S P Apparels Ltd — Q3 FY26

S.P.Apparels Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=wdXzdQG7050 Published: 3 months ago

0:00 Good afternoon everyone. 0:04 4 seconds Okay, I'm Pundra Rajin, chairman, managing director of SPF Limited. 0:10 10 seconds Thank you for joining SPF's investor call. I'm pleased to share our business update, the evolving trade environment, 0:18 18 seconds customer traction across key markets and our priorities as we enter the next phase of growth. 0:25 25 seconds This has been a steady quarter for us and I'm happy to share that our operation across all verticals have 0:32 32 seconds continued to perform well. Even though Q3 was soft for the sector, we managed the quarter efficiently. 0:41 41 seconds The industry environment and policy clarity law trade deal between India and the US was cause of worry for past 7 to 0:49 49 seconds 8 months and now signing of India US agreement has helped bring clarity on the tariff situation. We are also happy 0:58 58 seconds that EU and India have signed the trade deal last month. Further we are all aware that UK and India also have agreed 1:07 1 minute, 7 seconds for a trade deal. This scenario is very positive for the textile industry. 1:13 1 minute, 13 seconds The clarification on the India US agreement has removed the uncertaintity we saw in the recent month. At the same 1:21 1 minute, 21 seconds time, Sri Lanka remains useful for programs where duty-free access to the UK and EU market provides an advantage, 1:31 1 minute, 31 seconds especially with the UK India FDA still about less than a year away. 1:38 1 minute, 38 seconds The India US tax which brings tariffs down to 18% strengthens our competitiveness and opens access to $118 1:48 1 minute, 48 seconds billion US textile import market. While the US Bangladesh zero duty provisions for government using US origin cotton is 1:57 1 minute, 57 seconds something we are monitoring. In Europe, the India EU FDA eliminating up to 12% 2:04 2 minutes, 4 seconds import duties has improved buyers sentiment. Overall, our presence in both India and Sri Lanka gives us the 2:13 2 minutes, 13 seconds flexibility to navigate the shifts and service customers efficiently. 2:21 2 minutes, 21 seconds On the demand side, we are seeing healthy re-engagement from American buyers who had earlier prepared for 2:29 2 minutes, 29 seconds Shaskar ships. Many of them now prefer continuity in India under the revised tariff clarity. At the same time, our 2:37 2 minutes, 37 seconds ability to serve UK EU orders from Sri Lanka gives us flexibility on the landed cost and the lead times. 2:47 2 minutes, 47 seconds We have active dialogue with existing customers on expanding product line and we are onboarding new programs aligned 2:55 2 minutes, 55 seconds to our quality compliance and delivery style. 3:00 3 minutes Our governmenting division continues to be the backbone of SP in India. The appreciation for Q3 FI26 3:10 3 minutes, 10 seconds declined largely on account of addition of new machines and impact of US. However, we believe 3:18 3 minutes, 18 seconds the utilization to improve in next financial year. We also onboarded four to five new buyers during the year which 3:28 3 minutes, 28 seconds has strengthened our presence in these key markets. The temporary pause with our US customers which we saw in Q3 due 3:37 3 minutes, 37 seconds to the US tariff situation has now eased after the signing of the India US agreement and customers have started 3:44 3 minutes, 44 seconds working on new orders placements with the clear normalization in booking patterns in Sri Lanka. We made further progress 3:53 3 minutes, 53 seconds by integrating one additional one more additional factory in this space taking total operation capacity to approximately,650 4:02 4 minutes, 2 seconds machines. Stabilization efforts across production HR and financial systems are 4:09 4 minutes, 9 seconds progressing well supported by this phase rollout of our homemade year platform. 4:16 4 minutes, 16 seconds We expect operations in Sri Lanka to reach normalized levels from Q1 FI27 with meaningful shipment and optimum utilization in Q2 FI27. 4:28 4 minutes, 28 seconds During the year by acquiring the factories, we have also added new customers from Sri Lanka. 4:35 4 minutes, 35 seconds Orders from these customers begin in Q1 and we expect steady contribution from Q2 onward. 4:43 4 minutes, 43 seconds Impels being predominantly US focused saw little pressure in Q3 because of the earlier tariff uncertaintity. 4:52 4 minutes, 52 seconds Q4 will have more pressure in the revenue. Despite this, the division maintained healthy operation bargains with the tariff situation now resolved. 5:02 5 minutes, 2 seconds Customers engagement has picked up sharply and order visibility for the upcoming seasons is wrong. We have 5:10 5 minutes, 10 seconds resumed the Salem expansion that was temporarily ped and brand is scaling towards,700 installed machines with the 5:18 5 minutes, 18 seconds face utilization ramp to around,500 machines. 5:24 5 minutes, 24 seconds We are also onboarding one or two new UK European customers which will help diversify the customer mix and reduce over reliance on the US market. 5:37 5 minutes, 37 seconds Young brand is also geared up to produce draw brought for the domestic market as a diversification of the product. 5:47 5 minutes, 47 seconds Overall brand well positioned to deliver strong growth as demand normalizes. 5:58 5 minutes, 58 seconds Our multi-country manufacturing model is at the heart of our strategy. The 6:05 6 minutes, 5 seconds clarity in the US duty-free access from Sri Lanka to the UK and the ability to command E EU UK program between India 6:13 6 minutes, 13 seconds and Sri Lanka provide us with the resilience as well as agility with tariff uncertainty withdrawing. The 6:22 6 minutes, 22 seconds young brand expansion is back on track and the Sri Lanka platform will operate at a normalized from Q1 next year with customer shipments ramping from Q2. 6:34 6 minutes, 34 seconds We will continue sharing utilization metrics and performance KPIs. 6:40 6 minutes, 40 seconds With regards to SPF UK, we remain very optimistic on SP UK. We are targeting a significant growth in the business over 6:49 6 minutes, 49 seconds the next two financial years with a revenue goal of about US 6:56 6 minutes, 56 seconds 20 million that is approximately 200 as customer additions and designless engagement scale. SPUK's ability to 7:05 7 minutes, 5 seconds source between India and Sri Lanka depending on land cost is a distinct advantage and we expect this to contribute to 7:14 7 minutes, 14 seconds improved profitability as the base expansion as the base expands. 7:21 7 minutes, 21 seconds The order book status division wise are SPAL is 353 crores. Young brand is 87 crores. SP UK is 30 crores. 7:36 7 minutes, 36 seconds With regard to retail, our retail division remains a bit positive and added another anchor store recently. 7:43 7 minutes, 43 seconds Procreate continues to perform steadily with disciplined inventory and agent rocket is gaining traction as we sharpen 7:51 7 minutes, 51 seconds products omni channel and consumer engagement. The cleanup of underperforming channels cost discipline 7:59 7 minutes, 59 seconds and tighter merchandising have sensed the fundamentals and we expect sustained profitability on EFC plans. 8:10 8 minutes, 10 seconds We are progressing well on our sustainability commitments by planning for addition of approximately 3 megawatt 8:17 8 minutes, 17 seconds of rooftop solar capacity across three additional units for the next financial year 2627 8:25 8 minutes, 25 seconds taking total installed capacity on in-house solar facility to 4 megawatt. 8:34 8 minutes, 34 seconds On the new labor code, we are already aligned with the most requirements and we do not expect any material 8:41 8 minutes, 41 seconds operational impact on the financials and once the def notification comes through we will align with the rules as and when cleared. 