Vaibhav Global Limited (NSE: VAIBHAVGBL) Q3 2026 Earnings Call dated Jan. 28, 2026
Corporate Participants:
Nishita Bhatt — Investor Relations, Adfactors PR
Sunil Agrawal — Managing Director
Nitin Panwad — Chief Financial Officer
Analysts:
Unidentified Participant
Deepali Kumari — Analyst
Kiran Gadge — Analyst
Garvita Jain — Analyst
Sahil Sharma — Analyst
Dipesh Sancheti — Analyst
Lakshmi Narayan — Analyst
Naveen Baid — Analyst
Dipesh Sancheti — Analyst
Shreyans Jain — Analyst
Presentation:
operator
Good day and welcome to the WebHub Global Limited Q3 and 9 months FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is now being recorded. I now hand the conference over to Ms. Nishita Bhatt from Afactors PR. Thank you. And over to you Ma’. Am.
Nishita Bhatt — Investor Relations, Adfactors PR
Good evening everyone and thank you for joining us on Weber Global Limited earnings conference call for the third quarter and nine months ended 31 December 2025. Today we have with us Mr. Suneera Agarwal, Managing Director, Mr. Nitin Pandwad Group CFO and Mr. Prashanth Saraswat, Head of investor. We will begin the call with the opening remarks by Mr. Sameer Agarwal on the business operation, key initiatives and broad outlook. Followed by discussion on the financial performance by Mr. Nitin Pandwad. After which the management will open the forum for the Q and 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 Agarwar to make his opening remarks. Over to you sir.
Sunil Agrawal — Managing Director
Thank you, Nishita. Good evening everyone and thank you for joining VGL’s Q3 FY26 earnings call. I trust you have reviewed the results and the investor presentation. We delivered a strong performance in December quarter with revenue growth slightly ahead of our guidance. Our consolidated quarterly revenue crossed Rupees 1000 crore mark for the first time reaching Rupees 10. 66 crore. A 9.1% YoY growth performance during the quarter was achieved despite tough geopolitical conditions. Gross margin stood at 63% up 170 basis points. YY driven by the strength of our vertically integrated global supply chain. Digital contribution was 42% of B2C revenue and we remain on track to reach 50% digital contribution by end of FY27.
Further, I’m delighted to share that our in house brands reached 48% of sales contribution marked during the quarter and we are on our journey to achieve 50% sales milestone before the target of end of FY27. Let me briefly cover regional performances. In the US we ended the quarter on a strong note and raised it revenue growth of 3% YoY. Highly elevated precious metal prices and lower consumer confidence compelled the consumers to defer discretionary purchases. During the quarter we started our in house jewelry casting manufacturing operations in US to mitigate tariff on our jewelry shipped to US.
However, we still had 489 basis points increase in our overall product costs due to tariff on other products. Despite this we were able to increase the gross margin by 30 basis points as our vertically integrated model provided requisite resilience. In the UK revenue was down by 1.8% while Ideal World continue to perform strongly and grew by 12%. YY. EGC had negative growth of 6% due to softness in overall consumer confidence combined with steeply higher precious metal prices. Consumer deferred their purchases. This had a direct impact on core tac’s growth. Ideal World continued with a strong EBITDA profitability which is driven by healthy gross margins.
Overall, UK’s EBITDA margin improved substantially by 240 basis point yy owing to dynamic product profile and operational efficiencies. In Germany we delivered revenue growth of 5.1% supported by continued strength in the live TV commerce in digital. We have seen initial signs of improvements and we are confident that digital will start contributing to overall growth in Germany business in coming quarters. Further, I am pleased to share that the Germany business has turned profitable during the quarter. With EBITDA margin of around 6%. We remain on track to achieve EBITDA breakeven for the full financial year 2526. We expect Germany to start contributing the group EBITDA margin from financial year 2627 onwards.
Our growth continues to be guided by four clear priorities which are expanding reach, new customer registration, acquisition, retention and repeat purchases. During the quarter our TV networks reached 127 million households. As of 31st December 2025 our unique customer base stood at 706,000 up 2% YoY. On a TTM basis we added 308,000 new customers which while retention remains stable at 40%. Customer engagement remained healthy with customers purchasing on average of 22 pieces on TTM basis. Sustainability remains integral to our operations. Recently we have made a commitment to the science based Targets initiative that is SBTI and we are aligning our carbon reduction strategy within the 1.5 degree centigrade increment pathway.
Under the Paris Agreement, our ICRA ESG rating was upgraded to 73 reflecting continued progress towards governance and environmental practices. On the renewable energy front, we generated 1.1 million kilowatt hours of solar power during the quarter, meeting 100% of our manufacturing power requirements. The VGL Group is now great pace to work certified across all geographies. Further, under our flagship your Purchase Feeds program we have served 109 million meals, currently providing around 59,000 meals per school day. We remain committed to our long term goal of serving 1 million meals per school day by FY40. Capital allocation remains a key priority for us.
