Vaibhav Global Limited (NSE: VAIBHAVGBL) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Nishita Bhatt — Assistant Account Manager
Sunil Agrawal — Managing Director
Nitin Panwad — Group Chief Financial Officer
Analysts:
Rushabh Shah — Analyst
Anushka Chitnis — Analyst
Aditya Sen — Analyst
Subham Biswal — Analyst
Pritesh Chheda — Analyst
Saurabh Kumar — Analyst
Gaurav Nigam — Analyst
Nirvana Laha — Analyst
Govinda Reddy — Analyst
Manan Vandur — Analyst
Pradip Maity — Analyst
Pratik Dharia — Analyst
Ketan Chheda — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 and 9M FY ’25 Conference Call hosted by Vive Global Limited. As a reminder, all participant lines will remain 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 the operator by pressing star then zero on your touchstone telephone. Please note that this conference is being recorded. I now hand over the conference to Ms Nishita from Ad Factors PR. Thank you, and over to you.
Nishita Bhatt — Assistant Account Manager
Good evening, everyone, and thank you for joining us on Global Limited’s earnings conference call for the Third Quarter and nine months ended 31st December 2024. Today, we have with us Mr Sunil Agarwal, Managing Director; Mr Nitin, Group CFO; and Mr Prashant, Head of Investor Relations. We will begin the call with the opening remarks by Mr Suneer Agarwal on the business operations, key initiatives and a broad outlook, followed by discussion on the financial performance by Mr Nitin Pandwar, after which the management will open the forum for the Q&A session. Before we get started, I would like to point out that some statements made or discussed on today’s call may be forward-looking in nature and must be viewed in conjunction with the risks and uncertainties that we face. A detailed statement and explanation of these risks is included in the earnings presentation, which has been shared with you all earlier. The company does not undertake to update these forward-looking statements publicly. I would now like to invite Mr Sunil Agarwal to make his opening remarks. Over to you, sir.
Sunil Agrawal — Managing Director
Thank you. Thank you, Nishita. Good evening, everyone, and thank you for joining our quarter three FY ’25 earnings call. I hope you would have reviewed the quarterly results and investor deck. Before diving into quarterly updates, I’m happy to share that our Germany operations have broken even at the EBITDA level, an ideal word, the new business that we have acquired has turned profitable in Q3 as expected. Now let me start on the quarterly updates. I’m pleased to share that we achieved our highest-ever quarterly savings of INR977 crores, showing a 10% Y-o-Y growth. Owing to a surge in-demand of high-end jewelry, gross margin came in at 61.3%, which is 110 basis-points lower Y-o-Y. EBITDA margin improved to 11.5% this quarter, which is 40 basis-points higher than last year. Lower gross margins were offset by savings in shipping costs, operating leverage, Germany reaching breakeven levels and our ongoing cost optimization drive. Before I cover performance, I would like to update on lab-grown diamonds. Moving to the consumer demand towards lab-grown diamonds, we have successfully scaled our offering, which contributes to 8.9% of quarterly sales versus 0.2% a year-ago. We are leveraging our in-house sourcing, extensive jewelry design bank and in-house jewelry manufacturing to stay ahead of our peers in this emerging segment. Now let me take you through our key retail markets. In the US, revenue grew by 3.6% Y-o-Y, boosted by strong festive season and improving consumer confidence. In the UK, revenue was up 6.5% with ideal word making a significant contribution. Germany continued its robust performance, posting a 30.7% Y-o-Y revenue growth. With operations achieving breakeven this quarter, we are confident about maintaining this momentum in Q4 as well. We further expect Germany to start contributing to our bottom-line from FY ’26 onwards. Our 4R strategy that is widening reach, new customer registration and acquisition, strengthening customer retention and repeat purchases continues to deliver strong results. Our TV networks now reach reached 127 million households and our unique customer-base has grown by 30% Y-o-Y to approximately 698,000. Excluding — excluding acquisitions, our customer-base grew by 6% Y-o-Y. Customer retention remains strong at 43% with an average 22 pieces purchased by customer annually. I would like to update you on Ideal Word and. Ideal words showed impressive Y-o-Y growth of 95% and achieved full-cost profitability in Q3. Mindful Souls also performed well, maintaining PBT margin of 7% this quarter. With over 102,000 unique customers, we are getting visible benefits of leveraging VGL supply-chain and are regularly launching new products as well. At VGL, community giveback is our area of focus. We recently achieved milestones of serving 97 million meals to school children through our year purchase Feeds one-for-one meal initiative. With 69,000 meals donated every school day, our long-term goal is to provide 1 million meals per school day-by FY 2040. On the sustainability front, we generated 1.1 million kilowatt hours of solar energy this quarter, entirely powering two of our manufacturing units in India. This alliance with our long-term goal of achieving carbon neutrality for Scope 1 and Scope 2 greenhouse gases emission by 2031. During the quarter, we received the IGJ Award for the German jewelry from the German Jewelry Export Promotion Council for being the highest exporter of certain polished color jumpstones from India. This reflects our operational capabilities and commitment to contributing to India’s leadership in jumpstones and fashion jewelry industry. As we aim to balance growth, reinvestments and shareholder returns, the Board has declared an interim dividend of INR1.5 share for this quarter, INR1.5 per share for this quarter, representing 39% payout. This reflects upon robust cash generation ability of our business and a strong growth outlook. Looking ahead, we remain mindful of macroeconomic trends, particularly the muted consumer sentiments in UK and Europe. We expect 12% revenue growth for FY ’25, reflecting these conditions while maintaining operating leverage. From FY ’26 onwards, we anticipate early teen revenue growth with a continued focus on operating efficiencies and leverage. I will now hand over the call to Nitin to discuss our financial performance in details. Over to you, Nitin.
