Vaibhav Global Ltd
NSE:VAIBHAVGBL
Earnings Call Analysis
Q3-2024 Analysis
Vaibhav Global Ltd
Vaibhav Global Limited has had a striking quarter, with group turnover reaching INR 888 crores, marking a considerable 23% growth compared to the same quarter in the previous fiscal year. This growth figure includes contributions from newly acquired businesses, but even when adjusting for these acquisitions, the company maintained a 14% growth, aligning with their forecasted guidance. They've also managed to retain robust gross margins of 62.4%, an improvement of 185 basis points year-over-year.
The company didn’t just boast revenue growth; it also saw a significant improvement in efficiency with EBITDA margins reaching 11.1% of revenue. This translates to INR 99 crores and represents a 30% growth year-over-year, indicating prudent cost management and operational leverage that benefited margin expansion.
In the U.S., the company is surfacing from a challenging retail environment with noticeable positivity in consumer sentiment. The same upswing is seen in the U.K. market, despite earlier economic uncertainties. Specifically, volume in the quarter increased by 16% year-over-year. After excluding the impact of acquisitions, the company still recorded a healthy 7% volume growth. In terms of constant currency, growth is 7% in the U.S. and 5% in the U.K. Additionally, the German market is experiencing a robust 34% year-over-year growth, with monthly revenues reaching EUR 1.9 million.
Vaibhav Global's recent acquisitions, such as Ideal World Ltd and Mindful Souls, have been successfully integrated and are showing encouraging progression. Ideal World attained profitability on a direct cost basis shortly after acquisition, and within the next nine months, is expected to reach profitability on a full cost allocation basis. These acquisitions are expected to enhance the company’s market presence and profitability.
Sustainability is a cornerstone of Vaibhav Global’s operations, reflected in their significant milestones like donating 84 million meals to school children and generating 1 million kilowatt hours of energy through solar power this quarter alone. These figures underscore the company’s dedication to environmental stewardship and societal contribution.
The company’s revenue upsurge to INR 888 crores in Q3, constitutes a 23% increase year-over-year. Excluding acquisitions, they sustained a 14% increase. Notably, constant currency growth stood at 10% year-over-year. With the recent acquisition of Mindful Souls, Vaibhav Global expects long-term benefits to its digital segment, projecting an increase of digital business share to 50% of total revenue by FY '27.
The digital revenue stream continued its impressive performance with a 27% year-over-year growth, contributing 39% to the total revenue. This affirms the company's strategic focus on the e-commerce space and its potential for continued revenue growth. Moreover, the company’s product mix revenue from non-jewelry products rose to 29% in the first nine months of FY '24, showing diversification beyond traditional product lines.
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Vaibhav Global Limited Q3 and 9M FY '24 Earnings Conference Call. [Operator Instructions] Today, we have with us Mr. Sunil Agrawal, Managing Director; Mr. Nitin Panwad, Group CFO; and Mr. Prashant Saraswat, Head of Investor Relations. We will begin the call with opening remarks by Mr. Sunil Agrawal on the business operations, key initiatives and a broad outlook, followed by a discussion on the financial performance by Mr. Nitin Panwad. After which, the management will open the forum for question and answer session.
Before we get started, I would like to point out that some statements made or discussed on today's call will 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 now hand the conference over to Mr. Sunil Agrawal. Thank you, and over to you, sir.
Thank you, Ramit. Good evening, everyone. I welcome you all to Q3 FY '24 Earnings Conference Call of Vaibhav Global Limited. I trust you have reviewed our results and the presentation providing insights into our operational performance and market dynamics. Let us start with an overview of our operational highlights in Q3 FY '24.
At the group level, we achieved a record turnover of INR 888 crores, reflecting growth of 23% over the same quarter of the last financial year. The growth is partly attributable to the recently acquired businesses. Adjusted for them, the growth would be 14%, which is in line with our [ rated ] guidance.
The 5-year CAGR of Q3, we had 12%, showing the robustness of that business model and its various economic cycles. Our gross margins remained healthy at 62.4%, which is 185 basis points higher Y-o-Y. Being the only company in our peer group with in-house manufacturing capabilities and a global sourcing base, it enables us to maintain market-leading gross margins at 60% plus.
