Indo Count Industries Limited (ICIL) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Indoor Count Industries Limited Q4 and F526 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the lesson only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference to Uttam Samohit Jail, Executive Vice Chairman. Thank you, Vanuitio, sir.

Good morning and a very warm welcome to all of you joining us for the Indocount Industries Limited Q4 and FY26 Earnings Call. I am also joined by our group CFO, Mr. Muldi Dharan, Manish Bhatia, our CFO, and Strategic Growth Advisors, our IR Advisors. We hope you've had the chance to review the financial results and investor presentation available on the stock exchange and on our company website. Before moving forward on to the operational performance and summarizing how FY26 has been for Indocount, I would like to share a proud milestone with all our stakeholders. As informed in the previous quarter, the company was honored with the gold trophy for the highest exports of bedsheets in the cotton made-ups category. This marks the sixth consecutive year for Indocount, has achieved this recognition, reflecting our consistent leadership and commitment to setting benchmarks in export excellence. The award ceremony was held on 25th of May, where we had the privilege of receiving the award from Ms. Nirmala Sitaraman, our Honorable Finance Minister. It was a moment of immense pride and encouragement for the entire team at Indocount. Let me now share insights on our performance. Even in the toughest macroeconomic environment, we ended FI26 at a similar level to FI25 in terms of revenue, thereby delivering a resilient performance. Our focus during FI26 remained centered around three key priorities. First, protecting market share. Volume and core business revenues remain subdued and volatile during the year. Due to the evolving implications of the U.S. tariff situation, in certain cases, a part of the tariff impact and the Russia oil-related penalty impact was absorbed to protect customer relationships and preserve market share. Due to these challenges, our core business witnessed a low teen decline during the year. Importantly, business stability remained intact, with no loss of any customer or order cancellation during the year. Strong customer engagement, stable wallet share with existing customers, and continued operational reliability reinforce our confidence in the strength of our current business model. We believe the company is now entering its next phase of accelerated growth. Second, scaling utility bedding and U.S. brands. Utility bedding. A major highlight during the year included the continued expansion of our diversified product portfolio into utility banks. These adjacencies are opening up significantly larger wallet share opportunities into existing customers, while also enabling access to new customers. Major milestone during the year was the successful commencement of operations of a North Carolina facility. Our first greenfield manufacturing facility in the United States for utility bedding. With this addition, the total number of utility bedding manufacturing facilities in the United States has increased to 3, more than doubling our annual pillow manufacturing capacity from 13 million pillows to 31 million pillows and 1.5 million quilts per annum. The Greenfield facility is ramping up well, while our existing two U.S. utility bedding manufacturing facilities are currently operating at around 65% utilization. We are witnessing encouraging demand and believe that overall utilization levels of 60-65% across all three facilities is achievable going forward in FY27. The brand business. Our U.S. brand business also witnessed strong traction during the year, supported by the relaunch of the 180-year-old American heritage brand, Guamsuta, in the U.S. market. Additionally, during the year, we signed Tommy Hilfiger as a licensed brand partner for utility-bedding products, taking our total licensed brand portfolio to six. We further expanded our product portfolio through a sourcing-led strategy across curtains, towels, bathrocks, blankets, in addition to sheets, utility, and fashion wedding. So the seeds we sowed over the last few quarters are now beginning to yield visible results. New business revenues for FY26 stood at 792 crore, supported by consistent sequential growth throughout the year. We expect this momentum to continue into Fy27 as well. For Fy26, revenue from the new business segment stood at Rs. 270 crores, which is approximately USD 30 million. On an annualized basis, taking Q4 Fy26 as the base quarter, we are operating at nearly 40% of our targeted new business revenue, ambition, of approximately 275 million US dollars by 2028. Third, scaling non-US revenues. As a part of our strategy to further diversify core business revenues, we undertook several initiatives to strengthen our presence across non-US markets. In FY26, non-US core business revenues contributed approximately 30% of total core business revenues. With multiple FTAs now in place across several countries and the UK and EU in the pipeline, we expect stronger traction from these markets going forward and anticipate non-US revenues to grow by 20% in FY27. On the domestic front, our India business, led by our brands Boutique Living and Layers, remains steady, contributing nearly 2.25% of revenues during FY26. We continue to deepen engagement with channel partners and strengthen our market presence in India to drive future growth opportunities. Our products are available at nearly 2,000 touch points in the country, enabling us to drive market share. Summing up. Looking ahead, we believe... Demand visibility will improve gradually as the tariff overhang eases further, supported by the proposed U.S. Trade Agreement and other FTAs. We are already witnessing encouraging traction from the strategic investments undertaken over the last two years. Our strengthened global manufacturing and distribution capabilities, including the new U.S. facility, We are enhancing supply chain responsiveness, deepening customer confidence. and positioning Indocount as a preferred long-term sourcing partner for large global retailers. From an operational standpoint, we have largely completed our planned growth investments, positioning the company to benefit from significant operating leverage opportunities going forward. We remain sharply focused on driving efficiencies, improving product mix, optimizing costs, and increasing the share of value-added offerings. We are confident that these initiatives will support further margin expansion as volumes normalize and demand conditions strengthen. Before discussing the outlook for FY27, I would like to highlight the significant achievement on the ESG front. Our SNP Global ESG score has increased substantially to 78 from 45 over the last two years, well above the industry average of 35. This places us amongst the top three percentile globally within the textile, apparel, and luxury goods industry on ESG performance. This recognition reflects our continued focus on sustainable growth, responsible manufacturing practices, and long-term value creation for all stakeholders, further reinforcing our leadership position in ESG. Coming to FY27, the way forward. We believe FY27 will be a defining year for the company, not only in terms of stronger profitability, but also with meaningful improvement in volumes and margins. Simply put, we are on track to deliver a record year in FY27. We expect volumes to be in the range of 105 to 110 million meters compared to 94 million meters achieved in FY26. On the revenue front, we are targeting consolidated revenues of approximately Rs 5,500 crores, implying revenue growth of over 30% in FY27 compared to FY26. This translates into an incremental revenue addition of nearly 1,300 crores in FY27, a record for Indocount in its history. Of this, around approximately Rs 4,000 crores is expected to come from the core business, while approximately Rs 1,500 crores will be contributed by the new business. The core business is expected to reach new highs, while the new business will remain on track to nearly double from the existing FY26 levels of 792 crores. On the margin front, we are targeting EBITDA margin of around 13%. Driven by disciplined execution, improving demand conditions, normalization of U.S. trade environment, and revenue diversification opportunities, arriving from a more level playing field in markets such as the U.K. and the E.U., supported by long-standing customer relationships. As margins gradually move towards normalized levels, higher volume throughput on a stable cost base is expected to further support margin expansion. FY27 will represent a phase of converting investments into growth momentum, with accelerated scaling across businesses, and continued progress towards our stated objective of doubling our revenues by 2028 over the FY25 base. To conclude, over the last two years, we have proactively invested across capacity expansion, brand building, and distribution. Creating a strong platform for the company's next phase of growth. Going forward, our focus will increasingly be on optimizing asset utilization, enhancing operating leverage, and strengthening cash flow generation. With this, I will now hand over to Manish to take you through the financial numbers. Thank you.

