Thank you so much, Farah. Good day to all of you and thank you for joining us today.

Before we proceed, let me quickly remind you that the discussions on the call today may contain some forward-looking statements that may involve known or unknown risks, uncertainties, and other factors. It must 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 forward-looking statements.

Also note that the results and earnings collateral have been emailed to everybody, and the same is also available on the company's website. In case you haven't received these, you can write to us and we will be happy to send them over to you again.

To take us through the proceedings for the day and answer your questions, we have the management of Gokaldas Exports Limited represented by Mr. Sivaramakrishnan Ganapathi, the Vice Chairman and Managing Director, and Mr.

Sathyamurthy, the Chief Financial Officer. We will begin the call with a brief overview of the quarter and followed by the Q&A session.

With that, I'll hand over the call to Mr. Shiva.

Over to you, sir.

Thank you. Good morning, everyone.

Thank you for joining us for our earnings call for the first quarter of FY27. The quarter was a strong one and importantly, the strength was broad-based.

Growth came from across our geographies, across customer base rather than from any single customer or market. Our India business grew 16% year-on-year, supported in part by the transition to the lower tariff regime under Section 122 following the wind-down of earlier AEPA reciprocal tariff.

The significance of the growth is best understood in the context Indian apparel exports as a whole declined 12% year-on-year during the same period. Our Africa business delivered an exceptional 44% year-on-year growth, supported by the renewal of AGOA.

This performance, while partly drawing from a weak Q1 of the previous year, is an outcome of the sustained investment we have made in the region over several years. Consequently, consolidated income for the quarter grew 21% year-on-year, consolidated EBITDA rose 17% year-on-year with India operations up 14%.

Spending a moment on the cost environment, our margin performance was hard-earned. Wages rose across both India and Kenya, reflecting inflation in respective local markets.

Higher oil prices increased cost of synthetic fabric and trims, and simultaneously drove up factory fuel and logistics cost. Container availability constraints and shipping delays continue to disrupt flow of materials with consequent effects on production planning and throughput.

Against these pressures, we optimized overheads and drew on operating leverage to limit the financial impact. We also continued to invest in automation, which is delivering measurable gains in productivity alongside greater consistency in product quality.

We continue to look for ways to optimize our working capital with challenges like longer shipping lead times notwithstanding. BTPL merger process is on track and is expected to conclude in the third quarter of this year.

The business is seeing a consistent improvement in operating metrics. The unit has secured nominations from multi-clients for fabric sourcing, has started exporting fabrics as well, and is operating at a capacity of about 50 lakh meters a month.

This is expected to grow by another 30% in the near future. Increasing capacity utilization, investment in product mix, and rising average realization will help in margin growth of BTPL.

On the customer front, we recorded growth across all major accounts. We onboarded one new customer during the quarter with operations expected to commence in Q2.

Turning to the demand environment, end consumer demand in both US and UK recorded a strong growth through the first six months of CY26, although the pace of growth in US has softened in June. Apparel imports into EU and UK, by contrast, declined steadily over the first five months of CY26.

We see this as reflecting a shift in mix towards lower-value apparel together with continued inventory destocking by retailers, rather than a genuine contraction in underlying retail demand. To the extent that this reading holds, it should provide a measure of insulation against any near-term softness at the retail end.

In the US, May marked the first month of positive import growth since the beginning of CY26, an early but encouraging indicator. On the trade policy, two developments are material to our outlook.

First is the US tariff announced under Section 301 places India on an equal footing with competing sourcing destinations, while preserving an advantage over China and Vietnam, both of which are subject to a tariff of 12.5%. Second, the implementation of India-UK Free Trade Agreement will bring India to parity with Bangladesh and Vietnam in the UK market, while providing a duty advantage over China.

These developments do not create demand in themselves; what they do is remove a structural disadvantage from our customers' sourcing decision. We therefore expect them to strengthen customer confidence and to support higher order placement across our key markets.

We are equally attentive to the risks. The renewed engagement between United States and Iran has resulted in shipping reroutes and elevated freight costs, introducing uncertainty into global supply chain.

In addition, inflationary pressure in the US market warrants close monitoring, as it may, in time, affect retail demand. We do not presume to forecast how these developments will unfold.

Our approach is captured in the observation that plans are worthless, but planning is everything. We are not positioning the business around a single macroeconomic outcome; we are ensuring that whatever direction the situation takes, we retain the capacity, the cost structure, and the customer relations to respond decisively and effectively.

In closing, we have a strong order book visibility across our customer base. We continue to diversify our customer portfolio and remain confident in our ability to convert improving market conditions into performance through superior execution and operation excellence.

We continue to demonstrate something we consider more valuable than anything: the ability to grow despite headwinds. The outcome is not incidental; the environment ahead will present its share of complications in trade, in freight, in inflation.

