Thank you very much. Good afternoon, everyone, and I am delighted to welcome you all to our earnings call for Q1 FY27.

I hope you all had an opportunity to review our press release and the investor presentation, which are available under the investor section of our website, and the same are also uploaded on BSE and NSE websites. To discuss our results, we have with us our Managing Director, Mr.

Pallab Banerjee, and our Group CFO, Mr. Sanjay Gandhi.

They will take you through our results and business performance, after which we will proceed for question-and-answer session. Before we start, I just want to highlight that this call may include forward-looking statements based on the company's current views and expectations.

Actual results could be different as future performance is uncertain and involve risks that are hard to predict. I will now hand over the call to our MD, Mr.

Pallab Banerjee. Over to you, Pallab.

Thank you, Shishir. Good afternoon, everyone.

I welcome you all to our Q1 FY27 earnings call. We continued to deliver a strong top line and bottom line by our focused execution and multi-location presence.

During this quarter, we achieved a revenue of ₹1,528 crore, and our EBITDA stood at Indian rupees ₹164 crore, which is at 10.7%, and a PAT of ₹99 crore. We shipped 20.8 million pieces this quarter.

Some important updates on the key developments that's affecting our industry. USA, our biggest market, has now an MFN plus Section 301 tariff on our apparels.

As after Supreme Court judged IEEPA tariff as not legal in February, US had implemented a 10% additional tariff under Section 122, and this got over on July 24th this year. Now we have an additional 10% and a 10% for India, Bangladesh, Indonesia, and a 12.5% on top of the MFN tariff for Vietnam.

Now, following the Supreme Court's decision on February 28th, which striked down the IEEPA tariffs, approximately $166 billion was collected as duties, which became refundable to about 3,300,000 [330,000?] importers across 53 million entries.

US Customs and Border Protection is processing this refunds through the CAPES system, which went live on April 20th this year. US government is in process of providing a refund to this importers.

Now, very few or very small size customers that we have passed on this benefits back to their suppliers. In general, we haven't seen any of these refunds coming to us from our customers.

Energy volatility continues as Iran War and Strait of Hormuz remains sensitive. Last quarter, we saw almost all Asian countries face the pressure affecting the raw material prices and the timelines.

We had to maneuver through these challenges, and I would say that we're still going through it. In addition, even before the peak shipping season, we are seeing a shortage of containers and the shipping lines capacity shortages, resulting in delays and high spot prices of freights.

On other hand, the Bab-el-Mandeb is back in news as it affects one of the choke points of critical shipping lanes. This will also continue to put an additional pressure both in terms of cost and timeline of transit.

Mostly our customers are paying this freights, and we have FOB terms, but it does put a pressure to our industry. On a brighter side, what we find is that despite all these war and inflation, the US consumer behavior remained healthy.

We observe similar trends in other major Western markets as well, like European Union and UK. If I talk of now, the retailers and the brands in US are feeling better because one side they have the confidence of the customers, they're buying, and also they have the refunds that is coming to them, which will make their position much more healthier and they can pass on more aggressively, let's say, a pricing or their selling strategies.

This should have positive impacts on the order books what we feel. Talking of another different market like Japan, what we are seeing, it continues to raise security concern on the China, Russia, and North Korea, this whatever is happening there geopolitically.

Clothing import from China to Japan, which used to be around 65% plus, has now fallen down to 50%. That's a 15% drop what has happened, and this is the first time in 31 years.

Vietnam is now almost 17.4% of imports into Japan, and Bangladesh also has gained. It has come to a 4.3%.

This is a positive news again because Japan is one of the bigger market after US and European Union. Talking about the country of our manufacturing, if we talk of India, the implementation of India-UK Free Trade Agreement, which went effective 15th of July 2026, is a significant positive development for Indian exports.

Now the focus will be on the implementation of European Union FTA by the beginning of 2027. Such FTAs are normally a major boost to the raw material investments in India as well.

What we're seeing is coupled by the other various schemes from Indian government like the PLI schemes, the PM MITRA parks, and the competitiveness amongst the states to draw investment. What we feel is the textile and apparel continues to be a focus area in India.

Pearl Global already serves several of these markets in European Union and UK and have many customers because we're servicing them through other geographies, and we believe that this FTA will further strengthen this relationships as we create more additional sourcing advantage for them. We are proactively positioning ourselves to capitalize on this opportunities by enhancing our factory readiness in India, strengthening the compliance standards to meet some of the different standards of European Union and UK, expanding the capabilities, and also working closely with our customers on their future sourcing plans.

In terms of challenges in India, we did face the challenge of worker availability during the Q1, majorly because of being a harvest season, school holidays, and this time also we had the West Bengal elections, which saw a lot of labors going missing or absent. Haryana and Noida both raised the minimum wage significantly, 38% and 21% respectively, which caused another ripple into our cost structure.

At Pearl, we are having a healthy order book and have better utilization of capacity in India as compared to last year when we had the backdrop of the tariff pressure, which has started around this time. Moving on to Bangladesh, here our business continues to grow.

Again, we witnessed a healthy traction both from the existing as well as the recently added customers. Our ongoing capacity expansion projects in Bangladesh, along with the sustainable laundry operations that we are starting in September, and we should be becoming operational and execute orders in the second half of this year.

