Gokaldas Exports (NSE:GOKEX) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Gokaldas Exports Limited Q2 FY 'twenty seven Earnings Conference Call hosted by concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Kasuri Sharma from Thank you, and over to you, ma'am. Thank you so much, Ikra. Good afternoon to all of you, and thank you for joining us. Before we proceed, let me quickly remind you that the discussion on the call today may contain certain forward looking statements that may involve known or unknown risks, uncertainties and other factors.

0:50 It is important that these be viewed in conjunction with our business risks that could cause future results, performance or achievements to differ significantly from what is expressed or implied by these statements. Please note that the results and earnings collaterals have been emailed, and the same are also available on the company's website. If for any reason you have not received these, please write to us, and we will be happy to send them over to you. To walk us through the performance and answer your questions today, we have the management of Gokaldas Exports Limited represented by mister Shivrama Krishnan, vice chairman and managing director, and mister Satya Moti, the chief financial officer. We will begin the call today with an overview and highlights of Q2 and the half year, followed by the Q and A session. With that said, I'll let Ms. Shiva take over to you, sir.

1:38 Thank you very much. Good morning, everyone. Happy to have you at the earnings call for the second quarter of FY 'twenty seven. The business kept up its growth momentum in the second quarter of FY 'twenty seven. Our India business grew a robust 10% Y o Y in a seasonally weak quarter, supported by a strong automotive and improved execution. This is particularly notable because overall Indian apparel exports grew only by 1.2% year on year over the same period. It reflects continued market share gains through focused execution. Our Africa business delivered a 32% Y o Y growth on the back of higher volumes and improved realizations. At the consolidated level, income grew a healthy 13% year on year and EBITDA rose 48% year on year. And improved product mix and productivity gains supported this performance.

2:27 It was also aided by a lower base in the same quarter last year when U. S. Tariffs weighed on both our India and Africa businesses. Wage increases and higher factor costs arising from oil prices limited some of these gains. On the balance sheet front, we continue to work on maintaining a tight working capital cycle. The net debt declined to INR $4.29 crores as of September 26 compared to INR $5.53 crores as of March 26. Sourcing activity has lagged consumption in key markets. Apparel imports declined across our key markets, including U. S, EU and UK in the year to date period ending August 26. In our assessment, two factors explain this. First, last year's base is high because brands bought shipments forward ahead of expected tariff increases.

3:18 Second, retailers kept inventory tight through much of this year, while tariff picture remained unsettled. Importantly, early signs of recovery appeared in August, imports into The U. S. And EU returned to positive growth. Looking ahead, the year end holiday season in The U. S. Is expected to remain healthy. The National Retail Federation projects retail sales growth of 4.2% year on year. That said, the consumer environment is also becoming more uneven. Elevated inflation, rising fuel price and pressure on household budgets are expected to affect spending differently across income groups with lower income households likely to feel most strained. We expect this to show up as more value seeking behavior and continued inventory discipline from retailers.

4:04 That means a preference for shorter lead times, more frequent replenishment and fewer, more reliable supplier partners. We believe that we are well positioned for this environment. Our customers span value mainstream and premium segments, which give us resilience across income groups. Our scale, speed and execution record makes us a natural partner as customers consolidate their supplier base. End demand is holding up. Inventories have been managed tightly and tariff policy is now clear. Together, these point to a gradual recovery in sourcing volumes over the coming quarters. The past few months have brought much needed clarity on trade policy. In The U. S, the final Section three zero one tariff rates took effect on 07/24/2026.

4:49 They placed India on an equal footing with several competing sourcing countries, including Bangladesh, Cambodia, Indonesia, Sri Lanka, etcetera. India also has kept a clear advantage over China and based them, both of which face about 12.5% tariff. This is a significant turnaround from a year ago when Indian apparel faced additional duties up to 50%. For our Africa business, Agua has been extended through December 28, including the third country fabric provision. This gives us visibility for several years on preferential access to The U. S. Market. In The U. K, the India, K. Comprehensive economic and trade agreement has been in post since July 1526. It gives India duty parity with Bangladesh and Vietnam and a meaningful 12% duty advantage over China.

5:37 In Europe, the India, EU, FDA is expected to be signed soon, which will further strengthen India's competitive position in this region. Taken together, these developments are expected to enhance customer confidence and support stronger order placements across key markets going forward. In the quarters ahead, the company has a good order book visibility. We have secured two new customers for Africa and will begin operations for them starting FY 'twenty eight. We are expanding our business with our European customers in India and expect the growth to be strong. We expect BTPL to merge with Gokaldas and the completion of due process is expected in Q3. The fabric business team has been strengthened and the outlook for the next year seems promising.

6:27 Volume growth is key and BGPL management is working towards enhancing the throughput in Q4 FY 'twenty six. I thank you for listening and would be happy to address any questions that you may have. Thank you very much. We will now begin with the question and answer Participants are requested to use handsets while asking a question. The first question is from the line of Harshita Goklecha from Flair Investments.

7:14 Go ahead. Hello. Yes, sir. Sir. Am I audible? Yeah. Good afternoon, sir. So I just like to understand the demand the demand is great in the market right now. But are you also finding this skill... Proper skill for suing? Because because we are listening every day, there's lack of labor or the creativity is lacking a lot? No, I don't think we are facing that. I mean, wherever we are facing shortfalls, are using migrant labors, particularly in the South. And our incremental expansions are all happening in Central India, Eastern India, where we don't seem to have any concerns as far as labor availability is concerned.

8:01 So we're not seeing a significant labor challenge. We have found ways to manage. In addition, we run training camps in most of Central And Eastern India, all the way to Northeast, including Arunachal Pradesh. So we are conducting training camps there and then sourcing our employees or prospective workers from some of our own run training programs in those regions. So we have a manpower pipeline process put in place, and we which is serving us adequately. Okay. So are we also seeing any help from government also, sir, in creating the skills in India? So there is a DD UKGY program, to pass the training program. So we are utilizing that, but largely the effort is done by the company in training and securing the workforce.

8:59 So sir, manufacturing capacity and execution capability with FTAs opening up opportunities in markets such as Europe and UK, Indian government manufacturers could potentially receive significant large orders, sir, and the industry currently has significant manufacturing capacity to execute this. Do we have enough orders, sir? Like enough manufacturing facility? We will have to continue to expand our manufacturing facilities. We are doing that. So for example, our bulk of the growth in capacities will happen in Bhopal and Ranchi, where we have facilities running. And we are working towards it. For example, we are setting up a thousand machine factory in Ranchi. We are expanding our capacities in Bhopal. All of those, in addition to expansion in other regions, but these are principal areas where we are expanding.

