segments, and more specifically for B2B2C, what has happened, you know, post we moved, you know, to a cash and carry model? Because I think the numbers there have not been mentioned and I would imagine considering 10 and 20% growth in the other two segments yet a top line of just growth of 2% overall, which would imply there’s been a good degrowth in B2B2C. So, basically, outlook in each of these three segments and specifically what has happened in B2B2C after the transition to cash and carry model?
Sunil Suresh
Yeah. So, we realized that the B2B2C, the credit was getting piled up. Post IPO, we decided that we have to move it to cash and carry because the collections were becoming long overdue and due to the stress in the market, the tendency is the B2B2C, the dealers normally do not make the payment and delay the payment.
From our perspective, while we have lost a significant number of, in terms of value of business, but we were able to safeguard for, you know, recoveries, long-standing 60 lakhs, we have collected almost 75 to 80% of the overdues. So, that was one of the things that impacted the sale. I think the revenue loading from B2, I mean, from credit to cash and carry in that particular vertical.
Resha Mehta
Okay. And outlook?
Sunil Suresh
Outlook is that while we have streamlined it, we have started to grade B2C and from 1st of April, we will slowly start our, probably by Q2 of next year.
Resha Mehta
So, it used to contribute around 10% of our overall revenue. So, would that be down to close to zero? I mean, would that be a fair assumption?
Sunil Suresh
No, no. It was roughly, I think, at the moment, I think, 20% of overall business. Yeah. And which is de-growing by 30% for the quarter. Yeah.
So, for nine months, it has de-grown by almost 15% overall. No, B2B2C. Yeah, 50%.
But the percentage is lower. The entire B2B2C.
Resha Mehta
Sorry, I was specifically asking for the B2B2C segment where we had this cash and carry model transition, right? De-grown by 15%. 1, 5?
15%.
Sunil Suresh
Yeah.
Resha Mehta
Okay, for nine months. And this was 10% of revenues, right?
Sunil Suresh
20% of our revenues.
Resha Mehta
So, then how much was B2B? Because I think in last call, you had mentioned this was 10 and B2B, which is basically to the auto companies and the likes of Ikea, that was 20%.
Pradeep Kumar Mishra
So, we have, see, B2B is about 20%, which is 80-20 rule. Correct. Which we’ve always been telling.
Now, under brand, which is B2C, we have B2B2C, which is another 20% of overall revenues. So, COCO is 60%. Then we have B2B2C, which is 20.
And then we have B2B, which is 20. So, it adds up to 100.
Resha Mehta
Okay, so it’s 60 plus 40, basically. Yeah, 60 plus 20 and 20. Sorry, it would be 60 plus 40, right?
Sunil Suresh
No, it’s basically 60% is COCO business, 20% is branded B2B2C, and 20% is B2B.
Resha Mehta
Right, right, right. Got it. And what would be our outlook for, you know, the growth?
Because, see, from a mid-term perspective, we have highlighted that we aspire to grow, you know, at 20% CAGR, right? But considering the, you know, muted demand environment and, you know, the stress that we are also seeing on the B2B side of business, would you want to kind of, you know, scale down your growth aspirations, at least in the short term, say, the next six months to one year kind of a time horizon? And if yes, then, you know, what would that number be?
And also at an overall level, because, you know, B2B, like you were mentioning to previous participants, that, you know, order book visibility is not there. So if 40% of your business is probably de-growing or stagnating, you know, at an aggregate level, what would be our revenue growth aspiration in the short term?
Sunil Suresh
Okay, so from a B2B perspective, though we do not have any new account visibility, we have what we can call as, you know, already given forecast for a couple of years, both from our car automotive business as well as from IKEA. So thereby, though we don’t have any new visibility that will continue to stay where it is, so it might be a flattish growth for B2B. The B2B to C, we are correcting it, and we are very sure that we will bounce back to our previous business probably by Q2 of next financial year, whereas B2C is where we are expecting good growth because we have now signed up a lot more new stores that are coming up in areas we were not present, and we hope that we will definitely deliver 20% growth as explained in the past in the coming year too, quarter on quarter, this is how we are planning.
Resha Mehta
But, you know, with the B2B remaining flat and B2B to C only kind of seeing a resurgence Q2 onwards, right? So B2C really has to grow more than 20%, you know, for us to grow at an aggregate level at 20% CAGR, so I’m not able to kind of reconcile your, you know, revenue aspirations. Anyway, I think probably I’ll take that offline.
The second question was, you know, on the gross margins front, right? So you all have mentioned that, you know, the improvement was attributed to the localization. So if you could just call out, you know, what was our aspiration here in terms of localization and where have we reached and still how much, you know, gaps we kind of need to fill in terms of localization.
And also all of this gross margin expansion was purely due to the localization effort or was it also due to some product mix change that you saw?
Sunil Suresh
I think it’s a combination of various things, but a major part of our leather purchase to be localized this year and we are on track. Also, we have mitigated the risk, which has played out good for us. And also correcting it, it’s a product mix, fixed furniture also from Q1 and Q2.