Nitin Panwad — Group Chief Financial Officer
Thank you,, and good evening, everyone. I will take you through our financial performance for the December quarter. We are pleased to report that this quarter we recorded our highest-ever quarterly revenue of INR977 crores, up from INR88 crores of Q3 FY ’24, which is 10% year-over-year growth. Our gross margin was 61.3%, suggesting the impact of product mix tweaking to match the consumer demand. EBITDA margin improved by-40 basis-point to 11.5%. This was primarily driven by Germany achieving EBITDA breakeven, ideal World achieving full-cost profitability, operating leverage, part of which we reinvested in digital spend in the US. Profit-after-tax for the quarter stood at INR64 crores, a 36% year-over-year growth, reflecting the degree of operational leverage of our unique business model. In terms of regional performance, US revenue grew by 3.6%, supported by a strong holiday season and improving macros. The UK posted a 6.5% revenue increase driven largely by Ideal World. Germany recorded a strong 30.7% Y-o-Y growth with operations achieving breakeven this quarter. As Sunil also mentioned earlier that this progress strengthened our confidence in Germany’s ability to contribute to the bottom-line from FY ’26 onwards. For Q3, TV revenue reached INR547 crores, while digital revenue totaled INR38 380 crores. TV revenue grew by 6% year-over-year and digital revenue grew by 12% year-over-year. Digital sales is contributing 40% of total B2C revenue. Our budget day EMI auctions accounted for 38% of B2C revenue, highlighting its convincing for our customers highlighting convenience for our customers. Ideal world’s full-cost profitability this quarter is a significant milestone. Focus on scaling the business further. Mindful Sools also contributes to perform well with cross learning from its digital operations benefiting our existing business in US, UK and Germany. Our balance sheet remains strong with a net cash position approximately $12 million US dollars, that is INR106 crores. Free-cash flow and operating cash-flow stood at INR58 crores and INR78 crores respectively. Quarterly cash-flow generation was slightly impacted by our receivable due to increased inventory and prepayment to suppliers. Our ROC improved to 18% and ROE to 11%, reflecting steady progress. We are pleased to announce a third interim dividend of INR1.5 per equity share, representing 39% of quarterly and 63% of YTD payouts. As we look-ahead, we remain cautious about broader market conditions, especially in UK and Europe. Factoring in these challenges for FY ’25, we now expect 12% revenue growth while maintaining operating leverage. From FY ’26 onwards, we aim for FY ’26 onwards, we aim for an early teen revenue growth along with operating leverage. Back to you, moderator, please.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen we will wait for a moment while the question queue assembles the first question comes from the line of Rushab Shah from Bugal Rock PMS. Please go-ahead. I’m sorry, Rushab to interrupt you there but your audio is not clear.
Rushabh Shah
Am I audible now? Hello
Operator
If you can please use your handset.
Rushabh Shah
Yeah, am I audible now? Hello.
Operator
Yes, please go-ahead.
Rushabh Shah
Hello. Am I audible?
Operator
Please go-ahead,.
Rushabh Shah
Yes, sir. Yeah. Yeah. Sir, in the last call, you mentioned that our current market-share is 4% compared to the and shop HQ and their market-share has grown less than 2%, which is good for us. So as we grow our revenue per — revenue per household, which we are at $3 to $3.5 and the leaders are sitting at $60. So what steps are we taking to reach towards the leaders? I know the journey would be really long. Would — what — and what would — how much time would take the management and does the management have that vision to reach nearer to $60?
Sunil Agrawal
Yeah, Vishop, thank you for your question. Good question. So we focus on our four hours, expanding our reach on television footprint as well as our e-com reach through social, Google and affiliates. Then we expand additional registration to get more customers come in and register or join us and retention and repeat. So for these, we have action registers for each of these drivers of our business. We also have guardrails in-place. The gross margin is the guardrail, ROC is the guardrail and the profit leverage is the. So with these, we function and invest into these four hours continuously. Okay. As we have demonstrated over the years, we will continue to grow our market-share for many years to come. Because our business model is very, I would say, unique and very difficult to fail. So our moats are strong because being vertical from India and Asia and very agile to the market. So we’ll continue to see gaining the market-share in these advanced economies of the world.
