DOMS Industries (NSE:DOMS) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call of DOMS Industries Limited hosted by ICICI Securities. The presentation and the results release, which DOMS Industries Limited has uploaded on the stock exchange and their website, including the discussions during this call contains or may contain certain forward looking statements concerning DOMS Industries Limited business prospects and profitability, which are subject to several risks and uncertainties, and the actual results could materially differ from those in such forward looking statements. As a reminder, all participant lines will be in a listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr.

0:46 Anirud Joshi. Thank you and over to you sir. Yeah. Thanks, Agiras. On behalf of ICICI Securities, we welcome you all to Q1 FY twenty seven results conference call of DOMS Industries Limited. We have with us today senior management represented by Mr. Rahul Shah, Chief Financial Officer. Now, I will hand over the call to Rahul Vai for his initial comments on the quarterly performance, and then we will open the floor for question and answer session. Thanks, and over to you, Raphael. Good afternoon, and a very warm welcome to everyone. Thank you for your time and for joining us today for the Q1 FY 'twenty seven Earnings Call. Joining me on this call is the team from Marathon Capital, our Investor Relations Advisor.

1:36 I hope you have had a chance to review the investor presentation and the results release posted on the stock exchange and our website. We were able to maintain our growth momentum in Q1 FY twenty twenty seven despite a difficult external environment, including a sharp increase and continued volatility in raw material prices. This was driven by robust domestic demand, leading to volume growth, supported by a strong back to school season, coupled with marginal increase in ASPs on account of calibrated price increase to partially offset the significant increase in volatility in raw material prices. All our core categories witnessed healthy growth, Scholastic Stationery, Scholastic Art Material and Paper Stationery growth was led by the back to school demand, backed by new launches and capacity additions undertaken in the recent period.

2:38 Our office supplies category continues to see high positive traction, led by growing demand for our pens and a widening portfolio of products. The new launches across mechanical pencils, erasers, paper stationery, pens, pencil boxes, school bags and kits and combos received strong consumer acceptance. This reaffirms our capability to drive growth through consumer centric innovation and agile product development. Beyond our traditional led growth, we also saw high growth traction in new age channels of modern trade e commerce and ClickCommerce. This was primarily driven by momentum in our Baby Hygiene segment.

3:25 Export growth was flattish during the quarter, primarily due to the global disruptions and elevated logistics challenges arising from the ongoing war situation. Coming to our margins and cost environment. Sharp increase in raw material prices and volatility persisted during the quarter, driven by ongoing global uncertainties. We continue to manage this through prudent procurement to ensure uninterrupted operations. However, the company has chosen to remain focused on volume led growth and market share expansion over near term margin consideration amidst sharp and volatile commodity inflation.

4:11 Now coming to the details of our financial performance for Q1 FY twenty twenty seven. Operating revenues for the quarter grew by 19.2% to INR $6.70 crores, in line with our annual guided range, highlighting our sustained growth trajectory. EBITDA for Q1 FY 'twenty seven were down by 16.4% to INR 82.6 crores, with EBITDA margin at 12.3% in Q1 FY 'twenty seven as compared to seventeen point six percent in Q1 FY 'twenty six, primarily on account of all in gross margins by nearly 400 basis points due to sharp raw material inflation linked to the West Asia crisis. Further impact on EBITDA was due to higher employee benefit expenses on account of new tranche of ESOP grants and increased employee headcount and increased other expenses primarily due to expenses linked to organizing our channel partners' need along with the ceremonial occasion to mark the possession of the first building of the 50 plus acre project.

5:22 PAT for Q1 FY twenty twenty seven stood at INR 45.3 crores as compared to INR 59.1 crores in Q1 FY 'twenty six and PAT margin for Q1 FY 'twenty seven stood at 6.8% as compared to 10.5% in Q1 FY 'twenty six. PAD growth was impacted primarily due to increase in depreciation on account of capacity expansion and commissioning of new facilities. We see this moderation in margins as a temporary blip rather than a structural deterioration and continue to maintain our focus on volume led market share growth. In relation to updates of our ongoing capacity expansion, our overall expansion plans are progressing well.

