DOMS Industries Limited (DOMS) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q1F527 Earnings Conference Call of Doms Industries Limited hosted by ICIT Securities. The presentation and the results release which Doms Industries Limited has uploaded on the stock exchange and their website, including the discussions during this call, contains or may contain certain forward-looking statements concerning Doms Industries Limited business prospects and profitability, which are subject to several risks and uncertainties, and the actual results could materially differ from those in such forward-looking statements. As a reminder, all participant lines will be in the listen-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 has been recorded. I now hand the conference over to Mr. Anirudh Joshi. Thank you, and over to you, sir.

Yeah, thanks, Avira.

On behalf of ICICI Securities, we welcome you all to Q1FI27 Results Conference Call of Doms Industries Limited. We have with us today Senior Management, represented by Mr. Rahul Shah, Chief Financial Officer. Now, I will hand over the call to Rahul Vahe for his initial comments on the quarterly performance, and then we will open the floor for question and answer session. Thanks, and over to you, Rahul.

Good afternoon, and a very warm welcome to everyone. Thank you for your time and for joining us today for the Q1 FY27 earnings call. Joining me on this call is the team from Marathon Capital, our investor relations advisor. I hope you have had a chance to review the investor presentation and the results released posted on the stock exchange and our website. We were able to maintain our growth momentum in Q1 FY27 despite a difficult external environment, including a sharp increase and continued volatility in raw material prices. This was driven by robust domestic demand leading to volume growth supported by a strong back-to-school season coupled with marginal increase in ASPs on account of calibrated price increase to partially offset the significant increase in volatility in raw material prices. All our core categories witnessed healthy growth. Scholastic stationery, scholastic art material, and paper stationery growth was led by the back-to-school demand, backed by new launches, and capacity additions undertaken in the recent period. Our office supplies category continues to see high positive traction, led by growing demand for our pens and a widening portfolio of products. The new launches across mechanical pencils, erasers, paper stationery, pens, pencil boxes, school bags, and kits and combos receive strong consumer acceptance. This reaffirms our capability to drive growth through consumer-centric innovation and agile product development. Beyond a traditional lead growth, We also saw high growth traction in new-age channels of modern trade, e-commerce, and quick-commerce. This was primarily driven by momentum in our baby hygiene segment. Export growth was flattest during the quarter, primarily due to the global disruptions and elevated logistics challenges arising from the ongoing war situation. Coming to our margins and cost environment. Sharp increase in raw material prices and volatility persisted during the quarter driven by ongoing global uncertainties. We continue to manage this through prudent procurement to ensure uninterrupted operations. However, the company has chosen to remain focused on volume-led growth and Now, coming to the details of our financial performance for Q1 FY27, operating revenues for the quarter grew by 19.2% to 670 crores, in line with our annual graded range, highlighting our sustained growth trajectory. EBITDA for Q1 FY27 were down by 16.4% to 82.6 crores, with EBITDA margin at 12.3% in Q1 FY27 as compared to 17.6% in Q1 FY26, primarily on account of call-in gross margins by nearly 400 basis points due to sharp raw material inflation linked to the West Asia crisis. Further impact on EBITDA was due to higher employee benefit expenses on account of new tranche of ESOP grants and increased employee headcount and increased other expenses primarily due to expenses linked to organizing as channel partners meet along with the ceremonial occasion to mark the possession of the first building of the 50-plus acre project. Pat for Q1 FY 2027 stood at 45.3 crores as compared to 59.1 crores in Q1 FY 26 and pat margin for Q1 FY 27 stood at 6.8% as compared to 10.5% in Q1 FY 26. PAD growth was impacted primarily due to increase in depreciation on account of capacity expansion and commissioning of new facilities. We see this moderation in margins as a temporary blip rather than a structural deterioration and continue to maintain our focus on volume-led market share growth. In relation to updates of our ongoing capacity expansion, Our overall expansion plans are progressing well. Development of the 50-plus-acre green flea project is now on track and we expect to commission close to 300,000 square feet of operational area by the end of Q2 FY27. This, along with expansion initiatives in upjoining areas, will help us scale capacity to capitalize on the latent demand for our products. The company has already invested close to 100 crore rupees in Q1 of FY27 primarily towards capital investments. Now coming to the update on the Reynolds brand team and asset integration. The implementation of the asset purchase agreement is progressing as planned. The integration of Reynolds team personnel along with the movement of assets at our Umarga facility is now complete. The brand's full sales potential will be unlocked over a time as integration progresses as well as on commencement of manufacturing under the Reynolds brand, aligned with the commencement of the operation in the first phase of our new 50-plus-acre greenfield project targeted for end of Q2 FY27. In the interim, until the desired scale is achieved, the apportionment of cost may exert some temporary minor impact on margins. Overall, we are very excited about the fundamental rationale behind the Reynolds acquisition. The strong presence in the Rs.10 to Rs.100 price segment of PEN's Compliments R portfolio and helps us elevate the group's product-price architecture. Further, by leveraging the legacy and brand equity of Reynolds, we aim to deepen consumer engagement across generations and is a strategic step in strengthening our office supply segment portfolio. As we look ahead, our guidance for 18-20% consolidated sales growth is further reinforced by the positive demand undercurrent in the domestic market. However, visibility on margin guidance remains limited, moving to abrupt fluctuation in raw material prices. Thank you. And with this, I would now request to open the floor for question and answers.

