Pearl Global Industries Limited — Q4 FY26

Pearl Global Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=dFh_2akBMQU Published: 1d ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Pearl Global Indices Limited Q4 and FY26 earnings conference 0:10 10 seconds call. As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to 0:18 18 seconds ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:26 26 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shishir Gahoy, head of investor 0:36 36 seconds relations of Pearl Global Industries Limited. Thank you and over to you sir 0:46 46 seconds and I you all to our earnings call for Q4 FI26 and financial year 26. I hope 0:54 54 seconds you all had an opportunity to review our press release and the investor presentation which are available under the investor section of our website and 1:03 1 minute, 3 seconds the same are also uploaded on the BSC and NSC website. To discuss our results, we have with us our managing director 1:11 1 minute, 11 seconds Mr. Paly and our group CFO Mr. Sanjay Gandhi. They will take you through our results and business performance after 1:19 1 minute, 19 seconds which we will proceed for the question and answer sessions. Before we start, I just want to highlight that this call may include forward-looking statements 1:28 1 minute, 28 seconds based on the company's current views and expectations. Actual results could be different as future performance is uncertain and involve risk that are hard 1:37 1 minute, 37 seconds to predict. I will now hand over the call to our MD Mr. Palopenji. Over to you. 1:45 1 minute, 45 seconds Thank you Shishir. Good afternoon everyone. I welcome you all to the full year of financial year 26 earnings call. 1:54 1 minute, 54 seconds We continue to sustain our growth momentum in topline and bottom line despite the challenging and uncertain 2:01 2 minutes, 1 second macro environment driven by our focused execution multilocation and the multilocation presence. 2:10 2 minutes, 10 seconds In this year under review uh we crossed revenue of 5,000 cr and our EITA stood 2:18 2 minutes, 18 seconds at 468 cr at 9.3%. 2:25 2 minutes, 25 seconds Excluding the incremental loss at uh new facilities of Bihar and Guatemala and the tariff cost that we b beer this year stands at 10.3%. 2:37 2 minutes, 37 seconds Our installed capacity reached 101 million pieces peranom with the 2:43 2 minutes, 43 seconds completion of financial year 26. We feel that we are solidly on track with our 2:49 2 minutes, 49 seconds vision of FY28 shared with all of you earlier and all this while we continue to improve on our efficiencies, governance and rating. 3:02 3 minutes, 2 seconds Now an update on the key positive developments in our industry during this year. As you all know that uh uh we all 3:10 3 minutes, 10 seconds experienced a roller coaster ride with the US tariff uh in this year of 26 especially for India first a 25% tariff 3:20 3 minutes, 20 seconds was levied and on top of this uh another 25% penalty was put on to Indian goods 3:29 3 minutes, 29 seconds and both these are on top of the MFN duties already prevalent uh for us. Thus 3:36 3 minutes, 36 seconds the total charges went up to the range of 65 to 69% of Indian made garments out of cotton fabric. 3:48 3 minutes, 48 seconds After 6 months of this painful situation, a deal between US and India brought this EA tariff down to to 18%. 3:58 3 minutes, 58 seconds And then of course the US Supreme Court declared the IEPA tariff as not legal. 4:05 4 minutes, 5 seconds And now businesses in US are starting to file legal case for refunds. Though it may not be so easy as it sounds 4:14 4 minutes, 14 seconds and uh currently a 10% tariff under the section 122 is in place till the month of July for all countries exporting to US. 4:24 4 minutes, 24 seconds Meanwhile, the US retailers got a big respike from the tariff and consumer sentiments have been very positive as 4:32 4 minutes, 32 seconds seen in their results of the first quarter. Equally important for India would be the FDA which is signed between India and UK and between India and EU. 4:44 4 minutes, 44 seconds Although we still await the implementation date, customers have started visiting and are excited about this opportunity to diversify 4:54 4 minutes, 54 seconds uh their sourcing into India more and uh from the overdependence on duty-free countries like Bangladesh and Cambodia. 5:06 5 minutes, 6 seconds Now with these agreements alongside earlier bilateral and free trade agreements that was already in place, India will have preferential access to 5:14 5 minutes, 14 seconds all major global markets which are served by Pearl Global. Namely, they are USA, European Union, United Kingdom, Japan and Australia. 5:24 5 minutes, 24 seconds Meanwhile, other manufacturing hubs of ours such as Bangladesh, Vietnam, Indonesia already benefit from this duty-free access. 5:32 5 minutes, 32 seconds Thus ensuring that Pearl Global's diversified footprint remains highly competitive 5:39 5 minutes, 39 seconds with a comprehensive market access across geographies. We believe Pearl Global is strongly positioned to 5:46 5 minutes, 46 seconds continue its growth beyond financial year 28 while withstanding the potential shocks resulting from geopolitical 5:54 5 minutes, 54 seconds conflicts and everchanging global macro environment. 5:59 5 minutes, 59 seconds Now let me take you uh through the outlook across our geographies starting with India. Uh FI26 profitability 6:06 6 minutes, 6 seconds marginally improved despite the discounts which we extended to US clients during the tariff period to maintain the strong relationships that 6:15 6 minutes, 15 seconds we already have which had a temporary impact on our margins. 6:20 6 minutes, 20 seconds This improvement was driven by our cost restructuring. 6:25 6 minutes, 25 seconds With the removal of US tariffs along with the India U FDA and the UK FDA, we anticipate higher volumes, increased 6:33 6 minutes, 33 seconds sourcing from India and renewed growth in our Indian operations from financial 6:39 6 minutes, 39 seconds year 27 onwards which were impacted last year mainly because of US tariffs. We 6:46 6 minutes, 46 seconds already have a very significant existing business with customers of European Union and United Kingdom who are keen to 6:53 6 minutes, 53 seconds place business in India as well. By leveraging the expanded capacity and the enhanced capabilities that we have 7:01 7 minutes, 1 second recently established in India, we are ready to play an important role in driving growth and delivering the improved profitability going forward. 7:12 7 minutes, 12 seconds Moving on to Bangladesh. As a country, this is on track since the new elected government are uh operations that we have in Bangladesh are running smoothly. 7:25 7 minutes, 25 seconds Uh it is witnessing a strong growth in uh the government exports with shipments 7:32 7 minutes, 32 seconds to key markets such as Europe uh US, UK, EU, Spain. Uh, of course, Spain comes 7:40 7 minutes, 40 seconds under EU only and Canada showing consistent moment momentum. The ongoing capex project expected to be completed in uh first half of 2027. 7:52 7 minutes, 52 seconds It will further expand the capacity by approximately 6 million pieces over the next two years of financial year 27 and 8:01 8 minutes, 1 second financial year 28. Driven by recent customer additions, mature operations and upcoming capacity enhancements, our 8:09 8 minutes, 9 seconds Bangladesh operations are well positioned to sustain growth momentum and strengthen our contribution to overall performance. 8:17 8 minutes, 17 seconds In Indonesia, we have been updating you about our ramping up on our recently commissioned factory. Indonesia capacity 8:26 8 minutes, 26 seconds utilization has increased to 47% of its total established capacity that we have there in this year. Uh last year it was about 39%. 8:36 8 minutes, 36 seconds Now this is being driven by the customer demand and continued focus on the premium clients. We are confident that 8:45 8 minutes, 45 seconds our Indonesia operations will deliver both topline and bottom line from this year onwards. 8:52 8 minutes, 52 seconds In Vietnam during this year, we witnessed a strong growth momentum uh in our operations. Capacity utilizations 8:59 8 minutes, 59 seconds improved to 80% plus in the current year compared to 63% of last year. Vietnam 9:07 9 minutes, 7 seconds has proven to be an important manufacturing hub for the US market and continues to enhance our competitiveness across all other major geographies. 9:16 9 minutes, 16 seconds Encouraged by the strong customer traction, we plan to have additional capacity in Vietnam, which would further 9:24 9 minutes, 24 seconds deepen the customer engagement and increase the wallet share. 