Page Industries Limited (PAGEIND) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Page Industries Ltd. Q2 and H1 F527 Earnings Conference Call hosted by E&Y. As a reminder, all participant lines will be in the listening-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V.S. Ganesh, Managing Director, Page Industries, for his opening remarks. Thank you, and over to Mr. Ganesh.

Thank you very much. A very good afternoon to all of you, and thank you for joining us for Q2 F527 earnings call. With me today, Deepanjan, our CFO. and Karthik, or CEO. I will start with some perspectives on how the COTA unfolded and the developments that mattered, after which Deep Monson will then walk you through the numbers. After that, we look forward to your questions. Consumption trends stayed positive through the quarter and the demand momentum we saw in Q1 held on. Even with the festive seasons coming in Q3 this year, we performed very well during the second quarter. The response to a newly launched Disney and Marvel range has also been very encouraging. On course, the environment remained very challenging. Cotton prices were elevated and volatile, and crude oil-based raw material remained significantly higher. As we shared last quarter, we had chosen to absorb a part of this inflation. The 2.5% increase we took in May 2026 was fully effective during Q2. This partially cushioned the pressure on cost. Despite these events, our EBITDA margins remained healthy and within a planned range of 19 to 21 percent. And we will continue to keep balancing margin protection and value for our customers. As regards to transformation journey, it is moving ahead steadily. The S4 HANA implementation is progressing well, with go-live planned to happen during the Q4 of this financial year, and the scale-up of our distribution management system is also on track. Our initiative to strengthen cybersecurity and our HR transformation program remain firmly on course. Together, these investments are aimed at making us a more agile and resilient organization, better equipped to serve our consumers and retail partners. Turning to our distribution network, We ended the quarter with 115,426 multi-brand outlets, 1,662 exclusive brand stores, and 921 large format stores. This broad presence across formats keeps a brand accessible to consumers wherever they choose to shop, and we'll keep deepening our reach across all these store formats. Our e-commerce channel also grew strongly in the quarter on both marketplace platform, as well as our own portal, and they contribute to a growing share of our business. We also launched a new distribution center in West Bengal, which strengthens our D2C capabilities in the eastern region for Jockey.in and our partner marketplaces. Looking ahead, we have remained confident about the underlying demand, the strength of a brand, and our ability to execute with discipline. None of this would be possible without the continued trust and support of all our stakeholders. And I thank you for all the support which you all have been extending all these years. As we come out of Diwali, I hope it was a joyful one for you and your families. And with Christmas just around the corner, I wish you all a very Merry Christmas and a wonderful start to the new year. And with that, please allow me to pass on the call to Mr. Deepanshan, who will take you through the financial numbers. Thank you.

Thank you, VSG. Good afternoon, everyone. And welcome to today's call. Let me take you through the financial performance for the second quarter of FI27 and of the first half. So quarter two FI27 performance, sales volume was 59.7 million pieces, which has a growth of 5.5% over Q2 last year. Sales value was Rs. 14,396.1 million, up 11.5%. Helped by the 2.5% price increase, which was fully affected in the quarter. EBITDA was Rs. 3,001.4 million, up 7.4%. EBITDA margin was 20.8%, as against 21.7% last year. Cotton and crude oil-based raw materials remained elevated, and the price increase only partially cushioned this pressure. The margin stayed healthy and within our planned range of 19% to 21%. Profit after tax was Rs. 2,025.4 million, a growth of 4% over Q2 last year. Coming to the first half performance, sales volume was 121.66 million pieces, up 5.6%. Sales value was Rs. 28,600.6 million, a growth of 9.7% over H1 last year. EBITDA was Rs. 5,891.4 million, up 2.6%. EBITDA margin was 20.6%, as against 22% in the same period last year, reflecting the cost inflation. Profit after tax was Rs. 3,953.5 million, broadly in line with first half last year. Coming to the balance sheet items, inventory days to rate 74.3 at the end of Q2. As again, 74.8% at the beginning of current financial year. Net working capital days improved to 51.3% from 55.85% days at the beginning of the current financial year. With that, we can now take up questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press start and do. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants are requested to limit yourself to two questions per participant and rejoin for a follow-up. We take the first question from the line of Ashitu Jhotharazitya from ICICI Securities. Please go ahead.

