Refused to commit on store guidance dmart ready.

The first question is on average sales per square feet - why are you not worried with the number? You mentioned sales per retail business area square feet will go up as we go forward, you have larger stores, but you're not too worried about the current trend - can you elaborate? Also on quarterly numbers, revenue per store - this was the first quarter where things were near normal, and you mentioned in your release you are a bit unsure on general merchandise. On gross margins in Q1 the number moved up quite a bit, a multi-quarter high, despite the wait-and-watch on GM discretionary - what is going on? Lastly on DMART Ready - quick commerce excitement is huge and same-day delivery options are far and few - is delivery timeline something you want to work on now that it's not a cash guzzler?

When you're in the ownership model, you don't get too worried about it. If you're in a rental model, then that's a very, very important criteria. We build for the future and the incremental cost of real estate build-up doesn't hurt the balance sheet or the P&L much. So it doesn't matter so much; if you're leasing, paying rent every month, then it is very, very important. On general merchandise: I'll give a very detailed note post quarter 2 FY 2023, because we said we need 2 quarters to give very good color. All I can say today is that yes, it is inching towards getting better - not just general merchandise, but general merchandise and apparel, the non-FMCG side of the business. But we're still not completely out of the woods there. We find discretionary spends in mass consumed category of products to be under a little bit of stress still - anything that is mass level consumed. For example, a Rs. 200-250 T shirt, generally used by lower middle-class kind of customer - that kind of buying is getting a bit postponed. On gross margins: that may not be the right way to look at it. Compare with Q1 of FY 2020, a non-COVID Q1 - we are still 30 or 50 basis points lower than that gross margin in this Q1. Q1 gross margins are generally higher than annual - back to school, people shifting homes - so high margin stuff sells during Q1. Q4 and Q1 are good, relatively better margin quarters. On DMART Ready: Independent of what's happening outside, there is a huge opportunity for us to improve our services. Our services are not where we want them to be because we are running out of capacity. We're building capacity. We are running this business as a separate entity. We need to build new fulfillment centers in particular geographies to service customers - we're trying to at least achieve a 24-hour promise but we are struggling with that to be very honest. So we need to build more FCs - this feeling is primarily in Mumbai. The location of the FC is very critical, should be as close as possible to the demand areas.

First, typically you use this forum to share guidance on store additions - any update? Second, on DMART Ready, you are increasingly getting confidence - what would make you become more aggressive on city additions? Lastly on discounting pressure - how is that panning out post normalization? And on general merchandise mass-end pressure - is it down-trading or reducing frequency?

Hi, Avi. We don't give store guidance. But we gave it last time because of the COVID anxiety and because our first-year store addition was 22 - 20 net because we shut 2. And hence we gave the guidance for second year also. But otherwise we don't give guidance. On DMART Ready aggression: internally nothing much. Externally, a little bit of patience is what is needed. We will go at our own pace - the pace that the business needs and the capability that we have. We're in a good state, not in a hurry, but not really going slowly. Read the resolutions in our Annual Report - that gives you a sense of what we're trying to do with the E-commerce business. On discounting: Not yet. We haven't seen that yet. Discounting is there, but it is not reckless. It is fine. On general merchandise mass-end: It is both. If it is soap, there will be down-trading because everybody has to take a bath - people don't reduce the number of baths per month. As far as general merchandise is concerned, yes, there will be a little bit of postponement. So it is category to category - certain categories, you need it, so you down-trade; certain you postpone. On margin opportunity from down-trading: we straddle across a reasonable range of price points within each category, so we capture demand depending on consumer behavior. That does not mean we recoup or do extra analytics on losing higher price point customer to lower price - we don't do that. We try to capture demand at a broader range of price points so the customer doesn't go empty handed.

First on store expansion strategy in Mumbai - in a city where you'd have 35-40 stores, do we still have potential to increase, especially since you don't have stores in South Mumbai? Second, on North India, Ghaziabad - first store opened 2017, last 12 months 5-6 new stores - what is the plan for northern India? Is there a land bank to new store ratio? On private labels - share thoughts on share and how deep you want to go. Final: share of delivery vs pickup on DMART Ready has been 50% - any change with reopening? And has the customer cohort interacting with us changed after scaling DMART Ready?

