Thanks Aaron. On behalf of ICICI Securities, we welcome you all to Q4 FY26 and FY26 results conference call of DOMS Industries Limited.

We have with us today senior management represented by Mr. Rahul Shah, Chief Financial Officer.

Now I hand over the call to Rahul bhai 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, Rahul bhai.

Thank you, Aniruddha bhai. Good afternoon, and a very warm welcome to everyone.

Thank you for taking the time to join our Q4 and FY26 earnings call. Joining me on this call is the team from Marathon Capital, our investor relations advisor.

I hope that everyone had an opportunity to go through the investor presentation and the results release that has been uploaded on the exchanges and our company's website. To begin with, let me take you through the highlights for Q4 and FY26 performance.

I am pleased to share that we have closed the year on a positive note, delivering steady performance across key metrics. Our revenue for the year grew by 21.6%, surpassing our full-year guidance.

Some of the key drivers aiding the growth were, first, new product launches across categories with attractive ergonomic and user-friendly designs that resonated strongly with consumers and gained strong traction. These new launches include pencil boxes and well-designed school bags in time for the BTS season, exciting new range of pens and mechanical pencils, stamp pads in the office supply segment, and a number of differentiated SKUs in scholastic stationery, scholastic art, hobby and craft, and kits and combo packs.

The new range of paper stationery products with fresh designs were also well appreciated by our consumers. Secondly, we witnessed sustained growth across all our product categories.

Growth in certain categories which were aided by capacity additions during the year outpaced the growth in other categories. Nevertheless, through improvement in our product offering and increase in ASPs, we were happy to state that other categories where no substantial capacity additions were made during the past year also delivered positive sales growth.

Thirdly, the demand scenario in the domestic market continues to remain buoyant and was a key contributor to growth, underpinned by strong, entrenched distribution network, robust brand equity, and a well-diversified product portfolio. At the same time, exports also delivered steady double-digit growth despite global uncertainties including trade tensions, geopolitical conflicts, and regional instability, reflecting continued demand for our products in international markets as well.

The love, trust, and acceptance that our consumers have shown towards our brand and products is unparalleled. Building on this bond, we continue to focus on strong consumer engagement through active participation in events, conferences, exhibitions in India as well as globally.

I'm pleased to share that our social media community has scaled significantly. YouTube subscribers have now crossed 4 million and Instagram followers are over 170,000, reinforcing DOMS as one of the most admired brands in stationery and art materials.

Coming to the details of our financial performance. Firstly, on Q4 performance, revenue for Q4 FY26 grew by 18.7% to ₹604 crores, highlighting our sustained growth trajectory, primarily led by buoyant demand scenario in the domestic market with higher growth coming from office supplies, hobby and craft, and back to school, aided by increased capacities and new launches.

On consumption, margins remained broadly stable. Despite raw material volatility linked to the West Asia crisis intensified in the later part of the quarter, the consumption was primarily of lower-cost inventory built as a part of our strategic stocking.

EBITDA for Q4 FY26 grew by 14.4% to ₹100.9 crore, with an EBITDA margin at 16.7% in Q4 FY26 as compared to 17.3% in Q4 FY25. The moderation in EBITDA margin is partly due to the onset of the seasonal slowdown in the baby hygiene segment, which impacted fixed cost absorption.

Further, the increase in contribution of e-commerce sales in the baby hygiene segment also led to higher advertising and marketing and freight expenses. PAT for Q4 FY26 grew by 13.5% to ₹58.2 crores, and PAT margin for the same period stood at 9.6% compared to 10% in Q4 FY25.

Coming to our performance for the financial year, revenue from operations for financial year 2026 grew by 21.6% to ₹2,326.4 crores as compared to FY25, surpassing our guidance range, led by healthy growth both from domestic market as well as direct export of DOMS-branded range of stationery products. Consumption margins were broadly consistent for FY26 at 43.6%, similar to FY25.

We are pleased to report an EBITDA growth on an absolute basis of 15.5% for the full year to ₹402.6 crore, with EBITDA margin at the higher end of our guidance. The EBITDA margins softened to 17.3% as compared to 18.2% in FY25 on account of higher Uniclan contribution in the overall consolidated operations.

PAT for FY26 grew by 12.2% to ₹239.6 crores. PAT growth was relatively lower than revenue growth, primarily due to decline in other income.

