Arvind Limited — Q3 FY26

Arvind Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=F8Lb-lUegR8 Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Urban Limited Q3 FI26 earnings conference call. As a reminder, 0:09 9 seconds all participants line will be in listenonly mode and there will be an opportunity for you to ask question after the presentation concludes. Should 0:16 16 seconds you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone telephone. Please note 0:24 24 seconds that this conference is been recorded. I now hand over the call to Mr. Satya Prakash Mishra. Thank you and over to you sir. 0:32 32 seconds Good afternoon everyone and a very warm welcome to Arvin Limited earning call for the quarter ended December 2025. The 0:40 40 seconds financial results for the quarter and related presentations were uploaded to our website. Hope you had time to go through it. Before we begin let me 0:48 48 seconds introduce uh the leadership team with me. Uh joining me today is Mr. Punit Lalhai our vice chairman. Mr. Jes Sha, full-time director and group CFO, Mr. 0:59 59 seconds Gri Singh Bhya, CEO and president of AMD business and Mr. Nigam Sha, CFO of Arvin Limited. We will have the opening 1:07 1 minute, 7 seconds remarks by uh Punit and then I'll take you through the financial performance and then we'll go for questions. I will now invite Punit to address you on the 1:16 1 minute, 16 seconds company's overall performance for the quarter and strategic path forward. Over to you. 1:21 1 minute, 21 seconds Good afternoon everyone. It's a pleasure to be here. Thank you for being on the call. If I were to sort of summarize the 1:30 1 minute, 30 seconds quarterly performance in a nutshell, I would say that the given the circumstances, we've had a reasonably good quarter. 1:39 1 minute, 39 seconds There was growth on both the textile front and the advanced material front. 1:45 1 minute, 45 seconds despite a very challenging trade environment, lots of geopolitical disruptions 1:52 1 minute, 52 seconds uh not just in the US but also in South Asia and other parts of the world. Um 1:58 1 minute, 58 seconds and um I think the team has done a great job in driving or maintaining margins in 2:07 2 minutes, 7 seconds the face of um tariff related discounts by good cost-saving initiatives. 2:15 2 minutes, 15 seconds uh and of course macroeconomic conditions of of the dollar etc have been favorable. So overall we've been able to deliver a a strong result. 2:26 2 minutes, 26 seconds I think the outlook is similarly cautiously optimistic. Um we have good 2:35 2 minutes, 35 seconds demand. So we should be able to continue the trajectory of uh of the path that we 2:43 2 minutes, 43 seconds are on currently and we expect that the quarter 4 uh performance will be similar to to quarter 3. 2:54 2 minutes, 54 seconds In terms of um the challenges and opportunities, the 3:01 3 minutes, 1 second challenge remains that we see this geopolitical volatility continuing. I 3:08 3 minutes, 8 seconds think on the opportunity side both the UK and now very importantly the EU FDAs 3:16 3 minutes, 16 seconds are you know sort of in uh at least uh have been ratified and 3:23 3 minutes, 23 seconds there will be now of course a process of getting all the approvals at various levels of government on on both sides. 3:31 3 minutes, 31 seconds Um so sometime in the not too distant future we should have duty-free access to this very important part of the world 3:39 3 minutes, 39 seconds and um this will be a huge philip for the entire apparel industry in India but 3:48 3 minutes, 48 seconds also for Arvin because today it's one of the under represented segments in our overall portfolio and there's great 3:56 3 minutes, 56 seconds headroom to grow and over the last six to 12 months we've We've been having conversations with the relevant 4:03 4 minutes, 3 seconds customers to increase our presence uh in in these markets. So we are looking forward to some growth there and 4:12 4 minutes, 12 seconds that will go a long way in d-risking some of our US dependency. 4:16 4 minutes, 16 seconds So that's on the opportunity side as far as textiles and apparel goes. And on the advanced materials side, we we see 4:24 4 minutes, 24 seconds enough momentum in the business to continue our 18 to 20% uh growth aspiration going forward. Um I think one 4:33 4 minutes, 33 seconds other important update to give everyone is that we've um our S&P 500 ESG um 4:40 4 minutes, 40 seconds score has been um received for this um for the last period and there I'm happy to share that we have improved from 68 4:50 4 minutes, 50 seconds to 73 which puts us sixth in the world out of a particip number of 176 participants ranked uh and it puts us ahead of 97% % of the participants. 5:04 5 minutes, 4 seconds Um and we are second in in in India. Um ESG is also a very important factor for 5:13 5 minutes, 13 seconds our Europe based customers. So it doubt as well with the FDA coming in and it will help us go a long way. We are of 5:20 5 minutes, 20 seconds course committed beyond an ESG score to achieving best-in-class um performance on all all on all things ESG. So with 5:30 5 minutes, 30 seconds that I close my general update. I'll see you again in the question and answer session and I request Satya to take you through the details of the quarter. Uh 5:40 5 minutes, 40 seconds thank you Pune. Let me share the key operational and financial highlight for the quarter. Our denim fabric [clears throat] volume stood at 13.9 5:47 5 minutes, 47 seconds million meters reflecting a growth of 16% primarily driven by higher verticalization. 5:54 5 minutes, 54 seconds Oven fabric volume came in at 36.7 million meters marking a growth of 5%. 