Rushabh Shah
So sir, just a follow-up on that one. You said your are strong because you are a vertically-integrated business. What else separate you from the competitor sir? Is it the SKUs or what else separates you?
Sunil Agrawal
So vertical being low-cost so we can afford to unrecut a competitor if should a competitor come and agility for any new idea coming in. Other people are working through middleman, so it takes time for people to respond to any new opportunity that comes. Within vertical, we can turn-around an idea within two weeks from idea to product on-air within two weeks, pretty much like Zara that they have perfected the model from concept to showrooms within four weeks since our product is mostly showed by air.
Rushabh Shah
So any idea how — how much — in how much time does the competition put idea into a product or like you say you take two weeks.
Sunil Agrawal
So they take much longer months. I do not have exact number for each of the competitors. But they didn’t have multi layers in-between. So the concept has to travel and it has to translate into the product and has to be a has to be approved and then product has to be issued. So much longer lead-time. So I can tell you from my experience, we used to — we used to supply to QVCs or HSNs or other Walmarts of the world. So they used to give us three months lead times. So we took long-time to make and then shipped to them and the concept used to be six months in advance. So used to be much longer period when we were vendors to them.
Rushabh Shah
Okay. So my next question is, in the budget pay, if a customer defaults on one-product and he orders another product from our website, so how do you maintain list of people who have defaulted? And do we offer a new product via to him via budget Pay?
Nitin Panwad
Hi, Rishab, Nitin here. Let me take this question. So we assigned the limit based on customer profile, customer payment per ton and customer default or failure history, which we are. So as soon as a new customer comes, we don’t assign a full limit to them. We give, for example budget pay available over there in customer default at a first-place, then customer will no longer able to take budget pay while they can check-out via full payment through card. As soon as customers repay their debt, then customer will be eligible from the — the assigned limit, respectively based on our internal management system?
Rushabh Shah
Yes. Okay. Okay. That’s great. And sir, in the last call, you mentioned that when a customer comes to you, you want to retain the customer and move them to the other platforms that the lifetime value goes up. So how many of the customers have been able to convert in the past three to four years?
Nitin Panwad
So that actually how we monitor is based on our total customer portfolio. So we monitor as a three categorizing our customers. One is an omnichannel customer, one is TV consumer and one is buying only on consumer, though there is a different subsections also, but omnichannel customers roughly contributes in counts is around 12% of our business, which contributes roughly around 70% to 80% of business sales. And while TV and web has different numbers. So that is why we promote the customers for having omnichannel experience, so we can increase the customer lifetime value. And we maintain this ratio and try to increase that customer count ratio of 12% to 13% I mentioned to you to higher levels to achieve higher revenue per customers?
Rushabh Shah
Okay. So last question is, what is your vision for Global? Where do you see Global going next five years?
Sunil Agrawal
So our mission is to reach 1 million meals by FY 2040. And we evaluate ourselves against that goal. It is a stretched goal though from currently 68,000 meals per school day-to million meals. And for that, we have an internal track of how we are doing against that. So that counts into number of pieces, revenue and the continued profitability deliveries in short to mid-term.
Rushabh Shah
Okay. Thank you so much. Thank you.
Operator
Thank you.
Sunil Agrawal
Thank you,.
Operator
Ladies and gentlemen, in lieu of time, we will restrict to two questions per participant and you can rejoin the queue for further questions. And we take the next question from the line of Anushkar from Ariant Capital. Please go-ahead. Anushka, if you can please unmute your line from your end and ask your question.
Anushka Chitnis
Congratulations on a good set of numbers and thank you for the opportunity. I have a couple of questions regarding material costs. They seem to be substantially higher this quarter. So any particular reason for that? And also, I would like to know about how you see your lab-grown diamond business shaping up in the future because it was quite a large contributor to top-line this quarter. So can you just talk about that a bit?
Sunil Agrawal
Yeah, let me talk about Diamond first and then Nitin will take the first question. So diamond is a strong trend-right now, promoted by most retailers, particularly and Pandora. So these are large retailers and they are trendsetters. And we believe that our value proposition in is pretty strong because of our direct costing, direct sourcing and our in-house jewelry manufacturing and designing. So that’s why it has taken a large portion of our sales. And for foreseeable future, I see this ratio to continue. It may go up a little bit. We don’t know. We are very agile in addressing consumer demands so we expect it to be double-digit for about 10% to 12% for foreseeable future.
Nitin Panwad
Yeah. And about your question of material cost. So our gross margins remains strong what we earlier guiding over 60%, though the margin is lower than the last year because of the mix in-product portfolio and the higher number of clearance days that we have done in this quarter and we expect that our gross margin will remain continue to above 60% in upcoming quarters and years.
Anushka Chitnis
Okay, thank you. I’ll get back-in the queue.
Operator
Thank you. The next question comes from the line of Aditya Singh from RoboCapital. Please go-ahead.