Good morning, everyone, and thank you for joining the Q4 and FI26 earnings call. I will first provide a brief overview of our performance. Following this, we will open the floor for questions. It is important to note that FY26 is not directly comparable to FY25 due to two key factors. First, there was no impact of US tariff situation in the base period. And second, revenue contribution from the new business commenced only from second half of FY25. Quarterly highlights for Q4FI26. Sales volume for Q4FI26 stood at 20.5 million meters due to elevated US tariffs. Total income for Q4FI26 stood at 1,088 crores compared to 1,074 crores in Q3FI26, showcasing a steady performance and continued momentum in the new business, which helped offset weakness in the core business. Total income grew by 6% on a year-on-year basis due to higher contribution from new business, favorable exchange rate, and normalization of downtrading scenarios. A bit of Q4FI26 stood at 116 crores compared to 102 crores in Q3FI26, a growth of 14% quarter-on-quarter, driven by higher contribution from new businesses, both utility bedding and USA brand business, and a favorable exchange rate. EBITDA grew 22% on YOI basis due to normalization of downtrading scenario, improved realizations in the core business, and favorable exchange rate. EBITDA margin for the quarter was 10.7% versus 9.5% in Q3FI26 and 9.3% in Q4FI25. Pets for Q4FI26 stood at Rs.24 crores, which is similar level to Q3FI26 and growth of 15% versus Q4FI25 pet of Rs.21 crores. Flow-through to PET remained relatively lower on account of higher interest and depreciation due to commencement of new U.S. manufacturing facilities. I will come to now yearly highlights for financial year FI26. Sales volume for FI26 stood at 94.1 million meters compared to 106.4 million meters due to volatile demand scenario pertaining to U.S. terrain. Total income for FY26 stood at 4,211 crores compared to 4,191 crores in FY25, a steady performance despite of temporary weakness in a core business, since our new business more than doubled as compared to FY25. EBITDA for FY26 stood at Rs.461 crore compared to Rs.577 crore in FY25 due to incubation cost of new businesses, lower absorption of fixed cost, and partly sharing of tariff on case-to-case basis. EBITDA margin for the year stood at 11% vs. 13.8% in FY25. PAT for FY26 stood at Rs.127 crore compared to Rs.250 crore in FY25. We expect stronger EBITDA-to-PET conversion in FY27 with a target of around 13% EBITDA margin in the FY27. EPS for FY26 to that, Rs. 6.4 per share. Some other highlights related to net debts and working capital. Net debt as on 31st March 2026 to that, Rs. 760 crores as compared to 960 crores at the same period last year, reduction of around 200 crores. Long-term debt has on 31st March 2026 to debt Rs. 425 crores. Our working capital days remain stable at 121 days versus last year of 132 days. The Board of Directors has recommended final dividend of Rs. 1.50 per equity share for the waste value of Rs. 2 each, subject to shareholder's approval. We have planned capex outlay of Rs. 250 crores to be completed in next 12 to 18 months, and this will be funded through mix of internal accruals and debt. With this, I open the floor for unit.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask the question may press star and 1 on their 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 will wait for a moment while the question queue assembles. The first question is from the line of Pritesh Chhera from Lucky Investment. Please go ahead.