9:30 9 minutes, 30 seconds In Guatemala, we remain focused on improving efficiencies and reducing our losses with a positive outlook and 9:37 9 minutes, 37 seconds further progress expected in the coming financial year. 9:42 9 minutes, 42 seconds With that uh let me hand over to Sanjay Gandhi our group CFO to share the financial highlights. Sanjay over to you. 9:49 9 minutes, 49 seconds Thank you Sal. 9:52 9 minutes, 52 seconds Welcome all to our quarter 4 and full year FI26 earning calls. I will now take you through our financial and operational performance. 10:01 10 minutes, 1 second FI26 consolidated performance. FI26 was a record year for us where we marked our highest ever consolidated revenue 10:09 10 minutes, 9 seconds performance despite geopolitical uncertaintity. 10:13 10 minutes, 13 seconds Consolidated revenue grew to rupees 5,025 cr up 11.5% yearonear. This strong 10:21 10 minutes, 21 seconds growth was driven by volume and high value added products growth in overseas business. Adjusted AITA excluding ESOP 10:29 10 minutes, 29 seconds expense stood at rupees 468 cr up by 14% in FI26. Adjusted AITA margin stood at 9.3%. 10:39 10 minutes, 39 seconds Excluding tariff impact of 36 cr and incremental loss in Bihar and Guatemala approximately 13 cr. Adjusted aa margin 10:47 10 minutes, 47 seconds stand at 10.3% for the whole year. Pad in FI26 stand at rupees 270 core. strong growth of 17% on year-on-year basis. 10:57 10 minutes, 57 seconds Quarter 4, FI26, consolidate performance. In quarter 4, FI26, we achieved our highest ever quarterly revenue with total revenue standing at 11:05 11 minutes, 5 seconds rupes 1,314 cr approximately reflecting a growth of 6.9% yearonear. 11:12 11 minutes, 12 seconds adjusted a bit excluding ESOP expenses at rupees 135 cr up by 13.7% yearonear 11:18 11 minutes, 18 seconds with the margin at 10.3% which has been the highest ever a bit margin in any quarter so far adjusted a bit margin 11:27 11 minutes, 27 seconds excluding the reciprocal tariff impact of rupees 5 cr and incremental loss in Bihar and Guatemala of rupees 3 cr 11:33 11 minutes, 33 seconds adjusted a bit margins stands at 10.9% at a group level rose to 81 growth grew by 24.6% 11:43 11 minutes, 43 seconds year-onear. Now talking about standalone financial performance FI26 standalone performance in FI26 total revenue stored 11:52 11 minutes, 52 seconds at rupees 1,081 cr adjusted a bit excluding ESOP expense stand at rupees 67 cr with a margin at 6.2% 2% up by 12:01 12 minutes, 1 second 60th year on year mainly due to cost restructuring effort done in the organization adjusted a bit margin 12:09 12 minutes, 9 seconds excluding tariff cost of rupes 19 cr stands at 8% for full year patch stand 12:15 12 minutes, 15 seconds at 69 cr compared to 55 cr in fi25 quarter 4 standalone performance for quarter 4 fi26 total revenue stood at 12:25 12 minutes, 25 seconds rupees 304 cr adjusted a victa excluding esop expense stand at rupes 24 cr a bit margin at 7.9%. 12:33 12 minutes, 33 seconds Excluding tariff cost of rupees 5 cr adjusted a bita margin stand at 9.6%. 12:39 12 minutes, 39 seconds Pad stand at rupes 14 cr. Balance sheet highlights our strong performance at the group level is reflected in our 12:46 12 minutes, 46 seconds strengthened balance sheet. Net worth as in 31st March 2026 stood at rupees 1,438 12:54 12 minutes, 54 seconds cr compared to rups 1,146 cr as on 31st March 2025. 13:00 13 minutes Cash and bank balance excluding cash year mark for LC payment stood at rupees 634 cr as on 31st March 26 compared to rupees 513 cr as on 31st March 2025. 13:11 13 minutes, 11 seconds Working capital day stood at 43 days as on 31st March 2026. Return on capital employee stood at 28% as on 31st March 13:20 13 minutes, 20 seconds 2026. Other highlights in line with our stated dividend policy and commitment to shareholder return the company declared 13:26 13 minutes, 26 seconds a second interim dividend of rupees 8 rupees 50 pesa per share representing 170% of face value for financial year 13:35 13 minutes, 35 seconds 2526 the total dividend for fi26 stand at INR 14 rupees 50 pesa per share 290% 13:42 13 minutes, 42 seconds of the face value this is the highest ever dividend payout ratio uh by the company which represent 25% of the group 13:50 13 minutes, 50 seconds of fi May 26. We are happy to share that the company has achieved a notable improvement in its credit profile with the long-term credit rating upgraded 13:59 13 minutes, 59 seconds from triple B stable in in 2021 to a stable for a long term in 2026. So we 14:07 14 minutes, 7 seconds have been consistently improving our credit profile for last 5 years. 14:12 14 minutes, 12 seconds Concurrently, the short-term rating has advanced from IKRA A3+ to A1 plus, underscoring our robust liquidity and operational resilience despite a challenging macroeconomic environment. 14:23 14 minutes, 23 seconds Our installed capacity has crossed 100 million pieces milestone significantly ahead of our earlier target of H1 FI27 14:31 14 minutes, 31 seconds with Bangladesh ongoing capix expected to be completed by H1 FI27. This will further increase capacity by six to 7 14:39 14 minutes, 39 seconds million pieces during FI27 only from this capex. Capeex update for FI26. Please refer to slide 8 of the 14:48 14 minutes, 48 seconds investor presentation. A capeex of two 250 cr has already been committed and is expected to be completed by H1 FI27. 14:57 14 minutes, 57 seconds This timeline is in line with what was declared at the beginning of the financial year. Capeex planning for FI27. 15:05 15 minutes, 5 seconds We continue to build capacity and capability across group and we are in the process of outlining cipex commitment of rupees 200 250 cr for fi27 15:14 15 minutes, 14 seconds across geographies. We'll update you further on detailed keex plan in the coming quarters. 15:22 15 minutes, 22 seconds Couple of commitment which has already been approved by the board in quarter one are as follows. The company through its step down subary company DSSP Global 15:31 15 minutes, 31 seconds Limited Hong Kong will be acquiring an additional 10% stake from minority shareholder in PT panacle apparel 15:37 15 minutes, 37 seconds Indonesia for a consideration of dollar 1.4 4 million. Post the accusition the company through its step down subsidy 15:45 15 minutes, 45 seconds will hold 99.92% stake in PT panacle apparel Indonesia. We have also 15:52 15 minutes, 52 seconds identified a land parcel in Vietnam and are in advanced stage of concluding the purchase the purchase consideration 15:59 15 minutes, 59 seconds could be in the range of $2.5 to $3 million. In summary, we have sustained the growth momentum built in earlier 16:06 16 minutes, 6 seconds years. FI26 performance testament to the strength of the Pearl global diversified business model which has enabled us to 16:13 16 minutes, 13 seconds sustain growth even in uncertain geopolitical environment. With this I now I now hand over to the moderator to open the floor for questions and answer. 16:26 16 minutes, 26 seconds Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star 16:33 16 minutes, 33 seconds and one on the touchdown phone. If you wish to remove yourself from the question queue, you may press star and 16:40 16 minutes, 40 seconds two. Participants are requested to use your handset while asking a question. 16:45 16 minutes, 45 seconds Ladies and gentlemen, we'll wait for a moment while the question queue assembles. 16:54 16 minutes, 54 seconds The first question is from the line of Bat Guli from Dalal and Rocha. Please go ahead. 17:02 17 minutes, 2 seconds Yeah. Hi sir, thank you for the opportunity and congratulations on a great set of numbers. I just had a question regarding uh you know growth 17:10 17 minutes, 10 seconds that has come in in this quarter. India has seen a sharp degrowth of about 23% and which predominantly is an India 17:18 17 minutes, 18 seconds heavy quarter and its overall contribution last quarter from 32 has dropped to 23 whereas the other segment 17:25 17 minutes, 25 seconds that we report in our audited results that has shot up significantly on a Qoq and Yi basis to 200 214 crores which I 17:35 17 minutes, 35 seconds predominantly understand as Guatemala so could you explain where that spike came in and also we've achieved profitability in that segment so Just wanted to 17:42 17 minutes, 42 seconds understand the sustainability of that EBIT going forward. Yeah. 17:49 17 minutes, 49 seconds Okay. I will start and then Sanjay can add to it. See what happened in India was we were uh under the uh very high 17:56 17 minutes, 56 seconds tariff from US market of almost 50%. So most of our retailers were pushing us to take out as much as goods from India and 18:05 18 minutes, 5 seconds manufactur in the other countries. So but still like we certain uh customers like which we are serving only from India we continue to pay the discounts 18:13 18 minutes, 13 seconds and still continue to have the goods in India. So that's that's the reason you are seeing that uh the India total number has come down for this quarter. 18:26 18 minutes, 26 seconds Now why in this particular quarter? 