This projects are expected to give us almost about 6 to 7 million pieces of additional capacity in Bangladesh, and that will take our total group installed capacity to almost 108 million pieces. This eco-friendly washing unit that we're adding, that also will help us in terms of value addition that we are doing to our garments.

In Indonesia, the business momentum remains healthy, with encouraging demand trends and strong growth from the relatively lower base, which is supported by our continued customer traction and the focus on the premium clients remains in this country. We remain confident of delivering both top line and bottom line from this geography.

In Vietnam, it continues to be one of the world's largest apparel exporting countries after China and is playing a strategic role in serving the high-value and fashion-oriented segments for us. The country benefits from favorable trade agreements, including the European Union-Vietnam FTA, and we have benefited most from ongoing sourcing diversification that has been happening under China Plus One strategy, as Vietnam also got the maximum benefit.

It remains an important manufacturing hub for US. Encouraged by this strong customer traction, we continue to evaluate opportunities for additional capacity expansion in Vietnam.

In Guatemala, we have reworked our operating strategy and seeing encouraging progress. We remain confident of achieving a break-even during this financial year of 2027.

Overall, we believe our diversified manufacturing footprint, diversified market and the client base, ongoing capacity additions, and our ever-strengthening customer relationships will help us as we maneuver through this geopolitical challenges to the trade environment is facing. I feel that Pearl Global is positioned for sustainable growth over the medium term.

With that, I would hand over to Sanjay Gandhi, our Group CFO, to share the financial highlights. Sanjay, over to you.

Thank you, Pallab. Welcome, all, to our Quarter 1 FY27 earning call.

I will now take you through our financial and operational performance. Quarter 1 FY27 consolidated performance.

Quarter 1 FY27 is a great start of the year for us. We registered our highest-ever consolidated revenue, EBITDA, and profit after tax for the quarter.

Consolidated revenue grew to ₹1,528 crore, up 24.5% year-on-year. This strong growth was driven by a strong volume growth across our manufacturing locations.

Adjusted EBITDA, excluding ESOP expenses, stood at ₹164 crore, up by 44.1% compared to Quarter 1 FY26. This is driven by improvement in product mix and the operating leverage which we witness in couple of our manufacturing location.

Adjusted EBITDA margin stood at 10.7%, up by 140 bps year-on-year. It is pertinent to note that given the current customer mix, product mix, and geographical contribution to revenue and margin in Quarter 1 of FY27, we are confident of sustaining this margin in Q1 series of subsequent year as well.

PAT in Quarter 1 FY27 stands at ₹99 crore, a strong growth of 51.4% on year-on-year basis. Now talking about standalone financial performance.

Total revenue stood at ₹340 crore, grew by 27.4% year-on-year. Adjusted EBITDA, excluding ESOP expenses, stand at ₹22 crore, EBITDA margin at 6.6% versus 7.3% in Q1 FY26.

Drop in EBITDA margin despite revenue growth is because of higher wage cost in all factories in Haryana post-wage revision by state government. Other highlights.

During the quarter, we received a total dividend of ₹5 crore from Pearl Global Hong Kong, Hong Kong subsidiary company of PGIL. This is in lines with the fungibility of cash across group entities.

Company shipped 20.8 million pieces in Quarter 1 FY27, highest-ever in Q1 series, up from 17.2 million pieces in Quarter 1 FY26. The Board of Directors have approved, subject to shareholder approval, the issue of one fully paid-up bonus equity share for every one fully paid-up equity share.

CapEx update. We continue to build capacity and capability across our group.

We have already updated on Bangladesh CapEx. Construction for the manufacturing shed in Bihar has already commenced.

We are expecting completion in next couple of months. The land acquisition in Vietnam is also completed in line with what we have communicated earlier.

Further, we are in the process of outlining CapEx commitment of approximately ₹200 to ₹250 crore for FY27 across geographies. We'll update you on the detailed CapEx plan in coming months.

In summary, we have delivered another strong revenue growth and encouraging improvement in profitability. Quarter 1 FY27 performance, testament to the strength of Pearl Global diversified business model, strong customer relationship, and enhanced capacity and capability, which has enabled us to carry the momentum built over past several years.

We remain confident of sustaining the double-digit EBITDA margin on a full-year basis as well. With this, I now hand over to the moderator to open the floor for questions and answers.

Good evening, team, and congrats to the entire team for the great set of numbers. Sir, my first question is related to the UK

Yes,

Yeah. My first question is related to the UK and EU FTA.

Last call also you mentioned about rising customer interest and customers visiting our facility in India. With UK FTA already in force and EU possibly by next year, can you share us an update on how it's progressing and if you can quantify the incremental order that we are eyeing or the incremental volume that we can actually get from our existing customers as well as new customers based out of these geographies?

Are we going to carve out some portion of our existing facility in India to these customers or the incremental ones will be enough for now?

Thank you, Kishore Kumar. See, what I said earlier also, we have been seeing when these treaties were getting finalized and was coming for implementation, we saw that interest started generating in most of these customers.

They have been talking to us much more intently in terms of more capacity, not only in India, but for other places as well, because, see, it gives them that kind of security that if something happens to Bangladesh or Vietnam and all, that diversification is there in Pearl Global that immediately the business can shift to other location. Also the kind of product, which is a unique handwriting for India, let's say those kind of products also are available, which earlier the price has become in a challenge because if they place it in India, then they had to pay higher tariffs.

