Dachepalli Publishers Ltd — Q3 FY26

Dachepalli Publishers Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=KluLcUktXQA Published: 2 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Dajapali Publishers Limited Q3 and 9 month FI26 earnings conference 0:09 9 seconds call hosted by Equibx Advisors Private Limited. As a reminder, all participant line will be in the listenonly mode and 0:18 18 seconds there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please 0:27 27 seconds signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being 0:34 34 seconds recorded. I now hand the conference over to Miss Chani from Equidex Advisors Private Limited. Thank you and over to you. 0:44 44 seconds Thank you Mumi. A very good evening to everyone. Welcome to the Q3 and 9 month FI26 earnings call of Dachipali 0:52 52 seconds Publishers Limited. From the management team we have with us Mr. Harish Dachipali, Executive Director. Mr. Abino 0:59 59 seconds of Dachipali, Executive Director. The management will begin with the opening remarks after which we'll open the floor 1:06 1 minute, 6 seconds for Q&A. Uh with that, I would like to hand over the call to Mr. Abinav Sur for his opening remarks. Thank you and over to you sir. 1:17 1 minute, 17 seconds Yeah, good evening everyone. I'm Abinav Dachapali, executive director of Dachopali Publishers. Thank you for joining us today for the earning calls 1:26 1 minute, 26 seconds of Dachopali Publishers Limited. This is an inaugural earning calls following a successful IPO and we truly appreciate the time and uh interest of our 1:35 1 minute, 35 seconds investors, analysis, analysts and stock stakeholders. 1:39 1 minute, 39 seconds This period is particularly meaningful for us uh as it reflects the company's steady progress as a list a listed 1:47 1 minute, 47 seconds organization marked by disciplined execution improved profitability and a sh and a sharper focus on long-term 1:55 1 minute, 55 seconds value creation. That's why publishers limited has a rich legacy in Indian publishing economy. Our uh uh over the 2:04 2 minutes, 4 seconds years the company has built a strong reputation in education and academic publishing catering to wide spectrum of 2:11 2 minutes, 11 seconds learners through well estab well researched curriculum aligned. 2:17 2 minutes, 17 seconds Our focus has consistently been on delivering valuedriven educational material supported by a longstanding 2:25 2 minutes, 25 seconds relationships with authors and distributors and a deep understanding of regional and inter uh institutional demand. 2:32 2 minutes, 32 seconds This foundation uh this foundation has enabled us to build a resilient and scalable business model. This quarter is 2:39 2 minutes, 39 seconds important for us as it is among the first reporting periods after our IPO and listing. The transition to a listed 2:47 2 minutes, 47 seconds company has further strengthened our governance transparency and operational discipline. The IPO has also enhanced 2:55 2 minutes, 55 seconds our financial flexibilities enabling us to plan growth initiatives in the more structured and uh sustainable manner. 3:04 3 minutes, 4 seconds The the encouraging investors response reinforces our confidence in the long-term direction of our business. 3:12 3 minutes, 12 seconds During the third quarter of FY26, the company delivered a stable and profitable performance reflecting 3:19 3 minutes, 19 seconds consistent demand and disciplined cost management. Total income for the quarter stood at uh 1477.77 3:29 3 minutes, 29 seconds lakhs. Uh while profit before tax was 274.69 lakhs and net profit for the quarter was 3:37 3 minutes, 37 seconds 144.31 lakhs. translating into a net profitable profit margin of approximately 9.78 3:46 3 minutes, 46 seconds and uh earnings per share for the quarter stood at 1.28 rupees. These results demonstrate our ability to 3:55 3 minutes, 55 seconds maintain profitability while uh continuing to operate efficiently in a competitive environment. It is also important to 4:03 4 minutes, 3 seconds highlight the seasonal and academic nature of our business model. As a social as a school uh textbook 4:10 4 minutes, 10 seconds publisher, our revenue cycle is aligned with the academic calendar. Q3 is traditionally a comparatively moderate 4:19 4 minutes, 19 seconds quarter for textbooks sales and largely consists of repeated institutional orders, holiday homework books and 4:26 4 minutes, 26 seconds purchases arise from interstate student transfers. The primary textbook procurement session typically aligns 4:34 4 minutes, 34 seconds with Q4 and Q1 depending on boards like CBSC and SSC structures and academic schedules. Additionally, during Q3, the 4:43 4 minutes, 43 seconds company strategically in increased investments in expansion initiatives including sales network strengthening 4:50 4 minutes, 50 seconds marketing efforts and promotional activities in preparing in preparation for the peak academic session. These 4:58 4 minutes, 58 seconds expenditures were consciously undertaken to en to enhance future revenue generation capability and expand our 5:06 5 minutes, 6 seconds market presence. Accordingly, Q3 performance should be viewed in the context of broader annual academic cycle rather than in isolation. 5:16 5 minutes, 16 seconds The Indian education and publishing industry continues to remain on a positive trajectory supported by sustained focus on education curriculum 5:25 5 minutes, 25 seconds revisions, increasing adoption of regional and academic content and study demand across institutional and retail 5:33 5 minutes, 33 seconds channels. Within this environment, Dapali continues to grow steadily. Our strong editorial capabilities, 5:40 5 minutes, 40 seconds curriculum aligned product portfolio and long-standing distribution relationships position us well to capture industry 5:48 5 minutes, 48 seconds opportunities while maintaining financial discipline. We remain confident in our growth strategy and 5:55 5 minutes, 55 seconds long-term outlook supported by improved financial flexibilities post IPO and a scale scalable operating framework. 6:03 6 minutes, 3 seconds Thank you for joining us today and for your continuous continued [clears throat] interest in DH Pali Publishers. We will now open the floor for questions. 