6:00 6 minutes In garmenting, we have delivered our second consecutive quarter of 10 million pieces of full garment representing 11% 6:08 6 minutes, 8 seconds increase year on year. Coming to AMD division's performance like Punit mentioned as we have already guided and 6:15 6 minutes, 15 seconds always guided our growth aspiration for the advanced material division remains at over 20% on a CAGR basis. However, 6:22 6 minutes, 22 seconds this trajectory will naturally see some quarterly variability due to factors such as industry cycles and competitive 6:29 6 minutes, 29 seconds dynamics. Accordingly, it'll it would be more appropriate to assess performance over a longer period of time rather than 6:37 6 minutes, 37 seconds just expect uniform 20% growth every quarter. As illustrated by the current quarter results, the division has 6:44 6 minutes, 44 seconds reported revenue and a beta growth of 32% and 36% on account of a stellar performance across its subsegment. 6:53 6 minutes, 53 seconds Revenue for the quarter stood at 2373 cr up 14% on a full year bas on a 7:00 7 minutes quarterly basis. uh IBITA for the same period stood at 286 cr up 15% achieved 7:08 7 minutes, 8 seconds its first milestone of crossing 12% in terms of margin. This is the highest ever revenue and IITA reported by the 7:15 7 minutes, 15 seconds company on a quarterly basis. Profit after tax before exceptional items stood at 125 crores reflecting a robust 17% 7:24 7 minutes, 24 seconds year-on-year growth. Higher volumes and timely management action on cost helped us partially offset the tariff impact 7:32 7 minutes, 32 seconds excluding the tariff related head headwinds. Our reported margins would have crossed a pre-desated trajectory of 13%. 7:39 7 minutes, 39 seconds Which remains fully aligned with our medium-term guidance. 7:43 7 minutes, 43 seconds External division achieved a revenue of 1,717 cr up 9% with an AITA of 193 cr at a margin of 11.2%. 7:54 7 minutes, 54 seconds garmenting division revenue at 493 cr up 23% backed by favorable product mix and better realization. 8:02 8 minutes, 2 seconds AMD reported it highest ever quarterly revenue of 496 crores just short of 500 crores and AITA during the period reached 77 cr a growth of 36%. 8:15 8 minutes, 15 seconds AMD AITA margin reached 15.5% again on account of higher growth in more profitable segments and favorable operating leverage. 8:24 8 minutes, 24 seconds Return on capital during the same period improved by 150 basis point to reach 16%. This number is 19% if we adjust uh 8:33 8 minutes, 33 seconds the a bit to normalized levels excluding one-offs and uh excluding the CWIP and capital employed. 8:41 8 minutes, 41 seconds The company has spent about 348 crores in various growth capex projects in the first nine months of FI26. 8:48 8 minutes, 48 seconds Coming on to the capital management, I'm pleased to share that our disciplined approach over last several years have yielded another positive outcome. Arrins 8:57 8 minutes, 57 seconds advanced material limited the entity housing our AMD business has been rated double A rating with a stable outlook by India ratings. This is the highest 9:06 9 minutes, 6 seconds rating achieved by an entity within the group and stands one notch above the rating of the parent company or limited. 9:13 9 minutes, 13 seconds This development underscores the strength of our business model, cash flows and financial discipline. Our consolidated net debt remains stable and broadly in line with March 2025 levels. 9:26 9 minutes, 26 seconds Our ability to remain agile, responsive and customer aligned. Customer alignment has allowed us to navigate this uncertain times while continuing to 9:35 9 minutes, 35 seconds deliver on our long-standing commitment on growth and value creation. 9:39 9 minutes, 39 seconds We continue to adapt to this changing landscape and our performance over the past few quarters reflect the strength of this approach. Guided by our 9:48 9 minutes, 48 seconds long-standing values of partnership, discipline, and responsible decision-m, we remain focused on navigating 9:55 9 minutes, 55 seconds volatility while consistently creating long-term value for our stakeholders. 10:00 10 minutes With this, I request the operator to open the line for questions. 10:14 10 minutes, 14 seconds Hello Yes. Uh operator, you may now open the line for questions. 10:22 10 minutes, 22 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone 10:30 10 minutes, 30 seconds telephone. Participants are requested to use answers while asking a question. 10:35 10 minutes, 35 seconds Ladies and gentlemen, we will wait for a moment while the question q assembles. 10:43 10 minutes, 43 seconds The first question is from the line of Ronuk Sha from Igious Securities Private Limited. Please go ahead. 10:50 10 minutes, 50 seconds Yeah, thanks for the opportunity sir. So sir, my first question is regarding the uh tanium and segment. So in last few 10:58 10 minutes, 58 seconds quarters we have seen that the tennium exports and domestic business is continuously witnessing a double digit 11:05 11 minutes, 5 seconds sort of volume growth. So what is driving uh this sort of growth and how sustainable it is in near to midterm? 11:16 11 minutes, 16 seconds So I think the this reflects uh two things. One on the denim side it 11:21 11 minutes, 21 seconds reflects um you know the uh full capacity utilization. For the first time 11:28 11 minutes, 28 seconds in a long time we have you know reached uh absolute full capacity utilization. 