Both these things that we have been seeing is a positive traction. In terms of UK business, yes, by end of this year, you will see a significant jump in the UK business that we do as a group.

Now, whether this free trade agreement will result into only India growth, the answer is no, because when the customer talks to us much more intently and much more strategically, it encompasses all the locations. That's one of the huge benefit that we are getting from this FTAs.

Yes, we are getting a traction in India also and other places as well. I think of course, second part of the question was sorry, I missed out.

Can you tell? No.

The second part was

the capacity.

Yes. Yeah.

No separate factories for European markets. Basically, what we do is that existing factories, wherever certain requirements were there from some of these customers, which was in addition to what we already had there, those fulfillments we have done.

We're ready to execute their business from these places as well. That way, the readiness is coming across all our factories.

Got it, sir. Got it.

Sir, my second question is related to the revenues. Similar to the EBITDA margin jump, we did see the revenue growth also much higher than our guidance.

Is there any one-off delivery that placed in Q1 which led to this growth? Given both moved in our favor, is there any revision to our full-year guidance for the revenue?

You did mention about the EBITDA sustenance, but on the revenue side? See,

last year there was a challenge as US market faced the tariff challenges. There were a lot of conversation, and most of the retailers are also going defensive because the prices were going up, how the customer would react, what would happen to the economy.

There are a lot of question marks. As that overhang went out, we saw a good traction from the customer.

The confidence of the customers and the consumers is definitely resulted into a better order book. It is not a one-off thing that has happened.

Yes, if there is a change in the consumer sentiment or the market sentiments in the Western market, that might fluctuate. Otherwise, I think that the pressure that was there because of tariffs, that, I think, got released quite a lot.

As I said, the other geopolitical development that is going on, whether it is Japan, whether it is European Union, most of these countries, what we've earlier faced that the war when the first Middle East war that was happening in Palestine or before that in Ukraine were basically creating some kind of negative consumer sentiment. That, fortunately, what we saw in the last 6, 7 months or even after this war started in Iran in March, we didn't see that.

That, I think, is a big differentiator this time that we see.

Got it, sir. Understood.

Sir, there is a proposal under Section 301 to provide a tariff quota for textile and apparels to, I think, specific countries which includes Bangladesh and Indonesia for us. Is that a real beneficial prospect given we have to import US cotton and there'll be cost related to freight, insurance, all those things?

No. See, the US cotton part is that if any country import US cotton and then make the garment from there, then they get that kind of tariff benefit.

That's how the US rule is. That's for every country.

There's nothing specific for Bangladesh or for near country. Even our minister also has clarified that.

That exists. That is use of US cotton specifically just to promote US exports.

Otherwise, I think every country has got under 301 a 10% tariff additional tariff over MFN. Vietnam and China, this kind of countries have got 12.5%.

It is definitely stacked on the existing penalty tariff that China already has for US. Less a little, but yeah, there's some advantage definitely there for India out here.

Okay. Got it, sir.

Got it. Sir, other expenses went up Sorry to interrupt.

Hi. Thanks for the opportunity.

Couple of questions from my end, and first of all, congratulations on a very good set of numbers. First question is regarding the average realization per unit.

Historically, we've been doing around ₹600 to ₹650, but this quarter we've done closer to ₹735. Can we assume that ₹700 to ₹750 would be the normalized range average realization per unit?

That is number one. Second is regarding the earlier guidance that you had given.

We have already achieved on our current run rate, ₹1,500 is the first quarter revenue, and we had alluded earlier regarding ₹6,000-plus crore of top line for FY28. We've achieved in the first FY27 itself based on the current run rate.

Would you like to revise revenue guidance going forward?

Thank you, Bhavya. See, the average realization part, this particular season a lot of outerwear definitely gets shipped out.

I don't think we should be focused on the average realization so specifically. Yes, our endeavor is to grow it from ₹600 to higher.

As we get better customer, more upmarket customers, then this will go up. If I get a more volume customer, then it will go down.

Yes, for this particular quarter, definitely there is a lot of this value-added outerwear shipments goes. In terms of the top-line guidance, yes, our goal was to cross ₹6,000 crore by 2028.

As we said, our capacities and all have been made. We can definitely achieve that, but depends on how the macroeconomic situation is.

If it remains favorable like what we saw in the first quarter, if the rest of the year remains like that, then definitely we should be very close to our target with this kind of numbers that we are trending. It's more of a future statement I would say.

Yes, we are ready. We are, in fact, capacity-wise, we are ready.

Let's see how it goes. Sanjay, if you want to add anything further to this?

Sure. Bhavya, on the realization part, if you compare Quarter 1 last year also, our average realization was around ₹715, and this year it's ₹735.

Typically, as Pallab has mentioned about the product mix, in this particular quarter, our realization is always on the higher side. Last year we closed an average realization of ₹643 crore, ₹643 per piece.

Comparing an average of full year with a Quarter 1, that may be not the right comparison. I think if you look at Quarter 1 of last year to this year, we have improvement of ₹20, which is there.

Then it depends on the product mix how it continue for the rest of the year to really determine our average realization price.

Got it, sir. Just one follow-up, if I can squeeze in, yeah.