8:53 8 minutes, 53 seconds We are maintaining our revenue guidance of 2,000 crores by FI27 on consolidated 8:59 8 minutes, 59 seconds basis. Q3 was softer for the sector but Q4 also will be softer because of the 9:06 9 minutes, 6 seconds year 7 issues and we see a stronger outlook from next financial year onward as policy clarity translates into steady order inflows. 9:17 9 minutes, 17 seconds Our order pipeline and customer additions in Sand combined with the resumption of Enbrand expansion and 9:24 9 minutes, 24 seconds scaling up of SPUK support this trajectory. 9:29 9 minutes, 29 seconds We will continues to prioritize quality growth, disciplined execution and return. 9:36 9 minutes, 36 seconds To summarize, the signing of the India use agreement has restored visibility for customers who are in waste and watch 9:43 9 minutes, 43 seconds mode. We expect production to continue in India for those programs while Sri Lanka provides flexibility for UK and EU 9:51 9 minutes, 51 seconds opportunities. Our diversified footprint, integrated capabilities and strong compliance culture position 10:00 10 minutes position us well to capture incremental share as global sourcing recalibrate. 10:07 10 minutes, 7 seconds With that I will now hand the call over to Mr. Balaji our CFO to take you through the financial highlights for the quarter and 9 months. Bali over to you. 10:20 10 minutes, 20 seconds Thank you sir. Good afternoon everyone. 10:23 10 minutes, 23 seconds Uh I'll just take you through the financial performance of the company for the Q through and the 9 months ended. 10:30 10 minutes, 30 seconds Standalone performance for Q3 adjusted revenue stood at 258 crores. A growth of 10:37 10 minutes, 37 seconds 10.9% yearonear adjusted AITA stood at 40.4 crores with a EIA margin of 15.6%age. 10:46 10 minutes, 46 seconds profit after tax during the current quarter stood at 19.3 crores against 18 10:51 10 minutes, 51 seconds crores of Q3 FI 25 a growth of 7.2% yearon year on a standalone basis for 9 10:59 10 minutes, 59 seconds months ended uh December 2025 adjusted revenue grew by 20.8 8 crores and stood 11:07 11 minutes, 7 seconds at 851 crores. Adjusted EVITA stood at 138 crores with an AVITA margin of 16.3%age. 11:15 11 minutes, 15 seconds Profit after tax during 9 months stood at 66.4 as against 58.8 crores, a growth of 13% 11:25 11 minutes, 25 seconds yearon year. On a consolidated basis, revenue from operations in Q3 uh stood 11:32 11 minutes, 32 seconds at 382 crores. a growth of 6.6%age year on year. EITA grew by 11.2% yearonear to 11:42 11 minutes, 42 seconds rupees 56.6 crores with a EITA margins of 14.8%age. 11:47 11 minutes, 47 seconds Profit after tax stood at 27 crores as against 24 crores a growth of 9.1%age 11:56 11 minutes, 56 seconds year on year. On a 9-month basis revenue from operations stood at,213 crores as 12:04 12 minutes, 4 seconds against 995 crores a strong growth of 21.9%age year on year. AITA during 9 months stood 12:13 12 minutes, 13 seconds at uh 29.7%age growth year on year as again which which stood at 173 crores with a margin of 14.3%age. 12:24 12 minutes, 24 seconds Profit after tax stood at 82.4 4 crores against 64.77 12:30 12 minutes, 30 seconds crores a growth of 27%age year on year on a segment wise performance government 12:37 12 minutes, 37 seconds division Q3 FI26 adjusted operational revenue stood at 12:43 12 minutes, 43 seconds 343 crores a growth of 7.6%age year on year adjusted EITA during the quarter 12:50 12 minutes, 50 seconds stood at 58.3 crores a growth of 7.6 6 year on year 9 months ended 12:57 12 minutes, 57 seconds adjusted operational revenue grew by 9 16.7 yearon year to,5 13:05 13 minutes, 5 seconds crores. Adjusted EITA stood at 179 crores a growth of 16.3%age 13:12 13 minutes, 12 seconds year on year. SP UK Q3 revenue stood at 19.2 crores with a positive AITA of8 13:20 13 minutes, 20 seconds crores. Retail division Q3 FI 26 revenue stood at 17.2 crores with a positive AIT 13:28 13 minutes, 28 seconds of8.8 crores against a loss of 6 crores Q3 FY25. Further in the retail division 13:38 13 minutes, 38 seconds crocodile brand revenue stood at 14.5 crores and angel and rocket sto uh revenue stood at 3 crores for the 13:45 13 minutes, 45 seconds current quarter. Our current debt position on a standalone basis gross debt stood at 275 crores and our net 13:53 13 minutes, 53 seconds debt is 227 crores. With all this with all these information and all the other 14:00 14 minutes information that are present in the uh present in the presentation I would move to the question and answer session. 14:09 14 minutes, 9 seconds Thank you. 14:12 14 minutes, 12 seconds Thank you very much. Now we begin the question and answer session. Anyone who wish to ask a question may press star 14:19 14 minutes, 19 seconds and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use a 14:28 14 minutes, 28 seconds headset while asking a question. Ladies and gentlemen, we'll wait for the moment while the question q assembles. 14:38 14 minutes, 38 seconds The first question is from the barat gulati dal and brocha. Please go ahead. Yeah. Hi, thank you for the opportunity. 14:46 14 minutes, 46 seconds I just had a couple of questions. So, uh my first question uh sir would be regarding any change in our FI27 14:54 14 minutes, 54 seconds guidance given that the tariffs have been revised and we would see higher utilization levels in our YBAL business. 15:02 15 minutes, 2 seconds Would there be any revision in guidance? 15:07 15 minutes, 7 seconds So on on the guidance I guess in the chairman's speech he is uh uh he has 15:15 15 minutes, 15 seconds assured that we our guidance on the revenue funds should stands at 2,000 crores for FI27 on a consolidated basis. 15:28 15 minutes, 28 seconds Got it. and the past guidance that we've given on margins of about 15% consolidated margins on the IITa front 15:35 15 minutes, 35 seconds would we see a change in that going forward with operating leverage uh kicking in due to the higher utilization levels in our YBAL and our Sri Lanka 15:44 15 minutes, 44 seconds business no we currently we would like to stick to the guidance of 15%age at the IITA 15:50 15 minutes, 50 seconds level on the government inclusion okay sir and sir if I just look at our IITA margins in terms of X of YB it's 16:00 16 minutes seen kind of a degrowth in uh in this 9 months as well as in this quarter. So 16:07 16 minutes, 7 seconds would that would there be any specific call out or is tariffs the only reason for that to happen? 16:14 16 minutes, 14 seconds So if you look at last year versus this year, our wages have gone up uh from 16:21 16 minutes, 21 seconds March 2025 or minimum wages have changed and because of the tariff there there 16:28 16 minutes, 28 seconds has been couple of factors that has been closed down because of so purely because of tariff and the wages increase there is an impact on the margin front. 16:40 16 minutes, 40 seconds So it would be fair to say that our government division X of YL should touch that 18% EITA mark again next year. 16:48 16 minutes, 48 seconds Yeah definitely I I I feel that on on the governmenting division you have the Sri Lanka business sales also. 16:58 16 minutes, 58 seconds So while we give guidance on governmenting division Sri Lanka business is also part of the governmenting division. So naturally Sri 17:07 17 minutes, 7 seconds Lanka business will give you only 10% margin. So literally when you add up both together including the Sri Lanka 17:15 17 minutes, 15 seconds business we are looking at 15% margin in the government position going forward. 