Hi, Sheela. Mumbai can take significantly more stores than what we have. When I say Mumbai, it's MMR - Mumbai, Navi Mumbai and Thane. We can have 100-130 stores. In fact, probably even more, but I don't want you guys to get too excited about it. From a demand standpoint, there's no issue. Pricing/real estate also got relatively better over the last 2 years, especially during COVID and we did acquire some locations. But South Mumbai is not possible - very, very clear, we will never open there at these price points. But Virar, Vasai, Dombivli - huge opportunity. On NCR: we're quite glad about the outcome. More concentration of stores in that region indicates the region is doing well on all financial metrics. Delhi-NCR like Mumbai has challenge in getting real estate. But Ghaziabad, Noida, Gurgaon, Faridabad - very interesting locations, looking for space there. On land bank: No, we don't believe in land banks. Our objective is properties should open in 2 years, worst case 3 years. On store visibility for next 2 years: If I say yes, you'll ask me how many - I don't want to comment. But yes, we will have a view, we have those properties acquired. On private labels: Sheela, my position remains the same as last year and 2020. Nothing changes - everything is on our website. On delivery vs pickup: We can see people prefer home deliveries more, but too early - shifts are very minor. We've been a little slow on opening more pickups recently to reduce drain of capital. There are 2 distinctly different customers - the affluent one who loves convenience and is happy to pay delivery charge; the pickup customer is very different - doesn't want to waste money, has time available. On customer cohort: A good chunk of DMART Ready customers are very different customers as compared to regular DMART Store customer. We don't track consumer data, but this customer is a significantly larger customer as a cohort and is a very premium customer - that's why we are calibrating our assortment accordingly on DMART Ready.

Two straightforward questions. One, any revised or updated thoughts on fresh and cash and carry? You are now a Rs. 10,000 crore quarterly run rate company - your scale and size is very different versus 3 years back. Is there a different thought process in cash and carry?

On both points, we hold the same position as we had last year. We feel that fresh is very challenging to run in our model, whether it is brick-and-mortar or in e-commerce. And on cash and carry, our comments remain the same as last time. Our position on cash and carry is the same that - we earlier thought we should get into that business, but we've got too much on our plate to be honest. We'd like to focus on what we're already doing and we're doing it well. We are busy with what we are doing and we are happy with just doing that.

Some questions on e-commerce. You're investing up to Rs. 350 crores in share capital there. Do you want to keep this business separate? Going forward, more use of offline assets for DMART Ready? Number of fulfillment centers? Loyalty/data leverage from offline stores - any change? And on store count - how many of these are leased? Less than 10%? Going forward, should this share change much?

Last year we've gone through the journey of thinking multiple things to leverage ASL capability - hard infra and soft capability. A lot of the buying and merchandising strength of ASL, built over 2 decades, has been transferred to AEL. A lot of the pressure of buying actually significantly reduced for AEL. From consumer standpoint, they get the same products at similar prices. We're now a Rs. 40,000 crores company with a lot of talent built. People who know the business, operations, DMART culture are also being moved to AEL. In a lot of locations, we have spare physical infra available, and we are going to utilize that but in a calibrated manner. Read the resolutions for what we're trying to do. On data: The ethos continues to be the same, Latika. We look at the data to enhance our services. But looking at data to upsell, down-sell, things like that is something not a part of the DNA of the firm. We always believe we should be a platform where customers are choosing basis what they want - very clean, clear, simple. This is the product, MRP, this is the price we offer - through that differential, this is the benefit you get, because you shop at DMART. Other than that, we don't nudge or push anything in any fashion. That is the ethos. On leased: 13%, at least. 10%-15% will continue. Because of the size of stores we look for, lease versus buy doesn't give you much leverage - maybe 20%, like instead of 40 stores you may open 50. But because of the size of the stores we need, the market scenario doesn't change much. We just need to have a reasonably large team always out in the market looking for new properties.