9:52 And we continue to expand because we have visibility of growth in business. There's a lot of European growth, which we are anticipating post FDA, and that will also aid our continued growth in the quarters and years ahead. So we do anticipate that, and we are in turn creating capacities aligned to it. Okay. So like there is no problem with manufacturing issues. I'm talking general market, I said, sir. Okay. Yes. There is no problem. Okay. So the next one, sir, the swing machinery import restrictions have come a lot, sir. Finally, there has been some reports regarding restrictions on the import of swing machine. Could you clarify whether the restrictions apply to household swing machines or only the industrial We don't face any sewing machine import restrictions. So I'm not sure about household. But as far as industrial imports are concerned, especially for export oriented manufacturers, we don't have any such restrictions in place, and we have not seen any problems on that count.

11:02 Okay. Given that the advanced industrial sewing machines involve sophisticated technology and India still depends significantly on imports for such equipment, Could these restrictions adversely affect the industry ability to expand capacity? Sir, we have not faced any restrictions so far, and we don't seek to have any problems in securing any technology or for our purposes. Gotcha. Sir, my last question, sir. Sorry to interrupt you, Harshita. Okay. Just one last question. Ultimately, do you do you believe India is currently equipped to capture the incremental government orders arising from FTAs? Or will it take another two, three years to build the required manufacturing capacity, skilled workforce and supporting infrastructure, sir? No. No.

11:49 It's always a ramp up, and we do have the ability to ramp up and grab the business. All these businesses will come inflows. So as and when an FDA happens, for example, India, UK FDA happened in the middle of twenty twenty six. The real impact will be seen in FY 'twenty eight because most of the orders for this current financial year was done by then. So these growths do tend to come with a face lag, and it will get built up. The buyers or the brands will also have to take time to move orders from other regions. Indian manufacturers will also take time to build the capacity and ramp it up and settle down. So all that this is a trajectory. If you look at when Bangladesh got LTC status many years ago, probably a decade ago, their growth started ramping up or rather galloping, and they were growing at an industry level, they were growing at about 11% or 10% year on year. And of course, many companies grew much faster. So growth happens in waves and phases, and will be sustained over the next several years.

13:09 The capacity is supposed to be put in Harshad, please rejoin for our follow-up question. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your question to two per participant. If you have a follow-up question, please rejoin the queue. The next question is from the line of Jignesh Kamani from Nippon Mutual Fund. Yes. I see your answer. Yes. Just on the Otrako segment, I think we started taking the fresh order at the revised price from last I think third and fourth quarter of last year. So despite that, we have seen the deepened margin at least sequentially. So what explain that? And what is current outlook based on the order book and increase in the outlook?

13:57 What kind of margin Ataco can do currently? So in the second quarter, it's a seasonally weak quarter for Atraco, and that is what it reflects. So when you have a large capacity and seasonally, there is a weakness in terms of order book, which happens in the second quarter, there will be a little different in margins because of the fixed costs impacting it. In fact, if you look at the order book for the quarters ahead, it is fairly robust. And if I look at FY 'twenty eight, we seem to have a strong surge in demand from some newer customers as well as existing customers who want to diversify into Kenya, in particular, to take advantage of the duty differential. So a lot of customer discussions are going on. We've actually secured two new customers in Africa, which will start from April onwards, one American and one European. So there is a fair amount of demand.

15:00 One of the things that we are looking at in the quarters ahead is also rebalancing our portfolio with respect to the right set of customers. So there could be a movement from one customer to another just so that we have a strong, profitable and suite of customers and product types that we work with. So going forward, I think the margins will improve and the order book as well as the pricing is aligned towards it. Maybe six months down line, can we hit to around 10% kind of margin at Atrakow or is still generally a little bit far ahead? Six months down the line, I am confident that we should be at the 10% EBITDA margin.

15:49 Understood. And how is the efficiency improvement and the margin improvement at BTPL? And if you want to say margin right now after one quarter, can you give us some pro form a what kind of data and certain capital BTPL is having right now? So BTPL's currently, if I look at Q2 revenue, it is of the order of about INR170 odd crores, with Q3 revenue going to about INR225 odd crores revenue in Q3. In Q3, we are expecting BTPL to be EBITDA breakeven. In Q2, the EBITDA was slightly negative. And in Q4, we are expecting the revenue to go to the region of about INR $2.50 crores or thereabouts.

16:38 And we are expecting or we are working towards the PBT level breakeven. So we're working towards that. And on the working capital... And answer your question on BTPL? Yes, on the working capital and debt levels or the BTPL. Okay. On debt level, currently, BTPL is at about INR 300 crores. We are trying to manage the working capital tightly. So as and when we go towards Q4, when the revenue will be INR $2.60 odd crores, we will still try to manage it at about INR 300 crores of working capital level in BTPL. Understood. So once we merge INR 300 crore debt will be added to our books, right, roughly? Yes, that is correct. Correct. Dignesh, as of September, we are at $4.23 crore net debt level.

17:27 At the year end, when we close this financial year end, including BTPL, we are targeting to end at around INR $6.50 crores to INR 700 crores. Remember, this is after taking we started with INR $5.50 crores at the beginning of this financial year. So after taking it upon this INR 300 crores, we are targeting around INR $6.50 crores to INR 700 crores. We'll be also we have also accounted INR 80 to 100 crores settlement to BTPL shareholders in cash component and all the CapEx and working capital whatever we incur here in this financial year will be funded out of all those has been baked in and accordingly the number we should end up with around INR $6.50 to INR 700. Understood. Thanks a lot. Thank you. The next question is from the line of Soham Samanta from Motilal Uswal Financial Services Limited.

18:18 Please go ahead. Yes. Thank you for the opportunity. So my first question is where... I mean, when we can see your double digit volume growth in India, like, most of our peers are growing nine ten... Minimum 910% of volume, and we're growing hardly 5%. So can you please put a light on India business? And another point is that the realization, if you look this quarter, I mean, not for us, for every most of the textile company having a huge realization growth. But will this realization growth is sustainable for H2 or maybe FY 'twenty eight? Double digit volume growth, we should start seeing from FY 'twenty eight. And we are seeing a fair amount of growth even starting from Q3 onwards.