This was a result of higher utilization of cash towards capital expenditure, which aligns with our disciplined, growth-focused capital allocation strategy. Despite this, PAT margin for the year remained healthy at 10.3%, reflecting the underlying strength of our core operations.

Coming to our expansion initiatives, we continued to focus towards building the base for our future growth in terms of capacity creation and expansion. Our capex was primarily towards the development of our 45-acre land parcel, acquisition of additional land parcels both in Umbergaon and Jammu for our future expansion, as well as procurement and installation of plant and machinery in the existing infrastructure as well as for the commercialization of the 45-acre facility.

The company totally spent around ₹292 crores in FY26 towards these objectives. As a part of the phased development of our 45-acre facility, the first building is on track for completion in June 2027, with commercial production expected to commence towards the end of Q2 FY27.

Significant investment was also done in expansion of our molding capacities, writing instruments, as well as in the adhesive manufacturing infrastructure. Speaking about our outlook, as we enter the new financial year, we do so in an environment of elevated uncertainty and volatility, primarily stemming from the ongoing developments in West Asia, which has resulted in significant increase in prices of raw material.

As a part of our operating framework, we have initiated a set of calibrated measures to minimize the impact of such geopolitical disruptions. Our first priority is to maintain continuity of our manufacturing and safeguard our supply chain.

We are actively working to minimize any margin impact and have started implementing focused measures as the situation evolves. These include balanced and gradual approach to pricing and continued focus on cost efficiencies.

The overriding principle is that any pricing action must be taken in a way that does not impact our market share or competitive positioning. Our approach continues to be measured and disciplined, drawing on past experience in navigating periods of disruption, where a focused and prudent response has supported sustainable growth over time.

With our strong brand, distribution reach, new products pipeline, and capacity investments underway, we believe we are well positioned to deliver on consistent growth. Therefore, despite the current geopolitical and regulatory uncertainties, we have lined up a capex plan between ₹250 to ₹275 crores for FY27.

Thank you, and with this, I would now request to open the floor for question and answers.

Hi, thank you for the opportunity, and congratulations on the continued good set of performance. My first question is the core stationery segment delivered 19% growth this quarter.

Could you help us understand whether there was any element of channel stocking ahead of the raw material price increases that led to this kind of growth, or it was entirely driven by the underlying consumption demand? Related to that, how was the secondary sales trend versus the primary sales during the quarter?

With this, also if you could highlight which are the specific categories or SKUs where we are seeing those kind of price hikes currently, and how much is the price hike that we've taken? That's my first question.

Hi, Aradhana. Thank you.

Aradhana, in Q4 FY26, revenues from operations were about ₹604 crores total, growing at about 18.7%. Our core stationery business also grew at similar levels.

This was not a part of any channel stocking or anything because we closely monitor our primary sales vis-a-vis the re-primary and our secondary sales. I think it's the back to school season and in the season, there is always an undercurrent for higher demand of products.

That was what we've seen, and nothing with respect to any channel stocking for expected price rise or something like that. In terms of your second question, to mitigate the impact of raw material prices, the company has taken certain calibrated steps where we are gradually passing on some of this to our consumers.

As a first step, what we've done is, wherever we believe we could rationalize our channel margins, or we could rationalize the schemes and discounts, we've taken that step, which has resulted in about 4% to 5% increase, which has been passed to consumer. This is across different products, not any specific SKU or product category.

Understood. The second question is, if the current geopolitical situation sustains for say another two to three months and the crude-linked inflation remains at the current elevated levels that they are, would EBITDA margins take a hit going forward, or would we still continue to guide at the 16.5% to 17.5% band?

The near-term environment remains uncertain. A significant portion of our input basket is directly linked to crude derivatives, which makes cost trends especially sensitive and highly volatile to the developments in the West Asia conflict.

While the situation has improved versus the peak uncertainty in the month of April, the environment is still very volatile and far from stable. On an average, we have seen our raw material cost increase by approximately 15% to 17%, while the pricing actions taken so far are around 4% to 5%, which naturally creates a near-term gap.

Given the current commodity environment and the volatility arising, we do expect margins in Q1 to remain slightly under pressure versus the corresponding period last year. We do not view this as a structural revision of our long-term margin profile, but more of temporary.

Our focus currently is to maintain healthy growth momentum, ensure we protect and improve our market share, while simultaneously driving cost efficiencies through calibrated pricing actions. Hence, providing a definitive margin profile for FY27 at this point of time would be a little difficult, but in the near term we might see certain impacts.