On the way discretionary buy has evolved - mass end is under pressure. Is there an opportunity to redefine the value proposition - online-to-offline progress, especially mass and consumer categories. Have you done thinking on calibrating the entire pie of discretionary, repositioning stores? My sense is consumers may have structurally changed habits. Also on COVID-time non-operational areas: large stores, average ~60,000 sq ft vs lower previously. Part of that area still dormant or used for future-proofing? Now that part will go to DMART Ready/e-com infra - kept for discretionary purchases - what proportion of last 3 years' added area is still non-operational? And do you see opportunity in larger area becoming available beyond just headline footfall recovery? Would you ever start considering opening smaller stores?

On this specific question, it is too complex a point you're trying to make. We are not thinking about it that way. Our business focuses on very basic everyday use simple products. We'll see with time - it is not as gloomy as I may have communicated. Overall the business is roaring, doing extremely well. Certain categories on discretionary side have pressure but otherwise overall it is fine. We don't think we need to do anything significantly different for this specific cause. On non-operational area: very little of the space is non-operational. Larger stores give us more opportunity to sell discretionary in a better way, hence discretionary contribution increases - that position holds. Addition of new categories is a continuous process - every year or 2 you'll see a few things differently, adding incrementally. The buying and merchandising team's job. On utilization: Utilization of the entire space of DMART Stores is already done - back to full flow. When I speak about stress, basis points, maybe 1% here or there. The weighted average size of stores this year is higher than last year, and last year higher than the base. The trend is opening larger stores. 1.5 years have passed and we've got insights on e-commerce. Coupling all of this, we are now saying - is there an opportunity to do some part of e-commerce in some of these larger stores? You have to connect these 3 together. We are thinking about all of this because certain operating leverage is available. On smaller stores: No, we like the large format. We would like to focus more on the large format, and obviously the e-commerce business.

Three questions. On larger stores being opened recently - how does store economics differ vs earlier stores? Mainly larger share of GMA being key driver, or some space for e-commerce? Follow up: stores recently in excess of 80,000 sq ft - is the share of GMA more than 25%, 27% company average, or significantly higher? On DMART Ready - last year you alluded to focus on city-wise profitability. Mumbai obviously reached scale, entered a few more cities. How many more cities do you see this format getting into? Last: in Q1 FY 2023, fair to assume positive like-for-like? In metros like Mumbai, Pune - any impact on footfall versus pre-COVID since e-commerce traction was higher there?

They are all mutually exclusive. When we set up a store, our math is around - will the store make money on the brick-and-mortar side, that's the main call. Incremental construction cost - whether warehouse or brick-and-mortar or small fulfillment center - are very incidental to overall working. Will this store make money in brick-and-mortar? That's the way to look. Size is a factor of price of land, construction, location, revenues of other DMART stores in vicinity. On store-by-store GMA: Not really, the moment you go store by store. We declare averages - you'll have variations. In general, when we say pre-COVID was 28%, you'll have a lot of stores above 28%. As business grows, stores mature, GMA contribution actually reduces - but trades off with absolute revenue. If 28% GMA at certain revenue versus 3x revenue at 20% or 18% GMA - the 3x business is better, ROIC is awesome. Getting fixated on GMA may not be right - lot of our older stores do very high throughputs, GMA is much lower than 28% and still deliver great ROIC. On Mumbai DMART Ready breakeven: Your assumption is wrong - we are not yet breaking-even in Mumbai. Except Mumbai, other cities have still not reached that level - probably wait another year to comment. On Q1 FY 2023 LFL/footfall: Just to be fair to all our shareholders, allow me to comment post Q2 FY 2023 on anything specific on these trends. In general, the business is back. But specifics, I will give it through a note at the end of Q2 FY 2023.

I just wanted to understand the bill cuts - average bill size is about Rs. 1,600 or Rs. 1,700. What proportion of bills are below in the Rs. 500 to Rs. 1,000 range? And how much from much larger ticket sizes?