The Board has approved a third interim dividend of rupees 1.5 per equity share implying a 28% payout. Despite ongoing adverse macros, our balance sheet remains strong providing the requisite agility. During the quarter we delivered revenue growth slightly ahead of our guidance of 79%. We remain well positioned to sustain profitable growth while maintaining our FY26 guidance. We expect to achieve 9 to 11% revenue growth in FY26 27 with EBITDA margin of 10.5 to 11%. I will now hand over the call to Nitin to discuss financial performance. Over to you Nitin.
Nitin Panwad — Chief Financial Officer
Thank you Sunil. Good evening everyone. I will now take you through the financial performance and key operational highlights for the third quarter. Please note that from this quarter onwards we have announced the disclosure of our segmental performance and the same is published in our investor presentation. As Sunil mentioned, we delivered middle quarterly revenue of over Rs. 1000 crore reaching revenue of rupees 1066 crore reflects a growth of 9.1% year over year which is slightly above our guidance range. It is also satisfying to see branded sales mix becoming 48% of B2C sales in Q3. Further, digital business is also progressing towards achieving our target of 50% since contribution by FY27.
These milestones reflect satisfactory performance towards achieving our strategic objectives. Now I will cover the geography wise performance in quarter three. In the US revenue growth for the quarter was 3% year over year. In quarter three, customer deferred their purchase amidst softer consumer sentiments triggered by higher metal prices. Despite these conditions, our margin remains strong and supported by integrated sourcing and local jewelry casting manufacturing capabilities which got operationalized in Q3 itself. In the UK revenue declined by 1.8% year over year. The TGC operations were impacted due to taper demand owing to surge in metal prices and subdued consumer sentiment Ideal World continues to deliver strong revenue growth supported by a wider assortment of products and in house sourcing capabilities.
Ideal World continues to sustain its healthier profitability. Overall, UK operation has delivered a strong profit growth of 40% year over year owing to cost rationalization and operating leverage. Germany recorded 5.1% revenue growth during the quarter supported by sustained growth in light TV commerce. In line with our stated guidance, the business delivered positive EBITDA of 6% in December quarter driven by scale and cost virtualization, we remain on track to achieve full year EBITDA profitability for financial year 2526. Overall in US dollar terms, Q3 revenue growth was 3.4% year over year for visual TV revenue stood at Rs.
589 crore growing 7.7% year over year while digital revenue increased by 11.2% year over year to Rs. 423 crores. Digital now accounts for 42% of total revenue and we remain on track to achieve reach by 50% by FY27. Lifestyle products contributed 35% of total sales with a medium term target of 50%. As mentioned earlier in house brand sales mix now 48% of B2C revenue during the quarter and we are confident to achieve 50% sales contribution before our targeted period of FY27. Gross margin remains strong at 63% maintaining margin above 60% in a challenging operating environment underscoring a strength of our vertical integrated in house supply chain.
EBITDA margin expanded by 170 basis point to 13.2% with EBITDA growing 26% year over year in absolute terms. Margin expansion was driven by improved realization and operating leverage led by 120 basis point improvement in employee cost 60 basis point improvement in airtime cost. Profit after tax grew by 41% year over year to rupees 90 crores. The business continued to generate healthy cash flows. Operating cash flow stood at rupees 160 crore and free cash flow at 143 crore. The balance sheet remains strong with net cash position of 213 crore reflecting prudent capital management and liquidity strength.
ROCE improved to 21% while ROE stood at 15% indicating continued improvement in our returns ratio. The Board has approved an interim dividend of rupees 1.5 per equity share reflecting a balanced approach to capital allocation while maintaining adequate liquidity in view of the prevailing operating environment. We remain well positioned to sustain our profitable growth while maintaining our FY26 guidance and expect to achieve 9 to 11% revenue growth for FY27 with EBITDA margin of 10.5 to 11%. Thank you and over to you moderator. We may now open the lines for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star N1 on the attached tone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Deepali Kumari from Arihant Capital. Please go ahead.
Deepali Kumari
Yeah, thank you for taking my questions. So I have just a few questions. Quarterly sales volume for TV declined from 1.74 million to 1.71 million units and digital volume dropped also. So while consolidated revenue grew by 9.1% due to ASP increases, particularly a spike in digital ASP from 30 to 32 to 38. So how sustainable is the reliance on pricing power if units volume continue to tend onwards.
Sunil Agrawal
And let me take this so hi Bitali so unit decline is mainly related to the customer adoption of the products. Right now the lab grown adoption is pretty high from the customer point of view and we are seeing the productivity metrics on TV and also on website. The lab grown product demand is high so that is driven driving the higher asp but it is also realizing higher revenue to us. So volume has a degrowth but the realization is pretty good with the the lab grown products.
Deepali Kumari
Okay, so what is the revenue contribution for LGT and what is the average selling price of that?
Sunil Agrawal
LGD is now double digit roughly around 10.7% of our retail revenue and average selling price is roughly around $250 for lakh crore.