Yes, sir. I have two questions. So, the first question is with respect to margin. Now, we have two positives and one negative. So, one is lower tariff, higher INR as positive, and higher cotton price as a negative. So, how does this play out on margin? Let's say four quarters is, and in that, how does it play out on your debt for whatever spending debt that we have? So how should we look at this for S527? This is my first question.

Yeah. Hi, Pratesh. Morning. So I think on March, all the moving parts, as you just mentioned, that's how we've guided 13%. You know, having said that, of course, you know, in the last 30 to 60 days, we've seen every single raw material components, whether it's coal, gas, energy, raw material like cotton, cotton yarn, everything has gone up. So, as any company, we would also have inventory in the pipeline, but we have to go and correct our pricing with our customer, which has happened multiple times before. There could be some laggard effect, but keeping everything, all of this in mind is what we've given the guidance for, you know, standing where we are today. You know, as far as the debt is concerned, we have a long-term debt repayment of around between 85 to 90 crores every year, you know, right now for the next couple of years. So that will get repaid. Otherwise, the rest of the cash flow goes into some capex, you know, we have announced a capex of 250 crores, which will get funded by internal accruals, 75% and 25% by debt. And it goes to reducing our working capitals, you know.

Okay. And my second question is, for your guidance, what, so there is a substantial jump in the new business revenue, which is actually doubling. Maybe you want to call out some data points on why this confidence and on doubling on the basis of 800, you know, that would be very helpful.

You know, we've been very transparent and, you know, we're already at a run rate of almost 1,100 crores as we speak. In our Q4, we've done 270 odd crores. If you multiply that by 4, you'll get the run rate. So keeping that in mind, and we've always said that our total target is $275 million, which is roughly 2,500 crores. So if we want to get there, we have to keep. Moving on the, moving in the right direction. So, we have business visibility, you know, as we speak, that is showing that. So, that's how we've been able to give the guidance.

Interesting. Thank you. I have no question. Thank you, sir.

Thank you. Next question is from the line of Abhishek Shankar from ICICI Direct. Please go ahead.