EBITDA margin in Q3 FY '24 was 11.1% of revenue, which is a INR 99 crores, showing a growth of 30% Y-o-Y. Better gross margins and operating leverage helped us expand EBITDA margins last quarter.
Let me now take you through each of our addressable retail markets. In the U.S., retail sales are witnessing a gradual recovery growth by retail consumer sentiments. In the U.K., with inflationary pressures and mortgage risk easing out from the [indiscernible] peaks, the slow, but persistent movement of the economic growth positive delta is encouraging.
We are also breaking our offerings best suited to changing consumer demands. Consequently, during this quarter, our volume went up by 16% Y-o-Y. Excluding the impact of acquisitions, our volume is up by 7% Y-o-Y. In constant currency terms and excluding acquisitions, our growth is 7% and 5% in U.S. and U.K., respectively.
It is also to be noted that last year's base was marginally affected by delivery disruptions in the U.K. and further attacks in U.S. and U.K., which had approximately 8.6% impact on sales. In Germany, our growth momentum continues in Q3. Currently, we are clocking revenue of EUR 1.9 million per month, which is growth of 34% Y-o-Y.
Having invested considerably across major dividend trucks and digital platforms, we believe that we have desired building blocks in place to achieve breakeven in H2 of FY '25. We remain committed to strengthening our performance based on the [indiscernible] risk while a new reach new registrations, customizations and repeat purchases.
In Q3 FY '24, the reach of our TV networks was 139 million households. New registrations in Q3 on TTM basis is 3.5 lakhs and customer retention stood at 37%. Customers [indiscernible] pieces on a TTM basis.
Our recent acquisitions, Ideal World Ltd and Mindful Souls are progressing well. The integration of Ideal World with our U.K. operations was completed within a month of acquisition. During the first quarter, we achieved profitability in Ideal World on a direct cost basis.
As we are leveraging common resources like warehouse, studio and management team, we are confident of becoming profitable on a full cost allocation basis in the next 9 months. Our second acquisition, Mindful Souls continues to perform profitably. Already a margin-accretive business, we are utilizing the digital capabilities of Mindful Souls to create synergies for our existing digital businesses.
In parallel, plants are already -- are also in place to leverage our existing supply chain to improve the profitability of this business further. Sustainability is at the core of our business operations. We are delighted to share that this quarter, we reached a milestone of 84 million meals donated to school children under our flagship Mid-Day Meal program, Your Purchase Feeds. Presently, we are serving approximately 66,000 meals every school day. This quarter, we generated 1 million kilowatt hours of energy through our solar power plants. I'm delighted to share that to-date we have generated 14.5 million kilowatt hours of energy. This is equivalent to planting 2 lakh piece.
In addition to utilizing renewable energy, there are many other ESG initiatives in place at VGL. We have set 2031 as target year to become carbon neutral in Scope 1 and 2 greenhouse gas emissions. And we are confident to achieve this target within the stipulated time.
We continue to reward our shareholders and keeping in mind our dividend policy. The Board has declared a third interim dividend of this fiscal year amounting to INR 1.5 per equity share. Over the years, we have demonstrated agility and resilience in our performance. I would like to reiterate our positive outlook for the business. I'm confident to achieve our stated guidance of 13% to 15% revenue growth of FY '24, and the high teens range in FY '25 with decent operating leverage.
And in conclusion, I will say that the outlook is promising and compelling, and we are well placed to leverage the opportunity that lies ahead of us.
With this, I now hand over the call to Nitin to discuss financial performance. Over to you, Nitin.
Thank you, Sunil. Good evening, everyone, and thank you for joining us for Vaibhav Global’s Q3 FY '24 Earnings Call. As Sunil mentioned earlier, the macro challenges in our addressable markets are slowly easing out. We are constantly reflecting our range to net customer demand, which is well supported by our in-house manufacturing capabilities and globally [ present ] sourcing days.
Overall, in Q3, our revenue increased to INR 888 crores, which is 23% higher year-over-year. Excluding the acquisitions, the year-over growth is 14% including [indiscernible] score. Now let us discuss the revenue breakdown. In local currency terms, excluding acquisitions, revenue in Shop LC-us and TJC UK were up by 7% and 5%, respectively.