Deepali Kumari
Okay, and Europe mainly in Germany jumped year on year even though revenue in Germany grew only 5.1% in local currency. So what specific price control measure and cost sapping helped achieve such a big margin improvement? Is the current exposure to reserve margining in Germany sustainable going forward?
Sunil Agrawal
Most definitely. So Germany one reason is the improvement in our gross margins we have from past quarters we have managed to improve gross margin roughly 300 to 400 basis points in our gross margin with better product offerings and also the cost measurement that we have done in all the respective areas from airtime to shipping partners and also in a productivity increase in our warehouses. So improvement in gross margins and the our cost improvement we have done in Germany operation resulting a higher profitability with the 5% growth and we Suspect that this growth is sustainable and we continue to improve this profitably and this number with the improvement in our EBITDA margin.
Nitin Panwad
Just one point deepali on this one. So the seasonal time which is October to March is seasonal time for TV e comm business. During that time we expect to see continued improved gross margins of the EBITDA margins. But during the summer months it may be a bit lower. But overall for this financial year we will be EBITDA slightly above EBITDA positive. And next year we expect the EBITDA margin to grow up. But the 6% may not be constant every quarter. Some quarter may be higher than that and some quarter may be lower. But overall will be better next year than almost flat or slightly positive EBITDA we expect this year.
Deepali Kumari
Okay, so like we can consider like above 6%.
Nitin Panwad
Yeah, we are not guiding a specific number for next year yet, but we will be noticeably better than almost less than 1% EBITDA this year.
Deepali Kumari
Okay. Answers of TGC in the UK show revenue fall in local currency. So what economics are flowing growth there? How will the Ideal World acquisition help improving performance in the market in the next few quarters or years?
Sunil Agrawal
You want to take it?
Nitin Panwad
Yeah, sure. So Ideal World as stated is performing pretty well. Last quarter we have seen 12% growth in ideal World and now it is achieving almost similar EBITDA margin what TJC is generating TJC as mentioned that we have seen slowness in terms of consumer demand towards the elevated metal prices that impacted and also the lower consumer sentiment impacted the lower sales growth in tgse. But that is offsetting in our higher growth in Ideal World. And Sunil, would you like to add on the growth perspective measurement of TJC part?
Sunil Agrawal
Yeah. So in TGSE we are seeing good traction on digital space and we are also exploring some additional national airtime for only part time two, three hours or four hours a day. We had some of these hours which we exited actually two broadcast services we had. We exited them because there was some price negotiation could not be completed. We are storing some other shortly and digital continues to benefit to us. And the cord cutting in UK is much much slower than us. So we expect the TV to continue to add value to our business or the growth to our business in coming quarters and years foreseeable future.
Deepali Kumari
Okay, so answer your Japanese plant. Do you have any plan to increase factory utilization?
Sunil Agrawal
Jewelry manufacturing is a low capex model. Even if we need to increase the proximity capacity for future growth, we can do that with very little Capex and currently it is Very well optimized for people.
Deepali Kumari
Okay. Okay, sir. Got it. Thank you.
operator
Thank you. The next question is from the line of Kiran Gargay from Nightstone Capital Management. Please go ahead.
Kiran Gadge
Hello. Hi. So for lifestyle the contribution was 35% of total sales. And in medium term we are targeting 50% of sales. So because of this shift, will we be able to maintain our margin? Because in lifestyle we are not vertically integrated.
Sunil Agrawal
Yeah. Although we’re not manufacturing lifestyle, but we are able to source it from directly from all over the world. We have offices in all the four countries to source and we have supply chain relationships with manufacturers in 30 countries. Yeah. So we expect the margin to be similar growth trajectory as we are seeing in jewelry.
Kiran Gadge
Okay, got it. That’s it for me. Thank you.
Sunil Agrawal
Thanks, Kiram.
operator
Thank you. The next question is from the line of Garvita Jain from Seven Islands pms. Please go ahead.
Garvita Jain
Hello. Hi, sir. I hope I’m clearly audible.
Sunil Agrawal
Yes, you are. Gandhita.
Garvita Jain
Yeah. So my first question is on the content and broadcasting expenses part. So I wanted to understand if I take content and broadcasting expense as percentage of the sales, can we expect it to further reduce and if in terms of absolute number, can we expect it to remain in the same range of 190 crores and around that?
Sunil Agrawal
There are two components of this content broadcasting. One is the TV content broadcasting. Other is the digital spend. So we expect the TV portion to remain constant but the digital will go up. So as a percentage of revenue we don’t expect a leverage from this area.
Garvita Jain
Okay. The leverage is expected. Right.
Sunil Agrawal
From three areas we expect leverage in future as we’re guiding for higher ebitda. One is that the gross margin we expect to continue to improve slowly over time. The second is the employee cost. The employee cost. As we are gaining efficiencies in process improvement and scaling from the fixed base, we expect HR cost to improve. AI is also helping in this area. And SG&A, some SG&A may have some savings as well. These three areas will give us a leverage.