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 touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles.

The first question is from the line of Kunal Bora from PNP Paribas.

Please go ahead.

Yeah, thanks for the opportunity. Now, the first question is on margins. How should we think about the trajectory from here? Is it fair to say that your margins this year will remain slightly weak due to higher RM costs, additional expenses for the new factories which you will start booking at least To some extent, an initial cause for Reynolds. And these will only normalize in FY28. And why have you not taken larger price hikes? That's the first question.

Hi, Kurar Bhai. So, Kurar Bhai, like we mentioned, for us, our priority was very much clear that we wanted to focus on volume-led growth, ensure that the market share growth trajectory is retained. And therefore, with respect to our pricing decision, we have taken very calibrated price increases. You know, towards the end of June, once the situation with the war was turning out positive, we've seen the raw material prices to come down from their highs. However, in the last couple of weeks, again, we started seeing some increases because of, you know, the renewed situation in West Asia. And hence, you know, again, the raw material prices have started going up. But over a period of time, we believe that, you know, the raw material prices will not be sustained at these high levels. They should probably cool off soon. And once we come to know the new case, then in order to reach our earlier margins, if there are any further price increases to be taken, we will be taking that. But right now, owing to the abrupt fluctuation in raw material prices, you know, visibility on margin guidance continues to be limited. But in 28, I think structurally, there is nothing that is deteriorated. And once we have some stable price levels. The company will take required decision to ensure that we again reach to our guided range of about 16 to 17 percent.

Okay, okay. Second is, as the production and the new facility starts in the coming quarter, how should we think about the revenue growth in the second half? There will also be price hikes which will be contributing and there will be increased capacity. Would you expect to go beyond 20 percent growth, excluding any impact from Reynolds? And how should we think about Reynolds' contribution in FY28, which will be the first full year of operations?

So, Kunalbhai, see, Reynolds, you know, is a brand and asset acquisition that we did. You know, we did not take over any new manufacturing facilities from them. So, the capacity to manufacture and sell Reynolds product will be coming from our existing planned expansion only. So, it is not going to add anything. It's just that, you know, otherwise in that particular plant, we would have manufactured Dom's branded pens. Now, we will manufacture Reynolds branded pens. So, it's not going to add significantly to the revenue projections for the current financial year. And, you know, with respect to the new capacity coming up in H2 of this financial year, this was already planned and when we guided for the 18 to 20% revenue guidance, we've taken into consideration the new capacities which would help us to, you know, lead this volume growth would come from the 50 plus acre plant. So, from a revenue growth perspective, we continue to guide with the 18% to 20% revenue growth in the current financial year.

Okay. But what's Reynolds brand right now in terms of revenue number? And once you integrate that in F528, where do you see the Reynolds brand revenue to be?