In Germany, our growth momentum continues with our revenue increasing by an impressive 34% year-over-year growth. On an overall basis, the constant currency revenue growth is 18% year-over-year. And excluding the acquisitions, was [indiscernible] constant currency growth is 10% year-over-year.
In Germany, actually 95% households transition [Technical Difficulty]
Sorry sir, please proceed sir.
Apologies for inconvenience.
On stat where I missed, in local currency terms, excluding acquisitions, revenues in Shop LC-us and TJC UK were up by 7% and 5%, respectively. In Germany, our growth momentum continues, with revenue increasing by an impressive 34% year-over-year. On an overall basis, the cost sale currency revenue growth is 18% year-over-year and excluding the acquisitions, also currency revenue growth is 10% year-over-year.
In Germany, achieving 95% household penetration within 2 years is a significant achievement. And we are on our part to achieving breakeven by next half of FY '25 at operating level. During the quarter, our [ PDA ] revenues grew by 17% year-over-year reaching INR 518 crores. Digital revenue continues its momentum and has increased by 27% year-over-year to INR 340 crores.
The retail platforms contribution towards total revenue is 39%. Also with the new acquisition of Mindful Souls, we expect this to be benefit our digital business in long term. We are anticipating that our digital business share will increase to 50% by FY '27 with the help of recent investment in retail sales.
We can only change, our focus remains to encourage customers to transact both [ EV ] as well as digital platforms. Omnichannel's business provides customers with a unique shopping experience while enabling us to fetch significantly higher spending per customer and customer lifetime value.
Overall, product mix revenue contributes from [ non-daily ] products increased to 29% in first 9 month of FY '24. Non-jewelry categories include home decor, beauty, fashion accessories and other lifestyle products. This marks a substantial increase from single-digit level a few years back, highlighting our ability to diversify our product mix successfully. For FY '28 we are looking at increasing the contribution from non-jewelry products to be 50% of total fee. Our unique offering in form of budget phase this customer the option of buying products on an EMI basis. For 9 month '23 FY '24 budget contribution to oral written [ revenues ] stood at 38%. Gross margin in Q3 FY '24 remains robust at 62.4%, indicating better realization. The EBITDA margin for the quarter is INR 99 crores, which is 11.1% of revenue and 30% higher year-over-year. Better gross margins and operating leverage contributed to EBITDA margin improvement. Profit before tax for the quarter is INR 72 crores, which is higher by 32% year-over-year.
Our operating cash flow and free cash flow remained healthy at INR 221 crores and INR 190 crores, respectively. This is possible because of our asset-like business model and ability to generate healthier [ retention ]. Our ROC and ROE stands at 18% and 11%, respectively. These [indiscernible] have marginally improved, and we expect them to improve further.
Our recent acquisitions Ideal World and Mindful Souls are progressing well. By September end, Ideal World resumed it's operation after a [indiscernible] of 3 months. During the first quarter, we became profitable in Ideal World on direct purchases. As we are now leveraging common resources, [indiscernible] warehouse studio workflows. After accounting all the other regional cost, we are confident to become profitable on a fully-allocated cost basis in the next 9 months.
Second acquisition, Mindful Souls continues to perform profitably. Already in margin-accretive business, we are utilizing the digital capabilities of Mindful Souls to create synergies for our existing digital businesses. Currently, Mindful Souls is clocking monthly revenue of USD 1.6 million. Going forward, we intended to leverage our existing supply chain to further improve the profitability of businesses.
We are pleased to announce that the Board of Director has approved a third interim dividend for the fiscal year amounting to INR 1.5 per equity share. This underscores our commitment to providing consistent payout to our shareholders.
In conclusion, despite our addressable market being a bit softer, our whole performance has been as per our expectations with some market share gain. We are optimistic about our prospectus driven by our robust business model and the accumulation of recent acquired businesses we repeat our guidance of 13% to 15% top line growth and full year FY '24 in the high teen range in FY '25.
We continue to generate healthy cash flow from [indiscernible] return and value for our stakeholders.
Thank you for your attention. I will now pass on the call back to the moderator for Q&A.