Garvita Jain
Okay, got it. And so if I talk about the automation in the business model, any type of automation or AI use in the business model, any possibility of employing such thing in the business which can help us to improve efficiency and reduce cost. And any kind of EBITDA margin improvement we can expect from that part.
Sunil Agrawal
Yeah, that is true constantly. We are implementing the process improvement, automation and AI into our business processes. And that is the reason we saw 1.2% efficiency improvement last quarter in our HR costs.
Garvita Jain
That is in the HR cost. Right okay, one more question sir, on the German Germany business part. Good to see that you have achieved the break even on this business. But can you please give me how exact figure of how much was the PAT loss on nine month basis from the Germany business?
Sunil Agrawal
You can look it up.
Nitin Panwad
So PAT is higher. We guiding for EBITDA1. So EBITDA is roughly around for nine months. 300,000 loss that we have and we expecting that it will cover up in the current code.
Garvita Jain
Okay, this is a bit. Can we give you Padmaster, that is.
Nitin Panwad
Not significant because major cost is the interest which is intercompany interest, not a third party. So it is an intercompany cost.
Garvita Jain
Okay. Okay. That’s right. And so can you give me some kind of guidance on a Germany business in terms of the revenue guidance and profitability that we expect? We can expect for FY27?
Sunil Agrawal
Yeah. So overall revenue guidance we are giving for next financial year to be 9 to 11%. And that incorporates all the businesses that we have now from the EBITDA point of view, we gave the guidance that next financial year Germany will start contributing to group ebitda. Current financial year it will be flat or slightly positive ebitda. But next year it will be. It will start contributing still it is. The macro environment is still a bit uncertain. So we are not giving specific guidance of specific business unit. But overall EBITDA guidance we’re giving for next year is 10.5 to 11%.
In fact this is the first time we are giving EBITDA range guidance in our investor calls just for overall business.
Garvita Jain
Okay, okay, I get it. One more question sir, because with the.
operator
Increase, can you please rejoin the queue for follow up question?
Garvita Jain
One last question if you can allow. Please.
operator
Sorry ma’, am, can you please rejoin the queue as there are more participants left in the queue.
Garvita Jain
Okay, thank you.
operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question may press star n1 on their touch tone telephone. The next question is from the line of Sahil Sharma from Dalmas Capital Management. Please go ahead.
Sahil Sharma
Hi sir. Thank you for the opportunity. So I just wanted to understand. So the digital ASP has been consistently growing over the last few years and it is now more in line with the TV asp. So first of all, what has been driving this growth and is there scope of further ASP growth given that the TV ASP seems to have stagnated at the 38, $39 mark for the last 2, 3 years?
Nitin Panwad
Yeah, so I’ll take the first part. The ASP. So digital has a two portion one is the major part is one is the rising option which is a $1 bidding model and the rest is the fixed price catalog and the web TV.
So $1 tend to be a lower ASP as that is a lot of engagement with the customer and the inventory clearance mechanism. Now as the business is moving towards more the digital marketing through social media and the sales in coming through paid channels. The other portion is increasing significantly over the years. And we have seen over the period that the high end jewelry consumer are giving more lifetime value compared to the $10 or $5 product. And then towards that we are investing our money where we are getting the higher lifetime value from the customers. One of the example is the lab grown product which is continuously performing well and that we are marketing and targeting the customer through the paid media on web that is driving the higher SP towards that ASP normally will keep a range of for a business perspective around $40.
But we are targeting based on the profitability of the customers. So right now we cannot guide on the where the price will fall of digital consumer but it will be on the profitability side wherever we would like the customer is giving more value.
Sahil Sharma
You mentioned that SGDs are about 250$ASP and share has been growing. So I was just trying to understand if that share goes further. So you know this can move further up, you know beyond $40.
Nitin Panwad
But definitely that will be the acquisition product. But then the repeat will come that will be different offerings from jewelry to lifestyle products that will have the lower selling price.
So not necessary that it is the price is 250. It will remain same. The different product bouquet we have from 5 doll thousand dollar with 30,000 different SKUs. So that’s where the average price becomes low.
Sahil Sharma
Understood. What was the revenue from the OTT channel this time in Q3? I think that number was missing in the presentation.
Sunil Agrawal
Not with me right now but the Prashant will come back to you on the OTT numbers.
Sahil Sharma
Okay. And so how are we seeing the conversion trend in the OTT channel? We were making a lot of investors investments in that channel.
So is that investment trend continuing and how is the conversion trend that you’re seeing there? Would you like to take this?
Sunil Agrawal
Yeah. So we’re continuing to make the investments. There are two reasons for that. We are seeing the audience migrating a lot towards OTT channels. There is a Fire tv, Roku Samsung TV or Hulu tv. There are so many different platforms. In fact the OTT viewership right now is almost four times the linear TV viewership in the US So we are continuing to make investments and we are seeing the lifetime value of OTT customer much higher than TV customer. Also, the challenge in OTT is once you get customer to download through paid media. Once they download, it is difficult to retarget that customer because the OTT ecosystem is not as evolved as the mobile app or the online system is.