18:27 18 minutes, 27 seconds because since August of uh 2025 this tariff was levied and whatever was the existing orders that we already had at 18:36 18 minutes, 36 seconds that point of time was shipped out by mostly by about December and Jan. So that net impact of of the US tariff uh 18:45 18 minutes, 45 seconds or the reduction of business specifically in India came in this period of time. other markets continued 18:53 18 minutes, 53 seconds uh and similarly like most of these US gain that we have in terms of uh the customers wallet share and other thing 19:02 19 minutes, 2 seconds that we took their advantage from the other locations of ours in terms of numbers you want to give 19:09 19 minutes, 9 seconds yeah uh thanks so the first there two three points which you mentioned in your queries first is the growth in overseas 19:17 19 minutes, 17 seconds business growth in overseas business is coming from uh the volume and the value added product from primarily from you 19:26 19 minutes, 26 seconds know uh Vietnam, Bangladesh and Indonesia. Um so that's that's the first part of the question you know uh which 19:33 19 minutes, 33 seconds is there. Uh second is I think you mentioned about sustainability of EIT margin which has been uh achieved 19:42 19 minutes, 42 seconds how sustainable it will be. So given that you know we have mentioned earlier in the in our earlier earning calls as well that you know inherently if you 19:50 19 minutes, 50 seconds look at the business capability um once we exclude the reciprocal tariff and the initial ramp up or setup cost in 19:59 19 minutes, 59 seconds operation like Bihar we have been consistently maintaining and delivering that 10% double digit a bit margin now 20:07 20 minutes, 7 seconds having delivered now 10% having achieved 10% a bit margin for this quarter um after looking at all the uh strength and 20:16 20 minutes, 16 seconds the ch you know addressing the inefficiency which is there um in some pockets which you mentioned about the losses in Guatemala and Bihar we are 20:24 20 minutes, 24 seconds pretty confident at this stage to really um maintain 10% a bit for the full year as we start FI27. 20:35 20 minutes, 35 seconds Um third question was about the gross margin. The gross margin is largely a function of the product mix. So given 20:42 20 minutes, 42 seconds the product mix we have it's a it's also a seasonal you know on a quarterfold if you are really referring to that is something is a combination of the 20:51 20 minutes, 51 seconds product mix customer mix. So given the same consistency of the product and customer mix we believe that profile 20:58 20 minutes, 58 seconds will also uh continue for the same quarter you know every quarter is a different quarter because of seasons 21:06 21 minutes, 6 seconds seasonality in our business. So that will continue and uh I guess these were the three points which were to be covered. I hope I have addressed all of them. 21:16 21 minutes, 16 seconds So I it was more specifically related towards the other segment that we report which is primarily Guatemala to my understanding that has seen a huge spike 21:24 21 minutes, 24 seconds up this quarter. So is that going to be sustainable on the top line and bottom line because we've delivered about 85 million in EBIT in that section and 21:33 21 minutes, 33 seconds about 214 crores in terms of topline. So is that run rate is going to be sustainable going forward even as India business and everything comes back? Just trying to understand that. 21:44 21 minutes, 44 seconds Yeah. So I would just like to correct here in our segment reporting we mentioned Hong Kong, India, Bangladesh, Vietnam and others. So um so what 21:53 21 minutes, 53 seconds happened Guatemala is part of our other segment where we have Indonesia as well. 21:58 21 minutes, 58 seconds We have uh Dubai entity as well. We have US entity as well. So it's not Guatemala which is bringing the quarter 4 growth. 22:05 22 minutes, 5 seconds It's as I mentioned the growth is coming largely because of the uh high value and the volume which is being driven in 22:12 22 minutes, 12 seconds Bangladesh, Vietnam and Indonesia that has been the large causal driving and as I mentioned that these growth and these number are sustainable number on a 22:21 22 minutes, 21 seconds yearon basis in the same quarter by quarter. 22:26 22 minutes, 26 seconds So sir it would be fair to say that this quarter has been a huge spike up in Indonesia revenue which has aided for the loss in revenues from India. that would be the right understanding. 22:36 22 minutes, 36 seconds Uh all three all three all three as I mentioned you know see we have we follow a built to ship to model. 22:41 22 minutes, 41 seconds So the Dubai, US and Hong Kong sorry Dubai, US and Indonesia, Guatemala all will be combined in that other segment. 22:51 22 minutes, 51 seconds So there is a growth of transaction in all these three geography and that billing which happened to US and Dubai 22:58 22 minutes, 58 seconds happen for all the Bangladesh operation also Vietnam operation and Indonesia operation. So largely it is it is it is 23:05 23 minutes, 5 seconds a combination of three entity which is really pushing the sale up and we believe that you know this will be sustainable. Yeah 23:13 23 minutes, 13 seconds got that. Got that. And in terms of Guatemala, are we still in losses in Guatemala and that do we achieve the break even in the start of FI27 or will 23:22 23 minutes, 22 seconds that take some time to achieve that uh break even? 23:27 23 minutes, 27 seconds Yes. So Guatemala operations uh we have reworked on the strategy of operations 23:34 23 minutes, 34 seconds in Guatemala and given that strategy you know as we are in the first quarter of FI27. 23:40 23 minutes, 40 seconds I seem that it is working out and we should be able to have break even in FI27. 23:47 23 minutes, 47 seconds uh we'll keep you updating as the progress happen during the quarter but our estimate and our strategy with the way it is devised is to really 23:55 23 minutes, 55 seconds definitely achieve a break even in this year got that I got that and just in terms of IBIT I E I E I E I E I E I E I E I E I E 24:03 24 minutes, 3 seconds I E ITA margins for India you know excluding tariffs we've achieved the 9.6% 6% IITA in India. Can we expect 24:09 24 minutes, 9 seconds this IBITA to go to group levels by FI28 and uh just on where do we see this number going forward given that with 24:18 24 minutes, 18 seconds such significant degrowth and topline and delever we still were man managed to get this margin in 24:26 24 minutes, 26 seconds yeah so as a part of so quarter 4 for India if you see the last year we had 24:32 24 minutes, 32 seconds 10.2% 2% a bit. Uh so seasonality wise if you look at India the quarter 4 has always been the robust and will continue 24:40 24 minutes, 40 seconds to be the robest and we are pretty confident that India also should generate definitely quarter 4 specifically if I have to mention in 24:48 24 minutes, 48 seconds FI27 as well uh double digit AITA and our effort is to have high singledigit AITA for the full year um and for sure 24:58 24 minutes, 58 seconds you know as we accomplish that number you know in standalone result that will get reflected in the group result as well on the higher side it will it should show improvement there on. 25:09 25 minutes, 9 seconds Got it. Got it sir. And just on you know the aim that we set out for FY28 to have a builtout capacity of 125 to 130 25:17 25 minutes, 17 seconds million odd pieces. Just trying to understand how much of that capacity that we add going forward from here which is roughly some 25 30 million odd 25:25 25 minutes, 25 seconds capacity would be utilizable in FY28. 25:31 25 minutes, 31 seconds So if you see like we continue to uh expand our capacity uh already we have given you the details of uh the 25:39 25 minutes, 39 seconds Bangladesh expansion which started and I think uh those factories the two two units that we are setting up one for 25:46 25 minutes, 46 seconds washing and one for uh stitching garments. So both will be ready in the second half of uh this year and uh that 25:54 25 minutes, 54 seconds I think ramp up will continue to happen within uh this year and and the next year in terms of the output production. 26:01 26 minutes, 1 second Um and similarly like you know we uh as you just heard that we are also looking at Vietnam expansion because uh there is 26:10 26 minutes, 10 seconds a good opportunity of business out there and so we are buying a land and building up a green field project as there as 26:16 26 minutes, 16 seconds well. Uh so all the details of that what size uh of capex and all uh will be uh 26:24 26 minutes, 24 seconds told to you as we go through the all the details in the next few quarters. Um in terms of India also like we had started 26:31 26 minutes, 31 seconds the Bihar factory now is in the ramping up phase. So all these things if you look at it today as I speak on 31st of 26:38 26 minutes, 38 seconds you know looking at 31st of March where we were uh we were at 101 uh million 26:45 26 minutes, 45 seconds pieces of our established capacity now all of all of the factories are not running on full capacity or we haven't 26:52 26 minutes, 52 seconds hired all the people as yet because it's in the ramp up mode and uh as you know in governments like you know we go line by line once uh the production 27:01 27 minutes, 1 second establishes in one line profitability then we go into the next. So that's the kind of you know uh you will always see that we are putting more and more 27:09 27 minutes, 9 seconds capacity. So by 2028 what we had for uh foreseen is that we 27:16 27 minutes, 16 seconds should be having a established capacity of anywhere between 125 to 130 million and we should be shipping around 100 27:24 27 minutes, 24 seconds million to uh sorry 100 million pieces uh to get to that uh target of 6,000 cr that we spoke about. 