Dollar Industries Limited — Q3 FY26

Dollar Industries Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=tZ6jphyC5qI Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to Dollar Industries Limited Q3 FI26 earnings conference call hosted by 0:08 8 seconds Anandhati Share and Stock Brokers Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:16 16 seconds concludes. Should you need assistance during this conference call, please signal an operator by pressing star and zero on your stone phone. Please note that this conference has been recorded. 0:27 27 seconds I now hand the conference over to Miss Anjali Oja from Anandrati. Thank you and over to you ma'am. 0:34 34 seconds Thank you. Hello and good evening to everyone. I thank you all for joining the Q3 and 9M SI26 conference call of 0:42 42 seconds dollar industries limited. Today from the management we have Mr. Ankit Gupta President marketing, Mr. Gorav Gupta 0:50 50 seconds vice president strategy and Mr. AJ Pattoriia chief financial officer. So without any further delay, I would now 0:58 58 seconds like to hand over the call to the management for the opening remarks. Over to you sir. 1:05 1 minute, 5 seconds Thank you Anjeli. Good evening everyone and thank you for joining us today. We thank our shareholders, analysts and 1:12 1 minute, 12 seconds stakeholders for their continued trust and support. Your confidence allows us to remain disciplined in execution, uphold strong governance standards and 1:21 1 minute, 21 seconds stay focused on long-term value creation. 1:24 1 minute, 24 seconds I would also request everyone to take note of the safe harbor statement in our presentation. 1:31 1 minute, 31 seconds Turning to the operating environment, the industry continues to face intense competition and sustained price pricing 1:39 1 minute, 39 seconds pressures. In this context, the company has deliberately adopted a margin first strategy anchored in cost discipline and 1:46 1 minute, 46 seconds operating leverage. Our approach is not about choosing between growth and profitability but about sequencing them 1:54 1 minute, 54 seconds correctly prioritizing earnings quality cash flows and returns in the current environment. 2:03 2 minutes, 3 seconds During Q3 FI26 demand conditions remained steady operating revenue for the quarter stood at 388 cror rupees reflecting a year-on-year growth of 2%. 2:16 2 minutes, 16 seconds While topline growth was measured, a sustained focus on cost efficiency, operating discipline and product mix 2:24 2 minutes, 24 seconds helped us maintain healthy operating performance. 2:29 2 minutes, 29 seconds Gross profit for the quarter increased by 4.6% yearonear to 142 crores rupees. 2:35 2 minutes, 35 seconds Gross profit margin expanded by 91 basis point to 36.5%. 2:40 2 minutes, 40 seconds reflecting the benefits of disciplined sourcing and and improved product mix and tighter 2:47 2 minutes, 47 seconds cost control. For the 9 months ended FI26, gross profit stood at 447 crores 2:54 2 minutes, 54 seconds rupees registering a growth of 10.7% yearonear with margins expanding by 72 basis point to 35.5%. 3:04 3 minutes, 4 seconds Operating AITA for the quarter stood at 39 crores and remained largely stable yearon year with margin at 10%. This 3:14 3 minutes, 14 seconds performance reflects our clear focus on protecting operating profitability through efficiency improvements and operating leverage despite a challenging pricing environment. 3:24 3 minutes, 24 seconds For the 9 months ended FI26, operating AITA increased by 12.6% yearon-year to 142 crores. Operating AITA margin 3:34 3 minutes, 34 seconds expanded by 41 basis point to 11.3%. 3:39 3 minutes, 39 seconds Underscoring the impact of structural cost initiative and improved operating leverage as volumes scaled. 3:46 3 minutes, 46 seconds Given the current industry dynamics, we believe that maintaining cost discipline, leveraging our operating structure and prof protecting 3:54 3 minutes, 54 seconds profitability in is the most prudent and sustainable approach. As the operating environment normalizes, growth is expected to follow, supported by a 4:03 4 minutes, 3 seconds strong stronger cost base and improved operating leverage for this fiscal year. 4:09 4 minutes, 9 seconds We we reaffirm our revenue growth guidance of approximately 11 to 12%, we expect a margins to remain stable in the 4:17 4 minutes, 17 seconds range of 11 and a half to 12%. We remain opportunity led on growth with a clear focus on returns and cash flows. Now 4:26 4 minutes, 26 seconds Boro will provide further details on the business and operational highlights of the quarter. 4:32 4 minutes, 32 seconds Thank you Ankit. Let me now highlight some of the key business and operational trends during the quarter. During quarter 3 FI26 total volumes grew by 4:41 4 minutes, 41 seconds 2.4% while for the 9 months ended FI26 volume growth stood at healthy 8.5%. 4:47 4 minutes, 47 seconds We also continued to witness steady traction across modern trade e-commerce and quickcommerce channels in quarter 3 FI26. Collectively, these channels 4:55 4 minutes, 55 seconds contributed 12.8% of overall revenue during the quarter. 5:01 5 minutes, 1 second For the 9 months ended FI26, these channels recorded strong value growth of 36% and volume growth of 38.9% contributing 11.6% to overall revenue. 5:11 5 minutes, 11 seconds On the exports front, we delivered a value growth of 10.9% in quarter 3 FI26 with exports accounting for 5.6% of 5:18 5 minutes, 18 seconds overall revenue for the quarter. Coming to our brands, Force NXT continued it strong momentum registering a year or yearon-year value growth of 26.5% and 5:27 5 minutes, 27 seconds volume growth of 48.1% in quarter 3 FI26 for the 9 months ended FI26 Force N achieved a value growth of 5:36 5 minutes, 36 seconds 16.7% and volume growth of 27.1% reflecting consu increasing consumer preference for differentiated highquality products. 