6:15 Development at the 50 plus acre greenfield project is now on track, and we expect to commission close to 300,000 square feet of operational area by the end of Q2 FY 'twenty seven. This, along with expansion initiatives in adjoining areas, will help us scale capacity to capitalize on the latent demand for our products. The company has already invested close to INR 100 crore in Q1 of FY twenty twenty seven, primarily towards capital investments. Now coming to the update on the Reynolds brand team and asset integration. The implementation of the asset purchase agreement is progressing as planned.

7:00 The integration of Reynolds team personnel along with the movement of assets at our Umarga facility is now complete. The brand's full sales potential will be unlocked over a period over a time as integration progresses as well as on commencement of manufacturing under the Reynolds brand, aligned with the commencement of the operation in the first phase of our new 50 plus acre greenfield project targeted for end of Q2 FY 'twenty seven. In the interim, until the desired scale is achieved, the apportionment of cost may exert some temporary minor impact on margins. Overall, we are very excited about the fundamental rationale behind the Renault acquisition, the strong presence in the rupee 10 to rupee 100 price segment of TENS complements our portfolio and helps us elevate the group's product price architecture.

7:58 Further, by leveraging the legacy and brand equity of Renault, we aim to deepen consumer engagement across generation and is a strategic step in strengthening our office supply segment portfolio. As we look ahead, our guidance for 18%, 20% consolidated sales growth is further reinforced by the positive demand and the current in the domestic market. However, visibility on margin guidance remains limited, owing to abrupt fluctuation in raw material prices. Thank you. And with this, I would now request to open the floor for question and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch tone telephone.

8:49 If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of from BNP Paribas. Please go ahead. Yeah. Thanks for the opportunity. Now the first question is on margins. How should we think about the trajectory from here? Is it fair to say that your margins this year will remain slightly weak due to higher RM cost, additional expenses for the new factories, which you'll start booking at least to some extent and initial cost for Reynolds? And these will only normalize in FY 'twenty eight? And why have you not taken larger price hikes? That's the first question.

9:37 Guravayan. So Guravay, like we've mentioned, for us, our priority was very much clear that we wanted to focus on volume led growth, ensure that the market share growth trajectory is repaid. And therefore, with respect to our pricing decision, we've taken very calibrated price increases. Towards the end of June, once the situation with the war was turning out positive, we've seen the raw material prices to come down from their highs. However, in the last couple of weeks, again, we've started seeing some increases because of the renewed situation in West Asia.

10:24 And hence, again, the raw material prices have started going up. But over a period of time, we believe that the raw material prices will not be sustained at these high levels. They should probably cool off soon. And once we come to know the new base, then in order to reach our earlier margins, if there are any further price increases to be taken, we will be taking that. But right now, owing to the abrupt fluctuation in raw material prices, visibility on margin guidance continues to be limited. But '28, I think, structurally, there is nothing that is deteriorated.

11:09 And once we have some stable price levels, the company will take required decision to ensure that we again reach to our guided range of about 16% to 17%. Okay. Okay. Second is as the production and the new facility starts in the coming quarters, how should we think about the revenue growth in second half? There'll also be price hikes, which will be contributing, and there'll be increased capacity. So would you expect to go beyond 20% growth, excluding any impact from Renault? And how should we think about Renault's contribution in FY 'twenty eight, which will be the first year full year of operations? See, Renault is a brand and asset acquisition that we did. We did not take over any new manufacturing facilities from them.

12:02 So the capacity to manufacture and sell Renault product will be coming from our existing planned expansion only. So it is not going to add anything. It's just that, you know, otherwise, in that particular plant, we would have manufactured DOMS branded plants. Now we will manufacture Reynolds branded plants. So it's not going to add significantly to the revenue projections for the current financial year. And with respect to the new capacity coming up in H2 of this financial year, this was already planned. And when we guided for the 18% to 20% revenue guidance, we've taken into consideration the new capacities would which would help us to, you know, lead this volume growth would come from the 50 plus acre plant.