Right now, when we acquired Reynolds in the year, the previous financial year, Reynolds had done a sale of about 130 to 140 crore rupees. But we believe that we will be able to add significant value to this brand, not only in terms of introducing new products within the writing instrument segment, but also leveraging this brand for, you know, other product categories. You know, our intent is to operate Enolts as a parallel brand focused towards In addition to the existing range of products, we will also launch other products that shall fit right with this brand DNA. I believe that in a short period of time, in the near term, probably by FY29, Close to 20% of the company's overall revenues.

This last question, so with all of these things happening, Rinald. Sorry to interrupt.

Mr. Vohra, may we request you to return to the question view for a follow-up question? Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Sneha from Novama Group. Please go ahead.

Hi, sir. Thanks a lot for the opportunity. Just a couple of questions from my end. You did mention that there are a lot of one-offs, right? One was ESOP related, one was, you know, new facility related, and then there was raw metal prices which could not be passed on. Could we get some color in terms of individually how much did, you know, how much have we passed on in terms of raw metal pricing? I do understand that, you know, scenario remains volatile, but how much of it is left to pass on, which will clear up two things, that how much of price increases accounted in revenues and how much of volume growth and also will give some flavor on margin. That was the first one.

So, right now, you know, we've taken on an average price rise of about 4 to 5 percent. If I have to just talk about the, you know, first quarter, The average raw material price increase was about, you know, about 20%. You multiply that with a consumption margin. So overall gross, overall consumption increased by about 10 to 11%, where we were able to pass on 4 to 5%, and hence 500 basis points was something which was left to, you know, pass on. But like I said, we've seen some amount of moderation in the raw material prices. Hopefully, you know, from what we heard as recent as Sunday, things should now stabilize again. Probably those raw material prices should come down a bit. So hopefully, you know, and with respect to the one-off expenses, like I said, in terms of. I saw in the previous year, same quarter, you know, after that, we've given one more tranche of ESOP. So that added about 0.2% to the cost. And there has been a, I wouldn't say a one-off expense, but a non-recurring expense in terms of the channel partner need that we organized along with the, while we were taking the possession of the. First building in the 50-acre facility, so that impacted our Q1 margins by about 0.4%.

Understood, understood. And Rahul, you know, following up with the last previous question where you said Reynolds itself will become 20% of your revenues by FI29.

Ten percent.

Okay, okay, that's terrifying. But despite all of those things, and you know, your office supplies business, what we understand will be then, you know, the biggest driving factor in your revenue growth. Don't you see an upside to 18 to 20% estimate because 350 odd crores coming in effect only from a newly acquired brand, and your previous guidance was itself 18 to 20% out of a killer.

That's what I tried to clarify in the previous answer to Kunalbhai also, was basically, see, Denon's as a brand is an addition that is coming, but we've always been constrained with the capacity which we have. So while we've acquired the brand, we are not acquiring any physical capacity. So, you know, my land building, you know, it's still something which is a constraining factor. And that growth was already planned. So instead of those growth coming in doms, we will try to get some growth in Reynolds work as a parallel brand. Let's say we plan to launch diaries and paper stationery products under the Reynolds brand, so it is going to come from the same facility of the paper stationery capacity that I have, you know. So it's just a diversion of capacity. Some capacity would be for Reynolds brand. But yes, with Reynolds, we believe that ASPs might increase a little better because Reynolds, like I said, is more in a, especially in the writing instrument segment, targets the 10 rupee plus, between the 10 rupee, 100 rupee price point. So ASPs might improve a bit, but not a lot of volume growth that would come. It would be more of substitution from, you know, selling Dom's Bandit products to Reynolds' Bandit products.

While I agree with you in that terms that, you know, today we have capacity constraint, what we were looking at the bigger picture for FI29. Do we really have to, because by then we will definitely have, you know, large amount of capacity. You are working on a 50-acre land, you are already starting in Q2. And assuming by FI29, you will have, you know, like, you know, manufacturing setup, you know, expanded already. Then why do we need a substitution? Why can't we run both the brands simultaneously, was my question, and why can't both the brands, you know, contribute?

Ladies and gentlemen, we have the management line disconnected.

Please stay connected while we reconnect to management. Ladies and gentlemen, we have the management line reconnected. Sir, you may please proceed.

