Ladies and gentlemen, good day. Welcome to the DOMS Industries Limited Q4 FY 2026 conference call hosted by ICICI Securities Limited. This presentation which DOMS Industries Limited has uploaded on the stock exchange and their website and 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 zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aniruddha Joshi from ICICI Securities.
Thank you, over to you, sir.
Yeah. Thanks, Aaron. On behalf of ICICI Securities, we welcome you all to Q4 FY 2026 and FY 2026 results conference call of DOMS Industries Limited. We have with us today senior management represented by Mr. Rahul Shah, Chief Financial Officer. I hand over the call to Rahul bhai for his initial comments on the quarterly performance, and then we will open the floor for question and answer session. Thanks. Over to you, Rahul bhai.
Thank you, Aniruddha bhai. Good afternoon and a very warm welcome to everyone. Thank you for taking the time to join our Q4 and FY 2026 earnings call. Joining me on this call is the team from Marathon Capital, our Investor Relations Advisor. I hope that everyone had an opportunity to go through the investor presentation and the results release that has been uploaded on the exchanges and our company's website. To begin with, let me take you through the highlights for Q4 and FY 2026 performance. I am pleased to share that we have closed the year on a positive note, delivering steady performance across key metrics. Our revenue for the year grew by 21.6%, surpassing our full year guidance.
Some of the key drivers aiding the growth were, first, new product launches across categories with attractive ergonomic and user-friendly designs that resonated strongly with consumers and gained strong traction. These new launches include pencil boxes and well-designed school bags in time for the BTS season, exciting new range of pens and mechanical pencils, stamp pads in the office supply segment, and a number of differentiated SKUs in scholastic stationery, scholastic art, hobby and craft, and kits and combo packs. The new range of paper stationery products with fresh designs were also well appreciated by our consumers. Secondly, we witnessed sustained growth across all our product categories. Growth in certain categories which were aided by capacity additions during the year outpaced the growth in other categories.
Nevertheless, through improvement in our product offering and increase in ASPs, we were happy to state that other categories where no substantial capacity additions were made during the past year also delivered positive sales growth. Thirdly, the demand scenario in the domestic market continues to remain buoyant and was a key contributor to growth, underpinned by strong entrenched distribution network, robust brand equity, and a well-diversified product portfolio. At the same time, exports also delivered steady double-digit growth despite global uncertainties, including trade tensions, geopolitical conflicts, and regional instability, reflecting continued demand for our products in international markets as well. The love, trust, and acceptance that our consumers have shown towards our brand and products is unparalleled. Building on this bond, we continue to focus on strong consumer engagement through active participation in events, conferences, exhibitions in India as well as globally.
I'm pleased to share that our social media community has scaled significantly. YouTube subscribers have now crossed 4 million, and Instagram followers are over 170,000, reinforcing DOMS as one of the most admired brands in stationery and art materials. Coming to the details of our financial performance. Firstly, on Q4 performance. Revenue for Q4 FY 2026 grew by 18.7% to INR 604 crore, highlighting our sustained growth trajectory, primarily led by buoyant demand scenario in the domestic market, with higher growth coming from office supplies, hobby and craft, and back to school, aided by increased capacities and new launches. On consumption margins remained broadly stable despite raw material volatility linked to the West Asia crisis, intensified in the later part of the quarter.
The consumption was primarily of lower cost inventory built as a part of our strategic stocking. EBITDA for Q4 FY 2026 grew by 14.4% to INR 100.9 crore with an EBITDA margin at 16.7% in Q4 FY 2026, as compared to 17.3% in Q4 FY 2025. The moderation in EBITDA margin is partly due to the onset of the seasonal slowdown in the baby hygiene segment, which impacted fixed cost absorption. Further, the increase in contribution of e-commerce sales in the baby hygiene segment also led to higher advertising and marketing and freight expenses. PAT for Q4 FY 2026 grew by 13.5% to INR 58.2 crore and PAT margin for the same period stood at 9.6% compared to 10% in Q4 FY 2025. Coming to our performance for the financial year.