19:04 In fact, revenue growth will be at strong levels. We are very margin conscious also. So we make sure that we're not simply changing volumes, but I'm confident that next year, there will be double digit volume growth. In Q3, definitely, revenue growth will be very strong, and the volume growth will also be pretty reasonably strong. What was your other question? So other, is that the realization momentum, is it sustainable? Because even this quarter, half yearly basis, the realization growth was much higher compared to volume growth. So this pricing or is it sustainable or not? It is sustainable, and it depends on product mix. Usually, in Q1 and Q2, we have higher realizations simply because we tend to do a lot of outerwear, which are higher ASP garments.

19:51 We have certain customers who are more oriented towards autumn winter wear. In fact, we are seeing a very strong traction in that space. So when I look at auto winter twenty seven, which will be actually production in Q1 and Q2 of FY 'twenty eight, we are seeing a strong growth in those product types, including volumes. So not only are the ASP side, but we are seeing a pretty strong volume growth also for Q1 and Q2 next year based on the early projection discussions that we are having with customer. So yes, I mean, that's usually Q1, Q2, we will have a higher ASP product growth. Q3, Q4 is.

20:39 But on an average, we tend to work with higher ASP products. And that will be maintained or improved. And sir, in the follow-up in the India business, the capacity in last year, we had a 52,000,000 including metrics. How we are looking the total capacity by 'twenty nine, another 15,000,016 million dollars we can add this, Rachi, and your Kandrataka field and the Bhopal one? Just a second. It is possible. Definitely, it is possible. And what kind of CapEx then we're looking in that case for next three years? For next I think our CapEx, for instance, this year, we are planning about INR 150 crores.

21:30 We might ratchet it up to INR 75 crores based on the volume growth. The projections which I'm getting from certain customers in the years ahead would necessitate us to CapEx in excess of INR 200 crores in three years every year because there is a fair amount of business traction that we are seeing from some of our customers going forward, forward looking projects are very strong. So the combined CapEx is INR $4.50 crores... INR 50 I'm sorry, go ahead. Yes. So the combined CapEx for next year will be in the range of $4.50 crores to 500 crores. Say that again. I mean there's a lot of disturbance in the line.

22:19 Can you say that again? So basically, the combined CapEx from FY 'twenty six to INR 29 crores, it would be in the range of $4.50 crores to 500 crores? From FY 'twenty six to FY 'twenty? 'twenty nine. Yes, give me about, say, 150 crores to INR 175 crores this year and say at least INR 200 crores in the years ahead. So yes, that's correct. What could be the tax rate going forward because we have some BTPL losses and all. So on a half year... Tax going forward will be low because once the BTPL asset merges with us, we will have accumulated losses coming into the company. BTPL carries an accumulated loss in excess of, what, INR 600 crores or thereabout.

23:10 And hence, there will be a tax shield, which will come from there. Some of the subsidiary entities in India will continue to be taxed as the tax will apply to the parent entity of the stand alone entity. So our tax rates will low for some time to come, very low. It will be it will approach near zero or quite in a So for the full year BTPL, can we add the four months, can we add INR 130 crores to INR 140 crores in our top line? There's so much of disturbance in the line. Can you repeat the question? I was asking for the four months, BTPL, can we add INR 130 crores to INR 140 crores in our top line in FY 'twenty seven, BTPL? In FY 'twenty seven?

24:03 Yes. Think of say, if the fourth quarter revenue is about INR $2.50 crores, I think we should be able to add about twothree of that. The next question is from the line of Sunny Vishay from Prabhudas Leeladel Capital. Sir, I'm it's more of a follow-up from earlier two questions. So in Africa, you said the quarter is seasonally weak. But even on year on year growth, the growth in first quarter was somewhere around 44%. That has now dropped to 32%, I think. So the utilization has again dropped to close to 40%.

24:58 So do we expect the realizations to remain so low in the next two quarters? Because of the two new customers you said will be starting to contribute from April onwards. So for the next two quarters, what are your expectations in terms of the utilization? The additive business for Q3 and Q4, we have a fairly strong order book. And I think we should see growth from Q2. In that sense, Q2 is the plateau or the trough and from which growth will be robust. And there will be a robust growth in FY 'twenty eight also. In 'twenty eight, I would see at least a 20 plus percent growth, if not more, in FY 'twenty eight.

25:46 And Q3 onwards, there will be a robust growth. Okay. Okay. And another follow-up on the earlier question. So realizations, you said again realizations also have seasonality effect. So those may drop seasonal, right? Hello? The seasonality effect. What happens is when the seasonality effect hits in that particular quarter, there is a drop in revenue and fixed costs then tend to as a percentage of revenue increases, which is why margins tend to drop in Q2. But then it gets it bounces back in the subsequent quarters. So does that mean the average selling price that we achieved in India and Africa, this is sustainable in absolute terms for the next two quarters?

26:34 Average selling price is a function of product type. Usually, it will be higher in Q1 and Q2 and lower in Q3 and Q4 because in Q3 and Q4, we make a lot of spring summer dresses, tops and shirts, etcetera, which are lower ASP garments relative to the outerwear that we tend to make in Q1 and Q2, which are autumn winterwear. So when we look at that a per garment basis, the realization per garment will be always higher in Q1, Q2 vis a vis Q3, Q4. Naturally, in Q3, Q4, the volume or the unit quantity will go up to occupy the remaining volumes that occupy the manufacturing volumes that we have. Right. But on year on year basis, there will be a realization growth. So on comparable quarter, it will be better.

27:23 Absolutely. Because we tend to go to more higher value products year on year. Yes, you're right. Okay. And finally, couple of bookkeeping questions. One is any orders you see that have it prebooked? Because I think there has been a buzz that given the longer freight time, some of the holiday orders, some companies are delivering have delivered in September itself. So do you think that some of the Q3 volumes have already been recorded in Q2? We have not seen too much of it. We do tend to work on shorter lead time orders usually. And we have not seen any prebook and Q3 getting advanced into Q2 compared to the previous year.

28:09 Finally, would you be willing to share the volumes and realization for Matrix, the average selling price, if possible? We have actually merged Matrix and Gokaldas because a lot of our current orders in Gokaldas is now being manufactured in Matrix factories, etcetera. So literally, that old division between the two has become instructors as all India businesses are being run as one business with one set of management team with factories becoming fungible. So purely carving out the earth to aile matrix business may not be the right way to look at it also. Okay. Understood, sir. Thank you. Thanks a lot.