Hi, sorry, we got disconnected. So, yes, what I meant was, you know, while we continue to grow, you know, the growth denominator will keep increasing. So, the new capacity, the 50-acre plant and another around, you know, 80-odd acres that we've acquired adjacent to our current facilities, both in Umargao and in Jammu, that will also come under development. So, a lot of new capacities will be added and they would be sold in the Dom's brand and Reynolds brand both.

Thank you.

The next question is from the line of Jinesh Joshi from PL Capital. Please go ahead.

Thanks for the opportunity. Sir, in the opening comments, you mentioned that our focus is on volume-led growth. But given the ticket size of our products and our market leadership position, why are we hesitant to maybe take a slightly higher price hike to compensate for the RM inflation? I mean, do you think that this can lead to any kind of down trading? And historically, has there been any precedence of any peer taking a price hike which has consequently lit? It led to any kind of loss in market share, and we believe that something similar could perhaps play out with us.

Hi, Ginesh. So, Ginesh, you know, in terms of historically, you know, what we've seen is whenever such inflationary cycles have come in, You know, when you take price increases, being a leader brand and, you know, enjoying strong position in a lot of product categories is definitely something which we couldn't do. But during such time, it also allows a lot of peers and especially small and unorganized players also to have some breathing space. So historically also when we've seen such inflationary cycles. We tend to be a little more aggressive when it comes to pricing, because that allows us to ensure that, you know, the breathing space given to the small unorganized players is reduced, and which results in, you know, sustained market share growth for branded players. So we experience something similar, you know, during the COVID period. You know, if you look at pre-COVID numbers, you would see the company's revenue growth and margin trajectory had changed. Similar we'd experienced during the... Again, again. The choice that we've taken during this time, only for a near-term margin consideration, we don't have a choice. Thank you.

Understood. And sir, my second question is on Raynaud. Now, if I'm not mistaken, we have just bought the PEN business and have chosen not to buy the OEM NIP business of Ziaz. So, I just wanted to understand the rationale for not buying the NIP business, because that would have provided an immediate backward integration advantage to us, given the fact that we do not have. The manufacturing capability and also from their perspective, if they are selling the Prince business, bundling the Prince business with the OEM piece would have given them a perfect exit. So it was like kind of a win-win situation for both of them. So just wanted your thoughts why we chose not to buy the new business.

So, Ginesh, let me first clarify, it is not that we chose not to buy the business. It is, see, Reynolds is basically owned by Newell Group. Newell Group is a $7 billion plus revenue generating US-based entity. They have multiple brands and multiple businesses across the world, and they were specifically looking at exiting only the Reynolds and Reynolds-related asset business in India. They globally manufacture, you know, own brands like PaperMate, Sharti, Parker, which are big brands within the writing instrument segment. And a lot of their tips for these products are manufactured in India. So strategically, they wanted to continue the tip manufacturing business. And when we entered into discussions with them, what we understood was they were looking at only exiting the Reynolds brand and related assets. You know, that is why we did the transaction only for the Reynolds grant and the Asset, and coming to the tip manufacturing,

you know, from a backward integration perspective,

we are already in the process of, you know, we've already got the first tip manufacturing plant. In India, it's a Swiss imported brand that we've got in India. And currently, the installation is going on. There have been more machines for which we've ordered. And I think over the current calendar year plus the coming calendar year, a lot more machines are going to come in, which will help us to manufacture at least about 30 to 40. Thank you.

It's from the line of Aradna Chain from 361 Capital. Please go ahead.

Hi, sir. Thank you for the opportunity. A couple of questions from my end. One, I wanted to understand on the crude salience in our core stationary category and in the diaper business. The reason I'm asking this is, if I see the margins for your core stationary business there, we can see a clear-cut reduction of close to around 600 bps. But your EBITDA margins for the Unicland business has been intact. So, wasn't the Unicland business also impacted because of crude? That's my first question.

Unicline business also was impacted by crude. There are a couple of key raw materials in a dipole. One is SAP, which is like a super absorbent polymer, again a derivative of crude. Synthetic fabric they buy, but what happens with And then because, you know, there is some more visibility and these products are basically... And the deliveries for that happened at the originally agreed prices because there was a little bit of a long-term agreement. But, you know, the raw material prices there have also increased. And probably we'll see that impact of that in the current quarter. Good

morning, everyone. I expect like in 2Q to see some more margin depletion on account of say the higher cost inventory. Thank you. Higher cost inventory, which could lead to some more margin depletion at the gross margin level.