17:22 17 minutes, 22 seconds Got it. Got it sir. And just so to understand in terms of realization there's been a trend of about uh degrowth that's been seen in the in the 17:31 17 minutes, 31 seconds past three quarters uh of about roughly 3% degrowth in our realization. So is this going to continue going forward or will we see an uptick in realizations as 17:40 17 minutes, 40 seconds the product makes changes towards the adult wear. 17:44 17 minutes, 44 seconds So it's purely on the product makes like uh when you do lot of children products like the baby's bodysuits and the 17:52 17 minutes, 52 seconds sleepsuits the realization tend to come down it's purely the product mix only 18:04 18 minutes, 4 seconds from Q1 onwards we will normalize it Q2 will be the stabilization Q2 27 18:12 18 minutes, 12 seconds got it but so Just to understand just our realizations, will they be continuing in this downward trend or is this a new base for us for realizations 18:21 18 minutes, 21 seconds or can we see them go back to that 140 kind of average realization level? 18:27 18 minutes, 27 seconds Realization is to do with the product mix only to do with the uh margins. 18:34 18 minutes, 34 seconds So we expect this either maintain or move up little bit because you know we are planning to uh to bring in more of 18:41 18 minutes, 41 seconds adult orders also. So which will break up the average price hoping because we 18:49 18 minutes, 49 seconds need to fill up the capacities by bringing in adult adult orders. 18:55 18 minutes, 55 seconds Right. Right. Fair enough. So fair enough. But just so just one last question I wanted to understand in terms of a capacity uh that we I mean in terms 19:03 19 minutes, 3 seconds of the what we mentioned in our PPT the volumes that we've exported and the realization when I add when I you know 19:10 19 minutes, 10 seconds do the math on that I don't see us uh achieving the revenues in our garment business so what exactly is the exports 19:19 19 minutes, 19 seconds the 18.2 2 million exports in this quarter that's been done. Which business is that exactly talking towards? 19:26 19 minutes, 26 seconds That's purely on the government division which is person the standalone. So if you look at standalone numbers, it'll get reflected there. 19:37 19 minutes, 37 seconds All right. So that's standalone and then our YBA. So it excludes basically our YBL business and our Sri Lanka operation UK all needs to be excluded. 19:49 19 minutes, 49 seconds Uh sir didn't get that. Sorry. Can you repeat yourself sir? 19:54 19 minutes, 54 seconds Sorry I couldn't hear you sir. Sorry your voice cracked a little bit. So on the governmenting division which is 20:02 20 minutes, 2 seconds segmental reported in the presentation it is inclusive of the the export and 20:08 20 minutes, 8 seconds the ya put together. So you exclude ya in the government division you will find the number. 20:15 20 minutes, 15 seconds Uh so that number would be for purely our standalone India exports wouldn't include city right sir got it sir got it 20:24 20 minutes, 24 seconds very helpful sir thank you thank you sir thank you the next question is from the 20:32 20 minutes, 32 seconds line of shankar Gupta from equitri capital please go ahead hello audible 20:40 20 minutes, 40 seconds yeah yeah you are audible uh so the first question is with regards to the labor code changes So uh as per I what I could see from the presentation 20:48 20 minutes, 48 seconds and the numbers the 27 cr consolidated pad does not include the labor code changes impact. Is that correct? And if 20:56 20 minutes, 56 seconds that is so then can we get a number as to what would that impact be like? 21:00 21 minutes No. See in the in the chairman's speech there is no material impact because of the labor code. See the labor code was 21:08 21 minutes, 8 seconds supposed to be introduced in the year 2020 itself. So we have aligned ourselves with the labor code in the 21:15 21 minutes, 15 seconds year 2020 itself. So there will be no big material changes or impact in the financials because of the new labor code. 21:26 21 minutes, 26 seconds Okay. So we are saying that uh we had already increased the salary of our all our labor force about 15. 21:34 21 minutes, 34 seconds So that should not be a challenge right okay so that should not have any impact. 21:40 21 minutes, 40 seconds Fair enough. Second question sir. So uh it's it's more broad. So second question is around so there has been so many trade deals which have happened right 21:47 21 minutes, 47 seconds but then there are two major ones which is one is US and one is UK. So what is our our take on the timelines with 21:54 21 minutes, 54 seconds regard to the same and are we doing anything extra to gain from these big trade deals which have happened. 22:05 22 minutes, 5 seconds Can you come again please? So basically my question is there have been major trade deals which have happened in the last six seven months out of which two 22:12 22 minutes, 12 seconds are major US and UK. What's our take on the timelines with regard to the same like how will it start impacting SP's numbers and are we doing anything extra 22:21 22 minutes, 21 seconds to gain like gain more market from these trade deals. 22:26 22 minutes, 26 seconds I see see actually speaking so it will take another one more quarters to come back to normal and because all the 22:32 22 minutes, 32 seconds customers are have been with us now and they were waiting for these tariffs to be revised. So now they have already uh 22:40 22 minutes, 40 seconds the pressed the button to to resume the the normal business inquiries and the placing the orders that has already started 22:47 22 minutes, 47 seconds and so all these things will reflect from Q2 Q2 numbers and we are also adding some new 22:56 22 minutes, 56 seconds customers about four to five five more new customers maybe two from US and another two three from from the Europe 23:04 23 minutes, 4 seconds from the UK. So everything will reflect from Q2 onwards and and the Q4 is going to be under pressure for financial 23:13 23 minutes, 13 seconds members. Q1 is going to slowly improve and Q2 will be the restoration of the the original situation. 23:24 23 minutes, 24 seconds Got it sir. and and like what would be the clarity on the timelines uh with regard to both both US and UK deal like 23:31 23 minutes, 31 seconds will will we see any goodness in calendar year 27 with regards to UK or US according to you? 23:38 23 minutes, 38 seconds So uh see with respect to guidance we have we have included that the trade 23:45 23 minutes, 45 seconds deal will be considered and we will have a uh US business. 23:52 23 minutes, 52 seconds So the guidance has been given with the two pro The 2,000 cr top top line is based on the trading only. So 24:00 24 minutes sorry, it is based on the US but we've I don't think we've taken into account the UK 24:08 24 minutes, 8 seconds FDA in the guidance. We taking consider the US uh agreement but uh not the UK yet. 24:16 24 minutes, 16 seconds No UK agreement still not through. Yeah. Yeah. 24:22 24 minutes, 22 seconds But we are working on you know based on filling our capacity. So whatever you know the business what we are getting that will be enough to fill our capacity 24:30 24 minutes, 30 seconds which will fetch this kind of volume. We are you know the guideline is 2,000 crores. Considering all the situation uh 24:38 24 minutes, 38 seconds US and Europe as well as UK that's the situation now. 24:46 24 minutes, 46 seconds Okay. Okay. Got it. So I think that is helpful. That is helpful. 24:55 24 minutes, 55 seconds Thank you. The next question is from the line of Bavin Sheda from Inam Holding. Please go ahead. 