Indo Count Industries Limited — Q3 FY26

Indo Count Industries Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=UCiDfU0wdRU Published: 2 months ago

0:06 6 seconds Ladies and gentlemen, good day and welcome to Indoccount Industries Limited Q3 and 9 months FI26 earnings conference call. This conference call may contain 0:14 14 seconds forward-looking statements about the company which are based on beliefs, opinions and expectations of the company as on date of this call. The statements 0:22 22 seconds are not guarantee of future performance and involve risk and asserties that are difficult to predict. As a reminder, all participants line will be in listenonly 0:31 31 seconds mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. 0:42 42 seconds Please note that this conference is being recorded. I now hand over the conference to Mr. Mohit Jen, executive vice chairman. Thank you and over to you sir. 0:52 52 seconds Thank you. Good afternoon and a very warm welcome to all of you joining us for the Indocount Industries Limited Q3 1:00 1 minute and 9 months FY26 earnings call. I'm also joined by our group CFO Mr. 1:06 1 minute, 6 seconds Mulharan Manish Bhartya our CFO and strategic growth advisers our investor relations advisor. 1:14 1 minute, 14 seconds We hope you have had the chance to review the financial results and investor presentation available on the stock exchange and on our company website. 1:24 1 minute, 24 seconds Let me begin with great news that has come at the start of 2026. 1:30 1 minute, 30 seconds India concluded the FDA with Europe and a trade deal with the United States. 1:36 1 minute, 36 seconds Developments that are truly transformative for the Indian textile sector. Starting with the United States, while we are still awaiting detailed 1:44 1 minute, 44 seconds notifications and finite aspects of the agreement, one thing is very clear. 1:50 1 minute, 50 seconds Tariff uncertainty has meaningfully eased. 1:55 1 minute, 55 seconds With these trade developments, India is moving towards a more competitive position relative to other exporting 2:01 2 minutes, 1 second countries. This is extremely necessary and it strengthens our business outlook going forward. 2:09 2 minutes, 9 seconds Coming to Europe with the EU FDA textile exports from India to Europe will now become duty-free. This is a 2:17 2 minutes, 17 seconds significant structural advantage as it creates a level playing field for the Indian players. Europe is one of the largest textile markets globally with imports of over US dollars 260 billion. 2:31 2 minutes, 31 seconds Indocount already has a presence in Europe and works with leading retailers in that region. We must acknowledge that post-signing 2:39 2 minutes, 39 seconds implementation takes time and scaling up takes further time. Having duty-free access combined with the existing relationships gives us a clear head 2:48 2 minutes, 48 seconds start. There is no denying that this is a major development for Indian textile players. At Indoccount, we have already begun internal discussions putting pen 2:57 2 minutes, 57 seconds to paper to study, strategize and evaluate how to best capitalize on this golden opportunity. 3:04 3 minutes, 4 seconds Although the trade deal would take take time to get implemented, we expect customer confidence to steadily improve through FI27. 3:13 3 minutes, 13 seconds In addition, some of the FDA signed earlier with countries like Japan, Australia, and in the Middle East are beginning to show traction. As we have 3:22 3 minutes, 22 seconds consistently communicated, geographical diversification remains one of our key strategic priorities. Today non- US 3:29 3 minutes, 29 seconds markets contribute to approximately 30% of our core business revenue. 3:35 3 minutes, 35 seconds Now coming to our internal developments, we started the year 2026 on a very positive note with the commencement of our commercial production at our new 3:44 3 minutes, 44 seconds green field pillow manufacturing facility in Kernisville, North Carolina, United States. This is our third manufacturing unit in the United States 3:52 3 minutes, 52 seconds and the largest amongst the three having a capacity of 18 million pillows annually. taking our total utility 3:59 3 minutes, 59 seconds bedding capacity to 31 million pillows peranom. Strategically, this strengthens our manufacturing footprint in the 4:07 4 minutes, 7 seconds United States and presence in the Midwest, West Coast, and now the East Coast. It enables customer proximity, 4:15 4 minutes, 15 seconds improves respon, improves responsiveness, and gives us clear operational flexibility. Our first two 4:22 4 minutes, 22 seconds utility bedding facilities are currently operating at approximately 65% capacity utilization. With the third facility now 4:30 4 minutes, 30 seconds operational and backed by this expanded infrastructure, we expect this segment to scale up. I'm also pleased to share 4:39 4 minutes, 39 seconds that Indoccount has been honored with the textroil export award for the year 2324 winning the gold trophy for the 4:46 4 minutes, 46 seconds highest exports of bed sheets bed linen in the cotton madeups category for the sixth consecutive year. This award is a 4:54 4 minutes, 54 seconds strong validation of our consistent export performance, our leadership position in the category and the trust that global customers continue to place 5:02 5 minutes, 2 seconds in us. Lastly, but certainly not the least, we have strengthened our ESG leadership position. Our SNP global ESG 5:11 5 minutes, 11 seconds score has sharply risen to 78, up from 45 over the last 2 years, significantly 5:19 5 minutes, 19 seconds ahead of the industry average of 35. We now rank within the top three percentile globally among textile, apparel, and 5:28 5 minutes, 28 seconds luxury goods industry peers in ESG performance. 5:32 5 minutes, 32 seconds This achievement reinforces our long-term commitment to sustainable growth, responsible manufacturing and value creation for all stakeholders. 5:42 5 minutes, 42 seconds Now coming to our Q3 performance. 5:45 5 minutes, 45 seconds Despite operating in a challenging 50% tariff environment, we delivered a stable performance while continuing a strong belief on our long-term growth. 5:56 5 minutes, 56 seconds Importantly, there was no substantial impact on volumes. In order to sustain volumes and protect our market share, we 6:04 6 minutes, 4 seconds undertook calibrated product mix adjustments and shared a part of the tariff burden to support our customers. 6:12 6 minutes, 12 seconds While our core business revenues were impacted due to tariff due to the tariff environment, this was largely offset by 6:21 6 minutes, 21 seconds growth in our new business. As a result, we delivered stable overall performance on a sequential basis. 6:29 6 minutes, 29 seconds Lastly, coming to our new business in the United States, our new business revenues have doubled compared to the same period last year. At this juncture, 6:38 6 minutes, 38 seconds I would like to pause and share with pride that utility bedding, part of our new business, began its journey just 16 6:46 6 minutes, 46 seconds to 17 months ago, and today it is actively fueling our next phase of growth. This business is expected to 6:53 6 minutes, 53 seconds contribute approximately $175 million to a consolidated topline over the next few years. We believe this is just the 7:02 7 minutes, 2 seconds beginning and there are still huge opportunities to scale further and create long-term value. Coming to our brand business, another part of the new 7:10 7 minutes, 10 seconds business segment. Our newly relaunched brand warms continues to perform well. 7:15 7 minutes, 15 seconds We are receiving encouraging customer feedback and strong product reviews reflecting the brand's premium positioning and quality credentials. The 7:23 7 minutes, 23 seconds response validates our strategy of building a differentiated branded portfolio alongside our core business. 7:30 7 minutes, 30 seconds Our portfolio of licensed brands Fieldrest Waverly Gam will continue to be strong road drivers supported by 7:37 7 minutes, 37 seconds deeper custom engagements and increasing preference for end-to-end home textile solutions from Indoount. The ability to 7:45 7 minutes, 45 seconds offer a range of collections across bed, bath, utility bedding, etc. strengthens our value proposition and enhances the wallet share with our retail partners. 