11:34 11 minutes, 34 seconds So I think if we are able to maintain this level of um u growth it will be on 11:43 11 minutes, 43 seconds volume if we are able to maintain this volume over the long term I think that's a good objective to to take um in terms 11:51 11 minutes, 51 seconds of woven there is an impact also of product mix um that that that that keeps 12:00 12 minutes improving every year. So some some growth comes in terms of um growth in realization. Um though of course if you 12:09 12 minutes, 9 seconds look at realization it is it is reasonably flat. Uh that is because of then cotton price adjustments as well. 12:17 12 minutes, 17 seconds So if you are correcting for raw material cost adjustment I think our product mix in ovens has has improved 12:23 12 minutes, 23 seconds and I think in both those in both both uh segments we should continue the product mix improvement journey going 12:32 12 minutes, 32 seconds forward but the capacity of course is finite and once you hit 100% capacity uh 12:38 12 minutes, 38 seconds we are not aggressively investing in the fabric side of of the business. We are 12:45 12 minutes, 45 seconds only investing in innovation based or differentiation based capex and some debottlenecking capexes. I think the 12:53 12 minutes, 53 seconds growth we should look at is vertical growth and I think the ability to fully utilize our denim fabric capacity has 13:00 13 minutes come because we have expanded our garment capacity in denim and that also reflects in the higher top line. uh 13:08 13 minutes, 8 seconds compared to you know um last quarter or last few quarters you will see an uptake in overall um uh uh sales value of the 13:18 13 minutes, 18 seconds garment piece and that is coming because of a higher proportion of denim garments which are higher FOB. So I think the 13:27 13 minutes, 27 seconds future growth should be seen vertically rather than you know thinking fabric and and garment separate. 13:35 13 minutes, 35 seconds Got it. So, so uh just uh to read through this uh we can expect some moderation into the volume growth especially in these two sub segments but 13:44 13 minutes, 44 seconds your envirment uh will continue to clock in double digit sort of growth uh does is uh understanding correct 13:53 13 minutes, 53 seconds yes broadly correct no sir my second question is follow to this so this quarter we have seen a 14:00 14 minutes recent sort of realization growth in your team so as you highlighted this is just because of the product mix or is there something? 14:08 14 minutes, 8 seconds Yes, it's it's product mix. It's mainly product mix. We've also uh there's another trend at play. We've produced 14:15 14 minutes, 15 seconds more than we sold, right? So, we we hit some cut off uh related. So, I think quarter four you will see the the impact 14:21 14 minutes, 21 seconds of that. So, every I think now we will see volume growth also going forward. 14:28 14 minutes, 28 seconds Plus, I think um the segment that has grown the fastest is denim. So then it will stabilize at at once we achieve the 14:37 14 minutes, 37 seconds full and we are close to now full utilization of of our denim expansion. 14:42 14 minutes, 42 seconds There is still some some upside left after which we will you know uh become more steady state in terms of the 14:50 14 minutes, 50 seconds product mix related uh growth but the volume related growth will keep continuing as new factories come online. 14:59 14 minutes, 59 seconds Noted sir my second question is on AMD. 15:02 15 minutes, 2 seconds So though the sir has highlighted that the 20% sort of figure will be uh possible in near term uh near to long term but this quarter is there any 15:10 15 minutes, 10 seconds oneoff because this is something uh extraordinary in terms of the growth rate. 15:16 15 minutes, 16 seconds No so I think it's a it's see there are parts of this project business. So um you know we had almost no defense orders 15:24 15 minutes, 24 seconds for the first two quarters you know a chunk of defense orders came in in quarter two. Um we had u we had some 15:32 15 minutes, 32 seconds good orders in in the industrial and um in uh in composites which were also 15:39 15 minutes, 39 seconds chunky um and that's why we've seen this this growth but I think overall you know 15:46 15 minutes, 46 seconds in a it's it's good to in our mind think that it'll be around uh 18 to 20% 15:54 15 minutes, 54 seconds if you look few quarters on average and it will be this 14 to 15% EIA even this, 16:03 16 minutes, 3 seconds you know, we've we've had some, you know, very very profitable orders in go out in Q3. So, you know, we've we've 16:11 16 minutes, 11 seconds exceeded that 15% mark on on AITA as well. But I think for long-term um you know, consistent growth over many 16:19 16 minutes, 19 seconds quarters, we should consider 18 to 20% and and 14 to 15% EIA. That should be the thumb rule for and some quarters 16:27 16 minutes, 27 seconds will be below that some quarters will be better than that. 16:30 16 minutes, 30 seconds Got it. And the last question uh regarding the recent talks. So uh Yan said disruptions are getting a red flag 16:38 16 minutes, 38 seconds into the Bangladesh. So what can be the incremental opportunity does this create for the Indian market and how are we this position to benefit from this? 16:48 16 minutes, 48 seconds So it is both a opportunity and a risk. 16:52 16 minutes, 52 seconds I think a destabilized Bangladesh is a risk more a risk than an opportunity for us because still 16:58 16 minutes, 58 seconds we are you know as our garment business is still you know relatively small compared to our fabric portfolio. 