I can't comment on that. In general, since you raised this point of bill cuts, we have seen a huge surge on the average bill value, which is obviously a disclosed number. And this is a factor of 2 things. One is obviously inflation. Inflation is playing a role there. I think COVID has also helped - during COVID basket values were pretty high and that habit has somehow sustained. It has helped us also as a business - less crowd, more revenue, on all elements. Financials have changed a lot because of this change in buying behavior. But in general, basket values have gone up, which is very, very good for us.

Two questions. For stores in existence over a long number of years, what is the level of revenue growth you'd be happy with - in context of pretty muted revenue per store post COVID compared to earlier? What number is acceptable for the portfolio? On the network - if we go to lower-tiered towns/cities/neighborhoods, how should one look at store-level economics between large and lower center? Is it fair to say as we grow larger, ROIC profile keeps going lower?

Even the oldest of stores, if they are growing at the rate of inflation, which means no volume growth, and these are stores doing very high turnover per square feet - even if they grow at inflation we're very happy. That is more than enough for very, very old stores. On portfolio average: I cannot comment, Richard. We declare LFL, basis that you have to make a judgment. It is very dynamic - now the base of younger stores is much higher because we've added more and more stores. Earlier 15-20, then 20 to 38, now 50. That will tilt the like-for-like for higher rate of growth. We just look at ROIC per store. On Q1 numbers vs 3-year ago revenue/store CAGR: While arithmetically your number may be right but I will respond in different way. We look at age-wise like-for-like growth - 10 years and older, between 10 and 5, between 5 and 3 - store-wise. If a store is not performing well, it's primarily for 1 reason - another DMART store has opened close by. Otherwise, decent volume growth. Q1 FY 2023 - we have significantly recovered, decent growth. I don't think it is 2% at aggregate level, much better than that. One reason your data may be distorted - lot of preloading of new store openings in Q4, entire annualized sale is not baked in. On large vs small center economics: Higher population city directly correlational to higher per capita income, real estate price, and higher revenue. Mumbai/Bangalore/Hyderabad - turnover per store much better, real estate cost relatively higher. Small town, real estate cheap, revenue also low. Larger towns is where returns are relatively better. On future ROIC: I don't know about the future.

On quick commerce - any sense if they had impact on your sales per store? Whoever achieved scale must have come from market share gains - Kiranas losing or incumbents like yourself or e-com traditional? On total bill cuts of 18 crores annually vs 20-odd crores in FY20 with much higher store count - bill cuts per store significantly lower - why hasn't total recovered? Can you share Q1 bill cut numbers? And on revenue per store 3-year CAGR being only ~2% disconnected from SSSG analysis - reconcile this disconnect.

Our business is doing fine, is all I can comment - we play in the positioning on value, don't play much on convenience format. Our numbers are pretty much intact. I cannot comment on anybody else's business. Whether large metros, cities after that, all small towns - everywhere our business has recovered and is doing relatively well. On bill cuts: First, that is annualized for full year. Our overall revenues have come back pretty well. Q1 was fantastic. We just want to see if that sustains for Q2. Average bill cut per customer is also sustaining - not going back to pre-COVID levels. Even after factoring inflation, we have got a bump higher than inflationary growth - very encouraging. We don't share for the quarter. Number disclosed next year. After Q2 FY 2023, I will give some additional color on our businesses. On 2% CAGR disconnect: See, on Page #10 of our presentation, top right, like-for-like growth is what we referred - which is 2 years and older stores, that's the metric. I don't know where 2% is coming from. We've never done arithmetic the way you have done or Richard. I think there's an error in that arithmetic. But on like-for-like, you're absolutely right, 16.7% versus the negative 13.3%, you're back to zero. Q1 FY 2022 was wave 2 of COVID, significant downer, business takes time to recover. We commented in Q4 FY 2022, again in Q1 FY 2023, business is back. I'll not give numbers; I'll give it in Q2 FY 2023, like we have promised. With all old stores we look at value sale, apply weighted average inflation per annum, multiply CAGR inflation, then look at how the business has done in Q1 of this year - even on month-on-month basis. I have numbers even for July - considering Q4 FY 2022, Q1 FY 2023 and July 2022, business has recovered, doing fine.