7:57 7 minutes, 57 seconds The new business contributed 20% to our total topline in Q3 FI26. 8:04 8 minutes, 4 seconds On a sequential basis, it grew by 16% to 210 crores, achieving an annualized run rate near of nearly $100 million. 8:16 8 minutes, 16 seconds To conclude, the tariff uncertainty for our core business is now behind us. Our manifuing 8:24 8 minutes, 24 seconds and branded portfolio are building scale and we expect improved traction in the coming years. Additionally, the evolving 8:32 8 minutes, 32 seconds trade agreements are likely to open up growth opportunities for us. 8:37 8 minutes, 37 seconds With our presence across 50 plus countries spanning five continents, we are positioned to unlock the next phase of global growth while further 8:46 8 minutes, 46 seconds diversifying geographically and strengthening our competitive adv edge. 8:51 8 minutes, 51 seconds We remain confident in our strategy, execution capabilities and in our ability to deliver sustainable and 8:59 8 minutes, 59 seconds balanced growth as global trade conditions normalize. 9:03 9 minutes, 3 seconds Importantly, we stay committed to our long-term vision of doubling our revenues by 2028 supported by a well balanced mix of 9:12 9 minutes, 12 seconds business and geographies, strong brands and an expanding global manufacturing footprint. With that, I now request Mr. 9:20 9 minutes, 20 seconds Manish Bhart here to walk you through the financial highlights. 9:25 9 minutes, 25 seconds Good afternoon everyone and thank you for joining the Q3 and 9 months FI26 earnings call. I will first provide a brief overview of our performance 9:34 9 minutes, 34 seconds following which we'll open the floor for questions. At the outset I would like to highlight that Q3 FI26 and 9 month FI26 9:42 9 minutes, 42 seconds are not directly comparable to the corresponding periods last year. This is largely due to two key factors. First, there was no US tariff situation in the 9:50 9 minutes, 50 seconds base period. Second, revenue contribution from the new business portfolio commenced only from Q3 FI25. 9:57 9 minutes, 57 seconds Volume sales volume for Q3 FI26 stood at 24.8 million meters, showcasing SD performance in this uncertain 10:05 10 minutes, 5 seconds environment as compared to the volume of Q2 FI26. 10:09 10 minutes, 9 seconds Total income total income for the Q3 FI26 stood at 1,774 10:15 10 minutes, 15 seconds Kors compared to 1,82 KS in Q2 FI26 showcasing HDD performance despite full quarter impact of 50% US. Coming to 10:24 10 minutes, 24 seconds Abita, Abitra for Q3 FI26 stood at 102 crores rupees compared to rups 123 10:31 10 minutes, 31 seconds crores in Q2 FI26. A decline of 16.8% 8% quarteron quarter due to partial tariff absorption and new labor code impact of 10:40 10 minutes, 40 seconds approximately rupees 9.2 crores adjusted AITA for Q3 FI2 FI Q3 FI26 to rupees 112 10:48 10 minutes, 48 seconds crores after taking onetime impact of new labor code margin for the quarter was 9.5% versus 10:56 10 minutes, 56 seconds 11.4% in the previous quarter adjusted AITA margin for the quarter was 10.4% 4% which is 100 bps regrowth quarteron 11:03 11 minutes, 3 seconds quarter due to full quarter of 50% US tariff we expect margin pressure to gradually ease off pat 11:13 11 minutes, 13 seconds for Q3 FI2 FI 26 stood at rupes 24 crores compared to rupees 39 crores in Q2 FI26 11:22 11 minutes, 22 seconds as mentioned earlier the volumes in the core business will scale up going forward and new businesses will also show more traction therefore we expect 11:30 11 minutes, 30 seconds stronger AITA to PATD conversion over the next two years. 11:34 11 minutes, 34 seconds EPS EPS for Q3 FI26 is rupes 1.23 per share. 11:39 11 minutes, 39 seconds Coming to debt side, net debt has been reduced by rupes 215 crores as compared to March 25. With this, I open the floor for question and answer. 11:52 11 minutes, 52 seconds Thank you very much sir. We will now begin the question and answer session. 11:56 11 minutes, 56 seconds Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you 12:04 12 minutes, 4 seconds may press star and two. Participants are requested to use answers while asking a question. Ladies and gentlemen, they will wait for a moment while the question Q assembles. 12:25 12 minutes, 25 seconds The first question is from the line of Rahul Jen from CDM's Wealth. Please proceed. 12:32 12 minutes, 32 seconds Thanks for the opportunity. Uh so a couple of questions. Uh one uh uh how do we look at the scenario in US typically 12:40 12 minutes, 40 seconds in terms of the demand at the customer end and your uh the end customer as well as your customer end. uh given the 12:47 12 minutes, 47 seconds tariff situation was the stock at our customer much lower than the normal 12:54 12 minutes, 54 seconds whereby in coming months can we see a spike in overall revenues that is my first question 13:02 13 minutes, 2 seconds sure R so what we've seen in the US is uh you know retail sales during the holiday season have been decent you know 13:09 13 minutes, 9 seconds having said that all retailers have increased their prices keeping tariffs in mind uh just after the holiday season 13:16 13 minutes, 16 seconds which is towards the mid mid of December onwards. So we have to really it's uh early days to say anything you know we have to watch their sales because you 13:24 13 minutes, 24 seconds know when prices go up uh there's a little bit of an impact on demand as you can see also on our volumes from last year Q3 to this year Q3. So we have to 13:32 13 minutes, 32 seconds wait and watch but US is a very resilient economy. All the numbers on retail sales on labor you know unemployment numbers have all come in on 13:40 13 minutes, 40 seconds the positive side. uh in terms of inventory levels, yes, customers have not overbought anything but it all depends on how retail sales go in the next uh one to two quarters I would say. 13:52 13 minutes, 52 seconds Sure. Secondly, on the margin side, so we have kind of given discounts to our customers. So once this uh the final uh 14:01 14 minutes, 1 second tariff comes in play, you know, all the modies are getting completed. So will we kind of reverse the kind of discounts 14:09 14 minutes, 9 seconds and accordingly because of this discount only nothing else. Uh what would be the margin uptick? 14:17 14 minutes, 17 seconds Understand? 14:19 14 minutes, 19 seconds While the benefit of the reduced tariff Ra may take some time to fully reflect in the reported numbers which will be 14:26 14 minutes, 26 seconds gradually visible from our first quarter FI27 onwards. But the structurally the outlook has improved meaningfully. 14:34 14 minutes, 34 seconds You know, one thing is clear. We need to understand that the Indian textile industry is now competitively positioned and at par with other exporting nations, 14:42 14 minutes, 42 seconds if not better. You know, and the US is the largest textile importing market. 14:47 14 minutes, 47 seconds This sign significantly strengthens our long-term opportunity. We already hold, as you know, a very strong share in the 14:54 14 minutes, 54 seconds US home textile market and expect to consolidate and grow the position further. At the same time the recent trade agreements you provide incremental 15:03 15 minutes, 3 seconds tailwinds for expanding our presence in non- US markets. 15:07 15 minutes, 7 seconds Coming to your specific question of guidance you know at this point of time we would not you prefer not to provide any specific numeric guidance at this 15:16 15 minutes, 16 seconds stage. However directionally we expect improvement across volumes realizations margins going forward as the operating 15:24 15 minutes, 24 seconds environment normalizes and competitive positioning strengthens. 15:28 15 minutes, 28 seconds Sure. So I do accept and appreciate the kind of opportunities which lie ahead in the medium to the long term and uh I 15:35 15 minutes, 35 seconds understand your uh part in terms of guidance on numbers. I just wanted to clarify there is a certain discount 15:43 15 minutes, 43 seconds which you must have given to your customers which is specific to the tariff situation which is you know kind of not a regular situation regular 15:50 15 minutes, 50 seconds business situation. So say the discount which has been given to the in terms of x amount or x percentage as this say 15:59 15 minutes, 59 seconds another when things get clarified in terms of the final duty structures uh assuming it goes to 18%. Then do you 16:06 16 minutes, 6 seconds reverse that special discount related priorities which was given to your customer? 