17:06 17 minutes, 6 seconds Bangladesh is a is a today end market for our fabrics. So if there is disruption in the Bangladeshi market for 17:14 17 minutes, 14 seconds whatever reason it's not not a great news for us. Um we want a stable Bangladesh. But that said, you know, our 17:23 17 minutes, 23 seconds business model is quite resilient. Over the last uh couple of years, we have reduced our dependency on Bangladesh and 17:30 17 minutes, 30 seconds now you know almost all of our export denim used to go to to Bangladesh. Now it's fairly better distributed. 17:38 17 minutes, 38 seconds Bangladesh is still important but there are newer geographies where our denim is going. So to that extent uh we are 17:45 17 minutes, 45 seconds taking steps and have taken steps to to reduce our dependence there. On the opportunity side if if it's only yan 17:53 17 minutes, 53 seconds that gets um gets uh uh you know tariffed or taxed um then you know it's 18:00 18 minutes a it's an opportunity because we are a net buyer of yan. We had some softness in price and and we should get uh 18:07 18 minutes, 7 seconds advantage because of that. But these are all you know gains or losses on the margin. Our overall business model is 18:15 18 minutes, 15 seconds quite resilient to all sorts of scenarios. 18:19 18 minutes, 19 seconds Got it. Got it. Let's take my Thank you. The next question is from the 18:27 18 minutes, 27 seconds line of Pya from Ara security. Please go ahead. 18:32 18 minutes, 32 seconds Thank you. Uh congratulations on good set of numbers sir. Um few questions on macro. uh just wanted to understand what 18:39 18 minutes, 39 seconds is the progress on UK uh FTA um how are we leveraging uh uh the 18:47 18 minutes, 47 seconds opportunity meanwhile till the time it gets operational. 18:51 18 minutes, 51 seconds So I think the second question is um you know the the question that I I will answer in detail. I mean on the first 19:00 19 minutes part of the question I think it's still in the process and um I mean we can get back to you our our our corporate 19:07 19 minutes, 7 seconds affairs team will know exactly where the pro process has progressed to um which we'll we'll get back to you on but it's 19:15 19 minutes, 15 seconds in in process and generally these things take take time you know all all their previous uh FDAs also have taken upwards 19:23 19 minutes, 23 seconds of a year to to to go from signing to uh being uh uh implemented. So it is 19:31 19 minutes, 31 seconds somewhere in that phase and we'll get back to you on our opinion on that in writing on um on the efforts. Um we are 19:40 19 minutes, 40 seconds actually focused a lot on strengthening the teams. 19:44 19 minutes, 44 seconds um we are we are hiring and we are reallocating teams uh to the um uh to 19:53 19 minutes, 53 seconds these two new reg regions and it's not just the UK now with EU I think that's a that's a huge u I mean it's a really big 20:02 20 minutes, 2 seconds deal for our industry all our competition has had duty-free access to both these geographies and now suddenly we'll be on the level playing field from 20:11 20 minutes, 11 seconds them all countries uh all customers are worried about overdependence on Bangladesh 20:20 20 minutes, 20 seconds and add to it all this um you know instability an election cycle coming up 20:27 20 minutes, 27 seconds um you know conflict in the neighborhood um India suddenly starts looking much more attractive. So I think from a 20:36 20 minutes, 36 seconds directional point of view this is this is a big deal. Both these FDA's uh being we government has done a great job in in 20:45 20 minutes, 45 seconds in you know fast forwarding this process and um we can look forward to some good 20:52 20 minutes, 52 seconds growth uh as a as an industry uh in both these regions. So but what what are we doing? We are having conversations with 21:00 21 minutes customers and we are reallocating a lot of internal marketing resources and sales resources to focus on these 21:06 21 minutes, 6 seconds geographies so that we can build the pipeline uh before theation of the duty fee tariff. 21:16 21 minutes, 16 seconds Understood. Um the second question on uh Denim, you have been uh able to utilize 21:23 21 minutes, 23 seconds your capacities to the police in the last two to three quarters. uh given the opportunity coming in garmenting um with 21:32 21 minutes, 32 seconds FDA getting signed do you think uh uh you'll be allocating some expansion in 21:38 21 minutes, 38 seconds denim or woven fabric also to expand capacities to support garmenting? 21:44 21 minutes, 44 seconds There is amount of capacity available in the country and in the world. So as we grow garmenting we should tie up more 21:51 21 minutes, 51 seconds and more capacities. Um and we will only invest if it makes if if if you know it's something that is unique in terms 21:59 21 minutes, 59 seconds of you know capability or unique in terms of uh uh IP. So we don't want to 22:07 22 minutes, 7 seconds grow our our fabric footprint beyond a certain point um because we have a lot of you know uh work to do on growing the 22:16 22 minutes, 16 seconds garment footprint and we'd like to focus our um financial and execution resources on on you know a more robust vertical 22:25 22 minutes, 25 seconds journey and even at this current level we are sub 20% verticalization 22:32 22 minutes, 32 seconds or just about approaching 20% now. So um if we if we there's lot so if we have a 22:39 22 minutes, 39 seconds dollar to invest it should be invested in garmenting because garmenting is so much easier to sell and all the customers want a vertical 22:48 22 minutes, 48 seconds offering rather than selling uh selling um fabric and the big opportunities in UK and EU that whole 22:57 22 minutes, 57 seconds market works on full package. Nobody buys fabric in EU and UK. they only buy full package garments. So we we have to 23:07 23 minutes, 7 seconds we have a lot of work to do in in in 23:09 23 minutes, 9 seconds [clears throat] 23:10 23 minutes, 10 seconds potentially growing up our our garment. 