We do not expect in any other wise. What we do expect is that the same capabilities which delivered us well so far will continue to distinguish us in the future.

Thank you for your time. I would now be happy to take your questions.

Thank you, sir, for the opportunity. Just wanted to check one part.

In India, this quarter we have a volume growth of only 3.4%, majorly growth is coming from realizations part. Going ahead in this year, how do we look the volume for India business?

See, volume growth is somewhat of a misnomer because what we do in Q1 and Q2 are quite a bit of high-value outerwear products. In absolute volume terms, these garments may not add up to much.

Some of these are 200 SAM garments or garments which have got 150 to 200 to 250 minutes worth of content. Whereas in spring/summer, we will start making garments which are a lot more simpler.

A shirt, for example, is anywhere between 22 to 25 minutes to make. The volumes could be a misleading number from that perspective.

Q1 and Q2 are usually autumn/winter wear and we tend to make a lot more outerwear. Hope that clarifies.

We are not seeing a YoY drop or anything from a overall business perspective. On the contrary, there is a strong growth for us.

When we're saying that we have a strong visibility in order book, that means we will continue to be these earlier guidance of mid-teens kind of a growth will continue or we can do a better mid to high teens looking at the Q1 number?

When we say we see a strong growth possibility, we are looking at spring '27 for now. When I look at the order placements, spring '27 is executed in Q3 of FY27.

When I look at the customer projections, etc., for that period and beyond, we seem to see a fairly good revenue traction of the order of what we have had in the first quarter.

Okay. Last one in the Africa EBITDA, when can we say the double-digit EBITDA will bounce back from this eight below 8% to?

I believe it will be in Q4 or early Q1 next Q1. Our effort is to do it at the soonest.

H2 will be a differentiating factor, but that's the anticipation. One of the things that we need to keep in mind is we are still in a tariff volatile world.

Africa has, for example, under Section 301, there is no tariff, there is no 10% tariff which India or rest of Asia has. That's the benefit Kenya has.

However, they have an AGOA, which gives an underlying MFN duty-free access to US, which expires in December. There is a move in the US Congress to pass an AGOA extension for another two years.

That's gone through the Senate and passed bipartisan support for both, and now will go through the House, and later on for the President's consent. There is a presumption that AGOA will get extended by another two years, which will allow them time to negotiate free trade agreements with individual countries.

Countries like Ghana and Kenya are high up on the agenda for free trade agreements in Africa. We feel that we are covered there, but still that uncertainty still one could argue still exists.

What happens is AGOA exists till December; beyond that there is no AGOA, what would be the duty status beyond December is a question mark. Having said all of this, our business booking for beyond December seems to be robust.

Most customers seem to think that the cost economics of Africa is strong. Secondly, AGOA could get extended, and regardless of that, they are also taking a risk and going ahead and doing business out of Africa.

We're seeing a fairly good order traction for H2 in Africa as well, which indicates that both customers and the economics seems to be playing in favor. Thank you.

Thank you.

Sure.

Good morning. Thanks for taking my question.

Hope I'm audible. Congrats on a good set of results and thanks for the detailed information.

I just wanted to ask that you said that there has been some concerns regarding the shipping delays that is going on. How do we read the upcoming months?

Because the Strait of Hormuz still remains closed. Do you think there'll be some kind of order delays that is going to come in, how that's going to impact us?

I'll ask my next question after this.

Okay. I think as far as shipping and all are concerned, probably this is the worst we are going through.

There is, of course, the Strait of Hormuz and the Houthi problem occasionally shutting down Red Sea routes, etc. The other problem is typhoon in China also impacting lot of sailings from China into rest of the world.

These are all impacting container availability, these are all impacting shipping schedules. Even our outbound shipping, for instance, sometimes gets delayed by two weeks.

We deliver our finished goods into the port in India, we are selling FOB, but it still takes about two weeks to catch a ship and go, thereby us sitting on inventory and not able to realize our receivables until it is boarded into the ship. These kind of things I think the worst is being experienced now.

My sense is in the next two quarters it should ease. The war may not hold steam, the typhoon situation may improve, globally everybody is working towards improvement in logistics, logistics costs themselves may get somewhat rationalized, I would say it could get better is my sense from my vantage point at the moment.

Thanks, sir. Thanks for the response.

My second question is regarding the facilities of Madhya Pradesh and Karnataka. I think last time you had said that the ramp-up is going good there and you expect, I think, by H2 FY27, that is around Q3, Q4, Karnataka should stabilize.

What's the progress there? What's the progress on the second shift that's happening in Africa?

You had spoken about it last time that around 20-25% was 20-25% of something in Africa you're seeing the double shift going in. I just wanted to ask regarding that.

As far as Karnataka is concerned, it is completely on track, progressing. Madhya Pradesh on track, progressing well.

In fact, the second unit is ramping up as we speak in Madhya Pradesh. That should also reach near full capacity utilization by the fourth quarter in terms of manpower ramp-up.