Yeah, hi. Thanks for taking my question in progress on the good set of visits. My first question is just continuing on the EBITDA margins, you know, thanks for the guidance, but if we see the EBITDA margins, you're guaranteed for 13%. So, going ahead, you know, FI 27,

Ladies and gentlemen, we have lost the connection for the current participants, so we'll move on to our next question. We will take our next question from the line of Aman Azharwal from Carnelian Capital. Please go ahead.

So thank you for the opportunity and congrats on a good set of numbers. My first question was on the volume growth which we have added for F527, right? So we are estimating the revenue to go from somewhere around 3,300, 3,400 crores on our panic business from to 4,000 crores basically, right? So what is giving us confidence? Like I understand we are sitting on a low base in F525, very similar kind of numbers, but given the fuel price increase in the inflation, do you see How do you see a risk of US slowdown and how do you see the confidence basically on those numbers?

You know, we've seen that in the United States, which is our largest market, you know, all retail customers have increased their retail prices and, you know, consumers have now accepted the current retail prices. So retailers with current tariff situation are willing to make decisions of buying inventory, you know, goods are selling, you know, so that's how, you know, that gives us the confidence of giving this guidance.

Okay, and now coming to the margin piece, sir, like can you speak on the new utility business we have like for the two old plants which we acquired, like have we reached EBITDA break-even and like on the greenfield facility we come in in Q4, like when can we target EBITDA break-even on that facility basically?

So, now we are not looking at utility bedding as facility-wise, you know, I mean, because we were ramping up, that's how we were giving the break-up as to which facility is doing how much. Going forward, it is a cumulative utilization level. So, we are looking at doing 60-65% utilization in the coming year, you know, which is a substantial jump from last year because the last year, which is FY26, we only had 30 million units of pillow manufacturing, specifically. Now we are going to 31 million pillows. Of 31 million, we are saying we will do 60-65%. At that number, we are EBITDA positive.

So, we will reach EBITDA break even in FFAT 57, basically, right?

What that means for you to be able to reach EBITDA positive, yeah. So, there is no overhang of what we have mentioned in the previous years that we have taken the brunt of 150 to 200 basis points to, you know, launch these new businesses. So, that will get over from Q1 onwards.

But sir, like on this margin, like earlier we used to do 15-16% kind of margin like on a sustainable basis. So like when we are guiding for this 13% margins now that tariffs are mostly behind and the drag from this in brand business which we were trying to build is also mostly gone. So why are we seeing only 13% margins and not a reversal back to something like 15% which we used to do earlier?

Sure. So that's a good point. I mean, so from our core business, we expect to do around 15. You know, and as we are ramping up our new business, then our target is to get to overall 15% levels, not higher. But so in the guidance that we've given, we have kept our core business at roughly 15%. And the new business has yet, you know, earlier it was a drag on the, it was a negative margin, but now it's turning to be EBITDA positive. So it will take some time to keep adding. So it's only going to start adding now. It's not a subtraction, which it was last year.

Got it. So, like, just to understand from a point of view, like, the end-run rate for FY27, like, Q4 FY27 should be higher than 13% margins, basically, right? Because the margins will gradually improve in the new business and help it start contributing better margins than the overall margins can actually improve from what we are writing.

We would not be, I mean, very difficult to comment on that at this point of time.

Okay, got it. My final question, sir, was on the FY28 target, which we have reaffirmed in the presentation that we expect to be 2x the revenue compared to FY25. So we were sitting at around 4,000 crore kind of revenue in 25. So that implies 8,000 crore kind of revenue in 28 basically, right? And since we are riding for 5500 crores kind of revenue in FI 27, so in FI 28, we are expecting 40-45% kind of revenue growth like. So, is it achievable or, like, that might be a bit overstressed, basically?

So, we've been clear from day one, if you see, you know, we are seeing 2028, we'll get to that run rate, you know, so that's the idea. You know, so it's not 2728 financially. So, by 2028, we should be at that run rate. So, we're just holding on to that number yet. And even keeping in mind that, you know, we've had a blip here, which is 25-26, yet we are maintaining our guidance.

Great. So, mostly, like, if not 28, 29, we should be meeting this target, basically.

I've explained to you why I cannot explain more than this, Aman.

Okay. Thank you, sir. Thank you for answering my questions.