Revenue from operations for financial year 2026 grew by 21.6% to INR 2,326.4 crore as compared to FY 2025, surpassing our guidance range led by healthy growth both from domestic market as well as direct export of DOMS branded range of stationery products. Consumption margins were broadly consistent for FY 2026 at 43.6% similar to FY 2025. We are pleased to report an EBITDA growth on an absolute basis of 15.5% for the full year to INR 402.6 crore, with EBITDA margin at the higher end of our guidance. The EBITDA margin softened to 17.3% as compared to 18.2% in FY 2025 on account of higher Uniclan contribution in the overall consolidated operations.
PAT for FY 2026 grew by 12.2% to INR 239.6 crore. PAT growth was relatively lower than revenue growth, primarily due to decline in other income. This was a result of higher utilization of cash towards capital expenditure, which aligns with our disciplined growth-focused capital allocation strategy. Despite this, PAT margin for the year remained healthy at 10.3%, reflecting the underlying strength of our core operations. Coming to our expansion initiatives. We continue to focus towards building the base for our future growth in terms of capacity creation and expansion.
Our CapEx was primarily towards the development of our 45- acre land parcel, acquisition of additional land parcels both in Umbergaon and Jammu for our future expansion, as well as procurement and installation of plant and machinery in the existing infrastructure, as well as for the commercialization of the 45- acre facility. The company totally spent around INR 292 crore in FY 2026 towards these objectives. As a part of the phased development of our 45- acre facility, the first building is on track for completion in June 2027, with commercial production expected to commence towards the end of Q2 FY 2027. Significant investment were also done in expansion of our molding capacities, writing instruments, as well as in the adhesive manufacturing infrastructure. Speaking about our outlook.
As we enter the new financial year, we do so in an environment of elevated uncertainty and volatility, primarily stemming from the ongoing developments in West Asia, which has resulted in significant increase in prices of raw material. As a part of our operating network framework, we have initiated a set of calibrated measures to minimize the impact of such geopolitical disruptions. Our first priority is to maintain continuity of our manufacturing and safeguard our supply chain. We are actively working to minimize any margin impact and have started implementing focused measures as the situation evolves. These include balanced and gradual approach to pricing and continued focus on cost efficiencies. The overriding principle is that any pricing action must be taken in a way that does not impact our market share or competitive positioning.
Our approach continues to be measured and disciplined, drawing on past experience in navigating periods of disruption where a focused and prudent response has supported sustainable growth over time. With our strong brand, distribution reach, new products pipeline, and capacity investments underway, we believe we are well positioned to deliver on consistent growth. Therefore, despite the current geopolitical and regulatory uncertainties, we have lined up a CapEx plan between INR 250 crore-INR 275 crore for FY 2027. Thank you. With this, I would now request to open the floor for question and answers.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Aradhana Jain with 360 ONE Capital. Please go ahead.
Hi. Thank you for the opportunity and congratulations on the continued good set of performance. My first question is, the core stationery segment delivered 19% growth this quarter. Could you help us understand whether there was any element of channel stocking ahead of the raw material price increases that led to this kind of growth, or it was entirely driven by the underlying consumption demand? Related to that, how was the secondary sales trend versus the primary sales during the quarter? With this also if you could highlight, which are the specific categories or SKUs where we are seeing those kind of price hikes currently, and how much is the price hike that we've taken? That's my first question.
Hi, Aradhana. Thank you. Aradhana, in Q4 FY 2026 revenues from operations were about INR 604 crore total, growing at about 18.7%. Our core stationery business also grew at similar levels. This was not a part of any channel stocking or anything because, you know, we closely monitor our primary sales vis-à-vis the de-primary and our secondary sales. This was, I think, you know, it's the back-to-school season. In the season, you know, there is always an undercurrent for higher demand of products. That's what we've seen and nothing with respect to any channel stocking for expected price rise or something like that.
In terms of your second question with respect to, you know, raw material, to mitigate the impact of raw material prices that the company has seen, the company has taken certain calibrated steps, you know, where we are gradually passing on some of this to our consumers. As a first step, what we've done is we've wherever we could believe we could rationalize our channel margins, or we could rationalize the schemes and discounts, we've taken that step, which has resulted in about 4%-5% increase, which has been passed to consumer. This is across different products, not any specific SKU or product category.