27:35 27 minutes, 35 seconds Got it. Got it. And just on realizations, if I can squeeze in one last question, the tariff impact once it goes out of our business, how much 27:44 27 minutes, 44 seconds realization gain will that bring us? Uh if you can just clarify that. 27:50 27 minutes, 50 seconds So there will be gain but very difficult to quantify from the point of view of how much the tariff cost will actually 27:58 27 minutes, 58 seconds translate because every season will start a fresh negotiation and a discussion and the fresh cost structure. 28:04 28 minutes, 4 seconds So ideally speaking you know if you look at your number there will be a definitely uh improvement and that's what is giving us a confidence that you 28:12 28 minutes, 12 seconds know in this full year basis we should be achieving a 10% a bit margin which really factor into you know some of the 28:18 28 minutes, 18 seconds cost which incurred in FI26 will not be there in FI27 and the operational uh improvement which we just mentioned in 28:27 28 minutes, 27 seconds your earlier question regarding Guatemala. So I think these two factor which we really analyzed it and looked at it gives us a good confidence of you 28:36 28 minutes, 36 seconds know having achieving a 10% a bit on a full year basis. 28:40 28 minutes, 40 seconds So would it be fair to say that realization from here would improve at least not go down? 28:49 28 minutes, 49 seconds That's the target realization. We are already a 635 640 rupees per uh government and um I think they should it 28:57 28 minutes, 57 seconds should continue or should sustain an per unit per unit. It also depends on what kind of ratio that we are ending up 29:04 29 minutes, 4 seconds uh between uh knits and woven like if you're doing and the customer base. So that will be uh always uh you know 29:12 29 minutes, 12 seconds depending on where the need is what kind of uh you know demand that we are seeing from which segment of the customer base. 29:19 29 minutes, 19 seconds So if it is more of uh the uh Primarks and other people like where the FOBs are less so then that will swing the uh 29:27 29 minutes, 27 seconds number to a little bit. So that's something very difficult to predict but yes our overall goal is 600 plus as Sanjay mentioned 630 and all. 29:38 29 minutes, 38 seconds Sorry, sorry to interrupt. Mr. Gulati, please join the queue for more questions. 29:46 29 minutes, 46 seconds The next question is from the line of Kishor Kumar from Unifi Capital. Please go ahead. 29:54 29 minutes, 54 seconds Yeah. Uh good evening sir and uh first of all congrats to the team for delivering such a resilient performance in Q4 30:01 30 minutes, 1 second 26. uh sir I'd like to start with your comments on energy consensation and its impact on uh the uh raw materials and 30:09 30 minutes, 9 seconds the right cost that you have mentioned in the Mr. presentation. So as you know the cotton prices uh and the polyan prices have increased a lot since the 30:18 30 minutes, 18 seconds start of the war and how is pearl global managing this and is the current pricing negotiation that they are actually doing with our customers uh reflecting the 30:27 30 minutes, 27 seconds increase uh plus uh given the increasing inflation um all around the globe uh particularly in the US uh what are you 30:35 30 minutes, 35 seconds hearing from your customers and how do you see the demand trend panning out in the coming quarters? 30:44 30 minutes, 44 seconds Yeah. So, uh if I go one by one, first of all, the energy impact uh two parts to it like whatever is a raw material 30:52 30 minutes, 52 seconds cost increase that is coming because of this is visible to us as well as our customers. So when uh we negotiate price 31:00 31 minutes normally we give that visibility okay this is the raw material cost and this is our uh additional u value addition that we are doing. So generally uh that 31:09 31 minutes, 9 seconds impact is suddenly like you know if if you book the business and after that some uh you know increase happens then 31:16 31 minutes, 16 seconds it impacts us otherwise uh and that also at a maximum of about 1 to two month. So that's a that's how like our industry uh 31:25 31 minutes, 25 seconds the impact should be less but yes because of energy impact if if manpower is missing or uh if something happens on 31:32 31 minutes, 32 seconds that regard then it will be a uh another problem for us. uh what we see as of now 31:39 31 minutes, 39 seconds uh these both these things are workable and uh manageable 31:46 31 minutes, 46 seconds in terms of demand trend that you're talking about in US because of the uh current inflation uh inflationary uh 31:54 31 minutes, 54 seconds environment that US is undergoing uh surprisingly like you know the resilience that we are seeing from the consumers uh and the buying pattern so 32:03 32 minutes, 3 seconds that's uh definitely is quite good at this point of time uh if you see like if you compare with 2022 when the oil 32:12 32 minutes, 12 seconds prices were in the similar range of 110 an hour that time we saw that there's a huge drop uh in the consumer sentiments 32:21 32 minutes, 21 seconds so we have not seen that in US so far uh yes uh the you know experts are talking 32:28 32 minutes, 28 seconds about in the second half of uh US there could be a little bit of you know more inflation and more slowdowns but let's see like as of now we are not seeing 32:36 32 minutes, 36 seconds that trend Got it sir. So just a followup. So when we actually book a new order, we 32:42 32 minutes, 42 seconds simultaneously place uh fabrics from with 32:49 32 minutes, 49 seconds Yes. So as soon as we as soon as the order to us Yeah. immediately we place the business and then the raw material costs are already fixed with the supplier. 32:59 32 minutes, 59 seconds Yeah. Correct. Got it. Got it. Got it. 33:01 33 minutes, 1 second Uh sir also uh you spoke about uh uh the the incremental capacity that we are actually bringing in in India and in 33:08 33 minutes, 8 seconds Bangladesh uh and uh the U EU and UK FTA being the uh uh 33:16 33 minutes, 16 seconds the business which actually will come in the coming quarters. Uh but given this actually the tariff cost we actually 33:23 33 minutes, 23 seconds moved some of the business from India to the other uh regions. Do you see that coming back to India uh which will actually can aid in the capacity utilization in the interim? 33:35 33 minutes, 35 seconds Yeah, I think uh both are applicable. 33:38 33 minutes, 38 seconds one because of these FTAs we are seeing uh a lot of interest especially from the UK and EU customers like who were earlier if you see if you study these 33:46 33 minutes, 46 seconds customers they were heavily penetrated in countries like uh Bangladesh, Cambodia and all where because of their 33:54 33 minutes, 54 seconds LDC status there was no uh tariff now that uh today like if India opens up as a much more stable country much larger 34:03 34 minutes, 3 seconds country definitely their preference would be to uh you know have a bigger presence in India So that trend is already started. Most 34:10 34 minutes, 10 seconds of these customers we were already doing business in Bangladesh. Uh they were they are in fact uh engaging with us to 34:19 34 minutes, 19 seconds grab some cap additional capacity in India. So that's one thing that we can uh see already happening. Uh 34:27 34 minutes, 27 seconds whether uh these business of US which was shifted to uh other countries will come back to India. Yes, for the ones 34:35 34 minutes, 35 seconds that the raw material is easily available in India and is more competitive than the other countries, definitely it makes sense to produce 34:43 34 minutes, 43 seconds those kind of goods uh in India. So we will continue to take that call. In terms of our capacity, yes, what we are seeing is uh today the order book that 34:52 34 minutes, 52 seconds we have and the capacity that we have in India that's perfectly matching. 