23:12 23 minutes, 12 seconds So if I have a dollar to invest, I invest it in garmenting and fabric I can get from various places. There are so many good suppliers who can supply me fabric. 23:22 23 minutes, 22 seconds Understood sir. Now coming to garmenting um how has been the progress on improvement in margins in the garmenting 23:30 23 minutes, 30 seconds and uh what are your plans with respect to product uh expansions like any new categories that you planning to get into 23:39 23 minutes, 39 seconds uh because these are these markets commanding a newer product category as well apart from your existing categories 23:46 23 minutes, 46 seconds some color on that would uh uh really help so right now I think you know our focus is on getting deeper in the categories 23:55 23 minutes, 55 seconds that we have already opened. We have denim and knits which are the two areas that are going to experience the most 24:03 24 minutes, 3 seconds growth. We also have shirts um but it's easier to sell fabric in woven than than any other place. So um that would be 24:12 24 minutes, 12 seconds sort of you know expansion there would be phase two and then phase three are the more aspirational categories of um 24:19 24 minutes, 19 seconds say uh active wear where we started a small small facility but there we have you know lot of lot of learning and the 24:27 24 minutes, 27 seconds market is starting from a smaller sort of addressible size than the other other segments for us. So active wear and women's wear would be phase three. 24:38 24 minutes, 38 seconds But right now we are we have a lot of work to do in phase one which is growing denim and and knits jersey which is uh 24:47 24 minutes, 47 seconds where the capacity expansions uh have been invested and currently being invested. 24:53 24 minutes, 53 seconds Understood. Since the last question for AMD uh uh superb growth in the quarter uh could you just help me understand 25:01 25 minutes, 1 second whether it is uh from the split between domestic and export market uh in this growth 25:09 25 minutes, 9 seconds 65 um we are at our usual I think 6535 sort of makes in favor of exports 25:19 25 minutes, 19 seconds so not not too different from previous quarters. 25:23 25 minutes, 23 seconds Understood sir. Thank you and I'll come back to the question queue. All the best. Thanks. 25:32 25 minutes, 32 seconds A request to all participants. Please restrict your questions. Two per two per participant. For more questions, please rejoin the queue. 25:42 25 minutes, 42 seconds The next question is from the line of Vishal Ma from Il Capital. Please go ahead. 25:49 25 minutes, 49 seconds Yeah. Uh hi and uh thanks for taking my question. Congratulations on a very strong set of uh numbers on all fronts. 25:57 25 minutes, 57 seconds Um my first question uh would be uh you know on on tariff related discount impact. Last quarter we called out this 26:05 26 minutes, 5 seconds impact to be around 20 23 odd crores. Uh this quarter we are calling out a similar impact uh you know in terms of 26:13 26 minutes, 13 seconds quantification. Uh while uh you know last quarter was only partially impacted probably one one and a half month this 26:19 26 minutes, 19 seconds quarter we have a full impact. So uh why is there not increase? Have we scaled back our discounting or am I missing 26:26 26 minutes, 26 seconds something uh here? If you can throw some So I think most of the discounts got baked in fully. We were expecting 26:34 26 minutes, 34 seconds perhaps you know we might have to pass on something extra this quarter but it's it's now settled at this level and um 26:41 26 minutes, 41 seconds you know it'll go a little bit up and down based on you know how the demand is is sort of coming around and and how 26:50 26 minutes, 50 seconds what what level of patience the the the end consumer has. So US where we are still quite dependent directly with 26:58 26 minutes, 58 seconds around 20% of our business on fabric um is where we you know look at um where we 27:06 27 minutes, 6 seconds can see some changes or not you know so there is a lot of uncertainty around um 27:12 27 minutes, 12 seconds uh um uh you know uh what exact tariff number will be looking forward. So that that number is always a placeholder. 27:21 27 minutes, 21 seconds Plus you know the product cycles change. 27:25 27 minutes, 25 seconds So you know the you know once the once new products come in there is no discoverable then there is an online 27:31 27 minutes, 31 seconds bidding process uh that you know brands have resorted to. So instead of tariff 27:38 27 minutes, 38 seconds where there is a benchmark you can ask for a discount where a new product is coming in for the first time you know you don't have a benchmark. So then you 27:46 27 minutes, 46 seconds try and discover the lowest price product. So there's a lot of these things going on. So um so I would say 27:53 27 minutes, 53 seconds this level of tariff unless something changes or demand switches happen we can expect you know I mean good good 28:01 28 minutes, 1 second conservative assumption can be that it will be similar going forward till some trade deal happens with the US. 28:10 28 minutes, 10 seconds Okay. Okay. So 25 crores run rate for the quarter full full quarter I would think. So I mean it can go up and down a little bit but I mean not significantly. 