Understood. The second question is, so if the current geopolitical situation persists for, say, another two to three months and the crude- linked inflation remains at the current elevated levels that they are, would our EBITDA margins take a hit going forward? Would we still continue to guide at the 16.5%-17.5% band?
You know, the near-term environment remains uncertain. A significant portion of our input basket is directly linked to crude derivatives, which makes cost trends especially sensitive and highly volatile to the developments in the West Asia conflict. The situation has improved versus the peak uncertainty in the month of April, the environment is still very volatile and far from stable. On an average, we have seen our raw material cost increase by approximately 15%-17%, while the pricing actions taken so far are around 4%-5%, which naturally creates a near-term gap. Given the current commodity environment and the volatility arising, we do expect margins in Q1 to remain slightly under pressure versus the corresponding period last year.
We do not view this as a structured revision of our long-term margin profile, but more of temporary. Our focus currently is to maintain healthy growth momentum, ensure we protect and improve our market share, while simultaneously driving cost efficiencies through calibrated pricing action. Hence, providing a definitive margin profile for FY 2027 at this point of time would be a little difficult. You know, in the near term, we might see certain impacts. But in the long term, we believe that structurally the company would continue to do the same sort of a margin profile.
Understood. Last question from my end. On the office supply side, we've delivered very great growth over the last few quarters. What are the major growth drivers in the office supplies which is leading to I mean, I know it's pens, but if you could throw some light of how the pen segment has been performing, and also if you could help us understand what is our current market share in the organized office supply space, specifically pens, and how do we see that evolving over the next thee to five-year period?
Aradhana, you know, we... Along with ballpoint pens, as you rightly said, another category within the office supplies, broad category was highlighters. Again, a product which we launched towards the end of last financial year. That product category has also done well. Highlighters along with ball pens, has helped to increase or resulted in the increase in sales of the office supply segment. Now we continue to invest significantly in our writing instrument segment, especially ballpoint pens and highlighters. We believe both these segments have huge headroom for growth.
Once new capacity additions come in plus the capacity additions that happened towards the latter half of the year, last year, when, you know, they are available for utilization throughout the current year. We believe these segments to continue to grow. We typically don't evaluate or measure the market share or the size of the market number, so would not be able to share absolute details on it. We believe there is significant headroom to grow in the office supply segment, and the company is taking the required capital plans to increase capacities in this segment.
Thank you. Participants, in the interest of time and fairness to others, please restrict yourselves to two questions. For any more questions, you may rejoin the queue. The next question comes from the line of Percy Panthaki with IIFL Securities. Please go ahead.
Hi. just wanted to get a sense, in the last such inflation that we saw, which was around the Ukraine war, I think, FY 2023. If you can just tell us what was the total price increases over whatever 12-15-month period, that you had pushed through at that point of time compared to the 4%-5% that we have taken now?
Hi, Percy bhai. Percy bhai, I will not have a definite answer to what we did in the past in terms of the exact numbers, but the approach was very similar. It was an approach which was taking calibrated and gradual measures. The first thing that we typically do in such a scenario is try to figure out what scheme discount or margin rationalization that we can do. Second is we do selective and gradual MRP increases. These are done only after the scheme rationalization, margin rationalizations are done. We evaluate and take selective balance and gradual direct MRP increases. In the branded product segment like ours, you know, sometimes it becomes very difficult to take any immediate and frequent price changes. Hence we believe that MRP changes should be triggered only when you exhausted all other options.
I get the broad approach, Rahul. Since you were there at that time, even if you don't know the exact number. Some kind of ballpark idea you would have, what kind of price increases, including scheme rationalization, et cetera, at a net realization level? what was the increase that we have taken?
At that point of time, Percy bhai, one, you know, our dependence on polymers in our total raw material basket was not that very large because we were just about to enter the pen segment that time. That time, you know, primary sales used to come from scholastic stationery and scholastic art, so the dependence was less. But having said that, at that point of time also, we've taken about 4%-5% increase across the impacted products. You know, what happens is, certain inflationary cycles are structural and driven by long-term demand supply imbalances. While others are more event-driven and volatile, like what we are seeing right now. In such an environment, our pricing actions, you know, have always been in a phased manner rather than abrupt price increases.