Yeah, thank you for the opportunity. I have two questions. First one is on the volume growth in FY27. So, for the first half, the volume growth is around, say, mid single digit kind of range. So, just want to understand what could be the growth drivers going ahead and how confident the management is to maintain the volume growth guidance for the full year or is there any change to that. Thank you.

Thank you, Ashutosh, for the question. As Deepanjan pointed out and what we've published, it's about a 5.5% growth in volume for H1 against an annual guidance of a double-digit volume growth. Largely, in quarter two, we've seen the shift in festive season when compared to last year. Which has affected our primary volumes in terms of build up to the season, which we believe we will be able to in a way compensate in quarter three. Given that, our guidance for the full financial year remains intact, and the targets that we are gunning for internally remains intact as well. So there is no change in the outlook as far as the volume growth targets are concerned.

Okay, understood. And secondly, sir, on the Pema news which came in, so what would be the next step for the company, and could you highlight any financial or operational risks going ahead for the company? That would be really helpful. Thank you, and that was my last question.

Yeah, so on the FDI matter, that in fact happened last year. We identified it last year and we had filed for the compounding application with RBI in May 2026. RBI had to come back with our status of our application by October, which they did, but yes, they asked us to approach the government for post facto approval of the past noncompliance. So, we are now in the process of approaching DPIIT to take care of the earlier past issue. Currently, as we stand, we are fully compliant with the required FDI provisions. Yes, the outcome of the past compliance, how it will pan out, that is a bit early to comment as to any quantification. We don't see any impact on operations due to this matter.

Thank you.

Thank you.

Next question is from Land of Vidisha State from Ambed Capital. Please go ahead.

Hi, both my questions were pertaining to the earlier discussion on this one on the volume growth. Now, when we look at the remaining part of FI24, the hours become as steep as 14, 15 odd percent. So, Kasek, if you could please help us out as to how should we think about the building blocks or the moving parts as to how would you land up pertaining that growth in the second half. One, of course, would be the timing shift of testing, but if you could help us understand the things.

Sure. Yeah, so as we see it, the asking rate for H2, as you pointed out, is about 14% in volume growth to hit a double-digit number. Basically, three levers in terms of what will be different in H2 when compared to H1. One is obviously the build-up to the festive season has moved from September to October. This is both, and since we are largely a B2B company in terms of what we publish, the primary performance, that buildup will be realized in the month of October-November as against what we realized in September. Both for a shift in festive, also in the online space, the buildup for, you know, the large fests that happens across large marketplaces during the festive season. These two pieces are large impacts. The second one is in terms of a few key new introductions that has been planned for Diwali that's likely going to be realized in the month of October and November. And these are key, you know, categories in men's unaware as well as bras, which is also backed by campaigns, marketing campaigns and investments. These are largely the building blocks. Otherwise, from a tertiary point of view, I think we are well on course against what we have planned, even in H1. The large impact that we are seeing is largely in primary because of this shift. And hence the confidence of, you know, being able to recover that 14% asking rate for H2.

Sure. And just a follow-up to this, since we're already halfway into 3Q, have you seen that double-digit growth momentum shaping up in the primary part of the B2B part of the business?

I cannot comment on Q3, but what I'd say is, yes, we are on track against what we have planned for H2.

Sure. And the second question was that, is there any intention or any further price hike plans beyond the 2.5% I've taken in the month of serving?

See, our initial attempt was to absorb the inflationary pressures partially, and by doing so, we still, of course, a lot of operational efficiency has come in to keep us within our targeted EBITDA range of 90 to 21, even in H1. But looks like the inflation persists. We've not seen softening of input costs, whether it is crude lead or whether it is cotton. So we'll have to wait and watch. I think in the commentary that B.S. Ganesh made, what we will try and balance out is, you know, our targeted EBITDA range versus being affordable and accessible to consumers. So, it's almost a wait and watch to see when we need to affect the price increase. In my view, I think it will come at some point, but we'll take it one month at a time and see when we need to, you know, press the button on another price increase.