In the long term, we believe that structurally the company would continue to do the same sort of a margin profile.

Understood. Last question from my end.

On the office supply side, we've delivered very great growth over the last few quarters. What are the major growth drivers in the office supplies, which is leading to?

I know it's pens, but if you could throw some light of how the pen segment has been performing, and also if you could help us understand what is our current market share in the organized office supplies space, specifically pens, and how do we see that evolving over the next three to five-year period?

Aradhana, along with ballpoint pens, as you rightly said, another category within the office supplies broad category was highlighters, again a product which we'd launched towards the end of last financial year. That product category's also done well.

Highlighters along with ball pens has helped to increase or resulted in the increase in sales of the office supply segment. We continue to invest significantly in our writing instrument segment, especially ballpoint pens and highlighters.

We believe both these segments have a huge headroom for growth, and once new capacity additions come in, plus the capacity additions that happened towards the later half of the year last year, when they are available for utilization throughout the current year, we believe these segments to continue to grow. We typically don't evaluate or measure the market share or the size of the market number, would not be able to share absolute details on it.

We believe there's significant headroom to grow in the office supply segment, and the company is taking the required capital plans to increase capacities in this segment.

Hi. Just wanted to get a sense in the last such inflation that we saw, which was around the Ukraine war, I think FY23, if you can just tell us what was the total price increases over whatever 12, 15-month period that you had pushed through at that point of time compared to the 4% to 5% that we have taken now?

Hi, Percy bhai. Percy bhai, I will not have a definite answer to what we did in the past in terms of the exact numbers.

The approach was very similar. It was an approach which was taking calibrated and gradual measures.

The first thing that we typically do in such a scenario is try to figure out what scheme, discount, or margin rationalization that we can do. Second is then we do selective and gradual MRP increases.

These are done only after the scheme rationalization, margin rationalizations are done. We evaluate and then take selective, balanced, and gradual direct MRP increases.

In the branded product segment like ours, sometimes it becomes very difficult to take any immediate and frequent price changes. Hence, we believe that MRP changes should be triggered only when you've exhausted all other options.

No,

I get the broad approach, Rahul, but since you were there at that time, even if you don't know the exact number, some kind of ballpark idea you would have, what kind of price increases including scheme rationalization, etc., at a net realization level, what was the increase that we have taken? No,

at that point of time, Percy bhai, one, our dependence on polymers in our total raw material basket was not that very large because we were just about to enter the pen segment at that time. That time, primary sales used to come from scholastic stationery and scholastic art, the dependence was less.

Having said that, at that point of time also, we've taken about 4% to 5% increase across the impacted products. What happens is certain inflationary cycles are structural and driven by long-term demand-supply imbalances, while others are more event-driven and volatile, like what we are seeing right now.

In such an environment, our pricing actions have always been in a phased manner rather than abrupt price increases. Similar action we'd taken during the Ukraine-Russia war as well as, if you see, during the COVID disruption, where for some time the prices had increased significantly.

What we've seen in the past that whenever we've taken aggressive pricing moves can sometimes lead to loss of shelf space to new entrants and existing competitors. Hence, we would want to be a little balanced and gradual in this approach, which we believe will support long-term sustainable growth both in revenues and margins.

If there is a gap between the cost inflation and the price increase you have taken, and there is margin pressure on account of that, what are the drivers or levers that you have in order to sort of at least partially mitigate that margin pressure, and to what extent you can mitigate? Supposing if the overall gross margin is down by X percent, X amount, will it be half of that that can be mitigated, or is it 75% or roughly what amount can you mitigate of the pressure?

Percy bhai, eventually, we believe that we will be able to mitigate all of these pressures. It will have to come in a gradual manner.

That is what we are trying to stay. First thing what we typically do is evaluate that in our current margin profile, operating structure, what are the cost efficiencies we can get, restrict certain expenses like marketing, advertising, be very efficient in such time, you try to be efficient with these spends.

Then, like I said, we work very closely with our channel partners. With constant interaction and a consultative process with them, we try to rationalize the schemes, rationalize the product offering, and then look at MRP increases.

In the past also, when there has been a sustained price increase and after they'd stabilized towards the higher end of the increase, then we had taken calls to increase our MRP of our products also. That's how pencils moved from ₹55 a pack to ₹60 a pack.

Right. That's all from me.

Thanks, Rahul.