[Operator Instructions] The first question is from the line of Lalith Kumar an individual Investor, please go ahead. As there is no response, I would like to take the next question. The next question is from the line of Kunal [ Sharma ] from Care Health.
I wanted to understand about the demand scenario over there in U.S. and U.K., right? So what we are seeing -- if you can just elaborate the entire things in terms of retail demand and all of those things. And yes, that was our first question.
Yes. So [ claim ] demand, they are competing pressures. So inflation, still is there around 5% -- 4% or so and interest rate is 5% to 5.5%. So those have put some pressure, but job market is pretty robust in the U.S., especially. U.K. is not as strong as U.S. but still there. So we have macro factors and available for everybody to see. But what we are seeing is our continued modified offering to customers based on the current economic or demand environment, we were able to generate positive momentum both all at U.S., U.K., Germany as well as our new acquisitions, and we expect that to be the case in coming quarters and years.
Okay. Okay. That's good. And the last question was on the repeat repurchase that we are seeing that gradually like year-over-year, it's declining. So is that just because of the -- we are focusing on the [ longer ] side or the kind of things, so is that the reason behind? Or is that something else?
More of the consumer behavior at this time. And as I have mentioned 9 quarters earlier then consumer went out quite a bit. We have less [indiscernible] on TV or online to buy products from us. And secondly, there were a lot of inflationary fears. So people that more hiring product like gold or investable products. So our selling price went up because of average selling price going up, the volumes were higher or lower because of more [indiscernible] volume is lower. But going forward, we expect the price points to remain around where they are now or even scarcely moderate. Volume would go up in guidance to the revenue increase.
[Operator Instructions] The next question is from the line of Sandeep Raj from Oculus Capital Growth Fund.
Am I audible?
Yes, Sandeep, sir.
So my question was regarding the land acquisition which happened in U.S. almost 2 years ago. So can you have -- can you give any update on that?
Yes. We acquired the land at a prime location in Austin, Texas, due to plan of constructing our own headquarters. And then after buying that, we saw the inflation going up quite rapidly, interest costs also going up. And then the restructuring cost of constructing our own building in a bit too high, so we put construction counts on hold and we maybe moving into -- we maybe either staying where we are or moving to bigger rental premises. So plan to construct our headquarter has been put on hold.
This $20 million CapEx, which has planned for that never happened?
Yes. That never happened and we don't expect this to happen for another 8 to 10 years. Unless we have extraordinary growth and we see it and also the inflation coming down and cost of construction coming down.
Okay. So any plans for the land right now?
We're putting -- keeping on the balance sheet right now and it has already increased, much increased in value. So the investment we are fine with that. And we look at business growth in next couple of years and see where the business goes. What the message we'll take is for can you lease either existing or new place? And then if you really need more space beyond our expected growth then we may construct at the time. But right now, no plans.
[Operator Instructions] The next question is from the line of Yash Bajaj from Lucky Investment.
Am I audible?
Yes, you are.
So my first question is on Ideal World. So what kind of operating margins are we looking at once this business scales up, suppose, in the next 18 to 24 months?
Yes. We believe that our gross margin allows a pretty robust operating margins. So gross margin is 60% plus already for the business and you're reading a lot of existing infrastructure in the U.K. So once it scales, we believe the gross margin of the operating margin will be similar higher per business within the next 18 -- 12 to 24 months.
Okay. So it will be similar to our existing business, right, more or less?
Yes. Yes.
Okay. And I think, sir, in the previous presentation, you had mentioned that Ideal -- our goal is to surpass the acquisition revenue profitability in the next 3 to 5 years. So what is this revenue number which Ideal World used to do?
I don't believe we gave a guidance that we will exceed our pre-acquisition revenue numbers because we changed the structure of the business. This business used to do, I believe, GBP 80 million. Nitin, if you can correct me.
Yes. So before stopping this channel, the channel did GBP 60 million. And initially, we estimated that we will achieve this turnover in the next 3 to 5 years' time frame. But as we strategically that business earlier we are operating with a lower gross margins, and we are moving to the 60% in our gross margins. So we see and review that how long it will take to achieve that turnover. But our priority to achieve this business profitability... [Technical Difficulty]
Sorry for the inconvenience. Please go ahead, sir.