16:14 16 minutes, 14 seconds You know one thing you need to keep in mind is uh you know between our Q2 and Q3 we have a 100 basis point you know uh 16:21 16 minutes, 21 seconds EIDA margin hit uh due to the 50% Russian oil tariff you know yes we did give a case to basis you know 16:29 16 minutes, 29 seconds tariff discounts to customers which will start getting reversed you know we in touch with all our customers as we speak it's too early you know this has all 16:36 16 minutes, 36 seconds happened in the last 7 10 days so we've engaged with them as this unfolds it will all uh start resulting in in start showing in the numbers. 16:46 16 minutes, 46 seconds Sure. My last question sir, in terms of your guidance on the top line, you mentioned by FI28, our overall company 16:53 16 minutes, 53 seconds uh top line will double and uh our new business which has reached a 100 of about $100 million. uh by FI28 the new 17:02 17 minutes, 2 seconds business which includes the bedding uh utility bedding and also the USA brand business both put together should be in 17:10 17 minutes, 10 seconds the region of around $275 million was your guidance which was given in the previous quarter also do we stand by that 17:18 17 minutes, 18 seconds yes sure sure thank you so much sir and wish you all the best 17:26 17 minutes, 26 seconds thank you next question is from the line of Abishek Shankar from ICS. Please proceed. 17:34 17 minutes, 34 seconds Yes. 17:36 17 minutes, 36 seconds Yeah. Thanks for taking my question. Uh congrats on a good set of results. Uh just two questions from my side. One is 17:43 17 minutes, 43 seconds uh on the Europe markets. Uh can you just highlight uh you know what is the total size of the home textile market in 17:50 17 minutes, 50 seconds Europe and uh you know how uh what is the share of India in that and how are we looking to grow there. Uh my second question I'll ask after this. 18:03 18 minutes, 3 seconds Yeah. Hi Habishek. Sure. You know so I'll also give you a little bit flavor of where Indoccom stands you know so that uh for everybody to hear this 18:11 18 minutes, 11 seconds you know and uh clarify on the EU FDA and on the European market you know. Uh currently our revenue contribution is in 18:19 18 minutes, 19 seconds the mid single digit range uh from this market. you know we're in active discussions with multiple customers and 18:26 18 minutes, 26 seconds are engaged at various levels you know as we move forward once the EU FDA comes into full effect it will significantly 18:34 18 minutes, 34 seconds improve visibility for both into account and the retailers given in our enhanced competitive positioning versus earlier 18:41 18 minutes, 41 seconds we got to realize with this India becomes on a level playing field with its other competing countries so we expect you know the EU market is roughly 18:49 18 minutes, 49 seconds around $30 billion which is similar in size specifically to home textiles you know uh to the US market and uh over the 18:57 18 minutes, 57 seconds next couple of years I would say next two to four years we will be able to capitalize this market uh in a big way. 19:05 19 minutes, 5 seconds Yeah, thank you sir. And my second question is uh more on the bookkeeping side. So you mentioned about the incubation cost of new businesses. Uh 19:14 19 minutes, 14 seconds you know I just wanted to know what was the uh amount of that incubation cost. 19:19 19 minutes, 19 seconds As we mentioned Abishek it's 150 to 200 basis points. So you can run the numbers. I mean uh yeah we're not uh 19:26 19 minutes, 26 seconds going to provide any specific number but it's approximately 150 to 200 basis points. We expect this to get over by end of quarter 4. 19:35 19 minutes, 35 seconds Okay, great. Thank you, sir. Thank you so much. I'll call back into the queue. All the best. Thank you. 19:42 19 minutes, 42 seconds The next question is from the line of Amanagraal from Karen. Please proceed. 19:51 19 minutes, 51 seconds Uh thank you for the opportunity. Uh my first question was on the core business margins like uh while you have already talked about that uh there will be a 20:00 20 minutes reversal in margin but since the tariffs will come down to 18%. So uh will indo be expected to take some hit out of that 20:08 20 minutes, 8 seconds 18% or like do we expect our margins to go back to 15 16% kind of a number which we used to do earlier. 20:17 20 minutes, 17 seconds Sure Raman you know so the reality it's too early to speak on this because this is a very dynamic situation we are in 20:24 20 minutes, 24 seconds and we're in discussion with all our customers and I'm sure we'll get to a mutually beneficial conclusion with each other having said that our objective is 20:32 20 minutes, 32 seconds to get back to 15 16% I think we've been consistently saying you know that that's our uh goal on EITA and you know let's 20:40 20 minutes, 40 seconds hope that we can get there soon understood sir like now coming to the 20:47 20 minutes, 47 seconds Europe business part uh with the FDA basically coming and like it might take another year to basically implement. So 20:55 20 minutes, 55 seconds like how are we working internally like are we uh planning to put more sales team or like more offices in Europe so that our engagement with the customers 21:04 21 minutes, 4 seconds improve and once the FDA is in place in a year uh we are able to capitalize from the start only like uh can you touch a 21:11 21 minutes, 11 seconds bit on that like how we are thinking about capitalizing on the opportunity sir absolutely am and I think I addressed 21:20 21 minutes, 20 seconds this early on in my opening speech I'm not sure if you heard that you know so we have a team in place. You know, we are putting pen to paper. We have a strategy in place. We're evaluating. 21:30 21 minutes, 30 seconds We're seeing how we can improve our relation with each customer. We very recently in the month of January participated in a show called Heimex 21:37 21 minutes, 37 seconds till 2026 in Germany. You know, which happens in Frankfurt. It happens every year. And it was one of it's one of the largest global home textile exhibitions 21:45 21 minutes, 45 seconds which brings retailers all across the world under one roof. And with this participation we've seen specifically this time you know a lot of interest 21:53 21 minutes, 53 seconds from uh UK European retailers more than ever you know and of course you know the EU FDA was already in the works uh we 22:01 22 minutes, 1 second all were hoping that it will happen but till it didn't happen it didn't happen so even our retail customers were aware of this who we already do business with so they all came they were they're 22:10 22 minutes, 10 seconds seeing new products so I think the engagement level is very very high more than it's been you know because they know at the end of the day for them also country diversification is important and 22:18 22 minutes, 18 seconds they look at India very very well you know uh we also have uh Mr. Mr. McRun here today. So you know I 22:26 22 minutes, 26 seconds mean so it all shows how how important India is you know for all the global leaders. 22:34 22 minutes, 34 seconds Okay. So like from a medium-term point of view like 3 to 5 years can we put some uh like internal target like uh 22:42 22 minutes, 42 seconds from 30% maybe you want to go to 50 60% kind of diversification from non-year savings. I know it is very early to say 22:48 22 minutes, 48 seconds anything as of now but like uh it might speak a bit about your ambitions to grow that business right. So anything can we say on that end? 22:57 22 minutes, 57 seconds I I'll be a magician to tell you that right now you know. 23:02 23 minutes, 2 seconds Yeah sorry sir. Uh now again on the home textile bit only like uh if I see us also like uh Indian players are very 23:10 23 minutes, 10 seconds strong on the cotton part right because cotton is dominant in India as well. But if I see polyester and other uh aspects of the business like uh Indian players 23:19 23 minutes, 19 seconds have lacked a bit in terms of gaining market share on those presence and that is also a big part of the overall textiles market. Right. So uh with uh 23:28 23 minutes, 28 seconds more and more yan players coming in India and like focus of Indian government also on the mmf category. Do you think like there is a potential for 23:37 23 minutes, 37 seconds us and players like us to go and target that non-cotton pie also and like gain more wallet share in that category. 