So all this is helping us. Plus, due to certain of our verticals like case goods division, achieving certain scale, we have started backward, that will give us a lot more margin.
Resha Mehta
Right, right. And so this 20% localization that we are at in terms of leather, what was that number say two years ago? And finally, where do we want to reach this?
Where do we want the 20% number to go to?
Sunil Suresh
35% was the target we are on next year.
Resha Mehta
Right, and that would be the optimum level, right?
Sunil Suresh
No, it can actually, it is a very slow and steady process because there is equipment on finished leather as well as, so the tanners are more. In the long term, I think 80% localization probably in 24 to 36 months.
Resha Mehta
Understood, understood. And I have some questions. Should I join back with you or can I continue?
Sunil Suresh
As far as we are concerned, you can.
Resha Mehta
Okay, if you could also call out what was the central sales growth that we saw for Q3 specifically. And also the last question from my side would be on the B2B opportunities, right? So we’ve been highlighting that 70% exports of furniture from China to the US.
Now with this trade war happening, are we already seeing some benefit which can come to India? And of course in India, we are a player with an integrated ecosystem. So have we started seeing that benefit?
Have we started seeing other inquiries, et cetera? If you could just comment on this B2B export opportunity.
Sunil Suresh
Sure, I will answer this in a slightly different way. We have certification on certain parts and components of furniture. So anyone importing furniture from China or anywhere else will need to declare that first impact that they are going to face.
We are also aware and in discussion with the industries ministry, and there is a most likely chance that they will implement BIS and QCO on furniture as they have done in footwear as well as in toys. In that case, we believe that manufacturers like us in India opportunity because almost 90% of our competition currently is from importers and not from other local manufacturers. So while we do have a idea and wanting to start exports to America or other countries, we believe that the opportunity domestically will be much higher.
Also the fact is in March, we have just started our pilot shipment and one container of furniture is being exported to Germany. We opened a new account in Germany and the first shipment will leave this March. So that is as far as exports are concerned.
Resha Mehta
And on SSSG, our SSG is same store sales growth is negative for the quarter. We have expanded the retail square feet and quarter two, quarter three, we really saw subdued demand that led to my SSSG being negative.
Sunil Suresh
Now that is again to articulate it correctly. Primarily the expansion has happened in cities like Bangalore where we have actually gained market share of in excess of 10% compared to last year, but then there will be a same store degrowth because of cannibalization that normally is a trend for about a year, year and a half, but actual market share has improved. Yeah.
Resha Mehta
Understood. All right. Thank you so much.
All the best.
Operator
Thank you. The next question is from the line of [Indecipherable] from Molecule Ventures. Please go ahead.
Unidentified Participant
Hi, sir. Thank you for the opportunity. Am I audible?
Sunil Suresh
Yes, you are.
Unidentified Participant
So it will be really helpful if you can provide same store sales growth across all the three format individually.
Pradeep Kumar Mishra
Sure. So again, same store sales growth across all the three formats is, you know, it’s negative, but in a lower single digit. What we see is we see market as a whole, where, you know, we try to increase the market share in the respective region of Bangalore, Bombay, Delhi, Hyderabad, Chennai.
And what we have seen is at a, at a market level, we have increased our market share, though SSG being lower on a single digit, negative. And it remains same across all the, all the three formats.
Sunil Suresh
In certain areas like Delhi, where we are not expanded, actually the same store growth is much higher, much higher. And we are, I think, compared to previous year, Delhi. So in cities where we are not expanded, the same store growth is much higher.
Whereas in cities where we have expanded, for example, in Bangalore, it is definitely slightly lower in single digit, but that is the normal trend we have seen over the year. And they even out in a little bit of time, but overall market share has increased.
Unidentified Participant
So, sir, can you just provide a reason that, as we see from the past two years, that is FY23, we added 14 stores. In FY24, we added 10 more stores. We are expanding rapidly.
So why our growth has remained flat across, as we are expanding. So can you help us understand what is the scenario right now and why the same store sales growth is negative in the region while we are expanding there?
Sunil Suresh
Sure. To, to our best of business sales. So, it takes the time.
Usually, so when we keep expanding enough, what happens is, Okay, so got it.
Unidentified Participant
So as you are telling, like in 2021, in 2022, the stores you opened are now near breakeven or are giving positive SSSGR. But the stores which we opened in 23, 24, due to the fact that they are not, you know, matured right now. So as the overall same store sales growth is negative right now.
Sunil Suresh
Correct. Correct.
Unidentified Participant
So at what period or what time you are expecting them to be positive and overall positive V stores also along with those contributing 2122.
Sunil Suresh
Sure. As we continue to expand now, carefully, we believe that in the next three years almost 80% of our stores would have come to maturity levels. At this point in time, less than 50% of stores are in the maturity level. And as we keep going forward, the older stores will come to maturity level and we will buck the trend then.