Apologies, Yash, for this hold. Yes, so what we were mentioning about that the -- before in telling 12 months, that business was having GBP 60 million turnover in trailing 12 months. And it's strategically, that business earlier was operating with a lower gross margin of 30%. Now we are moving our business model to 60% gross margin with the help of our supply chain and the product categories that we operate. We -- our first focus is to make this business profitable. And with the similar kind of margin as -- similar mentioned in the next 12 to 14 months, what we are rooted in right now. So earlier guidance that we have given to achieve that revenue in 3 to 5 years, and will continuously review it and we guide accordingly in the coming quarters.
The next question is from the line of Nakul from DS Group.
Am I audible?
Yes.
Yes. So my question is in the view of probable India U.K. [ SPA ], if it goes through, how much impact will it have on the top and the bottom line?
Yes. So our jewelry or non-jewelry products from India effects, not very high GT. It's about 5% only and we do not know whether the jewelry would be relatively impacting or not. It's too early. So if it does, then we'll have the cost benefit of 5% just in the U.S. on the purchase of jewelry. And remember that we have very high gross margins, so the cost of goods is relatively low. So you know it's 5% on the jewelry component from India it won't have a lot of meaningful impact, maybe 50 basis points or something like that.
The next question is from the line of [indiscernible] from Svan Investments.
Can you hear me, sir?
Yes.
Sir, in the numbers. [indiscernible] so those costs are [indiscernible] about 22-odd event. So I'm just trying to understand what [indiscernible] some kind of leverage benefit kick in. But those expenses also have gone up in line with comment to sales growth. So just trying to understand that bit.
Actually, sir, your voice is breaking. But if I understood your question correctly, you were asking the higher contented broadcasting cost.
[indiscernible]
Mr. Siyansh, your voice is breaking.
Other than content and broadcasting ex of that, your other [ titles ] have grown in line with your sales. So I'm just trying to understand which other line item in cost has gone up because we were expecting some kind of leverage benefit for you in terms of sourcing and all of that. So just trying to understand that.
Actually, we have a leverage benefit we are getting in our employee benefit expenses. That has improved compared to the top line growth we have reported of 23%. Apart from that, the additional cost is pertaining to the new acquisitions of Mindful Souls, which is major expenses related in digital. So that is coming in our operating expenses side, which was not in last year. And also, we have seen a growth in our volume. Volume growth was pretty much stable in last -- some quarters. Last quarter, we have seen a growth of 16% in our volume. That is resulting to higher our dispatch and shipping costs.
Okay. Sir, my second question is, we've done about 6% odd growth in U.K. in constant currency terms. So if I were to remove Ideal World from this number, what would be the CC growth for our base business?
It is -- the 6% growth is for the base business only. If you include the Mindful Souls, it is 17%. Sorry, Ideal World. Yes, in constant currency.
Okay. Okay. Okay. So you're saying we did [indiscernible] versus 19.8. So you're seeing it in terms of [indiscernible] that we've given the presentation.
Yes. Yes. It is exercisable and I think it is written in the note below, so it is excess Ideal World.
Okay. And sir, my last question is, I think somewhere you mentioned in the call that Germany, we've grown about 35%, excluding [indiscernible]. And now I think last 2 quarters, we've been adding a lot of customers in what we understand in terms of cable addition that we have done. So how do you look at this number of 35% because we were like growing 70% to 80% every quarter. So just trying to understand this part, how do you look at this number, sir?
Yes. So Siyansh, this number is continuously improving, and we expect that it is continuously improved. And we are clocking around EUR 1.9 million revenue, which was in the previous quarter is around EUR 1.8 million. And we anticipate we are more focusing now on reducing the returns, which overall helped to improve the net revenue to grow, focusing on the categories and the offering the product to the customer on a low price points, which help to reduce overall returns. And in terms of net revenue, it will improve in terms of total revenue side.
Okay. Okay. So this EUR 1.9 million, when do we expect EUR 2 million, EUR 2.5 million run rate?
So the guidance that we have given to breakeven by next half of the -- second half of the next year, which requires 3 million odd numbers. So we are on track of that number. And I think by second half of next year, we'll achieve that number.