Total sales growth 3-year CAGR in Q1 about 19% - similar in Q3, Q4. Earlier we used to grow 25% plus. Even at high teens/20% - is that fair representation of underlying business? Or still some weakness? Also FY20 vs FY22 - GMA per store down ~20%, food up 1-2%, but non-food FMCG point to point down 9% on per store basis. Why is impact on food vs non-food so different? FMCG companies show decent growth FY20-FY22. And how frequently does a consumer shop at DMART per month?

What you mentioned is perfectly right. As the base grows higher, sustaining that level of CAGR may not be possible. It is a function of how many additional stores I keep adding every year. We were having this conversation internally - one fundamental difference happening - earlier when we opened a new store, CAGR growth at very high rate continued for 3-4 years. Now because the brand has become very, very popular, all that is getting front loaded. When I open a store, within the first 1-1.5 years, I am getting that sale at a very high level. And because we track like-for-like for 24 months, all the incremental revenue has already been baked in. By the time it qualifies for like-for-like, it is already a Rs. 150 crore store or Rs. 120 crore store. On food vs non-food: Honestly, good 6-7 months was COVID. In COVID, non-food consumption significantly reduced - washing lesser clothes, lesser utensils, no maid, fewer toiletries because not going out. If one goes up, other looks lesser. Look at it from perspective of consumption during that period. On consumer frequency: How frequently a consumer shops at DMart? Our sense is around 2.5 times. Broadly that's our sense (on Rs. 1,600-1,700 average bill x ~3 = monthly spend).

On sales per square feet from longer term perspective - do you think opening larger 50,000-60,000 sq ft stores will keep sales per square feet continuously below Rs. 35,000 because of saturation, or best level might be lower than that for better metrics on per square feet basis?

Like I referred in the previous question, revenue per square feet metric is not that important criteria for us because we are in the ownership model and also this Rs. 27,454 of last year has also a factor of second wave of COVID so that is why it looks low. But in general, this is not a number we bother too much about. What is really important is - what is the money we are investing in an asset, in a location and do we think we will make a return within our target of ROIC. When you are opening larger stores with a view that it allows you a longer period of CAGR, your turnover per square feet in the initial years is much lower. It has a tradeoff - the call you have taken so that in longer term your CAGR growth rates are better off than had you opened just a small store in the beginning.

Multiple questions. With 15% GM and 9%+ EBITDA from cost leadership - in past you said 8% EBITDA is suitable, would you reinvest the 1% extra margin and go lower on GM? Not proactively to 14% GM that accelerates sales? Store network - in G+2 building operating only 2 floors, retail area counted is just operations or full building? At existing sites as stores mature, additional space provision for more buildings/floors? Real estate team bandwidth - last call you said 50 stores hypothetically - bandwidth now? DMART Ready pickup points at 515 - how many in Mumbai? MMR saturated for adding more pickup points? Align Retail capex - what is that for, plan there?

Binoy, very good question. I have been thinking about this for last few months but I do not have an answer yet. 15% is the gross margin. We will never earn more than 15%. After that, whatever happens below, is a function of market forces in terms of what PAT it should be. I have categorically spoken about 15%-16% gross margins. I do not recollect anything about EBITDA, but I know where you are getting at. This is something for us as a team to reflect on, especially competitive context. If competitive intensity increases we are not ashamed to cut prices. But otherwise 15% gross margin in this business - that is the way. All we will confirm / guarantee / write in stone is that we should not cross 15%. I have said 15%-16%, but now I am pretty confident to even say this year that we should not cross 15%. On store network/retail area: We add all areas which are needed to run the business. Certain places we carve out some space to store goods - all of that is part of retail business area. Over last 3-5 years revenues per store rapidly going up, so days of keeping one floor empty, opening 2 years later have reduced. We are basically taking that leap of faith and opening larger stores from day one. On additional floors at existing sites: Theoretically there, but we do not do that. Done it in couple of places - it is a big pain in a public place, in operating store to add another floor. Unless pressing need because store doing exceedingly well. On real estate bandwidth: It is better. How much better I do not know. I really do not know but Binoy very difficult to comment because then you guys will project. We are doing our best to sustain a decent run rate. On DMART Ready pickup: 519. Approximately, 300 in Mumbai. From consumer demand perspective I do not think it is saturated. Could have even 1,500 pickup points but at end of day they have to make money. Focusing now on intensity per Pick-up-Point (PUP). On Align Retail: Just to build manufacturing capabilities. Lot of sorting, grading, packing. Most of it is done except one location, but this will be continuous - going to North, want to have some setup there. When I say manufacturing, just that we buy grains, clean it, sort it and pack it, basic packaging.