On the revenue side, we have been mentioning that our endeavor is to accelerate the milestone revenue which you specified for FY28, and we keep working towards that.

Right. Sir, assuming that this 7 million pieces will come on stream, you'll have closer to 108 capacity, right?

Our initial guidance for FY28 capacity was closer to 130 to 140. Can we expect further CapEx also after 108 million pieces?

See, we had said by 2028 we should be having installed capacity of around 125 to 130. That's because we want to grow.

Definitely, ₹6,000 is a point of time, ₹6,000 crore, we expected that we should cross by '28 or before, as of now it looks like. Now, that doesn't mean that that's my end goal.

That can go to definitely be higher. Yes, you asked the question of what is our next 3 years' vision or something.

We'll definitely come out and communicate with all of you on that. Yes, we want to grow.

As we said, our main competition have been with these big giants from South Korea and Taiwans and all who are in multi-billion dollars. Our first goal was ₹6,000 crore.

Definitely, after that, we have to touch that billion-dollar mark, and then move on from there. The capacity will continue to grow.

By 2028, we had forecasted that we should be having around 125 to 130 million pieces capacity. Yes, by this year, you will see that 108 number would be crossed in September, October itself, and then we'll continue to grow.

Got it. Fair enough, sir.

Thank you so much. I'll get back in the queue.

Thank you so much, yeah.

Hi. Thank you for the opportunity.

Congrats on the great set of numbers. Just regarding our standalone margins, there's seen a dip of about 70 basis points YoY, even though we've clocked all-time high gross margins.

I'm just trying to understand that do we expect to enter that 8.5% to 9% sort of EBITDA margin range in our standalone business, or will we continue to hover in that 7.5% to 8% range, because that's the only real drag on our consolidated margins. Just to add to that, have we peaked out on EBITDA margins in the remaining geographies, or do we still expect some operating leverage to further push up margins from that side?

Yeah.

Sanjay, you take this.

Sure, Pallab. First on the standalone EBITDA margin decline of which you mentioned, I mentioned in the commentary as well, there has been a revision in wages in Haryana, state of Haryana where we have four factories operating here, and that incremental wage impact has hit the P&L in this quarter, and which has really impacted the EBITDA margin for this particular quarter despite the increase in the margin.

This is why I mentioned we have a decline. If for a sake of exercise and I have to add that number, we should be looking at a 9%-plus kind of an EBITDA.

Having said that, of course, going forward in the subsequent quarter, we have to keep working on the efficiency and the cost optimization measures to stay competitive and also while working on the EBITDA improvement. Yes, the target is to really have high single-digit and double-digit EBITDA in Indian operations as well, and that's where we should be looking at as we move in the subsequent quarter.

That's the journey which is there. On your second question about the overseas location, overseas location have both potential of leverage because the new capacities are also getting added in specially in Bangladesh, and also Vietnam, we mentioned that we have done a land acquisition.

The complete project implementation plan will be shared in the coming months. There is a potential for improvement here as well.

Indonesia also has a scope of operating leverage. These are the opportunity in overseas location.

As we have guided earlier, our first aim is to really target between 10% to 12% by FY28, and we are heading very much in that direction. Of course, as and when there is a more opportunity coming up for improvement, it will be in line with our CapEx plan, we'll keep intimating to you.

Got it. Got it.

Thanks a lot, sir. Just on realizations, from the previous participants, have we seen a realization improvement in our India geography as well, or is this more of utilizations improving in Indonesia and Vietnam, which has caused the realization to spike?

Just understanding that has overall group realizations improved on a broader base, or is this just more of a seasonality we've seen of ₹735 taken? Yeah.

I think it's more of seasonality because a lot of this heavyweight outerwear and winter goods goes at this point of time. That has got a higher FOB.

That's what we are experiencing. Majority of these outerwear goes from Vietnam and Indonesia, some from India and Bangladesh as well.

That's how the nature of this business in this quarter is. Got it.

Got it. Just lastly, on our consolidated EBITDAs, would we be able to quantify how much was the tariff impact, or is this 10.7% without any tariff impact?

I'm just trying to get a like-to-like comparison because last year same quarter, our EBITDA margins on an adjusted ex of tariff impact basis were at 10.7%. Just trying to understand have we improved from that 10.7% or has it sort of been flattish?

Yeah. For

this quarter, there is no tariff impact. This entire EBITDA is operational improvement, and driven by the volume growth and the operational efficiency, which we have earlier mentioned in our commentary and answer to the questions.

We are pretty confident with the customer mix, product mix, and the geographical contribution given in the Quarter 1 in the Q1 series for the subsequent quarter as well, we should be able to maintain that and continue working towards improving it to our objective of reaching to the 12% kind of an EBITDA margin.

Got it, sir. Got it.

Thank you. That's it from my side.

Thanks a lot, sir.

Thanks for taking my question. The first part was obviously on the realization, I think, which is already touched upon.

I just wanted to confirm, we had been conservative in terms of the revenue guidance, and we have also been conservative in terms of forecasting the realization growth. Anything changes on that, because we have been considering stable realizations for FY27.

Do you mean that it is still in line with what we were expecting earlier?

In terms of top line, we have been always saying that our CAGR would be in the range of 12% to 14%. If you look at better years, we have done more than that.