I would like to say that because, see, at DOMS, which is much larger when it comes to consolidation, we do not carry very significantly higher quantities of inventory, especially polymers, because they are all locally purchased. So, it's not that we had significantly higher. Thank you. Significant impact to come on margin. In the diaper business, yes, there will be some impact, but at the same time, you know, this is going to be the start of the, you know, seasonality of the diaper business from Q2. So Q1 is always a slower quarter for the diaper business because it's sunny days, there's heat all around India. Fixed-cobs absorption is a little less. During that quarter, sales are relatively lower, but with the season pickup happening from the second quarter, the fixed-cobs absorption should be slightly better, which might offset some amount of increase in the consumption margins.

Thank you.

As of now, in the current quarter, we are not looking at any further price hikes. We believe that we would want to wait for And after that, if you believe that any price rise are required, once the base of the raw material prices are, you know, little visible. But in the current quarter, we are not looking at any significant.

Just two more questions. One on export revenue, that's defying this quarter. So, what was the reason for that? Which are the key exporting countries for us and which didn't do well? And second is on the West India revenue also, we see there's been a degrowth. So, if you could just highlight what was it.

So export growth was more, you know, flattish in Q1, FY27, 1 due to demand. It was affected by the West Asia disruptions, leading to longer transit times, higher freight Even West Asia, which contributes about 2% of our overall sales. It's completely opened up in terms of These are the key reasons why export. capacity, especially in the pencil segment, which is coming up. We believe that going forward, you know, pencils is a 30% of our wooden pencil sales comes through export with the new volumes that are... We have a full year experience.

I'm just referring to West India.

I don't know, West India, you're comparing it, you know, with which period?

Last year, 1Q, we did around 185, 186 crores of revenue. This year, we are at close to 140 on a YOY basis of us.

So, see, we earlier also highlighted this, that some of our export, merchant export revenues. Which are actually export done by third-party merchant exporters. That happens through, you know, customers who are based in western part of India. So we've got a few merchant exporters in Mumbai and Gujarat who do onward sales, onward exports. Because of that, even...

Thank you.

It's from the line of Rahula Garpal from Ikki Kaya Asset. Please go ahead.

Yeah. Hi, sir. Good afternoon. Just two questions. Firstly, to understand, is it possible to understand that if the company does a capital expenditure of, let's say, 200, 250 crores a year, how much sales can they add in the overall top line? Is that two and a half number of fixed asset? How much physics can that add?

Hi, Rahul. So, Rahul, firstly, you know, historically, we've always targeted that for every rupee that we invest in, you know, invest as capital expenditure, we should be able to generate three rupees of sales. And if you see historically, we've been able to achieve that even if you look at the last year's number, we were close to about two, you know, plus of 2.7 eggs and very close to a targeted range of three eggs. Once the production facility, you know, Rupee that is invested. Second question, with respect to this 300,000 square feet of space, which is coming up, so basically, in this 300,000 square feet that we'll start commercial. End of this quarter, and, you know, These are capacities for pencils, wooden pencils. Erasers, which is a complementary product. We hope that 18 to 20% growth for the full year. Second half of the year will come from these facilities. And like I said, we believe these facilities will gain complete commercial. Thank you.

Right, sir. And my second question is on margins. To understand this better, just a clarification rather. So, I could understand that there is still some gap, assuming spot RM pricing, when you've taken 4-5% of price hike, there's still some gap to cover. So, let's forget the shorter term. If we just understand the fiscal 28 net, at current spot RM pricing and the price hikes you have taken, do you think the company should go back to 60? 1570% of operating margin. Is that a safe number to assume for the next year? And just one question was on the ESOP theme. If you could just quantify the amortization of ESOP in terms of total cost for the full year.

So first, I'll just answer your second question with respect to ESOP. The cost for the total year for ESOP for both the tranches put together should be close to about 10 crore rupees. The one which we did in October 24 and then in February 26. The cost should be gross to about 10 crores. And with respect to the gap in margin, like I highlighted earlier, as for the current prices, we see that there would be a gap of about, you know, If the prices continue to, as per the current spot rises, so if the prices continue to be at this level, then that is the increase that we might have to take to ensure that our margins for FY28 reach to, reach back to our, you know, targeted range of 16 odd percent.