23:46 23 minutes, 46 seconds Sure. So you know India is uh you know there's a product which is a 100% polyester based product in the US it's called microfiber to be specific. That's 23:54 23 minutes, 54 seconds where you know it's an opening price point product uh really the starting price point where retailers would retail the product at $17 $19. So we as a 24:04 24 minutes, 4 seconds country uh I mean most of us don't play in that segment. So we are playing more on the mid to high end. Uh but but even 24:11 24 minutes, 11 seconds in the mid to high end it's not that all our products are exported with only cotton we using fibers like tensel IO blend of cotton polyester. So even when 24:19 24 minutes, 19 seconds we are blend blending cotton and polyester you know 60% cotton 40% polyester India is very very competitive. Uh as we move forward a lot 24:27 24 minutes, 27 seconds of the cotton polyester products are used in the fashion bedding business. So you'll see that business grow over the next couple of years. Uh and I think 24:35 24 minutes, 35 seconds we're competitive even today and uh we should see that growth happening further. As far as 100% polyester is concerned, I don't think we yet competitive. 24:45 24 minutes, 45 seconds That's sir. Now in the utility business like uh we have reached 65% kind of utilization in the old facilities and 24:52 24 minutes, 52 seconds the new facility green field one has also come on screen right and uh we are doing a run rate of like almost $100 million kind of business from the new 25:01 25 minutes, 1 second businesses so like uh any soft guidance can we give for next year like how much revenues are we targeting from the new business especially from the utility one 25:10 25 minutes, 10 seconds uh since old facilities will ramp up and like also the new facility will ramp up for as we mentioned you know like over three 25:18 25 minutes, 18 seconds years and this is our first year so next year will be our second year and the year after that will be our third year so we've given a clear guidance of $275 25:25 25 minutes, 25 seconds million you know so I think we should all be very happy to where we stand today you know in less than 9 months to 12 months we already had a 100 million 25:33 25 minutes, 33 seconds run rate so other than that it's very difficult at this point of time to guide you know 25:39 25 minutes, 39 seconds right so all I can say direction yeah we would be targeting 10 15% kind of Q on Q kind of growth which we have been 25:47 25 minutes, 47 seconds getting right like would that be a fair understanding not necessarily some quarters could be higher some could be flat you know so 25:55 25 minutes, 55 seconds it's not uh there's no t I mean it all depends on when when does business futify with which customer you know and 26:01 26 minutes, 1 second how the offtake is you know so our objective is more to stabilize the business and to grow from a long-term perspective you know it's not 26:08 26 minutes, 8 seconds quarteronquarter is not the concern here understood sir so my final question was on Vam Suta like uh can you speak about 26:16 26 minutes, 16 seconds the performance of Vam Suta and like any rough numbers you can throw like uh how we have been doing in terms of sales uh 26:24 26 minutes, 24 seconds because that is a category where which is very exciting for us right and it can become a $100 million kind of business so how has been the performance how has 26:32 26 minutes, 32 seconds been the ramp up in that business basically so the 100 million that we mentioned is with warmsut and the other brands uh 26:40 26 minutes, 40 seconds that are clearly mentioned and it's also on investor tech it's not only with warmut alone And we got to all realize uh Aman that it's only been 6 months 26:47 26 minutes, 47 seconds since the brand has launched. So we'll come to you once we've achieved some scale and size you know but all I can say that it's uh uh it's positively 26:55 26 minutes, 55 seconds surprised us and we are moving in the right direction. 26:59 26 minutes, 59 seconds Understood. Thanks for answering my question. Thank you. Thank you. 27:07 27 minutes, 7 seconds The next question is from the line of Gautam Shrii from NPN Capital LLP. Please proceed. 27:13 27 minutes, 13 seconds Yeah, hi Moit uh and team. Uh I think uh a pretty decent uh result uh given the 27:22 27 minutes, 22 seconds challenging circumstances over the past about almost two quarters. Um I was looking at your uh slide presentation 27:28 27 minutes, 28 seconds and uh I want to focus on number 22, slide 22. Hello, can you hear me? Sure. Hi Gotham. Yeah. 27:36 27 minutes, 36 seconds Yeah. 27:37 27 minutes, 37 seconds Yeah. So slide number 22 was uh you know it's interesting that you've shown the uh extent of US imports of uh two of 27:45 27 minutes, 45 seconds your you know major products uh cotton sheets and uh cotton pillow cases and also thereafter cotton spreads and quills. Um the first two have uh India 27:55 27 minutes, 55 seconds uh with the lion share and of course uh within that is uh into account and then you have uh slightly smaller share for 28:04 28 minutes, 4 seconds sure in the cotton bed spread and quills. But here's the interesting part you know there's no mention of Bangladesh. So question I have is is 28:13 28 minutes, 13 seconds Bangladesh absent in all these three categories. 28:18 28 minutes, 18 seconds So Gotham interesting question you know and we've gone through this a little bit of a roller coaster in the last 7 8 days as we've all seen uh you know with when 28:26 28 minutes, 26 seconds Bangladesh got the duty-free access using US cotton so actually Bangladesh produces very very low low products uh 28:35 28 minutes, 35 seconds you know which we would compete with them in the European market in the US market we actually don't compete with Bangladesh at all so that's why you 28:42 28 minutes, 42 seconds don't see Bangladesh on the map you know so you absolutely correctly pointed it out and also Our understanding from PUGG is that now India also going forward. Of 28:51 28 minutes, 51 seconds course, we'll have to see the fine print will have exactly the same benefit. So if we are importing US cotton, India should have tariff-free access to the 28:59 28 minutes, 59 seconds United States. Of course, the devil lies in the detail. So we'll wait for even for Bangladesh, the fine print has not come out as I mentioned. So as that comes out, I think this will also be a 29:08 29 minutes, 8 seconds gamecher for India, you know. But to answer your question, yes. Yeah, that's a good clarification because the thing is uh the Indian stock market puts 29:17 29 minutes, 17 seconds all the uh textile exporters under the same basket and says you know what if Bangladesh has got a preferential duty 29:25 29 minutes, 25 seconds structure with the US and everything gets uh you know impacted uh from an equity market perspective at the same time. So this is a this is a great 29:33 29 minutes, 33 seconds clarification. Um yeah I think this is great. I just wanted to also ask you a question with respect to your domestic business and how's that growing and are you because you've launched a whole 29:41 29 minutes, 41 seconds bunch of brands uh on the domestic front uh and one of the things that we look at at Napian Capital is that with so many 29:48 29 minutes, 48 seconds new uh uh residential apartments coming up across the country and that's a big boom for the real estate companies and 29:55 29 minutes, 55 seconds when we talk to them uh every new home is going to need need pillows, blankets, you know, bed covers etc. So how do you view the domestic market going forward? 