Okay, market share. But as you rightly said there will be some same store growth discrepancy. And that will even out eventually as the stores mature.
Unidentified Participant
Okay sir, got it. And the next question is regarding the expansion. So if we see the Cocoa stores have grown grown 10% this quarter. B2B despite the uncertainty has shown an amazing growth of 21%. So are we facing muted growth on blended basis because of four stores right now, the 27 stores which we have currently or is there any other another reason for the overall growth?
Pradeep Kumar Mishra
So because of the B2B2C, for the quarter.
Unidentified Participant
Okay.
Pradeep Kumar Mishra
We changed from cash to, credit to cash. Thereby, that segment of the business has, has been grown by 27% in this quarter.
Unidentified Participant
So, sir, I’m not able to understand that if 60% of the revenues coming from Coco, that is retail, retail outlet, and that is growing by how much are in this quarter?
Pradeep Kumar Mishra
Approximately 10%. And say another 20% is B2B, which is growing at 21%.
Unidentified Participant
Right. So as, so 80% of the revenues coming from these two segments, and if they are going 10 and in double digit, right? So how the blended revenue growth is only 2%.
Pradeep Kumar Mishra
Because the third leg has de-grown by 30%, 27%.
Unidentified Participant
Okay. So because of only that reason, the overall revenue growth is negative, or single, no single digit, sorry.
Pradeep Kumar Mishra
Yes. So the B2B2C is also brand play. Yeah. Branded, branded B2B2C.
Unidentified Participant
Okay.
Pradeep Kumar Mishra
Has seen some disruption because of credit issues, and hence we have scaled down. And that is de-grown by 27%, and hence taking overall growth to 2%.
Unidentified Participant
Okay. So you are telling that by Q2, FY26, B2B2C will also be, you know, reviving and the overall growth would be showing very good results post that.
Pradeep Kumar Mishra
As of now, we have, we have cleared all the old issues of credit. And now we are, like what you said, we are assessing the credit worthiness, and then we will start that cycle with a more measured way going forward.
Unidentified Participant
Okay, sir. And some, just last couple of questions. First, regarding the inventory handover. So like, like from one to two quarters, you are saying that we are seeing significant delay in inventory handovers from the developer side. So are you seeing any improvement from that side? And how you sense your growth going ahead regarding this issue?
Sunil Suresh
So there is, but not a placement of the —
Unidentified Participant
Right
Sunil Suresh
We are aware that, you know, this inventory is to start kicking in. And, you know, we are very bullish about the next couple of years coming forward because there is a lot of already sold inventory yet to come to the market.
Unidentified Participant
Okay, got it. So you are expecting the revival from next year, FY26?
Sunil Suresh
Yeah. Yeah.
Unidentified Participant
Okay, sure. Thank you.
Sunil Suresh
Thank you.
Operator
Thank you. Ladies and gentlemen. In order to ensure that management is able to address questions from all the participants in the conference, please limit your question to two questions or participants, do you have a follow up question? We request you to rejoin the queue. The next question is from the line of Shubham Binswar from Convince Capital. Please go ahead.
Unidentified Participant
Yeah, so sir, I want to know specifically about the Cocoa and the Fofo stores, right? And so I want to know how the Fofo stores are operated in the sense that are they decentralized? I mean do we have individual people handling their own marketing, handling their own, how they manage the footfalls, the store design, or is it something where we have all the control? We have a very high degree of control over the stores, over the staff. Because what I’ve usually noticed is that in stores, people there is a lack of control and because of which the unit economic doesn’t fit. Right. And then it doesn’t work. So are we facing these problems in our popo stores or how do we look at this problem? So that’s my first question.
Sunil Suresh
Okay, so in certain markets we have our legacy partners who have been present. Going forward we are also looking at stronger partners where we can give a complete state. For example in Kerala and in Gujarat we have demonstrated that entire state we have given to a single party so that he is able to open all our different formats of stores in the different cities of the state. While the fourfo model is always plagued with underselling or discounting, we try to keep a maximum control by ensuring that we need to know the end customer’s name and details. So part of our new Salesforce implementation which we have just done is that unless they are giving us the details of the end customer, we are not going to back up them for with the warranties. So controls have been putting, we have been putting these controls from our standpoint, the entire business is a cash and carry. We normally do not give any credit whatsoever. We sign up with an MoU of 10 lakh rupees just before engaging. Then we press our people to go to the markets.
Look for the location. We are very specific about location. So in certain markets, going forward, then we press our people to go to location and catchment area. In many cases where we feel that the markets are not ready, we offer our second.
So that is how we are able to control. We have enough and we have certain requirements where the franchisee has to be fully involved and it has to be. There are a lot of cases where real estate people who have invested in buildings want to take up the franchisee.
We do not give it to such people. Every year we conduct two events in the factory. We conduct events for almost two days each time. All the new products, all the franchisees will be here in Bangalore and we completely train them with our product.