5:44 5 minutes, 44 seconds Additionally, champion archway range recorded a robust performance during the 9 months ended FI26 with value growth of 5:51 5 minutes, 51 seconds 30.5% yearon year and volume growth of 5.8%. 5:55 5 minutes, 55 seconds Our strategic partnership with gold continues to yield strong results supported by continued traction across modern retail and quick commerce 6:03 6 minutes, 3 seconds channels. In quarter 3, FI26 revenue was 13.71 crores, reflecting a 43.9% year-on-year growth. For the 9 months 6:12 6 minutes, 12 seconds ended, FI26, revenue increased by 50% to almost 39 crores. 6:19 6 minutes, 19 seconds PAT for the quarter stood at 1.65 crores, up 45.1% yearonear and 57.1% quarteron quarter with a PAT margin of 6:27 6 minutes, 27 seconds 12%. With that, I would like to invite our CFO Mr. Raja Paty G to take you to the financial performance. Over to you. 6:36 6 minutes, 36 seconds Thank you Goro GI. Uh good afternoon everyone and thank you for joining the call. Let me take you through the financial performance for quarter 3 and 9 month FI26. 6:46 6 minutes, 46 seconds For the quarter operating income grew by 2% yearonear to rupees 388 cr supported by steady demand and an improved product 6:55 6 minutes, 55 seconds mix. Gross profit increased by 4.6% 6% yearonear to rupees 142 cr with margin expanding by 91 basis point to 36.5%. 7:05 7 minutes, 5 seconds Reflecting better mix and discipline cost management operating a stood at 39 cr with margin maintained at 10.0% 0% 7:14 7 minutes, 14 seconds demonstrating our contribute continued focus on protecting profitability despite a dynamic operating environment 7:22 7 minutes, 22 seconds as highlighted by Anki G earlier we have continue to maintain a stock cost discipline across the organization advertisement spends were rationalized 7:30 7 minutes, 30 seconds to 6.5% of operating income in 9 month FI26 and we expect this ratio to moderate further in the coming quarter as operating leverage improve profit 7:39 7 minutes, 39 seconds after tax for the quarter stood at rupes 18 crit letting into a pat margin of 4.7%. For the 9-month end FI26, 7:47 7 minutes, 47 seconds operating income grew by 8.4% yearonear to 1259 crores. Gross profit increased 7:54 7 minutes, 54 seconds by 10.7% yearon year to 40 44 447 KES with margin expanding by 2072 basis point to 35.5%. 8:05 8 minutes, 5 seconds Reflecting continue improvement in mix and cost efficiencies. Operating AITA rose by 12.6% 6% to 142 cr with margin expanding by 41 basis point to 11.3%. 8:18 8 minutes, 18 seconds Driven by operating leverage and structure cost action and profit after tax is stood at 75 croresing 8:26 8 minutes, 26 seconds a strong growth of 21.1% yearonear with fat margin expanding by 63 basis point to 5.9%. 8:35 8 minutes, 35 seconds The company generated operating cash flow of rupees 60 crores as of December 25 with no major capex commitment in the near term. The focus remains on 8:44 8 minutes, 44 seconds enhancing free cash flow and further reducing depth. Now I would quickly run through the brand wise contribution for 8:51 8 minutes, 51 seconds the quarter. Our dollar main category big boss brand contribute around 36%. 8:56 8 minutes, 56 seconds Our economic segment dollar always leer brand contribute around 37 37% contribution. Our uh women's segment 9:05 9 minutes, 5 seconds dollar women miss brand contribute around 7%. Our premium segment brand force NXT which uh contribute uh which 9:13 9 minutes, 13 seconds increased during the quarter in volume by 48% is contribute around 5%. Uh and 9:21 9 minutes, 21 seconds dollar thermal uh our winter product uh contribute around 12% in this quarter. 9:26 9 minutes, 26 seconds Overall, our performance reflect the impact of discipline, cost management, operating efficiency and improved product mix in a competitive environment. Our focus during the 9:35 9 minutes, 35 seconds quarter remained on protecting margin, strengthening earning quality and maintaining financial prudence. We will continue to prioritize profitability and 9:43 9 minutes, 43 seconds operating leverage while remaining selective in pursuing growth opportunities as market condition stabilize our strengthening cost base 9:50 9 minutes, 50 seconds and structure approach position to drive sustainable and balanced growth. With this we now open the floor for question. 9:57 9 minutes, 57 seconds Thank you. 9:59 9 minutes, 59 seconds Thank you very much. We will now begin with the question and answer session. 10:03 10 minutes, 3 seconds Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you 10:10 10 minutes, 10 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q 10:17 10 minutes, 17 seconds assembles. The first question comes from the line of Samir Gupta from India infin. Please go ahead. 