12:58 So from a revenue growth perspective, we continue to guide with the 80 to 20% revenue growth in the current financial year. Okay. But what's Reynolds brand right now in terms of, like, revenue number? And once you integrate that in FY twenty eight, where do you see the Reynolds brand revenue to be? See, right now, the Reynolds when we acquired Reynolds in the year, the previous financial year, Reynolds had done a sale of about INR 130 crores to INR 140 crores. But we believe that we will be able to add significant value to this brand, not only in terms of introducing new products within the lighting instrument segment, but also leveraging this brand for, you know, other product categories.

13:56 You know, our intent is to operate in all as a parallel brand focused towards the office segment as well as, you know, users which are, you know, professionals. I would say serious users sort of a thing. With this background, in addition to the existing range of products, we will also launch other products that should fit right with this brand DNA. And given this, we believe that in a short period of time in the near term, probably by FY 'twenty nine, Renault brand should be contributing close to 20% of the company's overall revenues. Understood. Just last last question. So with all of these happening, Renault Sorry to interrupt. Mister may we request you return to the question queue for a follow-up question? Sure.

14:48 You. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Neha from Navama Group. Please go ahead. Hi, sir. Thanks a lot for the opportunity. Just couple of questions from my end. You did mention that there are a lot of one offs, Right? One was ESOP related, one was, you know, new facility retail, and then there was raw material prices which could not be passed on. Could we get some color in terms of individually how much did... You know, how much have we passed on in terms of raw material pricing? I do understand that, you know, scenario remains volatile. But how much of it is left to pass on, which will clear up two things, that how much of price increases accounted in revenues and how much is volume growth and also will give some flavor on margins? That was first one.

15:40 Hi, Sneha. So, Sneha, right now, you know, we've taken on an average price rise of about four to 5%. If I have to just talk about the, you know, first quarter, The average raw material price increase was about 20%. You multiply that with our consumption margin. So overall gross overall consumption increased by about 10% to 11%, while we were able to pass on 4% to 5% and hence, 500 basis points was something which was left to pass on. But like I said, we've seen some amount of moderation in the raw material prices.

16:25 Hopefully, from what we heard at recent Sunday, things should now stabilize again. Probably, those raw material prices should come down a bit. So, hopefully, you know... And with respect to the one off expenses, like I said, in terms of ESOP in the previous year, same quarter, you know, after that, we've given one more tranche of ESOP. So that added about 0.2% to the cost. And there has been a... I wouldn't say a one off expense, but a nonrecurring expense in terms of the channel partner need that we organized along with the... While we were taking the possession of the first building in the 50 acre facility.

17:14 So that impacted our q one margins by about 0.4%. Understood. Understood. And, Rahul, you know, following up with the last previous question where you said Reynolds itself will become 20% of your revenues by FY twenty nine. 10%. 10 Okay. Okay. That's clarified. But despite all of those things, in your office supplies business, what we understand will be the, you know, the biggest driving factor in your revenue growth. Don't you see any side to 18 to 20% estimate? Because $3.50 odd crores coming in effect only from a newly acquired brand, and your previous guidance was itself 18 to 20% sort of a CAGR.

18:00 Yes. Yes. Yeah. That's what I tried to clarify in the previous answer to also was basically... See, as a brand is an addition that is coming, but we've always been constrained with the capacity which we have. So while we've acquired the brand, we are not acquiring any physical capacity. So my land building, it's still something which is constraining factor. And then growth was already planned. So instead of those growth coming in DOMS, we will try to get some growth in the NOMS, work as a parallel brand, introduce some more products. Well, let's say, we plan to launch diaries and paper stationery products under the NOMS brand. So it is going to come from the same facility of the paper stationery capacity that I have. You know? So it's just a diversion of capacity.

18:54 Some capacity would be for Reynolds brand. But as with Reynolds, we believe that ASPs might increase a little better because Reynolds, like I said, is more in a especially in the Writing Instruments segment, target the INR 10 plus between the INR $10,100 price point. So ASPs might improve a bit, but not a lot of volume growth that would come. It's... It would be more of substitution from, you know, selling DOMS branded products to Reynolds branded products. While I agree with you in that terms that, you know, today we have capacity constraints, what people looking at the bigger picture for FY '29, do we really have to... Because by then, we'll definitely have, you know, large amount of capacity. You have... You're working on a 50 acre land. You're already starting in q two.