This year, if it continues to be more than that, definitely I think as of now it looks like it should be better than that number. To really give a forecast, I think we will create another platform in which we talk about.

We are analyzing, and we are making preparation for what should be our numbers and goals. We'll share that with you.

As of now, the traction that we are getting seems to be much better than 12% to 14%. In terms of bottom line, I think Sanjay had repeatedly said that we are more confident because as these numbers goes up, we get the leverage.

Sanjay, you can add further to this.

Sure. As we mentioned that we are pretty confident of accelerating our target of FY28, ₹6,000 crore, and it should be able to achieve it earlier than that, and Quarter 1 demonstrate very clearly in that line.

We remain confident for the rest of the year as well. As far as the bottom line is concerned, I think that's will continue to improve and the double-digit margin is here in the business inherently as well.

We stated in our last earning call as well, business has reached a stage where inherently it can generate an EBITDA margin between 10% to 12%. Now, we mentioned four or five levers for it to reach 12%.

Now, the convergence of all this lever will be, of course, at a different point in time. Definitely with all this lever kicking in, I think our business should generate EBITDA of between 11% to 12%.

Okay. On the realization front, this realization that has happened is in line with what we were expecting at end of Q4.

Is that correct?

Yes, yes. Realization is, as I mentioned, that if you look at Quarter 1 of last year, which is FY26, our realization average has been ₹715 vis-a-vis we are at ₹735.

There is a 3%, 2.5%, 3% improvement. It is a function of product mix, realization per piece, and we always like to have better product and mix in while we do the actual execution, but is also a function of the demand and everything.

While we discuss the number with you, we have taken a little bit conservative view because our focus is bringing the volume growth more in all our model compared to the realization, which is a function of multiple things, which is some of the factors under our control, some are not in our control. We also look forward to improvement in realization as we go in the rest of the year.

Because last year Q2, Q3, Q4 were also impacted because of the price cut that we had taken due to US tariffs. Is it fair to assume that realization growth ideally should be much better in Q2, Q3, Q4 compared to Q1?

Last year from India, we had some discounts that was going on. A double-digit discount was going on to compensate that 50%.

Yes, that difference definitely should come through. For the other markets, it was hardly about 2% or 3%.

Yes, the tariff discount that we have been giving, hopefully that should fade away now or be much lesser. Customers are not talking of compensating this 10% tariff by giving extra discount at this point of time.

I think that should help. In general, we are a growing organization.

If we get a customer which is a mass volume customer, then definitely the realization prices will be lesser. Whereas more business comes from the premium segment of the customer base, then the realization would be higher.

As of now, I think we are more focused on the top line and the bottom line compared to purely on the realization per piece.

In general, we would love to track and we love to grow that.

Fair enough. Finally, would you be able to give some idea

This is only a second question. This is only our second question, and it's a short one.

Would you be able to give some idea on how the volumes have fared geography-wise? If not number, at least some utilization numbers.

Bangladesh continues to be the biggest, followed by Vietnam, India, Indonesia, and then Guatemala. Bangladesh is tracking close to about, I would say, 45% plus of the group.

Then Vietnam and India are very similar in the range of about maybe about 27%, 22% 22%, 27% to both of this, and then followed by the other locations. I hope that helps you.

Okay. Thank you.

Hi. Congratulations to the management team on a very strong quarter.

Few questions from First is what is our capacity in Bihar second unit that we are looking at? By when do we expect this to get operational?

On the current capacity in India, what is the utilization that we operated at in 1Q?

Bihar, we have two sheds that we are starting with, out of which one shed was functional with 450 machines, the full capacity. The second shed would be also similar, 450.

What we intend to divide is one of them would be more of the woven garments, and the other one would be knit garments. That's the woven part is already operational at this moment of time, and knit is should be ready by I think in October, November, we should see start seeing production there.

And

In terms of million pieces, sorry, Pallab. In terms of million pieces of garments, what is the capacity we are looking at including both the units in Bihar?

At its full capacity, we should be able to ship about 4 to 5 lakh pieces every month. That is once it fully ramped up.

At this point of time, it is doing about close to 120, 130,000 pieces a month. It should be over the period of next couple of quarters, it should move towards that full capacity.

Right. In India overall, what is the utilization that we operated at in 1Q?

That number we have not specifically ready at this point of time. We can come back to you.

Sanjay, if you have the number? Of India,

Sanjay? I'll just add, India, we are looking at this quarter capacity of out of the total number of pieces which are available at around 70% of that have been there.

In terms of the efficiency, we are looking at somewhere around 58% of efficiency. In terms of the total capacity when you compare, we are looking at 65% to 70% kind of a utilization.

For example, the Bihar, as I said, it is ramping up. When we calculate the capacity, we calculate it at the full capacity of 450 machines because the shed was operational.

We are ramping up line by line. Yes, in India, I think we are still averaging between 70%, 75%, I think we will be we'll see that.

Indian efficiency because we have been doing a lot of fashion garments and all, we are still between 50%, 55%, 58% in that range is our efficiency that comes through in India.

Right. Sir, I'm just looking at it from a point of view that where will the next leg of growth come from assuming that the Bangladesh CapEx takes some time to get commercialized.

Incrementally the headroom to improve utilization is only in Bihar, because Vietnam and Indonesia have done quite well from your segmenting numbers, if I'm right.