Thanks.

Thanks for the opportunity. Sir, my first question is on the RM basket.

Can you share what proportion of our RM basket is crude-linked? Secondly, out of the ₹377 crores of inventory on the balance sheet, can you share how much of it is the RM inventory?

Hi, Jinesh. Jinesh, basically, to answer your first question, we would categorize our raw material basket into three segments.

One would be about which has a direct link to crude and its derivatives, which should be roughly about 40-odd percent. Then there is about 30%, which is indirect linkage.

When I mean indirect linkage means, probably in manufacturing of that raw material, there are some crude derivatives which are used. Third would be having something like a minimalistic impact.

That's how the raw material basket is structured. When I compare the data from the time this geopolitical tension started till about 15th of May on a weighted average basis, we think that there has been a inflation of about 15% to 20% in the raw material basket, putting across the weights in the purchase.

Jinesh, your second question was, sorry?

RM inventory, out of that ₹377 crores of inventory that we have.

Right. Out of the ₹377 crores of inventory that we have, about ₹140 would be in terms of raw material and packing material, around 55 would be in terms of work-in-process, and the rest is finished goods, stock-in-trade, etc.

Understood. Sir, secondly, how are we trying to tackle this RM inflation, especially in pens?

I believe we operate at two price points, which is ₹5 and ₹10. Now, even if I randomly assume a 10% hike, the revised MRP could be ₹6 and ₹11.

These price points may not be very convenient to operate given the change issue. Is it safe to assume that we are absorbing the polymer inflation in the pens category?

Jinesh, what has happened is if you see, the market has evolved a lot. Definitely earlier times the market was where single pen used to be sold, but over a period of time and especially after DOMS' entry, what we've done is, let's say, we've made packs of five pens, which is one of our high-selling SKUs today.

In that, if you remember, earlier also the five pieces packs were always priced at ₹30. That seems to be a ₹6 per pen, but the way it was structured in the market was as if it was a ₹5 pen.

Such decisions that we had taken in the past have really helped us, because now you just need to revise that to a ₹6 MRP product. Right?

That's how the margin rationalization in the channel is helped us in the initial phase of this uncertainty.

Okay.

That is how it's a ₹30 pack. Then if you have to further increase it, you make it a ₹35 pack.

Then you in a way try to mitigate the impact of coinage issue.

Okay. Sir, just one follow-up on this bit.

What proportion of our pens are sold in the packs that you mentioned? One related bit on the RM inflation is that while we have seen inflation hit us in the month of March, we have seen gross margin expand on YoY basis, but EBITDA margin has compressed.

If you can just explain this bit as well. Hello, am I audible?

No, sir. I did not hear your response.

Okay. Gross margins for the quarter were largely steady, but EBITDA declined due to higher operating cost.

The main reason was increased contribution from e-commerce sales in our baby hygiene business, which is done through Uniclan. The e-commerce business has a slightly higher selling and distribution cost structure, including digital marketing spends.

While we are happy that e-commerce business is growing because it's so shows that the repeat order levels have increased, but at the same time, because of this, there was slight EBITDA margin compression despite stable gross margins. Going forward, once the Uniclan business becomes a steady business, then this would also get absorbed.

Hi, team. Thanks a lot for the opportunity.

You mentioned a lot on Uniclan that margins have actually deteriorated. One of the reasons is Uniclan's operations.

Where are we in terms of margins only of the Uniclan basis?

Hi, Sneha. Where are we on the margin profile?

Yes, for Uniclan. What are the margins for Uniclan?

For the quarter. In Q4, Uniclan's revenues were about ₹55.9 crores, and EBITDA margins were close to 6.3%.

Which last quarter was more than 7, 8, right?

Which was around 7.5%. Last quarter means fourth quarter of FY25, right?

No, I was speaking

about

quarter-on-quarter, third quarter.

Third quarter, because it was much higher, close to 10%, because Uniclan is a seasonal business. The third quarter is the strongest for the company and is the highest EBITDA.

In that quarter, the EBITDA was close to 12% actually, which is now at about 6.3%.

Understood. That explains some increase in your costing there.

Yeah. If you compare it with the previous year fourth quarter of previous year, there also, the margins EBITDA margins in Uniclan were around 7.5%, which has come down to 6.3% on account of, like I said, increasing e-commerce sales.

As this business evolves, we will try to mitigate this impact also.