19:42 And assuming by FY '29, you'll have, like, know, you know, manufacturing setup, you know, expanded already. Then why do we need a substitution? Why can't we run both the branch simultaneously was my question, and why can't both the brands, you know, contribute? No. No. No. Both are like Ladies and gentlemen, we have the management line disconnected. Please stay connected while we reconnect the management. Ladies and gentlemen, we have the management line reconnected. Sir, you may please proceed.

21:07 Hi. Sorry, we got disconnected. So yes, what we what I meant was, while we continue to grow, the growth denominator will keep increasing. So the new capacity, the 50 acre plant and another around 80 odd acres that we've acquired adjacent to our current facilities both in Umergaon and in Jammu. That will also come under development. So a lot of new capacities will be added, and they will be sold in the DOMS brand and the NOLS brand both. Perfect. Understood. Thanks a lot, team, and all the very best. Thanks. Thank you. The next question is from the line of Janesh Joshi from PL Capital. Please go ahead.

21:59 Thanks for the opportunity. Sir, in the opening comments, you mentioned that our focus is on volume led growth. Mister, given the ticket size of our product and our market leadership position, why are we hesitant to maybe take a slightly higher price hike to compensate for the RM inflation? I mean, do you think that this can lead to any kind of down trading? And historically, has there been any precedent of any any peer seeking of price hike and which has consequently led led to any kind of loss in market share? And and we believe that something similar could perhaps still play out with us.

22:48 Ginesh. So Ginesh, in terms of historically, what we've seen is whenever such inflationary cycles have come in, when you take price increases, being a leader brand and, you know, enjoying strong position in a lot of product categories is definitely something which we couldn't do. But during such time, it also allows a lot of especially small and unorganized players also to have some breathing space. So historically, also, when we've seen such inflationary cycles, we tend to be a little more aggressive when it comes to pricing because that allows us to ensure that, you know, the breathing space given to the small unorganized players is reduced and which results in, you know, sustained market share growth for branded players.

23:51 So we'd experienced something similar, you know, during the COVID period. You know, if you look at our pre COVID numbers, you would see the company's revenue growth and margin trajectory had changed. Similar, we'd experienced during the start of the Russia Ukraine war when, again, crude and crude derivative prices had increased. So it's like... You know, it's a choice that we've taken that in during this time only for a near term margin consideration. We don't want to increase the price, but become a little more aggressive to ensure that long term benefits to the company are received in terms of higher shelf space in the retail counters.

24:41 Understood. And sir, my my second question is on Renault. Now if I'm not mistaken, we have just bought the pen business and have chosen not to buy the OEM and the of. So just wanted to understand the rationale for not buying the new business because that would have provided an immediate platform integration advantage to us given the fact that we do not have the big manufacturing capability. And also from their perspective, if they are selling the print business, bundling the print business with the OEM piece would have given them a a perfect exit. So it was that kind of a win win situation for both of them. So so just wanted your thoughts why we choose not to buy the new business.

25:29 So, Ginesh, let me first clarify. It is not that we chose not to buy a business. It is see, Reynolds is basically owned by Newell Group. Newell Group is a $7,000,000,000 plus revenue generating US based entity. They have multiple brands and multiple businesses across the world, and they were specifically looking at exiting only the Reynolds and Reynolds related asset business in India. They globally manufacture their own brands like PaperMate, Sharpie, Parker, which are big brands within the writing instrument segment. And a lot of their tips for these products are manufactured in India. So, strategically, they wanted to continue their tip manufacturing business.

26:24 And when we entered into discussions with them, what we understood was they were looking at only exiting the Reynolds brand and related assets. That is why we did the transaction only only for for the the Reynolds Reynolds brand brand and and the the Ascent. And coming to the tip manufacturing from a backward integration perspective, we are already in the process of we've already got the first manufacturing plant in India. It's in, you know, Swiss imported plant that we bought in India. And currently, the installation is going on. You know, there have been more machines which... For which we've ordered. And I think over the current calendar year plus the coming financial...