10:25 10 minutes, 25 seconds Uh hi good good evening sir and thanks for taking my question. Uh sir firstly uh I believe you've retraated the uh 10:32 10 minutes, 32 seconds full year guidance to 11 12%. Now uh 9 months we are at 8% and uh this would 10:40 10 minutes, 40 seconds still imply 15% plus kind of a growth in fourth quarter which is the only remaining quarter. uh in the 10:48 10 minutes, 48 seconds presentation you have said that competitive intensity is high with pricing pressures and your focus is also on profitability in this time would it 10:55 10 minutes, 55 seconds not be a tall ask to go from 3% growth in the current quarter to 15% plus in a matter of a quarter then 11:05 11 minutes, 5 seconds so uh what happened is uh third quarter uh usually is a bit slow because of uh winter sales and seasonal product sales 11:14 11 minutes, 14 seconds and uh and fourth quarter is always heavy for our industry. So uh we are very hopeful that we'll be able to uh 11:24 11 minutes, 24 seconds do this 15% kind of a growth so that we stand somewhere between uh 11 to 12% overall growth 11:32 11 minutes, 32 seconds and if you're looking after sumit you analyze our last uh previous year uh turnover in this quarter you will find 11:39 11 minutes, 39 seconds that 35% of the total revenue come from this quarter only and uh this is the heaviest quarter in our overall in uh in 11:46 11 minutes, 46 seconds full year. So we are very hopeful that we uh uh uh get the our result. 11:54 11 minutes, 54 seconds Sure sir. Sure. Fair sir. Uh second question sir I mean even if I look at the other company results uh some of them are yet to report but page has 12:03 12 minutes, 3 seconds reported and they have been witnessing a modest growth all along. Now growth for you is also kind of slowing down. uh 12:11 12 minutes, 11 seconds innerware as a category we we would really relate it to being a very staple kind of a category ups and downs are 12:20 12 minutes, 20 seconds relatively less so and in your segment uh uh I would say that the typical uh 12:28 12 minutes, 28 seconds competitive pressure from the D2C brands or the higher growth brands is also not very high. So just to give a color what 12:36 12 minutes, 36 seconds exactly is happening on the ground in this category? Are we really seeing heavy heavy discounting? Why and why is 12:44 12 minutes, 44 seconds that? Because uh uh overall is consumption really really slow? What is your sense? 12:52 12 minutes, 52 seconds So uh thing is that uh the industry has been growing uh uh at a keer growth of 12:58 12 minutes, 58 seconds around 7%. And uh seeing our 9 months uh achievement uh like growth achievement uh it's somewhere around 8 and a half%. 13:08 13 minutes, 8 seconds And uh we'll be growing uh over and above that only and uh if you if you look at uh the competitors also like 13:15 13 minutes, 15 seconds page operates in a very different market segment but if you look at our immediate competitors also like uh we are three in 13:22 13 minutes, 22 seconds the listed space two in the non-listed space. So uh overall there are five companies at a similar level with 13:30 13 minutes, 30 seconds revenues being uh 15% plus and minus so here and there right so u past 5 years 13:38 13 minutes, 38 seconds we have been the fast one of the fastest growing company uh in our segment and this will also uh we we are very hopeful and we are 13:47 13 minutes, 47 seconds working towards uh um the the guidance that we have given we are working towards that only and we are very hopeful that we'll be able to achieve that 11 to 12% which we promised. 13:59 13 minutes, 59 seconds Fair sir my my question was on this industry growth of 7% I mean is this not a little underwhelming that a category 14:07 14 minutes, 7 seconds like innerware where there is still a large unorganized piece uh is only growing at 7% kar in I I believe you 14:16 14 minutes, 16 seconds you're saying on the organized side uh the 7% no that that's the overall uh industry data that has come in which includes the 14:24 14 minutes, 24 seconds organized as well as the unorganized actually the it is Our industry is very unorganized. Our in men's segment it is 14:32 14 minutes, 32 seconds only 60% organized. In women's segment it is around uh 30 40% organized and 14:38 14 minutes, 38 seconds each segment is 100% unorganized. So the studies done by the bajir uh you get the presentation at the bajir website. So 14:47 14 minutes, 47 seconds according to vazir and some some report also eny doing one survey to they uh refer that the industry grow around 7 to 8%. 14:59 14 minutes, 59 seconds Got it sir. I'll come back in the queue for follow-ups. Thanks. Thank you. Thank you. 15:05 15 minutes, 5 seconds Thank you. The next question comes from the line of Gonit Singh from counter cyclical PMS. Please go ahead. 15:12 15 minutes, 12 seconds Hi sir, thank you for this opportunity. 15:14 15 minutes, 14 seconds So uh you said that the industry is going through a difficult uh competitive environment. So uh I would like to 15:21 15 minutes, 21 seconds understand that you had earlier guided that uh we should be aiming for about 12 to 13% of beta margins and sustainably 15:30 15 minutes, 30 seconds reach 14% over over the medium term. So I I would like to understand I mean in FY27 15:38 15 minutes, 38 seconds would we be a would we be would we be targeting better AITA margins and if so uh what initiatives are we taking in that direction? 15:49 15 minutes, 49 seconds So uh uh definitely we are working towards that like uh in fact uh the entire company has been aligned towards 15:58 15 minutes, 58 seconds uh this thing only that how we increase our profitability over time. uh before before COVID hit us uh we were already 16:05 16 minutes, 5 seconds standing at uh somewhere around uh 13 13 and a half% kind of an AITA but uh and the highest was 16% which we went in 16:15 16 minutes, 15 seconds FI22 uh 16 12% but uh that was mainly because of the increase in the raw material 16:22 16 minutes, 22 seconds prices over time uh I think uh in our industry the segment where we operate u 16:28 16 minutes, 28 seconds it would be it would be uh uh very uh it would be nice to say or uh uh the 16:36 16 minutes, 36 seconds sustainable level of AITA that we uh look forward to is somewhere between 14 to 15%. Keeping in mind the operating 16:43 16 minutes, 43 seconds leverage that we get at a certain level of uh volumes and um so uh this year we'll be doing somewhere 16:52 16 minutes, 52 seconds between uh 11 12 to 12%. And uh next year will definitely be better and uh in 16:59 16 minutes, 59 seconds next couple of years I think we should be somewhere between 14%. 