We continue to explore more and more advertising options and continue to explore those areas. The revenue continues to improve. Y o Y I don’t have the exact number, but we are continuing to make the investment and continuing to expand in that area.
Sahil Sharma
Understood. And one last question, sir. We had this target of reducing our timeline breakeven timeline for customer acquisition cost from about nine months to three to six months. So where are we on that journey at present and is the trend encouraging?
Sunil Agrawal
Yeah, so we have two of six brands. So two of those brands have already achieved three months viki one and the rest are between five months to nine months period. And we are learning every day and experimenting with different products, different offers, different landing pages and getting to and shortening the time. And as we shorten the time, we’ll continue to scale those brands up and that is one of our growth strategies going forward in future.
Sahil Sharma
Thank you so much for answering the question.
operator
Thank you. The next question is from the line of Dipesh Sancheti from Manya Finance. Please go ahead.
Dipesh Sancheti
Hi, am I audible?
operator
Yes sir. Please continue.
Dipesh Sancheti
Okay, now I just wanted to understand in jewelry, how much is the sales from gold, silver and artificial jewelry? Hello.
Sunil Agrawal
So plain gold we don’t have much. Majorly we do the casted jewelry, studded gemstone or diamond or lab grown product plain gold as the our guardrail of keeping the margin 60 and above doesn’t need. So we don’t do unless there’s a designer jewelry we do that part. But the margin guardrail just that product normally do not need. So that is why the proportion is comparatively very low compared to our major productive gemstone jewelry.
Dipesh Sancheti
No, no. I’m just trying to understand that in the jewelry segment, which is approximately 65% of your sales, how much is in terms of in a gold product? In a silver product and how much of it is artificial jewelry. And does that all have the same margins or not.
Sunil Agrawal
That I mentioned about that. These are the proportions from gold, silver and platinum with the studied gemstones. So gold portion will not be a significant one in the product cost. So we target based on the different gemstones. So we cannot have, we don’t have right now that how much gold portion will have on those products.
Dipesh Sancheti
But the major part is of your products. I mean even studied how much of it is done in gold, how much of it is done in silver, how much of it is done in platinum. If you can have that, that I have bifurcation.
Sunil Agrawal
Got it. Now. I can give you rough numbers. I don’t have exact breakup but approximately 70% of our jewelry would have silver, gold or platinum component of plat. And by value I’m saying and the 30% would be base metal. There’s a brass or copper or stainless steel.
Dipesh Sancheti
Great. That’s it. That’s good enough.
Sunil Agrawal
Yeah, that’s just a rough number. So what Nitin can do is to get the data more detail and get that out to you later.
Dipesh Sancheti
I think you can contact the IR for that to have the exact numbers if you can have.
Sunil Agrawal
Sure. Yeah. Prashant will arrange for you. Great.
Dipesh Sancheti
And just wanted to understand also the US exports is it going fine? Because you had mentioned that you know you are casting over there, getting it here, finishing and going back. It’s only 5.5%. I think what you mentioned last, last Concord. So is that working well or are we facing any duty challenges?
Sunil Agrawal
No, that’s working well because we are casting there and we have the custom border protection ruling specifically for our company stating that this process is as per the law. In this case we are paying 5.5% tariff only on the value addition not on the casting component.
Dipesh Sancheti
And your lab grown is done mainly in gold or in other. In every metal. In every precious metal.
Sunil Agrawal
Pretty much every precious metal. Platinum workable.
Dipesh Sancheti
Platinum. Okay. Are you seeing any traction more in silver? Because a lot of. Because of the high gold prices a lot of lab grown jewelry has started coming into silver. Are you seeing that kind of traction or it’s working well in all the three metals.
Sunil Agrawal
For us it’s more platinum and silver. Gold velocity actually reduce after prices shooting up. Now silver has recently shot up exponentially. So we don’t know how the silver with the new prices fair up in lab grown right now it’s doing well but moving forward we don’t know. So what we’re doing is testing into more different metals like base metal with a lower carat weight lab grown and see how that consumer takes up. We constantly bring new product Dipesh 100 new products every day. There’s a very high velocity of experimentation testing and then money for the coming to customers.
Dipesh Sancheti
Great. And is this new FTA which has been signed by India between EU and India. How is we, how are we as a company exploring that opportunity because apart from the other part of EU, that’s why.
Sunil Agrawal
Yeah, yeah. So we’ll save 4% on our jewelry export from India to Germany. So that will definitely benefit us.
Dipesh Sancheti
Okay. That will add to our margin directly. Is. Is that the right assessment correct?
Sunil Agrawal
It will.
Dipesh Sancheti
Great. And if you can just give us a roe going forward.
operator
Can you please join the queue for more questions as there are more participants in the queue.
Dipesh Sancheti
Okay, no problem.
operator
Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investments. Please go ahead.