Understood. Rahul, while a lot has already been discussed on the raw material pricing and margins taking a hit, and, of course, you're not giving any guidance at this point of time for FY27, can we just get an indication that we've already been in this for close to 40, 50 days now, what would have been the current margin levels for the company?

On a gross margin level, how much is the impact you're seeing? I understand you're partially passing it on, and it's an ongoing process where MRPs would be changing gradually, you're changing your discounting system.

If I have to make something, where are we currently in terms of passing it on?

See, you very well know the volatility is still high.

There

has been high increases followed by substantial decreases also, and again certain prices starting to increase again. In a way, always a catch-up approach that we have to do because once the raw material prices increase and then you take actions in terms of pricing.

From that perspective, it becomes a little difficult to forecast something on sitting today. Like I said, we've seen about 15% to 20% inflation, and 4% to 5% has already been passed, and this 15% to 20% was peak inflation.

After that, we've also seen some amount of decrease in prices also. Like I said, current focus is maintain the growth, and more importantly, in this time, we believe maintaining the market share and trying to increase it is a prudent strategy from long-term sustainable growth, and margins will definitely follow.

Got that. Lastly, Rahul, anything on the top-line guidance?

Are you maintaining the similar guidance of 20% growth for the next one, two years on the top line?

At a consolidated level with the planned capacity expansion and the current demand trends, we expect revenue to grow by 17% to 20% in FY27. It's the same guidance that we'd had in the previous call.

Got that. Thanks a lot, team, and all the best.

Thank you.

Hello. Congratulations on a good set of numbers, and thank you for the opportunity.

My question is related to capex that you just estimated around ₹250 to ₹275 crores. Can you just help for what product category we are planning a capex and their timelines, and when it will be operational?

Mosam, this capex is generally going towards increasing our capacities for, one, molding and a lot of other writing instruments products that we planned, plus a large part of it will also go towards the construction of facilities for a lot of land that we acquired in the current financial year. A lot of our molding capacities are interchangeable, exactly giving the name of the products would be a little difficult.

We've lined up a significant capex also for wooden pencils, a segment where we've not done capex in a very long time now. In this year as well as next year, we'll do some capex there also.

It's going to be across host of products.

The current ongoing capex that will be commercializing from quarter two onwards, that was particularly for writing instruments, right?

Yes, it was for writing instruments, but it's a large facility, and we had that time thought of developing a part of it. Now, as this capacity comes into commercial production, we'll start the development for other parts of it also.

Okay. Do you want to comment on any particular timeline or something?

This is going to be an ongoing project. We believe that it will take another three-odd years for the company to complete the construction potential at the 45-acre plant.

Based on the current demand trends, what we believe the company can achieve, we think that every year we'll end up doing a similar level of capex for the next few years to completely utilize the 45 acres plus some new land that we purchased around it and close to our current flagship plant. It's going to be an ongoing project with next three years the company will be in that high capex cycle.

I'm sure, as things evolve, we will start planning our next phase of development also.

Okay. My second question is regarding Uniclan integration.

This year was some full year of integration, right? What would be the projected margins that you guide for Uniclan post one or two years?

Again, like DOMS, the diapers are also product where the contribution of crude derivatives is very high. In this segment also, we'll see some softness in the margins in the near term.

Going forward, basis our current operating plan for Uniclan, we believe in this segment also from a revenue basis we'll be able to maintain a growth of close to 20%, and then again start planning for additional capital expenditure to increase the growth further. In terms of margins, from a long-term perspective, we believe in this segment we'll be happy to achieve a 10% sort of an EBITDA and stay at that level, maximizing revenue growth.

Okay.

Thank you for taking my question. Just a couple of questions on capex.

We've increased our capex guidance to about ₹250 to ₹275 versus let's say previous call of somewhere between ₹225 to ₹250. Just to understand, is it because of rising cost of materials over there or are we bringing forward some of our capex?

That's my first question.

Yes. Hi.

It accounts for a little bit of increase in cost also, and at the same time also, like I said, there are some multiple new land parcels also with the company acquired, which are strategically located, one near our flagship unit in Umbergaon, current flagship in Umbergaon, and also in our flagship unit in Jammu. We have a large plant in Jammu.

Next to that plant, we were able to find a large parcel, which we've acquired. We'll be doing certain capacity enhancements there as well as in addition to the development that is happening at the 45-acre plant.

