Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Monte Carlo Fashions Ltd (BOM:538836, Financial) reported a narrowing of EBITDA loss from INR4.1 crores to INR2.3 crores year-on-year.
- The company has seen a positive uptick in online sales, particularly from its own website.
- Brand Rock.it has performed well and has been widely accepted by the market.
- Monte Carlo Fashions Ltd (BOM:538836) plans to open 45 to 50 new exclusive brand outlets (EBOs) across India.
- The company has increased its distribution network to 422 EBOs across 23 states and 4 union territories.
Negative Points
- Monte Carlo Fashions Ltd (BOM:538836) reported a revenue decline of 9% year-on-year for the first quarter.
- The company posted a net loss of INR13 crores for the quarter.
- The first quarter typically contributes only 10% to 12% of annual revenues, indicating a weak start to the fiscal year.
- There are still significant challenges in improving consumption levels.
- The company's working capital days remain elevated at 158 days, with no expected improvement in the near term.
Q & A Highlights
Monte Carlo Fashions Ltd (BOM:538836) Q1 FY25 Earnings Call Highlights
Q: What is the impact of the current Bangladesh situation on your business, especially the cotton segment?
A: We are not affected by the Bangladesh situation as we do not have any export presence there, nor do we import anything from Bangladesh. This is a non-event for us. (Sandeep Jain, Executive Director)
Q: Can you provide an update on the demand situation right now?
A: We are seeing some positive offshoots starting July compared to June, and August has begun well. We are looking forward to a positive start from Q2. (Sandeep Jain, Executive Director)
Q: What is the sales return policy for each of your channels?
A: In MBOs and NCS, there are no returns; it's completely outright sales. In EBOs, LFS, and online, there are returns at the end of the season, ranging from 10% to 20% depending on the channel. (Sandeep Jain, Executive Director)
Q: What is the revenue and margin guidance for this year?
A: We expect flat to single-digit growth in revenue for this financial year but anticipate a significant jump in margins, with at least a 200 basis point improvement in EBITDA margins compared to last year. (Sandeep Jain, Executive Director)
Q: How do you see the demand for the upcoming winter season and inventory freshness?
A: Inventory is under control this year. We have taken corrective actions, and we are very positive going into Q2 and Q3. (Sandeep Jain, Executive Director)
Q: What is the mix of online sales from your own website versus other platforms like Amazon and Flipkart?
A: Out of the total e-commerce sales of INR14 crores, around INR4 crores is from our own website, and the remaining INR10 crores is from different marketplaces. (Rishabh Oswal, Additional Executive Director)
Q: What is the net cash on your books as of today?
A: The net cash on our books is INR282 crores. (Sandeep Jain, Executive Director)
Q: Are there any plans for new CapEx, especially in manufacturing?
A: No new CapEx is planned for starting a new factory. We will have normal CapEx of around INR15 crores to INR20 crores for replacement of machines and warehouse expansion. (Sandeep Jain, Executive Director)
Q: How are you preparing for Q3 and Q4 in terms of inventory management?
A: We have taken corrective actions from last year’s inventory issues. This year, we are going very clean with our winter dispatches, and we are confident that inventory issues will not recur. (Sandeep Jain, Executive Director)
Q: What is your strategy for expanding the Monte Carlo brand?
A: We aspire to be among the top five brands in the country. Our focus is shifting from winter to summer wear, reducing dependence on winter sales. We aim to be an aspirational brand for our consumers. (Sandeep Jain, Executive Director)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