17:06 17 minutes, 6 seconds All right. So I mean by uh with 11% growth we would be around 1850 CR revenue this year and you said that 17:15 17 minutes, 15 seconds uh I mean operation leverage would start kicking in once we reach 2,000 CR type of a revenue. So I mean uh do we expect 17:26 17 minutes, 26 seconds to reach 20 cr in FY27 and I just would like to understand are there any initiatives that we're taking 17:34 17 minutes, 34 seconds to improve our AITA uh in FY27 or will it just kick in through operational uh 17:40 17 minutes, 40 seconds leverage and uh I mean are we taking any price hikes in FY27 or increase in the 17:48 17 minutes, 48 seconds share of value added uh or our premium segments in net for 27. I just want to uh hear your take on this. 17:57 17 minutes, 57 seconds So uh it won't be only uh driven through operating leverage but uh there will be a ASP change also in terms of product 18:06 18 minutes, 6 seconds mix change. As you can see like last three years our force NXT which is a premium brand uh which has a higher EIA 18:14 18 minutes, 14 seconds which contributes higher AIA also uh has been growing around 25 to 30% year-on-year basis and this year 9 18:22 18 minutes, 22 seconds months ended also uh it has been growing around uh 27 28% kind of a growth we are seeing in that uh particular premium 18:29 18 minutes, 29 seconds range. So u I think uh that will that will also help us uh in the mix change 18:35 18 minutes, 35 seconds and uh gross profit uh increment plus the uh new unit that we have put in um the spinning unit the increase in the 18:44 18 minutes, 44 seconds spindles uh which we did uh uh couple of years back. So la last year only the production uh started just started. So 18:53 18 minutes, 53 seconds we we can see some amount of efficiencies coming in from there as well also. Can I add something to it? 19:01 19 minutes, 1 second Hello. Yeah, please go ahead. 19:04 19 minutes, 4 seconds So, so the thing is, you know, I was listening to your question and you told will there be a price hike or something like that. So, see what happens is we're 19:11 19 minutes, 11 seconds talking about, you know, next financial year 27. So, it's very difficult right now to predict you know how cotton is going to react if the raw price is going 19:20 19 minutes, 20 seconds to go up or if it's not going to go down. current situation of exports also if you see you know with the Trump slapping so many tariffs and again going down and all of a sudden now he's 19:28 19 minutes, 28 seconds removed the tariffs so you know the market has gone more more tighter with the you know yarn rates coming up and again so so the market right now is 19:35 19 minutes, 35 seconds extremely volatile in terms of raw materials so until is a very high rate increase or price increase in raw 19:42 19 minutes, 42 seconds materials ASP hike is very difficult given the competitive nature of what industry is going through right now so there's a definitely a good amount of 19:51 19 minutes, 51 seconds change in raw prices then definitely there will be a price hike. 19:56 19 minutes, 56 seconds Got it. Got it. All right. Thank you very much. So uh my last thing would be that uh we do uh we pay dividends of 20:03 20 minutes, 3 seconds about 17th cere every year. So uh with the new uh tax regime buybacks have started falling under uh long-term 20:12 20 minutes, 12 seconds capital gains or short-term capital gains. So they are being treating as capital gains. So I would uh request you to consider uh doing buybacks instead of 20:21 20 minutes, 21 seconds uh paying out dividends as they're tax efficient and they also uh extinguish uh 20:28 20 minutes, 28 seconds outstanding shares and serve as a reward for long-term uh investors. So I would just like you to uh uh consider that. 20:37 20 minutes, 37 seconds Thank you very much. Thank you. 20:40 20 minutes, 40 seconds Thank you. The next question comes from the line of Warun from Equitary Capital. Please go ahead. 20:47 20 minutes, 47 seconds Hi sir. Uh couple of questions. Firstly, if you could provide the trade discounts and the promotion cost for the quarter. 20:57 20 minutes, 57 seconds Uh approx uh all the trade discount incentive uh around 6 to 6.5%. 21:06 21 minutes, 6 seconds Okay. And uh secondly, you said the industry is growing at only 7 to 8%. So how do you think that this will change? 21:15 21 minutes, 15 seconds what would trigger a higher growth and when should that happen? Hello. 21:24 21 minutes, 24 seconds So uh it would be very difficult to say that uh uh how uh the industry will grow 21:31 21 minutes, 31 seconds at 10 or 11% but uh surely we can we can say about ourselves like at dollar industries uh we really aim to grow 21:39 21 minutes, 39 seconds double digit for uh next 2 to 3 years and uh at least so u yeah so we have 21:47 21 minutes, 47 seconds been working on that uh we have changed our go to market strategy we are implementing a lot of technological changes in the company uh we are 21:54 21 minutes, 54 seconds limiting our advertisement cost or shifting our advertisement cost to digital media as well uh a huge chunk goes to digital media now which uh 22:03 22 minutes, 3 seconds didn't used to go earlier and uh focusing on our premium products. So all these things uh will uh entering into 22:10 22 minutes, 10 seconds new categories like uh dollar rainware that we uh started 2 years back. So all these things taken together will uh 22:17 22 minutes, 17 seconds really uh help us uh grow at a much much faster rate than uh any other company or the industry. 