We are, we've acquired certain land parcels close to our existing plants, which were available strategically. We'll simultaneously develop them also.

Because of that, we've increased our, capital outflow for the projected capital outflow for the coming financial year. There is, some amount of increase in prices also.

It accounts for both of them.

Sure, thank you. The second question is from the pens business, I believe most of your RM pressure on the pens business is due to the rise in polymer prices.

From a strategic point of view, are we also now focusing on increasing mix to the ₹10 price point versus let's say earlier I believe our majority of our sales was happening in the ₹5 price point. Are we trying to also shift the mix to the ₹10 price point?

Thanks.

Jayant, historically, you've always seen DOMS across all our products, SKU, our margin profiles always been similar. Irrespective I was selling a ₹5 pen or a ₹5 pencil vis-a-vis a ₹10 pen or a ₹10 pencil, the margins were pretty much similar, the EBITDA margins, around that 17-odd percent sort of a level.

Really doesn't make a lot of difference at what price point we are selling the product. We believe there is enough scope still.

This is a temporary cycle. We don't see this prices to be at this elevated levels for a very long time.

There would be some amount of corrections that would happen, plus the calibrated increases that we've done in selling prices that will come back to our original levels of EBITDA margin. It will take some time, but we'll come back to that levels.

Like I said, what we did in the past also, when we launched our ₹5 pens, after that we started packing them in packs of five, and that packet of five was priced at, let's say, ₹30. As such, the price per pen was ₹6, but in the market it operated as if you're selling a ₹5 product.

That's how our selling price was, that's how the channel margins and schemes and discounts were given. Now it becomes a little easier to go back to the ₹6 price point because consumers always aware this is a ₹6 product.

Sure. Thank you, sir, and all the best.

Thanks for the opportunity. Rahul bhai, first question.

What is the extent of Chinese imports in stationery industry, and how does the 20% depreciation of rupee against RMB impact the competition in various areas in which you face Chinese competition? Is there a market share gain opportunity, and on the similar lines, does this also have some impact on your capex as you are looking to import machinery for your new factories?

That's the first one.

Hi, Kunal bhai. Yes, there is some amount of imports that comes from China, Vietnam, a few other countries also in India.

To what extent, what percentage, that's a little difficult to judge. I honestly don't have an answer in terms of a percentage.

There are a decent amount of imports that happen. The current currency fluctuation probably has made imports slightly expensive.

This gives a good opportunity for a branded company like DOMS to, with their aggressing pricing decision, you can probably reduce or discourage such imports, which can eventually result in market share gains. In a way, that should benefit the company.

In terms of imports becoming expensive for us, both on the raw material as well on capital goods, we have a natural hedge. There is exports also that the company does.

Most of our imports are in US dollar, are our exports. In a way, they should partially offset each other.

Understood. That's clear.

Second one is would you expect a stronger second half of FY27 considering that by that time the full benefit of pricing will be there, you'll have higher capacities which you are adding, and potentially you'll also have some moderation in commodity cost, while in the first half you are taking the hit in terms of margins because the commodity costs have increased and you've not taken the full pricing? Again, on similar lines, would you look to bridge the gap?

Currently, you mentioned about 5% price hike against 15% cost inflation. Would you look to bridge that if the commodity costs remain high?

Yeah. Kunal bhai, basically, times are still uncertain.

I don't know when this is going to end. When it started, everybody was talking 15 days.

It's been more than 45 days. Still, there is no uncertainty.

The near-term environment continues to be very fluid, and given that a significant portion of our input basket is directly linked to crude and the volatility that we are seeing, there would be some impact which will gradually be passed to our consumers through calibrated, balanced, and gradual increase. When that happens, little difficult to say, and in how much time will it get covered, it's a little difficult to project at this point of time.

In second half, you will have a much larger capacity and the factory will start. Would you expect better profitability there?

Exactly.

New capacities will come, and, like I said, that will be a very good moment for the company to again focus on gaining more market share. Historically also we've seen that when there has been uncertain times, it has more impacted the unorganized players and importers rather than branded large companies.

This gives time for market share gains. We would like to focus more on this opportunity to gain market share, which will eventually help us in long-term growth in our revenues and margins as well.

Historically also, after COVID, if you see the company's margin profile pre-COVID and post-COVID, you will see that there has been certain change. Similarly, pre-Ukraine, post-Ukraine.

These times, if you follow a balanced approach, which is with a long-term strategy, I think it will greatly benefit the company.