Similar action we've taken during the Ukraine-Russia war as well as if you see during the COVID disruption, where for some time the prices had increased significantly. What we've seen in the past that whenever we've taken aggressive pricing moves can, you know, sometimes lead to loss of shelf space to new entrants and existing competitors. Hence, we would want to be a little balanced and gradual in this approach, which we believe will support long-term sustainable growth both in revenues and margins.
If there is a gap between the cost inflation and the price increase you have taken and there is margin pressure on account of that, what are the drivers or levers that you have in order to sort of at least partially mitigate that margin pressure? To what extent you can mitigate? Supposing if the overall gross margin is down by X percent, I mean X amount. Will it be half of that that can be mitigated, or is it 75%? Roughly what amount can you mitigate of the pressure?
Percy bhai, eventually we believe that we will be able to mitigate all of these pressures. It will have to come in a gradual manner. That is what we are trying to say. You know, first thing what we typically do is evaluate that in our current margin profile operating structure, what are the cost efficiencies we can get? You know, restrict certain expenses like marketing, advertising, be very efficient in such time you try to be efficient with these spends. Like I said, we work very closely with our channel partners . You know, with constant interaction and our consultative process with them, we try to rationalize the schemes. Rationalize the product offering, and then look at MRP increases.
In the past also when, you know, there was been a sustained price increase and after the... t hey had stabilized towards the higher end of the increase. Then, we had taken calls to increase our MRP of our products also. That's how pencils moved from INR 55 a pack to INR 60 a pack.
Right. Okay. Yeah, that's all from me. Thanks, Rahul.
Thanks.
The next question comes from the line of Jinesh Joshi from PL Capital. Please go ahead.
Yeah. Thanks for the opportunity. Sir, my first question is on the RM basket. Can you share what proportion of our RM basket is crude linked? Secondly, out of the INR 377 crore of inventory on the balance sheet, can you share how much of it is the RM inventory?
Hi, Jinesh. Jinesh, basically, to answer your first question, you know, we would categorize our raw material basket into three segments. One would be about which has a direct link to crude and its derivatives, which should be roughly about 40% odd. There is about 30%, which is indirect linkage. When I mean, indirect linkage means, you know, probably in manufacturing of that raw material, there are some crude derivatives which are used. Third, would be having something like a minimalistic insight. That's how the raw material basket is structured. You know, when I compare the data from the time this geopolitical tension started till about 15th of May on a weighted average basis, you know, we think that there has been a inflation of about 15% - 20% in the raw material basket putting across the weights in the purchase. Right. Jinesh, your second question was? Sorry.
RM inventory. Out of that INR 377 crore of inventory that we have?
Right. Out of the INR 377 crore of inventory that we have, about, INR 140 crore would be, in terms of raw material and packing material. Around, INR 55 crore would be in terms of work in process. The rest is finished goods, stock- in-trade, et cetera.
Understood. Sir, secondly, how are we trying to tackle this RM inflation, especially in pens? I believe we operate at two price points, which is INR 5 and INR 10 . Even if I randomly assume a 10% hike, the revised MRP could be INR 6 and INR 11. These price points may not be very convenient to operate, given the change issue. I mean, is it safe to assume that we are absorbing the polymer inflation in the pens category?
Jinesh, what has happened is if you see, you know, the market has evolved a lot, you know. Definitely earlier times the market was where single pen used to be sold. Over a period of time, and especially with after DOMS entry, you know, what we've done is, let's say, we've made packs of five pens, which is one of our high-selling SKUs today. In that, if you remember earlier also the five pieces packs were always priced at INR 30. That seems to be like INR 6 per pen. The way it was structured in the market was as if it was a INR 5 pen.
You know, such decisions that we had taken in the past have really helped us because now you just need to revise that to like a INR 6 MRP product. Right. That's how the margin rationalization in the channel is helped us with the initial phase of this uncertainty.
Okay.
You know, that's how it's like a INR 30 pack. You'll make it like if you have to further increase it, you make it a INR 35 pack. You, in a way, try to mitigate the impact of coinage issue.