Lakshmi Narayan
Thank you. Because your unique customer growth, I think the growth has been 2% for the nine months across. Just want to understand which geographies the growth has been positive and which geographies the growth has been limited. And if you can actually give some idea of whether based on the lifestyle or in the jewelry, just want to understand that particular product.
Sunil Agrawal
Yeah. Hello Lakshmi. So we are seeing the good improvement in UK digital customers. Adoption is pretty high over there. Ideal world remain flat and also Germany remain flat. Mainly we are seeing some low customer in US as the strategy of acquisition on digital customers we have moved from low price point to slightly higher price point customers.
So that’s where the unique customers were lower. We acquired a lot of digital customers through ten to thirty dollar price point. But we have realized later that those customers are not giving value as we anticipated and we are seeing that more high end customers giving more value. So that’s where we have seen last 12 months TTM basis unique customers are lower on US side.
Lakshmi Narayan
On the US again there are two ways to think, right? One is lifestyle, one is generally another way is digital and non digital. Where do you see the decline in unique customers in the US market? Which segment of this?
Sunil Agrawal
So with digital customers mainly we have seen the change in past one year as the customer inflow was very high and mostly jewelry product.
We were targeting to acquire those customers in one year back and that is now reduced after the changing of strategy to higher price point targeting. So mainly a US jewelry customer
Lakshmi Narayan
and what is your outlook in terms of that unique customer growth? Broadly what is the internal crop cost for HY57? Do you intend to keep the US unique customer growth at somewhere like mid single digits or how are you thinking about it?
Sunil Agrawal
We mainly target as the profitability of the customers rather targeting number of customer targets, getting quality of customers. So not a specific number but more a quality of customer we are targeting.
Lakshmi Narayan
The second question is that if you look at the last nine months, any specific projects or something which you have actually initiated and that have Actually done pretty good for us. Anything you would like to call out the last six months, last nine months that you see either benefits have already come or you think come actually down the line which you haven’t done the previous year.
Nitin Panwad
There’s so many initiatives just to sign.
Lakshmi Narayan
Anything you would like to call out in priority like towards the things which you are choosing.
Nitin Panwad
There’s one pure D2C brand called Rachel Galley that we started four years ago. So last quarter we we were able to see the good traction on Lab Grown diamond and a couple of other jewelry products. And then we scaled up the spend and were able to triple the revenue within that time. Now it’s a very small base so that overall doesn’t speak come up in those four numbers. But there is a proof of concept that on digital space, if we are able to crack the code, there is a room to scale up the revenue pretty rapidly that we saw with Rachel galley putting up AI initiatives on different places.
For example AI chatbot. So all the text responses are generated by AI. The email responses are generated by AI. Even the voice response. Now we’re testing with 10% customer in US the voice response is by AI. We’re using AI for creating our daily schedules. Our calendar is getting done by AI. We have CRO GPT within our business in us. So any question for internal data we can ask in natural language and get the answer. Now multiple levels, we are implementing AI content and everything everybody does. But these are more high value added AI use cases in the organization.
Warehouse automation, not automation. Process improvement in US especially has led to lower operation costs. Now US is 320 people at higher revenue which used to be 500 people 3 years ago. Thank you. So we are seeing a lot of different areas and initiatives and different places that is varying. One initiative that you asked and I’m just sharing with you, there’s a concept called zero distance. The Chinese term called Rinman Hey. Followed by Higher founder Zhang Rumin. And last month I went to China to meet him. He was a $55 billion company. He gave me 90 minutes.
We understood from him how they create micro enterprises within the group with PML responsibilities and then how they drive efficiencies, increase the sales, increase the cost, improve the margins and that leads to efficiencies. So across the same group, now we have over 100 micro enterprises with payment responsibilities and we are developing entrepreneurs within our company to drive the business forward. So a lot many initiatives that I can list here. But all this put together gives me confidence that BGL is Poised for strong growth in years to come.
Lakshmi Narayan
Thank you.
operator
Thank you. The next question is from the line of Naveen Bait from Nuama Asset Management. Please go ahead.
Naveen Baid
Thank you for the opportunity. So I had a bookkeeping question. So if I look at your segmental revenue. So there is a disconnect between what is reported to the exchanges and what is put out in the presentation. Can you please explain that?
Sunil Agrawal
Let me see one second. Yes. So exchange gain specifically is not present in the segment one. It is clubbed between the all the entities. You are referring in the next representation segment result.
Naveen Baid
Yes. Yes. So for if I look at the investor presentation, the segmental slide, your US revenue is at 593 odd crores.
Right?
Sunil Agrawal
Right, Right, Right. Right.
Naveen Baid
Whereas if I look at what you have reported as an extra one in the exchange filing, your revenue for us is 685 crores.
Sunil Agrawal
Yeah. So that is why we have shown separately because that is the the published account is based on the geography wise and here we have separated the retail and the manufacturing US we have a two entity. One is also sourcing entity so that revenue clubbed in us. But now for the better presentation that the actual real reflected numbering investor presentation. So the other revenue is the sourcing revenue which done by a separate entity in us.