Aditya Sen
Hi. Thank you for the opportunity. Sir, I’d like to understand more on the TV revenue and the volume growth because it is kind of flattish. So is there some kind of risk that we need to know in the TV segment.
Operator
So I’ll take that. So thanks for the question,. TV segment for us still there’s a lot of untapped opportunity within US. Although there is a cord-cutting happening on the cable front, OTA continues to grow year-over-year and we expect a single-digit growth continued into television space. It could be low-to mid-single-digit growth year-over-year. Now some quarters may fluctuate a bit, some quarters may not, but overall, we expect it to continue to grow. On the other hand, digital, we expect to grow faster than. Therefore, overall growth will continue on early teens or continue for the future year. Now the volume is also a factor of average price point with taking a lot of revenue-share, our ASP increased last quarter. Therefore, the volume you might be seeing a little bit subdued. But in long-run, we see it a steady-state at around similar price points and will continue to grow on early teen numbers overall.
Aditya Sen
All right. And with respect to Germany, and mindful, do we see any potential revenue or target market-share that we might be targeting to achieve in their respective geographies?
Sunil Agrawal
Yeah. So ideal world, we include within the same demographic and TV demographic. Mindful shows is a completely D2C digital business and we see this to be accretive for the Group from top-line and bottom-line both ways. The — and also we are learning from this pure D2C business, transferring that learning to our Group four TV channel brands. And we’ve seen benefit of that. Our digital spend has gone up, digital efficiencies have gone up. We are still not at the level of micro souls, but we expect the learnings to inculcate more-and-more in coming years and our TV business will become as efficient as in media spend, the digital media spend that we do
Operator
Thank you. The next question comes from the line of from Arient Capital. Please go-ahead.
Anushka Chitnis
Thank you for the opportunity again. And so I have again a couple of questions. I want to ask you
Operator
Can are you there? Apologies, Anishka, if you can hear me, we are not able to hear you. Since there is no response, we move on to our next question, which is from the line of Shubham Biswal from Conversions Capital. Please go-ahead.
Subham Biswal
Yeah, hi, sir. Am I audible?
Operator
Yes, you are. Please go-ahead.
Subham Biswal
Yeah. So in one of our slides, we have mentioned how we are making several B2C brands, right, of our own. So these brands necessarily have higher retention rates for — have you observed this or have you observed this with bigger companies having their own brands? What’s their playbook? So what’s your thought process here on our own brands? So that’s my first question..
Sunil Agrawal
Thank you, Shubam. It’s a good question. We track our own brands performance against the benchmarks we have from the industry. So we create the benchmark against each vertical of digital marketing, that is the social — organic social, paid social organic SEO, paid Google affiliates through email retargeting and other properties retargeting through display ads and all that. And through that, we constantly review and we try to improve each of our brands. To your point, yes, we track not only D2C brands, but our legacy brands as well against those practices.
Subham Biswal
Right. Right. Thanks for. So the next question is, we have been trying to expand our digital medium. I mean, I think it’s a significant portion of our revenues now. But what I’ve been trying to understand is our majority of our modes, right, in a way has been because we have been catering to a very old population who primarily watch, right? But now when once you have transitioning to digital, the customer-base changes, right now there is a much younger population. So what I want to understand is, is this digital transition kind of omnichannel approach that you’re following or if will there be higher A&P spends going-forward because there is a completely different high competition as well in this segment. So how are you looking at this with digital generation — sorry, that’s my question. Thank you.
Sunil Agrawal
Yeah, thanks,. So even digital space, we target customer 40 plus only, right? So that’s why we go on Facebook and Google for our customers, it’s not on TikTok or Snapchat or other younger demographic platforms. The reason of targeting this customer is because this customer is more affluent. This demographic is increasing every year as the population is aging. So this demographic increases and they have more disposable income. So our web customer is just about five years younger than our TV demographic, but still is same. And our product offering is also addressed towards this demographic 40 to 70-year old wide — mostly white Caucasian female. We also have some Hispanic, some Asians as well, but largely white coefficient females and seen in Germany and UK as well. So our ecosystem is largely driven towards this audience.
Subham Biswal
Right. That answers my question. Thank you and all the best for the future. Thanks.
Sunil Agrawal
Thank you. Thank you,.
Operator
Thank you. The next question comes from the line of Pritesh Chheda from Lucky Investments. Please go-ahead.
Pritesh Chheda
Hello. Sir, I wanted to know for — for the Nine-Month, what would be the margin percentage or loss percentage number in Germany operation and what will be the profitability or loss percentage number in the idle world.
Nitin Panwad
Yeah. So hi, Pritesh. So Germany in the first-nine months, roughly around 2% margin was consumed by Germany, Germany losses. Ideal world was very small. I don’t have the exact number, but why would expect roughly 0.5% Idele World was in first-nine months.
Pritesh Chheda
So you’re saying idle oil will be 0.5% of the Idle world revenue, right?
Nitin Panwad
No, not 5% as a group — as a group percentage if I talk.