Okay. Just one follow-up on this bit. I mean, what proportion of our pens are sold in the packs that you mentioned? One related bit on the RM inflation is that, while we have seen inflation hit us in the month of March, we have seen gross margins expand on YoY basis, but EBITDA margin has compressed. If you can just explain this bit as well. Hello, am I audible?
Sorry, can you hear me, Ji?
No, sir, I did not hear your response.
Okay, okay. Gross margins for the quarter were largely steady, but EBITDA declined due to higher operating costs. The main reason was increased contribution from e-commerce sales in our baby hygiene business, which is done through Uniclan, which has this business. The e-commerce business has a slightly higher selling and distribution cost structure, including digital marketing spends. While we take very, we are happy that e-commerce business is growing, because it shows that the repeat order levels have increased. At the same time, because of this, there was slight EBITDA margin compression despite stable gross margins. Going forward, once the Uniclan business becomes like a steady business, then this would also get absorbed.
Thank you. The next question comes from the line of Sneha with Nuvama Wealth Management. Please go ahead.
Hi, team. Thanks a lot for the opportunity. You mentioned a lot on Uniclan, that, you know, margins have actually deteriorated. One of the reasons is Uniclan's operations. Where are we in terms of margins only of the Uniclan basis?
Hi, Sneha. Where are we on the margin profiles?
Yes, for Uniclan.
So, uh-
What are the margins for Uniclan?
For the quarter?
Yeah, for the quarter.
In Q4, Uniclan's revenues were about INR 65.9 crore and EBITDA margins were close to 6.3%.
Which last quarter was more than 7%-8%, right?
Which was around 7.5%. Last quarter means, fourth quarter of FY 2025, right?
No, I was thinking-
Or the third quar-
... quarter-on-quarter, third quarter.
Third quarter, it was much higher. Close to 10% because Uniclan is a seasonal business. The third quarter is the strongest for the company and is the highest EBITDA. In that quarter, the EBITDA was close to 12% actually. It is now at about 6.3%.
Understood. That explains some increase in your, you know, costing mix.
Yeah. If you compare it with the previous year, fourth quarter of previous year, there also, you know, the margins, the EBITDA margins in Uniclan were around 7.5%, which has come down to 6.3% on account of, like I said, you know, increasing e-commerce sales. You know, as this business evolves, we will try to mitigate this impact also.
Understood. Rahul, while a lot has already been discussed on the raw material pricing and, you know, margins taking a hit. Of course, you're not giving any guidance at this point of time for FY 2027, can we just get an indication that, you know, we've already been in this for close to 40 days, 50 days now. What would have been the current margin levels for the company? Like an approx margin level, how much is the impact you're seeing? I understand you're partially passing it on and it's an ongoing process where MRPs would be changing gradually or changing the discounting system. If I have to make something, where are we currently in terms of passing it on?
See. Yeah, you very well know that the volatility is still high.
Right.
Sort of high increases, followed by substantial decreases also and again, certain prices starting to increase again. You know, in a way, always like a catch-up approach that we have to do because once the raw material prices increase and then you take actions in terms of pricing. From that perspective, it becomes a little difficult, you know, to forecast something on to sitting today. Like I said, we've seen about 15%-20% inflation and 4%-5% has already been passed, and this 15%-20% was peak inflation. After that, we've also seen some amount of, you know, decrease in prices also.
Like I said, you know, current focus is maintain the growth. More importantly, in this time, we believe maintaining the market share and trying to increase it is a prudent strategy from long-term sustainable growth and margins will definitely follow.
Got that. Lastly, Rahul, anything on the top- line guidance? Are you maintaining the similar guidance of 20% growth for the next one, two years on the top line?
Yeah. At a consolidated level with the planned capacity expansion and the current demand trends, we expect revenue to grow by 17% - 20% in FY 2027. It's the same guidance that we'd had in the previous call.
Got that. Got that. Thanks. Thanks a lot, team, and all the best.
Thank you.
Thank you. The next question comes from the line of Mosam Shah with Wealth Guardian. Please go ahead.
Hello. Congratulations on a good set of numbers. Thank you for the opportunity. My question is related to CapEx that you just estimated around INR 250 crore-INR 275 crore. Can you just help for what product category we are planning our CapEx and their timelines and when it will be operational?