25:02 25 minutes, 2 seconds Yes. Uh congratulations on a very good set of numbers in difficult environment and strong commentary also on FI27 plus 25:12 25 minutes, 12 seconds a very good detailed presentation. It includes uh every division's data and just uh from your opening remarks uh you 25:21 25 minutes, 21 seconds indicated a weak uh quarter 4 why is that when quarter 3 has been uh decent 25:28 25 minutes, 28 seconds has been growing and the margin is there. So any anything specific uh you're saying the recovery would happen 25:35 25 minutes, 35 seconds from quarter 1 or quarter two in both yeah the customers American customers 25:43 25 minutes, 43 seconds have you know slowed down their order placing and in in fact in Q4 shipments we have agreed to continue all of a 25:51 25 minutes, 51 seconds sudden neither we can stop their production or shipment nor the customer can completely 25:58 25 minutes, 58 seconds uh exit from India. and and place it the other move to other countries. So we both mutually agreed to give some kind 26:05 26 minutes, 5 seconds of a discount to them to maintain the continuity. So definitely that kind of the orders are under production in Q4 26:13 26 minutes, 13 seconds and Q1 27 they were not prepared for placing orders because they already decided to move the business from India 26:22 26 minutes, 22 seconds the main time since this uh the tariff reversal has happened. So now they are now geared us to place the order. So in 26:30 26 minutes, 30 seconds the meantime we have lost some some kind of a order placement during the Q1 shipment. So that is the that's the 26:38 26 minutes, 38 seconds transition quarter. So even now if they start placing the shipment will start from Q2. 26:46 26 minutes, 46 seconds Yeah. So so basically you're saying you accept uh you accepted less orders since initially the tariff was there. So some 26:54 26 minutes, 54 seconds top line and margin could be impacted but 25% margin has been taken off. So uh 27:02 27 minutes, 2 seconds that that hit won't uh come to the AIA margin in quarter 4 right 27:12 27 minutes, 12 seconds both both in terms of revenue and also on the bottom line. There have been couple of orders which we have neglected 27:20 27 minutes, 20 seconds because of huge deep discounts that customers are asking for. 27:25 27 minutes, 25 seconds I can sorry I can explain. So hi uh graphim this is Chendorin. So from 27:33 27 minutes, 33 seconds a US perspective on young brands where uh we had given discounts and the customers were holding back on some of 27:40 27 minutes, 40 seconds the orders for Q4 knowing that the tariff reversal will happen. So it has been a bit slow for this quarter and Q1 27:48 27 minutes, 48 seconds onwards now they're pushing the orders back again. So we will have a bit of impact because of them holding to place the orders which because they were 27:56 27 minutes, 56 seconds unsure about how it was going to move but uh Q1 onwards we will uh see the growth and the improvement in terms of 28:05 28 minutes, 5 seconds the numbers Q4 as I understand used to be only 10 11% 28:12 28 minutes, 12 seconds of your overall turnover right um on the young brand it's almost 85% % 28:21 28 minutes, 21 seconds of the turnover. So collectively if we come have consolidated it should be 25%. 28:27 28 minutes, 27 seconds Malaj correct me if I'm wrong the US contribution of the entire business you are saying 40%. 28:37 28 minutes, 37 seconds No 85%. 28:40 28 minutes, 40 seconds Sorry minute band and SPF put together our US 28:47 28 minutes, 47 seconds exposure is less than 25% which should be roughly around 23 to 25%age 23 to 28:54 28 minutes, 54 seconds 25%. Okay. Okay. So that some part of the business uh could have got impacted 29:00 29 minutes in last quarter but it would recover uh going forward. Okay. Q1 we are expecting 29:07 29 minutes, 7 seconds the recovery to happen and post Q1 I guess Q2 will be the optimum time where 29:14 29 minutes, 14 seconds you'll find all the orders reinstated and then kicking off from there on okay so young brand uh you have reported 29:24 29 minutes, 24 seconds ana margin of almost 22% quarter two it was 15% so it has improved substantially 29:32 29 minutes, 32 seconds probably you're saying because the US part is much more quarter four it could be less but it it will remain since the 29:39 29 minutes, 39 seconds tariff has been taken off again next year it would remain upwards of uh 20% as things normalize 29:48 29 minutes, 48 seconds I am again telling you our guidance is government division we are guiding for 29:54 29 minutes, 54 seconds 15% AITA margin including end brand HP apparent business all put together we are guiding 30:02 30 minutes, 2 seconds for 15%age okay the mix could be different but overall blended basis you are confident on 30:09 30 minutes, 9 seconds yes it may vary from quarter to quarter but on a consolidated basis it will have 30:15 30 minutes, 15 seconds the government division will have 15%age sure sure and sir uh next year since Sri 30:22 30 minutes, 22 seconds Lanka major capacity would uh start by the year end so in terms of uh 30:29 30 minutes, 29 seconds utilization normally ramp up takes uh how much time and when can we achieve 30:35 30 minutes, 35 seconds say optimum 80 90% on the Sri Lanka facility normally it will be second year third year 30:44 30 minutes, 44 seconds yeah actually we have uh yeah we have four factories out of that for three factories we can ramp up the 30:53 30 minutes, 53 seconds capacity from Q3 uh from Q3 I uh as per our plan it will be around 100% 31:01 31 minutes, 1 second replacation and for one of the factor Yeah. 20 26 31:10 31 minutes, 10 seconds uh 100%ation for three factories and one factory it will take another 6 months time. 31:17 31 minutes, 17 seconds Great sir. Thank you. 31:24 31 minutes, 24 seconds Thank you. The next question is from the line of Prana from Rare Enterprises. Please go ahead. 31:31 31 minutes, 31 seconds Hi sir. Uh thanks a lot for the opportunity. Uh sir uh can you just uh uh spend some time on highlighting uh 31:39 31 minutes, 39 seconds will we gain market share in EU after EU FDA uh against say Bangladesh, Vietnam, China etc. and how does that market 31:47 31 minutes, 47 seconds looks and how are we uh uh taking efforts to seed that market with new accounts, new customers and new SKUs. 31:55 31 minutes, 55 seconds Thank you for the American For the American business you're talking about, right? 32:01 32 minutes, 1 second for Europe. Euro Europe after EU FDA. 32:05 32 minutes, 5 seconds I say EU FDA. So EU say yes you know definitely because of this trade deal agreements for FDA definitely the India 32:13 32 minutes, 13 seconds is the most preferred country for all the Europeans and the UK customers which we are already you know the the benefits 32:22 32 minutes, 22 seconds by you know the new customers are coming in and they uh they're talking about the the the capacities for new businesses 32:30 32 minutes, 30 seconds and everything is very very positive and the focus because Bangladesh is I'm saying now that what we hear from the 32:38 32 minutes, 38 seconds market of the the brand they they would like if not reduce the business in Bangladesh at least they will not place 32:45 32 minutes, 45 seconds more orders in Bangladesh. So as a as a part of risk mitigation. So those additional business and some of the 32:53 32 minutes, 53 seconds businesses which they want to reduce from Bangladesh will come to India only and it is up to us whether you know when it comes to us you know we are treating 33:01 33 minutes, 1 second Sri Lanka and India as you know as one part. So we will decide how much we will produce in Sri Lanka. How much we produce in India. So we look at India 33:10 33 minutes, 10 seconds Sri Lanka as as one car in front of our retail customer. 33:19 33 minutes, 19 seconds Understood sir. Thank you. 33:22 33 minutes, 22 seconds Thank you. We move on to the next question that is from the line of Yash Baj from Lucky Investments. Please go ahead. 33:30 33 minutes, 30 seconds Yes. Uh good afternoon and thanks for the opportunity. Uh so my first question is uh this quarter what would be the 33:37 33 minutes, 37 seconds number of uh machines across uh India standalone Sri Lanka and young brands. 