6:13 6 minutes, 13 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 6:21 6 minutes, 21 seconds star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you 6:28 6 minutes, 28 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll 6:36 6 minutes, 36 seconds wait for a moment while the question cue assembles. 6:45 6 minutes, 45 seconds Our first question comes from the line of Disha from Sapphire Capital. Please go ahead. 6:52 6 minutes, 52 seconds Hello. Am I audible sir? 6:55 6 minutes, 55 seconds Yes ma'am you are audible. Please go ahead. 6:57 6 minutes, 57 seconds Yes. Thank you so much for this opportunity. So firstly uh coming on to the seasonality. So you mentioned Q3 is a moderate quarter and Q4 and Q1 we 7:06 7 minutes, 6 seconds primarily see having a higher proportion. So what sort of revenue contribution do we see from Q4 and Q1 as compared to the full year? 7:15 7 minutes, 15 seconds Uh this financial year we've uh projected a turnover of 90 crores and uh we've already achieved 55 and we have 7:22 7 minutes, 22 seconds confirmation orders of almost 25 to 30 crores. So we are uh as per the promise what we made to the public we will be achieving the 90 cr turnover because we 7:30 7 minutes, 30 seconds have confirmation orders but so so what I was trying to ask is in general Q4 and Q1 contribute to what 7:37 7 minutes, 37 seconds percentage of our overall revenues 90% of the business comes from Q4 and Q1 because if you understand we are making 7:44 7 minutes, 44 seconds we are selling school textbooks so Q4 is usually where CBSC and IC schools place order and Q1 is usually where stateboard school place orders across different 7:52 7 minutes, 52 seconds states so 1995 5% of the business comes from Q4 and Q1 only. 7:57 7 minutes, 57 seconds Okay. Okay. All right. And so for the in case of margins because you you said that this quarter we do higher spends for the coming quarter. So what what is 8:05 8 minutes, 5 seconds the steady state margin level you see going ahead? 8:09 8 minutes, 9 seconds uh usually we will uh in the past experience we have noticed a pat of around 18 to 20% PAT but in Q3 PAT is reasonably less because you know most of 8:17 8 minutes, 17 seconds our money is spent on on sales and marketing and you know approaching new schools and other other working capital needs or you know purchasing raw 8:25 8 minutes, 25 seconds material for the coming business right right so on an overall console basis we can see 18 to 20% pad going ahead 8:33 8 minutes, 33 seconds yes ma'am yes ma'am and yes my question was about capacity so our Current capacity utilization is around 40%. So 8:41 8 minutes, 41 seconds what sort of ramp up plan do we have for this and what's the revenue potential from the existing capacity at peak utilization. 8:49 8 minutes, 49 seconds Uh ma'am two things we have to understand here. DJI is solely a publishing company and printing uh press is just an anx unit for our existing 8:57 8 minutes, 57 seconds production. We previously used to produce our products in outside printing industries where there was delay in time and there were quality issues. So we 9:05 9 minutes, 5 seconds slowly set up our own machines. uh then uh we pushed the 90% of our production inhouse and 10% still goes outsource that is due to the seasonal nature of 9:13 9 minutes, 13 seconds this business and also about the capacity utilization in printing industry usually capacity is measured at a 22-hour shift 20our shift but in our 9:22 9 minutes, 22 seconds case and a 22-hour shift our machines are at 40% capacity but at an 8 hour shift we are at 80% capacity 9:31 9 minutes, 31 seconds okay so this is so what's the peak utilization that we can achieve uh in terms of uh utilization in the 9:41 9 minutes, 41 seconds quarters if you see Q2 and Q3 is majorly peak utilization happens because uh that's when we produce the books for the 9:48 9 minutes, 48 seconds coming academic year and Q4 and Q1 usually goes for reprints or any emergency printing uh on such matters. 9:59 9 minutes, 59 seconds Okay. Okay. All right. All right. Okay. 10:01 10 minutes, 1 second That's it from my side. Thank you so much. Thank you so much. Thank you. 10:06 10 minutes, 6 seconds A reminder to all the participants, if you wish to ask questions, you may press star and one at this time. Our next 10:14 10 minutes, 14 seconds question comes from the line of Rohan Kamas from LNPR Capital. Please go ahead. 10:21 10 minutes, 21 seconds Yeah. Hi sir, thank you for the opportunity. Uh sir, uh my first question is margin remains strong at the 9 months level but decline in quarter 3. 10:30 10 minutes, 30 seconds What margin range should be considered sustainable over the medium term? 10:35 10 minutes, 35 seconds uh annually if you see margin will be uh on a pat of 18 to 20% in Q3 PA will be lesser because we don't have revenue coming in Q3 but more expenditure is 10:44 10 minutes, 44 seconds going out of the company for Q3 for the coming academic year sales generation like promotional activities marketing activities to get orders from schools. 10:52 10 minutes, 52 seconds Okay. My next question is operating and selling expenses are increasing increased during quarter three where this primary preparatory expenses for 11:01 11 minutes, 1 second the peak accommodatic season uh and should we accept the normalizing the in the coming quarter? 11:06 11 minutes, 6 seconds Yes sir. Operating expenditures will come down in the in Q4 because it's usually revenue generated and most of the production is already been done and 11:14 11 minutes, 14 seconds kept ready for the coming academic season. So by Q4 and Q1 when the major revenue kicks into the business automatically operating the cost will come down because the cost of production 11:23 11 minutes, 23 seconds is almost negligible at that point of time. 11:26 11 minutes, 26 seconds Okay. Uh the inventory levels have increased at as of 9 months after how confident is management about the liquidation during the peak textbook 11:35 11 minutes, 35 seconds season and what is the accepted inventory cycle? 