28:56 Thank you. The next question is from the line of Abhishek Shankar from ICICI Direct. Please go ahead. Yes. Thanks for taking my question. Congrats on the good set of results, sir. So sir, I just have two questions, mostly on the industry part. So recently, we've been hearing news that in Bangladesh, the government facilities are getting shut. There are some protests and all these things are happening there. So very early to say, but do you see in the future, in the medium term, some demand shifting to India and any incremental orders coming from that? So this happens in Bangladesh from time to time, where the there is a clamor for higher and higher wages in Bangladesh because obviously, the wages in Bangladesh are insanely low. So clearly, an inflationary environment with the oil prices being high, etcetera, is creating a situation where Bangladeshi workers tend to push for higher wages. If you recall, three years ago, there was a substantial increase in wages in Bangladesh. At that time, it was almost a 50% increase in Tata terms. And now again, they are demanding from 12,500 going to almost 30,000, but it may settle down, there is a base code being constituted.

30:18 So this happens in Bangladesh. So there is a concern amongst brands that there is this unrest on one hand. There is also an opportunity in terms of European business seeing FTA benefits by delivering out of India. So it's clearly an opportunity for India going forward. So that is happening. But I wouldn't bank too much on Bangladeshi disruption to last long. So while from a risk mitigation standpoint, many customers are actively seeking capacities in India from all of us. The Bangladeshi business is not going anywhere. Their economic argument for delivering out of Bangladesh remains robust as long as the wage costs there remain low.

31:14 And because a lot of political interests are tied into the government industry there, they will at least historically, they have tended to keep to manage to keep the wage costs or wage increases fairly low. In the past, increase in wages were offset by depreciation of Tata. We have not seen too much of Tata depreciation in the last one point five, two years. So we got to see how the currency plays out. But having said that, the bigger factor as far as Bangladesh is concerned would be how is the LTC pending. So there is a least developed country status, which gives them zero duty access to Europe. And that is expiring in November 26 with a three year grade, so which will technically expire in November 29.

32:06 So if that is not getting extended, then India, which will in the future have zero duty FTA with Europe and Bangladesh, which may lose the duty free status, we will have that may have a much bigger play on movement from Bangladesh to India. These kind of current unrest may create uncertainty, but it may not significantly move the business. Yes. Fair point, sir. Just one more question. So I just wanted to know what is currently your regional mix? And why I'm asking that is because this EU FDA opens up a lot of opportunities for India, right? So if I'm right, please correct me if I'm wrong.

32:51 If I'm right, the EU realizations, any order from EU client realizations from EU would be higher than what it is in U. S, right? So I'm just trying to understand if over a period of time your EU and UK salience moves up, your realization should improve further. So that's what I basically wanted to understand. So our current European business, which includes UK, would be about 15%, and we intend to take that up pretty significantly. In fact, our growth of European business is very, very strong. And based on certain projections from our European customers, we anticipate that to remain fairly robust. Some of those customers are growing some 60%, 70% Y o Y.

33:40 So that tempo of growth will be sustained. My sense is that it may also over a period of four, five years grow to about 25 odd percent of total revenue. Having said that, we have not seen too much of difference in profitability between European and American customers simply because the customers that we choose to work with and the products we choose to work with, we make sure that we have the minimum threshold margins. Normally, I find U. S. Margins better than European margins simply because we get good amount of run sizes. It's a more homogenous market. Also, is a market where barring Africa, which gets a reduced duty access to U. S, from all other countries, the duty structures are similar.

34:30 Unlike Europe, where currently at least Bangladesh enjoys the duty free access until that gets balanced in India balanced to India's favor, European customers do tend to expect us to serve at or at least match the Bangladesh land and duty paid price. So margins in Europe are a notch lower than U. S. Having said that, the business that we do, we tend to expense and get equivalent margins from both regions. Thank you so much. Once the duty free access is restored, probably our margins for Europe will also improve because that gives the additional play of duty saved.

35:16 Okay, sir. Thank you and happy Diwali. Thank you. Thank you. The next question is from the line of Vishal Mehta from IIFL Capital. Please go ahead. Yes. Hi. Thank you for the opportunity. So my first question can you hear me well? Yes, yes. So my first question was on Africa. So in 1H in Africa, we've done like $45,000,000 kind of revenue. You'd earlier guided that with the expansion coming in, we should probably target this year in Africa to reach around 110,000,000 to $120,000,000 kind of revenue rate. So any change in that guidance or we stick to that INR 110,000,000,120,000,000 for this year in Africa? So we do have a visibility to go to that level.

36:09 We do have visibility to million dollars kind of revenue in Q3 plus Q4. Having said that, we are actively kind of slowing down on one of our customers there, where we are anticipating that customers' financial strength to be a bit weak. So we want to be careful before we really commit to that volume. So that is the only concern I'm having. So at this moment, we are not anticipating any credit loss kind of situation. Having said that, we are also not ramping up to the fullest extent because we are careful with the customer profile that we have there. So there is a little bit of that, else we could have easily ramped up to 60,000,000 in H2.

37:06 We might slow that down to close to about INR 50,000,000 or thereabouts in Q2 in H2, I'm sorry. By next year, anyway, we have we probably will be out of we have enough abundant choice of customers to ramp up without fear of any customer related challenges. Okay. How big is that customer from as a percentage of African revenue? It is about 20%, 25% revenue, but at the moment, yes. And they are usually a little Q2 H2 heavy customer, spring summer customer. Okay. So we'll completely ramp them down this year?

37:53 We want to ramp it out rather than keep them in place as a measure of derisking rather than go all out. So that's a call we are still in the process of taking. If we don't take that call, we can easily do million dollars If we may take the call and end up doing 50,000,000 to $55,000,000 Shivas, second question was on margins. Obviously, there have been sharp input price rise in 1H. We've also seen sequential dip in margins in 2Q. For 2H now, is the price pass through achieved both in India and Africa? And how are you looking at margins at India and Africa in 2H? Okay. Good question. So there are multiple factors at play in 2H, right? One is some of those input costs are being passed through back to the customers going forward. Second, there is an exchange rate benefit that we will get. So in Q2, for instance, our exchange rate because we hedge our foreign exchange receivables, our exchange rate was at about INR 91.

39:02 In Q3, we are holding an average hedge at about INR 93 And in Q4, we are holding it closer to INR 94.50 or INR 95. So there is a two gain that we will get in exchange rate in Q3 and another INR 4 gain in Q4 Q2 over Q4, right? So that itself is about INR 1.3%, 1.4% in EBITDA margin. So that's an additional gain that will come purely out of exchange rate. Then in Q2, there were some discounts that we had passed on to our customers. Effectively, that was about of the order of 0.5% of gross total revenue, gross revenue of the company. So that is no longer in effect from Q3. So that is an added margin gain that we will see from Q3 onwards.