33:45 33 minutes, 45 seconds So in terms of massive utilization we were closely around 4,200 missions in 33:53 33 minutes, 53 seconds India and uh 280 missions in 33:59 33 minutes, 59 seconds uh in Sri Lanka and uh,00 machines in brand utilization 34:08 34 minutes, 8 seconds and and the installed have we added any machines this quarter? Uh yeah this quarter we have added 700 missions. We 34:15 34 minutes, 15 seconds we don't want to give all the all the mission details in the presentation uh purely because because of the 34:22 34 minutes, 22 seconds strategy of the company. We don't want to provide any other data in the presentation. So we have uh we have we 34:33 34 minutes, 33 seconds have not shared any data there. This year we added 700 missions. 34:38 34 minutes, 38 seconds Okay. Got it. And uh so so uh uh we had kind of held back our plans in terms of adding machines uh in the young brands business because of the US tariff issue. 34:49 34 minutes, 49 seconds Uh now that the tariff issue we have gotten some uh clarity uh regarding that. So are we back on uh you know 34:57 34 minutes, 57 seconds adding the planned machinery machine addition uh which you were thinking of in FI27 as well? 35:06 35 minutes, 6 seconds Can Yes. Yeah. So I think as we said in the initial uh um um opening remarks 35:14 35 minutes, 14 seconds there is plans to expand or restart that project uh in Salem with uh for young brand in terms of expansion for this uh 35:23 35 minutes, 23 seconds the coming financial year it would be around 150 missions effective running but that can scale up to 350 missions by the end of the next financial year. 35:36 35 minutes, 36 seconds Okay, got it. And uh my second question is on the Sri Lanka business. Uh last quarter we had highlighted that we would 35:45 35 minutes, 45 seconds uh achieve close to 50 kores of business uh this year. Uh so are we on track uh 35:52 35 minutes, 52 seconds this year for Sri Lanka business to achieve that number? 35:56 35 minutes, 56 seconds For the first 9 months we have we have done 37 crores on the sale and enter business and we expect to go to uh 50 crores of financial. 36:11 36 minutes, 11 seconds Okay. Okay. Got it. And uh uh my uh uh my third question is on the young brands 36:18 36 minutes, 18 seconds business. Uh we have witnessed a very good gross margin expansion this quarter. 36:24 36 minutes, 24 seconds uh uh I mean considering that you know there was US tariff issue and all that you would expect that the gross margins 36:31 36 minutes, 31 seconds could have uh impacted so any reason how we have had such a healthy gross margin expansion of 300 basis points 36:39 36 minutes, 39 seconds um so I can explain Mali yes sir 36:46 36 minutes, 46 seconds so in terms of the growth I think if you look at uh the current quarter uh last 36:52 36 minutes, 52 seconds quarter was was uh because we have agreed to certain discounts. This quarter we have passed on the certain discounts to the customer and supplier. 37:02 37 minutes, 2 seconds So uh there there are improved margins and moreover uh the customers have 37:11 37 minutes, 11 seconds requested for a discount which we have we have given earlier to be passed on to the suppliers. So that is why the 37:18 37 minutes, 18 seconds margins is little better this year this quarter. So we expect the margins with 37:25 37 minutes, 25 seconds respect to uh IBA at an evita margin of 15 to 18 percentage quarter to quarter 37:33 37 minutes, 33 seconds it may vary but yearly we expect it to be around 18 15 to 18 percentage you want to say anything 37:42 37 minutes, 42 seconds uh yeah pretty much on that with a lot not every all the discounts brought through the customers happened in Q3 a lot of those will be in Q4 37:50 37 minutes, 50 seconds Q3 had only November December effectively uh in terms of the impact of discounts and as Mr. Balaji said this 37:58 37 minutes, 58 seconds those were passed on to the raw material uh suppliers as well. So we had better raw material prices and I think there 38:05 38 minutes, 5 seconds was a bit of uh rupee uh depreciation helped to an extent as well. 38:10 38 minutes, 10 seconds Okay, understood. And my last and final question is on uh the uh Spark business SPUK business uh which uh we are 38:20 38 minutes, 20 seconds planning in the next two years. In your initial commentary you mentioned that we'll be planning to reach uh 200 crores kind of business in that. So can you 38:28 38 minutes, 28 seconds help us understand uh what is leading uh uh to this kind of uh you know optimism for uh kind of generating that kind of 38:37 38 minutes, 37 seconds business uh in that segment and uh at that margin at that uh scale what kind 38:45 38 minutes, 45 seconds of margin and working capital requirement would be there? Yeah. 38:51 38 minutes, 51 seconds with regard to SPUK the current uh uh growth expected you know as per the guidance is because we are definitely 39:00 39 minutes the existing customers they're we're observing our uh business model moving from as I used to say before from list 39:09 39 minutes, 9 seconds to London and setting up the entirely the new team with designers and everything so the customers are 39:17 39 minutes, 17 seconds waiting to watch and see how we has settled down in the UK and the last few quarter quarters we have performed and 39:25 39 minutes, 25 seconds our prices are acceptable product development design support everything they are extremely happy. So now they 39:32 39 minutes, 32 seconds have openly have they told our team in the UK said that yes no we can do most of our departments we will we are 39:39 39 minutes, 39 seconds consolidating our our suppliers and you are you are in the top four of our vendor list. So they have they have 39:49 39 minutes, 49 seconds given a guidance of you know this is a kind of volume say one customer is giving about 80 crores and another one is another about 80 crores and we are 39:57 39 minutes, 57 seconds adding another one or two more new customers. So putting all together the ma major business comes from the existing customer. So which mean it 40:05 40 minutes, 5 seconds should happen there should not be there is no reason why it cannot happen and then with regard to the market you know it's a trading model. So the fix and 40:13 40 minutes, 13 seconds expenses are there. So we are working towards uh achieving 4%. 40:19 40 minutes, 19 seconds At the level at the embit level. 40:23 40 minutes, 23 seconds Got it. And the working capital required for this would be so working it's a trading business the 40:30 40 minutes, 30 seconds working capital should not be a big requirement as such. We take uh uh from 40:36 40 minutes, 36 seconds suppliers 45 days credit to 60 days with certain suppliers and it it will be a 40:44 40 minutes, 44 seconds requirement of one month turnover only for uh for uh as working capital. So it's it's a high ROM. 40:54 40 minutes, 54 seconds Joel, you have anything to say? You are there. Okay. 41:02 41 minutes, 2 seconds Got it. Thank you so much and all the best. 41:08 41 minutes, 8 seconds Thank you. The next question is from the line of Pria Janjun Wala from Lara Securities. Please go ahead. 41:16 41 minutes, 16 seconds Uh hi sir congratulations on strong set of numbers. Um just wanted to understand um on your um machine addition plans are 41:25 41 minutes, 25 seconds we um on track of uh the numbers that you have guided in the past to add machines. 41:36 41 minutes, 36 seconds See with respect to number of medic missions to be added in this financial year we we have uh guided for thousand 41:46 41 minutes, 46 seconds missions and we have already added 700 but uh because of this US tariff we have 41:52 41 minutes, 52 seconds slowed down uh even we have closed down couple of faces which we have started. 