Thank you. Ladies and gentlemen, before we take the next question, a reminder to all the participants, if you wish to ask a question, please test star N1. We will take our next question from the line of Abhishek Shankar from ICICI Direct. Please go ahead.

Yeah, thanks for taking my question. I'm sorry, my line got cut. So, I have two bookkeeping questions. So, the first question is, in your slide number 15, you have mentioned revenues of 3419 crores. So, I just wanted to know, what's the split of this, basically?

This is the core business. If you do 3419 and add it to 792, you'll get to total revenue, hopefully.

Yes, so that I understand. So in the 3419, if I am calculating it correctly, it is standalone plus what is the difference? Where is it coming from?

Let's say our bedsheet business, which we are selling in the US or UK or any of our subsidiaries, the UAE, that gets, you know, a warehouse there and then sold. So all of that is part of the core business. And if you see on the right side, we've explained it also.

Oh, okay, great. Yeah, and my second question, this is a basic, you know, bookkeeping question, what factors should we assume in, you know, going ahead?

25% is the tax rate. So, we should assume that.

Yeah. Okay. Okay. Okay. Yeah. Thank you. I'll get into the queue.

Thank you. Next question is from the line of Vanshul Solangti from ISP and Ventures. Please go ahead.

Yeah. Good morning, Vanshul. So, my question is on the Q4 volume side, that the Q4 volumes were drastically, you know, reduced from around 24-25 million times to 20. So, like, I understand the US Terrip was there, but it was in previous quarters also. So, like, there was any delay in order, some kind of thing, or, like, why did this happen? Because the US Terrip was in full year, not just in quarter four.

Once, you know, when we get orders 60 days at least in advance, you know, roughly, so all our customers that were placing orders were keeping 50% U.S. status in mind. So keeping 50% for India, that's where we saw a drop in, you know, in the business and the volatility. It's only in February that, towards the end of February, it became 10%, and that's where Clarity came in. And that's how we are seeing business come back to normal levels, and product mix come back to normal levels.

Thank you. Okay, so what I understood is that customers have placed orders in the quarter three, which you have, you know, delivered in quarter four, but in the quarter three, the U.S. credit was high, and that's why the customer hasn't placed the order. Is my understanding correct?

Yeah, even in January, it was 50%. It was only in mid-February that it started coming down.

Okay. Okay. That's next. And also, you have guided for 13% extra margin. So this margin is with other income or without other income? With other income. All our margin drives into EBITDA. Just the way we are presenting our numbers. Okay. But in this quarter four, the other income is like drastically increased to 13 crores. So is there any one more for this correct income investment or what?

It's more forex accounting, you know, it's all part of business income, you know, so certain hedges get accounted in sales, and certain hedges which are not hedged come in other income, but it's all part of revenue. So there's no other income, it's all related to the business. Okay, and do you see these other income will be sustained by 25, 30 euros is running through? It all depends on hedge rate and what the forex rates are, you know. As far as you are concerned, you should look at the total revenue.

Okay, okay.

Vansh, does that answer your question?

Yes, man. Yes, sir. Thank you.

Thank you. We will take our next question from the line of Kannan Sonpal from Capri Global Capital. Please go ahead.

Hello. Yeah. Hi, sir. This is Riken Gopani here from Capri Family Office. Thank you for taking my question. I have two questions. Firstly, sir, if you could help me understand a little bit about the U.S. demand scenario. While you have given an encouraging guidance of 16% growth in the core business, is it driven to some extent by inventory restocking in US? Or, you know, if you could give some color on the reasons why you think there could be reasonably good growth, given all the current scenario that you are seeing in the US?

Rikyan, right, you said? Yes, Rikyan here. You know, so in the U.S., it's interesting, despite the inflationary pressure, you know, we have not observed any material impact on the demand scenario. You know, in fact, with the U.S. tariff overhang settling down, you know, we believe that the trade environment is improving in FY27. So keeping that in mind, we're expecting normalization of our core business revenue and volume on account of better demand scenario.

Okay, and are the end customers, just a follow-up here, so are the end customers also restocking? Are they at normalized inventory levels or where are they in their cycle?

No, so there's no restocking that is happening, you know, so retailers have increased their prices as I mentioned and customers are buying at that price. So the sales flow is at normalized levels.