From a India capacity standpoint, all the existing and the newer capacities are shaping up very well. The African capacities are also being managed well.

We have not increased the second-shift operations beyond last time. Q2 is usually a seasonally weak quarter.

Come Q3, Q4, our order book itself will force us to again step up more capacity by utilizing the second-shift operations, again we will start ramping up then. These are all based on seasonal flows, etc., we will have the ability and access to swing capacity, particularly in regions like Africa where running a second-shift operations is a lot easier.

We're

also experimenting with second shift in Bhopal and in Ranchi. These are both locations where we run second-shift operations, and in India also we have been reasonably successful in some of these outlying regions of the country.

Okay. Sir.

Thank you. I'll get back into the queue.

Thank you.

Yes.

Yes, sir. Just want to understand on the margin picture for the next maybe 12 months, because we have several parts moving in here: the AGOA duty that you mentioned; secondly, in India, I think we are closing in September on the extension that was there on the incentives.

Plus we have this merger that we have done the BTPL thing. How does one assess how things are going to move, both in case these incentives were to go ahead, and if they were not to be there, how do we navigate the situation on the profitability?

Your thoughts on where this is going, because you explained on the African incentives, but in India, what is the situation like?

Sir, see, since these are policy issues, one can only say that look, one is in discussions with the government and trying to impress upon them at an industry level that these kind of incentives do provide us a level playing field with other countries because at the end of the day they are refund of state and central levies, which are embedded in some of our cost structures. For instance, fuel which is diesel or electricity, etc., are outside the remit of GST and some of these costs are embedded in our cost structures.

They kind of reimburse for that. Reduction in that can alter the dynamics or the financials of the industry as a whole.

Having said all of this, we tend to factor all of these into our calculation and plan and prepare for the worst. For instance, as we progress into H2, our business growth, product mix, etc., will help us yield a better margin profile, which allows us to absorb some of these cushions.

We've already absorbed the wage cushion in Q1, where minimum wages have gone up, it goes up every first quarter, and we did that fairly well. We also see a relief coming in the form of a better exchange rate.

Our rupee has weakened and we are not fully realizing the value of a weaker rupee as yet in our P&L. Our P&L is a hedged one where we sell forward dollars and, for instance, in the first quarter, our forward cover rate was about ₹89 or thereabouts.

Even though the rupee is much weaker than that, 70% of our dollars were hedged, the rest 30% being covered by natural hedge through imports. We do tend to have that extra cushion as we move forward to absorb some of these cost increases if they indeed come through.

Not withstanding operational efficiencies, which is a continuing journey. There are lots of things going on.

Our capacity increases are happening in lower-cost regions in the country as well, which will also offset some of the margin pressure inducing external macroeconomics. While some of these things are concerned because they do tend to have a one-off kind of effect, I think we are well prepared to handle some of these situations.

My sense is that RoSCTL, the worst case is it'll go half of where it is. We have a RoSCTL of about 3.5 odd percent.

If it goes by half, it goes to 1.75%, the impact will be that much. We can probably offset that through our own performance is the impression I'm having.

Nevertheless, it would be good to have that RoSCTL also come through at current levels, those are areas that are under discussion. Secondly, you asked about BTPL.

BTPL is expected to come in or merge in the third quarter, it'll probably happen in the latter half of the third quarter. Effectively, BTPL will merge into Gokaldas probably for the last four months of the year or thereabouts.

During that period or by that period, my anticipation is that BTPL will be generating mid to high single-digit EBITDA margin and should be contributing positively to Gokaldas after its merger. The trajectory of that particular unit at the moment is strong.

It's growing in terms of its capacity utilization. It's growing in terms of the average selling price of fabric as well.

It's got several nominations from several new customers nominating it for fabric procurement. All of these things augur well for improving the utilization.

We're also moving to do several high-value products like linen, linen blends, even some certain bottom weight fabrics where the price realization is better. Product mix change is also happening as we speak.

We've been consistently delivering good quality out of that unit. Overall, I think the way it's shaping up, I think by end of this calendar year, by the time it merges, it should be also performing reasonably well.

Okay. Sir, in totality, what you're saying is if the Indian incentives were to halve and we have benefits coming in from BTPL plus the rupee, things should balance out.

In that case, except for what happens with the African incentives, if one were to take a potshot at what the margin base could be, would it be something like a 10% [unclear] or could be higher for the company?

In my opinion, it should be higher. I'm also somewhat confident, though one can never second guess policies, that African AGOA will also come through.

That's the confidence which customers also seem to have. Overall, I think, regardless of everything, the EBITDA margins will be a bit higher than what you're indicating.

Sir,

Thank you for the opportunity. You have highlighted a strong order book, can you give some indication of the order book visibility for Q2 and H2 FY27, particularly for the India business?

