Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased by 7.6% year-on-year, driven by core product sales.
- Volume growth reached 9%, supported by sales in the economy and athleisure segments.
- EBITDA saw a significant year-on-year increase of 59%, totaling INR18 crore.
- Net profit increased by 129% year-on-year, reaching INR10.5 crore.
- The company has become debt-free net of fixed deposits as of the end of Q1 FY25.
Negative Points
- The company did not meet its initial revenue growth guidance of 18% to 20%, achieving only 7.6%.
- The industry continues to resist any price increases, affecting potential revenue growth.
- High inventory levels due to lower-than-expected sales in Q1.
- No major CapEx plans for FY25, which could limit future growth opportunities.
- The company does not foresee any price hikes for the next two quarters, potentially impacting profit margins.
Q & A Highlights
Q: What are your plans for the Pragati scheme going forward? And which states are we planning to start the scheme?
A: Right now, we have tested in a few areas of UP, Rajasthan, and Chhattisgarh from where we have got a positive response. Gradually, we'll implement it in the whole state and then take it to other states as well. - Vikash Agarwal, Whole-time Director
Q: How is the thermal order book currently? And what is the volume guidance for FY25?
A: Thermal order has been quite good, and we expect a strong business this year with a volume growth of at least 20% to 25%. For the financial year '25, the volume guidance would be in the range of 12% to 13%. - Vikash Agarwal, Whole-time Director and Sumit Khowala, CFO
Q: What are our CapEx plans for FY25?
A: Currently, we don't have any plans for major CapEx and major expansion. There will be routine CapEx of INR12 crores to INR15 crores. - Sumit Khowala, CFO
Q: Can you provide a brief idea about the branding cost for FY25?
A: In the first quarter, the ad spend stood at INR19 crore, which is 9% of the revenue. In coming quarters, it will be rationalized, and the yearly guidance is around 6% to 7%. - Sumit Khowala, CFO
Q: Is there a possibility of any price increase in this quarter and the upcoming quarters?
A: The cotton prices are stable, and the market is very competitive now. We don't foresee any price hike for the next two quarters. - Vikash Agarwal, Whole-time Director
Q: What is giving us the confidence that for the full year, we'll be able to achieve the 13% to 15% growth that you stated?
A: Despite the first quarter not meeting expectations due to election disturbances, we are investing in building teams in export and modern trade, which should pay off in the coming quarters. - Vikash Agarwal, Whole-time Director and Sumit Khowala, CFO
Q: How do you see the company's growth over the next 2-3 years?
A: We aim for a 12% to 15% CAGR, leveraging opportunities in modern trade, LFS, EBOs, and export. We are building strong teams to achieve this growth. - Vikash Agarwal, Whole-time Director
Q: What are your plans for expanding modern retail stores and central warehouses in FY25?
A: We are building a strong team and expect to grow at least 20% to 25% in modern retail stores. We are present in all major platforms like Amazon, Flipkart, JioMart, Ajio, Myntra, and Tata CLiQ. We do not have plans for central warehouses. - Vikash Agarwal, Whole-time Director
Q: Can you throw some light on the women's segment from your products? How is it going?
A: We are building up a team and portfolio for the women's segment. In the coming quarters, it should contribute roughly 9% of the total sales. - Vikash Agarwal, Whole-time Director
Q: How much cash do we have on the books?
A: We have cash and cash equivalents, net of debts, around INR11 crore. Additionally, we have made an investment in an arbitrage fund of around INR26 crores, totaling INR36 crores. - Sumit Khowala, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