Got it. Got it. That is quite helpful. And the second question is with regards to margins. Of course, there are certain headwinds which you did allude related to raw materials because of the current scenario. If you could specifically call out as to what is the kind of impact that is having on the operating performance today?

We would not be able to give you any specific number, but, you know, as we are all aware, you know, globally, there's not a single input cost that hasn't gone up, you know, whether it's, you know, polyester yarns, polyester fiber, cotton, cotton yarns, dyes and chemicals, oil, gas, so it's packaging material, you know, so everything is, so we are factoring in all this, and, you know, we will have to reprice our contracts with our customers, which we are in the process of doing, you know.

Thank you.

And we should be able to, we should be fine.

And the tailwinds for us in terms of margins moving from 11 to 13 percent, apart from currency and operating leverage as we sort of grow the new business, are there any other tailwinds that you would want to call out?

You know, I think also what we're seeing is better utilization of our U.S. assets, you know, and also we are in a normalized non-tariff environment, I mean, regularized tariff environment, let's say, you know, so as long as India is at a similar tariff to all other countries globally, you know, then we are fine, we are okay to compete, right? How do you compete, you know, when your tariff is 50% and your other competitors at 20%, right? So even in an environment like that, we have kept every single customer and every single program within that customer, you know, for the company.

Right. Got it, sir. Thank you so much.

Thank you. We will take our next question from the line of Bhavika Singh. Please go ahead.

Thank you very much. So, let's say that there has been an impact on the raw material side. If we talk about cotton, can you tell us what's the mix of the things domestically and how much we import? Because recently there has been news that the government has based import duty on cotton. So, how is it going to benefit your account in terms of margin improvement and all?

Good morning, Bhavika. So for Indocount, you know, we mentioned before also around 30% of our raw material, which is cotton, gets imported. You know, so we use Egyptian cotton, American cotton predominantly, you know, which comes from overseas. 70% is sourced domestically. The cotton that we buy as a company more or less is what we call long staple or extra long staple cotton, which was anyway, which has always been exempted in India from duty because, you know, it's 32 millimeter in length and above. The recent notification that has come out on. Friday, Saturday, will put India on a global level playing field, you know, as far as raw material prices is concerned. So it basically makes Indian cotton competitive. Otherwise, when you have an 11% tariff or duty on imported raw material, then, you know, the Indian vendors can price the product accordingly in terms of raw material. So this will allow all companies in India to compete in a better manner. So it will help us, you know, also.

The second question is, in the current scenario, as we see, there is a lot of demand from opportunities that are created globally for the textile sector. So, do you see the situation also exists in the U.S. where, as you already mentioned, there has been demand in the scenario, but is the demand above the average demand? Like, the binds have increased in this, or is it just a normal thing?

No, the U.S. demand, if I remove the tariff here, which was 25, I mean, if that one blip or speed bump, we remove, then it's a normal demand.

Okay. Okay, that's settled. Thank you.

Thank you. Next question is from the line of Amman Agarwal from Canadian Capital. Please go ahead.

Sir, thank you for the follow-up. Just one more question. It was on Vamsuta. Can you talk about how that brand is doing? Like, if you can share any numbers, like, how is the monthly revenue run rate from Vamsuta? And, like, how do we expect Vamsuta to basically ramp up and up by 27 and going forward?

So as far as Vamsutra is concerned is, you know, revenues are ramping up gradually. We began sales in only Q2, FY26, and have steadily added more categories to expand the portfolio, rather than just bed linen. You know, at this point of time, revenues are yet small, and we'll be able to share more color, you know, in the coming quarters, which is an important brand for us, and we're moving in the right direction.

Okay. Thank you, sir.

Thank you. Next question is from the line of Shirish Fardesi from Modila Loswal. Please go ahead.

Yeah, hi, good afternoon, and thank you for the opportunity. Sir, I have two questions. With three capacities in the U.S., what percentage of U.S. business is catered from these three facilities? Because the utilization level is also ramping up. So, I think you have given about 31 million pillows and 1.5 million killed. But I was just more interested, how is this business catering locally?