28:20 28 minutes, 20 seconds Sure. Sure. 28:21 28 minutes, 21 seconds Uh second question would be you know u uh just a clarification on how are we placed on our governmenting expansions now that we also have EU FDA in our bag. 28:32 28 minutes, 32 seconds um uh you know uh it's it's still early days but uh you know uh if you can give us some ideas about how you're thinking 28:39 28 minutes, 39 seconds about the expansions and what is our current name plate garmenting capacity any third party capacity that is available for garmenting. 28:48 28 minutes, 48 seconds So we do use third party very judiciously because see you know the compliance in our industry is a very 28:56 28 minutes, 56 seconds important uh factor. Um and you know we have created 55 million type of capacity 29:03 29 minutes, 3 seconds and that that is moving towards the direction of 16 which we should complete over the next financial year. That was 29:11 29 minutes, 11 seconds the original plan and I think the limitation is you know is execution capability over and above rather than 29:20 29 minutes, 20 seconds demand. I think demand is not an issue in governmenting at all. Um and if we are able to demonstrate good confidence 29:28 29 minutes, 28 seconds in our execution then in the context of EU we can start to press the accelerator perhaps in the second half of next year. 29:37 29 minutes, 37 seconds Um and till then I would like to focus on this journey and ensure that you know we are doing a good job in in reaching where we've committed to reach. 29:50 29 minutes, 50 seconds Sure. And we have all the enabling resources in terms of uh uh land availability etc. uh so no worry about 29:58 29 minutes, 58 seconds so there are a couple of big factories that will come on stream. There is automation happening at the old factories. So we don't need to actually 30:06 30 minutes, 6 seconds increase the footprint too much beyond you know the places where we've already begun. Uh we have a varanasi factory 30:13 30 minutes, 13 seconds coming up. We have the we had a Bangalore facility that came up last year which now is scaling up to full 30:20 30 minutes, 20 seconds potential. Uh and then we have automation in three of our existing facilities ongoing as we speak. So all 30:28 30 minutes, 28 seconds this growth is going to come in this footprint only. 30:32 30 minutes, 32 seconds Sure. Thanks. Thanks a lot. All the best. 30:36 30 minutes, 36 seconds Thank you. The next question is from the line of Surya from Sunni Securities. Please go ahead. 30:44 30 minutes, 44 seconds Yeah, thank you. Uh thank you sir. Uh so uh most of the questions have answered. 30:52 30 minutes, 52 seconds So uh one one question actually uh just to uh to your uh reply to one of the 31:00 31 minutes person that the wor condition of Bangladesh will be uh not good for India. So just to 31:08 31 minutes, 8 seconds understand that when the minister is no that is a misunderstanding um uh in the [clears throat] short term 31:17 31 minutes, 17 seconds disruption in Bangladesh is is not good for Arvin for India it is a huge opportunity and I'm a patriot so I 31:26 31 minutes, 26 seconds want India to to grow um and and it you know I don't want Bangladesh to suffer 31:33 31 minutes, 33 seconds also but um it's it's the short term because we have a high Bangladesh 31:39 31 minutes, 39 seconds dependency today. Um any disruption there can can can be a negative right 31:47 31 minutes, 47 seconds that's that's the limited point I was trying to make. Um and it could be an opportunity on the yan side because yan 31:55 31 minutes, 55 seconds prices will go down but that's not good for India because we have lot of yan capacity that has come up in India. So sometimes you know what is good for the 32:04 32 minutes, 4 seconds whole industry and what is good for an individual player is not the same thing but in the long term it is good for everybody that India develops its own 32:13 32 minutes, 13 seconds garmenting capacity. So we have to take market share from all our neighbors and 32:20 32 minutes, 20 seconds we have been punching under our weight as an industry in the government field and we have to grow aggressively and I think now the government has done everything in its power to to help us. 32:31 32 minutes, 31 seconds Now it is the ball is in the industry court and we have to bat on the front foot and become a world force in garmenting and not be in competition 32:40 32 minutes, 40 seconds with Bangladesh but car own you know very impressive journey that can be much larger than what Bangladesh is today. 32:48 32 minutes, 48 seconds No, but but if you if you see uh the yan for example uh those are actually 32:56 32 minutes, 56 seconds established with a view that we should be serving external market and particularly Bangladesh and other 33:02 33 minutes, 2 seconds countries majorly Bangladesh but in this context when when Bangladesh facing it don't you think India should be thinking 33:11 33 minutes, 11 seconds more inward and because the minister is saying that no we India can capture the Bangladesh position very quickly. If 33:19 33 minutes, 19 seconds that was the case, then we should be developing more facilities in the RMG segments rather than thinking of again 33:27 33 minutes, 27 seconds know external supply chains issues like you know yarn should be supplied and more yarn things should be coming out 33:34 33 minutes, 34 seconds rather than RNG but now in the RNG if you see in the listed space uh you know adult segments hardly around 500 million. 