Your voice was a little muffled, but what I understood was you're asking for order book visibility into Q2 and H2. Is that correct?

That's correct.

Okay. Q2 is already booked and Q2 and Q1 were booked long back.

Our order book is fairly strong for those quarters. Q2 should also be from a revenue standpoint like Q1.

Usually Q2 is a seasonal weak quarter. Q2 is when we make for winter season in the Western Hemisphere.

Typically winter season products are all synthetic-based, which are product mainstays of China, Vietnam, Cambodia, and some of those regions. Having said that, Gokaldas, since it has got a strong outerwear presence, it does well in Q2 as well, and our Q2 performance will be like our Q1 in terms of revenue profile.

Coming to Q3 and Q4, the orders are being booked as we speak. The projection seems to be going good.

I think, notwithstanding certain concerns in the US on how 2027 will be from an inflation standpoint and what's the buyer behavior or consumer behavior going to be, I think from an order standpoint, we seem to be okay with the indications and projections that we have so far.

Understood. I'm

Is it better now?

Yeah. With India now at a tariff parity with several competing sourcing countries and an advantage over China and Vietnam, are customers actively shifting incremental business towards India?

If yes, and within apparel product categories, which product categories are seeing the strongest opportunity?

See, I wouldn't say a 2.5% advantage as a remarkable advantage, right? Some of those guys in China and Vietnam will probably discount to that extent and absorb it.

It's an advantage from that standpoint that India will not come under pressure to do any discounts. That's the plus.

Having said this, do we see an advantage? Of course, we see an advantage, right?

If general direction is that India tariff is at level with the rest of the world or a notch better, then automatically the global placements will come back to favor India. We see a lot of Europeans looking at India, a lot of inquiries coming from there.

Americans are rebalancing their portfolio to increasing the weightage towards India. We're seeing across product categories people are soliciting business from India.

Historically, India was only strong on fashion, high-value items. Gokaldas had outerwear, etc.

Today I'm finding even people are looking at India for shirts and bottoms, where these are a typical Bangladesh category products. They're looking at low-cost regions within India to manage this manufacture out of.

There is a broad-based move to explore India across product categories. Obviously, there are fashion-oriented trends which dominate.

For example, denims are dominating the scene now. There's a lot of denim inquiries and denim business coming India way.

Those all keep changing from time to time. We are a versatile business partner.

We can handle any type of products, thereby, whatever is in vogue, we can benefit out of that.

Understood. That's all from my side and wish you all the best for the coming quarter.

Thank you.

Hi. Two questions.

One is you've indicated in the presentation that you might look to evaluate your capex plans depending on the demand environment. What is the kind of incremental capacity addition that we can look at now that we're also talking of MP Phase 2 inching into peak utilization by second half of '27?

Then, I'll have a follow-up.

I would like to add at least 2,000-3,000 machines extra by the end of this year, additional. Those will probably come into operations by later half of next financial year, it will actually contribute to FY29 and beyond.

Do we have the ability to sell those capacities? Answer is yes.

Do we see the demand traction? Generally, answer is yes.

Those are the kind of capacity additions we need to look at in low-cost parts of the country. We are open to it.

We have already evaluated and identified opportunities for some of those expansions. It's just awaiting a go-ahead from all of us internally, and that is a call we will take in the next three months.

Right. This will be more towards FY28, right?

Correct, but some early capex may happen in FY27, but the larger capex will happen in FY28.

Right. Earlier in the last earnings call, you had indicated that you're targeting a 15%+ growth in this financial.

Given where we stand after 1Q, do you stick by this number or do you think there's a possibility of we doing 20% type of a growth? Also in Africa, we were targeting close to $120 million revenue in '27 versus $80 million that we did in '26, where do we stand in Africa targets now?

Africa visibility at the moment, while we said 120 and we are pushing for it, I can see about 112 to 115 at the moment. We are trying to push for bridging that balance as well.

We still have about half a year to do so. As far as the growth percentages you mentioned, 15 odd percent, that seems to be very straightforward.

We probably should do better than that.

Got it. Sure.

Thank you.

Thank you for the opportunity and congratulations on strong set of numbers, sir. Just wanted to understand the capital expenditure of ₹80 crores that you have mentioned in the presentation, where all it will be spent and it will add how much capacities in this year?

Hi, Prerna. We intend to add one capacity in Jharkhand and another one in Karnataka.

Both the facility, we expect the investment would be in the range of about ₹100 crores. About ₹70 to ₹75 crores is what we are anticipating will be spent in this current financial year, that's the estimate.

In a steady state, these two facilities will add to the revenue to the extent of almost about ₹350 crores.

This can get fully utilized in next one or two years?

Yes, in FY28 second half, it will come on stream. In FY29, you will see the full potential of it in FY29.

As Shiva, we create the capacity to 1.5 years to two years in advance, and this is largely meant for FY29 as far as we are concerned.