The next question is from the line of Gaurav Nigam from Tunga Investments.
Sir, first question was on the unique customers. Can you provide what is the TTM unique customers in Germany and Mindful Souls?
Mindful Souls unique customer TTM, which is actually in the numbers what we have reported is not there. But what number we have reported for the last quarter is 50,000 customers from Mindful Souls.
In the number that we have given our total TTM unique customer, does that include Mindful Souls or not? 5 -- 40,000 that you're reported.
50,000 customers, that includes Mindful Souls, Yes.
And what about Germany, sir?
Germany is around 60,000 customers on TTM basis.
Okay. Understood. And sir, in Germany, how should we look at this business? Should we look at it on a Y-o-Y basis or Q-on-Q? Because on a Q-on-Q basis, it just seems to have delivered the same. So I just wanted to understand how you are viewing it internally?
We are reviewing internally many different metrics, number of customers, volume, revenues. So many different factors we followed. But we follow based on the -- if our repeat rate is going up, retention is going up or overall revenue is growing. So there are many different metrics to follow, but we see that all the trajectories are improving in trend and we anticipate that it will continue to improve.
Your decline in data any concerns, sir? Or is this...
There is no concern on it. It is mainly related to higher provisions of the results. Returns policy is based on the past trailing 12 months. But the efforts that we have done in changing categories and moving to the low price points that resulting the provisional amount is higher, but we are seeing this already a lower return rate. So that will reflect in the coming quarter.
Understood, sir. Sir, one more question was on the spend per customer, which we have disclosed this quarter, which is 701, I think it has declined from 718 from the last quarter. Just wanted to understand, is there -- is this because of acquisition, something has changed? Or is this a like-for-like comparison?
Yes. So I have to check that number. I'm not sure, but I think Prashant will come back to you on it.
Okay. Perfect. And sir, just a last question. This Slide 24, just before the acquisition where you have given the breakup of U.S., U.K. and Germany, is that with acquisition or without acquisition? Just wanted to confirm. Just before the acquisition and update on recent acquisition there is a slide, Slide 24.
It is including the acquisitions.
The next question is from the line of [ Siyansh ] from Svan Investments.
Sir, I'm just looking at Germany numbers. So Q3s are typically the best [indiscernible] Just trying to understand why was this number flagged. So I understood the returns to it, but still do you think this is it slightly more sluggish than [indiscernible]?
One of the reasons Siyansh is that on Q2 we had done a big clearance that for the August month was a full clearance on that month. So we have seen a pretty good momentum and response from the customers for the clearance we have done in August. So August numbers were pretty high due to the clearance. Also on the quarter 3, we are focused more on the categories which are having a lower returns and the price point accordingly, but provisions were based on the trailing 12 months. So we anticipate that the lower returns in Q3 and Q2 revenue was higher due to the one-off big clearance events we have done.
Okay. Okay. And sir, second is just on the ASP for both TV and digital. In the last 3 quarters, we've seen some kind of slowdown like from [ INR 51 crore to INR 29 crore ] and then from [ 42 to 47 ]. So are you envisaging that customers are buying cheaper or [indiscernible] volume growth, but less these any downloads last [ Q4 quarter ].
Yes, I'll address that. So we modify our offering based on the consumer demand and the consumer [indiscernible]. So last few quarters, you're seeing a lot of higher-end gold and diamonds pulled in because of inflation fears. And now inflation fears have subsided. The people now levering to the -- a little bit of revenue like with a new products and we're seeing the traction of lower price points. And I really want to go lower price point because that helps in reducing the returns and acquiring more customers. And those customers then we can take out to the different higher price points. So our long-term goal is to bring the price point closely even slightly a little more lower if we can, with the economy would permit us.
The next question is from the line of Narendra Mahajan an Individual Investor.
First of all congratulations to the numbers. I have 2 small questions. First is on the outlook in that Q4 '24 and on the exceptional items that we had cyber attack in Q3. So can you put some light on it. It will be helpful.
Nitin?
Yes. So I'll address your second question first on the exception of cyber attack. So last year, we had an impact of 3% in our revenue related to cyber attack. But even if we exclude that impact, we have a growth in our revenue of 19%.