Understood. That's clear.

Just one last question if I can. One is on Uniclan, what's the numbers which you've done for FY26 full year, revenue and margin, and what's the outlook for FY27?

FY26,

on a full-year basis, we've done revenue of around ₹203 crore rupees at Uniclan. For Uniclan this represents close to a 23% growth over their base year revenue.

In terms of margins, the margins has been around 8.6%. Kunal bhai, we've been talking about Uniclan since the time we acquired this company, and like we've said that our idea when we acquired this company was a 4%, 5% EBITDA margin and was to gradually increase it to 10%.

We've reached about 8.6%. We believe with the increasing revenues and certain new product SKUs that we'll be launching at Uniclan very soon, improvement in the product that we've been doing, with this, we'll be able to maintain a 20% sort of a growth rate at Uniclan also, and eventually this margins on a long-term basis will stabilize around 10%, which has been our target.

Hi. Good afternoon, sir.

Thank you for the opportunity. My question is mainly regarding the capacity expansion.

How did right now happen?

Just a second. Yeah.

Am I audible now?

ahead. With respect to the capacity expansion, I just want to know what is the capacity and what is the capacity expansion percentage, that is, are we adding another 50% or 100% capacity expansion to the existing facilities, or is it SKU-wise?

Just want to know an idea on that. My second question is regarding the distribution channel growth plan.

What is the company looking at for the current financial year?

Hi, Nikil bhai. Nikil bhai, honestly, we never looked at capacity from a perspective at the product level because we would want to be agile towards the requirements of the market, not commit anything in terms of specific product.

Yes, I can give you a certain flavor where the capacity is dedicated for certain products, like for the wooden pencils, the capacity right now is around 5.8 million pieces a day, which eventually, once the new plant is entirely ready, will increase to about 8 million. Other than that, there are a lot of molding capacity that we are adding, and molding is, in a way, interchangeable, which can be used for host of products like pens, highlighters, markers, sketch pens, sharpeners, scales, etc.

Depending on the market requirement, we would want to be flexible. How do we add those?

Which products we add capacities? Having said that, today our operations are spread across close to 2 million square feet of built-up area, and what we're constructing in 45 acres eventually, once all the phases of construction are over, would be again close to 2 million.

In a way, it would be doubling our reach in terms of manufacturing infrastructure in the next few years. To answer your second question with respect to the distribution network, historically, if you would have seen, DOMS has never been in terms of specifically targeting a number to grow in terms of its distribution reach.

We've always been focused on maximizing the throughput, where we believe that when we get into a relationship or a partnership with a particular retail store, it is more important to ensure that we have maximum shelf space in their store. Till their demand is not fulfilled, we would really not want to go in a adjacent store and try to keep two people waiting for products.

From that perspective, we are actually not from a number perspective. This entire universe of stationery outlet is close to about 300 to 350,000 stores in India.

Out of this, we believe the directly serviceable stores are around 225,000 stores. Beyond these number, they are either located in remote geographies or it really doesn't make economical sense to cater them on an individual basis, and these stores are very well catered to the wholesale segment, which is a good segment for DOMS also.

Our universe to target would be direct reach about 225,000 stationery stores. By that time, I think our distribution through Uniclan in the general merchant outlet would have also reached a substantial point, which is basically into kirana stores.

That's when we will also start cross-selling a lot of stationery products in that distribution network also. Both ways we believe there is still significant headroom to grow our network, both in the stationery store segment as well as in the general merchant outlet segment.

Rahul bhai, just clarification. You gave a guidance of 17%, 18%.

This doesn't include the new plant that will get operationalized from H2, right?

No. Hi, Priyank bhai.

This is an annual guidance of close to 17% to 20%, which includes the new capacities coming in from H1 for the new plant. It will be a gradual end of H1 from the new plant.

It will be a gradual ramp-up in capacities that will come in the 45 acres. That has been considered while guiding for around 17% to 20% growth for FY27.

Just reconciling the capex numbers. It's ₹450 crores or higher for the phase one of new plant?

No. We've done a capex of close to ₹292 crores in this financial year FY26, and for FY27, the capex planned is around ₹250 to ₹275 crores, ₹250 to ₹275 crores.

I'm asking for the whole of this new expansion. Earlier, we had guided for total capex of ₹450 crores and two times asset turnover.

Now is that any change in the numbers with respect to additional land and anything coming in?