Hi, Mosam. This CapEx is generally going towards increasing our capacities for one molding and a lot of other writing instruments products that we planned. A large part of it will also go towards the construction of facilities for a lot of land that we acquired in the current financial year. A lot of like, you know, our molding capacities are interchangeable, so exactly giving the name of the products would be a little difficult. We've lined up a significant CapEx also for wooden pencils. A segment where we've not done CapEx in a very long time now. In this year, as well as next year, we'll do some CapEx there also. It's going to be across host of products.
Okay. This, the current ongoing CapEx that will be commercializing from quarter two onwards, that was particularly for writing instruments, right?
Yes, it was for writing instruments. It's a large facility, and we had that time thought of developing a part of it. Now we are, you know, as this capacity comes into commercial production. We'll start the development for other parts of it also.
Okay. Do you want to comment on any particular timeline or something?
This is like going to be an ongoing project. You know, we believe that it will take another three odd years for the company to complete the construction potential at the 45- acre plant. Based on the current demand trends, what we believe the company can achieve, we think that every year we'll end up doing a similar level of CapEx for the next few years, to, you know, completely utilize the 45 acres plus some new land that we purchased around it and close to our current flagship plant. It's going to be an ongoing project. With next three years the company will be in that high CapEx cycle. I'm sure, you know, as things evolve, we will start planning our next phase of development also.
Okay, okay. My second question is regarding Uniclan integration. Once this year was some full year of integration, right? What would be the projected margin that you guide for Uniclan post one or two years?
Again, like DOMS, Uniclan is also a product. Yeah, the diapers are also product where the contribution of crude derivatives is very high. You know, in this segment also we'll see some softness in the margins in the near term. But going forward, bases are current operating plan for Uniclan. We believe in this segment also from a revenue basis. We'll be able to maintain a growth of close to 20%, and then again start planning for additional capital expenditure to increase the growth further. In terms of margins from a long-term perspective, we believe in this segment. We'll be happy to, you know, achieve a 10% sort of an EBITDA and stay at that level, maximizing revenue growth.
Okay.
Thank you. The next question comes from the line of Jayant Parasramka with 3P Investment Management. Please go ahead.
Thank you for taking my question. Just a couple of questions on CapEx. We've increased our CapEx guidance to about INR 250 crore-INR 275 crore versus let's say previous call of, somewhere between INR 225 crore-INR 250 crore. Just to understand, is it because of rising cost of materials over there, or are we bringing forward some of our CapEx? That's my first question.
Sure. Hi. It accounts for a little bit of increase in cost also, and at the same time also, like I said, you know, there are some multiple, you know, new land parcels also which the company acquired, which is strategically located. One near our flagship unit in Umbergaon, current flagship in Umbergaon, and also in our flagship unit in Jammu. You know, we have a large plant in Jammu. Next to that plant , we were able to find a large parcel which we've acquired. We'll be doing certain capacity enhancements there, as well as in addition to the development that is happening at the 45- acre plant. We are, you know, we've acquired certain land parcels in close to our existing plants which were available strategically. We'll simultaneously develop them also.
Because of that, we've increased our, you know, capital outflow for the projected capital outflow for the coming financial year. There is, you know, some amount of increase in prices also. It accounts for both of them.
Sure. Thank you. The second question is from the pens business, I believe most of your RM pressure on the pens business is due to the rise in polymer prices. From a strategic point of view, are we also now focusing on increasing mix to the INR 10 price point, versus earlier our, I believe our majority of our sales was happening in the INR 5 price point? Are we trying to also shift the mix to the INR 10 price point? Thanks.
Then historically, you know, you've always seen DOMS across all our products, SKU and margin profiles always been similar. Irrespective, I was selling a INR 5 pen or a INR 5 pencil vis-à-vis a INR 10 pen or a INR 10 pencil, the margins were pretty much similar. The EBITDA margins around that, you know, 70% odd sort of a level. It really doesn't make a lot of difference at what price point we are selling the product, but we believe there is enough scope still. This is like a temporary cycle. We don't see these prices to be at this elevated levels for a very long time.