30:06 30 minutes, 6 seconds Absolutely. Uh so you know the domestic market is very very important for Indocc. We have two brands. A brand called boutique living which is an 30:14 30 minutes, 14 seconds aspirational brand uh priced at a mid-priced and above 3 and a half,000 rupees on a bed sheet and above. And then we have an affordable brand which 30:22 30 minutes, 22 seconds is a opening price point you can say which is called layers. Uh you know we have a dedicated separate team of over 65 people running this business for us. 30:31 30 minutes, 31 seconds Uh India is a tough market I must say but we are fully committed to it. We are in over 2,000 multibrand outlets as we 30:38 30 minutes, 38 seconds speak and growing. We are in stores like shopper stop at home so multiple of these uh uh large format stores. Uh also 30:47 30 minutes, 47 seconds online we're revamping our website you know making it more uh also from a D2C presence you know making the websites more alive and uh you know showing the 30:56 30 minutes, 56 seconds curated assortment you know so uh and selling more higherend products on a website. So we're in the journey of of putting that also in place. So it's a 31:03 31 minutes, 3 seconds very important business. Uh currently it's 2.25% of our revenue you know but uh it's very important for us and hopefully in the next 3 to 5 years this will become a sizable business. 31:14 31 minutes, 14 seconds Understood. Okay. Uh thank you so much. Thanks. 31:23 31 minutes, 23 seconds Thank you. The next question is from the line of Yash Tana from I thought PMs. 31:29 31 minutes, 29 seconds Please proceed. Yeah. Hi team. Uh am I audible? Yes. Yes please. 31:37 31 minutes, 37 seconds Yeah. So uh I had a question uh relating to the guidance uh that we've given for FI28. 31:43 31 minutes, 43 seconds uh now we do understand that uh you know the medium to long-term uh the visibility is great uh but uh if I just dissect the numbers uh I think maybe 31:52 31 minutes, 52 seconds this year the new businesses will be uh will be doing anywhere between 750 to 800 crores and even if I assume that by 31:59 31 minutes, 59 seconds fi 28 they scale up to the $275 million uh the base business the core business 32:06 32 minutes, 6 seconds has to sort of grow uh more than 25% year on year for the next two years so what what is giving has this confidence 32:14 32 minutes, 14 seconds uh of such a growth high growth uh which we've not achieved in the past. 32:20 32 minutes, 20 seconds Sure. Yeah. Sure. So you know directionally we feel positive on this growth trajectory that we've laid out you know as the revenues uh improve uh 32:29 32 minutes, 29 seconds currently with tariffs and FDA the target to double revenues is doable you know with these going away and we have the capacities and the capability and we 32:37 32 minutes, 37 seconds are witnessing improved scale across all segments as we speak here. 32:43 32 minutes, 43 seconds Uh sure sir. Got it. But uh in any case uh I mean is there a possibility where this uh could extend uh because uh it 32:52 32 minutes, 52 seconds seems rather uh very aggressive and it's good to be aggressive but just trying to understand uh we've never done this sort 32:59 32 minutes, 59 seconds of a growth. Uh so yeah of course we got to realize that this is an aspiration that we all have you know so we've not changed the 33:06 33 minutes, 6 seconds numbers. We around 12 to 18 months ago we declared our numbers. So we want to hold ourselves to it you know now if it moves by 6 months or 9 months or one 33:15 33 minutes, 15 seconds year here and there it's not the beginning or the end of the world right I mean uh conceptually and uh how do you 33:23 33 minutes, 23 seconds say directionally you know we're very clear and you got to also understand that now we have three levers that we are playing on it's not one lever only our core business in our core business 33:31 33 minutes, 31 seconds now with all these FTAs us opening up I mean that we have 35 40% open capacity there we have the 33:40 33 minutes, 40 seconds utility betting business and we have the brand business. So we have all these three to support this growth for us for the companies. 33:48 33 minutes, 48 seconds Sure sir I think that may make sense. Uh my second question was on the margins. 33:53 33 minutes, 53 seconds Uh so the margin decline from the 15 16% uh if we dissect it into two parts. One could be uh due to lower utilizations 34:01 34 minutes, 1 second due to the external macro factors tariffs etc. And the other one obviously uh that you had to give discounts to 34:08 34 minutes, 8 seconds your customers uh uh because of the tariffs. So uh just trying to understand uh to get back to this aspirational 15% 34:16 34 minutes, 16 seconds margin uh maybe the tariff discount will be immediate and the utilizations uh will be eventual. So uh can you break 34:24 34 minutes, 24 seconds that up for us if possible like what's the margin impact due to both these factors? 34:31 34 minutes, 31 seconds Uh you laid it out quite well. I mean uh it would not be possible uh for me to break it up. Just one more point I 34:38 34 minutes, 38 seconds wanted to add that our US business that is yet at growth phase uh we have have a margin impact of 150 to 200 basis points 34:47 34 minutes, 47 seconds on the overall consolidated revenue and we fingers crossed we expect that by the end of March 2026 that should be over. 34:56 34 minutes, 56 seconds So starting Q1 we would not see a drag of that you know and then as uh the retail business in the US picks up and 35:04 35 minutes, 4 seconds our capacity utilization starts improving again that's a big factor you know to get their margins back to the levels that you mentioned. 35:12 35 minutes, 12 seconds Sure sir got it that makes sense. Uh good luck. Thank you. Thank you. 35:20 35 minutes, 20 seconds The next question is from the line of Dali from Nshia. Please proceed. 35:26 35 minutes, 26 seconds Hello. Hi sir, thank you for the opportunity. Uh I just had a few questions, a few followup questions on our previous participant. Uh so first of 35:34 35 minutes, 34 seconds all, I wanted to know that out of our total cotton consumption right now, how much is sourced from US? 35:41 35 minutes, 41 seconds So US currently would be uh slightly below 10%, our overall import is around 30 35%. 35:50 35 minutes, 50 seconds Okay. So if you can help us understand the working of this like like we know that if we import US cotton it will be duty-free but we also know that US 35:58 35 minutes, 58 seconds cotton is comparatively expensive than other countries. So I wanted to understand that working how the net net 36:05 36 minutes, 5 seconds is it beneficial or not for us to import the US cotton or is it depends on like customers only the demand uh for US cotton then only we'll use it. 36:14 36 minutes, 14 seconds Sure. So I'll explain it to you first. 36:16 36 minutes, 16 seconds I'll explain you from Indoccount's perspective. You know, from our perspective, the cotton that we predominantly import from the United States is a cotton called US Puma, which 36:24 36 minutes, 24 seconds is less than 1% of the cotton grown in the world. So, it's a very high-end cotton, similar to Egyptian cotton. So, this is specifically when our product 36:32 36 minutes, 32 seconds development teams and sales teams go and show a customer specific product. They like it. It's on the higher end of the range. That's the cotton that we import. 36:41 36 minutes, 41 seconds Any cotton that is imported into India which is 32 mm in length and above is duty has duty-free access irrespective 36:49 36 minutes, 49 seconds of country of origin into India you know. So most of the cotton that Indocount imports today are 32 mm and 36:55 36 minutes, 55 seconds above in length. uh coming to the US as we speak today when tariffs were put in 37:02 37 minutes, 2 seconds place uh if you use a as we are speaking right now uh if you use US cotton the content of the US cotton in your end 37:10 37 minutes, 10 seconds product if that is above 20%. Then on that much value you don't pay tariff. So for example if the cotton content is 30% in the product and your tariff is 25%. 37:23 37 minutes, 23 seconds So you don't pay you'll not pay 7 and a half%. Basically you know 20 30% of 25%. 37:30 37 minutes, 30 seconds That law is applicable for any country not only India it's the same law is applicable for uh any any US uh you can say content as long as it's above 20%. 