Understood, sir. Any capacity expansion in Africa?

We have already created the capacity, that's what Shiva has explained. We should be able to do with that current capacity addition close to about $120 million.

Our aim is to utilize our existing facilities. As I had mentioned earlier, there's also a potential of using second shift in Africa.

Until we exhaust all those opportunities, I don't see us investing significantly in capex there. There is lot more potential to extract out of existing capex itself.

Understood. Just wanted to understand the UK FTA, which has been implemented, what kind of inquiries are we seeing from there?

How are we positioning ourselves to gain traction in that geography?

As of now, I'm seeing traction across all geographies, notwithstanding UK. While UK FTA has resulted in some of our UK clients stepping up business with us, we are also seeing all other areas also.

We are kind of overwhelmed from that perspective, but UK is growing for us and we are working with select customers in UK with whom we feel that we can build a long-term future together. Those are happening.

There is a new UK customer who is engaging with us for onboarding as well. We have not yet done that, we have not signed off with them, but that's work in progress.

We will take a call depending on the profitability, etc. There are those kind of inquiries from new customers while existing customer volumes are also growing.

How much would UK be at present in your total revenue?

I think 4-4.5%. 4-4.5%.

Sir. Thank you and best wishes.

Thank you.

Hi. Thanks for giving me the opportunity and congratulations on good set.

My first question was regarding the minimum wage revision impact. While you mentioned that we kind of see this every year in the first quarter, the revisions that have been taken by some select states have been quite steep this year, right?

Just wanted to get a sense or any quantification of what's the impact like, and how are we managing this? Also, just wanted to get in Karnataka specifically, while we understand that textile sector is excluded from that revision, but is the notification effective?

Do we expect more hits on this? Your thoughts.

Okay. Minimum wage is again in the realm of policy, government, etc.

Unlike any other place, predicting these kind of things in India is always harder, as it's also governed by political whim and so many other things. Having said all of that, we saw a 35% increase in Haryana, a 25% increase in Noida area where we don't have facilities, but we do have facilities in Gurgaon between Gurgaon and Manesar, those facilities saw a 35% wage increase starting April 2026.

In Karnataka, the wage increase was 5%, which is really CPI-linked, which is the annual DA increase, which indexes the minimum wage to inflation. Clearly, we pay above minimum wage.

When the minimum wage increases by X percentage, we don't have to increase it by the same percentage. We could go up from where we are to the new minimum wage, which itself is a hike.

For example, in Haryana, when the minimum wage went up by 35%, we managed the costs, etc., etc., and our overall wage went up only by 14-15%. Even though it was a 35% wage increase, because we were to start with higher and we also managed our costs, efficiencies, etc.

These kind of things have to happen. Some of these minimum wage are inevitable as well, and we need to factor that in our planning.

For example, in Q1 of this year, our India business saw a salary wage cost increase of ₹20 crores, and that has been absorbed into the system. If the same time last year, we didn't have to pay this 20 additional ₹20 crores on account of rise in minimum wage.

That got absorbed in the way we do our business. We typically tend to plan this.

One quarter will always be short or inadequate to absorb it all. We tend to try to drive automation, efficiencies, which is a continuous process in itself, to help improve our margins.

Some of it we try to price in, but these days with tariff, that becomes a harder deal. Nevertheless, there are offsetting factors like rupee depreciation, too, which supports us.

There are multitude of effort that goes in to plan and absorb some of this. Karnataka, the minimum wage for non-textile industries, which has been solicited and is stuck in policy making was very high, and that's outrageous.

I don't foresee that happening for textiles and apparel. Even for other industries, it needs to be settled.

We'll see how these things pan out. My sense is that incremental growth in terms of focus for us will all be in low-cost regions of India, which is Central India, Eastern India, on and so forth, or in rural areas where government incentives are much higher, which then offsets some of these cost increases.

That's how we are looking at our business. We're cognizant of it.

We can't put an estimate to it, but nevertheless, regardless of what comes, we'll manage the business. Another factor to keep in mind when we look at some of these wages is that if I look at China, the minimum wages are of the order of $500+ in Vietnam, the wages are of the order of $300+ and growing.

If the industry is viable there, then why is the industry less viable when Indian wages are of the order of $210 to $230-$240? It's a question of how do we run it efficiently?

How do we run it to maximize the value out of what the wages that we pay in the country. Those are the factors which will also help us challenge some of these cost assumptions and still try to drive the margins.

No, thanks for that detailed answer. The second cost pressure that we are probably seeing is on the RM side, right, both in cotton and MMF.

My question therefore is, are we able to get effective pass-through when we are now negotiating the contracts with the customer? Some color there.

Effectively for us from an apparel standpoint, fabric costs are pass-through. We do factor it into our costing and then pass it on to the customer in terms of pricing.