22:25 22 minutes, 25 seconds My point was key if you think that the industry will grow at this rate only for next 2 three years then that will also limit your upside for the growth. 22:35 22 minutes, 35 seconds But uh but if you see the other players in the industry also like uh people are shifting from unorganized market to 22:42 22 minutes, 42 seconds organized market and then um in our uh in our uh segment and space also uh uh 22:49 22 minutes, 49 seconds there are five companies and uh few of the companies have been uh going through some issues also uh won't be naming the 22:57 22 minutes, 57 seconds company but uh so all those market share gain that you can do in the market will really help you grow at a faster rate. 23:06 23 minutes, 6 seconds Okay. And uh what is leading to this overall pricing pressure? Is it because some uh because of competition from 23:14 23 minutes, 14 seconds unorganized or the majorly from the organized side? 23:20 23 minutes, 20 seconds Uh basically uh this is uh due to market condition only not not uh any uh we can 23:27 23 minutes, 27 seconds not any analyze that whether it is organized or unorganized. Uh but sometime it is uh due to some issue with industry also. Uh but uh now it is 23:37 23 minutes, 37 seconds settled down and uh from now onwards we hope that uh we get the uh good 23:44 23 minutes, 44 seconds improvement in the pricing also and uh already uh there is some increase in the price yarn prices also or we hope that 23:53 23 minutes, 53 seconds uh we also increase our ASP in the coming future. Okay sir. Thank you. 24:02 24 minutes, 2 seconds Thank you. The next question comes from the line of Priya Junjunwala from Ara Securities. Please go ahead. 24:10 24 minutes, 10 seconds Thank you for the opportunity sir. Um so just wanted to understand this competitive intensity has been there 24:18 24 minutes, 18 seconds from a long time and it has been uh is there any sign of easing that off or it continues to remain high as earlier? 24:29 24 minutes, 29 seconds No. So it's not like uh what we saw 9 months back but uh it's it's easing out but it's still there. So uh which is 24:38 24 minutes, 38 seconds causing a bit of a problem. Uh but we are uh very hopeful that uh in few few 24:44 24 minutes, 44 seconds months time or maybe uh 2 3 months time uh it should uh it should uh get settled down. 24:52 24 minutes, 52 seconds So uh how are we going to progress on distribution expansion project uh which is lakshshire 24:59 24 minutes, 59 seconds um with uh easing competition because uh this year has not seen any major improvement over there. 25:07 25 minutes, 7 seconds So uh yeah in luxure project our contribution coming in from luxure project has been 32% uh this uh 9 months 25:15 25 minutes, 15 seconds ended if we look at the 9 months ended figure uh which is up 1% from last year but yeah no addition in new distributors 25:23 25 minutes, 23 seconds uh but we are very hopeful key uh as soon as uh things get stabilized uh we'll again restart the project and 25:32 25 minutes, 32 seconds enter into uh new states like uh few of the states which are in WIP like Bihar, Jharkhand, uh Maharashtra. So we'll be 25:41 25 minutes, 41 seconds working on that and we'll try and complete. But overall, wherever we have completed u the luxure project 100%, we 25:49 25 minutes, 49 seconds are getting good results over there till now and uh still they are showing uh good sign of improvement uh and even 25:58 25 minutes, 58 seconds after uh the pricing issues that we are seeing in the market. 26:02 26 minutes, 2 seconds Could you elaborate on this? Uh this would be really helpful. how much is the growth that we seeing in uh Lakshia project uh which is 100% complete states 26:12 26 minutes, 12 seconds and maybe WIP and non-luxure uh so if you if you if you see that uh uh 9 26:19 26 minutes, 19 seconds months ended uh uh like a few of the states uh if you if you talk about Hana if you talk about 26:26 26 minutes, 26 seconds Andhra Pradesh uh Andhra Pradesh grew by around 20% Hana grew by 11% 26:34 26 minutes, 34 seconds uh then uh if you if you look at Udrisa, Udisa grew by 24%. 26:40 26 minutes, 40 seconds Maharashtra is growing by 10%. So Maharashtra means Mumbai and surroundings which is 100% completed. So 26:50 26 minutes, 50 seconds all these states uh uh is doing really well and uh we are very hopeful about the project. So we have not given up on 26:58 26 minutes, 58 seconds it. It's just that uh there's some delay because of the market situation but uh yeah so these kind of double high double 27:07 27 minutes, 7 seconds digit growth rates that you're talking about which means in our uh base states are we losing market share or the the 27:14 27 minutes, 14 seconds market is only grow growing or degrowing maybe I'm not able to understand uh these growth rates in detail 27:24 27 minutes, 24 seconds sorry I I didn't get your question the question is uh if in luxury project states uh you are getting doubledigit 27:31 27 minutes, 31 seconds growth and you've grown uh about single digit in overall sales then your other 27:39 27 minutes, 39 seconds non-luxury states I are either singledigit you know low single digit 2 to 4% or even some maybe even negative 27:49 27 minutes, 49 seconds uh just trying to understand this math behind this like how are 27:55 27 minutes, 55 seconds we are facing issue thing Sir yeah the thing hello am I audible I can yes sir