Organised luxury retail market is expected to grow by almost 26% by 2027. What are your growth projections for the next few years?
Sunil Suresh: We intend to double our business in the next three to four years. We have been stably and steadily growing at about 20% year-on-year and that is our target to double our business in the next four years.
Currently you have about 62 stores as a 20% CAGR target. Are you set to double that? How many new stores are you targeting?
Sunil Suresh: The major metros. We are not planning to expand into smaller towns. We will mostly be in the major metros, Delhi, Mumbai, Hyderabad, Pune, and Calcutta. Our intention is not to go into smaller towns because high-end, luxury furniture is a big-ticket purchase, there is a tendency among people to travel to the nearest metros to make this purchase. So, we do not see ourselves expanding into smaller towns. Even if they build homes in such towns, the habit is to come to the major metros because they get greater choice and selection of furniture and we want to be present in these metros.
The nine-month performance for FY24 has remained subdued compared to what we saw in FY23. A) What were the factors and what do you think you are going to clock in for the coming quarters?
Pradeep Mishra: Last nine months, we saw there was a major delay in the inventory handover. That did not uptake as per what we expected and that was a major reason for it and could be that people were traveling. Also, there was a Covid impact because of which the construction delay happened and then handovers got delayed. We are in the tailwind of the housing industry. So, any changes or delays there will have an impact on us. So, this is where my last year nine months were impacted.
Currently your revenue is evenly mixed across three formats. How do you see the revenue mix going forward?
Sunil Suresh: Our core business has always been seating. We continue to expand in the seating business, trying to get a bigger chunk in terms of different categories. While we compete with top global brands, the raw material has to be of a certain level and certain quality, so thereby we continue to import but with scale, we are now getting an opportunity to start localizing it. We are in discussions with certain European joint ventures where they are willing to come and set up facilities to be able to supply raw materials. For that, scale is required and that is where we are at this point. As I mentioned, we might be a bit import-dependent right now in terms of raw materials, but the actual plan is to start localizing. We have already localized close to about 25-30%. So, our vision is to localize almost 70-80% in the next three to four years and terms of competition, like I said we compete with global brands, and thereby we cannot do any kind of a short chase in terms of quality of material.