41:58 41 minutes, 58 seconds So currently we we looked at maybe uh two quarters that could be an extension of the 42:07 42 minutes, 7 seconds addition of missions but I guess we are on track but the position what chairman 42:14 42 minutes, 14 seconds has given to you it is based on the existing available machines. So so there won't be any increase of machines for this year. 42:25 42 minutes, 25 seconds Okay. And for FI 27 and 28 um given the uh given there is some more clarity on trade deals and stuff uh 42:34 42 minutes, 34 seconds coming in. So can we see that also going as per track as discussed earlier? 42:43 42 minutes, 43 seconds Uh it's hardly 15 days since the trade deal has happened and so many things 42:50 42 minutes, 50 seconds every day there is a new update on certain things. Today our commerce minister has said that even India will 42:58 42 minutes, 58 seconds get a 0% trade I mean similar to Bangladesh similar to Bangladesh on 43:03 43 minutes, 3 seconds cotton uh bought from US so 27 28 I guess that will be very tough to look at 43:12 43 minutes, 12 seconds but we have been adding missions and we still have good amount of uh headroom to improve our uh utilization level uh even 43:22 43 minutes, 22 seconds though when the trade deals Sir, I appreciate that. Thank you. Uh this is last 43:29 43 minutes, 29 seconds existing setup. There is no plan for new new projects or new acquisition. 43:35 43 minutes, 35 seconds Okay. And sir, what about Sri Lanka? Um how uh there uh are we planning? You mentioned about one more factory to be 43:44 43 minutes, 44 seconds added. So where should we reach in Sri Lanka? Because there we have tariff. Uh there's no tariff. Madam said, Madam 43:52 43 minutes, 52 seconds said we have already added four factories. So now we are at close to,650 43:58 43 minutes, 58 seconds missions of you uh in Sri Lanka. So there room for 2,000 missions. 44:05 44 minutes, 5 seconds I I think by March we will have this, 650 missions and we can add more 44:12 44 minutes, 12 seconds missions in the same factories. So the adding missions will be an issue. So okay u they are in line with whatever guidance that we have given for FI27. 44:24 44 minutes, 24 seconds Oh that's fantastic. So um uh thank you and all the best. Thank you. 44:32 44 minutes, 32 seconds Thank you. The next question is from the line of Bavika Jane from invest nvesia invest in investment. Please go ahead. 44:41 44 minutes, 41 seconds Uh thank you for taking my question. Uh sir I want a bit understanding on the tariff duty. Uh so basically as per my 44:50 44 minutes, 50 seconds understanding like we have 18% reciprocal tariff. So uh do we have to pay uh like in total 30% or is going to 44:59 44 minutes, 59 seconds be the total 18%. And along with this I also want to know like there was a uh threshold of 20% like there is a relief 45:07 45 minutes, 7 seconds from us uh initially uh where u if we have a US original material uh somewhere 45:13 45 minutes, 13 seconds about 20% then we get some uh relief on the tariff duties. So just want to 45:20 45 minutes, 20 seconds understand if we like u SP apparel were enjoying that relief by using US cotton or uh like if you can um give me 45:29 45 minutes, 29 seconds understanding on that and the second question I have related to the the recent Bangladesh deal uh on the US 45:36 45 minutes, 36 seconds import. So uh so just want to understand because uh as now we are having the tariff advantage and also uh we export 45:44 45 minutes, 44 seconds um like uh to us also. So are we planning to uh do the uh use the US because the talk which are going on 45:52 45 minutes, 52 seconds about the increase the same clause which India will will get. So are we looking to take advantage of that or just want 46:00 46 minutes to understand the Indian cotton uh market scenario. 46:06 46 minutes, 6 seconds First of all, you know this US cotton using US cotton for zero tariff it is it 46:13 46 minutes, 13 seconds is a deal for you know but it is not attractive. Why? Because the American cotton are much more expensive and when 46:22 46 minutes, 22 seconds it landed no it will be at the duty paid the other other Indian cotton or something. So there is no big difference 46:31 46 minutes, 31 seconds unless and until the any customers from the US insist for American cotton there is no big advantage we don't see any big 46:39 46 minutes, 39 seconds advantage so even if it comes to India India is anyway you know we are strong in the cotton and we I don't think we 46:47 46 minutes, 47 seconds will look at the American cotton unless the customers ask for it and there is there will not be any cost 46:54 46 minutes, 54 seconds benefit on your first question I is uh the this 18% is a reciprocal tariff. 47:06 47 minutes, 6 seconds So already there is a duty which setting which the retailers are paying and over and above that is a reciprocal tariff. 47:15 47 minutes, 15 seconds So uh this reciprocal tariff is 10 12% plus this 18% will put together 30% duty 47:25 47 minutes, 25 seconds on in the Indian imports. So that's the kind of uh impact that the customers and supplier retailers will have. 47:36 47 minutes, 36 seconds And for a followup question on the Bangladesh uh so as to my understanding uh the U the Europe Bangladesh deal 47:42 47 minutes, 42 seconds which is going to end because they are now in the developing state uh status uh country status Bangladesh. So what you 47:50 47 minutes, 50 seconds see like uh do you see having any advantage from that side uh in terms of uh uh like customer acquisition from 47:59 47 minutes, 59 seconds like Europe uh from because Bangladesh losing the the customers from that uh 48:05 48 minutes, 5 seconds because of the the deal going uh to end 48:15 48 minutes, 15 seconds as I told you in Bangladesh we what article I read today is that you know it says that American cotton is so expensive. 48:25 48 minutes, 25 seconds Uh this what I told you before. So even if they import that American cotton and reexport it the landed cost is going to 48:31 48 minutes, 31 seconds be the same unless otherwise the any customers from America is insisting for 48:38 48 minutes, 38 seconds using American project otherwise I don't think Bangladesh will you know up for this American one. There are so many things they have to buy bulk and keep 48:47 48 minutes, 47 seconds the stock whether they can get from China or ATR in a short period so flexible. 48:55 48 minutes, 55 seconds Oh, sorry to interrupt. My question is um sorry to interrupt sir my question is 49:04 49 minutes, 4 seconds related to the Europe and Bangladesh deal. The the deal they have right now of uh duty free is going to end. So on 49:12 49 minutes, 12 seconds that thing I want uh your understanding the euro sign it is 49:21 49 minutes, 21 seconds then it will be we will be at par with Bangladesh as well as Sri Lanka like other countries 49:28 49 minutes, 28 seconds and we will be better placed as against Bangladesh. So we we expect the country expects more business coming from EU and uh UK. 49:40 49 minutes, 40 seconds Okay. Okay. Uh thank you sir. 49:45 49 minutes, 45 seconds I think your question sorry I think I I clear your question as thank you ladies and gentlemen in order 49:54 49 minutes, 54 seconds that the management is able to address all the questions in the queue. You are requested to limit yourself for one or a two question as per the participants. 50:04 50 minutes, 4 seconds The next question is from the line of Rupesh Tatya from Long Equity Partners. Please go ahead. 50:11 50 minutes, 11 seconds Uh hello sir. Thank you. Thank you for the opportunity. I have two questions. 