37:41 37 minutes, 41 seconds uh what the government is working on is that if you use US cotton uh and fiber from the US then you get then the tariff 37:49 37 minutes, 49 seconds becomes zero again we have not seen the fine print and uh any cotton that is below 32 mm in length we have 11% import 37:57 37 minutes, 57 seconds duty as we speak from anywhere in the world so hopefully I've been able to answer your question okay sir and like from where are we 38:05 38 minutes, 5 seconds sourcing our raw material for US facility our US facility you know where we are making pillows and 38:12 38 minutes, 12 seconds quilts is is a global sourcing model depends on the product that we are showcasing to our customer and depending on what the tariffs and pricing is we 38:20 38 minutes, 20 seconds source it globally from China, Vietnam, Thailand, Korea, India all across the world. 38:30 38 minutes, 30 seconds So what exactly facility we have in uh US like uh what exactly we are doing in US? Uh are we just uh doing the end product or it's from the start? 38:41 38 minutes, 41 seconds We manufacture pillows, the pillows that you sleep on and we manufacture quilts uh in the United States in one of our 38:49 38 minutes, 49 seconds the quilts are made in our Ohio facility. 38:53 38 minutes, 53 seconds Okay. So for that you do the sourcing from like all over as per the pricing and the demand for the raw material. Yeah. 39:00 39 minutes Yeah. Okay. Thank you and all the best. 39:08 39 minutes, 8 seconds Thank you. 39:10 39 minutes, 10 seconds The next question is from the line of Dwani Savla from Savla Family Office. Please proceed. 39:18 39 minutes, 18 seconds Hello sir, am I audible? 39:21 39 minutes, 21 seconds Yes. Audible sir. Uh this is with regards to this expansion of all the pillow which you 39:30 39 minutes, 30 seconds are putting up in US. uh by when will it be operational and if and by if if when it's operational what will be our total 39:39 39 minutes, 39 seconds capacity by then and based on that capacity what kind of a top line are we actually targeting is it in line still 39:46 39 minutes, 46 seconds in line with what used to be a few quarters ago Dwani so Dani I would uh suggest also to 39:55 39 minutes, 55 seconds go through our investor deck you know where we've clearly laid it out so we have as we speak we have three manufacturing facilities ities in the United States to uh the third one 40:04 40 minutes, 4 seconds commissioned in January of 2026. Our capacity is 31 million pillows and if I'm not mistaken around 2 million quilts 40:12 40 minutes, 12 seconds with this capacity we should be able to do 175 million in revenue and we expect that to happen in 3 years. We are currently in the first year 40:21 40 minutes, 21 seconds and this is uh 175 million uh in revenue. Uh so I was talking about just 40:28 40 minutes, 28 seconds from the third facility. Is this just from the third facility? 40:31 40 minutes, 31 seconds The third facility should give us $85 to $90 million. Okay. Okay. Thank you. Which is part of the 175. 40:39 40 minutes, 39 seconds Yeah. Yeah. That that I get. Thank you. Thank you. 40:48 40 minutes, 48 seconds Ladies and gentlemen, anyone who wishes to ask a question may press star and one on their touchstone telephone. 40:56 40 minutes, 56 seconds I repeat participants who wish to ask question may press star and one at this time. 41:09 41 minutes, 9 seconds The next question is from the line of Shreddha Garval from AMSE. Please proceed. Yeah. Hi. Am I audible now? 41:18 41 minutes, 18 seconds Yes Sha. 41:19 41 minutes, 19 seconds Yeah. Hi. Uh congratulations on a good quarter month. Just two questions. First of all, the tariff impact that we've booked. We've booked it on the revenue 41:28 41 minutes, 28 seconds line or at other expenses or where have we actually taken the impact and possible to quantify the impact for both Q2 and Q3 separately. 41:39 41 minutes, 39 seconds So uh in terms of where the impact it depends on the nature of the order you know if it's an FOB shipment the impact comes on gross margin you know and uh if 41:48 41 minutes, 48 seconds it's not FOB then it comes in you know it will come in the AIDA margin you know very difficult to quantify you know at this point of time 41:57 41 minutes, 57 seconds but have we taken an equivalent hit on the revenue line or is it only in the cost line that it is getting reflected even on revenue. 42:06 42 minutes, 6 seconds Okay. So for most FOB shipments it happens on the re I mean it's all customer to customer specific you know how their accounting works what they 42:14 42 minutes, 14 seconds want. So it's very it's honestly tailored to their uh through their requirements and in discussion with our teams you know 42:22 42 minutes, 22 seconds and possible to quantify the impact yeah for both the quarters Q2 and Q3. No, that would not be possible because it's 42:29 42 minutes, 29 seconds all you know uh sensitive information that you know and done on a No, but you've given you've given the 9month impact uh so 354 is your adjusted 42:38 42 minutes, 38 seconds AITA versus 345 uh the reported AI. 42:43 42 minutes, 43 seconds Yeah, that adjusted AITA the impact of the labor code impact. Yeah. 42:47 42 minutes, 47 seconds Okay. Okay. Okay. Got it. And secondly, I mean, how do cost dynamics change if we use US imported cotton versus locally 42:56 42 minutes, 56 seconds sourced cotton currently? So any thought on whether will it be cost economical for us to go for US imported cotton if 43:04 43 minutes, 4 seconds at all the tariff gets down to zero for that kind of a product. 43:10 43 minutes, 10 seconds If the tariff becomes zero, yes, uh for certain product ranges, it will become viable. And we're very familiar with the raw material sourcing base in the United 43:19 43 minutes, 19 seconds States. It will all depend on what the Indian government puts. If the 11% tariff in India for import of cotton 43:26 43 minutes, 26 seconds from the United States remains then the equation changes. If the 11% goes away on the raw material uh then it would make sense to import some amount of raw material from the US. 43:37 43 minutes, 37 seconds And currently what is the content of cotton that uh is there in our products general average content of cotton? 43:45 43 minutes, 45 seconds Uh as a thumb rule you can take 35% if on a bed linen if you to take if you have to put your finger on one number but it could vary between anywhere 43:54 43 minutes, 54 seconds between 30 to 42 43% you know because there are talks that uh the cotton content has to be much higher for 44:02 44 minutes, 2 seconds us to be eligible for that kind of 0% tariff. So I'm not sure right now currently the rule as I explained earlier if it's above 20%. 44:13 44 minutes, 13 seconds then on that content you'll not get but what the new rule is going to come out whether it's for India or for Bangladesh uh the USR has not laid down any 44:22 44 minutes, 22 seconds guidelines so any guesswork on our part or anybody's part is only a purely a guess 44:29 44 minutes, 29 seconds got it and for shipments after 7th of Feb so this 25% penal tariff goes away 44:36 44 minutes, 36 seconds uh retrospectively from 7th Feb right I mean for whatever shipments land in the US after that Right. Correct. 44:45 44 minutes, 45 seconds So and the remaining 25 to 18% that will be a gradual recovery on tariffs because probably you would have booked orders at 44:53 44 minutes, 53 seconds certain rate and it will be a gradual negotiation with customers and that will get reflected in numbers gradually. Is that the understanding or right? 45:02 45 minutes, 2 seconds Fair. I would say you know as I said earlier that you know it's too early you know it's very very dynamic and we're in discussion with all our customers you know. 45:12 45 minutes, 12 seconds Got it. Sure. This is helpful. Thank you. Thank you. 45:17 45 minutes, 17 seconds Thank you. The next question is from the line of Sachin from Swan Investment Managers. Please proceed. Yeah. 45:25 45 minutes, 25 seconds to the team and uh I would like to congratulate you for a good numbers in such a volatile and uh difficult 45:33 45 minutes, 33 seconds environment. Uh my question is on the margins. Uh so we had two impacts on our margins. One was because of the tariffs 45:41 45 minutes, 41 seconds and second was because of the investment in the new businesses. 