Naveen Baid
Okay, but then it’s fair to assume that those products are eventually getting sold in the US only. So the incidence of sale, the true incidence of sale in the US is what is reflected in the exchange number of 685 crores. Is that fair to assume?
Sunil Agrawal
Yeah. Not good. That will not be a comparable number then because some of the inventory will be remaining from those products in us. Fail to compare the retail and the sourcing separately, both sales.
Naveen Baid
Okay. Okay. Just one more question. So what is our current customer acquisition cost across channels? Just some color.
Nitin Panwad
So that would be very Naveen. That would be difficult to pinpoint because we have six brands and within each brand we have multiple acquisition channels. We have Google, we have meta within meta different. We drive about 10 to 12 different product categories and each have different customization costs.
Naveen Baid
Let me rephrase the question. So then what is the ROAS that we generate on the digital performance marketing spend that we do the return on taxpayer.
Nitin Panwad
Yeah, so we look at ROAS overall ROAS on a store ROAS basis. We look at 2.5 as a target routes that we should generate because our margin is about 65% at 2.5 reverse we are very human and then we try to get that customer to purchase again and again in future. With us. So from all marketing put together there is meta, Google, Apple, affiliate and email text. All those marketing there are the overall company target that we look at or the brand target we look at. But individual channels may differ. Some channels for example meta lab grown diamond one day click accrual roas we are okay with 0.4 or 0.5.
0.4, 0.5 because then that eventually we know flows into the other channels and email or direct or whichever and then goes to 2.5. So it’s a bit complicated across different product categories and different channels.
Naveen Baid
Okay, got it. Thank you. That was helpful. Thank you.
operator
Thank you. The next question is from the line of Tripty. An individual investor. Please go ahead.
Unidentified Participant
Hello sir. Am I audible?
operator
Yes ma’. Am. Please continue.
Unidentified Participant
Okay, so sir, my question is like India and UAFTA trade deal was concluded yesterday removing the 2.4percent duty on jewelry. Your German revenue has been stagnant and you cited a 9% digital drop last quarter. So since pure Jaipur unit are already shipping to Germany, will you use this 400 basis point margin tailwind to the lower price and fix the digital decline or will you let the flow bottom line ensure Germany doesn’t slip back into the launch and seasonally be Q4?
Sunil Agrawal
Good question, Prithi. Thank you. So our aim would be to get to a revenue growth of 10% or higher in Germany with EBITDA contribution to the group. So within that objective we will look at what works best. Should we reinvest some of that into the customer acquisition or to let it flow? So that will be decided on a pretty dynamic way. So at this time it will be difficult for me to give a guidance how exactly it will play. Our business is very dynamic. 50 there’s a TV, web and multiple product lines. So we look at pretty dynamically.
Unidentified Participant
Okay. Okay. And one more thing that you had multiple leadership alignment in Germany over past 18 months. So is current team permanent or should we expect more reconstruction in cost in FY26?
Sunil Agrawal
Yeah, we’re pretty happy with the team that we had now and they’re coming together very well and they’re performing as you saw last quarter revenue growth from quarter before. There was no revenue growth last quarter There was revenue growth, gross margins are higher, EBITDA positive profitable. So we’re very happy with the team coming together and performing.
Unidentified Participant
Okay, so there is no change in team, right?
Sunil Agrawal
No managing, expected some additional spaces to fill. But there is all middle level only. There’s nothing. No senior changes or no major changes.
Unidentified Participant
Okay, there is a last question like you can Consistently beat your lower, lower margin like 7 to 9%. Whatever you guided then given that you grew 16% in US this quarter so why are you still maintaining such a low guidance for full year?
Nitin Panwad
First what I’ll take Sutrabti. So US growth 16% is not Apple to apple comparison because that includes the sourcing unit growth. But for you can refer the investor presentation that will be the better in line with the comparable number. So us in past quarter we have a growth of 8.7% in local currency terms. That is the more comparable number in rupees terms. Yeah. And before next year we are guiding that 9 to 11%. So that is definitely the other initiatives helping and that is why we are guiding the higher number for the next year.
Unidentified Participant
Okay, thank you so much.
Nitin Panwad
Thank you.
operator
The next question is from the line of Dipesh Sancheti from Manya Finance. Please go ahead.
Dipesh Sancheti
Yeah, a couple of questions from here. Can you hear me first?
Sunil Agrawal
Yes, Dipesh.
Dipesh Sancheti
Yeah. What is the labor code impact on our company in this quarter?
Sunil Agrawal
Yeah, I’ll take that. So the basic labor code impact was not a significant around 1.7 crore. So that we have accounted in our employee cost.
Dipesh Sancheti
Okay. Okay. And going forward what is ROE expectations? Because in nine months you’ve done ROE of about 15% and in 2022 we were you know, about 20, 20%, 23, 32, that kind of a number. So we how when do you see that number actually going to 23? You know from 15 to 2023. Hello.