You spoke of 1 lakh or 2 lakh population per offline store - similar metric for DMart Ready Retail Fulfillment center? What population can be served from one Ready store? Tamil Nadu apparently is higher online adoption market but not rolled out - any strategic insight on choosing next location? On QSR concept of split store metric led by service parameter - do we have such service-level parameter for splitting stores? And does relevance of SSSG go down with split stores - QSR introduced cohort-based like-for-like? Service-level parameter on split stores? On Kaizen - extending store hours - last initiative or middle?

Too premature, Tejas, to think about that business in that fashion. Our first focus is path to profitability. Opportunity is there - similar lens to brick-and-mortar from opportunity standpoint. But our view - first make operating model scalable and at least breakeven there. On choosing next location: Primarily population. Indore and Bhopal standout because population relatively lower but had additional capacity, real estate which we could deploy quickly. Otherwise playbook is going to large metros first. Now, also part of resolutions - exploring more cities where DMart store available infra is good. Even if city population lesser, allows entering at very low upfront capital cost - digital teams in place, corporate office, technology scalable. At very small incremental cost we can go to more cities. On split stores: We do not do that. For us very simple SSSG. Example - next to Malad Store we opened a very large store hardly 2 kilometers away in Goregaon. Malad Store sales have dropped, gone negative, but that is part of SSSG. We don't separate because it gets too complicated. We have to see all data points in totality - cannot see SSSG independently or turnover per square feet independently. But to answer specifically on SSSG, we do not do that and do not intend to moving forward. On service-level parameter for split: That is a good question. The scale of effort needed once decision taken is humongous. Powai or Malad - at the brim for longest time. We take decision, but getting another store takes huge amount of time. Looking at data we know when we need another store in vicinity - very clear. What we are known for is the Principle of Kaizen - one of those small elements we need to constantly keep improving day-to-day. Guiding principle is our whole 4RQC direction - product, price, availability, software, technology. Single positioning aligns every department, employee. On extending hours: Yes, that is in fact one big overhang post-COVID. During COVID we extended shopping hours in almost all stores. In a lot of stores we continue to have longer shopping hours even now. Pre-COVID vs post-COVID shopping hours have been significantly extended at almost all stores.

Two questions. On comments that footfalls in stores continue to be below pre-COVID, hence operating leverage from lesser manpower - in couple of quarters as business moves back to pre-COVID levels, will operating leverage be lower as you may need to recruit more staff (permanent and temp), with electricity cost also inching up? On DMART Ready - new city launches only for home delivery, not pickup - now with more DMart stores in network for DMart Ready, would we focus more on home delivery vs pickup?

It could be or it could be not. What is trending is that our basket value continues to be high. So if it remains at this level and you do more revenue, then operating leverage will continue to remain. It would not reduce but let us see. I do not know, let us see. So another two months to pass by and that will give us a better feel on that. On home delivery vs pickup: That is a good question. What we have noticed in small towns is that the real need for a pickup point is not there because these towns geographically are smaller. In certain towns like Vizag, we already have more than one store. We have got a lot of learning over the last few years. We find the home delivery system to be less complicated, if I may say so. And hence in some of these cities we have launched the offering without the pickup point and just do the home delivery. On smaller cities customer time/willingness: We are trying to have the pickup point within the store.

Questions mainly around DMart Ready - past 3 years numbers close to 10x in sales, much more confident on format/scalability. With competitive intensity in online format, what steps to improve efficiency on cost? Time to delivery - competitors quicker. Response in cities beyond Mumbai/Pune? Pickup vs delivery ratio in bigger cities like Mumbai? Newer cities in last 1-2 years - same FC peakout trend? Mumbai/Pune share of total Ready sales? Couple years back you said 1,200 stores potential in physical states - has number changed?