In India also you'll see that, if as as this FTAs are coming through, India will trend towards more core products as well. Earlier India we were more focused on the fashion products, and that was the seasonality was there, because of which the utilization on certain season was much higher than the other seasons.

Now our goal would be to have more uniformity across all the four quarters. If that we are able to achieve, then you will see this number pinching up in India, because we have a substantial capacity already built up in India.

First quarter, definitely, you saw that year-on-year we had a growth of almost 27%. That's a positive sign.

Our endeavor is to continue to do that, get more core products in India as well, and get it done. Core products normally the margins are sharper.

Yes, as the efficiency goes up, again, the margin then becomes better. That's that's a chicken-and-egg story that we are going through.

Overall, I think we're in the positive direction.

Great. Thanks, Pallab.

Thank you.

Thanks for taking my question. Am I audible?

Yeah. Thank you.

Yeah. Congrats on a good set of results.

Just continuing on the bit of utilization, right? If I heard it right, you had mentioned 65% to 70% utilization in India.

Can you help me with the utilization rate across Vietnam, Bangladesh, and Indonesia as well?

Utilization in India, as you said, it is just 70% plus as of now. There is definitely a room.

As we do more and more, we can execute more in India. With the positive direction that India is taking in terms of FTAs and in terms of other promotion of India that is happening, I think we are in the right direction.

Other locations like Bangladesh and Vietnam, we do have the flexibility of partner factories as well. That way, if we get more business, we can quickly ramp it up because we can negotiate additional capacity from our partner factories.

That way, inherently the numbers would always look better. In terms of utilization.

Sanjay, you want to add anything to this?

Just want to mention that in terms of the utilization overall at a group level, we're looking at 75% to 80% in overseas location if we have to look at a quarterly available capacity. As Pallab rightly mentioned, the partnership facility keep adding in location in countries like Bangladesh and Vietnam.

There is always a increase in the capacity which is being available for that particular season and quarterly basis also and on a full-year basis. That's the add-on, in line with what there was one question by one participant about 120, 125 million pieces.

That target will still remain with us in the interim period, because there is a lot of opportunity which is there in terms of without incurring the greenfield CapEx, we can have those capacity also getting added. That's how it will span out.

As far as specific to India, if we add the second shed which is under construction which should be ready by September, October, the revenue-wise run rate should be close to ₹1,700 to ₹1,800 crore given the full utilization reaching there. We still have a lot of room to grow in India.

In Bangladesh as well, there is a good potential to add on the revenue both on the volume side and according in the sales revenue side as well. The two and Indonesia as we mentioned that is not really fully utilized.

The region right now have a good opportunity. Vietnam also have the partner facility being available.

As demand really keeps going up, those options are always under exploration in addition to the land on which we'll do the greenfield project, which will come up in some time. That detailing also we'll share in the coming months with you on the capacity front.

Capacity is not a challenge for us to grow even beyond ₹6,000 crore or even ₹6,000 crore in this financial year. Should this momentum continue, which we'll see in the coming quarters.

Okay. Thank you.

Thank you so much for the opportunity, and congrats on the good set of numbers. Sir, just a couple of questions from my side.

Looking the Q1 number, is it fair to assume that we expect high-teens kind of growth in FY27? High-teen

percentage of growth in FY27? That's the question you asked?

Yeah. With the current run rate, it looks feasible.

Of course, the second half of the year we have to see what happens in US. We're seeing the Fed is talking about high interest rates, they might hike further.

Let's see what happens to the war. All these kind of things are there.

Otherwise, as of now, what we have seen in the market, the trend that is there in the market currently, if it doesn't change, then that should be feasible.

The second question is the India-UK FTA. After the FTA, it's been almost more than a month we have been.

On a quantitative number, how numbers will look like? Is there any incremental order book will come in our plate, or how is it look like on a sector or on an industry basis?

Overall industry, if you talk about specifically in India, I think our export to UK is in the range of, I think, about 1. some $2 or $1.3 billion.

I personally feel that that should definitely grow up significantly, at least it should double within the next 2 years 2 to 3 years.

Any visibility, sir, as of now looking the current scenario?

Anything visible, you mean?

Yeah. Basically,

Immediately customers have been coming here, and more queries are coming definitely for India. Because earlier, if they knew that, okay, this kind of product, if India, Bangladesh is giving the same price, then it is better to place in Bangladesh rather than in India.

If the price is advantageous in Bangladesh, then definitely those orders go to India. There are a certain group of product where the pricing would be similar both in India and Bangladesh, but it was landing 10% cheaper if you source it out of Bangladesh.

Those kind of business will start coming into India immediately. Because if it's typical India handwriting, the product execution, the product richness becomes better if it goes out of India.

That particular segment of business, I think, should come to India immediately. If you talk about us, we have been doing certain customers like UK some major retailers, we are definitely seeing a significant growth with those customers.

Because, as I just explained earlier also, that it gives them also confidence we as a supplier are bringing now multiple location where we are maintaining the cost and we are able to give the similar kind of service. That's a huge confidence-building for them from a supplier point of view.

That benefit we are definitely tracking.

Okay. Sir, the growth 24% is majorly coming from it's a mix of old customer or new customer, or how is it higher growth for this quarter?

Yeah. Yes,

yes. See, from the older customer also we are growing.