11:38 11 minutes, 38 seconds Uh so the reason why inventory is high because we've we were very clear that the after IPO we'll be spending more uh 11:46 11 minutes, 46 seconds on sales and marketing and then you know entering new geographical locations where we were business and also we brought in lot more new products like the NCERT workbooks like the financial 11:54 11 minutes, 54 seconds literacy textbook which was not there prior to this and we've changed certain uh sales and marketing team in the states where we have existing business. 12:02 12 minutes, 2 seconds So overall with the confirmation of orders uh and then with the previous year's business and with all the uh required reports we've come up with the 12:10 12 minutes, 10 seconds stock level and we are very sure that this will be finished in the next two quarters. 12:15 12 minutes, 15 seconds Okay. How should you as working capital requirement and cash flow movement across the academic year and given the signal of the business? 12:26 12 minutes, 26 seconds So usually in school education business what happens is in Q4 and Q1 major orders kick in where uh we start dispatching our supply and from after 12:34 12 minutes, 34 seconds from Q1 end to Q2 is major our revenue uh start where income starts coming back to the company. So usually the working capital cycle is around 4 to 5 months. 12:45 12 minutes, 45 seconds Okay. How many schools were added during 9 months after 26 and what is the average revenue per school? 12:52 12 minutes, 52 seconds Uh right now we our presence is in around 10,000 schools. So uh we can't give an average just like that because you know some school might be just using 12:59 12 minutes, 59 seconds one product from our company or one subject and some schools might be using 40 50% of the average. uh let's say if a school if all the 10,000 schools where 13:08 13 minutes, 8 seconds we are supplying if all of them have a similar strength of around 500 to 8 800 then average order value will be around 13:15 13 minutes, 15 seconds 1 lakh 1 and a half lakh but that's not possible because in India school strength is different from 300 to 2,000 so in that case measuring average value 13:24 13 minutes, 24 seconds per school gets very you know not reasonably correct okay what is the current status of curriculum integration partnership and 13:31 13 minutes, 31 seconds how do how do this partnership ends revenue visibility and long-term growth. 13:36 13 minutes, 36 seconds Yes. So last year when we introduced this curriculum integration and partnership with schools, we've tied up with only 10 schools where we did our handrolling with the schools and where 13:44 13 minutes, 44 seconds our editorial team or the training team has gone into the schools. They did hand rolling, they've uh taught the teachers on how to teach the textbooks to the 13:53 13 minutes, 53 seconds students. We help them with integration of technology inside the school. And this year we've had with 60 schools and going forward we are anticipating around 200 schools in the next coming year. 14:02 14 minutes, 2 seconds Okay. Thank you. That's from the my side. Yeah, thank you so much. 14:06 14 minutes, 6 seconds Thank you. Participants who wish to ask a question may press star and one at this time. Our next question comes from 14:15 14 minutes, 15 seconds the line of Harini from Lorett Consultancy Services. Please go ahead. 14:28 14 minutes, 28 seconds Harini, your line has been unmuted. Please go ahead with your question. 14:35 14 minutes, 35 seconds So can you give us a clear update on IPO fund utilization? Have we cleared the dues of six crime gone and we are using that as 25 crores per working capital? 14:47 14 minutes, 47 seconds Uh hello [clears throat] ma'am uh thank you for the question. Yes. Uh like what we we've mentioned in our RHP we have cleared 6 crores loan with SDFC bank 14:55 14 minutes, 55 seconds where we had a term loan with them and out of the 25 crores we bought raw material bulk bulk raw material where we get good cash discounts and bulk 15:03 15 minutes, 3 seconds discounts which which are likely to get higher profit margins going forward. In the next quarter you'll be seeing that. 15:10 15 minutes, 10 seconds And uh and also we've got in multiple things. one uh we've got into a distribution of notebooks and stationary as well to our existing customers 15:18 15 minutes, 18 seconds because prior to that we were only dealing with school textbooks and we never entered into this particular vertical but post IPO yes we've got in 15:25 15 minutes, 25 seconds the distribution and right now our uh distribution network for notebooks and stationary is at a reasonable quantity of around 10,000 to 20,000 pieces per uh 15:33 15 minutes, 33 seconds CBS or ICC standards but going forward the moment once we reach a 25,000 capacity of each product like for example each geometry box or stationary 15:41 15 minutes, 41 seconds or notebook we'll start manufacturing our own line. So far we want to depend on the distribution model by procuring the material and supplying to existing 15:48 15 minutes, 48 seconds customers only. And then apart from that we have a new e-commerce vertical called Pelican edu supply. What happens here is uh our tech team generates a link for 15:57 15 minutes, 57 seconds each and every school. The school then forwards that link to the parents where the parents get to purchase the textbooks, notebooks, stationary and other requirements of the school through 16:05 16 minutes, 5 seconds that link where we pack that in our warehouse. That box is shipped to the parents like how Amazon or Flipkart does the delivery and uh last year we've did a pilot project of around three schools. 