34:58 34 minutes, 58 seconds Industry pretty clear. Uh although sir uh uh we were actually keeping a target of 6,000 cr topline in FI28 and that 35:06 35 minutes, 6 seconds translate to a 9% CG over the next two years. Uh is is that the minimum that you are targeting or should be keen actually uh 12 percentage to 14% that we 35:15 35 minutes, 15 seconds are guiding for the last year. Uh so 12 to 14% is something like we have been talking about as a CAGR that we 35:24 35 minutes, 24 seconds have planned. Of course there are certain years where uh we get uh more opportunity to grow the business like it 35:31 35 minutes, 31 seconds happened uh last year uh we had a reasonable growth in Bangladesh and all. 35:37 35 minutes, 37 seconds So that's that's something like compared to that like this year because of tariff from US uh with all the global all 35:44 35 minutes, 44 seconds countries of sourcing. So there was definitely some kind of you know that growth pattern was slowed a little bit but I think uh yes if the more 35:53 35 minutes, 53 seconds opportunity comes then we should be growing at a faster rate at least we are ready in terms of our capacity uh otherwise like you know the goal of 36:01 36 minutes, 1 second 6,000 cr as you said is achievable even with the modest growth of 9% of both the years so yes we are quite confident that 36:08 36 minutes, 8 seconds we should be hitting that target and and maybe more. 36:13 36 minutes, 13 seconds Got it. So lastly a bookkeeping question given the incremental uh capacity that we are adding in India in Bangladesh in 36:20 36 minutes, 20 seconds H2 um how much incremental startup cost should we actually factor in um the 10%age that we are guiding for uh FI27 36:29 36 minutes, 29 seconds does it include the incremental cost and what is the incremental depreciation that should be that we should gain 36:37 36 minutes, 37 seconds yes so it does factor into the incremental cost which will be incurred during the stabilization ation phase. Uh 36:44 36 minutes, 44 seconds in terms of the depreciation, if you look at our balance sheet, the capital work in progress is at 110 cr rupees. 36:53 36 minutes, 53 seconds This is largely pertaining to the Bangladesh factory expansion plan. Uh there will be addition or you know there 37:01 37 minutes, 1 second are some commitment already done. Some work is in progress in H1 of this year which we said you know at by that time the entire factory should be ready. So 37:10 37 minutes, 10 seconds we should have another 40 50 cr adding to that uh capitalization. So around 150 will be there as we see it as of now on 37:19 37 minutes, 19 seconds account of the ongoing capex. Now if during the year as we are under as we are evaluating uh the capital commitment 37:26 37 minutes, 26 seconds across geographies there can be a further addition which will update you in the maybe in the next quarter or you know if we have call it anytime before 37:34 37 minutes, 34 seconds the depreciation the depreciation will come around on that. Thank you sorry for interrupting Mr. 37:43 37 minutes, 43 seconds Kumar please rejoin the queue for more questions. A reminder to all the participants please restrict yourself for three questions per participants. 37:52 37 minutes, 52 seconds The next question is from the line of sum Samantha from Motivival Oswald. Please go ahead. 38:01 38 minutes, 1 second Yeah, thanks. Thank you sir for the opportunity. So just wanted to check one thing when is saying 6,000 K target for 38:08 38 minutes, 8 seconds Sy 28 and on the other hand we are saying our realization is 660 630 now 38:15 38 minutes, 15 seconds and we are saying 100 million sleeping target by 28. So things are matching. So 38:22 38 minutes, 22 seconds do we look realizing declining for next couple of years? 38:28 38 minutes, 28 seconds So let me answer that. uh 6,000 cr is something that we talked about in 2023. 38:35 38 minutes, 35 seconds Yeah. So that's the time that we gave ourselves this target and uh so naturally what we are seeing today in the last few years like we have been 38:42 38 minutes, 42 seconds ahead of that and if if if this uh trend continues like which we as of now we are quite confident what we are seeing in this particular year. So naturally uh it 38:52 38 minutes, 52 seconds should be like you know more quite more than uh 6,000 cr. So that's yeah is it correct to assume 12 to 13% 39:00 39 minutes is achievable by looking the current trend. 39:05 39 minutes, 5 seconds Yeah, if if if our global leaders continue to be sensible, I think uh that's the kind of you know rate that uh we have planned for. 39:16 39 minutes, 16 seconds Okay. And in that case, if it is continue in that case, so what will be the driver like is it fair to assume 39:23 39 minutes, 23 seconds that Bangladesh would be the largest driver in that business? 39:28 39 minutes, 28 seconds So we tend to uh Bangladesh is always in this period of last 3 to four years you have seen Bangladesh was contributing uh 39:35 39 minutes, 35 seconds a major part of of our uh total turnover. Uh so at the same time we have been investing 39:44 39 minutes, 44 seconds in the other market for example uh this year if you look at overall growth I think uh Vietnam is more than the Bangladesh the rate of growth that we 39:51 39 minutes, 51 seconds have seen. Uh so that's with that keeping in mind we are continuing to invest in Vietnam, Bangladesh and uh 40:00 40 minutes India like because India despite the problems we have not stopped uh you know increasing our capacity because we think these are temporary and at some point of 40:09 40 minutes, 9 seconds time uh it will be uh better. So that's that's something like we are in cashing upon at this point of time as this 40:16 40 minutes, 16 seconds demand is coming back. So we are investing in all the region not specifically only to Bangladesh 40:23 40 minutes, 23 seconds but uh if we to change the number 12 to 13 in that case Bangladesh could be more than 20% growth 40:31 40 minutes, 31 seconds are we looking for next couple of years I I think we look at a group level we 40:41 40 minutes, 41 seconds mentioned that 12 to 14% keger is something we are working upon and uh given that trajectory you know in one 40:49 40 minutes, 49 seconds year one origin will contribute more in second year other origin will contribute because the capacity commercialization 40:57 40 minutes, 57 seconds and is uh you know has a lag so it will keep on happening and you know uh the every country will contribute significantly so overall at a group 41:05 41 minutes, 5 seconds level we are looking at 12 to 14% growth to continue got it and the last from my side that 41:13 41 minutes, 13 seconds you said that double digit lower double digit margin will continue. So uh we expect that similar like 10 to 11% 41:21 41 minutes, 21 seconds margin will continue for food right 27 I lost your voice in the sorry I think 41:35 41 minutes, 35 seconds your your question is about the margin the beta margin right margin for everybody yeah 41:42 41 minutes, 42 seconds yeah so I mean so our trajectory is definitely 10 to 12% So 10% is our first uh big milestone from you know the 41:50 41 minutes, 50 seconds company perspective given that you know the expansion which has been taking place. So so yeah I mean uh we we are we 41:57 41 minutes, 57 seconds are looking at a range of 10 to 12% in coming years uh starting with FI27. 42:05 42 minutes, 5 seconds Okay. Thank you. 42:12 42 minutes, 12 seconds Thank you. A reminder to all the participants, please list yourself to three questions per participants. The next question is from the line of Abhishek Shankar from ICICI direct. 42:24 42 minutes, 24 seconds Please go ahead. 42:25 42 minutes, 25 seconds Uh thank you for taking my question. Uh and congrats on a good set of results. 42:31 42 minutes, 31 seconds So my question was basically uh when I see the inventory days it is you know uh moved up a bit and is it fair to assume 42:38 42 minutes, 38 seconds that this inventory days movement is basically because of lower shipments in quarter 4 or maybe in the second half of 42:45 42 minutes, 45 seconds the year because of the second half of the quarter because there was a lot of issues relating to the shipments. 42:53 42 minutes, 53 seconds So I would uh so that's also one way of looking at it. The second way of looking is that it also depict the higher shipment which is expected in quarter one. 43:04 43 minutes, 4 seconds Okay. Okay. Okay. Okay. Yeah. So, yeah. 43:07 43 minutes, 7 seconds Thanks. That that was the only question I have. If I have anything, I'll just join back to the Thank you. 43:15 43 minutes, 15 seconds Thank you. The next question is from the line of H Dubai from LF LFC Securities. Please go ahead. 43:24 43 minutes, 24 seconds I say congratulations on good set of numbers and very happy with the results. Uh just having uh one or two questions. 43:32 43 minutes, 32 seconds Uh so first is when we when we talk about Muji I just wanted to understand uh uh we do have numbers for the 43:40 43 minutes, 40 seconds contribution from our top three clients from the perspective of how much as a vendor we contribute to their sourcing. 