Okay. So is there any breach out of the customer data or anything like that?
There's no breach in that, and we have received a claim also for insurance side of the revenue losses and we also partly claim is still pending for the recovery of the investment of expenses related to cyber attack.
Okay. Fair enough. And on the first part of the question please.
Sorry, -- can you repeat your question?
Yes, yes. So I was mostly looking into the outlook in the quarter 4 financial position. So what a growth we are expecting, if you can highlight on that, please.
So for the next quarter, we are anticipating similar kind of performance what we are seeing right now. And that we have given the guidance to achieve full year growth of 13% to 15%. We are anticipating similar numbers to achieve in the full financial year, remaining -- equaling to 18% to 19% growth in quarter 4.
The next question is from the line of Pritesh Chheda from Lucky Investments.
Sir, my question is on the unique customer number. They are about 540 today. So in that the Mindful Souls is about 40. So I'm reducing that. And Germany, you mentioned is about 60. So the base business, which is the U.K. and U.S., the number is about 440. Can you help us with the base business number of this customer identification for last year?
Yes. It is for the base business. What we see, we are seeing the growth in U.S. business as well as in the U.K. I don't have a number with me at the moment. But we are seeing growth of 2% to 3% in unique customer TTM basis what we have reported in September quarter and this quarter.
Okay. Is it fair to assume that your pre-COVID number was 360,000. And then there was this whole COVID-related jump. Is -- now this 440 number can be looked at versus the 360 number of FY '20. Is it correct assessment? Or there is some other number that we have to look at?
Yes. You mentioned 540 today, then in that 40 is Mindful Souls, 60 is Germany, which was not a part of the number in FY '20, right?
Yes. There is also 1 more the Ideal World, which was included [indiscernible]. So that is 410,000 versus 360,000.
Yes. So if I give you the correct number, so including Mindful Souls, Ideal World and Germany, it is around, around 410,000 is our base business.
Base business. Okay. So now we had about 410 divided by 360. So we are basically in 4 years, we are from 360 to 410. What efforts are we doing to increase our unique customer cost?
Yes. So Pritesh, there's multiple efforts to increase that. First is to household expansion -- in U.S., we are currently having 70 million households and we have potential to increase the 100 million households, which [indiscernible], which we don't have at the moment. So household expansion is one of the factors. OTT, which is a huge space. We are very small or very unexplored area for us. OTT is a huge opportunity to expand the household. Also the lower [ sale ] positioning in U.S. and U.K. whereas for the established airtime or broadcasters is our major opportunity to expand the household in previous business.
Apart from that, we are investing on the diesel space to make -- to bring the customer profitably in COVID time or after -- even after COVID, we spend the customer -- money in the customer side in retail marketing, but we acquired customers which we are not letting any money. So we are now focusing on the first such as profitability of digital customers that we generate the profit also and acquire the customers in decent space.
So all the efforts which you mentioned were always present, right? If you're going to incrementally also through these efforts, will they come at a cost? So when you're increasing the -- when you're increasing the stable connectivity. So will we see another round of cost increase or we will see operating leverage staying or [indiscernible]?
Yes, there will be operating leverage because what we normally monitor, we have -- we have created a cadence. If with a time comes within the cadence, so we continue at a time. And that if there any time doesn't come with the cadence we exit that data. And that cadence, it gives us our operating leverage, which is the cost increase is lower than the revenue growth.
Okay. So you're mentioning that incremental growth will bring leverage and you will not have significant costs associated with the stable countries.
Yes.
Okay. And in the U.S. and the U.K. geographies, what kind of growth are you looking at next year and, let's say, for next 6 to 8 quarters or the next 2 years?
So we will continue to grow, however, it's difficult to anticipate at the moment. At the current scenario, we will grow in existing territory with low double digit or higher single-digit rate.
Existing means U.S. and U.K.?
Yes, existing, yes, for U.S. and U.K. excluding Ideal World, we expect the growth to be high single digit. And the new acquisitions that is Ideal World as well as Mindful Souls give us additional growth. So to the ads that we are giving is mid-teens.
And single digit is the dollar growth, right?