There would be some amount of correction that would happen, plus the calibrated increases that we've done in selling prices that will come back to our original levels of EBITDA margin. It will take some time. We'll come back to that levels. Like I said, what we did in the past also, you know, when we launched our INR 5 pens, you know, after that we started packing them in packs of five. That packet of five was priced at, let's say, INR 30. As such, the price was per pen was INR 6. In the market it operated as if you're selling a INR 5 product. You know, that's how our selling price was. That's how the channel margins and schemes and discounts were given.
Now it becomes a little easier to go back to the INR 6 price point because consumers are always aware this is an INR 6 product.
Sure. Thank you. Thank you, sir. All the best.
The next question comes from the line of Kunal Vora with BNP Paribas. Please go ahead.
Yeah, thanks for the opportunity. Rahul , first question. What is the extent of Chinese imports in stationery industry? How does the 20% depreciation of rupee against RMB impact the competition in various areas in which you face Chinese competition? Is there a market share gain opportunity? Like on the similar lines, does this also have some impact on your CapEx as you are looking to import machinery for your new factory? That's the first one.
Hi, Kunal bhai. Yes, there is some amount of imports, you know, that comes from China, Vietnam, few other countries also in India. To what extent, what percentage, that's a little difficult, you know, to judge. I honestly don't have an answer in terms of percentage. There are a decent amount of imports that happen. The current currency fluctuation, you know, probably has made imports slightly expensive. This gives a good opportunity for a branded company like DOMS to, you know, with their, you know, aggressive pricing decision. You can probably reduce or discourage such imports, which can eventually result in market share gains. We are, you know, in a way that should benefit the company.
With respect to, you know, in terms of imports becoming expensive for us, both on the raw material as well on capital goods, we have a natural hedge. There is exports also that the company does. Most of our imports are in U.S. dollars, so are our exports. In a way they should partially offset each other.
Understood. That's clear. Second one is, would you expect a stronger second half of FY 2027, considering that by that time the full benefit of pricing will be there, you'll have higher capacities which you are adding, and potentially you'll also have some moderation in commodity costs? While in the first half you are taking the hit in terms of margins because the commodity costs have increased and you've not taken the full, like, pricing. Again, like on similar lines, would you, let's say, look to bridge the gap? Currently, you mentioned about 5% price hike against 15% cost inflation. Would you look to bridge that if the commodity costs remain high?
Yeah. Basically, you know, times are still uncertain. I don't know when this is going to end. When it started, everybody was talking 15 days. It's been more than 45 days. Still there is no uncertainty. You know, the near-term environment continues to be very fluid. Given that, significant portion of our input basket is directly linked to crudes and the volatility that we are seeing, you know, there would be some impact which will gradually be passed to our consumers, you know, through calibrated balance and gradual increase. When that happens, little difficult to say. In how much time will it get covered, it's a little difficult to project at this point of time.
In second half you will have a much larger capacity and like, say, your factory will start.
Exactly.
Would you expect that to recover? Yeah.
Capacity will come. New capacities will come, and like I said, that will be a very good moment for the company to again focus on gaining more market share. You know, historically also we've seen that when there have been uncertain times, you know, it has more impacted the unorganized players and importers rather than branded large companies. This gives time for market share gains. We would like to focus more on, you know, this opportunity to gain market share, which will eventually help us in long-term growth in our revenues and margins as well. Historically also, you know, after COVID, if you see the company's margin profile pre-COVID and post-COVID, you will see that there has been certain change. Similarly, pre-Ukraine, post-Ukraine.
These times, if you follow a balanced approach, which is something more long-term. With a long-term strategy, I think, you know, it will greatly benefit the company.
Understood. That's clear. Just one last question, if I can. One is, on Uniclan, like what's the numbers which you've done for FY 2026 full year revenue and margin, and what's the outlook for FY 2027?
FY 2026, you know, on a full- year basis, we've done a revenue of around INR 203 crore at Uniclan. For Uniclan, this represents, you know, close to a 23% growth over their base- year revenue. In terms of margin, the margins have been around 8.6%. Kunal, we've been talking about Uniclan since the time we acquired this company. Like we said that our idea when we acquired this company was a 4%-5% EBITDA margin and was to gradually increase it to 10%. We've reached about 8.6%.