Unidentified Participant
Right sir? That, that sounds great, sir. Yeah. And so sir, how is our, the revenue sharing model? I mean how does the unit economics work here? Like so between the franchisee and us, like what does the upfront capital that the franchisee bring brings and how do, can you give some, can you shed some more light on it?
Sunil Suresh
Depending on the three different models, for example for the sofas and more, the investment will be about roughly one to one and a half crores. So Stanley Boating is again one and a half to two crores. Stanley LevelNext is about four to five crores. Depending on the market. The franchisee must have the credit worthiness to bring the entire money. We normally give him between 40 to 50% margin. There is an element of discounting allowed. But normally most of our successful franchisees have broken even and got ROI within 24 to 30 months.
Unidentified Participant
Right, that’s one final question, sir. We have a different kind of a customer segment. But what is your view on furniture rental companies? And I mean so would you, in the future, if you ever consider to go towards the tier two, tier three cities, would you go the furniture rental way or would you consider even going towards those cities? I mean, how are you looking at this market? And yeah, that’s my final question, sir.
Sunil Suresh
So for us, basically in the three segments where we are playing are actually much higher than people wanting to hire furniture. At this point in time, most of the customer, our customers are what you call as in the segment where they normally have enough, what you call budget for doing their homes. So at this point in time I do not believe that we have an opportunity or we are looking at anything to do with furniture rentals, but we never know. As trends change in the future, we might get into it. But this point in time we have people who are very conscious about and proud about their homes and we would like to continue to cater to them.
Unidentified Participant
Yeah, thank you sir. That answers my questions. All the best for the future.
Sunil Suresh
Thank you very much.
Operator
Thank you. The next question is from the line of Arvind Arora from Enam Capital. Please go ahead.
Arvind Arora
Hi, good evening sir. Good evening. So my question is mainly regarding on this operating margin. So I can see like there is an increase of 400bps approx. So is it due to this hike of 5% that we have taken in quarter two?
Pradeep Kumar Mishra
Gross margin increasement is mainly because like what we explained earlier localization effort which has really helped in gross margin improvement and further saving from the dollar fluctuation. So it is all internal efforts which has helped us increase the gross margins.
Arvind Arora
Okay so there was some notification on BSE side where we commented that we will increase our 5% like sales price by 5% in quarter two. So was that taken out or like — Price increase you mean to say? Yeah, sales price yes.
Pradeep Kumar Mishra
So there was a. There was a small price increase but that was again to offset the cost inflation which happened. But then you know that really gets passed on. But a major portion is the localization of critical raw materials that has happened and that has really getting translated into the bottom line.
Arvind Arora
Okay. Okay. And you mentioned also we are planning to import or planning to purchase a machinery so that we can use that raw material since there is a waiver of import duty. So how we are funding this like this Capex like internal accruals or is there any like fundraise or something like that?
Pradeep Kumar Mishra
What is plan for that For Capex?
Arvind Arora
Yes,
Pradeep Kumar Mishra
I mean all the manufacturing capex I think this year we had invested in you know PVD machine which is a coating machine which is gives a high superior and very good coating product on our product so that we had completed this year and I think next year also we might do some incremental capex but that won’t be very heavy. We will do it from an internal accruals.
Arvind Arora
Can you please specify the quantum of this capex
Pradeep Kumar Mishra
Say max 5 to 7 crores for next year manufacturing capex
Arvind Arora
Then there would be a good roi Correct due to this.
Pradeep Kumar Mishra
Yes. So our normally what we do is initially we do not put the machinery throughout our journey. We wait for the scale to come and when we realize the ROA is between 24 and 36 months then is when we actually backward integrate.
Arvind Arora
Nice. So answer what is our utilization of this manufacturing facility that you can see dignity and electronic city.
Pradeep Kumar Mishra
What utilization?
Arvind Arora
Factory utilization.
Sunil Suresh
Currently it’s at about 70% utilization.
Arvind Arora
So sir if our demand increases like as we are saying we are we want to be like 1000 crore company in next three to four years. Is there any requirement to like there is Capex or something like that for manufacturing facilities since we are already operating at 70%
Sunil Suresh
At this point. Actually that is coming from one shift basis we can increase it to almost two shifts at least if not three. And secondly if we need to expand maybe we need to relocate our raw material warehouse and milk the asset much higher. I think we are quite comfortable till at least about 800 crores as we see it in today’s run rate.
Arvind Arora
Okay. Okay, very nice. So if I put all the pegs together then the operating margin will improve drastically, correct?
Sunil Suresh
Yes, that’s the idea. And with scale we are also expecting lot of benefits in terms of cost saving of from purchase raw material. And our target remains very clear that we would like to be a thousand crore company with a 15% PAT in the next 902,000 days. That’s our target.
Arvind Arora
And sir what is update on like this China plus strategy like and is there any benefit due to this budget or government incentive to us?
Sunil Suresh
Sorry, sorry, can you repeat that again?