you're audible 28:03 28 minutes, 3 seconds so pina the thing is that uh I just gave you the examples of uh few states right there are some states which are growing 28:10 28 minutes, 10 seconds by 2% also 5% also where we saw some problem and uh like uh in south if you talk about Karnataka Karnataka is 28:20 28 minutes, 20 seconds growing by around uh 1% 2% uh up in 9 months and because of some issues with the distributor So I just 28:29 28 minutes, 29 seconds give you the overall impact overall 9 months ended company level. So with 28:39 28 minutes, 39 seconds respect to Lakshia we are growing at around 10%. Okay. 28:44 28 minutes, 44 seconds So the growth we are seeing in Laksha project is around 10%. I just gave you some examples where we have completed 28:51 28 minutes, 51 seconds 100%, what kind of a growth are we we are still seeing in some of the states which have matured. 28:59 28 minutes, 59 seconds Understood. Understood. So, so we're not losing market share in your opinion in any of the states that you definitely not definitely not. 29:08 29 minutes, 8 seconds Okay. And to protect that market share uh we uh are 29:14 29 minutes, 14 seconds um holding on to our prices is what uh uh is how the things are moving. 29:21 29 minutes, 21 seconds Yeah. So so if someone is involved in the dip discounting of let's say uh four to 5%. Mhm. 29:29 29 minutes, 29 seconds We we are in like we are uh giving around 1 one and a half%. And we are not going down to 5% kind of a thing and we 29:37 29 minutes, 37 seconds are very sure about it internally also that we won't be doing that. 29:41 29 minutes, 41 seconds So in that case you are still uh gaining getting volumes from your distributors and are you sure that you're not losing market share over there despite the 29:50 29 minutes, 50 seconds strategy which is which talks about the brand pool is what I'm trying to understand. 29:55 29 minutes, 55 seconds So that is being created over time. So it's a process uh like uh when we changed our brand logo and the entire uh 30:03 30 minutes, 3 seconds overall structure also brand restructuring that we did um after that also we got a really uh good positive 30:10 30 minutes, 10 seconds feedback from the market and uh uh that time also I told everyone that it's a gradual process and it will happen it 30:17 30 minutes, 17 seconds will create some pull for the brand and uh if you if you see our uh second quarter also or the first quarter also 30:25 30 minutes, 25 seconds uh now uh we We are seeing that impact in the market uh that uh the in fact the uh retailers are the biggest uh brand 30:34 30 minutes, 34 seconds ambassador for the companies right in in our industry uh uh MBOS's actually act as your brand ambassador and uh their 30:43 30 minutes, 43 seconds word of mouth their loyalty towards your brand uh really uh assures the consumers 30:52 30 minutes, 52 seconds key uh yeah we can go ahead with this particular brand and uh through luxury project we have been able to create that kind of a uh pull. 31:02 31 minutes, 2 seconds Understood. So that's fantastic uh to know that we are gaining or at least holding on to our market share. Um 31:12 31 minutes, 12 seconds all the best and thank you. Thank you so much. Thank you sir. Thank you. Thank you. 31:18 31 minutes, 18 seconds Thank you. The next question comes from the line of Bharav Buddha from Ambit Asset Management. Please go ahead. 31:27 31 minutes, 27 seconds Uh good afternoon team and uh thank you for the opportunity. Uh sir, if you if you look at uh the volume growth for 9 31:34 31 minutes, 34 seconds months of about 8% and in this quarter of about 2%. And if you look at your gross margins as well, there has been a 31:43 31 minutes, 43 seconds improvement both in 9 months and this quarter. So in this competitive environment uh if you can elaborate a 31:53 31 minutes, 53 seconds bit in terms of how are you managing to increase gross margins and also continue working growth. Is it more a function of 32:00 32 minutes product mix or is it cost saving which you are enjoying through your integrated operations if you can elaborate a bit on that. 32:11 32 minutes, 11 seconds Actually uh you can see that uh in 9 month uh the gross margin improved uh due to uh product mix and due to cost 32:20 32 minutes, 20 seconds reduction also. And uh uh last year we started our uh uh additional capacity 32:27 32 minutes, 27 seconds and uh the machines are very new and imported one and so that the efficiency of the machine is very very much than the uh old production uh machines and 32:37 32 minutes, 37 seconds other than this uh in last 6 month we also have the volume growth around uh 8 in 11% in this thermal also uh thermal 32:46 32 minutes, 46 seconds is a high aida margin product. So there is product mix also uh some uh the improvement of 90 basis point in this 32:53 32 minutes, 53 seconds quarter due to product mix and due to cost control also and in this GP margin you can uh also that uh uh due to uh 33:02 33 minutes, 2 seconds some our procurement uh uh due to procurement we procure uh cotton at good rate and at uh very reasonable with our 33:12 33 minutes, 12 seconds competitor because only we have the backward processing uh in in in this 33:18 33 minutes, 18 seconds segment. So this uh extra benefit to our company is uh reflecting the gross margin reduction uh improvement. 33:28 33 minutes, 28 seconds Uh in terms of operating cash flow, the operating cash flow was about 47 crores in the first half. Is it possible to 33:36 33 minutes, 36 seconds show what has that number been at the end of 9 months? 