Pritesh Chheda
So basically both these operations put together consume 2.5% of the Group’s revenue just so adjust so adjusted for that, if your — if your Nine-Month — whatever was your Nine-Month margin, we have to add 2.5% to it.
Nitin Panwad
Right. Yeah.
Pritesh Chheda
Okay. Okay. Thank you very much, sir.
Operator
Thank you. We take the next question from the line of Anush Kachetnes from Aviant Capital. Please go-ahead.
Anushka Chitnis
Thank you for the opportunity. I have a couple of questions. I would like to know about your US and UK growth ex the ideal world and Mind mindful source acquisitions? And the second question is what — how do you see your medium-term margin outlook shaping up and how will the German business be contributing towards the margins and the bottom-line in like going ahead in, say, say the next three to five years.
Sunil Agrawal
Yes. So this is Sunil. I’ll take the second part and first part, then Nitin will answer. So we expect the US to — US economy is relatively better. So we expect US to continue to give us a growth of high-single-digit in the coming quarters and coming years. And TJC and in UK, TJC and ideal world are sort of combined operation. They are both — they are combined legal entity and they have a lot of common staff and operations are also quite common. So we prefer to give the guidance together with UK. And so together, the UK will give us the low double-digit revenue growth in coming quarters and years. And now did you ask — does it answer your question or you had other question to get.
Anushka Chitnis
I wanted to know about the — ex the two businesses, what kind of business?
Nitin Panwad
Let me take Mr the question that you ask. So UK in a first-nine month if we exclude the acquisition of Ideal World, UK standalone was de-grew by 2% while Ideal World grown significantly in first-nine months, UK grew by 12.3% year-over-year, including Ideal World.
Anushka Chitnis
Okay, that is helpful. Thank you. And regarding the medium-term margin outlook also, if you can say anything and the German business as well?
Sunil Agrawal
Yeah. From gross margin point-of-view, we expect the gross margin to be in the region of around 62%, 62% or up in medium-term. And Germany continues to grow. As you saw, we had 30% growth rate in Germany last quarter. So we’ll see good growth in 20% or 30% kind of growth in coming quarters as well.
Anushka Chitnis
Thank you, sir. I also have one more question if I can squeeze it in. I noticed that your B2B revenue is up substantially compared to the B2C revenue in terms of growth. So why is this? And also you have any plans to significantly enhance your retail presence?
Sunil Agrawal
Yeah. So I’ll take that. So B2B revenue is more a reflection of our operational excellence from India. We — a lot of customers are approaching us from Europe, USA, Japan, probably because of China plus One and also seeing our operational efficiencies and value that we offer to them. So long-term ago — long-time ago, we used to have our own B2B operation in US that we discontinued quite long-time ago. So whatever is done from India and we also make sure that these operations give us at least that 18% 20% ROIC and also learning from those markets because we are in these markets, Europe, PUS and we do hope to go to Japan. So those learnings are valuable to us.
Operator
Thank you. The next question comes from the line of Saurav Kumar from Scientific Investing. Please go-ahead.
Saurabh Kumar
Hello. Sir, I have a question. So our target audience is basically 45 plus and women and TV has been historically a key revenue driver and we are trying to grow digitally to 50%. But my question is, you know, this whole Internet in US and Europe, it caught up in post 1995. So ideally, if we look at the age band people who are like at a young age after, 95, 97, they are the one who are hitting 45 years of age band. Do you see some major disruption coming in next three, four years because now the next-generation of 45 year-plus people you will see in next Five-Year, there will be the people who have grown on Internet. So I know your digital is growing and you want to take it to 50%. But do you see any major disruption in the consumer behavior coming in the TV segment because of this risk? And if yes, how are you planning to mitigate is 50% good enough or we need to have a higher yield for digital?
Sunil Agrawal
Good question, Saurab. Thank you. So we expect the digital to continue to grow as a ratio of sales and TV to continue to grow in absolute numbers for foreseeable future because we still have some footprints that we can still acquire on television. We are not fully covered. But the main phenomenon that we look ourselves as that we are live programming company. We broadcast our signal right now through television, through cable satellite telcos, but more-and-more our webstream revenue-share is going up as a percentage of revenue. Now webstream would be consumed by these consumers through OTT platforms, say Netflix or Fire TV, Amazon Fire TV, Roku’s, Hulu’s and AT&T now of the world. And those platforms will become bigger and bigger issue of our sales. So our USB is a live programming with engaging content of now and here kind of entertainment, education and company to give audience that we have, 42, 75-year old, they are mostly single living their homes, single in the sense, the children have gone, they are at-home, they have time on their hand and they want the company education and entertainment. So whether the signal goes through cable, satellite, telco or OTT or OTE that is over the AI that you don’t pay or through their desktop or tablets or iPhones. So we see that as our strength and that will continue to grow. As you might have seen it, I’m not sure. The webstream business in China is substantially large and that phenomenon is coming in the US as well more-and-more. So those streaming advantage that we have over many years will continue to help us in long-time to come. The medium may change.