50:15 50 minutes, 15 seconds So first the question sir is on the parent business right standalone uh business. Uh how how are we looking at 50:23 50 minutes, 23 seconds the US growth now now that all the uncertainty is gone can US became become you know I mean it's fairly large 50:31 50 minutes, 31 seconds market. So can it become you know 20 30% of our revenue in two three years. So that is question number one. And second question sir is again on standalone 50:40 50 minutes, 40 seconds business only is uh our fixed asset terms I I find uh a little bit on a lower side. So maybe if you can explain 50:49 50 minutes, 49 seconds why why are they low and and how can we improve the fixed asset terms because margin we are guiding 15 16% I mean and 50:58 50 minutes, 58 seconds not like 20%. So at least then I I was hoping that the asset turns will go up. So these are the two questions. 51:07 51 minutes, 7 seconds Yeah, I'll answer to question number one. Uh, regard to India's market, yes, uh, there had been a dip in Q4 and Q1 51:16 51 minutes, 16 seconds also. The existing customer, they started looking at India and we'll be maintaining the same percentage of 15 to 51:23 51 minutes, 23 seconds 17%. And we are adding one more customer in US. So if we consider that also the 51:30 51 minutes, 30 seconds US business will increase to 20 plus uh for the year 26 27. 51:37 51 minutes, 37 seconds uh with respect to your question on on the fixed effect like uh so SPF 51:45 51 minutes, 45 seconds uh is a backward integrated so like uh we have the investment gone into our two 51:52 51 minutes, 52 seconds spinning plant dying plant uh is not reflecting uh in the margins because of the uh the 52:01 52 minutes, 1 second bottle prices it's movement but uh I guess uh once the spinning the 52:08 52 minutes, 8 seconds US business revives I think yawn realization will be up and we should we 52:15 52 minutes, 15 seconds should see the margins going up for fi 26 27 we estimate only 15% is purely 52:23 52 minutes, 23 seconds because of the uh impact of the US coming late in the second half so once 52:31 52 minutes, 31 seconds the US business revise our spending plant and the D plan will be fully utilized and they will also be yielding 52:39 52 minutes, 39 seconds more margins which will improve the margins on a standalone basis. 52:45 52 minutes, 45 seconds That's that's helpful. So just one follow up on the first question. My my question is little bit broader in the sense that I mean you have two customers 52:53 52 minutes, 53 seconds you're adding one customer but given the landscape now I mean why why can we not add let's say 10 customers in next 2 53:01 53 minutes, 1 second three years it's a little bit broader question so you need to you need to be clear I I 53:09 53 minutes, 9 seconds guess the question is not clear I mean why why are we let's say let me 53:17 53 minutes, 17 seconds put it this way Are we a little bit cautious on the US growth given now the trade deal and you know competitive advantage against China and some of 53:26 53 minutes, 26 seconds these other things why why are we still you know slightly cautious on the US growth 53:34 53 minutes, 34 seconds currently currently our contribution is quite uh very low with us and we are improving on the US so we are moving 53:43 53 minutes, 43 seconds from 10% to 20% uh in the indic standalone business and we are also 53:50 53 minutes, 50 seconds reducing the contribution of US in young brand by adding two more uh UK based customers. So we are we are looking at a 53:59 53 minutes, 59 seconds balanced uh customer base like next year we may have 30 20%. 54:08 54 minutes, 8 seconds Next year we may increase it by another 5%. So we would stick to a balanced approach of US, UK and Europe. That will be our strategy. 54:20 54 minutes, 20 seconds Okay. Okay. Thank you. Thank you for answering my questions. 54:25 54 minutes, 25 seconds Thank you. The next question is from the line of Bat from Quest Investment Advisor Private Limited. Please go ahead. 54:33 54 minutes, 33 seconds Hi sir, good uh good good morning and congratulations sir. My question is related to I mean the Sri Lanka. How do 54:41 54 minutes, 41 seconds we are looking? I mean beyond I mean 27 hello 54:48 54 minutes, 48 seconds beyond beyond 2030 it is very it looks very prospective and very potential Sri Lanka 54:55 54 minutes, 55 seconds we we we have been you know very confident the way the things are happening in Sri Lanka 55:03 55 minutes, 3 seconds because you know the labor labor force is available and the efficiency skill is good and it's 55:11 55 minutes, 11 seconds EU duty free and UK duty free and so uh and it's not too far from our place from 55:18 55 minutes, 18 seconds Tamil. So we don't see any any we treat this as you know one of our other you know Tamil practice like an extended 55:27 55 minutes, 27 seconds practice of Tamil that's how we see it and their way of working is very much you know compatible to our way of working and they they are open to change 55:36 55 minutes, 36 seconds to our way of working and customers also are not not hesitating or reluctant to 55:43 55 minutes, 43 seconds give more businesses into Sri Lanka. So what they say the customers say SPF either you do in India or Sri Lanka it's 55:50 55 minutes, 50 seconds more than the same for them and so and the capacity there are good possibilities of increasing the capacities in the four packages what we 55:58 55 minutes, 58 seconds have acquired so we can increase another about 500 m over a period of 2 three years back so it's not an issue we look 56:06 56 minutes, 6 seconds at this is a very potential work and the great future my uh second question are we looking at 56:14 56 minutes, 14 seconds different product than the existing product range like Sri Lanka has a much better I mean capability in lingeries. 56:22 56 minutes, 22 seconds So are we really evaluating or we have already started uh manufacturing that 56:31 56 minutes, 31 seconds uh it's it's not that we just started manufacturing but we are looking at the special product even we are focusing on 56:38 56 minutes, 38 seconds woven in Sri Lanka also we are approaching customer to increase the woven business and not only that you know that is more 56:45 56 minutes, 45 seconds flexible Sri Lanka because you know the they all multi-kill they can handle you know all kind of fabric woven or you 56:53 56 minutes, 53 seconds know or polyester or modal or corset and style ladies fashion or you know 57:01 57 minutes, 1 second undergarments or babies. So they are so versatile those factories are all the factories in Sri Lanka and not only that 57:08 57 minutes, 8 seconds now that you know the UK has given UK and also UU I think they have given one more the scheme is that they import 57:17 57 minutes, 17 seconds fabric from anywhere in the world and they are getting duty free into EU and the UK previously if it is from China 57:25 57 minutes, 25 seconds they used to impose 12% duty now they have removed everything they can source import from any free and the we export 57:33 57 minutes, 33 seconds is duty free. So which is a big advantage where we can get some some orders of China based fabric also. 57:44 57 minutes, 44 seconds Okay. So thank you and all the best sir and wishing you very I mean uh 57:55 57 minutes, 55 seconds thank you. The next question is from day from Sapphire Capital. Please go ahead. 58:06 58 minutes, 6 seconds Hello. Am I audible? Yeah. Yeah. Yeah. 58:14 58 minutes, 14 seconds Yeah. You are audible. Ma'am, we can hear you. Please go ahead. Yes, you are very much audible. 58:25 58 minutes, 25 seconds Since there is no response, we will take the next question. 58:30 58 minutes, 30 seconds The next question is from the line of Anand Mount Infra Finance. Please go ahead. Uh, hi. Am I audible? 58:39 58 minutes, 39 seconds Yeah. Yeah, you're audible. Uh, yeah. I just have a small question. 58:43 58 minutes, 43 seconds I'm sorry uh if I didn't know this before. I have a question regarding the share of loss from an associate company. 