16:15 16 minutes, 15 seconds We raised the revenue of around 2 crores and this year we tied up with 50 schools and we're expecting a revenue of around 30 crores from these 50 schools. Going forward we want to scale up this 16:23 16 minutes, 23 seconds industry with the space constraint in our existing plants and plant. We've also um we've also purchased a new land 16:30 16 minutes, 30 seconds recently where we'll be building around 60,000 square ft² of shed where we'll use this place only to scale our e-commerce vertical and going forward we 16:38 16 minutes, 38 seconds want we are estimating around 3 to 400 schools in the next coming year that's one thing and uh NCERT workbooks is one uh new demine where we were not in this 16:45 16 minutes, 45 seconds product before since our business is uh consistently growing in each and every state where we are entering NCERTT uh NCERTT workbooks are a common product 16:54 16 minutes, 54 seconds which could be sold across all the states in the country so we got that product into line and the financial literacy is another product where this particular after the new education 17:02 17 minutes, 2 seconds policy was introduced and schools have been made the mandatory to teach financial literacy from class 1 to class 10th. So we launched that product also 17:09 17 minutes, 9 seconds to uh this year and uh since we were the first more in the market we've already sold close to 20,000 pieces of each class and our reprints are going on now. 17:17 17 minutes, 17 seconds So these are all the new updates what we did post IPO and the IPO just closed like 30 days back. 17:31 17 minutes, 31 seconds Hello. Hello. Disha. 17:39 17 minutes, 39 seconds Yes. 17:44 17 minutes, 44 seconds You want if you want to ask more questions, please go ahead. 17:47 17 minutes, 47 seconds Yeah. So, just one more question. Why why are receivables so high and what sort of normal uh trajectory do we expect for the receivable day? 17:58 17 minutes, 58 seconds Uh so ma'am there are multiple reasons. 18:00 18 minutes One being see what happens is uh the this industry is doesn't it works in a different model. What happens is we 18:08 18 minutes, 8 seconds usually tend to get orders from CBSC schools in the month of January to March and CBSC and IC and stateboard schools order come from uh April to June but 18:16 18 minutes, 16 seconds usually our payment start kicking in only when the school reopens across India in any state if you see 90% of the states open school reopen on June 15th 18:25 18 minutes, 25 seconds but then orders are procured 3 months 6 months before the reason being is let's say my product is sold in 10,000 schools I cannot dispense 10,000 orders in to 1 18:34 18 minutes, 34 seconds month or two months I need proper 3 to four months to pack distribute to schools across various states, various districts, various bundles, talucas. So 18:42 18 minutes, 42 seconds in that process it takes about 100 children and each and what happens is in every vicinity uh the set of schools are tied up with a vendor. Let's let you can call him a book seller or a distributor. 18:52 18 minutes, 52 seconds This particular distributor proced material from multiple vendors like us like multiple textbook publishers, stationaries, notebooks and he makes a 19:00 19 minutes basket for that particular school. Once he makes that basket for school, he sends that basket to the school and at school level they again make sets class 19:07 19 minutes, 7 seconds wise sets for the students and then once the parents start I take admissions around June June 15 they start procuring this material once the reopen happens we 19:14 19 minutes, 14 seconds go collect our distributors or us we go collect the money and then that money comes back into the system so that's why this this particular procedure is long 19:22 19 minutes, 22 seconds and so because we are sending stock early that doesn't mean that only it is that means we have invoiced the product early it doesn't mean the invoice is 19:29 19 minutes, 29 seconds actually acrew to Okay. So, what's the normalized uh rate for this receivable day? 19:37 19 minutes, 37 seconds Uh usually it'll be around 150. Sorry, I couldn't get that. 19:45 19 minutes, 45 seconds It will be around 180 to 200 days. 250 200 days. 180 to 200 days. 19:53 19 minutes, 53 seconds Yes. Yes. Because you know 6 months goes in season time. Once the so usually when June 15 the school reopens by September October 90% of our payments are recovered. 20:03 20 minutes, 3 seconds Okay. So immediately by Q2 and we see sorry. 20:07 20 minutes, 7 seconds Yeah. So by Q2 and we see most of the payments coming through. 20:10 20 minutes, 10 seconds Yes. Yes. Yes. So and also the pricing on the products are also uh MRP like that which covers that four months or six months of cost interest cost also. 20:20 20 minutes, 20 seconds Okay. All right. And this is the model has been there in India for almost 100 years in terms of textbook publishing. All right. All right. That's clear sir. 20:29 20 minutes, 29 seconds So what sort of growth are we targeting for the next year? 20:32 20 minutes, 32 seconds So this year we will be closing at around 90 crores turnover ma'am. Next year with the e-commerce vertical also kicking in we'll be we are planning to do around 150 crores of turnover. 20:42 20 minutes, 42 seconds 150 crores. Yes. 20:44 20 minutes, 44 seconds And currently I think we're supplying to 10,000 schools. Right. Where do we see this number say in next two three years? 20:50 20 minutes, 50 seconds So post IPO what we did we have started in before IPO we used to do one state at a time depending on the revenue from the previous sales business or the profit we 20:58 20 minutes, 58 seconds made from the company but post IPO now what we instead of doing one state at a time we started four states at a time this year we started Gujarat Rajasthan 21:06 21 minutes, 6 seconds and uh sorry Assam and another state and uh next year we'll be doing four four state at a time in the next three years we want to do around 25,000 schools 21:14 21 minutes, 14 seconds across 28 states and eight unit territories of the country in next three three to four next three years. Yes. 21:23 21 minutes, 23 seconds Okay. Okay. That's very Thank you so much, sir. That's it from my side. Thank you. 21:28 21 minutes, 28 seconds Thank you. Our next question comes from the line of Jes Securities. Please go ahead. 21:37 21 minutes, 37 seconds Yeah. Uh thank you so much for the opportunity and good evening. Uh am I audible? Yes sir, please go ahead. 21:44 21 minutes, 44 seconds Yeah, thank you. Uh so sir uh see the top 10 customers uh have contributed significantly in FY25. So how should 21:52 21 minutes, 52 seconds investors view customer concentration risk going forward? 21:59 21 minutes, 59 seconds Sorry I didn't get your question. Can you ask can you ask again your voice was not? 22:02 22 minutes, 2 seconds Yeah yeah yeah see my question is that the top 10 customers have contributed significantly in SI25. Okay. And so how 22:11 22 minutes, 11 seconds should investors view uh customer concentration risk going forward in the future? 