45:46 45 minutes, 46 seconds So you mentioned that from Q4 more or less a drag of the investment uh uh on the new businesses and all will go away. 45:53 45 minutes, 53 seconds So that will bring us to around 11%. So fair to assume that the remaining gap between what we used to report at 15 16% versus 11%. Is the impact of tariff and 46:02 46 minutes, 2 seconds as and when you know slowly and gradually uh things normalize that should come back is that the way to look at the margin trajectory over the next six to eight quarters. 46:11 46 minutes, 11 seconds So Sachin more or less uh your thought process is correct but you got to realize that this US business will uh the impact will not we expect that the 46:20 46 minutes, 20 seconds impact will not be then quarter 1 of next year there'll be some impact yet in Q4 the impact you know but in starting Q1 we expect that it will go away so as 46:28 46 minutes, 28 seconds I said you know by March it will go away and coming back to the regular uh margin levels is also dependent on capacity 46:36 46 minutes, 36 seconds utilization so as capacity starts getting utilized then there's no reason why we shouldn't be at a normalized margin. 46:43 46 minutes, 43 seconds So but just to summarize basically the impact that we are seeing on margins from 15 16 to the current levels is primarily a function of the impact 46:52 46 minutes, 52 seconds because of the tariffs and the investment that we are making in the new facilities and the brand building of which the impact of brand building 46:59 46 minutes, 59 seconds investment probably will go in a quarter to two and slowly gradually as things improve for us as utilization improves the remaining impact of tariff should 47:07 47 minutes, 7 seconds also go away that's that's the way to look from a six to eight quarter perspective I'm not talking from a quarter to quarter but six to eight quarter Sure. Yes sir. Absolutely. 47:14 47 minutes, 14 seconds Secondly, if you could give us some sense on the investments that we are planning for financial year 27 and how in that case are we looking at our debt levels in the next year. 47:25 47 minutes, 25 seconds Sure. So you know this year we had planned around 214 crores odd if I'm not mistaken you know and uh we've invested 47:33 47 minutes, 33 seconds uh up to 9 months 131 crores. Uh in Q4 we should have another 20 odd crores. So let's say 150 odd should be where the 47:41 47 minutes, 41 seconds year ends. Some of this capex will spill over especially the ZLT we in the final stages of choosing our technology 47:48 47 minutes, 48 seconds partner. So that will spill over into next year and then there will be normal uh balancing capex maintenance capex as 47:56 47 minutes, 56 seconds we say that will come into 26 27 maybe like 125 to 150 crores at best. 48:03 48 minutes, 3 seconds Yeah. That's a yeah yeah yeah that's a fair number but how do we see our debt levels because you mentioned that debt levels have started to come down now that we have parked uh you know past the peak 48:11 48 minutes, 11 seconds investment cycle so how should we look the debt going ahead especially say FY27 maybe if you could give us a sense of one or two three year period how should 48:19 48 minutes, 19 seconds we look at it I think uh as far as debt levels is concerned the only reason we need debt is as revenues go up we need to working 48:27 48 minutes, 27 seconds capital to invest back in working capital you know so that's the only balancing act uh yeah so we don't see any major changes of fluctuations in our debt. Uh we have 48:36 48 minutes, 36 seconds seen a reduction in first 9 months and uh hopefully this the the worst is behind us. Ideally 27 we should see a 48:44 48 minutes, 44 seconds reduction because we don't have any major capex and we expecting performance to improve both in terms of revenue and margins next year. So should we not see 48:52 48 minutes, 52 seconds a further reduction in uh the net debt levels in financial year 27 from where we are today? 48:59 48 minutes, 59 seconds Yeah, definitely it will it should happen. 49:03 49 minutes, 3 seconds And we have no major investment now lined up uh for the next maybe 18 in 24 months till we achieve this uh guidance of doubling the revenues. More or less 49:11 49 minutes, 11 seconds the large investments for achieving this guidance are in place. That's the way to look at it. 49:16 49 minutes, 16 seconds Uh no no we as a company we always looking at opportunities right we have a very strong balance sheet you know. So certain decisions that we've taken over 49:24 49 minutes, 24 seconds the last 3 years 2 years those are reaping benefits now. So at the same time we are always evaluating. So as and 49:30 49 minutes, 30 seconds when opportunities come our way. Now as we speak we have nothing on the table other than what we've discussed and we are clear that we should be able to 49:38 49 minutes, 38 seconds double our revenue with with whatever investments have been made but we'll look at further growth in the business but depending on what opportunities come by you know. 49:46 49 minutes, 46 seconds Yeah that I understand but for the doubling of revenues the large part of the investment is my question was more specific to your respiration to double the revenues. 49:54 49 minutes, 54 seconds Okay. So, so if and when you look at any major investments that would be opportunity beyond what we already given a guidance for it would be over and 50:01 50 minutes, 1 second above that right so yes okay that carries thank you 50:08 50 minutes, 8 seconds thank you the next question is from the line of Surya Narin from Sunnidi securities please proceed 50:17 50 minutes, 17 seconds yeah thanks uh Mohit for the opportunities uh so congratulations for good set of numbers even in a 50:24 50 minutes, 24 seconds challenging environment uh just you know just to understand uh the uh kind of uh you know trajectory in the US business 50:33 50 minutes, 33 seconds uh especially the onore activities so what is the idea that look you are understanding that whether the US green 50:42 50 minutes, 42 seconds field facilities will have 50% kind of utilization maybe achieving next year uh so that no we'll be uh getting less 50:51 50 minutes, 51 seconds track and number two is uh in Indian operation it is the currently my understanding is know it would be operating around 60 plus uh 51:00 51 minutes utilization so will you see that know this year when FI27 there will be a ramp 51:06 51 minutes, 6 seconds up in the uh utilization and third know as you diversify away from the US market 51:14 51 minutes, 14 seconds know garnering around 30% share outside of US so are we uh seeing that know the non- US market are not that 51:22 51 minutes, 22 seconds reminiserative as US market and uh portly whether uh the consumer sentiment 51:30 51 minutes, 30 seconds has improved off late what we understand from the media but uh are we seeing that the kind of consumer sentiment is like 51:39 51 minutes, 39 seconds the Biden era uh that is my question yeah four questions sure so you know very difficult at this 51:48 51 minutes, 48 seconds point of time to give any guidance uh Mr. Surya you know uh we are of course expecting better utilization levels but 51:54 51 minutes, 54 seconds it all depends on demand you know from the countries that we are shipping to any FDA related countries which is 52:01 52 minutes, 1 second specifically UK and EU you know none of these have been even the UK has not yet been ratified we we expect all of this 52:09 52 minutes, 9 seconds to happen in the next two quarters so that you know that business can flow so once it gets ratified of course we're in touch with all our customers but they 52:17 52 minutes, 17 seconds will only start taking major decisions once you know the tariff is behind right I mean because it both EU and the UK have to get ratified by their 52:25 52 minutes, 25 seconds parliaments and we got to remember EU as is part of the 78 countries 27 countries that make up the EU. Uh as far as 52:34 52 minutes, 34 seconds utilization in the US is concerned we do expect you know as we said our current utilization levels are 65% and we are 52:42 52 minutes, 42 seconds positive about the business. So we are we think our third facility has come up at the right time and uh we already at a $und00 million run rate you know so if 52:50 52 minutes, 50 seconds we are currently at that we would expect the business to grow from there. 