Thanks for that. And just one small clarification as I made. The FEMA related, although you called out there won't be any impact on operations possible to quantify what could be the impact on the P&L if it were not to hold up?

I think our best estimate going by the earlier precedences and RBI guidelines that we have. There can be a penalty up to 0.75% of the amount that is involved. And as per our estimate, the total amount involved in the contravention is up to 48 crores. So we make the levied penalty of almost 0.75% of that. There is a very extreme outlying chances that, yes, there can be a very extreme penalty of three times of the amount involved, but there is no precedence of such a levy.

Thank you. I request to all the participants, please limit to two questions and rejoin for a follow up. Next question is from the line of Nihal Jam from HSBC Securities. Please go ahead.

Yes, hi. Good evening, team. Two questions. The first one was you mentioned about this festive shift. Like last time, you know, you called out the logistics impact at sort of a 3% impact. Can you sort of give a ballpark quantification? What was the lost sales because of the shift in festive to Q3?

No, I don't think we've quantified it that way. It's difficult to quantify because it's kind of moved from September to October. And this is a function of three things, right? Pujo billing, which largely happened in September last year, moved to October. Diwali has shifted from October to November. And like I mentioned, the festive buildup. For, you know, e-commerce platforms for, you know, the Big Billion Day and Great Indian Festival Fests. So we're not quantifying it in terms of percentages, but what we've seen is we've seen sharp decline in the month of September, largely because last year we had realized the sales in primary, which this year has moved to October.

Got that, Karthik. So, if we just call out, say, what the growth in July-August was like, that would, you know, automatically give us a sense of it's possible to give you, give us a ballpark sense of July-August growth.

It's almost two times what we've achieved for the quarter.

That is very helpful. My second question was that on the cost inflation part, can you just give a ballpark sense of what is it like the YY inflation? You mentioned about cotton, multiple polyester. I would believe that cotton is the largest part, but as a basket, what is the IM inflation in Q2 on a YY perspective and how is it trending currently if you can just, you know, give that out?

So I think we touched upon this last quarter as well. The input cost purely from a raw material point of view seems to be inflated to the tune of 6.5% to 7%, which of course has been offset by price increase to the tune of 2.5%, which was affected in Q2. And as we saw some level of softening in in the month of September, but that's kind of rebound in October back to operate at a level that we experienced in quarter one. So as we stand today, the inflated input costs persist and similar to the range of what it was in quarter one, which is about six and a half, seven percent higher than what it was last year.

Understood. That's very helpful. I'll come back in the queue for most questions. Thanks.

Thanks, Nihal.

Thank you. Next question is from line of Samir Gupta from Indian InfoLine. Please go ahead.

Hi, good evening, and thanks for taking my question. Firstly, sir, I just want to touch upon on the gross margin front again. I know it's been answered partly, but I still see an acceleration in the contraction of gross margin at around 280 bps versus what it was last quarter. Now, this quarter is having a full impact of price hikes taken, plus there is actually a mix that has improved. I remember you called out last quarter that the mix was a little adverse and I see the overall ASP plus mix growth is healthy this quarter. So just wondering why would there be a higher gross margin contraction in 2Q versus 1Q given all these factors would have played out.

It's also a function of the inventory that we have sold. We had mentioned it last time that in quarter one, we had pre-positioned a lot of our inventory in Q4 itself. At prices much lower than what the input costs were in quarter one. We had a benefit of that in quarter two. I'm sorry, in quarter one in terms of gross margin. And we had also prepositioned the MRP increase of 2.5% in May. But the full-blown input costs, the inflated input costs actually hit us. From towards the end of June onwards, and we realized the price increase of 2.5% from July onwards, and hence you're seeing a contraction in gross margins as far as Q2 is concerned when compared to Q1. The benefit of the pre-positioned raw material is something that we exhausted in Q1 and did not carry it into Q2.

Got it. This is very clear. Second question is on the employee cost. Now, we are seeing wage inflation across the board, but I'm only seeing a 4% increase in our employee cost, and this is against a good, healthy volume growth, which has got impacted by a delayed festive in any case. So just wondering how exactly are we able to manage these employee costs in such a narrow band, given overall widespread inflation?