27:15 Coming calendar year, a lot more machines are going to come in, which will help us to, you know, manufacture at least about 30% to 40% TIF requirements in house going forward. Got it. Understood. Thank you. Thank you so much, and all the best. Thanks. Thank you. The next question is from the line of Aradhana Jain from three sixty one Capital. Please go ahead. Hi, sir. Thank you for the opportunity. Couple of questions from my end. One, I wanted to understand on the crude salience in our core stationery category and in the diaper business. The reason I'm asking this is if I see the margins for your core stationery business, there, we can see a clear cut reduction of close to around 600 bps, but your EBITDA margins for the Uniclang business has been intact.

28:09 So wasn't the, you know, Uniclang business also impacted because of crude? That's my first question. Yes. So Unicline business also was impacted by crude. There are couple of key raw materials in our diaper. One SAP, which is like a super absorbent polymer, again, a derivative of crude. And second is even the nonsynthetic fabric they buy. But what happens with Unicline because, you know, there is some more visibility and these products are basically imported.

28:54 So, you know, they give purchase orders well in advance, and the deliveries for that happened at the originally agreed prices because there was a little bit of a long term agreement. But, you know, the raw material prices there have also increased, and probably we see that impact of that in the current quarter. Okay. So could we... Yeah. Yeah. Please go, sir. Yeah. Yeah. Sorry. Go ahead. Can you go ahead, madam? No. No. So I was asking, so could we expect, like, in 2Q to see some more margin depletion on account of, say, the higher cost inventory on account of... Like, I'm assuming in one q, you would have some bit of lower cost inventory also, which would have helped you.

29:41 But in two q, could you have more of higher cost inventory which could lead to some more margin depletion at the gross margin level? Is that because, see, at DOMS, which is much larger when it comes to consolidation, we do not carry very significantly higher quantities of inventory, especially polymers, because they are all locally purchased. So it's not that we had significantly higher volumes of high cost or low cost inventory during the earlier quarters. So we don't see that significant impact to come on margins. In the diaper business, yes, there will be some impact, but at the same time, this is going to be the start of the seasonality of the diaper business from Q2.

30:35 So Q1 is always a slower quarter for the diaper business because it's sunny days, there's heat all around India. So fixed cost absorption is a little less during that quarter. Sales are relatively lower. But with the season pickup happening from the second quarter, the fixed cost absorption should be slightly better, which might offset some amount of increase in the consumption margins. So overall, we don't see it would significantly impact the overall EBITDA margins. Understood. And any further price hike are we anticipating or the four, 5% that we've already taken is sufficient to cater to the volatility that still exist in the crude side of things?

31:27 So as of now, in the current quarter, we are not looking at any further price hikes. We believe that we would want to wait for the volatility or the abrupt fluctuations to settle. And after that, if you believe that any price rise are required once the base of the raw material prices are, you know, a little visible, then we might take a call. But in the current quarter, we are not looking at any significant price rises. Understood. Just two more questions. One on export revenue. That's a decline this quarter. So what was the reason for that? Which are the key exporting countries for us and which didn't do well? And second is on the West West India revenue also. We see there's been a degrowth. So if you could just highlight what... What's the reason for that?

32:21 So export growth was more, you know, flattish in q one FY twenty seven, one due to demand softness amid persistent inflation and subdued consumer sentiment in certain EU economies. Further, it was also affected by the West Asia disruptions leading to longer transit times, higher freight costs, shipment difference. So that is the key reason. Even West Asia, which contributes about 2% of our overall sales, And it's not still completely opened up in terms of sales. So those were the key reasons why export was flattish.

33:07 But with the new capacity, especially in the pencil segment, which is coming up, we believe that going forward, pencil is a product which we export about close to over 25% to 30% of our pencil... Wooden pencil sales comes through export. With the new volumes that are expected to come up, export sales is expected to grow. And I think here, for the full year, export should be around 13 to 15% of our overall sales. Understood, sir. And West India? Yeah. I don't know. West India, you're comparing it, you know, with which period?