Our strategy as Pearl Global, we are doing almost about seven seven different category of product. That means you can say almost about 70%, 75% of our apparel store, all the product that is selling, Pearl can give them that.

We are not able to provide sweaters and we are not able to provide undergarments as of now. Keeping that aside, I think we almost have the rest of all the products that is there in apparel.

If I was in an existing customer, if I was supplying two or three different category of product, we are trying to get into the balance four and thus increasing the wallet share with the same customer. That's the kind of strategy that plays in Pearl, and that's how we have been trying to grow and give them those services, the additional services.

Like we have on-site location in terms of our product development creations and all, have the showrooms in those markets, working full-time with the customer in the real-time also not depending on this time zones. These are the kind of additional services we provide so that we can get this extra wallet share by providing this seven different categories to them.

I think that strategy will continue, and that's how, once we get a new customer and then we continue to grow with that customer by giving them one after the other categories of products. Got it.

Got it. Thank you very much, sir.

Thank you.

Thank you for the opportunity, and congrats on a great set of numbers. My questions are largely very financial related.

First is that when we see the gross margin, there's a significant YoY increase from 46% to 51.5%. At the same time, other expenses is up by 51% YoY.

Just trying to understand this nuance, is this a very one-time aspect? Is this going to continue, and what is the reason for this more importantly?

Pulkit, thank you. The gross margin and other expenses, there is an improvement in gross margin.

See, there is a combination of outsourcing production and in-house production. The manufacturing expenses in other expenses has gone high, which means the goods have been manufactured in partnership factory, resulting in a higher other expenses.

Whereas when we go to the gross profit, there is actual improvement in terms of the volume growth led by the high value-added margin products which we had in overseas location, which has led to improvement in the gross profit. As I mentioned that, given the customer mix, product mix, and the geographical contribution remaining in this quarter, which should continue for the Quarter 1 of the next year and the year after, I think this kind of a gross margin is very much sustainable.

Therefore, the EBITDA margin and other thing will also go. Other expenses is, as I mentioned, that higher because there is a lot of job work and other outsourcing manufacturing expenses has gone slightly higher in line with the production volume going higher.

We've answered that. Yeah.

Therefore, when you do higher job work, does one read it as that's because our own in-house manufacturing facility capacities were not there for this kind of growth, and therefore you had to do it, or it was a conscious decision? No, no, this is

more of the accounting practice. Because, see, there are two ways.

Even in our own facility, there could be something which is done under, I would say, more of a job work or let's say contract workers and all. That also happened.

It is a combination of all this. It's just the accounting that you have seen their heads.

Where we are paying our own salaries and all, that comes under our expenses and everything else comes under the others. Got it.

Got it. Second question is finance cost.

Far we've been doing receivable financing, and therefore the certain part of this cost item grows in line with the revenues. Now we've been seeing that to be tapered off.

Should I be reading it as receivable days will therefore go up, or how should I think of it going ahead, this finance cost item?

Sure, sure. Our net working capital days remain same what it was as on 31st of March 2026, around 43, 44 days.

The finance cost as a absolute amount remains stagnant, as the percentage-wise, it has come down to 1.7%. Our receivable financing program continued.

It is just that we are using more of internal resources, which is the cash generation for working capital requirement. Wherever the opportunity is there where we feel that there is a scope for optimization of finance cost and utilization of the resources, that's how the cost has come down in that way.

How should this line item grow going ahead? How should we think about it?

The receivable factoring is already a part of it. Interest on lease amortization, which is a part of it, will continue to be this.

We mentioned that finance cost as a percentage of sales should remain at 1.7% to 2%. As the scale goes high and the realization keeps coming up, maybe it is it is to a level of 1.7% to 1.8%.

Our endeavor is to have it, any any percent and in terms of the percentage of sales to 1.7% to 1.8%. That that should be a targeting for this year.

Got it. Thank you, and all the best.

Thank you very much.

Thanks for the opportunity, and congratulations on a good set of numbers. I just wanted to understand the Bangladesh expansion scheduled for September.

What is the utilization trajectory we expect in first 12 months, and how quickly the new capacity can achieve margins comparable to the existing capacity?

Normally, the scaling up in Bangladesh is faster compared to India. You see the industry is very focused it's one city and its outskirts, Dhaka.

The labor pool is already experienced, and so is the lower management and the middle management and all. That's why an investment in Bangladesh to capitalize and really utilize the capacity a scaling up of the capacity we have experienced in past is much faster.

We definitely would try to do that. Within the next 1 year, our goal would be to capitalize what we'll be starting.

That's the objective. Let's see how it progresses.

Understood. My second question is despite global disruptions happening, you indicated that there is a healthy business momentum.

Are you seeing customers increasing their order book aggressively, or shifting from seasonal ordering to long booking cycles as they diversify the supply chain? What's your qualitative comment on that?

I'm not sure I could hear your question properly. What I understand is that you mean to say that whether the customers would be placing more longer-term orders or not.

Exactly.

Yeah. Yeah.

On the contrary, we are seeing that with so much of forecasting of potential problems, high inflation, negative consumer sentiments and all, which always surveys and economists have been forecasting about, most of the retailers have been a little conservative in terms of going long-term. They are more in terms of what is selling and read the sales and then place the business.