33:41 33 minutes, 41 seconds uh currently in 9 month in already I my speech I already uh uh uh told that 33:48 33 minutes, 48 seconds around 60 cr is the operating cash flow in 9 month 33:56 33 minutes, 56 seconds uh in terms of price is it fair to say that in the last 18 months uh uh including dollar the industry you would 34:03 34 minutes, 3 seconds not have seen any price in the last 18 months so last 18 months uh uh in our industry 34:12 34 minutes, 12 seconds no one took a price hike as such and uh we are very hopeful that uh with this uh 34:20 34 minutes, 20 seconds tariff thing going down and uh uh now uh Tirur as a export hub uh the yan uh 34:28 34 minutes, 28 seconds demand will increase and uh it will give some push to the industry with respect to some uh raw material prices going up 34:35 34 minutes, 35 seconds and uh uh maybe we'll be able to take a price hike then. 34:41 34 minutes, 41 seconds So there's a very high correlation between yarn prices and your end product prices. 34:46 34 minutes, 46 seconds Definitely because 50% of our raw material is the yarn. 34:51 34 minutes, 51 seconds Oh total cost to total cost of production 50% is contributed through yarn. So that is the 34:58 34 minutes, 58 seconds main thing uh which actually uh uh lead to price hike or uh nonhank. 35:07 35 minutes, 7 seconds Uh lastly sir if I look at your subsidiaries in this quarter there seems to be a loss so is it that you have uh 35:16 35 minutes, 16 seconds you are on a hiring spree I think that is mainly your inway the business if you can give a small update in terms of what's happening there what's the size 35:24 35 minutes, 24 seconds what are your plans maybe in the next 50 years that so uh uh so our subs dollar government 35:32 35 minutes, 32 seconds is basically in the reward segment and our segment reware segment is the seasonal only the season for the rain is 35:41 35 minutes, 41 seconds from January to June. So quarter 1 and quarter four is the uh in uh in this subsidiary we have the uh revenue uh 35:50 35 minutes, 50 seconds increased and quarter two and quarter 3 is uh generally there is uh no such uh requirement of the rainer product. So uh 35:59 35 minutes, 59 seconds in this quarter quarter four we hopeful that uh last year in this subsidiary hour uh around uh we have the uh total 36:06 36 minutes, 6 seconds turnover around 37 crores uh is there or and uh this year we hopeful that we have 36:13 36 minutes, 13 seconds the growth of around 12 to 15% in the overall segment and uh already we completed the 15 cr in the quarter one. 36:20 36 minutes, 20 seconds So balance we cover in the this quarter. 36:23 36 minutes, 23 seconds Other than this uh we have the target that within uh two years we reach uh uh we cross the three digit in our revenue 36:31 36 minutes, 31 seconds in this segment. So we very helpful that uh we get our target achieved 36:38 36 minutes, 38 seconds and here the margin will also be per right uh in this segment our a level margin is around 18 to 20%. 18 to 20%. 36:50 36 minutes, 50 seconds Great sir. Thank you very much. And on the Thank you. Thank you. 36:55 36 minutes, 55 seconds Thank you. The next question comes from the line of Anek Mitra from Phenomic Solution Private Limited. Please go ahead. 37:02 37 minutes, 2 seconds Good afternoon sir. Am I audible? Yeah, audible. 37:07 37 minutes, 7 seconds Yeah. So my uh first question is related to that nine proprietary companies uh which has been absorbed or which is 37:16 37 minutes, 16 seconds going to be absorbed. So uh I would request you to throw a little more color into it means how will it uh matter uh 37:25 37 minutes, 25 seconds or impact your overall performance in terms of margin in terms of your revenue growth as well as on your cash flow. 37:35 37 minutes, 35 seconds So uh we already filed the uh for the merger application with the uh SE and uh 37:42 37 minutes, 42 seconds uh uh we are waiting for the app approval. 37:47 37 minutes, 47 seconds Uh the nine companies which are merged into the our industry that is uh only uh engaged with the uh main company only 37:56 37 minutes, 56 seconds and uh mostly in out of nine companies six companies are related to the real uh real estate company which assets used by 38:04 38 minutes, 4 seconds our dollar industry only like we are office uh and the factory. So once they are merged our rent part which we said 38:13 38 minutes, 13 seconds at uh Armst is uh also removed and other than the three in three companies one is the uh one company is holding the brand. 38:23 38 minutes, 23 seconds So uh uh in our segment in first uh we are the first company uh in which uh the 38:30 38 minutes, 30 seconds brand is uh transfer uh in the main company our dollar industry limit. So our dollar brand is also with our main company and uh the royalty uh which we 38:40 38 minutes, 40 seconds paid uh to the dollar brands private limited is also uh removed and uh from 38:47 38 minutes, 47 seconds the cost but and uh other than this uh two company is mainly related to uh job 38:54 38 minutes, 54 seconds worker related. So the worker cost is also uh uh minimized and uh the overall 39:02 39 minutes, 2 seconds efficiency in the labor form and in the uh production capacity is also increased. Overall we analyze around uh 39:09 39 minutes, 9 seconds 5 to 7 crores of expenses is to be rationalized uh due to this merger and more than this the net worth of the company inner net worth of the company 39:18 39 minutes, 18 seconds basically because due to the brand coming at very low price at at book value price. So net worth of the company 39:27 39 minutes, 27 seconds uh inner network dollar industry is increased. 