33:54 Last year, one q, we did around one eighty five, one eighty six odd crores of revenue. This year, we are at close to $1.40 on a Y o Y basis, if I So, see, we earlier also highlighted this that some of our export merchant export revenues, which are actually export done by third party merchant exporters, that happens through customers who are based in Western Part Of India. So we've got a few merchant exporters in Mumbai and Gujarat who do onward sales onward export sales. Like the overall export sales because of these fluctuations, which we just highlighted, were impacted. And because of that, even export, you know, those West India sales gets impacted a little.

34:49 Understood. I'll join back with you. Thank you. Yeah. Otherwise, there's no change in the regional mix, you know, where north followed by west and then east and south continue to perform in that order for the company. Thank you so much. Thank you. The next question is from the line of Rahul Agarwal from Ikigai Asset. Please go ahead. Yes. Hi, sir. Good afternoon. Just two questions. Firstly, to understand, is it possible to understand that if the company does a capital expenditure of, let's say, 200 crores, $2.50 crores a year, how much sales can they add in the overall top line? Is that 2.5 number of fixed asset term reasonable?

35:37 And the three lakh square feet which you're commissioning this year, how much sales can that add? That's the first question. Hi, Rahul. So Rahul, firstly, historically, we've always targeted that for every rupee that we invest in our invest as capital expenditure, we should be able to generate INR 3 of sales. And if you see historically, we've been able to achieve that even if you look at the last year number, we were close to about two plus of 2.7x and very close to our targeted range of 3x. So once the production facility, you know, is set up and starts commercial production, it takes us about eighteen months to... Eighteen to twenty four months to reach the full optimal level, which is about three x on the rupee that is invested.

36:36 And your second question with respect to this 300,000 square feet of space which is coming up. So basically, in this 300,000 square feet that we'll start commercial production in the end of this quarter and eventually will start getting gaining pace and momentum in h two. We are increasing our capacities for pencils, wooden pencils, pens, erasers, which is a complementary product to pencils. So as... You know, when we talked about that 18 to 20% growth for the full year, a large part of the growth for the second half of the year will come from these facilities.

37:25 And like I said, we believe these facilities to gain complete commercial production, you know, full utilization in about eighteen to twenty four months. Right, sir. And my second question is on margins to understand it better and just a clarification rather. So I could understand that there is still some gap assuming spot are in pricing. When you've taken four, 5% of price side, there's still some gap to cover. So let's forget the shorter term. If we just understand the fiscal twenty eight math, at current spot RM pricing and the price hikes you have taken, do you think the company should go back to 16, 70% of operating margin? Is that a safe number to assume for the next year? And just one question was on the ESOP thing. If you could just quantify the amortization of ESOP in terms of total cost for the full year for fiscal 'twenty seven and 'twenty eight, which is expected to be booked?

38:25 Okay. So first, I'll just answer your second question with respect to ESOP. The cost for the total year for ESOP for both the tranches put together should be close to about 10 crore rupees. And the one which we did in October 25 and then... No. October 24 and then in February 26. So both these tranches put together For the full year, the cost should be close to about INR 10 crores. And with respect to the gap in margin, like I highlighted earlier, as per the current prices, we see that there would be a gap of about four to five percentage if the prices continue to as per the current spot prices. So if the prices continue to be at this level, then that is the increase that we might have to pay to ensure that our margins for FY twenty eight reach to... Reach back to our, you know, targeted range of 69%.

39:33 Just a clarification on the reserve. 10 is for fiscal twenty seven. Right? Yeah. Yeah. For the fiscal twenty seven. And fiscal twenty eight, what will be the number? So, see, basically, as part of our reserve policy, you know, we would want to... Current policy, we plan to give out ESOPs over a five year period. We've done that for the two periods. Even this year, there will be some ESOP outlay that will happen, and this will continue for the next couple of years. So this number will rise. Again, we'll be able to quantify it once we decide on how much ESOPs will be granted in the current financial year. Additional ESOPs will granted in the current financial year.