39:56 And some of these oil factor input factor costs, we are now pushing it back into our pricing as well. So those will yield a little margin upside in H2. Sure. And my last question on capacity. Are the Bhopal Phase II and the Brownfields done last year in Karnataka, Jharkhand settled and ramped up now? And you had also guided for 2,000, 3,000 incremental machine additions in addition to the Brownfield done last year in Karnataka and Jharkhand. So how are we placed there? And any new large greenfield on cards? Or we'll still continue with small brownfields here and there? So all those expansions are done. And Bhopal Phase two is on a ramp up as we speak. So by this financial year end, that Phase II will be fully ramped up.

40:53 Ranchi, we have started work on a new factory, which is 1,000 machine factories, which will run-in two ships. So effectively, thousand machine factories. 2,000 machine factories effectively will control will contribute INR 400 crores in top line. And that we anticipate to be ready for ramp up somewhere by the Seva Diwali next year. So around third quarter, middle of third quarter. Ramp up will start, so the revenue contribution for that largely will come from FY 'twenty nine onwards. And we are looking actively looking at adding at least two more factories based on projections that we have from our customers, a minimum of two more factories of 1,000 machine each, which effectively will contribute to another 400 crore top line. Brownfield debottlenecking is a continuing activity.

41:44 At least across the board, we will realize 4% to 5% extra revenue from debottlenecking in all the factories. So that's an ongoing effort. That debottlenecking effectively happened in the form of automations and improved throughputs, etcetera, that we run those projects everywhere. Just a follow-up here, if you can give revenue capacity at right now, considering Bhopal phase to fully ramped up? And what will be the revenue capacity after you have this Ranchi 2,000 machine factory coming in? So Bhopal will be about 300,000,000 in India.

42:29 Bhopal II will be INR 3,500,000 a minute pieces. 3,500,000. Revenue will be about INR 200 crores. INR 200 crores. Yes, revenue will be about INR 200 crores. And Rajee will be INR 400 crores. So it's about INR 600 crores. And then additional factories will come in a multiple of INR 200 crores, which we are working on. And deep auction making itself can be used about 4% to 5% across the board in India. So on a revenue base of about 3,000 crores in India, we will have a, let's assume, a 4% growth, that's about INR 128 crores or INR 125 crores. Okay. So INR 3,000 crores goes to 4,000 crores probably by end of next year in revenue capacity?

43:19 It will That's right, capacity wise. Yes. Okay. Thanks. That's all. Thank you so much. All the best. Thank you. Thank you. The next question is from the line of Saurabh Shivasawa from Arista Consulting. Please go ahead. Hello? Yes, sir. Audible. Good morning, sir. Sir, my first question is regarding Agua. It has been signed retrospectively. So are we expecting any sort of refund from the clients? First question. Second thing, are you also targeting some loss making units which can be later on merged with the Gokaldas so that the tax benefits can improve going forward when the current one is exhausted, sir? And third is that, sir, what is utilization going as of now vis a vis the installed capacity, sir?

44:19 Okay. So Agora, there's no refund expected because we sell FOB. And when we sell FOB, the duty incidents is picked up by the customer and hence, the refund also goes back to the customer. So we don't tend to either pay the tariff or receive tariff refund. So there is no refund expected. As far as securing tax benefits are concerned, I think our Africa business will continue to remain tax free primarily because of the structure there and tax holidays that, that enjoys and the fact that the revenue is booked largely UAE, which is a tax free zone. As far as India is concerned, we will have a tax shield going forward.

45:08 And are we actively seeking out loss making entities? We are not. We don't look at the business from that perspective at the moment. And third, sir, capacity utilization of the installed capacity in percentage terms, how much are we utilizing as of now? I think in India, we are I would say we are utilizing in Q3, we would be utilizing close to about 90% to 93% or thereabout. And in Africa, we will be utilizing at about 80%, 85%, and that also will be climbing up. The next question is from the line of Ashish Uganavala from InvestQ PMS. Please go ahead.

46:09 Yes. Sir, I have a broader question. Basically, we look at the turnout of the company that has doubled in the past four years, but our profitability or the profits have remained the same. So a few reasons for that, one, margins are a bit lower, interest costs have gone up, and depletion has gone up with the capacities and expense and the acquisitions that we have done. So all in all, I mean, all the expansion plus the problems that we had with the tariffs and stuff, everything seems to be getting over and in the balance sheet. So what do you expect to deliver maybe a year and maybe a couple of years now? Because the base base seems to have set in. If you could guide us on that, that will be helpful.

46:55 In my opinion, Q2 is I think from a financial standpoint, right, mean, are basis levels. And there will be growth in revenue across all the business units of ours. And in fact, a large amount of investments, big investments, heavy hauling would also get completed by Q3 when BTPL acquisition related monies will go in. From Q3 onwards, I can see that there will be stronger revenue growth and margin growth. As I mentioned, some of the currency related benefits and tariff discount related benefits will kick in. I just alluded to that answering the question before.

47:45 So margins will go up. Our top line will grow. So I think growth will start from H2 onwards and will be sustained because we will see a pretty significant growth happening from FY 'twenty eight onwards also based on some of the discussions that we are having with our customers and the volumes that we are anticipating from them. Okay. So do we see deleveraging also taking place because interest cost has been hitting the P and L? That is one thing. And we have that incentives from the state government on the rebate that remains lingering from India perspective. So all in all, put together, do you see maybe from 150 odd crores of profit that we delivered for the last four years average, this can be maybe around $2.50 odd crores plus?

48:43 Is possible? Because the base In my mind, it will be much above the numbers that you indicated in the from FY 'twenty eight onwards itself, right? I mean you mentioned about INR $2.50, right? I think it should be far higher than that based on how we are looking at the numbers. Simply because there'll be, a, growth in top line and b, margin yield itself, right? So for instance, every 1% improvement in margin will actually yield on a quarterly basis, I'm saying, on a 1,200 crore roughly top line, we are talking of additional INR 12 crores, right? So we are talking of exchange rate benefits tariff, plus our pricing has improved in all of those.

49:33 Those will kick in. Operating leverage will kick in. So there will be those additional levers which will start coming in. So we will see a stronger PAT growth in the from FY 'twenty eight onwards itself. With the rebate, sir, what is the status of that? The export, the ROSTTL, so that's work in progress. There are a lot of discussions happening with the Government of India. Subject to that, I really don't want to jump the gun and say anything. But there are discussions to continue this in the interest of protecting labor intensive business. This rebate is not technically a rebate. It is actually a refund of embedded taxes.

