Q&A
• Social media like Instagram would help create more brand awareness?
We have done. It didn’t work. Then changed the strategy.
• Proportional of sales through the APP is not that high?
We are investing in the apps. However, audience watching us for long hours on TV and Laptops. AI augmenting where customer can see the product on their own self.
• Inorganic growth, more dividend, capex plan as more cash flow?
Dividend is only visibility, no plan of capex in next 2 years, inorganic growth no plans yet.
• Market growth rate in US and UK, changes in competitive landscape?
Listed competitor reports 3-5% growth rate.
• How should one project sales and profitability in medium term?
US and UK markets are good. Our market share is 2.3% vs the listed companies which was 2% last year. Market size is big. We are the lowest product producer. Best cost structure in the industry. Confident of mid-teens growth for the next 2 years.
• Competitors took decades to reach to the size. Possible for VGL to reach there?
We want to grow at consistent pace, and not looking to be billion or trillion company.
• Employee cost grow yoy and % of revenue?
2 factors. This year we are performing ESOPs which goes in employee compensations. Cost booked from Mexico to inhouse. Call center in Mexico was in admin cost.
• What ked to this volume growth? Will it continue?
We give no guidance on volume growth. We are multi category and multiproduct company and therefore revenue growth is important. ASP 25-28 price points.
• Reason TV broadcast cost reducing so how will we reach to more customer?
Almost 2 years, we have optimized cost structure. Through negotiation, exiting non-performing location. Going forward broadcast may remain stable or go slightly up.
• Guidance of 14-16% revenue growth?
Yes
• Rupee depreciation benefit on margin expansion? Forex gain?
Yes
• ESOP cost?
4.4cr this quarter. It will continue due to application of IND AS. This is just change in accounting process comparing before Apr 2016.
• What % of revenue from Budget EMI?
Around 39% (39% in US and 37% in UK) vs (35% US and 36% UK) yoy.
• ASP up in tv and web, but gross margins lower yoy?
This quarter B2B business is higher which is lower margin. Not a core business. Guidance of 60% + gross margin.
• One subsidiary that has been formed, how will it contribute?
China, we have manufacturing process. Currently we export from Hong Kong, now this will be from China directly.
• Elaborate on welcome pack?
UK this was going on. It consists of letters from local business head unit with samples of some products like perfumes.
• Tariff war? Import duty?
We look this at opportunity. Our gross margin are very high vs competitors. It will impact them more and least to us as will be more competitive.
• Lifestyle products contribution?
Around 14%. More or less same margins however customer retention is less. Promote this form same channels, Amazon, ebay, Walmart.