No, I think the headcount has been optimal, but going forward, the headcount will go up as we ramp up Odessa operations as well as KRPay 2 operations. So what you've seen in H1 is more the ramp-up phase, which will have to accelerate a lot more in H2. So by the sheer increase in headcount, you will see manpower cost in a way catching up on the business. As far as wage increase is concerned, as of now, a large portion of our wage increase impact is in Karnataka, which has been affected from April itself, and that's been well accounted in what we have published in H1.

And this wage increase in Karnataka pertains to the retail store operations, not really the varminting which has still been left out.

No, so there are two parts to this. The garmenting workforce which increased was already affected in the month of April, which has been passed on to our workforce and has accounted in the budget. What was later on published towards the end of June, early July was to do with more the support staff, and that did not include garmenting as an industry. So that does not hit us in any form as of yet, which also is now subjudice, and it's been challenged and needs to be concluded in terms of way forward.

Got it, Karthik. Thanks for all this. I'll come back in the queue for follow-ups. Good luck. Good luck for me.

Thank you. Thank you. Participants kindly limit yourself to two questions and we join for a follow-up. Next question is from the line of Teja Shah from Avengers Park. Please go ahead.

Hi, thanks for the opportunity. A couple of questions. First, Karthik, the fact that we are holding on to our double-digit volume growth guidance, looking at where we are in the end of first half, the ask rate is quite high from the second half. So, would you say that on ground checks gives you confidence that the primary double digit growth is very much possible? And also, with all the digital transformation that we are doing, is it improving our demand forecasting capability as well?

Yeah, so on the first question, yes, I think this is a combination of what's, you know, in a way resulted by design because of the shift in the season and how we planned our inputs in trade accordingly. Both our schemes to the retailers as well as our planned secondaries. The confidence of, you know, the double digit piece is still intact and hence we are holding ourselves accountable to it as of now and continue to carry that target for H2. Your second question, sorry.

On demand forecasting led by?

Demand forecasting, yes. I think demand forecasting as of now is largely principle led, which is working very, very well for us. The digitization of this or the automation of this is still work in progress. That is something that we've initiated in quarter two, and we are piloting it across a few touch points, and that's been working very nicely. But what's important is the fundamentals are in place in terms of principles of auto-replenishment that's working very, very nicely now with only a function of automating it so that we don't need too many hands running that system. But we've started that well and we see that progressing.

I'll come back in. Thanks and all the rest.

Thank you. Thank you very much. Next question is from the line of Avi from 361 Capital. Please go ahead.

Yeah, hi team. Thanks for the opportunity. Most of my questions have been answered. I just wanted to check, clarify two aspects. One, given the pricing and given where the input inflation is, would it be fair to state that margins have bottomed out in this quarter and should improve? And second, I just wanted to confirm that those three days of billing that we lost, now that has normalized or that still continues into the system? How is that kind of behaved? Thank you.

So, on the second part, the three days of billing, that was a one-time aberration and there is nothing to normalize in that. So, that was a one-time incident which happened in Q1 and that has been flown back into the business in the normal course. On the margin front, yes, we are still will be within the 19 to 21% margin range even the coming H1, H2. Yes, there has been elevated cost pressures, but even with that, we have quite confidently within this 19 to 21 percent.

Because just to clarify, we have taken the pricing flow through should pass through. So, on the gross margin side, it should be watering out, is the EBITDA margin anything else that I am missing out, which is why you are arguing you are not kind of suggesting that These are probably the bottom margins.

So, for example, quarter two is a good indication of both gross margin as well as. You know, EBITDA margin, considering the fact that the price increase has completely flown in, as well as the inflated raw material costs have been considered in quarter two. So now whether margins improve from here will depend on largely input costs, and if there's any more operational efficiency that we can drive. If I keep these two out, I think what we've achieved in quarter two is a good indication of what the margins would be as we go forward. Thanks a lot.

That clarifies my apologies for the misunderstanding. Thank you.