50:25 There are a lot of diesel plus electricity duties plus money taxes, all these are actually embedded, which are not or GST able, which is what comes in a refund. So there is an expectation that it will continue in some form fashion, even if it the worst case will be it will get reduced by some extent. So ROS CPL, for instance, for us is approximately 3.5%. Even if that goes to half, it will be 1.75%. Those are kind of amounts which we will easily absorb through further efficiencies and production efficiencies and improvements. In fact, we see wage cost increases. In fact, this year, our wage cost increase itself has been about percent 8%, and wage being 25% of our revenue, that is the impact of that itself was over two two point five percent. And we have absorbed that. So I'm not particularly concerned about that we will be able to absorb.

51:28 In fact, we are working towards absorbing that in the quarters ahead. The next question is from the line of Kumar Saurabh from Scientific Investing. Congrats on good set of numbers, sir, both on the P and L as well as on the balance sheet and cash flows. My first question is, sir, on Slide 16, where you have discussed the inventory destocking. At the same time, you also mentioned that September has shown the first positive growth of 14% versus a minus 6%. And given we are done with October and November is also shaping up. Based on your experience continuing with September, how you are seeing this trend shaping up? Is it a continuous trend improving, if you can give some color to it?

52:19 So we like to see those numbers will be these are aggregate imports. So I can't extrapolate Gokaldas' numbers because we are seeing growth, but that doesn't mean that aggregate imports will be growing or declining. We will have to wait for the numbers that The U. S. Train bodies released. But my sense is that U. S. Imports have been on a downward trend for almost a year, while the retail sales has been on an upward trend. So inventory destocking has been there. Now whether anybody can sustain at these low levels, I'm not sure. It also will be heavily dependent on the holiday season sales, that is between Thanksgiving and December. If that goes well, which is what the prediction says, right, there's a 4% growth expected this holiday season. If that happens, then I think the buys will come in strongly for next year. The worry which many retailers have, which is what is baked into the lower imports, is that in the next year, FY 'twenty I mean, calendar 'twenty seven, high inflation, high oil prices, if Iran war continues, etcetera, what will happen to consumer sentiment. Consumer sentiment so far has got every trend and has continued to be robust.

53:35 So we need to my sense is if consumer sentiment is good, holiday season sales are good, there will be a continued improvement in U. S. Imports. And same will apply in Europe as well. Got it. Sir, my second question is in last 1.5, we have done fair amount of consolidation. And in Q4 or Q1, certain guidances have been given, of course, with a range on how Africa will scale up the margins, the BTPL consolidation, India business. I'm not asking on each of the parameter, but looking at overall things, whatever guidance is on margin and growth has been given. From the lower end, I'm not asking the upper range. At least the lower end, are we certain that all of these things are going in the right direction where the particular the particular margin, Africa margin, India margin, the lower end of the growth and the margins we should be able to achieve? Yes.

54:31 Okay. Okay. And sir, last question on the working capital side. I think there has been some improvement in the working capital. If you could give some color on how we will land on the working capital days this year and FY 'twenty eight, if we have some visibility into it? On an average, we are targeting around seventy five days. We are the only challenge, even though we have achieved 72 in this quarter, we should budget 75 on an overall basis. We are still working on some working capital improvements, especially in Atravco operations because there because of the supply chain related issues, we are stocking up and there at least about twenty days incremental working capital days is being deployed over there. I do not see that get released in this financial year, but at least in the next financial year, it will get addressed. So we are working towards that. We see at least 75, we should be able to steadily maintain, while our internal target is a little lower than that. Got it, sir. And one last question, sir, in most of the textile calls, I mean, I think even in your commentary, the EU trade deal, it seems to be that we are very close to it and it should happen.

55:37 So all the targets which we have met, is this EU deal already a part of it? Or let's say this deal goes by in next one or two months, do you see any additional benefits coming in out of it? So see, any benefit from a trade deal will happen only after the trade deal is announced. Nobody gives incremental business anticipating a trade deal because at this moment, any exports to Europe goes in at 12% duty. So commercial benefit, every buyer is commercially savvy and the real benefit flows only post an FDA benefit kicks in. Now that's point number one. Point number two, orders are placed at least four to six months in advance. So once a trade deal happens, for the next six months, you will most of people will be working on orders obtained prior to the FDA being in place. So the real impact will come only six months later.

56:34 So real benefit of EU, let's assume that it comes in first quarter of next calendar year or second quarter of next calendar year, the benefit will come start really flowing through by end of twenty twenty seven calendar. Great. Thanks a lot, sir. Wish you a very happy Diwali, and thanks congratulations, and wish you all the best for next quarter. Thank you so much. Happy Diwali. Thank you. The next question is from the line of Sherish Badhisi from Motimal Ushwal Financial Services Limited. Please go ahead. Hi, Shiva and team. Good afternoon, and thank you for the opportunity. Just two, three point which comes to my mind. In July, we had a tariff clarity in The US, and then we also have a clarity on our extension.

57:25 I'm not looking too much into Bangladesh on the Esther, but I... I'm more keen to understand, is there any meaningful change in the client behavior? And the reason why I'm asking is that now autumn is there, winter is... You're talking about big numbers. But is there actually client is giving you a why? Because when you share the ODEXA data, I think The US inventory is coming down. Now I I came to understand why it is like or is it a is it a phenomena that August inventories is not the way we should look at and there are going to be some shipment delays which would have got recovered in the month of September? I think The U. S. Imports are largely dictated by the fear of American customers in mass market retailers are actually leading that inventory destocking or reduced buying, primarily fearing that there is a inflationary trend in the economy.

58:39 It is not yet borne out by retail sales at the moment, right? So there is a fear that we will they will foresee a lower sales. This is that's the fair factor. So what they tend to do is that instead of ordering well in advance, and Americans have a much longer ordering cycle, unlike the Europeans. So they are coming in now closer and closer to date. So effectively, when the lead times shrink, there will be a period where while retail sales can continue to be high, your buys can continue to be low because your need to stock that much inventory will be less because lead times are shrinking. And people are driving towards that. Most retailers are driving their lead time shrinking. For example, in our Q4 order book got placed now, which is effectively going to be sold in retail in summer 'twenty seven, which is so way out.