So, Srish, just to give clarification, the products that we are manufacturing in the U.S. are basically sleeping pillows and quilts. So, those are not products that we are manufacturing in our India facility. You know, so these are, you know, you need to have U.S. manufacturing and multiple points of distribution with being a bulky product. So, this complements our current product because we have, our customers are predominantly customers that we already sell to, you know. For example, who we sell fashion, bedding, bed linen, bedsheets to. So, this is an addition of a product category for us as a company. And this product category, what we refer to as utility bedding, is in terms of retail sales as big a category as our bedsheet business in the United States.

So, within the U.S. business, what percentage of this revenue forms?

Within our, I'm not able to follow your question.

So, in the US business, I mean, you are saying that 790 crore is the new business. So, in the new business, what is the percentage of this business? And in 1500 crore, what will be the contribution of this business?

It's two-third, one-third. You know, two-third is coming from utility bedding of the new business, and one-third is coming from brands.

So, if I understand correctly, the scale-up and volume as goes up, you will have a strong operating leverage in terms of volume leverage.

That's why we will break even and get EBITDA positive.

Okay. And how this business will scale up over the next two, three years, and what is the path to margin story?

So our expectation in the utility bedding segment is to do a 15% margin. And on the brand business, we expect to do 1% to 2% higher than 15%. Our total targeted revenue from this category is approximately 2,500 odd crores, $275 million.

Okay. My second and last question, out of six brands like Vamsurta, Tommy Seeger, what we have got just now? What is this business overall in terms of export or maybe to the overall business? And within this, which are the brands? I mean, I can understand Vamsurta is a very strong brand, but it's more of a middle or mass segment. So I was more keen to build up what is the number or how these brands within these businesses are growing.

Sure. So I'll give you some clarifications for you and for everyone. You know, so when we say in our new business, our brand business, our brand business consists of four brands. The first one is Fieldcrest, which is again a very old heritage brand in the home textile space for many, many years, over 100 years. Our second brand is called Waverly. Our third brand is Gayam, which is a health and wellness brand. And the fourth brand is Vamsuta, which is positioned as a luxury brand, affordable luxury brand, I would say. So it's not on the middle level. It's at the highest level of every retailer, you can say. So these are the four brands that when we're giving you information or sharing data, when we say our brand business, out of our new business, is amongst these four brands. In the current year that has gone by, we have done 792 crores roughly of revenue, out of which you can take one third, would have come from these four brands. So that's roughly around 250 odd crores, which we expect to grow to 500 crores. The other two brands are Beautyrest and Tommy Hilfiger, which are specific to the utility bedding business, which is pillows, quilts. Mattress pads, and those we count within our utility bedding revenue. Just for clarification. Overall, as a company, our branded business is 20% of our revenue. Overall. So that means we have some home brands, we have online brands that we are selling that are owned by Indocount. So all of that plus these new brands all put together is 20%.

That's helpful. Just last, if I could squeeze in. Can you share something about the margin part also?

So, as far as the new brands are concerned, which are the four brands, there we are selling a complete lifestyle of soft home textiles. That includes bed linen, fashion wedding, utility, towels, bath rugs, curtains, window, blankets. So, there we expect to do 100 to 200 basis points, better margin than our core margin of, let's say, our targeted 15%.

Okay. Thank you, and all the best.

Thank you.

Thank you. Ladies and gentlemen, anyone who wishes to ask a question, may press star and one. We will take our next question from the line of Palash Kavale from Nuwama World. Please go ahead.

Yes, sir. Thank you for the opportunity. Sir, my question is on realization. Sorry if I missed this. Realizations have increased by a lot, this contact. So, is this sustainable and what led to this jump?

Sure, sure, sure. So what we've seen in quarter four is, you know, we've seen some forex gains come in, you know, due to currency movement, as well as product mix in Q4 has been slightly more on the favorable side. Having said that, what we are seeing is, if you remember in Q4 of FY25, we had said that customers have started down trading, you know, so volumes are going up, but more opening price point products are going. So, we are seeing. We have a quick movement to normalization of our product mix. So you will see that in coming quarters also. I think from a realization standpoint, if you look at our full year realization, I think that should give you a better perspective going forward for now. But we are seeing a normalization of our product mix, which for the last quarters before that was on the downward side.