33:43 33 minutes, 43 seconds I completely agree with you that we should be doing the best to grow our garmenting industry and if we are 33:50 33 minutes, 50 seconds successful in doing that then we will not need to sell yarn to Bangladesh. We can sell yarn to our own garment uh units and our own fabric units and I 34:00 34 minutes think the only question is that it takes time to set up all these capacities at that scale. So in the short term there is a there is already a dependency. I 34:09 34 minutes, 9 seconds think in the long term what you are saying is exactly what our government wants and what our industry should be working for. 34:16 34 minutes, 16 seconds But sir the go so we are not the industry and the government are not at all in the same pace. Uh what we are No I don't think so. I think the 34:24 34 minutes, 24 seconds government is doing a very good job. Uh I I have a view that you know they are I 34:31 34 minutes, 31 seconds mean PM Mitra Park is coming. We have uh you know we have we are constantly 34:37 34 minutes, 37 seconds improving on all u all all reforms. Uh our labor um laws have undergone a great 34:45 34 minutes, 45 seconds change from the very restrictive labor laws in the past. Um we have uh you know we have great policies at the state 34:53 34 minutes, 53 seconds level to encourage investment and now we have FDAs. What else can the government do? No, if you if you see the given 35:02 35 minutes, 2 seconds given the productivity difference between the Bangladesh and India not to the tune of 50% labor productivity so definitely 35:10 35 minutes, 10 seconds no no no I I think there is no difference in labor productivity we only have an absentism attrition and availability problem where our 35:17 35 minutes, 17 seconds government sectors are I think with PMitra part with automation with digitization uh there is no I don't think Indian 35:25 35 minutes, 25 seconds productivity is second to any in the world if done right uh I think it is up to our industry to solve those problems and those solutions exist. 35:35 35 minutes, 35 seconds But but sir uh if you if you see in industry hardly around 500 million pieces of adult you know 35:44 35 minutes, 44 seconds garment pieces or let's say for around 300 to 400 pieces or million pieces of kids wear there but it is not you know 35:52 35 minutes, 52 seconds growing and the individual companies are also dithering to expand. Even in our case also we are we are actually trying 36:00 36 minutes to build up the capacity by 5 million or 10 million pieces per year not beyond that. So, so how do you think that know 36:07 36 minutes, 7 seconds India will be able to cope up with the demand that is that is emerging out of the current situation when the maybe EU 36:15 36 minutes, 15 seconds things will be EU FTA things will be settled maybe after one year EU and UK but in that case again another point is 36:23 36 minutes, 23 seconds that the way the uh the European unions consider Bangladesh as underdeveloped countries and still they are ready to 36:31 36 minutes, 31 seconds extend some sort of concessions so I mean don't you think that no in the government I mean the industry is thinking something or let's say 36:39 36 minutes, 39 seconds expecting some benefits from the government which is not available in terms of maybe uh in the base side or 36:46 36 minutes, 46 seconds labor side so that is what actually hindering the progress of building of the capacity in the RMG 36:53 36 minutes, 53 seconds no no it's just we have to focus more as an industry it's just that our textile industry because of historical factors 36:59 36 minutes, 59 seconds has invested in the upstream and this change takes some time but I'm I'm sure that in the medium-term we'll catch up. 37:06 37 minutes, 6 seconds So this is my view on it. Okay. And uh interrupt sir. Okay. Sorry to interrupt sir. 37:14 37 minutes, 14 seconds I would request you to please rejoin the queue as there are more participants waiting in the Okay. Thanks. 37:24 37 minutes, 24 seconds Thank you. The next question is from the line of Akira from Canada. Please go ahead. 37:31 37 minutes, 31 seconds Yeah. Thank you for the opportunity. I mean congratulations on a great set of numbers in a challenging environment. So just one question this is more from the 37:39 37 minutes, 39 seconds AMD perspective. So is it possible for you to break the AMD performance into say what was our underlying volume 37:46 37 minutes, 46 seconds growth what was the currencyled benefit that was there and what was the benefit because of the favorable product mix if 37:53 37 minutes, 53 seconds you could break it up. So that's a very complex answer to give on 37:58 37 minutes, 58 seconds a on a on a call. Um uh uh Satya can I think uh send you that that that details 38:06 38 minutes, 6 seconds offline right I mean I don't have the I mean it's it it it's a very sort of uh involved question that you've asked. 38:15 38 minutes, 15 seconds Yeah so no not a problem sir thank you. Thank you. 38:24 38 minutes, 24 seconds The next question is from the line of Rajat from Kinuza Bell. Please go ahead. 38:33 38 minutes, 33 seconds Yeah. Hi sir. Congratulation on a good set of numbers. Question. My first question is on debt level. What's your 38:41 38 minutes, 41 seconds outlook on the debt level going forward because currently the total debt is around 100 2300 cr and do you expect the 38:49 38 minutes, 49 seconds secretary to broadly sustain or is there any scope for further reduction in leverage over the medium company? 38:56 38 minutes, 56 seconds We are very comfortable on leverage. So we are not worried about this level of leverage and I think we have enough cash flow to finance our growth without 39:05 39 minutes, 5 seconds increasing leverage the leverage ratio from from this level onwards. So we don't want to you know sacrifice growth 39:13 39 minutes, 13 seconds to further reduce leverage nor do we want to take more leverage and increase risk. So I think we are at the ideal mix and this ratio should continue and we 39:22 39 minutes, 22 seconds should be able to manage all our growth ambitions uh keeping this ratio intact. 