59:40 So we are talking of July, August, September next year, right, for which orders are in hand now. This will start getting is getting closer and closer. So we will see a lot of orders for that coming in October in January, February, March also. So it will this movement also will probably trigger lower import while retail sales can be high. So there could be partly inventory destocking, partly lead time reduction moves by brands, which may be causing this. I I hope I've answered your question. But if your question was something else, then do let me know. So I my basis of information is quite different. The retail sales during my research recently and talking to brand owners, the retail sales is happening, but the disconnect is that the export data which is showing the lower number. So I...

1:00:37 Am I... I'm just saying your fear that if the business is getting diverted to some other countries like Bangladesh or maybe some other countries because now we have the answer. Sorry. Sorry. Are you talking about India's exports or total US imports? No. No. India India... I mean, US capital import and your India export. Okay. So... Okay. So India barrel export, yeah, then... See, there are multiple things here. Right? So we don't tend to track too much on India barrel exports because, you know, that is at a at a whole country level, and there could be tariff related or multiple other reasons. Typically, Gokaldas does not track or larger companies don't track the countries apparel exports. There is a consolidation towards larger suppliers.

1:01:27 And in India, there are a number of larger suppliers of fewer. In Bangladesh, there will be many more larger suppliers. We understand there will be larger suppliers. So the general consolidation towards larger suppliers then tend to favor other regions. But I wouldn't read too much into India apparel exports, read more U. S. Apparel imports and then see how that trends because for Gokaldas, that will be a more appropriate data point to look at. Thank you. The next question comes from the line of Niraj Mamsinga from White Pine Investment Management Private Limited. Please go ahead. Yeah. Thank you for the opportunity.

1:02:14 I just wanted to know on this revenue capacity, if you break down the three parts of the company, stand alone India and BTP and Agua, what would what is it right now? And what would it be, say, one years, point one year from now? Just some revenue capacity. No. First of all, stand alone is not India. So you have to understand that. There are a lot of other like our Bhopal entity is not part of stand alone. It's a different entity, which we have set up for PLI reasons, etcetera. So and also getting tax benefits. So India is not stand alone. Meant India. Sorry for this. Sorry for the confusion. I meant India. Okay. So what's the split between India, Atraco and BTPL, say, next year? That's what you're asking?

1:03:06 The revenue capacity, yes. Revenue capacity. Just give us a moment. India will be INR 4,000 crores. Africa will be about INR $12.50 crores revenue capacity. And BTPL will be about, I would say, 1,200 crores revenue capacity. But the to the extent that the Gokaldas buys from BTPL, that will be netted off as it will be an intercompany transfer.

1:04:00 So out of that, you could assume some 35% netting off. Okay. The other question is, this you said India utilization, I think you're talking about the revenue capacity year down the line, right? Yes, 28%, I would say. FY 2020. Yes. And what would be the EBITDA margin of these three entities if they reach an optimal utilization during that time? So the India EBITDA margin in my assessment should be 13%. The Africa EBITDA margin should be 10%. And for the first year, which is FY 'twenty eight, the BTPL or the fabric EBITDA margin should be 10%.

1:04:49 And you have fair visibility of the optimal utilization today, right, for those capacities? Yes, we can see that here. Okay. So going forward, henceforth from there, what are your thoughts on your growth? Like you said that you're looking at two more capacities in India. So how you're thinking? Yes, because this is an opportunity the Europe and The U. S. Opportunity has suddenly started looking positive. I was think that will start, right? Because after the tariff challenge, which I think Chirish was also alluding to in his earlier one, right? When India had a 50% tariff, a lot of growth might have gone to other regions, Vietnam, Bangladesh, various regions, it's U. S. Is now rebalancing.

1:05:39 They are looking at India again as well as European growth will start happening. So we are I'm seeing a fair amount of traction for India related growth in the periods ahead. So for a larger entity, again, with supplier consolidation, for us to target a 15% growth is not that much of a challenge in apparel. Okay. Hence what you would be adding, you would be looking at putting up assets after those expansion in FY 2020 it is over. We are already looking at them right now. We are already planning those expansions and aligning those expansions because it takes time to build the factories too. Yes, yes, yes. Okay, that's all. Thank you.

1:06:28 You. The next question is from the line of Tushar Dundee from Sangvi Family Office. Please go ahead. Hello. Hi, team. Most of my questions were answered through previous participants questions only. I would like to just draw your attention back to the road shell scheme. If you could if you can share the number, I guess you mentioned some number that we are dependent on the road shell scheme. And how do you plan to offset the dependency if the Rochelle scheme were to not extend from the December onwards? So ROACPL comes in at about 3.5%. Duty drawback for us is about 1.5% to 2%. Duty drawback, we anticipate it to remain. So ROSATL 3.5%, there is a possibility it may go half.

1:07:18 If it goes half, then it is 1.75 is a drop in that ROSATL number or percentage. And that 1.75 we will absorb in pricing, we'll absorb in our productivity, etcetera, going forward. And this percentage is EBITDA? 1.5... Yeah. I mean, 1.5% of the revenue is is this... You know, ROSAPL comes in non export revenue. Right? So so that's the percentage. Yeah. Okay. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant.

1:08:07 Should you have follow-up questions, please rejoin the queue. The next question is from the line of from K. Seema Wealth Private Limited. Please go ahead. Sir, just wanted some numbers. Could you just share the expected capacity in Indian people by year end? And what it would be in FY 'twenty, sir? Yes. For India operations, the expected total capacity by the end of this year would be around 59,000,000. And for Africa operation, it will be INR 45,000,000. Okay. For next year, sir? Next year, for each of the we are targeting at least two to three factories to come onboard.

1:08:58 Each factory will add INR 3,500,000 pieces incrementally. The next question is from the line of Prerna Junjunwala from DAM Capital. So just wanted to understand the increase in creditors' days in working capital, is there any reason to this increase? Or we should just let it go as a balance sheet date? No, Prerna, this we have worked out with vendors trying to really get it in terms of financing to really take care, extend the credit period aligning with the customers.

1:09:53 So this is what I enjoyed. That was one of the activity which we were taking it up to take care of our working capital. We were aligning the pay cycle in line with my the credit cycle with my customers. That was one of the things which we are able to achieve it and that's the reason you see the credit increase. So does that increase our cost of procurement or It is part of the regular commercial transaction. Normally, extended credit period what we work. My customers keep extending, so I keep extending my credit after credit period. We have not received any cost increase of that nature. Okay. That's what I wanted to check. Second question, in BTPL today, how much of the production is being consumed captively by you?