40:22 All right, sir. Maybe I'll get back in the queue. Thank you so much and all the best. Thank you. The next question is from the line of Rehan Syed from Preenetra Asset Managers. Please go ahead. Yes, good afternoon. It's going to be in the question. Am I right? Not very clearly. Hello? Hello? Now it's you. Sorry to interrupt. Mister Sayed, you have a lot of background noise. Can you please use a microphone while asking a question? Oh, I'm on handset only. Now it's clear. Hello? Yes. Please go ahead with your question. Oh, yeah. Susan, my majority of questions has been answered. Just I have left with one question.

41:15 I just wanted to understand regarding on the exposed side. So your exposed remains a relatively small part of revenue despite the partnership. So what are the key bottlenecks preventing faster export growth? And do you see exports become a double digit percentage of revenue over the medium or long term going forward? You said export is currently also double digit. It's close to 12% of our total revenues. There isn't any... You know, I wouldn't say there are any bottlenecks or anything. It's just that company continues to remain constrained with capacity. And historically, as well, whenever it's come to choose between exports and growth in the domestic market, we've always prioritized the growth in the domestic market, you know, and whatever new capacities, whenever they've been added, you know, the domestic market has supported or accepted it wholeheartedly and a bulk of new capacity additions, which which actually drive the revenue growth of the company, have been absorbed in the domestic market.

42:30 So that is the only, I would say, challenge. Challenges in terms of capacity. But like I said, with some new capacities coming for, you know, 10 sales, new capacities coming for some innovative, differentiated products, export, at least in the near term, will gain slightly better momentum than it has done in the past. Got it, sir. That's it from my side. Thank you. The next question is from the line of Persi from IFL Capital. Please go ahead with the question. Yes. Hi, Rahul. You mentioned that FY 'twenty seven, despite Reynolds coming in, you... We should take a 18 to 20% type of top line at the total company level.

43:20 What about FY '28? Would it also be 18 to 20, or Reynolds will add some incremental... Incrementality to it? So, firstly, I I... A little early to write about the revenue growth in FY '28. But I believe the growth trajectory momentum should remain similar. Like I said, it is from the planned capacity, which was expected to drive growth in the coming two, three years. From that, we will divert some capacities to manufacturing the all branded products. So those would not incrementally add significantly to revenue growth.

44:09 It's just that we'll be able to create a parallel brand. Yes. There would be some growth because of higher... Relatively higher ASPs under the Renault brand, but not something very substantial. But we'd probably want to, you know, discuss on FY twenty eight growth numbers a little later in the next couple of calls probably. Oh, but, Rahul, when we have acquired a brand, when the demand is there for that brand in the market, what really prevents us from, let's say, adding significantly higher CapEx and starting to sort of add it right away. So let's say some part of it comes in second half, some part of it comes in first half of next year.

44:55 Why can't we do, let's say, over the next twelve months, 400 crore of CapEx instead of the 200 or $2.50 we are planning? We certainly have the internal accruals, and even if little bit of debt is required, we can take it. I mean, there is a market for this product and sort of we have done an acquisition. And if ultimately, it's not going to add incrementally to sales, that is a lost opportunity for us. So what prevents us from really doing higher CapEx now? Space, you know, like we said, we are already constructing this massive project now. It's about fifth... Earlier, it was about 45 acres. We've acquired more additional land. It's becoming... It's now about 50 plus acres of land, which is under development.

45:45 And as and when these buildings get ready and developed, we'll start manufacturing activities in these buildings as fast as possible. In addition to that, in our existing... You know, close to our flagship unit, we've acquired another 11 plus acres. In Jammu, we were added land building. So we are doing CapEx, but, you know, it's it's it's probably easier said than done in terms of deciding that let's do 400 crores together to it because a lot of planning needs to happen. A lot of... You know, we need physical space, which has been a constraining factor because of which we've been developing these constructing these lighter buildings.