39:31 39 minutes, 31 seconds Okay. Answer my second question is on working capital like what's your current working capital requirement as a percent 39:38 39 minutes, 38 seconds of school and assuming if your top line is will be around 10,000 to 12,000 then what level of working capital will be 39:46 39 minutes, 46 seconds required and how do you plan to fund this requirement? 39:49 39 minutes, 49 seconds So we have to think about working capital turns and we are at six six just above six time turns which is a good 39:56 39 minutes, 56 seconds level of working capital turns in the business and that will continue. So to that extent the ratio of that leverage 40:03 40 minutes, 3 seconds will will remain the same right with uh with the earning power provided our margins are broadly intact. 40:14 40 minutes, 14 seconds Okay. Thank you sir. Thank you very much. 40:18 40 minutes, 18 seconds Thank you. The next question is from the line of be samput. Please go ahead. 40:26 40 minutes, 26 seconds Yeah. Good afternoon. 40:29 40 minutes, 29 seconds Yeah. So uh just I uh was talking on the uh break up of our fabric sale. How much 40:35 40 minutes, 35 seconds is uh exported directly? How much is domestic B2B and how much is domestic B2C? 40:44 40 minutes, 44 seconds You know now you have tied up with this killer also. 40:49 40 minutes, 49 seconds So and that would be domestic B2B. So broadly in our fabric business it is um you know slightly in favor of exports 40:58 40 minutes, 58 seconds but there is a big domestic component as well and out of the domestic components about thousand crores of fabric and a 41:06 41 minutes, 6 seconds little bit bit of arvin branded readymade which happens in Arvin store um is is part of that thousand cr kind 41:13 41 minutes, 13 seconds of revenue. So uh B2C is about 1,000 crores now which is you know our our 41:21 41 minutes, 21 seconds sale to over-the-counter fabric suppliers our own Arvin store um and uh uh and and little bit online. 41:31 41 minutes, 31 seconds Okay. And how much is Arvin store? 41:35 41 minutes, 35 seconds Arvin store um and Arvin store would be you know it is about 30 to 40 crores a quarter. 41:46 41 minutes, 46 seconds Okay. So about 120 crores per year. 41:50 41 minutes, 50 seconds Yes. But that primary sale right the secondary sale will be higher because that is that that 41:57 41 minutes, 57 seconds converted to it's a no it is by the franchisee franchise. Okay. Okay. And uh uh second 42:04 42 minutes, 4 seconds thing is uh uh inter segment is only 92 crores correct. So out of uh in this 42:11 42 minutes, 11 seconds quarter so out of 1100 crores of fabric what we are uh making only 92 crores is 42:19 42 minutes, 19 seconds used for our own consumption. So garmenting there is a big scope to uh 42:25 42 minutes, 25 seconds grow it. What is your view on that? Yes, that is exactly why we are restricting our investment in fabric and increasing 42:34 42 minutes, 34 seconds [clears throat] our investment in so only 10 less than 10% is being used in house now around 10% 42:42 42 minutes, 42 seconds so volume it will be higher um and and there are segments where you know it is a fabric first business and it will remain a fabric first business so we 42:51 42 minutes, 51 seconds have to get to higher utilizations in specifically two segments which are denim and and knits 42:59 42 minutes, 59 seconds where the customer requires more verticality and it is difficult to sell just fabric. Whereas in open we have no 43:07 43 minutes, 7 seconds urgency to increase garmenting because you know we have lot of virtual vertical partners where we go together to the end 43:15 43 minutes, 15 seconds consumer and we have deep relationships with such people in Bangladesh, in Sri Lanka, some in Indonesia, 43:23 43 minutes, 23 seconds some in now starting in Africa and some in India also. So uh you know we have those virtual verticals in place in the 43:31 43 minutes, 31 seconds woven division. So the urgency to start our own garmenting there is not there. 43:37 43 minutes, 37 seconds So that will always be a low vertical integration. But in um say in ns we have already touched close to 50%. And that 43:45 43 minutes, 45 seconds number has to go up and in denim we are approaching that 20% mark. 43:51 43 minutes, 51 seconds Okay. And capex for FY27 is still you had indicated around 400 500 crores a year. Are we still on track? 44:01 44 minutes, 1 second You should you should consider 400ish plus minus 50 I think maybe plus 50 if things are going well. 44:08 44 minutes, 8 seconds Okay. Okay. Thank you very much. Thank you. Thank you. Thank you. 44:18 44 minutes, 18 seconds As there are no further questions from the participants, I now hand over the conference to Mr. Specty Prakash sir for closing comments. 44:30 44 minutes, 30 seconds Thank you once again uh everyone for joining the call today. We trust most of your questions are addressed and uh 44:38 44 minutes, 38 seconds should you need any more assistance or any more explanations on the results today. Uh please feel free to reach out 44:45 44 minutes, 45 seconds to me and my colleague Himmansu. Uh we are just a phone call or email away. We look forward to engaging with you in our 44:52 44 minutes, 52 seconds upcoming engagement efforts. Thank you and wish you a pleasant day ahead. 44:59 44 minutes, 59 seconds Thank you on behalf of Arvin Limited. 45:02 45 minutes, 2 seconds That concludes this conference. Thank you for joining us and you may now disconnect your lines.