1:10:44 About 33% or onethree of it. Currently, also the ratio remains same? Correct. Going forward, we intend to increase it to 50%, but that will take a little time, not primarily because we need nominations securing from our customers. Our intention is to increase it as much as possible. Our aim is to get 20% to 50%. But I don't anticipate that in FY 2028, I will probably anticipate 50% plus in FY 2029. Okay. And sir, what kind of synergistic benefits have you seen over the last one, two years that you have? Ma'am, I'm sorry to interrupt you. If you have follow-up questions, please rejoin the queue. So it's on the BTPL only.

1:11:30 So I'll just answer this question. Maybe what sort of logistic benefit you asked? No. Synergistic benefit that you've seen after taking control of BTPL in minority and now in majority. So what happens is with a lot of customers, we can do a fair amount of advanced planning where we can prepare and hold fabric at BTPL. We can run for large scale orders, sizable orders. So this will enable us to grow faster with our customers, especially also look at platforming fabrics, look at fabric innovation. So some of those things will get start driven from FY 'twenty eight onwards, where we are strengthening our fabric innovation side going forward. So in a garment fabric and the design of the sewing structure of the garment are the two inputs, which a customer sees.

1:12:29 And by controlling both those elements, we will be able to, a, strengthen our customer relations, stickiness with our customer and b, go for scale with the customers. So larger customers will get attracted to having a verticality in the business. So that we can supply to innovation with them. And lastly, there is also a lead time reduction, which we are seeing, which because we have our own fabric mill, which in a system where increasingly, we are reducing lead time. If I have to reduce lead time by ten days, fourteen days, having an own mill certainly helps from that perspective.

1:13:15 Have you seen any of these panning out is what my actual question was? It is coming in. I can see that pan out based on the orders that we are securing for fallwinter next year. So maybe it will really come in start kicking in from FY 'twenty eight. Understood, sir. Thank you and all the best and happy Diwali. Thank you. Happy Diwali. Thank you. The next question is from the line of, an individual investor. Please go ahead. Yes, hi. Hello. Yes, sir. Thank you for taking my question. So I just have one question. Rest of my questions have been answered. On the BTPL acquisition, I was reading in a business theory about a SFIO investigation going on with Bombay Rayon, the publicly listed company as well as BTPL.

1:14:12 In the early two thousand twenty, they've done some asset transfer. So just wanted to understand whether post merger of PTPL, will we have any legal or financial recourse if things were to go south with the SFIO investigation? At the moment, are getting legal inputs on this topic. And early indication seems to be that there seems to be no strength in those allegations. In fact, we have derived the comfort from the sellers also that there is no all the procedural requirements have been fulfilled, and they are also extending that comfort to us. So I don't anticipate it. But nevertheless, we are further digging in from a legal angle onto that news magazine allegation, we don't see an issue. For instance, there have been saying that some of the banks have been have taken an extra haircut, but those are all flowing out of banks selling their credit to an ARC.

1:15:30 So some of those the comments there don't seem to hold water, but nevertheless, we are getting all this checked out legally as well. Understood, sir. So just a small question on that. So have we received the final NCNT approval? Because last I checked, I think we received the shareholder approval under NCNT. So the final one is still pending, right? Correct. It was heard today, and the I mean, the matter the judgment is resolved. We are expecting the verdict of judgment verdict in the next ten days' time. So hopefully, the process will get completed in this quarter itself. The next question is from the line of, an individual investor. Please go ahead.

1:16:25 Hi. Thank you for taking my question. I I just have one question. For any new CapEx that we do, what is the kind of asset turnover that we look for? Normally, ForEx. ForEx? Okay. Thank you. The next question is from the line of Gaurav Singh, an individual investor. Sir, your line was a bit disturbed in terms of EBITDA improvement Q3 over Q2. Could you elaborate once more? And secondly, when do you expect to hit $1,000,000,000 revenue consolidated this year?

1:17:12 And one more question, thirdly, do we expect to become dividend paying anytime soon? So Q3 over Q2, as I said earlier, there is an exchange rate benefit itself, which will yield about 1.3%. And the tariff discount elimination will yield another 05%. So approximately, you could say about 2%. And then there is what else is the and there will be a further upside coming in Q4 because even our Q3 is only at about INR 93 to $1 So Q4, we will see a little more growth. That's point number one. Point number two, when will we hit your $1,000,000,000 revenue? $1,000,000,000 today would be about INR 10,000 crores by the time we achieve or probably more.

1:18:03 We probably should take about five years or four years, thereabouts. This year, we will be tracking towards, what, about closer to 5 ks top line, and we are talking of doubling. Yes, it will take about four years at least. Okay. And there was one more question that you had asked. Any time when it comes Yes. To dividend had paid dividend before all the impact tariff impacted us in 2025. And I think once there is some clarity on stability of tariffs, etcetera, Since we are profitable, there is enough cash flow being generated by the business.

1:18:58 We will take a call on dividend paying paying dividend once there's a little more stability on the tariff front as well as geopolitics front, the volatility in oil prices, etcetera, once that settles down. So we want to see a couple of quarters of clarity on that before we take some calls like that. Okay. Now anyway, business volatility of these sorts will remain, but still, I think... No, business volatility or like tariff is has been extraordinary on India, right, in particular. So we did get significantly impacted. I mean, we even this financial year, we were for a good chance, a good part, we were facing a 50% tariff. So it is I'm sorry, the previous financial year.

1:19:44 We do want to be watchful of how things are. And now I'm hoping that these things will settle down. We want to see that for a little while before we draw that comfort. Sure. So you mentioned about 2% because of various reasons you highlighted in terms of EBITDA. Because of the seasonality also some improvement comes in Q3 and Q4? A little bit comes in. But that's again, if I look at Y o Y then that seasonality gets taken care of, right? Quarter on quarter? There could be some. Okay, great. Thank you. Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks. So we the growth bullishness for the next three, four years is strong.

1:20:38 We are seeing most of our customers continue to want to grow with us. We're also adding customers, and I'm confident that with higher revenues, operating leverage will kick in, margins will go up. We are yet to fully realize the full benefit of India currency depreciation. So some of this will also pan out in the periods ahead. Fabric will aid business growth and drive margin growth. So as and when BTPL comes in, that benefit will also start kicking in primarily from FY 'twenty eight. So there are a lot of moving parts in the business, which are all coming together, and most of that will get played out in FY 'twenty eight. So I want to leave you all with that thought that some of the investments that we have done will start playing out from FY 'twenty eight onwards.

1:21:35 Thank you so much for listening to us and happy to connect and address any specific questions later. Happy Diwali to everyone. Thank you. On behalf of Gokaldas Exports Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.