That's the kind of trend that we see, how to bring down the lead time from order to have goods in store. This repeated disruption that we are seeing in terms of the logistics, now it has become most of a regular feature.

Every year we are seeing in the peak period the rates are raised and timelines are getting disturbed, availability of containers are getting disturbed. Those are the kind of things are definitely disrupting the retail planning.

Yes, it's a continuous push and pull that is going on. I am not seeing that trend of ordering early as of now.

They are putting more and more pressure on the supply chain how we can be much more reactive and how we can bring down the lead times so that they can compensate this logistical issues.

Understood. That's all from me.

Thanks. Thank you so much.

Thank you.

hi, greetings to the management. Congratulations on a very good set of numbers.

Two questions from my end. One is on the gross margin part.

To an earlier question, you did mention that because of improved product mix, etc., the margins which we did at the gross level in this quarter is representative and there is no reason to believe that it may not continue and the trend will be similar to what it was in the previous year. Is that the right inference, sir?

Yeah. Sanjay, you mentioned the quarterly.

Yes, Sanjay, go ahead. Hello?

Sanjay, you're speaking?

Pallab, you're audible.

Pallab, you're audible. Go ahead.

Please, please, go ahead, Sanjay. Go ahead.

I said to you, go ahead.

The voice was not clear. This Quarter 1, as we mentioned that subsequent quarter also, Quarter 1 series should be able to generate this kind of a gross EBITDA margin which we just achieved in this quarter, 10.7%, rather we will make an effort to improve as we step into FY20s '28, '29 onwards.

Yeah. Okay.

The reason I am pressing on this is because if I see next '26, your Q1 versus Q3 gross margins itself, there is a significant jump. Like, for example, Q1 of S26, you had 46% gross margins, and Q3, despite all the tariffs use, noise, etc.

being there, the gross margins were 51. Roughly 600, 610 basis points improvement from Q1 to Q3 at the gross level you were able to deliver in S26.

I am only trying to understand now in Q1 itself, our gross margins are 51.5. Now on this level also Q3 should be following the same trend as it did in S26?

That's what I was trying to get to, sir.

I will let Sanjay explain, but I can tell you one thing, in terms of product-wise, this Q4 and Q1, these are the two seasons where a lot of outerwear starts shipping. That's the time, that this differential of product definitely happens from season to season.

Yes, Sanjay, go ahead with your details.

Pallab, I was about to say the same thing. It's a product mix which has driven this gross margin improvement.

If we are purely looking for a gross margin point of view, yes, I think season to season, this should be the trend. As we mentioned that on a full-year basis, we are confident of achieving double-digit EBITDA in FY27, which means the improvement in Quarter 3 as well.

To some extent the trend should continue for improvement in margins.

Great. Great.

That answers. Thank you so much.

The other question is, Mr. Pallab, the initial part of the conversation, you had mentioned about the clothing inventory levels country-wise, China, Vietnam, Japan, Bangladesh, etc.

If I missed those numbers, if you may please help us understand that one more time, please. Hi.

I was talking about Japan. Like, the biggest market is US, and the other important market is European Union, UK, and Japan for us.

In Japan, their dependence on China was very high. Historically, like 65% of the total Japan imports was coming from China.

What we saw this year, last year, like a significant diversion in that. The number came down from 65% to 49%.

That means 16% of of Japan imports actually moved out of China sourcing, and that went to markets like Vietnam, to certain extent to Bangladesh. India so far has not been able to capture, but we are we have been growing in India also in terms of Japan exposure.

Yes, so that's another significant development that is happening in our industry. I was mentioning that.

I mentioned that, Vietnam now is about almost 17% plus of the Japan share, Japan's total import, and Bangladesh has reached almost about 4.3%. That's that's the number that I was sharing.

Okay. One of the top five accounts of ours is also Japan-based, I guess.

Any color incrementally that you would want to share on that particular front?

Sorry, repeat your question, please.

I thought for Pearl Global as well, I believe one of the top five accounts is from Japan as we speak. Any incremental data points you would like to share with us in terms of ramp-up of that particular Japanese client or where is it currently and what are your target expectations, etc., over there?

Japan is an interesting market. I feel that Japanese brands like Uniqlo or Muji and all now even GU are becoming international brands.

If you see the number of big US retailers who have gone international, and then now I'm seeing a lot of Japan also has gone international, like what happens between UK and European Union also. If we look at that, then that should be an interesting market and I should have more clients from that market.

Yes, we are focused on understanding that market more and more and diversify. Yes, currently, we are supplying to one of the clients, which is Muji.

We would like to diversify and have more clients there, not the big ones. Uniqlo and Muji are names that everybody knows, but there are many other significant retailers out there.

We are trying to get into them as well. As a market, definitely it's an interesting market for us.

Great.

Thank you very much, and wish you all the best.

Thank you.

Thank you to all the participants for joining us today. We are pleased with our strong start to FY27 and remain focused on disciplined execution and sustainable profitable growth.

We believe Pearl Global is well-positioned to capitalize on emerging opportunity and create long-term value for all our stakeholders. Thank you once again for your continued support and confidence in Pearl Global.

I hope we have been able to address all your queries. For any further information, kindly get in touch with Shishir, our Head of Investor Relation, or Strategic Growth Advisors, our investor relation advisor.

Thank you.