43:46 43 minutes, 46 seconds Uh just from the movie perspective since it's going to move from a tactical segment to a top tier. So what is an 43:53 43 minutes, 53 seconds expectation of Muji contributing to our revenue and then uh how much do we currently contribute to their vendor uh 44:01 44 minutes, 1 second uh contribution that like uh the supply that we do to them. 44:09 44 minutes, 9 seconds So um Muji is a a Japanese uh brand as you know. Uh so they have been working 44:16 44 minutes, 16 seconds with us for some time. Once the confidence get built up then uh they grew more rapidly in the last uh 2 to 44:23 44 minutes, 23 seconds three years. Uh we will continue to grow with them. We are uh you know at this point of time uh we are in discussion 44:32 44 minutes, 32 seconds with them to grow further. So both India and Bangladesh is the two countries that we are servicing from and they're looking at uh the other country of 44:40 44 minutes, 40 seconds origin as well potentially as a as a source. So um in terms of uh total 44:48 44 minutes, 48 seconds turnover from Muji, we had already crossed about I think $65 million uh dollars. Yeah. So so that will continue 44:56 44 minutes, 56 seconds to grow. Uh that's why like you know maybe your question is in the top six. 45:00 45 minutes Yes, it is figuring in the top six and uh we expect uh it to continue to be there. 45:06 45 minutes, 6 seconds Perfect. So just on this so uh just when when Muji has like let's suppose when they when they are taking uh you know 45:13 45 minutes, 13 seconds they have lot of vendors so how much as a vendor we contribute to their sourcing is is one of the questions that I wanted to understand. 45:22 45 minutes, 22 seconds So unfortunately that's not visible to me as yet. Uh as we become more and more important to them and when I uh get that 45:31 45 minutes, 31 seconds visibility I can definitely share with them. Like for some of the US customers I have already said that okay we are at number one position or number two position or number three position but 45:38 45 minutes, 38 seconds yeah with Japanese uh it might take a little bit more time uh to get to that level. Sure of trans. Sure. 45:46 45 minutes, 46 seconds Perfect. Uh just on this uh when we say that we have Muji as a Japanese client what I wanted to also understand is we 45:54 45 minutes, 54 seconds said that we are also looking for other Japanese players to be onboarded as our client. Just just as an example if if is there is there a plan further to go with 46:02 46 minutes, 2 seconds Uniqlo which is one of the brands Japanese brand since they are already working with Muji. 46:10 46 minutes, 10 seconds So yes Japanese as a market uh we are looking at more seriously and and what are the opportunities are there 46:17 46 minutes, 17 seconds specifically uh if you're talking about Uniqlo uh that's not on the priority because these two brands compete with 46:24 46 minutes, 24 seconds each other um to a certain extent. So, so that's why like there are many other brands uh or maybe like you know uh fast retail has got a couple of more brands. 46:36 46 minutes, 36 seconds Um so yes all those are in the scope and uh we will be uh putting all the effort 46:43 46 minutes, 43 seconds to have a couple of more customers to Japan. 46:47 46 minutes, 47 seconds Perfect. Uh on this uh just u another question uh so this will be having three parts. First is that uh we were saying 46:55 46 minutes, 55 seconds that we are expecting to add uh uh you know new client in India. Uh so uh any update on that uh as of now and also the 47:05 47 minutes, 5 seconds second part to the question is uh we do say that uh we are expecting approximately 12 to 14% growth. Now uh 47:13 47 minutes, 13 seconds as for my understanding all the brands that we do cater to uh have a growth rate right now of approximately 7 to 8%. 47:21 47 minutes, 21 seconds So the other uh extra 4% increment will that be majorly through the vendor consolidation and specifically how much 47:30 47 minutes, 30 seconds is Pearl Global expected to benefit from this vendor consolidation that is happening. 47:39 47 minutes, 39 seconds So the uh addition of new clients yes as a group we continue to add new clients uh we go as per the need of the clients 47:48 47 minutes, 48 seconds which country of origin they are looking at and and what kind of product they're looking at. So yes anybody uh any uh once we identify okay these are the two 47:56 47 minutes, 56 seconds or three clients that we should be working with as I said earlier also like you know what we do is we look at the growth of the client their positioning 48:04 48 minutes, 4 seconds in the market and their financial uh how confident we are about their financial. 48:08 48 minutes, 8 seconds So these three things are the ones like what we consider while adding a client. 48:13 48 minutes, 13 seconds uh so specifically for uh India and other country I think uh that would be too immature for me to say at this point of time but yes we are continuously 48:21 48 minutes, 21 seconds adding clients uh sorry this second part of your question was uh in terms of 12 to 14% growth uh what specifically was that can 48:30 48 minutes, 30 seconds you just repeat uh so my question was we say that 12 to 14% is the revenue growth that we expect but major of our clients 48:38 48 minutes, 38 seconds that we serve to have 8 7 to 8% of the growth so are we expecting another 4% to 5% growth coming from the vendor 48:46 48 minutes, 46 seconds consolidation happening and how probably uh we are going to experience that vendor consolidation 48:53 48 minutes, 53 seconds that's that's like you know gaining more and more wallet share of that particular customer by uh working very closely with them uh giving them uh best of the 49:02 49 minutes, 2 seconds services best of designs so it it's a variety of factor and you know as per global uh one the strength that they see 49:10 49 minutes, 10 seconds is definitely a multilocation and multicategory. So both both these uh you know factor also plays as we gain 49:18 49 minutes, 18 seconds more and more wallet share from the same customer. So that's why like you know our growth rate we expect at least to be better than theirs. 49:32 49 minutes, 32 seconds Thank you Mr. Dubai. I would request you to join the queue for more questions. 49:38 49 minutes, 38 seconds The next question is from the line of Gandhi from Bajage Alternative Investments Limited. Please go ahead. 49:47 49 minutes, 47 seconds Yeah. Hi, thanks for the opportunity and congratulations on good set of numbers. 49:52 49 minutes, 52 seconds Uh my first question is regarding uh the entire 250 cr that uh will will it be 49:58 49 minutes, 58 seconds enough to uh do capacity addition of 25 to 30 million pieces or we'll have to spend beyond 250 crores. 50:11 50 minutes, 11 seconds So uh this 250 crores will see the addition of the capacity. First of all let me break this question into two 50:19 50 minutes, 19 seconds part. The addition of capacity has always been a and will always remain a combination of inhouse facility plus the 50:25 50 minutes, 25 seconds partnership facility. Uh both are under under discussion at this point in time as we really speak. Part of it is 50:33 50 minutes, 33 seconds factored in the capex program which we just mentioned about 252 cr for the next financial year. Um the one which is underway should add 6 to 7 million 50:42 50 minutes, 42 seconds pieces from to 100. So we should be at 107 plus additional 20 20 million pieces that will be uh capex plus the 50:50 50 minutes, 50 seconds additional uh partnership facility. Um there may be more cipex beyond 250 cr as 50:56 50 minutes, 56 seconds well which is outlined for fi27 but this we as we mentioned that we are evaluating it. This is a ballpark number 51:03 51 minutes, 3 seconds given the the number of actual capex may be more than that as well. So so yes that's the intent. 51:11 51 minutes, 11 seconds Okay got it fair enough. And sir last 2 three years you've taken various steps to increase the margins. I believe that those have played out also going forward 51:21 51 minutes, 21 seconds are there any further room for margin improvement all these steps like something uh like a laundry uh that you 51:28 51 minutes, 28 seconds had established in Bangladesh and there were various other margin levers that you were predicting you know I mean that would lead to margin expansion over the 51:35 51 minutes, 35 seconds years. So are there still uh room for margin expansion going forward? 51:42 51 minutes, 42 seconds Yes. So uh B very appropriately you captured that point of laundry capix. So that will not have an impact on the top 51:51 51 minutes, 51 seconds line but it will improve the AITA margin. So there is a improvement coming from that as well. the 10% AITA which we 51:59 51 minutes, 59 seconds are confident for FI27 is largely um operational AITA which we think we should achieve it um given that you know 52:07 52 minutes, 7 seconds the way the business capability as of now has been established and demonstrated across the last four quarter and continue to be so therefore 52:15 52 minutes, 15 seconds we say that you know journey of 10 to 12% will be combination of all these uh capital expenditure like laundry and there may be other uh other kishes as 52:25 52 minutes, 25 seconds well which will improve the margin profile of the company. Um and while we continue to work on the various uh 52:32 52 minutes, 32 seconds customer and product profile to really uh bring more enhance and the value addition in overall margin profile of the company. 