58:50 58 minutes, 50 seconds Which associate company will this be? Because this is just coming in FI26. 58:56 58 minutes, 56 seconds uh so is this in I I think Sri Lanka and uh SP UK and SP retail have been consolidated. So I'm I'm just trying to 59:04 59 minutes, 4 seconds understand which associate company would this be. 59:09 59 minutes, 9 seconds So uh with respect to associate company you're right it is Sri Lanka uh Sri Lanka operations comes under the 59:18 59 minutes, 18 seconds associate company uh but on the UK and retail it's all consol in the 59:25 59 minutes, 25 seconds consolidated revenue so associate company is purely on the operations from 59:31 59 minutes, 31 seconds the uh Sri Lankan so so can you explain your setting in Sri Lanka like are you are you outright 59:40 59 minutes, 40 seconds purchasing companies or are you uh partnering with companies in or factories in Sri Lanka? 59:48 59 minutes, 48 seconds So in in the associate see in Sri Lanka the foreign companies are not allowed to own the land. So what we have done is 59:57 59 minutes, 57 seconds that we started an associate company and we have extended loan to that associate company for the purpose of buying all 1:00:04 1 hour, 4 seconds the assets in that associate company. So in the related party transaction we'll see an ECB extended from SP apparel to 1:00:13 1 hour, 13 seconds the associate company and this associate company would be headquartered in Sri Lanka or would have origin in Sri Lanka. 1:00:22 1 hour, 22 seconds Correct. Correct. Okay. Thank you so much. Thank you. 1:00:33 1 hour, 33 seconds Thank you. The next question is from the Barat Gulati from Dalalan Brcha. Please go ahead 1:00:49 1 hour, 49 seconds Mr. Baragulati. 1:00:54 1 hour, 54 seconds Yeah sorry sorry I was on mute apologies. uh just trying to understand that our current capacities that we are that we have available for operation in 1:01:02 1 hour, 1 minute, 2 seconds India it's at about 4,200 machines. So I I'm a little confused. Our presentation talks about close to 5,000 machines as 1:01:10 1 hour, 1 minute, 10 seconds of FI25 but currently 4,200 plus we've added 700 machines. So has there been a shutdown of a lot of machines? 1:01:20 1 hour, 1 minute, 20 seconds So 4,200 machines is the utilization and every factory has got some 1:01:28 1 hour, 1 minute, 28 seconds unutilized missions and moreover when we spoke in the beginning we have closed down couple of factories due to the US 1:01:37 1 hour, 1 minute, 37 seconds tariff issue which factories are mainly planned for US orders. 1:01:45 1 hour, 1 minute, 45 seconds Got it. So sir just would it be able to quantify how many machines are there today available to us in our uh in our 1:01:54 1 hour, 1 minute, 54 seconds respected geographies that are that you are guiding for the 2,000 kores of topline. So how many would how many 1:02:01 1 hour, 2 minutes, 1 second machines are there operational for that guidance to be achieved? 1:02:06 1 hour, 2 minutes, 6 seconds Operational mission details I I guess uh you can reach out to our IR and collect data. 1:02:16 1 hour, 2 minutes, 16 seconds Sure. Sure sir. Sure. Just one last question sir. So if I just do a kind of reverse calculation of our India 1:02:23 1 hour, 2 minutes, 23 seconds utilization and the volume shipped for the quarter, I arrive at about 103 million pieces for the entire year. So 1:02:31 1 hour, 2 minutes, 31 seconds would that be fair that we have a current capacity of 103 million pieces to be available to be shipped from India currently? 1:02:41 1 hour, 2 minutes, 41 seconds So uh we usually don't go by the number of pieces that we produce because if you 1:02:48 1 hour, 2 minutes, 48 seconds produce uh children garments it will be different. If you do fashion design products it will be different. So it 1:02:57 1 hour, 2 minutes, 57 seconds differs. So we don't go by number of pieces. Roughly around our capacity we 1:03:04 1 hour, 3 minutes, 4 seconds should be doing roughly around 3,000 cr 4,200. Right. 5,000 if 5,000 m. 1:03:16 1 hour, 3 minutes, 16 seconds If we run the full capacity of 5,000 machines, we will be doing close to,000,200 1,200 K of exports alone. 1:03:26 1 hour, 3 minutes, 26 seconds Exports alone. Exports alone. 1:03:29 1 hour, 3 minutes, 29 seconds Got it. So 1,200 K of exports would be from the 95% kind of utilization that we plan to achieve next year in our current capacity. 1:03:39 1 hour, 3 minutes, 39 seconds Correct. Correct. 1:03:40 1 hour, 3 minutes, 40 seconds Got it. Got it. And young brands. So if you can just give a broad understanding of will we see a growing trend take 1:03:47 1 hour, 3 minutes, 47 seconds place in young brands next year in terms of revenue topline or will it be flattish like how do we look at that? 1:03:56 1 hour, 3 minutes, 56 seconds So yeah with respect to sir. Yeah. Yes. 1:04:00 1 hour, 4 minutes Hi. So with regards to young brand uh for next financial year there will be a growth again as we've guided normally 1:04:08 1 hour, 4 minutes, 8 seconds between 15 to 20%. So definitely that kind of a growth will be there. uh but to have the full impact of the growth uh 1:04:17 1 hour, 4 minutes, 17 seconds will come an exponential year with the Salem project fully running but there will be better utilization and uh we are 1:04:24 1 hour, 4 minutes, 24 seconds adding as we said they're adding customers as well even UK customers TM brand so there will be a a growth compared to this year 1:04:34 1 hour, 4 minutes, 34 seconds fair enough so fair enough so just to get a broad understanding that uh the there would be no capeex for next year going forward we would be doing all this 1:04:42 1 hour, 4 minutes, 42 seconds capeex for sale and for India closing this financial year right? 1:04:47 1 hour, 4 minutes, 47 seconds Yes. With respect to capex, I guess we we are planning to have some maintenance capex which will be roughly around 10 to 1:04:55 1 hour, 4 minutes, 55 seconds 15 crores every year and we are as a part of sustainability we'll be investing into the solar which uh 1:05:04 1 hour, 5 minutes, 4 seconds chairman has given in the beginning of his speech that could be costing us somewhere 10 crores and roughly around 1:05:14 1 hour, 5 minutes, 14 seconds expansion could be uh reinstating Whatever uh in brand we spoke about uh 1:05:23 1 hour, 5 minutes, 23 seconds uh the party project uh could cost us another 5 crores. So roughly around 20 crores we 1:05:31 1 hour, 5 minutes, 31 seconds expect sorry 30 crores uh for capex next financial year. 1:05:37 1 hour, 5 minutes, 37 seconds Got it. Got it. So no major expansion capex. Got it sir. Yeah. Thank you. No major. Thank you. 1:05:44 1 hour, 5 minutes, 44 seconds Got it. So thank you for the followup sir. Appreciate it. I'll reach out to you offline for the follow for the further queries. Thank you sir. 1:05:54 1 hour, 5 minutes, 54 seconds Thank you ladies and gentlemen. Due to the time constraint this will be the last question. I now hand the conference 1:06:02 1 hour, 6 minutes, 2 seconds over to the management for the closing comments. 1:06:07 1 hour, 6 minutes, 7 seconds Thank all the participants and I I would like to thank everyone for showing interest in this in this company and I 1:06:15 1 hour, 6 minutes, 15 seconds hope we were able to answer to all the questions up to your expectation and we still expect your support as you have 1:06:23 1 hour, 6 minutes, 23 seconds been all the time and we we still stay confident about our growth plan and growth path and we are we seem to be 1:06:33 1 hour, 6 minutes, 33 seconds having a very strong and thank you once again for having confidence in this company. Thank you. 1:06:43 1 hour, 6 minutes, 43 seconds Thank you on behalf of LR Securities. 1:06:45 1 hour, 6 minutes, 45 seconds That conclude this conference. Thank you for joining us. You may now disconnect your lines.