Arvind Arora
So I was asking like there was lots of talk on China plus strategy and then you also pointed out last in the last funding call that there are lots of talks what’s going on? Company want to like companies discussing with us and then like on B2B business or something like that. So is it like on hold due to this US tariff right now or is there any.
Sunil Suresh
No, no that is. That is a China plus one or China plus two strategy is already started by large importers in US and and Europe also technically and Vietnam, India, Malaysia have been identified for furniture exports. The thing is that while we had already started our negotiations and discussions with William Sonoma group and other groups from. The US because of the uncertainty today due to Trump and the tariff, it is on hold. Once we get some amount of clarity, we can restart that exercise. Today we are not very clear. So they have actually put it on hold till there is more clarity on the tariffs that Trump is, you know, kind of implementing in the US today.
Arvind Arora
And you are saying tentative, like we will get more clarity in quarter one of FY26, correct?
Sunil Suresh
We are hoping. We are hoping and we should have more clarity. We have already started our first export to Germany. First container is leaving next month in March. So that is the pilots have already started to Europe. But from America we are still awaiting, you know, clarity on the tariff bit.
Arvind Arora
So sir, like if I see at a conservative, conservative level also this US Tariff and other things, even if this goes in negative, still we do not have much impact other than this B2B business.
Sunil Suresh
You’re right. At this point in time, yes. We are expecting, you know, some new business coming in because of inventory handovers which I think has been our main impact throughout this year. We’re hoping once the sold inventory comes to market we will see a better surge in demand for us. There has been a market, subdued market condition, but I think we have been resilient in managing our business quite well.
Arvind Arora
Okay, okay. Okay sir, that’s all from my side. All the best. Thank you for answering my question. Thank you sir.
Operator
Thank you. A reminder to all participants, you may press star and one to ask question. The next question is from the line of Nitin Gandhi from I know Quiz advisors. Please go ahead.
Nitin Gandhi
Hi, thanks for taking my question. I have basically two question. How is the response to your recent brand income sale half page ads appearing for 50 lakhs deal? How is it shaping up and how many customers you are getting inquiries? How are they? If you can share some thoughts on that and
Sunil Suresh
Sure. As a matter of practice for almost five, seven years now we normally go on sale twice a year. We have something known as a season sale between September and October and we have an off season sale between Feb and March. September, October sale, season sale was slightly, I would say subdued. We did not get the desired results. We have just started our off season sale and it’s a bit early for us to comment on it but we feel confident that with the current order book we started picking up. Up orders later in December and we started the year with a much better order book compared to last year. And we feel secured for this year number. So that is how we are positioned today. We will be in a better position as we as the sale campaign goes on for a couple of weeks at least.
Nitin Gandhi
No, just I was trying to understand is it city specifics where you have the stores and each city wise, what’s the target like 200, 500,000 if you can share those kind of number. I was just trying to correlate those data with home registrations for above 1 crore or about 3 crore depending upon the city registrations happening and trying to assess work out some model to. So if you can share some data.
Sunil Suresh
We follow Rara quite diligently and at this point in time in terms of our internal workings we believe that we have the desired expansion in our home market Bangalore. And you know we are able to cater to a larger inventory handover in our city. While Mumbai we still continue to face a challenge in terms of real estate. We continue our search for real estate and we are definitely going to increase our footprint in all other cities and do exactly what we have done in Bangalore. Have what you call as a the hub and spoke model and increase our business. So in fact this year when you look at it compared to previous year up till now our marketing spend has actually reduced compared to last year. But we have a budget and equity. We will expand our marketing if needed as we go forward. So that is how we manage our business at this point in time.
Nitin Gandhi
Thanks. Maybe I’ll be one of the customer from Mumbai. All the best.
Sunil Suresh
Please give me your number. I’ll address you directly. Sir. Thank you.
Nitin Gandhi
Thank you. My card is with Mrs. I had met her in the IPO. Mate.
Sunil Suresh
Sure. Definitely. Thank you.
Operator
Thank you. The next question is from the line of Yug Jhaveri from Molecule Ventures. Please go ahead.
Yug Jhaveri
Hi sir. Thanks once again. Just two questions. First is if you can provide a pre index EBITDA margin for the this quarter also and for full year FY23 and FY24 if available.
Pradeep Kumar Mishra
3 index EBITDA margin, right?
Yug Jhaveri
Yes,
Pradeep Kumar Mishra
I got one. Pre index for the quarter is 9.4% for this quarter.
Yug Jhaveri
This quarter.
Pradeep Kumar Mishra
Yeah.
Yug Jhaveri
9.4% for this quarter if available for FY23 and 24.
Pradeep Kumar Mishra
FY23?
Yug Jhaveri
3 and 24.
Pradeep Kumar Mishra
FY23 full year.
Yug Jhaveri
Yes.
Pradeep Kumar Mishra
Is about 13%.
Yug Jhaveri
13% and FY24.
Pradeep Kumar Mishra
About 12%.