52:41 52 minutes, 41 seconds Got it sir. And for this 25 and 30 25 to 30 million piece addition pieces edition uh have we already logged customers or 52:49 52 minutes, 49 seconds are we seeing any visibility from the customers over next maybe couple of years or some have we engaged with the customers for this new capacity addition 52:57 52 minutes, 57 seconds that you are planning from a demand standpoint. 53:03 53 minutes, 3 seconds So, so yes, what we are saying is that we continue to grow with the existing 53:10 53 minutes, 10 seconds customer and then we also bring in uh the customer. So whether uh a customer has committed a number to us for this 53:17 53 minutes, 17 seconds extra additional 25 to 30 million uh over the next two years. I I had mentioned this earlier also in our other calls that we do have uh certain 53:26 53 minutes, 26 seconds strategic uh discussion with these customers where we get some amount of visibility. 53:31 53 minutes, 31 seconds So whether uh like it is everything is perfect and uh goes as per it's not a long-term order that they're placing 53:39 53 minutes, 39 seconds with us. So we do strategize with the customers which category they are buying from us and what are the additional category they will be buying from us uh 53:46 53 minutes, 46 seconds in future what is their size and requirement. So that discussion continues to happen as we uh do it with 53:53 53 minutes, 53 seconds our existing customer as well as uh when we add a new customer. We look for the opportunity what is their requirement 53:59 53 minutes, 59 seconds first and once we get them on on board then we try to increase our wallet shareh with them by uh offering 54:07 54 minutes, 7 seconds multilocation and multi- uh category of product. 54:13 54 minutes, 13 seconds Thank you Mr. Gandhi. Please rejoin the queue for more questions. The next question is from the line of Mjubu 54:20 54 minutes, 20 seconds Basini uh from Ask Wealth Advisers Limited. Please go ahead. 54:27 54 minutes, 27 seconds Hi, good evening to the management. 54:30 54 minutes, 30 seconds Thank you for the opportunity. So first on the uh on the topline um how does the 54:37 54 minutes, 37 seconds current situation have eased out and um and we have also increased the capacity and fairly uh the capacity in India has also ramped up in the last few quarters. 54:48 54 minutes, 48 seconds So in this context uh what how are the discussions with the clients happening now? What what is it that the clients 54:56 54 minutes, 56 seconds are looking for now? Is there any um improvement in the timeline of orders being placed with us? Um um and is there 55:05 55 minutes, 5 seconds some sense of utilization rate improvement uh that we have over and above what we have achieved? I know Indonesia, Vietnam etc. have had a a 55:14 55 minutes, 14 seconds very good improvement in utilization this financial year. But from here on uh what is the uh sense of disability we 55:21 55 minutes, 21 seconds have on the volume pick up because I think the previous participants question was also trying to address on the same lines um with capacities coming up how 55:30 55 minutes, 30 seconds quickly do we think we can uh build the production line also? 55:37 55 minutes, 37 seconds Yeah. So uh first part of it like whether what's the trend that we are seeing in India because I think India is the country which got affected with the tariff. 55:47 55 minutes, 47 seconds Sorry to interrupt sir there's a background noise going on. 55:54 55 minutes, 54 seconds Yeah manu if you can uh mute yourself. I think there's some kind of disturbance coming from your side. Yeah thank you. 56:01 56 minutes, 1 second So uh so yeah so talking about India like that's where like we had this 50% tariff and rest of the other countries uh as we 56:09 56 minutes, 9 seconds had noticed that all were in the similar range of 20% or around so yes with this tariff moving away from India uh 56:17 56 minutes, 17 seconds definitely we are seeing a positive response from the customers and also added to that are the other uh European 56:25 56 minutes, 25 seconds Union and UK customers uh interest because of the potential FDA implementation in the next uh uh few quarters or a year. So that's keeping 56:34 56 minutes, 34 seconds that in mind we are seeing a good traction uh in the order books of uh India so far whatever we have seen I 56:41 56 minutes, 41 seconds think uh that's specifically that you were asking for like how how this uh Indian capacity is looking at and uh if 56:48 56 minutes, 48 seconds you're talking about the global capacity that's something uh as I mentioned like we continue to uh plan and discuss with our customers what product what category 56:57 56 minutes, 57 seconds that they're looking at so that's an ongoing process that continues Um 57:05 57 minutes, 5 seconds Viet is already at 80% utilization and um on the existing capacity uh you also talked about how you're looking for land 57:12 57 minutes, 12 seconds banks to increase further capacity there etc. But with 80% um to what extent what would be the optimal utilization level? 57:21 57 minutes, 21 seconds So is 80 itself an optimal level or you think um it can stretch up to another 10 percentage points close to 90% is the 57:29 57 minutes, 29 seconds optimal level. Uh when you will really look for additional capacity to uh garner high more. 57:38 57 minutes, 38 seconds Yeah. So um as you have been uh talking to us for some time so you have must have noticed that we keep a try to keep 57:46 57 minutes, 46 seconds a ratio of about 8515 or 80/20 kind of you know how much we do inhouse and how much we uh have do it through the 57:54 57 minutes, 54 seconds partner factories. So in Vietnam the situation is that okay we have got a good growth of all the capacity that we over to the customer offer to the 58:02 58 minutes, 2 seconds customer. uh now what we are seeing is that a majority part of it is uh being uh you know uh on the partners uh 58:10 58 minutes, 10 seconds capacity so this is a good time to invest there and get in-house capacities so that's the process that we are 58:18 58 minutes, 18 seconds undergoing so uh whenever we publish our capacity especially from India from Bangladesh and Vietnam where we do 58:25 58 minutes, 25 seconds actively work with uh you know partner factories and when we see that the proportion is going high in the partner factory that's the is the right time to 58:34 58 minutes, 34 seconds put our own uh investment in capitals. Does that answer your question? 58:44 58 minutes, 44 seconds Yes. Yes, that is helping. So, you're saying incrementally you look to add more capacity to partner facilities rather than uh uh give away any business 58:53 58 minutes, 53 seconds for the lack of capacity. That's the uh Yeah. Yeah. Because if we are doing like 90% of the order from partner factory and 10% that's that's like a very skewed 59:02 59 minutes, 2 seconds up uh ratio like the control becomes less. So it it should be a balance that has to be maintained. 59:08 59 minutes, 8 seconds So that's how we take the decisions. Uh just one last question from my sir. 59:14 59 minutes, 14 seconds Um this year we had called out for 36 or approaches from the uh one-off impact from Paris and um so in in a sense then 59:23 59 minutes, 23 seconds the adjusted aida what will become the base for the next year's um growth from that perspective if you see it'll be 59:31 59 minutes, 31 seconds somewhere in the range of 540 550 north growth is that's the correct readings or 59:37 59 minutes, 37 seconds uh or is there any change to that number 460 I think you're calculating 430 468 59:44 59 minutes, 44 seconds plus 36 that's the kind of number that you're talking about. Yeah. 59:47 59 minutes, 47 seconds So if that's the case like let me just explain this break up of the 36. There are two uh uh for all other countries 59:54 59 minutes, 54 seconds the tariff was at a lower level and for India the tariff was at a much higher level. So to most of our customers they 1:00:02 1 hour, 2 seconds came back and say that okay what kind of burden share that you are doing with us and specifically for India they wanted 1:00:08 1 hour, 8 seconds to uh have that 25% of penalty to be boned by us. So naturally from India we had to give uh more discounts compared 1:00:16 1 hour, 16 seconds to the other countries. So some of these tariff is still continuing at 10% level as of now. So there are some burden shares that we'll continue to do. So 1:00:25 1 hour, 25 seconds then maybe the 36 number will come down significantly may not be zero. with us specifically. 