Saurabh Kumar
Okay. And sir, I have added question there. So when it comes to competing in digital, in digital, what kind of market-share we have and who are our key competitors? That is one. And second is a bookkeeping question. I think out of nine years of only two years we have gone free-cash flow negative else, we have already have a lot of good free-cash flows. And given now we don’t have any major capex for next two, three years, can we expect an increase in dividend in the years to come for next two, three years? These are the two questions.
Sunil Agrawal
Yeah. I’ll take the first one, the digital market-share. Now we are right now counting against the relative — relative TV/E-com companies. Now we do not compare ourselves against the Amazon or all the D2C companies so-far because our pure D2C is very small portion. As we learn the D2C to that level of being pure D2C, then we will start to measure that market, but we are not there yet. So I don’t want to even a guess how big is the market, what is our market-share in that space yet. But we are confident that we are learning rapidly and getting more-and-more efficiencies in our digital spend and gaining those customers and hopefully transitioning those customer to live-streaming that goes through web or OTT and thus increasing the lifetime value of that customer that other D2C players cannot because they don’t have their experience. Saur, can you repeat your second question?
Nitin Panwad
So let me take the second question about the free-cash flow. So our business model is very unique where we get the payment early from the customer and we generate pretty high cash. There is a low, very asset-light model. Apart from a year that we had, as you mentioned negative cash-flow, but all the year we had a good amount of cash-flow. We reward that through dividend payments and we constantly look for our future opportunities to get more market-share via digital or TV mediums. But if you don’t find a suitable opportunity which gives 20% or above ROIC, then definitely we may think of rewarding to shareholders.
Operator
Thank you. The next question comes from the line of Gaurav Negam from Tunga Investments. Please go-ahead.
Gaurav Nigam
Yeah, thank you for taking my question. My first question was on mindful source and, sir, just wanted to get your view. Since the acquisition in your view, how has the business performed, what has worked favorably and what has not? And a related question, which I wanted to just whether I’m looking at the right numbers. In mindful source, I think the last quarter, the TTM PBT margin disclosed was 10%, which is right now 7% in the presentation. Is this number right? And the growth numbers are also looking almost similar. So just wanted to check if the numbers are printed correctly and if you can help understand on mindful souls, what’s your view? What has worked and what has not?
Nitin Panwad
Sure. Sure. Yeah, let me take the first part. So the — for the mindful source, the last some months, we moved our warehouse facility to our own in-house and also supply-chain started using from our own in-house, Weber Global rather using from third-party China. So that required air shipments that resulted in lower gross margins, what we initially had with the mindful source. But now as the leveraging of the supply-chain is fully completed in February onwards, that will converted in a higher gross margins. So numbers you are looking is right as a current PBT margin is 7%, but with the leveraging full supply-chain from India after having a sea shipments started that will come from this quarter onwards, we will see the higher gross margins. And you can take the other part
Sunil Agrawal
Yeah. So other part about the revenue growth, we transition the business to us now in that process, we are also learning and implementing new strategies. For example, when was doing its own business, it was separate, it was not our company, they were only focused on subscription. And now we started adding single item sales as well. The hope is to get the single item customer to move into subscription and to acquire a single item customer is much lower-cost and easier than a subscription customer. So that is paying-off. So our customer acquisition is now higher year-over-year every month and every week now. And we are hoping to transition that and having those email flow, text flows and retargeting flows to convert them into subscription. So we are very happy with the business that we acquired from ROIC point-of-view and from learning point-of-view for other parts of the business. So this is one of the best things — best deals that we’ve done.
Gaurav Nigam
Very interesting. Thank you, sir. Sir, one — another question was on ideal world. So when we said it is full-cost profitable, are we talking about it at the EBITDA level or at the PBT level? Just wanted to clarify this point.
Nitin Panwad
Yeah, it is PBT level thank you. There is no much depreciation cost involved in Heidelwood. So it is.
Operator
Thank you. We take the next question from the line of Laha from Holdings. Please go-ahead.
Nirvana Laha
Hi, sir. Thank you for the opportunity. Sir, to hit the early teens revenue growth that you’re targeting now, can you please break-down the volume growth, the ASP growth and any kind of INR depreciation that you’re factoring in this 13% growth, 13% or 14% early teens growth number. The reason I ask is because the volume growth in this quarter, I think it’s the first full-quarter with Mindful and ideal World in the base is only 1.7%. So what are the levers that you have to take it up to your target volume growth number? And what is that target volume growth number to achieve the target revenue number.
Sunil Agrawal
Yeah, I’ll take that question. So thank you, Nirvana. So for us, we are very agile company with our lab-grown diamond keen as a trend. Last year we had almost zero revenue-share of lab goal and this is almost touching 10%. So we take opportunity of the trend and address and cater to the market. So in that process, our ASP went up. And because we give more airtime to higher ASP, our lower-price point product was not given sufficient Real-time. So overall volume came down. But for — going-forward, we see about similar ASP for the foreseeable future. So you must assume in your model, similar early teens volume growth and therefore similar operational expenses or at similar volume and from revenue coming up at early teens, the leverage coming down from our other expenses, HR expenses, logistics expenses and some of the distribution expenses. The digital spend will go up because we see that future leverage potential, so that may go up. So content distribution may stay constant as a percentage of revenue, but there will be leverage coming in from other areas.