Yug Jhaveri
Okay, thanks a lot. Last question regarding the agreement. So I just wanted to get some clarity on a couple of agreements related to the trademark which you made. The first agreement was regarding the 2015 year. 2015 with Stanley Furniture Company. I think it is based in US so it restricts the standalone use of Stanley name. The official sources doesn’t provide much detail on this. So if you could help me understand the background of the deal and with whom you made the agreement. If I’m wrong.
Pradeep Kumar Mishra
Stanley Furniture. This. No. Stanley Tools and Stanley. Stanley Furniture. We don’t have any challenges. We have challenges. We had challenges with Stanley Tools. So they restricted us from refraining from using a standalone Stanley. So all our three brands are Stanley level. Next. Stanley Boutique and Stanley Sofas and more.
Sunil Suresh
Yes. Yes. Right. So that was the whole agreement. So you cannot use standalone name. Right. In 2015. We cannot use. We cannot use the. The same tools or whatever they are using. That was the agreement. I think this is about 10 years ago. Yes, 10, 12 years ago. Yeah. Okay. And we can. We can add a name to Stanley in whatever other businesses we are doing and continue with Stanley with adjacent name.
Yug Jhaveri
Okay. Okay, got it. And the second was about the recent 2023 transaction. So where the trademark and copyright were sold to the company for 37.5 crore. So does it include all the trademarks and copyrights which were held with promoters and if there is a provision and also there is a prov allowing promoter to register the Stanley name for other businesses not in which not companies involved given a notice period. So it would be really helpful if you could share the thinking behind this clause also.
Sunil Suresh
Yes. So all the. All the trademark and products that the company is engaged in in the furniture and living space transferred to the company in the personal name. There was some real estate and some other recreation or venture, hospitality venture and that has got retained by the promoter himself that is not belong to the company or operation. So that have not got transferred.
Yug Jhaveri
Okay, got it sir. Thank you so much.
Sunil Suresh
Thank you.
Operator
Thank you. The next question is from the line of Rahil Shah from Crown Capital. Please go ahead.
Rahil Shah
Hi sir, good evening. Can you hear me?
Sunil Suresh
Yes, good evening.
Rahil Shah
Yes, hi sir. Just one question regarding the EBITDA margins which are currently at this 19% or so levels, how sustainable are these for the next few quarters and do you expect any improvement there?
Pradeep Kumar Mishra
So see this has a direct impact on how our company owned stores perform because the bigger store operating expense and everything is linked to our retail performance. And we’ve seen quarter three onwards a very good turnaround in the retail performance in quarter three. So we expect there to be a continuation of this growth momentum while gross margins have expanded. We see that a significant part of this gross margin expansion at a healthy revenue growth should start getting accrued to the EBITDA numbers.
Rahil Shah
Okay, okay. So but like overall any kind of range like you think you can always, you know, be within in terms of EBITDA margins,
Pradeep Kumar Mishra
A more sustained and a more, you know, for all the investments that we are doing and for that to pay off properly, I think EBITDA margin of somewhere about 2022 is what we should be aiming at. But you know, because new stores are taking little longer to break even and you know, it takes little longer gestation period, it’s little subdued now, otherwise it should really show a much healthy EBITDA numbers.
Rahil Shah
This 20 to 22% will take a while, right, for you to reach a sustainable level.
Pradeep Kumar Mishra
Yeah. In about you know, two quarters or you know, middle of next year. And okay.
Sunil Suresh
It’s possible as the stores which we open start maturing, this equation is going to change and we are expecting to hit around 20, 22% by mid of next year.
Rahil Shah
Okay, perfect. Thank you. Thank you so much and all the best.
Sunil Suresh
Thank you.
Operator
Thank you. The next question is from the line of Tanya from Anand Rathi Institutional Equities. Please go, go ahead.
Tanya Sahhu
Hi, thank you for joining me back again. So I had two questions. One was if you could give us a revenue contribution among the different store formats. So we have the contribution for Coco and Coco. But if I could get for Stanley Boutique so far then never next.
Pradeep Kumar Mishra
Yeah, so the trend has been the same. Stanley Boutique has come down little.
Sunil Suresh
So basically the Trend has remained 33% for the past couple of years since we started the three formats. But currently since Stanley Boutique is going through a complete. Stanley Boutique is the oldest format which is almost 15 year old and now we are changing that to a completely new format. The first pilot store started in Anniversant, not anipasant in Lower Parel, Mumbai. The second one is going through a complete facelift in Bangalore and that has come down a little bit. We will do the required correction within this year of renovation. Once that is done, our desire is to make sure that all the three formats continue to give us an equal. What you call as a contribution. Contribution.
Pradeep Kumar Mishra
Okay. Okay. Right now level next, which is our luxury range for nine months. That is a highest. That’s the highest share at almost like more than inching close to 50%.