22:18 22 minutes, 18 seconds So the top 10 customers came from multiple uh group schools where we procured orders last year which was uh which was not the previous uh method of 22:26 22 minutes, 26 seconds business. So we have got into group schools like Purami and Shatanya and Arena where each school has around 150 branches. So because the number of 22:34 22 minutes, 34 seconds schools ac particular brand is high so the revenue coming from them looks like on the top 10 customers also what happens in our industry every time a 22:42 22 minutes, 42 seconds book gets prescribed in a school the book stays in the school for almost four years. So this particular top 10 customers from the similar revenue will 22:49 22 minutes, 49 seconds definitely stick for the next four years and then we'll also be adding newer new schools across different states and different verticals. So the the 22:56 22 minutes, 56 seconds concentration risk is very less in that way. 22:59 22 minutes, 59 seconds Okay. So okay so we can say the that these customers are definitely sustainable sustainability school textbooks school textbooks usually you know it's very difficult to 23:07 23 minutes, 7 seconds get prescribed in a school but the moment it get prescribed it stays for 4 years minimum that is minimum but there are some customers of mine who have been using my product for almost 18 to 20 23:15 23 minutes, 15 seconds years also okay okay maximum 18 to 20 years so that is that is a higher but I'm still promising only four years because 23:24 23 minutes, 24 seconds that's a reasonable change and happens in every four years but there are customers to the company who's been using the same product in continuous so 23:31 23 minutes, 31 seconds many years also. So if there's a top 10 customer giving more revenue in this if you see that in FI25 they'll continue for the next 3 years definitely. 23:40 23 minutes, 40 seconds Okay. Three to four years minimum. Okay. Yes. 23:44 23 minutes, 44 seconds Okay. And uh and what effects are being taken to diversify the customer base further? 23:52 23 minutes, 52 seconds Any specific that you would like to mention or specify? 23:57 23 minutes, 57 seconds diversify the customer base and we are doing the same business right we're not so what we are doing is we were only making school textbooks and selling 24:04 24 minutes, 4 seconds prior to this but post IPO we realized what other things can we sell to the existing customer that's exactly where we got into notebook distribution 24:11 24 minutes, 11 seconds stationary distribution then we got into home delivery of the products of e vertical so all these are not diversifying the customer is getting new 24:19 24 minutes, 19 seconds products into the existing customer okay uh okay uh okay so actually the 24:26 24 minutes, 26 seconds question regarding customer base actually customer base diversification. 24:33 24 minutes, 33 seconds Uh no see the thing is you know previous before the e-commerce vertical were lost mostly our customer was the school but now after e-commerce vertical has 24:42 24 minutes, 42 seconds launched we got too much data from the parents and you know what what standard the student is in or you know we have used some AI tools to understand what is 24:49 24 minutes, 49 seconds the need of that particular class or what product has been focused more. So we are using that data now to sell others products to the same to B toc 24:58 24 minutes, 58 seconds that is the parents and the school like you know pushing holiday homeworks additional STEM kids educational toys to those parents. So the that's how we've been diversifying our customers. 25:08 25 minutes, 8 seconds Okay. Okay. Okay. Uh okay. As far as the growth aspect is concerned, so which segments of the companies seeing the are 25:16 25 minutes, 16 seconds seeing the fastest growth such as textbooks, supplies or uh or or uh or or sector 25:24 25 minutes, 24 seconds 90 to 95% of the business comes from the textbooks. 25:28 25 minutes, 28 seconds It has always been like that. So going forward also textbook will be the major contribution of revenue and we are slowly adding other revenues so that you 25:35 25 minutes, 35 seconds know we get multiple sources of income from the existing customer or from the existing network. So revenue source major turnover for the company comes 25:44 25 minutes, 44 seconds from textbooks. Now whether we are selling it directly or indirectly it doesn't matter 25:50 25 minutes, 50 seconds 90% to be precise and uh 90% to be precise on textbooks. Correct. 25:57 25 minutes, 57 seconds And uh what about we are a school textbook publishing company. Yeah. 26:01 26 minutes, 1 second Yeah. And sir what about the supply part? 26:05 26 minutes, 5 seconds So here the supply network works you know if you're doing the textbook the we are into two different modules. One model where the textbook is supplied to 26:12 26 minutes, 12 seconds schools is for let's say out of the 10,000 schools could be around 10 different states of the country. These textbooks are for every district there 26:20 26 minutes, 20 seconds are multiple schools. The multiple schools have a vendor. Now they procure um that particular vendor they procure the stock from them let it be textbooks, 26:28 26 minutes, 28 seconds notebooks, stationary or even uniform and also shoes. So that particular vendor once he gets orders from the schools he'll make the basket for that particular school and then he procures 26:36 26 minutes, 36 seconds from us. So we have a supply chain with all these uh distributors around 3 to 400 of them across the 10 states where 26:43 26 minutes, 43 seconds we are operational right now. uh and um every time we get an order it takes two to three days to dispatch and then in depending on the locality also if it is 26:52 26 minutes, 52 seconds in the south it probably reaches in 3 days if it's in the north it just takes up to 4 to 5 days but and we use transport companies like VR guty na 27:01 27 minutes, 1 second for transportation uh in and around 150 km radius from Hyderabad since our office is head office is Hyderabad uh we 27:08 27 minutes, 8 seconds give we give them door delivery in our own vehicles okay Okay. And sir, how much of the 27:15 27 minutes, 15 seconds revenue currently comes from the repeat school customers? Most of the uh uh what is the new ones, new customers? 