What happens is when suddenly polyester prices go up, etc., there are certain elements like polybags, cartons, etc., or fuel costs, which caught us by surprise in Q1, and we had not factored those in when we had priced our orders for Q1 in the month of January or even before. Then going forward, we are pricing these things also in.

Raw material costs are a reality. I'm not sure if this will be sustained.

Eventually, cotton yarn prices in India peaked, it will cool off. Polyester prices also will move in tandem with oil prices.

Then we will try to push this into the customer pricing.

Sure, thanks. I have just two bookkeeping questions.

One was on other expenses, including project expenses, that's seen a steep rise both YoY and QoQ. Also on the ETR, with losses in Atraco, we were expecting that we should probably see an ETR lower than the effective 25%, but we still continue to see an ETR at elevated levels.

Satya, your thoughts here will help.

Yeah. The other expenses largely is gone up mainly on account of two factors.

One is on the utilities cost, primarily the gas and fuel cost, plus the chemicals cost, which has gone up substantially in this period. That we have taken a hit close to around ₹5 to ₹6 crores.

That's one important cost. The second one is on the inbound and outbound the freight cost we have also taken incremental cost.

These are the two factors which reflect primarily in other expenses. That's something partially we feel that part of this cost will get neutralized in H2, hopefully, if situation improves.

Otherwise, we have to factor in this and suitably we address it in the costing going forward. That is a action plan what we have taken.

Otherwise, these are the two main reasons for the other expenses increases. Now coming back to the ETR, surely by the end of this year, with the contribution coming in from the international operations, we believe that the ETR will come down substantially.

We still hold a view about between 20 to 22% is what the ETR we can take for this year.

Many thanks. Very detailed and it clarifies.

Thank you. All the best.

Shiva sir, good afternoon and thank you for the opportunity. With Bhopal addition, what is the current capacity is available for us in India?

Capacity in terms of revenue?

Garmenting.

In terms of pieces or in terms of revenue? That's the That's the question.

No, I'm saying what is the total capacity in terms of stitching, the number of pieces? When we merge, I think it was about 50 around 50.

I'm just asking with Bhopal addition, what is as of now and what will be the exit of March '27?

Okay. In terms of number of pieces, again, it is a basis of the assumption about ₹500 ASP level, it's about 3.5 million pieces is a new capacity addition what we are adding.

However, it will vary depending upon the product profile whatever we do. In a steady state, that new capacity will deliver almost about ₹175 crores as a revenue.

That's to answer your question, what is the incremental revenue that can come from the new addition.

Okay. Shiva sir, I was asking in the context that if we are adding more capacity, you are very positive saying that the orders are there and we can execute, and you've said that you will add about 200 odd machines.

I'm just asking that if this machine addition is happening and order flow is there, what is the sellable capacity in terms of number of products or in terms of units or in terms of revenue?

I didn't say 200, I said 3,000 machines actually, that we intend to add. Anyway, every 1,000 machines to us brings in an incremental revenue of ₹175 to ₹200 crores, I think it's more like ₹200 crores than ₹175 crores.

That's the kind of broad metric that we look at. If I have to plan to add my revenue by about, say, 15 to 20% YoY, I think 4 to 5% will come only by productivity gains in the existing factories itself.

The rest will have to come through incremental capacity. Those need to be planned well in advance.

If I plan a capacity now, it'll yield revenue in FY29 and beyond. That's how we look at incremental capacity.

The current Bhopal second unit should yield revenue from H2, it's already started ramping up, should yield revenue in H2 and beyond. Next year will be its full financial year.

The older Bhopal facility is fully running. It's working to the brim.

By fourth quarter of this year, the second facility will also be running to full capacity. We have to now look at capacities beyond that, which is what we're looking at.

A 1,000-machine capacity yielding about closer to ₹175 to ₹200, more like ₹200 crore revenue, those will be the modules we'll be looking at moving forward.

Okay. That's helpful.

On Atraco, with the clarity of tariff and 301 implemented, do you think we have already started shifting some of the production to knit in Atraco, or it's still time to wait till December?

See, any uncertainty is not good. AGOA uncertainty beyond December if it gets cleared, earlier the better.

All the efforts are on. As I said, the bill has moved to the Senate already and passed.

If the AGOA gets extended, that gives us a lot more clarity on things. My sense is that we are all involved in that activity and the sense coming in from the States is that they want to do it.

There is a high likelihood that it will. If that happens, then there is a lot of momentum of business going that direction.

Keep in mind that if you look at, say Bangladesh, right? Bangladesh has a 10% reciprocal tariff and the underlying tariff, which varies anywhere between 20 and 30%, depending on cotton versus synthetics.

Now, Kenya is 100% all of this duty is zero. The value proposition is of a different order.

Automatically, the business flow will gravitate towards such locations, which is also one of the reasons why I'm seeing a lot of Chinese companies are setting up factories there. Huge amount of capacities are being built in that region.