Next question is from Jainesh Khamani from Nippon, India. Please go ahead.

Yeah, hi. Just rating the 3, 3.5% kind of revenue growth which we, revenue dose we witnessed in one queue was fully make up in the second quarter, right, and the 11.5% kind of revenue growth, right?

Yes.

Understood. And when we interact with some of the dealer, distributor, and the EBO owner, some of them highlighted they faced the supply chain issue some part of the days, particularly in the men's innerwear and the women's outerwear segment. Have we lost any revenue at least on the primary side because of the supply bottleneck in the 2Q?

Yes, I think from a supply and order fulfillment point of view, we've historically operated at a 98% to 99%. That has dropped to about 96% to 97%. And that's largely in men's unaware and women's outerwear, like you've indicated. So there has been about 3 to 4% order loss that we've experienced at a primary level as far as inventory availability is concerned. But that is something that we are ramping up to make sure we're able to, you know, supply to the true demand in H2.

So, that has been ironed out the issue or still we are facing that issue and probably it might take one or two more quarters?

Not one or two more quarters. It's largely about ramping up to demand. As we stand today, it's improved. It's not still back to the 99% levels, but it's hovering about 97-98. I think there is still scope of about 1-1.5% improvement.

And safe to assume that it has not materially infected the secondary demand.

To an extent, it has, but not completely translated to secondary demand. But I wouldn't rule out that it has, you know, not impacted secondary or tertiary at all. It is to an extent has impacted, but at least it gives us the confidence because these are controllables and something that we can ramp up for us to meet the true demand. Thank you.

Thank you. Next question is frontline of Devansha Bansal from MK Global. Please go ahead.

Yes, hi, thanks for taking my question. Sir, I wanted to better understand this July abyss comment that you made of double the growth that we've sort of seen for the full quarter. This is inclusive of that three days of benefit or it's like for like? So if you could just throw some light there.

No, no, whatever we lost of the three days has been fully recovered in July itself, and hence we've seen better performance in July, and that's sustained through August as far as primary numbers are concerned. While tertiaries kept pace as far as September is concerned, we've had an impact in primaries, largely because the build-up to the season has been deferred this year.

Karthik, just to better understand this. So if we assume double, then it suggests 11, right? So if we have three out of 60 days benefit, that is actually a 5% kind of a benefit. So 11 minus 5 is 6. So is this a, I would say, an underlying demand that we should sort of understand? So is this for July versus 6% the right metric to look at?

No, no, no. What I meant was between July and August, if not for the September demand, we should have in a way reached about 11%, 11 to 12% when I said double. And that was not to count what we had in a way lost in the month of June. That would have been over and above by about 2 to 3%, which we lost for the quarter reporting, but it would have come in in the month of July.

Okay, okay, got it. And lastly, sir, you mentioned that tertiary sales are running ahead of primary, right? So, if there is festive shift, so that tertiary demand will also get impacted, right? So, and in addition to that, obviously, we have been ramping up our ARS system as well. So, why is there this mismatch?

Because from a demand perspective, there is this… Not from a growth point of view. Let me retract and rephrase what I had said. I was not referring to growth. So if I look at the kind of performance we had witnessed in the month of July as well as in the month of August, that was in line with September as far as tertiaries are concerned. We've not seen a dip in tertiary in September when compared to August. It kind of kept pace. From September to September last year, there is naturally a drop across the chain, whether it is tertiary, secondary, or in primary, largely to do with the festive season. But the impact was small because it was only Pujo, because even last year, Diwali was in October, this year it's in November. So, October to October, we were fine as far as tertiary is concerned. September, we saw a small dip. But the bigger dip was in primaries and secondaries. That's mainly because you build up to the season in terms of stock holding at the stores. That is something that's got deferred from quarter two to quarter three.

Got it. Got it, Patrick. Thanks for taking my questions.

Thank you. Next question is from Lion of Ashish Kanoria from City. Please go ahead.