Confidence comes for two reasons - we are getting better than last year on older locations like Mumbai, people love the offering, more customers shopping. We need to open more fulfillment centers because capacities are peaking. Second - our brick-and-mortar business is also doing very well, hence ability to fund this business gets easier. We will calibrate investment commensurate to limit. On pickup vs HD ratio: Function of how many pickup points - more pickups, ratio remains same. In micro market with lesser pickups, home delivery increases. We are calibrating so unit operating metric gets more efficient and value accretive. Pickups not as easily available as Mumbai - HD contribution will go higher. On cost efficiency vs delivery time: Both these are contrary. If I look for efficiency, service to customer goes down. We are playing the balance. The best way to shrink delivery time is to have more fulfillment centers closer to demand area. Fulfillment centers we open peak-out within 6-8 months. Efficiency comes from throughput - more throughputs per FC, per vehicle, per employee. The way DMart model is, way we think about cost - lot of that operating-level knowledge is being transferred to DMart Ready. Problem with model is gross margins - making money is function of how much gross margin I will be able to make. Confident about running show with same ethos, beliefs, principles of brick-and-mortar. On peakout in newer cities: No. All these comments are for Mumbai. Metros, large towns, high density, vertical cities is where we see opportunity. In small towns, requires up-fronting all capex cost, waiting time for business to come. Different approach - we don't want unnecessary upfront CAPEX, going through brick-and-mortar assets and getting charged only for variable cost would be better way to make capital more efficient. On Mumbai/Pune share of Ready sales: It will be a dominant share - that much I can tell you. On 1,200 stores potential: No, it remains the same. Population and cities do not change - around 1,500ish.

Two questions. On the team - global retailers like Walmart, Costco built significant analytics bench strength. Given high inventory turnover in diverse India and capital deployment for new stores - one would think deep analytics capabilities essential. How are you building on that aspect? How large is analytics team, who heads it? In previous con-call you mentioned biggest challenge is putting in place right culture, training programs as you scale, ensuring talent stays. Concrete examples? How do you ensure right talent in right place, long tenure? You said you spent couple of years on training programs - any particular emphasis why? Once store matures - metro vs semi urban vs rural - ROI profile?

It is a very simple business, Suraj. The names you gave - global companies, scale, articles, 50-60-70 year old companies, very complex, tech evolved when there was no tech. So their systems are not as simple, straightforward as we have because we directly adopted best technologies. Not as complicated as you are assuming. One of biggest values is to have bunch of highly talented people across the organization - not just analytics, real estate. We all come together, each brings great value. Keeping them long time. Lot of things together makes great business. On talent/culture: Suraj just one simple thing - if you identify rightly and look at where he comes from, take him to a place he would have never reached anywhere else. Starts from front-end guy to maybe person like me. We are all simple fellows. At every level - where did this guy come from, does he have potential. Sense of ownership cuts across every single person - not just top management. On training programs: Spoken about this in detail two years back. As you scale up - 10, 20, 30 stores you are connected. As you grow, how do you know every store doing it right way? SOPs, standardization comes into play - same playbook like McDonalds, Walmart, big QSR or retailers. Map entire organizational activity through perfectly documented SOPs. Strong L&D program. In today's tech world you can digitize every single thing, brilliant audit trails. Online certifications - every person mapped to certain activity, certification, has to pass. Qualifying factors plus subjective evaluation by line managers. Never 100% perfect, but 80%-85% we are there - done all this for last 3-4 years, quite pleased with outcomes. On ROIC by location type: It is not really metro versus semi urban versus rural. In general, as the store matures the ROICs are pretty high, pretty good. On average turnover per square feet today is Rs 27,000 and when it was Rs. 35,000 I would say our mature stores are at multiples of Rs 35,000. Imagine capital price 15 years back, then judge ROIC. Nothing special about DMart - take Walmart's 30 years balance sheet, P&L - throwing cash on old stores like crazy. Beauty about this business - patience pays. Operating right, over period of time, returns are awesome.