Sunil Agrawal
So yeh, difficult to guide the exact timeline for that. But what I expect that we already given the guidance for next quarter for EBITDA number and we don’t foresee a major capex except some in UK but nothing exceptional capex. So ROE and ROC ROIC both should improve next year and medium term they should continue to improve. So what I, what I’m guiding is that we should continue to see leverage next year and in midterm.
Dipesh Sancheti
So the trajectory will be upwards.
Sunil Agrawal
Yes, it will be upwards. Correct.
Dipesh Sancheti
Right. And if I can just put in one more question that how much of your lab grown sales actually come from a carrot and above because that’s where the real margin would be. I’m assuming.
Sunil Agrawal
We have an idea.
Nitin Panwad
No, we don’t have that.
Sunil Agrawal
It’s a good question Dipesh, but it’s a very micro question. Yeah. Prashant can probably but I can give you a general idea that from my back of the Envelope estimate about 70 75% of sales would come from 1 carat and up.
Dipesh Sancheti
Great. That’s good enough. Yeah. Thank you so much. All the very best guys.
Sunil Agrawal
Thank you.
operator
Thank you. The next question is from the line of Sriance Jain from Swan Investment. Please go ahead.
Shreyans Jain
Hello, can you hear me?
operator
Yes sir, please connect.
Shreyans Jain
Yeah, so my first question is when you’re guiding for 9 to 11% of top line growth, what sort of INR depreciation are we building in this guidance?
Sunil Agrawal
Yeah, so we’ll have some, we’ll have benefit of first two quarters assuming that now rupee slide stays where it is so it doesn’t slide any furthermore. So first two quarter will have benefit and we don’t expect much benefit for second H2 of next financial year. So I don’t have exact numbers that we calculated with me right now. But it’s just overall benchmark, Overall framework is H1 will have benefit, H2 won’t have much.
Shreyans Jain
And so given historically the rates at which INR depreciates, would it be fair to assume that 5 to 6% is our constant currency guidance in that 9% growth rate?
Sunil Agrawal
I don’t have the exact number Shayans, but I do long term rupee has depreciated about 3.5% against dollar. But first two quarters would have more than that and next two quarters would have less than that. The calculation that we’ve done in detailed regulation is not with me right now but there is some component of depreciation in the guidance.
Shreyans Jain
Okay, all right. And sir, the other question is on our acquisition of Mindful Souls. You know, since our acquisition I think the revenue run rate has been Constant at about $4 million. And given that that business is at a high gross margin of 75%. So is there an opportunity to look at 60, 65% gross margins which we typically operate at at a company level and drive some growth there? Because I think post our acquisition the revenue run rates have largely been stagnant at 4 million.
Sunil Agrawal
Yeah, good observation. So the, the main reason for revenue stagnation is the digital cost, customer cost acquisition, customer acquisition cost and we want to limit to certain percentage of revenue. Beyond that it becomes not a profitable business. And as we are learning more and more about the business and also adding some more strength to the team in India, we expect this business brand to scale in coming future. So Y O y we had DE growth in last quarter Q3 and Q4 would not be will also may have a little bit of degrowth but from Q1 onwards we expect it to have single digit growth and then get into double digit growth 3/4 down the road.
So I’M quite excited with this brand that we have as a group, major group. We learned quite a bit from the processes, data marketing processes from this brand and this brand itself has a potential to grow with the demographic that we address it. We target there.
Shreyans Jain
Okay, and the last question on the UK business. So you know exof constant currency we’ve degrown by about 6 odd percent now. UK you know since the last few quarters has been struggling at least on the revenue bit. So what are, what are the opportunities you think there are, you know going forward? Because both US and UK are a large piece of business for US and UK was negative and US also I think was 3, 3% constant currency. So when we’re guiding for 9 through 11 of top line growth, these two geographies have typically, you know they have to fire.
Right. So are we seeing some signs on the ground where you know, customer sentiments have improved or something on those lines?
Sunil Agrawal
Yeah, so I’m not seeing consumer sentiment improving. Our guidance is without that sentiment in play. But we are seeing our own internal digital marketing improving in both US and UK. As I mentioned Vishal Galley had 3x revenue and with profitability and that learning from each other, all the six brands that we have is percolating within the group in different vertical like meta, Google app, login, affiliate influencers, email, all these areas and that is that gives me confidence for the UCL group. In addition to that we lost two contracts for national broadcasting in UK in last six months and we are negotiating with couple of such contacts and that contract will also give us growth.
I’m fairly confident that the UK will come back to growth and US will accelerate the growth.
Shreyans Jain
Okay, all right, that helps. Thank you and all the best.
operator
Thank you ladies and gentlemen. We will take that as a last question for today. I now hand the conference over to Mr. Sunin Agrawal for closing comments. Over to you sir.
Sunil Agrawal
Thank you everybody. I want to thank all the participants for your time and great questions. If you have any further question, feel free to reach out to Prashanth Saraswat Agvija or Amit Sharma at AG Selectors PR India and we’ll be happy to answer your questions. Thank you all once again.
operator
Thank you on behalf of WebHub Global Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. It.