Yeah, thank you for the opportunity. Again, on the volume growth, I think, you know, too many things have happened so far. One, we saw June getting impacted because of logistics issues, and then, you know, we have a self-interesting Pooja, Diwali all being in different months. I think the best way to understand, you know, how the volume growth trajectory is, you know, really looking like is if you can help us understand how is the YDD performance because Diwali is already over, and in the base year also, you know, Diwali was already over by this time. So, if you look at why did you do YTD performance, you know, like almost 10 and a half months, what kind of a volume growth you have seen on the primary side because tertiary could, again, be very different, but not necessarily a number, but if you can help us understand if you look at this data till November, are you on track on the double-digit volume growth?

Ashish, unfortunately, I cannot share with you October and November performance being a listed organization until we complete the quarter. But the confidence of still maintaining the outlook is coming from the fact that against the plans we had for ourselves for the year, we are tracking on that plan as we stand today.

Look, I hear you out, Kantika, and that is why I said I am not looking at numbers, but, you know, when you put a guidance that, you know, you want to achieve a double-digit volume growth, and then we saw, you know, 1Q getting impacted, 2Q, I think when we were getting into 2Q, we knew that, you know, there's a shift in festive season. So, at least when you look at the YTD performance, are you in your skill in the guidance range? That's what I'm trying to understand.

Yeah, that's what I'm saying. So while from a growth rate point of view, it is what we have published, but against target versus achievement, we are on track.

Got it. That's all from my side. Thank you.

Thank you. Next question is from the line of Rishi Modi from Modi Advisory. Please go ahead.

Yeah. Hi.

Slightly muffled. Can you speak through the handset, please?

This is better.

Yes.

Yeah. First question I had was if you could just comment on the competitive intensity in the market. Uh, are you seeing increased doubles, decreased doubles, any qualitative comments on that?

Uh, as far as quarter 1 and quarter 2 is concerned, I think the competitive intensity has been subdued. We've seen a high level of, you know, consumer offers and discounting during the festive season, which was largely in October and November. But as far as overall presence of competition, both online and offline, it's been subdued when compared to what we've experienced in the last three years.

Okay, got it. Second is more of this, trying to understand our supply chain issues, right? So, what's the root cause analysis? Like, last quarter, we had three days of missed orders. Again, this time, our fulfillment rates dropped. Despite investing so much into ARS and now SAP, HANA and all, I'm just trying to understand, is this, there's some structural issue here with our logistics and supply chain? Or would you, like, just help us understand why is this a recurring pattern?

So quarter one was, I wouldn't say anything structural about it. And honestly, whether you realize that on the last three days of June or the first three days of July does not structurally impact the organization's health and our, you know, ability to cater to demand. And that was not to do with availability. It was to do with delivering primary numbers at the point of say which is in our case distributor. So I wouldn't attribute much to that as far as quarter one. And like Dipanjan pointed out, it's a one-off case which we've kind of salvaged in July and we are back on track in terms of delivery. In terms of specifically quarter two, we've had absolutely no issues in terms of logistics and making available our build stock to the distributor point. Now, in terms of product availability itself, yeah, there were two specific categories where we had a bit of stress. Which, again, does not impact consumer level as much as it impacts primary. That's largely because of the inventory that we hold across the value chain, whether it is at the retail store or at the distributor point or at our warehouse. So there are three levels of. Inventory buffer, which is anyway built in the way we design. But yeah, we have two new plans this year, which is ramping up. The efficiencies are not optimum as we stand today. And we are building up with efficiencies so that we can meet demand. So I wouldn't in a way look at it as a structural issue. It's something that we need to work on harder as far as execution is concerned, so that we are able to leverage that one. 1-2% which we might have lost because of non-availability.

Okay, all right. So I can chalk it up to the factory issues, which can get solved rather quickly in maybe a couple of quarters here and there.

Yeah, like I said, these are largely within our control, and hence, it's a good piece to have. It's not something which is beyond our control to achieve.

Okay, and anything to read into your distributor accounts dropping QOQ for the last two quarters as well as the MBO network drop-off by about? I was in touch points, like smaller numbers, 2% here or there, but still I'm assuming that the, I am just trying to understand, is there something concerning you or something? Speaking to these guys.