Dollar growth, yes. I hope digit growth.
So basically, India translation will be double digit.
Yes. We hope we can't predict the currency, probably single low-double digit.
The next question is from the line of [ Aniket Ridker ] an individual investor.
So I have a few questions. I just want to understand the subscriber base growth apart from the effect of this acquisition, so to better understand the organic growth plan.
You're asking subscriber base growth in plain geographies outside the acquisition? .
Yes. Yes, Yes.
Okay. I can look at the numbers. You're asking me for the future growth number or?
No, the current quarter.
Let me take the numbers back from Prashant. Prashant, can you share the numbers with me, please? Prashant call got disconnected. They're coming back in.
Operator, can you take another question in the mean time.
Sorry, apologies.
Okay. We can answer Aniket question. Nitin, if you can answer Aniket's question about total customer numbers outside of acquisition in last quarter and the growth year-over-year.
Yes. So year-over-year, I don't have it with me, but outside the acquisitions, quarter-over-quarter from September to December, we have a total 3% -- 2% to 3% growth in unique customer base.
Okay. Okay. And sir, are we divesting paying into any other product categories with acquisition to a broader demographic and the age group?
So we constantly scan the competitors environment and the trend setting website and set of newspaper block, and we're bringing about 100 new products every day. The new introduction our huge strength and whatever works well when we go deeper into it. And we are very robust exit mechanism of exiting nonperforming products on TL. So I cannot answer that specifically [indiscernible] constantly. So any product that we give us our gross margin of 60% plus. That will also be profitable in logistics costs and they acquire sufficient new customer to get our metrics productivity ratio of the metrics productivity target is combining of the margin permanently make new customers to be acquired, the return rate it will have and the shipping cost that we incur. And based on that, we take a decision on the product. It's a [indiscernible] process that we have across the group.
Okay. Okay. And sir, one last question. Do we have any plans for the geographical expansion to the new country?
Not in near future. I don't believe it will be at least 3 years.
The next question is from the line of Harsh Mulchandani from [indiscernible].
I wanted to understand with the operating leverage kicking in as we move forward, can we expect EBITDA margins to interrupt historical highs or patent or we might end up being low double-digit margin going forward.
Yes. So we expect the operating leverage to continue for foreseeable future for the next 3 to 5 years at least, if not more. And we do expect us to get to our historical high margins, so about 15%, 16%, 17%. 15% on the highest. We expect to reach there and even beyond in our business model as we leverage the business.
Got it. So we could see incrementally say, 100 bps every year improvement or faster just on a ballpark basis?
I can't give specific guidance on that because the business is so dynamic. But I'm clearly confident of reaching and going beyond our historic high EBITDA margins in the coming few years.
The next question is from the line of Gaurav Nigam from Tunga Investments.
So just one question I forgot to ask. Sir, what is our current NPS in the U.S. and U.K. geographies. I believe we track it, right?
Yes, we do. Nitin can you share.
Yes. Yes. So in U.S., 53 is our NPS and U.K., 57 is our current NPS.
So sir, if I remember correctly, it used to be higher earlier, right? It has -- both of them have declined. Is there something to read into it? Or do you think it's transitional?
Yes. So I think the macro environment also creates some pressures on NPS. So any NPS above 50 is considered pretty good because as you know the NPS measurement criteria is pretty strict on a scale of 1 to 10. The promoters are only 9 and 10, and then passes are [ A76 ] and from 1 to 5 are detractor. So of the 1,000 response you get, so if you have 800 promoters of environment 10 score out of 10 and the 1 to 5 are reduced from that. So given the strict measurement of pure [ NPS ] management criteria, anything above 50 is good.
Now I suspect this macro environment more than anything else. And as that macro environment subsides, we will get back to our 60s or even 70s in coming quarters and years.
That was the last question for today. I now hand the conference over to management from Vaibhav Global Limited for closing comments. Over to you, sir.
Thank you, Amit. So I want to thank all the participants for your time and great questions. If you have any further questions, please free to reach out to Prashant Saraswat, me, or Amit Sharma at [indiscernible] India and we'll be happy to answer your questions. Thank you, once again.
On behalf of Vaibhav Global Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.