1:00:34 1 hour, 34 seconds So is this right if we put a number of let's say 5 to 8 or crores could continue to be the direct related uh 1:00:43 1 hour, 43 seconds cost which we may have to bear um is that right understanding I'm just looking for some quantification later 1:00:55 1 hour, 55 seconds I mentioned uh earlier as well you see the there will be definitely uh some in some flow uh since the cost will not be 1:01:04 1 hour, 1 minute, 4 seconds there. So that should lead to uh improvement in the uh in the in the margin and every season is new costing 1:01:13 1 hour, 1 minute, 13 seconds new product and since the tariff is not there that will not be part of the costing. Um so we hope that you know 1:01:21 1 hour, 1 minute, 21 seconds that will certainly result into some gain at a margin profile also. 1:01:29 1 hour, 1 minute, 29 seconds Sorry for interrupting. Ma'am, please rejoin the queue for more questions. 1:01:34 1 hour, 1 minute, 34 seconds The next question is from the line of Shirish Paresi from Modilal Oswan. Please go ahead. 1:01:42 1 hour, 1 minute, 42 seconds Hi Pala, Mr. Gandhi, thank you for the opportunity. I have just one question on the design and marketing. Uh generally 1:01:51 1 hour, 1 minute, 51 seconds uh design is one of the uh one of the pillar of attracting new clients. So what number of people what number of 1:01:59 1 hour, 1 minute, 59 seconds designs we would have chosen in last one year and how this uh segment will scale up over next 2 three years. I mean I 1:02:07 1 hour, 2 minutes, 7 seconds understand capacity expansion will happen but winning the customer trust will be based on the designs 1:02:15 1 hour, 2 minutes, 15 seconds design and capability both. Uh so uh what we do is uh if you uh if you follow 1:02:23 1 hour, 2 minutes, 23 seconds us then we have been investing in the design stuff and also in the country where the sales are happening. So that 1:02:31 1 hour, 2 minutes, 31 seconds means uh whether it is European countries like uh Spain and all where we have a significant exposure. Uh similarly for US for UK these are the 1:02:40 1 hour, 2 minutes, 40 seconds places like we have invested in the design team who work very closely uh with the customers. what kind of trend 1:02:47 1 hour, 2 minutes, 47 seconds what are the requirements that they have so that's definitely uh plays in our favor uh exactly how much of number and 1:02:55 1 hour, 2 minutes, 55 seconds all uh of samples uh yes the numbers are quite significant always but uh I do not have a uh exact number to be shared with 1:03:05 1 hour, 3 minutes, 5 seconds you as of now so what is the employee base we had in 25 and what is in 26 and what is it that we're looking for next to three years 1:03:13 1 hour, 3 minutes, 13 seconds yeah yeah design stuff if you talk about yeah we are almost like you know we used to be uh in the range of 70 75 now it's 1:03:20 1 hour, 3 minutes, 20 seconds uh almost crossing 100. So that continues to grow like as we get more uh clients uh depending on their needs 1:03:28 1 hour, 3 minutes, 28 seconds their handwriting we have to uh continue to invest uh in the design stuff and we do that and also uh the second part is 1:03:36 1 hour, 3 minutes, 36 seconds more than the design stuff is the technology of design. So there are a lot of uh you know technic uh technical uh 1:03:43 1 hour, 3 minutes, 43 seconds advantage that is coming through like for example the 3D uh designs then AI uh you know rendering on those 3D designs 1:03:51 1 hour, 3 minutes, 51 seconds which improves the sales and the adoption. So those are also playing an important role. So that both these investments go uh hand in hand. 1:04:01 1 hour, 4 minutes, 1 second Okay. And same question on the marketing investments in terms of front-end staff in terms of business development. What was the number in 25 and 26? 1:04:16 1 hour, 4 minutes, 16 seconds So uh every region we have uh leaders the CEOs uh who are uh working. So what 1:04:24 1 hour, 4 minutes, 24 seconds we do at the leadership level we uh front end couple of customers. So some would be done by me, some would be done 1:04:31 1 hour, 4 minutes, 31 seconds by uh my Vietnam counterpart or like uh the Bangladesh. So that how like we the 1:04:37 1 hour, 4 minutes, 37 seconds leadership position goes and then depending on uh any customer that we are acquiring or uh adding and if it's a 1:04:46 1 hour, 4 minutes, 46 seconds sizable number so definitely then we try to give them more uh you know dedicated service. So most of the customers like 1:04:54 1 hour, 4 minutes, 54 seconds we built up dedicated teams and uh that's how uh this game gets played and 1:05:01 1 hour, 5 minutes, 1 second u so if you want to the details there are lot of details out there there would be some maybe design stuff there would be merchandising stuff sourcing stuff 1:05:09 1 hour, 5 minutes, 9 seconds sometimes like you know all the approvals that they allow us to do uh technical approvals and all so those kind of stuff so we built it up 1:05:16 1 hour, 5 minutes, 16 seconds continuously uh as we acquire the customers see I got Aladra what I wanted to check 1:05:24 1 hour, 5 minutes, 24 seconds with you that is there any target that we are looking for adding two or three or four customer in every quarter but there are a lot of work which will 1:05:32 1 hour, 5 minutes, 32 seconds happen starting from design capability showing them how sustainable how technological advanced we are but is there any number you can share 1:05:40 1 hour, 5 minutes, 40 seconds that particular particular yeah so you see like we already have that uh you know uh the core stuff which 1:05:50 1 hour, 5 minutes, 50 seconds is generating the new designs and the new which is which can be shown to every customer or even the new customers also. So then that part 1:05:58 1 hour, 5 minutes, 58 seconds remains constant as the new customer gets on board then we start investing in in terms of more people dedicated to 1:06:05 1 hour, 6 minutes, 5 seconds that particular uh customer. Uh we are in conversation with all uh you know the ones that we have uh targeted where we 1:06:14 1 hour, 6 minutes, 14 seconds feel that they are doing very well and they are growing and we should be with them. So that kind of list is always there. Now how many of them will be uh 1:06:22 1 hour, 6 minutes, 22 seconds converted in which quarter? Uh that means like how many will place uh new orders to us or new clients will be ordering to us in every quarter. That's 1:06:30 1 hour, 6 minutes, 30 seconds more difficult to predict because sometimes this onboarding takes maybe years. A market customer like we recently added we have been added at it 1:06:38 1 hour, 6 minutes, 38 seconds for more than two years. So, so it when that opportunity comes when they need something uh different or they need a 1:06:47 1 hour, 6 minutes, 47 seconds different uh you know location or a different product that's the time uh where they would be entertaining us to uh start placing the business before 1:06:55 1 hour, 6 minutes, 55 seconds that it's more of a conversation what we can do what we can't do what is their requirements so yeah so it's very uh to 1:07:03 1 hour, 7 minutes, 3 seconds put a number would be difficult but that's a continuous process that we have so what we do is that we generally 1:07:10 1 hour, 7 minutes, 10 seconds publish like you know the uh the new addition that has happened in the last 5 years what is the contribution to a total topline so that we'll continue to 1:07:19 1 hour, 7 minutes, 19 seconds do okay all right thank you and all the best thank you thank you in the interest of 1:07:28 1 hour, 7 minutes, 28 seconds time that was the last question for the day I now hand the conference over to Mr. Sanjay Gandhi for closing comments. 1:07:39 1 hour, 7 minutes, 39 seconds Thank you to all participant with positive industry development in the future given the tariff and the 1:07:48 1 hour, 7 minutes, 48 seconds reciprocal tariff and the penalty is not there. Um and we across the geographies 1:07:56 1 hour, 7 minutes, 56 seconds are feeling at a pearl group a lot of optimism u as we step into the new financial year. Of course, there are 1:08:03 1 hour, 8 minutes, 3 seconds challenges across um which we are uh navigating well and with the diversified manufacturing base, new capacity 1:08:11 1 hour, 8 minutes, 11 seconds additions, ongoing expansion plans and a strong relations shift with grow global retailers, world global is entering FI27 1:08:20 1 hour, 8 minutes, 20 seconds well positioned for continued profitable growth. We remain confident of sustaining this momentum beyond FI27 as 1:08:29 1 hour, 8 minutes, 29 seconds well driven by our expanded footprints, strengthen capabilities and deeper customer engagement enabling long-term 1:08:37 1 hour, 8 minutes, 37 seconds value creation. I hope we have been able to address all your queries. For any further information, kindly get in touch 1:08:44 1 hour, 8 minutes, 44 seconds with Shishir, our head of investor relations or strategic growth advisor, our investor relation adviser. Thank you. 1:08:54 1 hour, 8 minutes, 54 seconds Thank you on behalf of Pearl Global Industries Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.