Nirvana Laha
Got it, sir. Next question is strategic on the TVP, sir. So if we look at our reach, it’s 127 million households, but our unique customer is only 0.7 million, which is like a 0.5% penetration, right? And when I compare this with Qrate, Qrate reaches not many more households, only about 200 million, but their penetration by unique customers is very-high. It’s 14.5 million. So almost like a 7%, 8% kind of penetration compared to our 0.5%. So my question is, sir, out-of-the budget that we say that out-of-the 18% that we spend, 11% goes towards TV. My question is, out of this 11%, how much are we spending and tying up the broadcast deals with the carriers which just carries our channel to their households versus how much are we spending to actually market our channel to the viewer so that they actually tune into our channel. So if you can help in understanding how the spend is split between the two and what we are doing to get our penetration number high because I think our household reach is already very good.
Sunil Agrawal
Yeah. Thanks, Nirvana. So household reach has two factors. One is the footprint, how many homes we are in? And second is, what is the channel position in respective home that we have? So has been able to get very low channel positions or prime position and multiple channels in each home. So Curate has three or four channels in most of the homes and we have 1.2 or 1.3 channels per home. I don’t have the exact number, but it is substantially lower than them. And the channel position also is not as high as 10. So hi, high semis are not as prime as them. It’s a factor of how much we pay to those airtime companies. Now our effort is to continue to improve the channel position and number of channels, each home that you broadcasting based on the ROI that we expect from these markets. So we are very tight in managing that expense where it can run away very quickly. So we have good analytics team, so we evaluate that continuously. Every week there these deals are offered to us and we evaluate them and we go with that open eye. If it doesn’t work, we are able to get-out of these deals during the same 90 days or so. So we’ll continue to evaluate those opportunities and try to get better and better channel positions or more footprints in time to come. And the biggest opportunity for us coming time, Nirvana is the streaming channel position. For example, YouTube TV is about 11 million or 12 million homes and we are not there at all. They are Roku TV. They are not in that. Is a couple of million homes. So we are not into that OTT say, OTT online linear scheme space yet. It’s a huge potential market for us. But as we go deeper and deeper into the understanding of this OTT, that will add bottom-line revenue or top-line bottom-line revenue to us. So there’s a lot of potential in TV space to grow per household revenue, better channel position, a larger footprint, additional position and more channels within each market. But we are frugal in getting analyzing each of these opportunities.
Operator
Thank you. The next question comes from the line of from PINR Investments. Please go-ahead.
Govinda Reddy
Hello, sir. My question is why are we not entering Indian market? And we have shown our channels, web channels to some of the women here and they are very much liking the models as well as they are very much fine with the pricing also. And I wonder why we are not entering given that we are also entering into lab grown diamonds now, which is a good market in India.
Sunil Agrawal
Yes, thank you for a good question, Mr. So we evaluated the Indian market few times. We couldn’t make the model work even in the three, four years timeline that we make our Western companies profitable. Indian market didn’t have the visibility for a few factors. Number-one, the airtime costs in India are higher than Western World as a proportion of sales. Number two, the shipping cost is all on us. We — consumer don’t pay shipping costs in India, whereas in the Western world, we charge shipping cost. Our shipping cost contributes about 6% of our revenue. So that doesn’t come in India. In India, when we looked at numbers of some of the target companies we were thinking of acquiring in India, the 30% of the customers don’t release the parceler and parcel reaches them on COD basis. So those 30% packages come back, whereas in US, UK, Germany, this ratio is less than 0.2%. So the economics of India TV space doesn’t work. Now India is a potential market for complete D2C in future, but still is discovery mode. So majority of the NG2C companies in India are still loss-making. So we will come into India market down the road, but we believe that it is still in discovery mode and doesn’t fit well for our business model.
Govinda Reddy
Okay. That’s it from my side. Thank you.
Operator
Thank you. The next question comes from the line of Manan Vandhur from Wallfort PMS. Please go-ahead.
Manan Vandur
Yes, sir. Thank you so much for the opportunity. So one of the participants had asked about excluding Germany, like how much cost Germany took and so that number you said 2.5%. So that 2.5% I add-in the PAT or in the EBITDA.
Sunil Agrawal
Yeah, it’s a margin, Manil. The initial first-six months, we had a losses in Germany for this year. And though we have achieved our breakeven in-quarter three, but six months in terms of our margin side, roughly around 2% of our margins were lower due to Germany. So I meant to say that excluding Germany and ideal world both, if I exclude that, I could have achieved higher EBITDA margin in this quarter — in this nine months.