Just a clarification on the result, 10 crores is for fiscal 2017, right?

Yeah, for the fiscal 27th.

And fiscal 28th, what will be the number?

So, see, basically, as part of our ESOP policy, you know, we would want to, the current policy, we plan to give out ESOPs over a five-year-old period. We've done that for the two periods. Even this year, there will be some ESOP outlay that will happen, and this will continue for the next couple of years.

So, this number will rise.

Again, we will be able to quantify it once we decide on how much ESOPs will be granted in the current financial year. Additional ESOPs will be granted in the current financial year.

All right, sir. Maybe I will get back in the queue. Thank you so much and all the best.

Thank you. The next question is from the line of Rehan Sayyad from Preenetra Asset Managers. Please, go ahead.

We are going to ask you what you want to do. Amand is right?

Not very clearly.

Hello. Hello. Now it's you.

Sorry to interrupt. Mr. Syed, you have a lot of background noise. Can you please use your microphone while asking a question?

I'm on handset only. Now it's clear.

Yes, please go ahead with your question.

Oh, yeah. So, sir, my majority of questions have been altered. Just I have left with one question, which is I wanted to understand regarding on the export side. So, your export remains a relatively small part of revenue, despite the PIDA partnership. So, what are the key bottlenecks preventing faster export growth and do you see exports become a double-digit percentage of revenue over the medium or long-term going forward?

You say, export is currently also double-digit. It's close to 12% of our total revenues. So, there isn't any, you know, I wouldn't say there are any bottlenecks or anything. It's just that company continues to remain constrained with capacity and, you know, historically as well, whenever it's come to choose between exports and growth in the domestic market, we've always prioritized the growth in the domestic market, you know, and whatever new capacities, whenever they've been added, you know, the domestic market has, The company has supported or accepted it wholeheartedly and a bulk of new capacity additions which actually drives the revenue growth of the company have been absorbed in the domestic market. So that is the only, I would say, challenge, challenges in terms of capacity. But like I said, with some new capacities coming for, you know, 10 sales, new capacities coming for some innovative differentiated products, export, at least in the near term, will gain slightly better momentum than it has done in the past.

Thank you. Good morning, everyone. Thank you for having me. Thank you.

The next question is from the line of Percy from IFL Capital. Please go ahead with the question.

Yeah. Hi, Rahul. You mentioned that FY27, despite Reynolds coming in, we should take an 18% to 20% type of top line at the total company level. What about FY28? Would it also be 18% to 20% or Reynolds will add some incrementality to it?

A little early to write about the revenue growth in FY28, but, you know, I believe the growth trajectory momentum should remain similar. Like I said, it is from the planned capacity, which was expected to drive growth in the coming two, three years. From that, we will divert some capacities to manufacturing the non-branded product. So, those would not incrementally add significantly to revenue growth. It's just that we'd be able to create a parallel brand. And yes, there would be some growth because of higher. Relatively higher GHDs under the Reynolds plan, but not something very substantial. But we probably want to, you know, discuss on FY28 growth numbers a little later in the next couple.

Rahul, when we have acquired a brand, when the demand is there for that brand in the market, what really prevents us from, let's say, adding significantly higher capex and starting to sort of add it right away? So let's say some part of it comes in second half, some part of it comes in first half of next year. Why can't we do, let's say, over the next 12 months, 400 crore of capex instead of the 200 or 250 we are planning? We certainly have the internal accruals, and even if a little bit of debt is required, we can take it. I mean, there is a market for this product, and sort of we have done an acquisition, and if ultimately it's not going to add incrementally to sales, that is a lost opportunity for us. So what prevents us from really doing higher capex now?