52:56 52 minutes, 56 seconds Okay but my understanding is that no because uh and what about the consumer sentiment as I asked uh now if you 53:04 53 minutes, 4 seconds compare the current era versus the Biden era where we were actually growing very well and doing 53:11 53 minutes, 11 seconds very well. I mean uh is it that kind of sentiment reversing or or uh some cautious optimism is still there? 53:19 53 minutes, 19 seconds No, I think uh you know we got to all realize uh a the US is a very resilient economy but at the same time you know uh 53:27 53 minutes, 27 seconds finally tariffs have come in you know these are not small numbers whether it is 15% 20 from China it was up to 146% 53:35 53 minutes, 35 seconds sometime last year so finally it's the US consumer who's paying for it right so retail goods if you travel to the United States even if you have a glass of juice 53:44 53 minutes, 44 seconds today or a cup of coffee you know the prices have all gone up so only time will tell you know what consumer sentiments remain and and how robust is 53:53 53 minutes, 53 seconds their discretionary spending. what we've seen in the last two quarters uh even in the holiday season and right now it's a little bit muted but once everything 54:02 54 minutes, 2 seconds settles down we expect it to come back after 2 three quarters you know the demand levels okay and but it's not like something just because 54:10 54 minutes, 10 seconds India tariff has come down from 50 to 18 it's not like going to be a hockey stick that it's a immediate rebound you know correct correct correct correct yeah 54:19 54 minutes, 19 seconds what this does for for customers it gives them clear visibility you know on what basis to take decision decisions you know for our customers which is very 54:26 54 minutes, 26 seconds very important for our country and for us as a company. 54:31 54 minutes, 31 seconds maybe initial stocks to be absorbed then maybe as you rightly said maybe around Q3 of next year some kind of you know 54:40 54 minutes, 40 seconds rebound in the consumer sentiment to appear that is what my understanding is and and and regarding the imported raw 54:48 54 minutes, 48 seconds metal you said no around 32% is your import content so is it majorly related to the pima curtain or anything else 54:57 54 minutes, 57 seconds no no I said that our total raw material imported for our company is between 30 and 35%. 55:03 55 minutes, 3 seconds You know, okay. 55:03 55 minutes, 3 seconds Uh that's what I said and we import cotton from different countries including Egypt and the United States being our two major countries. 55:11 55 minutes, 11 seconds Okay. So uh so in this case you know if I say if it will be beneficial then uh 55:17 55 minutes, 17 seconds still we will be raising the quantum to beyond 35% what we are currently doing 55:25 55 minutes, 25 seconds because uh because our kind of raw metal requires higher mm of maybe 33 mm kind of material rather than uh low length. 55:37 55 minutes, 37 seconds So in that case it makes sense. So and and again the MSP issues also creating 55:43 55 minutes, 43 seconds issues. So do you think that know the uh even uh we can uh go further? 55:50 55 minutes, 50 seconds I think at this point of time we are comfortable with 35%. depending on what regulations come out of the United States by USR uh and depending on what 55:59 55 minutes, 59 seconds our customer needs are what the price of the raw material is all those uh mathematical calculations product everything will be done and then we'll 56:07 56 minutes, 7 seconds take those calls you know I mean we in a position to buy from anywhere in the world as a company and regarding the brands promotion 56:16 56 minutes, 16 seconds expenses whatever the current rates that is currently going on so is it going to be steady uh or it will it will it will come down as the sales sample happens. 56:29 56 minutes, 29 seconds Sure. So as I said that by end of quarter 4 which is in the next 45 odd days I mean by end of March uh that should go away. So till today including 56:37 56 minutes, 37 seconds the brand promotion we are taking a hit of 150 to 200 basis points on our consolidated margin number 56:44 56 minutes, 44 seconds and the incubation that you told about is it related to the brands or or or is it related to the green field? I mean what is that incubation? 56:53 56 minutes, 53 seconds It's a mix of both, right? The the the EIDA margin hit is coming for both for our new new businesses which includes brands as well as our utility bedding business in the United States. 57:04 57 minutes, 4 seconds Okay. Okay. And uh any any understanding of uh kind of guidance for the next year uh at least based on the inquiries that 57:13 57 minutes, 13 seconds currently you could be getting for No, it's too early for us you know uh you know at this point of time to give 57:20 57 minutes, 20 seconds any sort of guidance please. But it should exceed 100 million pieces for FI 27. 57:27 57 minutes, 27 seconds What is pieces? Uh we've not given any number of million 100 million meters. Sorry 100 million m very early to say that you know. 57:37 57 minutes, 37 seconds Yeah. Our objective is always to do better. Yeah. 57:40 57 minutes, 40 seconds And with just no one understanding is that we were actually count I mean understanding the realization of 57:49 57 minutes, 49 seconds ours know sequentially and y and with the introduction of the new business from the uh US. So because that is also 57:58 57 minutes, 58 seconds coming as a package because you know C plus the quils and pillows that is a package. So can we understand that we 58:05 58 minutes, 5 seconds will just know add up everything and uh and know whatever the seeds you know we are actually in exporting so that will 58:13 58 minutes, 13 seconds be the blended realization we can understand uh I'm not sure how you're taking out realization you know if you're taking 58:20 58 minutes, 20 seconds realization by taking our revenue for example of 1,74 crores and dividing that 58:27 58 minutes, 27 seconds by uh 24.8 8 million m that will not get you the right number because uh I mean 58:34 58 minutes, 34 seconds the 24.8 8 million mters is the pro the goods that are produced in our core business in India. That's the you can 58:43 58 minutes, 43 seconds take out a utilization level because our capacity is 153 million meters. And we got to also understand that uh from a 58:51 58 minutes, 51 seconds revenue standpoint some of that meterage has gone into the brand business. So the brand that Indocount that Indocount 58:58 58 minutes, 58 seconds India is producing and shipping to its customers under the brand name falls under the branded business. you know which are the four brands that we mentioned. So it might be a little 59:07 59 minutes, 7 seconds complicated to take out exact realization per meter. 59:11 59 minutes, 11 seconds Yeah because ultimately the brand brands brand brands and the the uh utility building and the quilts and pillows 59:18 59 minutes, 18 seconds those are actually as a package to I mean financially if you understand uh it it is it goes to fortify our margins I mean realization as well as the margins. 59:29 59 minutes, 29 seconds So that is the understanding. Sura, maybe our team can take it up with you offline and try and explain it to you better. Sure. Sure. 59:36 59 minutes, 36 seconds They'll satisfy your requirement here. Okay. Sure. Thanks. 59:42 59 minutes, 42 seconds Thank you. Ladies and gentlemen, that was the last question for today. I now hand over the conference to Mr. Mohit 59:49 59 minutes, 49 seconds Jan for closing comments. Over to you, sir. Thank you everyone for joining us today. 59:56 59 minutes, 56 seconds We hope been able to address all your queries. Should you have any further questions, please feel free to get in touch with SGA, our investor relation 1:00:04 1 hour, 4 seconds advisers. Thank you once again for our continued interest and support. We look forward to connecting with you on our next call. Thank you. 1:00:16 1 hour, 16 seconds Thank you on behalf of Indoccount Industries Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.