27:24 27 minutes, 24 seconds Uh out of the revenue, 70% is from the repeated customer and 30% is from the new customer 27:31 27 minutes, 31 seconds you know 7030 ratio is there 70% because like I said the book continues for three four years. So that three then 27:40 27 minutes, 40 seconds we our existing sales and marketing team try and pitch this product to new schools where our business is not there. 27:45 27 minutes, 45 seconds So that the generation is 30%. This was post IPO but IPO after IPO this will change because now we are rapidly increasing it in new states where we 27:53 27 minutes, 53 seconds were not present previously. So that revenues also once it kicks in it will go down to 6040 ratio. 27:59 27 minutes, 59 seconds Okay. Okay. Yeah. Thank you sir. And sir, one last one from my end that can management comment on the pricing power 28:05 28 minutes, 5 seconds in the current academic publishing uh uh publishing time. Yes. Yes, we can 28:14 28 minutes, 14 seconds comment on the MRPs and actually what favorite thing is you know many publishers in India do not have their own printing line but in our case we have our own complete production unit. 28:24 28 minutes, 24 seconds So because of the production unit uh our there are higher margins compared to our uh competitors and because of that our costs are also less and we are our 28:33 28 minutes, 33 seconds margins are still very reasonable because the paper prices have been down from the last four years and we kept the same MRPs but compared to our competitors who are dependent on third 28:41 28 minutes, 41 seconds party printing units their MRPs are incre slightly increasing 5 to 7% every year so we still have that leverage because we haven't changed the MRPs for four years and that has been a great 28:50 28 minutes, 50 seconds advantage in the schools because the title keep continuing they can continue with the same price list again and again. But now even if I increase my MRPs by another 10 to 15% the market 28:59 28 minutes, 59 seconds wouldn't mind because my competitors MRPs are still higher and with existing MRPs I'm still getting more margin is because my production is also in house. 29:08 29 minutes, 8 seconds Okay. So sir uh but depending on the situation and uh and in future time as well so uh price can change as well 29:16 29 minutes, 16 seconds price or the uh prices of the books textbooks MRS prices will change if the raw material 29:24 29 minutes, 24 seconds changes 70% of a raw material is paper if the prices of paper prices change then automatically the textbook prices also will change but if you just to give 29:33 29 minutes, 33 seconds an example in 2020 I bought paper at 150 rupees per kilo this year I purchased paper at 70 rupees per kilo and last here also around 70 then it was previous 29:41 29 minutes, 41 seconds year it was around 75 so paper price only been declining so at my MRPs right now I have priced at a paper price when it was 150 rupees per kilo today at 70 29:50 29 minutes, 50 seconds rupees MRP also uh cost also per paper I haven't reduced my MRP so I just kept it the same 29:57 29 minutes, 57 seconds okay okay so that was uh nice yeah and uh okay so it will depend on the materials itself raw materials yes 100% 30:06 30 minutes, 6 seconds okay okay sir okay thank you so much for All 10% ded from our Thank you. Thank you so much. 30:13 30 minutes, 13 seconds Thank you. A reminder participants, if you wish to register for a question, you may press star and one at this time. Our 30:21 30 minutes, 21 seconds next question comes from the line of Sahil Raj from Sam Dara. Please go ahead. Am I audible sir? 30:30 30 minutes, 30 seconds Yes sir, please go ahead. 30:32 30 minutes, 32 seconds Yeah. So my spec on this uh utilization of your capacity uh what capacity utilization are you targeting for this year and the next year? 30:42 30 minutes, 42 seconds Uh so actually uh we uh like I said you know for a 22-hour shift of printing industry we are at a 40% utilization but at a single shift of 8 hours we are at 30:50 30 minutes, 50 seconds an 80% utilization capacity but the moment we will the moment our capacity we don't want to do a 22-hour shift of printing because our business is 30:58 30 minutes, 58 seconds seasonal in nature. So and also printing is not our main business. It's an ancillary unit for an existing publishing school textbook business. So going forward whenever our production 31:07 31 minutes, 7 seconds increases at more than 80% we ourselves will buy an additional missionary. So this year we are we are noticing that our for a single hour shift our 31:14 31 minutes, 14 seconds production is going more than 80%. And uh in the next quarter um I mean after Q2 we are planning to buy more missionary to stabilize that 31:23 31 minutes, 23 seconds and what what would be the cost of these machineries that you are trying to get in after Q2? uh printing machines vary 31:30 31 minutes, 30 seconds if it is an international machine it comes around 4 to 5 crores an Indian machine comes at around 1 to2 crores but the quality difference is 50% and the speed of the machine let's say a 31:39 31 minutes, 39 seconds monograph machine which is an international make gives around 30,000 forms per hour whereas an Indian machine for example orient gives at a 15,000 31:46 31 minutes, 46 seconds forms per hour and the quality difference between the board machines in terms of uh printing it is around 50%. 31:52 31 minutes, 52 seconds And price obviously is also double the price. And the life also is different because an international machine usually stays for more than 20 25 years. An Indian machine last for five years. This 32:01 32 minutes, 1 second is about this is in terms of uh web. But in terms of sheet fit that is like in printing there are two types vertical machines and horizontal machines. What I just told you about is about vertical 32:09 32 minutes, 9 seconds machines. But about horizontal machines uh if it's an international machine it'll be going for a firstand machine it be going around 20 to 25 crores. But in 32:17 32 minutes, 17 seconds India right now even 1970 machines are still operational because this horizontal machines life is around 150 32:24 32 minutes, 24 seconds years. Even right now in our printing we have around 2003 model and 2000 uh 2002 model also which are very efficiently 32:32 32 minutes, 32 seconds running and the great quality they give us. So if you maintain them well easily these machines last for 70 75 years. 