46:34 So I think, like I said, there will be because of Reynolds, there will be incremental revenue growth that will come in, but that will be more from a perspective of being able to sell at a higher price point. And at the same, which will help us in improving our ASPs, but not a lot of volume growth will come because of... You know, because that volume growth will come from the capacities that we are able to add. Understood. I mean... Okay. Fine. I'll take this offline. Yeah. That was my only question. Thank you. Yes. Thank you. The next question is from the line of from Goldman Sachs Asset Management. Please go ahead. Hello?

47:25 Yes, Mr. Jalan, you can proceed with the question. Yes. I just want to understand, is Renault a higher margin business? Hansen, I see, Renault, historically, when they was being operated by Newell, they did not operate at very high margins because they had a lot of you know, costs. But now that we've just acquired the brand and we will be managing the entire production and the sales part of it, it will operate as per our margin structure. So I believe the margins for the Renault's brand also will be as per our margin structures. With respect to margins, we've always followed a a principle which says that nothing at the cost of market and nothing at the cost of margin.

48:20 So eventually, we will, you know, want Reynolds to also operate like our other brands doing about, you know, that 60 naught percent EBITDA margin. And since we'll be controlling the costs, controlling the production, we believe we'll be able to get to that margin number also soon. Right. And would you say this is the bottom in terms of EBITDA margin for the year? Hopefully what that was that you said for staff cost and for Yes. Absolutely. So, hopefully, shouldn't be many more surprises from mister Trump, but then we believe that this was probably the bottom, and things should be better going forward.

49:14 Thank you. Thank you. The next question is from the line of Nehal Shah from Prudent Corporate Advisory Services. Please go ahead. Thank you for the opportunity. So I just wanted to know if the four, 5% price like that we've taken is the standard throughout the industry as well, or our price hike was a bit lower or higher compared to the industry? So I think... And probably the industry was actually waiting for what decision we've taken. And after we've increased, then a calibrated increase, I think overall, the industry has done sort of a similar sort of a step. Not anybody doing anything very high or very low.

50:04 And once the raw material costs come in our comfort range, so then what do you plan to do of that? Right? Like, do we plan to enjoy the extra margin for some time, or we go back to some lower prices than are right now? So what we've always done is, you know, like I said, nothing at the cost of margin, nothing at the cost of market. Whenever we've seen in any product or because of any such actions, if the margins are increasing, that we want... We'll add some value to the product. You know, we'll make the product much better for the consumer. So we will definitely not want to sit and eat on these margins sort of a thing. We'll definitely give the consumer or our channel something additional to enjoy.

50:58 Okay. So we should take a five twenty six gross and EBITDA margins as we spot for our margins and try to maintain those wins ahead. Yes. Like I said, yes, FY '28, that's how we should look at it. Okay. Thank you. Thank you very much. Thank you. The next question is from the line of Saurabh Patwar from Quest Investment Management. Please go ahead. Hope sir, I'm audible. Yeah. Hi, Saurabh. Hi, sir. Sir, just wanted to get your thoughts on, say, last decade or so, what would be a cumulative price hike which you have taken in, say, in fences on a blended basis? No. I'll have to come I'll have to come back to you on this. I'll probably have, you know, some marathon or somebody get back to you with this answer. I'll have to calculate.

51:56 But I wouldn't say it is very significantly higher because the MRPs of the product have... Would have increased from, what, you know, 5 rupees to 6 rupees or 7 rupees at max. But I will have to come back to you on this. Sure, sir. Sure. And sir, May 2, last day, maybe a decade or so, what would have been the industry volume growth per se? Difficult. Honestly, difficult to give this answer. No problem, sir. Great, sir. Thanks. Yeah. Understood, sir. Fair enough. Great, sir. Thanks a lot, sir. All the best. Bye bye. Thank you. Ladies and gentlemen, that was the last question for the day. And now I would like to hand over the conference to the management for closing comments.

52:50 Thank you, everyone, once again for joining us today. We appreciate your continued support and confidence in our journey. Should you have any further questions, please reach out to our Investor Relations team. Thank you, and have a great day ahead. Thank you. On behalf of DOMS Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.