Egypt is another area where lots of capacities are being built. There's a lot of momentum in that broader region, which indicates that probably the future is also headed somewhere there.

Okay. No, Shiva, I got that.

I was just asking if AGOA is not happening or if it happens, still it is a relevant capacity for us, and in terms of capacity utilization, we are far behind. I'm just anticipating that if that clarity emerges, maybe after quarter three onwards, we have a meaningful utilization at that capacity.

That's what my question was.

Absolutely, right? When I say that earlier I indicated that we will be doing about $112-$115 million in Africa and we're still trying to do 120.

Quarterly run rate of $30 million is what we're gunning for. That will take us to, at whatever capacity we have today, it'll take us to full capacity utilization.

We are approaching that strong zone very quickly.

Okay. Just last question on top three, four retailers.

With this tariff settling, is there any meaningful new product additions which we have seen for next year summer onwards, specially from Carhartt or maybe Gap?

All of them. Yeah.

We're seeing new product additions across all customers.

These are beyond ₹700 and odd realization or it is lower than that?

It's a mix, right? It's always a mix.

We have products which are extremely high ASP, like $40-$50 also, but it's always a mix and average will be in that ballpark.

Okay. Got it.

Thank you and all the best.

Thank you.

Yeah. Thank you for taking my question.

Most of my questions are answered and I just seek couple of clarifications and a bookkeeping question. On Jharkhand and Karnataka, you mentioned about ₹100 crores investment in each of these, total ₹200 crores, out of which ₹70 to ₹75 crores will be done this year.

This will be operationalized in FY28 second half, and we will expect full revenue for FY29, and that will be around ₹350 crores. Is that correct?

No, the total capital investment for both the units put together is about ₹100 crores.

Okay. The revenue potential of ₹350 crore is also together?

For both the units put together.

Okay. On Bhopal, you mentioned 3.5 million pieces, which may vary depending upon the product type.

The incremental revenue potential that you mentioned was ₹175 crore, is it? Correct?

Correct.

Correct. Correct.

Okay. Finally, I just need a bookkeeping question.

Can you give a breakup of volumes within India? Matrix and the stand-alone, and if possible, the average selling prices for both?

No, we have already given in the presentation.

No, within India, the breakup within India

Within India? Okay.

Just a second. Matrix, you can take it's about 1.5 million pieces at ₹613.

The differential

is Gokaldas. 630?

613, is it?

Okay. Yes.

Stand-alone?

Matrix, it's a few factories of Matrix, because now everything is combined. That's why we find it difficult.

Yeah. What else?

No. Sorry, I just missed the last bit and that's it.

I don't need anything else. Could you repeat?

This is the old factories, whatever the new addition is happening in central part of India is part of Gokaldas. That is why we club both and provide the data as one figure on India operations.

For your reference, if you're referring only to the old Gurgaon units, then the volume is 1.53 million and the average ASP is ₹613.

Okay. Understood.

Okay. Thank you.

Increasingly, we have amalgamated all those operations under one, we don't tend to distinguish between what was erstwhile Matrix operations. What Satya just did was pull out that data and give you.

Understood. Fair enough.

Yeah. Thank you.

Thank you for the follow-up. Just wanted to check on what is the BTPL number for this quarter?

Couldn't really follow the question. Can you repeat it?

What is the BTPL number for this quarter? See,

the turnover they've done almost around ₹170 crores in terms of the fabric turnover. It's a average operational EBITDA is in the range of 7.5 to 8% negative.

This is at a 54 This is at about 50 54 50 to 53 lakh meters product run rate. As we mentioned, that with the incremental volume what we are targeting and with the mix what we are talking about, it will be better.

Currently in this quarter, that is in first current this quarter, they had a challenge, especially with the chemical cost and the fuel cost gone up substantially and that's why the EBITDA loss is relatively higher. Those things they are also addressing it in the pricing.

Hopefully, we should be able to see as we targeted now, we said in Q3 when it is in Q4 when we are merging, by then whatever Mr. Shiva has indicated mid to little higher over mid single-digit EBITDA positive is possible.

We're working on that. Earlier in the last call, we had mentioned that by H1, it will be break-even.

That's the target and even now they are working on it for Q2. Definitely in Q3, we should be EBITDA positive.

In Q4, we are targeting PBT positive.

Okay. Got it, sir.

Thank you so much.

Thank you, sir, for the opportunity. Sir, regarding the two capacities in Jharkhand and Karnataka, you've given us revenue guidance.

Could you give us in million pieces the guidance, how much each facility will contribute?

Both the units are in the similar capacity, about ₹175 crores is the revenue run rate in a steady state, with an investment of ₹50 crores

each.

Pieces is 3.5 million pieces.

Okay. Sir, what was our utilization level, the blended utilization level across all the capacities, and bifurcation between India and Africa is possible?