Okay, okay. Thank you. Thank you for that. And sir, do you think with this US business, but like historically, home textile business has been very volatile. But with contribution from this US business increasing, the volatility would go down going forward? Is that a right understanding from my side?

I think the way we look at it is, you know, we are building different pillars for the company, you know, so one pillar is our India manufacturing, you know, which is shipping to 54 countries. I think with FTAs happening, you know, whether it's Japan, Australia, New Zealand now, Middle East, UK, EU, so I think it puts all of us. You know, in India, on the manufacturing side, at a very, very strong footing, you know, when we go and pitch our products. Then is our utility bedding business, which becomes another big vertical for us. And the third is our brand business, you know. So I think, you know, earlier we were focused on one core activity, now we have three. So when we are, you know, firing on three levels, you know, hopefully things should stabilize better. And as all of them mature, then there is... You know, more manoeuvrability.

Okay, sir. Thank you. Thank you so much. That's your message. And all the rest for the upcoming quarters.

Thank you. Next question is from the line of Raman K.V. from Frequent Investments. Please go ahead.

Hello, so can you hear me?

Yes, please. Yes. Yes, Raman.

I just have one question on the raw material side. So with the elevated raw material prices as of now, whether it be cotton or in terms of production like gas and stuff like that? How long will it take us to pass on the prices, and will there be a margin pressure in the Q1?

So, Raman, normally it would, I mean, of course, In a scenario like now, I mean, because people would act very quickly because this is not a normal scenario, so it should take us within a quarter we should be able to pass them on. And we also have raw material at the back and, you know, the supply chain inventory. So, I think overall within the year we should be fine here. That's what we're estimating.

Understood. And so, with the domestic cotton prices increasing, can we expect the share of imported cotton as a percentage of raw material to increase further from the current 30%? In order for you to maintain your raw materials, cotton prices, stability for the business?

Sure. So the kind of raw material that we are importing as a company, you know, 90% is more specialized, very high-end cottons, which is Egyptian and American cotton, a particular type of American cotton. I think it will remain at 30%. We don't see any much big change.

Understood, sir. So, just another book-living question. What does other income include? Does it include the foreign scheme as well in the other income?

Yeah, it includes foreign exchange scheme and some other bit of investment income also. Understood, sir. Thank you. Foreign scheme income is more or less part of our revenue.

Yeah, understood. Thank you.

Thank you. Next question, Assamzalainaf Subrata Sirkaar from Mount Incura. Please go ahead. You are audible, sir.

Yes. Sir, can you guide us about the incremental working capital that we will be requiring because of that? And what is the resultant of the interest income? It is about 120 days. Yes, so this incremental revenue which will come, for that we will have the same 120 kind of a working base, incremental working capital tax request. For now, you can consider that. Okay. And then any, like, accordingly update on the interest, incremental interest output that we need to do?

See, we don't see any major change in our interest profile, though with the globally interest rate goes up. There are certain loans which are linked with the floating rate that might have some impact, but as of today, we don't see there is any major impact on that.

Okay, sir. Perfect, sir. Sir, last, is there any change in the tax rate that we can anticipate, sir?

No, we don't see any change in tax rate. Okay. Effective taxes will be the same, sir.

Perfect. Thanks, sir.

Thank you. Next question is from the line of Hemant Soni, an individual investor. Please go ahead.

Thank you for providing me the opportunity. I just wanted to ask one thing. We are doubling our revenues in the next two years for about 26% years. So, sir, it seems a little difficult. So, how confident are we, sir?

No, Hemal, what we've said this morning that we'll double our revenue by 2028. So, somewhere in 2028, we'll reach to the 8,000 crores roughly run rate. It's not 2728, to be clear.

So, you're talking about the calendar year 2028, right?

Somewhere in the calendar year, we expect, you know, that we should be able to be at that run rate of revenue.

Sir, one more thing I wanted to ask you is, like, Good morning, everyone. The tariff has now been reduced to ten percent. I think from the second half of the year. We would not be able to comment like this on a quarterly basis.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Mohit Jain for closing comments. Over to you, sir.

Thank you. Thank you, everyone, for joining us today. We hope we've been able to address all your queries. Should you have any further questions, please feel free to get in touch with SGA, our investor relation advisors. Thank you once again for the continued interest and support. We look forward to connecting with you on our next call.

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