Manan Vandur
Okay. So, okay, so you are saying that at the EBITDA level, if we would have — if we exclude the cost — the — sorry, the losses of Germany and ideal both on the EBITDA level, then we would have had 2.5% more, right?
Sunil Agrawal
Yeah.
Manan Vandur
Okay. Okay, understood. And sir, second question is that could you — could you please tell us what were the Germany revenue, okay, in INR for quarter three and for full nine months ’25 in INR.
Nitin Panwad
INR, I’m not sure, but we reported that number in one of the slides, I think EUR7.5 million in-quarter three we have done and EUR19.4 million in first-nine months we have done.
Operator
Thank you. The next question comes from the line of Pradeep from RGI Private Limited. Please go-ahead.
Pradip Maity
Hello. Hello.
Operator
Yes, Pradeep. Please go-ahead.
Pradip Maity
Yeah. Yeah, thanks. Thanks for giving me the opportunity. My first question is, why your company call up the margin between Limited and Lifestyle by selling the Bista Limited? What is the reason?
Sunil Agrawal
Yeah. So both these companies are in not in operational nature. So the merger was just to — that the Vistar is not in operational. It was just sitting with the asset of a land in that company. So the — to the optimize our working capital, we have sold that asset. So that is not needed for our operational perspective in India side. We already have six different buildings in India, which has a capacity of even 30% to 40% higher production in the current capacity. So that is why we have sold that and we called up the merger of Vistar and Nova.
Pradip Maity
Okay. And my second question is, what is the gross margin for lab-grown diamonds that you said that it’s the 10% of our top-line, total dopeline. And can you comment on that?
Sunil Agrawal
Yeah, it’s slightly better than our overall margin a couple of percentage point better.
Pradip Maity
And that means our actual gross margin now, this current quarter, 61.5% approximately. That means higher than that.
Sunil Agrawal
Yes. Correct.
Pradip Maity
Okay. Okay. Thank you.
Operator
Thank you. The next question comes from the line of Pratik, an investor. Please go-ahead.
Pratik Dharia
Hello.
Operator
Yes, Pratik. Please go-ahead.
Pratik Dharia
My questions have been answered. Thank you.
Operator
Thank you. The next question comes from the line of Ketan Chheda, an investor. Please go-ahead.
Ketan Chheda
Yeah, hi. Thank you for the opportunity and congratulations on good results. Sir, what I’d like to ask is, in terms of our digital platforms, of the various mediums like the digital — the websites, the mobile app, social OTT or the third-party marketplaces which contributes higher amongst the digital options in terms of revenues
Sunil Agrawal
Sorry can you repeat please
Ketan Chheda
Yeah sure my question is that of all the various digital avenues that we have like the mobile application, the website, the social media, the OTT platforms of all these different avenues, which avenue generates maximum revenue in the digital platform space for us currently.
Sunil Agrawal
Yes. So digital — our main medium is our own proprietary website and where we do our live-streaming of our live shopping live running video commerce and also the other selling medium for fixed-price catalog rising auctions and clearance. Apart from that, we have a other medium of marketplaces and selling through smart TVs. But our majority of almost around 80% of sales is coming through our own proprietary website. But sorry, actually let me correct this. And the digital medium also includes the mobile apps. So mobile, if I — if my total digital sales is 100, the mobile app itself is contributing roughly around 30% of total digital sales and around 50% roughly contributing our proprietary website through desktop and rest is our other different mediums of marketplaces and smart TVs — OTTs.
Ketan Chheda
Yeah. Thank you. That was very helpful. So again, relative question. So in terms of the spends, if we were to — for the nine months FY ’25, if we were to divide the spends between digital and TV, could you give a breakup, either in absolute numbers or in percentages, however?
Nitin Panwad
Yes. So in percentage terms, absolute, I don’t have, but percentage terms is the cost is roughly around 18% were contained broadcasting. And out of this 18%, 11% is our PV-related broadcasting cost and 7% is our two digital medium cost, which is primarily in meta and Google.
Ketan Chheda
Okay. So does it mean that we are spending less on the digital right now even though our the growth rate of digital revenues increasing and the share of revenue also is increasing digital.
Sunil Agrawal
Yeah. So digital, we have a good amount of sales coming through live shopping medium. That is also part of the broadcasting of some of the customers who watch our show in live-streaming platform on our website, they also watching from television. So that digital 100% cost, we cannot attribute that our sales — our all-digital sales is coming through our native digital platform. That is why you may see that the lower amount of spend generating higher revenue in digital.
Operator
Thank you. Ladies and gentlemen, that was the last question and that concludes our question-and-answer session. I now hand the conference over to Mr Sunil Agarwal for his closing comments.
Sunil Agrawal
Thank you. Thank you, Anne. I want to thank all the participants for your time and great questions. If you have any further questions, feel free-to reach-out to Prashant at VGL or Amit Sharma at AdFactors PR India, and we will be happy to answer your questions. Thank you once again.
Operator
Thank you. On behalf of Global Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.