Africa is in the range of 80 to 85%, and in India, mostly South India factories are capacity was going full. Except in Central part of India, we are at the range of 85% is the capacity utilization.

Okay. Thank you, sir.

Hello.

Hello. Sir, I had two questions.

My first question is that how you people are approaching the new FTAs which are flowing in, especially the European one? Second, are you looking for any acquisition outside India?

As far as FTA is concerned, we are eagerly looking forward to the European FTA. We believe that there is a lot of work which has happened in that direction.

I hope that it happens by the second half of next year, which is 2027. If that happens, it opens up a very large market, duty-free access for us.

That will give us a tremendous advantage from a growth standpoint. We're already ramping up relationship with European customers and are growing with them.

The real benefit will happen only once the FTA is inked and the FTA is in process. We're planning our business according to the FTA.

As far as acquisitions go, I think we are currently focused on the business that we have. We are not working on any such inorganic moves at the moment.

Sir. What about the capacity expansion apart from the capex?

Are you also looking forward to some leased facilities also?

That's always an option open. If there is a very good facility that is available for lease, then we are open towards that.

The usual challenges that always happens is that the facilities which come up for leasing will always have some defect or some inadequacies, we are mindful of what kind of capacities we get and proceed accordingly.

Okay. Any expansion in Bangladesh geography, sir?

At the moment, we're doing some sub-con work out of there. For the future, at the appropriate time, if the conditions are favorable, we may look at it.

For now, it is sub-con kind of work that happens there.

Thank you, sir. Thank you.

All the best, sir.

No, thanks for the follow-up. Just wanted a clarification that in the capacity expansion plan that we had, in addition to Bhopal Phase 2, we were already working on adding some machines in Karnataka and in Ranchi to a tune of around 500 to 700 if I'm not wrong.

That is not happening this year or all of this will happen

That is happening. That is all happening this year itself.

Okay. I thought we were to commission these this year, Sivaramakrishnan Ganapathi (Vice Chairman and Managing Director):

That is correct. Those are in existing factories.

In Karnataka, we already have one factory where we are taking it to full capacity utilization. Those are all incremental facilities.

In Ranchi, we have two units in operation as we speak. One of them is full capacity utilization, the other one we are taking it to full capacity utilization.

What Satya mentioned earlier was two new facilities, one each in Karnataka and Ranchi, which are brand new, which will be effective 2029. The existing ones which we had mentioned earlier, those are getting ramped up as we speak.

Okay. Total of Bhopal Phase 2 plus Karnataka plus Ranchi, what is the additional revenue potential?

I'm talking about the already commissioned ones.

I'll tell you. About a shade under ₹275 crores or thereabouts.

Okay. Plus this ₹250 in the new expansions which will come next year.

Correct. Correct.

Okay. Thank you.

Thanks a lot for this clarity.

Good afternoon, sir, and thank you for the opportunity. I wanted to understand what is the current breakup of your garments by fabric type?

Like cotton, viscose, and man-made?

By fabric type, you're saying?

By fabric type, like cotton, viscose, and man-made.

Cotton is almost 65% or a little higher. The polyester, nylon, spandex, those kind of fibers contribute to anywhere up to 30%.

Again, this varies quarterly. For example, in Q1 and Q2, we will have a lot more man-made fiber made garments because we do a lot more outerwear in the first and second quarters.

This is not the annual figure, this is the quarterly figure?

Annual figure. Oh.

My second question is given that the UK market is inherently more fragmented than the US, then what's our strategy to scale there? Are we targeting the same large retail customers that we serve in US, or is it a different customer mix given the fragmented nature of the market?

Does it require different sourcing or manufacturing setup than a US-facing capacity?

At this moment, we're only targeting the larger customer profile, because we are geared to handle larger customers than several smaller ones. Our intention is to continue to focus on the larger UK players, like Marks & Spencer's and stuff like that.

Those are the opportunities that we're going forward. We're also margin-conscious, we will pick and choose the business portfolio that suits our profile the best.

Okay. Thank you and all the best.

Thank you.

Thank you, everyone, for participating in the conference call. We continue to watch out for any external headwinds.

I think, some of the headwinds which we discussed are any possible changes to RoSCTL, any disruption to logistics, etc., US retail demand, and any tariff volatility, though at this moment on the tariff side we seem to be looking good. We are gearing ourselves for any such business volatility and feel confident that we can handle as long as some of these are within reasonable levels.

We have the management depth, the business capability, and the investments required to be able to manage all of these. We're focused on BTPL and its performance, making sure that the business is performing strongly by the end of this calendar year, and there's a lot of effort going on on that front.

Early signs seems to be encouraging. Overall, I think with the way the business is shaping up, things are looking encouraging, and we feel that we are ready to handle any eventuality which will come our way.

Given our order book and customer relationship, we should continue to do strongly. Thank you so much.