It's a cyclical pattern because any year that you look at it, this is a coverage number which improves quarter on quarter because it's cumulative. And there are a large set of retailers who buy only once in a year. Typically, that happens during the festive season or let's say during a period where we offer a certain scheme on certain ranges. So, the best comparison of this would be to look at the annual number versus the annual number, because through the year, you're always catching up to the annual number of the previous year and then growing beyond that. So, a good indication, even if you're looking at a trend line or a pattern, is to look at it year on year for the last three years, four years, where we've, I think, consistently added about 7,000 to 8,000 outlets to our network, and that wouldn't be any different this year. I think we will look to add anywhere between 8,000 to 10,000 outlets to our overall network by the end of this financial year.

So Q3 should see your jump on this count is what my inference is, given it's festival. Q3 and Q4, yeah. Q3 and Q4, yeah. Okay, all right. That's it from Mayan. Thank you.

Thank you. Next question is from 9 of Rahul Adarwal from Ikigai Asset Managers. Please go ahead.

Hi, good evening. Just couple of questions. Firstly, on Orissa and KRP8, where are we on in terms of utilizations? How are we thinking of ramp up? You also mentioned headcounts will go up. So, just some bit of flavor on how do we see these, you know, both these units ramping up from here? That's the first question.

Well, for both the units, we are on track as far as plan is concerned, and the complete ramp-up will take another year and a half. I think we will, in a way, reach our peak capacity by end of next financial year. As of now, we are operating at about 40% of where we want to be, or not where we want to be, where we can get to as far as these two plans are concerned. So, I would imagine by end of next financial year is where we will be hitting the peak capacity utilization as far as these two plans are concerned.

Got it. Some qualitative feedback on, you know, for the quarter and for the festive season in terms of men innerwear, women innerwear, outerwear and atleisure, just in terms of qualitatively, you know, how are the growth trends?

No, by the nature of our current penetration levels, and not specifically for the festive period, I'm talking to you about YTD performance as well as what we can expect in H2 as well, is that athleisure or autoware as a business as well as women's in-aware as a business will be a notch above men's in-aware in terms of growth rates. And that's not unique to this year. It's a pattern that we've seen over the last three to four years, partly by design in terms of where our investments are going and partly because of the headroom that there is to grow given our penetration levels.

Got it. And lastly, any other contingent liability which where issues are pending to be sorted out apart from the same thing which you have discussed?

No, I think there is one issue on our Middle East partner which we have already disclosed in the Fi26 annual account so that the status quo remains that remains a contingency disclosure as of now.

Thank you. Rahul, may I please request you to come back for a follow-up question?

Okay, thanks.

Thank you. At a kind request to all the participants, please limit yourself to two questions and we join for a follow-up. Next question is from the line of Prerna Junjunwala from Dam Capital Advisors. Please go ahead.

Thank you for the opportunity. First question is on FEMA. I just wanted to understand what actions you have taken, which brand's online sales have been reduced. So could you just help us understand what... Specific actions have been taken brand-wise so that we can understand it better.

So, lastly, the issue of FDI is restricted to our, I mean, the restriction in selling imported goods in online space. So, today, what we have done is we have restricted selling of imported goods only for jockey products. Whereas, Speedo is being catered through a third-party franchisee.

Okay, understood. So, Speedo is not a direct sale from our company now going forward?

Yeah, that's the change we have done. Speedo is no more a company to consumer direct business. It is through a third-party franchisee.

Understood. This is helpful. And the second question is on ASP breakup. Could you help us understand that this 2.5% would be largely price improvement, but from where is the premiumization improvement and mix improvement coming in the rest of the ASP? That will be helpful.

So, premiumization is a natural process which happens every quarter. So, we see premiumization or our consumer scaling up even within each category. So, within, say, men's premium in interwear, people do scale up to higher price points. Also, if we have better sales of outerwear, we get a price advantage. And the third aspect is, yes, if you have a higher sales in, say, EBS or higher sales in online, we get a price advantage there as well because one, we have a full price sales as far as B2C channels are concerned, and even the margin structures are different in EBS and other channels. So, combination of all these three things results in this premiumization.

Understood. Thank you, and all the best.