Priyank bhai, this entire project of 45 acres starting from the land that we purchased to full development of the construction and full development of plant and machinery, the total capex would be close to ₹850 to ₹1,000 crores. We've done a substantial part of it from the proceeds that we raised from IPO.

There'll be certain other investment that we'll continue to do from our internal accruals. Eventually the total investment in this plant over the next, considering we bought this land in June sorry, January 2023 to another three-odd years of complete development would be close to ₹850 to ₹1,000 crores.

Phase one is what you said was ₹550 crores, right? 290 plus 250.

No. We started investing in this plant.

290 is the total capex that we've done at the company level. This includes a lot of capital expenditure that happened in our current infrastructure, capital expenditure that happened at our subsidiary levels, and capital expenditure that happened in the 45-acre project plus the new land that we purchased also in both Umbergaon and Jammu.

At a company level, we did ₹292 crores. It's not that separately.

This 45 acres is like a separate project why we are discussing, because it was a part of our IPO document where the object was to raise funds for the development of this land.

Got it. One last question on exports to FILA, which has fairly remained flat over last two, three years, while the third-party exports have grown this year.

How should we look at this element of exports to FILA as well as third party with new capacity coming in over whatever timeline if you want to guide?

Yes, exports to FILA were a little lower than expected in the last year, and the key reason for that was, at least the initial period, was on account of the higher tariffs that were imposed by the US government. A large portion of intercompany exports happens to US.

Plus, there was some amount of decline in demands in European countries also, and these economies also struggled a bit. Overall, the intercompany exports were a little lower.

Having said that, the outlook with now tariffs being done away with, our FILA Group entity in US also recalibrating their pricing structures, we believe this business to pick momentum again. These exports would increase.

Also with the new capacity additions that we are lining up, especially for the wooden pencils segment, where a lot of goods are sold to FILA and FILA Group companies, the capacity addition in wooden pencil will also help in the FILA Group intercompany exports.

Hi. Hello.

Actually most of my questions got answered. That was related to capacity utilization.

Thank you so much.

Thank you.

Hi, thank you for the opportunity again. Just a couple of more questions.

One, the capex that we plan to do of around ₹500-plus-odd crores for the next two years, would we continue with the stance that all of that will be funded through internal accruals or we plan to take some debt for it, because we see that this year we've already reduced our debt quite a bit compared to last year? How would the capex be funded going ahead?

It would depend upon, one, the utilization of funds that we generate as free cash flows for the company. If there are free cash flows available, we'll definitely want to utilize them for capital expenditure rather than distributing it as higher than our stated policy of 10% of stand-alone profits to be distributed as dividend.

First that. There's a lot of headway available to take a little bit of additional debt if required.

It will be a prudent decision-making depending upon the capital allocation and how the company sees the use of funds.

Okay. Because the reason I was asking is because this year we were not able to generate any free cash flow.

So

Because of the capex. We did a little higher than expected capex.

When we started the year, we were looking at around a figure of 225 to 250, which eventually got increased to about ₹290-plus crores. There was certain good assets in terms of land parcels which were available in absolute vicinity of the company's operations, which we believed were strategically made sense to acquire them.

That's why it was a little higher.

Understood. Sir, second, on Skido and Sambhav JV, if you could throw some light as to how has the performance been of Skido specifically this quarter because of the back to school season?

Second, where are we progressing on the Sambhav JV and how the performance be?

Skido's revenue for the quarter was about ₹4.5 crores as compared to ₹2.8 crores in the same period previous year, which is a 60%-plus year-on-year growth. This growth was primarily on account of the successful launch of backpacks that we did in Skido last year for the DOMS-branded products.

As we go ahead, Sambhav team and Skido team have started discussing multiple projects together. At the same time, we plan to do some amount of additional capital expenditure at Skido in terms of buying new land and constructing new factory premises to increase our production capacities there significantly.

For a full-year sort of a basis, if you look, the revenues increased from ₹9 crores to ₹14 crores. We are still learning this business.

The management of Skido has exceptional talent in terms of product design and product engineering using the DOMS brand, the DOMS design philosophy, and the distribution reach. We believe this business will grow significantly in the coming few years and benefit from the association with Sambhav also.

In terms of our JV formation with Sambhav, we are in the process of formation of the joint venture entity, and this should be completed before the end of June 2026.

Thank you. Thank you once again for joining us.

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 once again, and have a great day ahead.