Tanya Sahhu
Okay, okay. And my second question was for. I was looking at the revenue breakup among the product category. So currently if we see on a nine month basis, we have beds and mattresses at 4%. So going forward, do we see this increasing or do we see the contribution increasing? Or like what is as a standalone product or what is the outlook? We believe that when we look at the international trends and understand what happens in companies like Ikea or other big global players, the tendency is that the living room furniture, which is primarily sofa, always contributes roughly around 50%. The rest 50% contribution comes from case goods and bedroom furniture. In our business right now, the product mix of bedroom furniture is a bit low. Case goods, we have definitely improved. I think compared to last year. Our case good contribution has significantly increased. What is the case? We’ll tell you. Yeah, that is significantly improved because we set up a new facility and started the case goods which are basically coffee tables, dining tables, dining chair, 11 to 16%. It has jumped from 11 to 16%. Bed and bedroom furniture also. Now we are actually innovating and coming up with a new catalog. We are hoping that that will also significantly grow. So we constantly keep our eyes on the average ticket size of the customer. That is what we always plan to see how we can increase our selling to the same customer. And that is what gives us the same store growth also. Okay. Okay, thank you.
Sunil Suresh
Thank you. Any other questions?
Pradeep Kumar Mishra
It. Hello, are we online?
Operator
Hello. Yes sir. A reminder to all participants, you may press star and one to ask questions. The next question is from the line of Resha Mehta from GreenEdge Wealth. Please go ahead.
Resha Mehta
Yeah. Thank you for the follow up. This is the last one because of you know moving to the cash and carry model in the B2B2C segment have what kind of improvement have we seen in the receivable days?
Pradeep Kumar Mishra
Srinda Receivable day. So I think we had a. For this one segment we had almost 3 to 4 crores of overdues which has now come down to almost like 50 lakhs. In terms of receivable days we in my. I mean this is overall impact. It is now under control. Everything is under cash and carry. So now it is more like the fresh businesses and the cash and carry doesn’t have receivable. So I’m just giving you the numbers in absolute amount.
Resha Mehta
Sure. But from a nine month perspective have at a company level have we seen any meaningful improvement in the receivable days or not really because this is like a small —
Pradeep Kumar Mishra
Receivables are like cash and carry. My B2C business is cash and carry so that doesn’t have much and this was, I’m not able to recollect but it’s come down very, very drastically at a. We don’t have any much of outstanding now.
Resha Mehta
Got it, got it. And lastly, just because of you know, this muted demand environment that you know we are seeing, are we planning to scale down our marketing spend or how are we thinking about the marketing spend going ahead?
Sunil Suresh
We have controlled it compared to last year I think we have reduced our marketing spend as on date but I don’t see us wanting to control it. We will kind of would like to continue in fact a bit more aggressively if the market tendencies are sluggish. Going forward. Only thing is that we are going to be in a very measured way in areas where we have the desired number of stores. We are going to increase our marketing spend and make sure that. And we have always ensured that our marketing spends are always within 8 to 9% and that is the trend we will continue to follow. Since we have not spent all our budgeted marketing spend for this year, we have slightly more room to spend in the next couple of months.
Resha Mehta
Got it, Got it. So, okay, so it will remain in that 8 to 9% range broadly.
Sunil Suresh
Absolutely, absolutely.
Resha Mehta
Got it. All right, thank you so much.
Sunil Suresh
Thank you.
Operator
Thank you. The next question is from the line of Arvind Arora from Mohammed. Please go ahead.
Arvind Arora
Hello. This is follow up question. So like what is our cash and bank balance as on 31st December? Pardon me, your cash in bank balance as on 31st December?
Pradeep Kumar Mishra
208 crores.
Arvind Arora
Okay. And sir, is there any benefit due to this budget or government incentivized scheme or anything from the budget perspective?
Pradeep Kumar Mishra
We are excited because the import duty on raw leather which was basically 25% on crust and 12% on wet blue has been completely taken off. So we are excited that we will be able to access better raw material from Europe and other countries and we can localize at a cheaper cost. In India that is one thing. Secondly, we are aware that BAS certification has been implemented on fabrics and boards which are basically parts of furniture. And the government has assured that they will also have the BAS on fully made furniture, completely built furniture like they have done for footwear and for shoes, sorry, footwear and toys. If that comes into play, I think we will have a much better market condition because 90% of our competition remains imported furniture itself. And with budget and tax cuts maybe the overall demand environment will be more positive and you know, it’ll be more favorable and definitely it’ll have some trickle effect on or some sentimental impact on furniture purchase as well.
Arvind Arora
Okay. Okay, understood. And sir, you mentioned on this 200 bank balance. So this is like out of this 208, 150 is like from IPA process. And this we are planning to use for this like store expansion, correct?
Pradeep Kumar Mishra
Yes.
Arvind Arora
So what is the like one time cost for store expansion or setting up a store. And how do we like account that? Like it is like we charge to PNL or we like deferred that cost. Tell me again which, which kind of cost? So one time, one time cost for copying the store.