Thank you. Next question is frontline of Narlinshah from NVS Brokerage. Please go ahead. Narlinshah.

Yeah, this thing at the outset, I just want to only understand regarding this FEMA violation thing that what is the kind of period for which, you know, we are talking about this violation thing and whether the auditors of the company have they given any kind of their comments or, you know, the estimate as to how do they feel in terms of, you know, the quantum that what kind of a penalty, etc., if any, which can be levied under the FEMA regulations or your For internal calculation, just to understand the financial impact of the entire this violation.

I think this is point we covered already. Yes, the auditors have given their comments as to this matter both in annual report of FY26 as well as in this quarter. The financial impact as I explained can be as low as 0.75% of the amount involved.

Sorry, can you come again? What is the quantum you said?

0.75% of the amount involved.

What is the amount involved? 48 crores. Yeah. Oh, it's a very negligible amount. That means it's very negligible. Yeah, around 2 to 5 million. Okay, okay.

In the period of around 2014-15 till 2026.

Oh, so I think it was maybe through oversight and not having a complete idea that this is not permitted under the FEMA regulations, is it?

In a way, yes, it is an inadvertent issue that had happened, and we understood that.

And what could be the value of the goods traded on account of this, approximately?

Sorry, I didn't get you.

What is the value of the goods traded during this period, which could be liable to be treated as a violation?

As I said, the amount involved is for treat course.

Oh, that's very, very negligible. No problem. Thank you very much. Thank you very much. Thank you.

Thank you. Next question is from Lainov Sameer Gupta from ISL Capital Services. Please go ahead.

Hi, thanks for giving me another opportunity on the follow-up. Just taking it from Dignesh and Rishi during the call, so now we are gunning for our target of double-digit volume growth, and this was at the start of the year. Then I'm just not able to understand how exactly are we not prepared for this ramp-up issue that we face, given that these are fairly new factories which will take time to ramp up, and we technically, logically, being the organization that we are, should I have been ready for this in terms of our outsourcing capabilities? Your thoughts on this?

Yeah, let me clarify on this. The issue is not overall inventory. If you look at it, the number of days inventory we are holding, it is very healthy. And as Karthik said, we have three layers of buffers. There are enough inventory at the destruction point, at the finished goods, and the WAP which we have. It will not affect the consumer availability immediately, and the issue has been on specific SKUs, you know, some of the styles and SKUs, the demand has been much higher than what we thought, and usually there's a lead time to procure the raw material for the upside orders and to service. Usually, the industry norm is usually they take three months. We have done a lot of work to bring in agility, and we actually serve the customer requirement within a month or month and a half. So that is why, you know, the impact has been less, and we are able to recover faster. So there is, as Karthik explained some time back, there is no structural issue. These are, at SKU level, the demand spikes, which we saw. And there has also been a lot of geopolitical tensions and issues, which affected some of imported goods. In fact, some of the SKUs where the raw material has been imported, because of the issues in the Middle East and all that, the lead time increased, some containers got stuck, and it took more time for us to clear. So it was not a capacity issue this way to do with some of the global disruptions which we went through. And we have taken enough measures to counter all this. In fact, we have increased the buffers for these. So as we speak, you might know there is a lot of turmoil happening in Bangladesh, but all proactive measures have ensured that this is not going to affect us adversely. So we have taken a lot of corrective actions to absorb these shocks.

Very helpful, Karthik. Thanks, Mr. V.S. Thanks a lot. One follow-up pertain to something else. So this 48 crore number that you are talking is cumulative over the last 12 years, or how should I look at it?

Yes, cumulative.

Great, sir. That's all from me. Thanks again, and all the best.

Thank you very much. Ladies and gentlemen, we'll take that as the last question. I'll now hand the conference with Mr. Dipanjan for closing comments.

Thank you all for joining us today and for the thoughtful questions. While the operating environment, particularly on the input costs, continues to evolve, our focus remains clear, serve our consumers better, strengthen our brands, execute with discipline, and build a business that creates enduring value. We look forward to engaging with you again next quarter. Thank you, and have a good day.

Thank you very much. On behalf of Page Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your hands. Thank you.