32:39 32 minutes, 39 seconds Okay. And uh have you thought of going for maybe uh getting this printing done from someone else rather than purchasing your own machines? 32:47 32 minutes, 47 seconds Yes. So eventually beforeh we were actively involved into the business where my father and my uncle were taking over they were 100% dependent on 32:55 32 minutes, 55 seconds outsourcing of the production but when we when we came and joined my business me and my brother we noticed that you know we are not getting our books on time quality is not being maintained the 33:03 33 minutes, 3 seconds paper quality which was promised to us is not coming out on time and also in reprints time when the peak season going on if there any particular title we need 33:10 33 minutes, 10 seconds uh the printing press already taken commitment from other publishers so the turnar around time was getting late and we were los continuously losing orders That's when we decided you know why 33:19 33 minutes, 19 seconds don't we start in our place. So immediately we got some some small units some uh binding and printing equipment and we saw our break even time and you 33:27 33 minutes, 27 seconds know how much we are getting benefit of this. Slowly over time in the last five to six years we started buying more and more machinery then we've taken a better 33:34 33 minutes, 34 seconds uh rented premises then we moved into a company owned uh warehouse uh production unit now. So it has been growing uh uh 33:42 33 minutes, 42 seconds very standalone but 90% of the production happens inhouse still and 10% still is outsourced one due to the seasonal nature of this business and 33:50 33 minutes, 50 seconds some products uh can still not need more machinery to produce some products but since it is only 10% of the production we we are happy to send it outside. 34:00 34 minutes Okay sir. And uh in terms of the your heavy quarters for the year be the quarter one or quarter two uh you don't 34:08 34 minutes, 8 seconds face any challenges with respect to capacity because you said that you can get uh more machinery as and when required and raw material is also fine. 34:16 34 minutes, 16 seconds So no capacity constraints as such right? 34:19 34 minutes, 19 seconds No no but we are at full for a single chip we are right now at full capacity but uh after our 34:27 34 minutes, 27 seconds but you can scale that up right as and when needed. Yes. Yes, we can scale it up anytime. 34:33 34 minutes, 33 seconds Okay. Okay. Okay. Thank you for answering. Yeah. Thank you. Thank you. Thank you. 34:39 34 minutes, 39 seconds Our next question comes from the line of Niha Sharma, an individual investor. Please go ahead. Hello. 34:47 34 minutes, 47 seconds Hello ma'am. Please go ahead. 34:49 34 minutes, 49 seconds Uh thank you for the opportunity of the platform. 34:58 34 minutes, 58 seconds Ma'am, your voice is not audible. audible. Yes. 35:04 35 minutes, 4 seconds So what is the current scale uh of the pelican platform? 35:10 35 minutes, 10 seconds Uh uh last year we did a pilot project in three schools and this year we tied up with 50 schools which will generate around 30 crores of revenue but this 35:18 35 minutes, 18 seconds revenue will be split between Q4 and Q1 because schools reopening dates are different across uh different uh verticals sorry different states. So and 35:27 35 minutes, 27 seconds uh going forward next year we want to push it to 150 schools and after that it will be 300 schools. 35:37 35 minutes, 37 seconds What are the unique economics and margin profile of the tradition model versus traditional publishers? 35:43 35 minutes, 43 seconds Uh actually traditional publishing model is uh uh profit margins are higher because we are manufacturing that own product. But in terms of the e-commerce 35:51 35 minutes, 51 seconds model there are multiple things. One our product is there inside it. Other publishers textbooks are there, stationary is there, notebook is there. 35:58 35 minutes, 58 seconds But stationary and notebook right now we are only uh trading it. We are not manufacturing it. So as and when we start manufacturing because we need a minimum quantity to manufacture that 36:06 36 minutes, 6 seconds particular product. When we get when we reach that stage like once we reach a 100 schools we will be having a minimum quantity to manufacture that product and 36:13 36 minutes, 13 seconds then the margin from that particle also will be will be as good as what we are getting from the textbook. 36:22 36 minutes, 22 seconds So what what investments are planning? 36:26 36 minutes, 26 seconds I'm sorry ma'am your voice is not about investments of money 36:33 36 minutes, 33 seconds this year ma'am your question is not clear ma'am 36:41 36 minutes, 41 seconds what investment our plan is there is a lot of background noise 36:51 36 minutes, 51 seconds hello what what investments have done in AI and analytics capabilities sir. 37:01 37 minutes, 1 second Yeah. So, so when we when we brought in the Pelican Educe supply e-commerce vertical of delivering this particular educational material to parents home 37:09 37 minutes, 9 seconds delivered uh we've got more information of the students needs and you know their classes whether it's the male or female and uh which background of the parents 37:17 37 minutes, 17 seconds which kind of school they are studying AI we've we developed an AI tool which helps us identify that particular parent and it purchasing capacity and with that 37:26 37 minutes, 26 seconds uh till now we've been uh on the on the B2B model of the supplying textbook to schools and other needs. But once this vertical opened, our AI model helped us 37:34 37 minutes, 34 seconds generate information of different students of across different economical backgrounds, different states, different needs. So now we started our own 37:41 37 minutes, 41 seconds e-commerce model where uh we have a website where all these data is pushed and then we send notifications to parents through email and WhatsApp and 37:50 37 minutes, 50 seconds other places to push other other things apart from textbook that is educational toys you know STEM kits and the Olympiad 37:58 37 minutes, 58 seconds books and other things which are uh which are for higher education. So usually when a customer becomes a customer for the company for three to four years but through this model we are 38:06 38 minutes, 6 seconds trying to make that customer stay with the company for at least 10 to 12 years ac across his educational journey. 