Pradeep Kumar Mishra
So one time you see there is an operating expense. From the day the store goes live, all the people store running cost is charged to P and L. Before that what happens is we take a rent free period with as per the agreement we have with the owners. So all the capitalization work happens within the rent free period at the store. So none of those expense are charged to P and L and the advance remains there in terms of building advance and we will have some employee
Arvind Arora
S to train or we would have onboarded few employees. Those get charged to PNL as in when we you know, onboard. So what would what used to be the cost for this like transition or implementation per se like training the people or like something like that.
Pradeep Kumar Mishra
We’ve not measured it separately but you know we do annually we do twice mega events where we call marketing and employee respectively. All included in the in the existing numbers.
Sunil Suresh
We have kept our marketing spends in single digits throughout between 7 and 9%. And all these expenses are booked under marketing expense itself.
Arvind Arora
And sir, you mentioned like we are like targeting for 15% paid for next three to four years. So this is like an like the goals. Correct. So are we also like since our sales will increase 800 crore or 1000 crores. So are we like planning to expand like increase our spend on marketing or something like that?
Sunil Suresh
So the marketing spend is kind of like I said pegged at between 7 to 9% and we don’t see ourselves wanting to increase it a lot more unless and until the you know the situations change a lot. And you know it is a subdued market where we would we have the opportunity to expand it at the cost of our gp but we have continuously been very measured and calculated and kept it below 10% throughout our journey. And I don’t see us really required to increase too much beyond this at this point in time. Okay. In fact this year also we are consumed a little lower than last year.
Arvind Arora
So this time we like strategically reduce this or like it is like an we are seeing some downturn in industry or something like that. It is. It is basically due to non availability. We had budgeted that we will advise in advertising certain new markets because the stores were actually delayed there. We have not consumed that budget. And as a last question like on the store expansion part where like I can see like more than 75% revenue comes from south India. So are we like planning to do this cluster approach only or like is there any shift or this is based on purely R D. When you feel comfortable then we’ll go beyond like south India.
Sunil Suresh
So at this point in time we are more comfortable to expand a little more. In cluster wise we are more or less 80, 85% completed in our home market. Next expansion is coming up majorly in Hyderabad, Chennai also. We are more or less coming to 70% of expansion completion Mumbai due to non availability of suitable real estate. We are very our hands are tied. We are constantly trying for suitable real estate. We would like to expand more in Mumbai and then finally Delhi. So we are going. Pune is another city. We have taken over now and there we are expanding. This year already we started with our megastore and next year we are planning to open three more stores. So wherever opportunities and you know we see good sales of premium and luxury housing which we diligently follow from RERA and we understand when the handouts are coming for these properties. Those cities are where we focus. We remain a bit opportunistic because also in terms of getting the right real estate is something that is the biggest challenge for our business. So we are not committed to continuously grow in one city if the real estate is not viable or not suitable. We try to have the flexibility of expanding in other cities. So that is how we have demonstrated our success in the past eight, 10 years and we continue to do the same going forward.
Arvind Arora
Okay sir. Okay. And as a last question like there was a news like from DLS that he’s selling one like plates approx of 180 crores or something like that. So is it like something like we are also getting inquiries from like from that like plate on us or something like that.
Pradeep Kumar Mishra
We didn’t hear you. Can you please repeat this question?
Arvind Arora
Okay so I was asking there was a news like for DLF there was huge luxury apartment being sold. So, are we getting inquiry from that side also?
Sunil Suresh
I want you to very importantly understand that from the time the apartments are sold to the handover is between 24 to 48 month period. So for us the we will the customers come to us when the handover is about to start. So we are very excited because when you look at the last 20, 36 months period there is a huge amount of inventory that has been sold and in various stages going forward they are going to come for handover. So from a sale date to furniture date is almost 24 to 36 months. But then since we are in luxury premium to answer to you, yes there are a lot of customers from dlf Camellia and other big buildings in Delhi. But then the entire project is not fully handed over. There are there’s a new project also that has fully been sold that will come to the market hopefully in the next 12 to 24 months.
Arvind Arora
And sir what is our order?
Pradeep Kumar Mishra
Take time like by when we receive the order and we will fulfill the order like new customer since this is luxury. And then yeah normally it is four to eight weeks depending on the type of furniture people order we take minimum is four weeks and maximum is eight weeks. So this is customization one you are saying.
Arvind Arora
Okay sir, thank you. Thank you so much for answering my all the questions. All the best sir.
Sunil Suresh
Thank you very much.
Operator
Thank you. Is that was the last question for the day. I now hand the conference over to the management for closing comments. Over to you sir.
Sunil Suresh
Thank you all for taking the time to join us today and for your continued interest in Stanley Lifestyles Ltd. As we continue to navigate opportunities ahead. We remain committed to delivering consistent growth and value in the coming quarters. As always, if you have any further questions please feel free to reach out to our investor relations advisor, Churchgate Partners and we’ll be happy to address all your queries. Thank you. Thank you once again.
Operator
Thank you on behalf of Investec Capital Service India Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.