The space, you know, like we said, we are already constructing this massive project. Now, it's about, earlier was about 45 acres. We've acquired more additional land. It's becoming, it's now about 50 plus acres of land, which is under development. And as and when these buildings get ready and developed, we start manufacturing activities in these buildings as fast as possible. In addition to that, in our existing, you know, close to our existing flagship unit, we've acquired another 11 plus acres. In Jammu, we've added land building. So, we are doing CAPEX, but, you know, it's probably easier said than done in terms of deciding that let's do 400 rows together because a lot of planning needs to happen. And a lot of, you know, we need physical space, which has been a constraining factor because of which we've been developing these, constructing these landed buildings. So I think, like I said, there will be, because of Reynolds, there will be incremental revenue growth that will come in, but that will be more from a perspective of being able to sell at a higher price point, and at the same, which will help us in improving our ASPs, but not a lot of volume growth will come because of Reynolds, because that volume growth will come from the capacities that we are able to add.

Understood. I mean... Okay, fine. I'll take this offline. Yeah, that was my only question. Thank you.

The next question is from the line of Anshad Jalan from Goldman Sachs Asset Management. Please go ahead.

Mr. Jalan, you can proceed with the question.

Yeah, I just want to understand, is Reynolds a higher margin business?

So, Hansel, I see Reynolds historically when, you know, they were being operated by Newell, they did not operate at very high margins because they had a lot of, you know, costs. But now that we've just acquired the brand and we will be managing the entire production and the sales part of it, it will operate as per our margin structure. So, I believe the margins for the Reynolds brand also will be as per our margin structures. With respect to margins, we've always followed. A principle which says that nothing at the cost of market and nothing at the cost of margin. So, eventually, we will, you know, want Reynolds to also operate like our other brand, doing about, you know, that 60% EBITDA margin. And since we will be controlling the cost, controlling the production, we believe we will be able to get to that margin number also soon.

Would you say this is the bottom in terms of EBITDA margin for the year? Hopefully, yes, absolutely.

So hopefully, shouldn't be many more surprises from Mr. Trump. And then we believe that this was probably the bottom and things should be better going forward.

The next question is from the line of Nihal Shah from Prudent Corporate Advisory Services. Please go ahead.

Thank you for the opportunity. So I just wanted to know if the 4-5% price like that we've taken is the standard throughout the industry as well, or our price hike was a bit lower or higher compared to the industry.

I think probably the industry was actually waiting for what decision we've taken, and after we've increased, done a calibrated increase, I think overall the industry has done sort of a similar sort of a step. Not anybody doing anything very high or very low.

And once the raw material costs come in our comfort range, so then what do you plan to do of that price? Like, do we plan to enjoy the extra margin for some time, or we go back to some?

So what we've always done is, you know, like I said, nothing at the cost of margin, nothing at the cost of market. Whenever we've seen in any product or because of any such actions, if the margins are increasing, that we want, we'll add some value to the product, you know, we'll make the product much better for the consumer. So we will definitely not want to sit and eat on these margins sort of a thing. We'll definitely give the consumers or our channel something additional to enjoy.

Okay, so we should take FY26 gross and EBITDA margins as the key spot for our margins and try to maintain those.

Yeah, like I said, FY28, that's how we should look at it.

Okay, thank you.

Thank you. The next question is from the line of Saurabh Patwa from Quest Investment Management. Please go ahead.

Hope, sir, I'm audible. Hi, Saurabh. Hi, sir. So, just wanted to get your thoughts on over, say, last decade or so, what would be a cumulative price I wish you would have taken in fences on a blended basis?

So, I'll have to come back to you on this. I'll probably have Vavin from Marathon or somebody get back to you with this answer. I'll have to calculate. But I wouldn't say it is very significantly high because the MRTs of the product would have increased from what, you know, 5 rupees to 6 rupees or 7 rupees at max. But we'll have to come back to you on this.

Sure, sure. And, sir, second, in last, say, maybe a decade or so, what would have been the industry volume growth per se?

Difficult. Honestly, difficult to give this answer.

No problem, sir. Great, sir. Thanks. Understood, sir. Fair enough. Yes, sir. Thanks a lot, sir. All the best. Bye-bye.

Ladies and gentlemen, that was the last question for the day, and now I would like to hand over the conference to the management for closing comments.

Thank you, everyone, once again, for joining us today. We appreciate your continued support and confidence in our journey. Should you have any further questions, please reach out to our investor relations team. Thank you, and have a great day ahead.

Thank you. On behalf of Tom's Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the lines.