38:14 38 minutes, 14 seconds Uh thank you sir and what particular of schools are currently adopting the study via platform? 38:22 38 minutes, 22 seconds So v study is a complimentary tool for textbooks. What happened is uh we've noticed that you know schools are interested in technology. So uh when 38:30 38 minutes, 30 seconds then when we ended up creating this technology we realized that you know the cost per student or cost per book is actually very small. So instead of trying to sell this model why don't we 38:38 38 minutes, 38 seconds give it for free as a complimentary along with the textbooks were purchased. 38:42 38 minutes, 42 seconds So then we started pushing this technology for free because you know the amount of uh investment we spent on that technology or creating the technology including the server charges when it 38:50 38 minutes, 50 seconds comes to divide by number of textbooks we're selling it's hardly coming to three to four rupees per book. So then what we did instead of G instead of trying to sell this product why don't we 38:58 38 minutes, 58 seconds increase the MRPs on the books by another 10 rupees and start providing this technology for free. So we are rapidly pushing this technology for school adopt use our videos use our test 39:07 39 minutes, 7 seconds generator tools and even we've integrated AI in the test generator where you know if a teacher teaches certain topic today you can push a mock test on that particular topic to the 39:15 39 minutes, 15 seconds students app where the students can solve that particular test and you know AI gives a result saying that you know whether the student have understood this particular topic or not or whether the 39:23 39 minutes, 23 seconds teacher has to come back tomorrow and revise this topic again before going to the next particular chapter or uh next particular paragraph and in case of 39:32 39 minutes, 32 seconds mathematics AI also helps them that you know if there are questions in addition or subtraction and then there then the AI notices that the students are not 39:39 39 minutes, 39 seconds performing well in addition. It pushes additional worksheets of uh addition to their email ID where they can download and practice that particular worksheet. 39:46 39 minutes, 46 seconds They can take a screenshot post it in the school app through the elements the teacher gets to know what the student is doing how well is he performing. So AI 39:53 39 minutes, 53 seconds has helped very much in the reports also with V study come with all these tools V study is coming as complimentary but still we have only noted 30% adoption 40:01 40 minutes, 1 second rate of technology in schools because uh uh there's a lag in schools of using technology but we are continuously pushing it we're trying it to give it for free because tomorrow tech companies 40:10 40 minutes, 10 seconds or anybody trying to come and sell technology the school itself will tell them that this technology is already available for free and we are using it. 40:18 40 minutes, 18 seconds Thank you. And uh the last question is what is the uh does your role in executing the BTC parent from a set? 40:28 40 minutes, 28 seconds Ma'am, your question is not clear. 40:31 40 minutes, 31 seconds What risk does management in executing the D2C parent from a set? 40:38 40 minutes, 38 seconds D2C parent ma'am can you please? 40:47 40 minutes, 47 seconds Yeah. Yeah. So, so our major business is selling textbooks to schools. So, that will be 90% of the revenue and we are trying to get additional revenue through 40:55 40 minutes, 55 seconds this e-commerce vertical through parents uh with an increase in number of schools. I'm guessing the revenue will 41:02 41 minutes, 2 seconds be 10% of the total business and uh going forward that margin will increase when we adopt more and more schools in the in the e-commerce portal of delivery 41:10 41 minutes, 10 seconds of textbooks. So, now this year we're tied up with 50% 50 schools and next year we are in line with doing around 150 schools. Actually right now also we can tie with more schools but you know 41:19 41 minutes, 19 seconds space is also and time are two constant things. Next year a new factory will open and with that we are easily concentating of 150 to 200 schools and 41:27 41 minutes, 27 seconds uh right now we are doing a pilot project with our uniform also and once we understand the challenges with the uniform we'll try to scale that up also. 41:36 41 minutes, 36 seconds Okay sir. Thank you sir. Thank you very much. 41:41 41 minutes, 41 seconds Thank you ladies and gentlemen. If you wish to ask a question, you may press star and one at this time. 41:57 41 minutes, 57 seconds Participants who wish to ask a question may press star and one at this time. 42:14 42 minutes, 14 seconds As there are no further questions, I would now like to hand the conference over to Miss Chani for closing comments. 42:21 42 minutes, 21 seconds On [clears throat] behalf of Dachali publishers and equex advisers, I thank everyone for taking the time out to join today's conference call. If you have any 42:31 42 minutes, 31 seconds queries, you can connect to us at info@ the rate equibrix.com. 42:35 42 minutes, 35 seconds Once again, thank you for joining the conference. Thank you, Harisha. Thank you, Abdul. Thank you, ma'am. Thank you so much. 42:42 42 minutes, 42 seconds Yeah, thank you ma'am. 42:45 42 minutes, 45 seconds Thank you on behalf of Equidex Advisor Private Limited. That concludes this conference. Thank you for joining us.