39:32 39 minutes, 32 seconds Okay. Okay. Uh uh sir uh as you said uh 7 cr of uh uh improvement uh in terms of 39:40 39 minutes, 40 seconds your uh cost. So will it be on quarterly basis or annualized? 39:46 39 minutes, 46 seconds Annualized annualized annualized 7 cr improvement. 39:50 39 minutes, 50 seconds Okay. And basically it lead to corporate governance also because 90% of RP transaction are uh now reduced. 40:00 40 minutes Okay. Okay. And sir uh any any uh impact on your free cash flow in this transfer 40:08 40 minutes, 8 seconds uh or takeover uh free cash flow uh mainly free cash flow uh not much affected this uh but uh 40:19 40 minutes, 19 seconds due to this as I told that uh we are the first company which owned the brand in our main company other than all the 40:27 40 minutes, 27 seconds company in our segment is the brand is owned by other company other entity. and they pay the royalty. So we are first in the segment that our brand in our 40:35 40 minutes, 35 seconds company only. So whenever we introduce new products in our brand so we don't have to uh pay any type of loyalty 40:43 40 minutes, 43 seconds royalty to the and uh somehow this reduce the ultimate cost to the company. 40:50 40 minutes, 50 seconds Got it. Got it. Okay sir. My next question is related to the tariff which you were mentioning probably Ankit was 40:58 40 minutes, 58 seconds mentioning. Uh uh sir my I just want to understand uh as you said uh US tariffs 41:05 41 minutes, 5 seconds uh may increase the um reduction of US tariff will increase the demand of yarn and prices will go up. So on this 41:12 41 minutes, 12 seconds context I just want to understand means you will be able to take price hike like will it be beneficial for you as uh the 41:20 41 minutes, 20 seconds price hike will be taken just because of yan price hike. So it will go to uh cater the increased yarn prices. So how 41:28 41 minutes, 28 seconds do you get benefited out of it out of the price hike? 41:35 41 minutes, 35 seconds Uh yeah I'll take this up. So so what happens is you know the US tar is coming down and everything. Uh currently you 41:43 41 minutes, 43 seconds know what we see in the export market because I stay in Tur and you know we look after production over here majorly. 41:49 41 minutes, 49 seconds What I speak to you know a lot of exporters is you know that now they have started taking goods which were with them kept in customs department or in 41:57 41 minutes, 57 seconds their warehouse as of now. So for now we are not seeing a lot of differences in the cotton price because they want to liquidate the old ones and if the export 42:06 42 minutes, 6 seconds market booms after this because of you know reduction in the tariffs that is where probably after 4 months or 3 months you know we'll come to know 42:14 42 minutes, 14 seconds anything if there's a very high price hike in the cotton prices or raw material but we do not expect to that level we certainly expect maybe 10 rupees 20 rupees here and there. 42:26 42 minutes, 26 seconds Okay. So, uh 10 to 20 rupees per kg in yarn. 42:31 42 minutes, 31 seconds Yeah. Approximately I'm telling about it's just a ballpark that is the yarn industry you know speaks it's like that. So you know the yarn 42:40 42 minutes, 40 seconds market might become a little tighter for sure but we do not expect it to become way tighter you know what happened during covid and everything yan prices 42:47 42 minutes, 47 seconds shot up by say 30% 35% you know so that is not the situation we are going to get into anymore. 42:53 42 minutes, 53 seconds Okay. Okay. And like as you were referring uh US price uh US tariffs uh 43:00 43 minutes reduction simultaneously US has already removed the tariff for Bangladesh. So will it impact anyway uh to our young prices? 43:11 43 minutes, 11 seconds So uh no not really. So what you know latest information what we have is it might be extended to India also as of now the same you know if you use US 43:20 43 minutes, 20 seconds cotton the tariffs go lower. So it might be extended to India but we are not very sure about it. If it might gets extended we might see a change and we have a 43:28 43 minutes, 28 seconds spinning mill of about 45 46 on spindles. So we are very very well covered with that also for this quarter of the yarn 43:35 43 minutes, 35 seconds you know we are much in a better space. 43:40 43 minutes, 40 seconds Okay. Okay. But in case uh tariff remains the remains same but for Bangladesh it is zero duty at this point 43:47 43 minutes, 47 seconds in time. So uh what would be the impact like uh will it again go back to like 43:55 43 minutes, 55 seconds sure some demand might get diverted to Bangladesh if the tariffs are you know because Bangladesh is a very good country to you know manufacture and the 44:02 44 minutes, 2 seconds prices are already lower there and with tariffs coming down I'm sure a lot of people will want to shift there but that is something that has just happened and I'm sure Indian government 44:10 44 minutes, 10 seconds will also be working towards the same so you know that our does not get affected too much okay Okay. Okay. Okay. Thank you so much. 44:23 44 minutes, 23 seconds Thank you. As there are no further questions from the participants, I now hand the conference over to the management of closing committee. Thank you and over to you sir. 44:32 44 minutes, 32 seconds I would like to thank you for uh thank you all for taking the time out to join the earnings call. Have a nice day. Thank you so much. 44:39 44 minutes, 39 seconds Thank you. Thank you everyone. Thank you. 44:43 44 minutes, 43 seconds Thank you on behalf of AndRati Share and Stock Brokers Limited. That concludes this conference. Thank you for joining us and you may now disconnect your line.