We believe with the new, with the increasing revenues and certain new product SKUs that we'll be launching at Uniclan very soon, improvement in the product that we've been doing, with this we'll be able to maintain a 20% sort of a growth rate at Uniclan also. Eventually these margins on a long-term basis will stabilize around 10%, which has been our target.
Thank you. The next question comes from the line of Nikil Sudhirk umar with Lister Ventures. Please go ahead.
Hi, good afternoon. Thank you for the opportunity. My question is mainly regarding the capacity expansion that is right now happening.
I'm sorry to interrupt you.
So I just-
You're not quite clear. Could you please use your phone on the handset mode in case if you're using it, you know, in a hands-free mode?
Just a second. Yeah. Am I audible now?
Yes, please go.
Yeah. With respect to the capacity expansion, I just want to know what is the capacity and what is the capacity expansion percentage? That is, are we adding another 50% or like 100% capacity expansion to the existing facilities, or is it like SKU- wise? Just want to know an idea on that. My second question is regarding the distribution channel growth plan. What is the company looking at for the current financial year?
Hi, Nikil bhai. Nikil bhai, honestly, you know, you know, we never looked at capacity from a perspective at the product level because we would want to be agile towards the requirements of the market, not commit anything in terms of specific product. Yes, I can give you a certain flavor where, you know, the capacity is dedicated for certain products, like for pencils. You know, for the wooden pencils, the capacity right now is around 5.8 million pieces a year, which eventually once the new plant is entirely ready, increased to about 8 million.
Other than that, there are, you know, lot of molding capacity that we are adding, and molding is in a way interchangeable, which can be used for, you know, host of products like pens, highlighters, markers, sketch pens, sharpeners, scales, et cetera. Depending on the market requirement, we would want to be flexible. How do we add those, which product we add capacities? Having said that, today our operations are spread across close to 2 million sq ft of built up area. What we are constructing in 45 acres, eventually once all the phases of construction are over, would be again close to 2 million. In a way it would be doubling our, you know, reach in terms of manufacturing infrastructure in the next few years.
To answer your second question, with respect to the distribution network, you know, you could historically, if you would have seen, DOMS has never been in terms of, you know, specifically targeting a number to grow in terms of its distribution reach. We've always been focused on maximizing the throughput, where we believe that, you know, when we get into a relationship or a partnership with a particular retail store, it is more important to ensure that we have maximum sell shelf space in their store. Till their demand is not fulfilled, we would really not want to go in a adjacent store and try to keep two people waiting for products.
From that perspective, we are actually not from a number perspective, but, this entire universe of stationery outlet is close to about 300,000 - 350,000 stores in India. Out of this, we believe the directly serviceable stores are around 225,000 stores. Beyond these numbers, they are either located in remote geographies or, you know, it really doesn't make economical sense to cater them on a individual basis. These stores are very well catered to the wholesale segment, which is a good segment for DOMS also. Our universe to target would be about direct target, direct reach about 225,000 stationery stores.
By that time, I think our distribution through Uniclan in the general merchant outlet would have also reached a substantial point, which is basically into kirana stores. That's when we will also start cross-selling a lot of stationery products in that distribution network also. You know, both ways we believe there is still significant headroom to grow our network. Both in the stationery store segment as well as in the general merchant outlet segment.
Thank you. The next question comes from the line of Priyank Chheda with Vallum Capital. Please go ahead.
Rahul bhai, just clarification. You gave a guidance of 17%-18%. It doesn't include the plant, new plant that will get operationalized from H2, right?
No, no. Hi, Priyank bhai. This is a annual guidance of close to 17%-20%, which includes the, you know, new capacities coming in from H1 for the new plant. It will be a gradual end of H1 from the new plant. It will be a gradual ramp-up in capacities that will come in the 45 acres. That has been considered while guiding for around 17%-20% growth for FY 2027.
Just reconciling the CapEx numbers, it's INR 450 crore or higher for the phase one of this plant?
No, no. We've done a CapEx of close to INR 292 crore in this financial year, FY 2026. For FY 2027, the CapEx planned is around INR 250 crore-INR 275 crore. INR 250 crore-INR 275 crore.
Sorry. I'm asking for the whole of this new expansion. Earlier we had guided for total CapEx of INR 450 crore and 2 x asset turnover. Is there any change in the numbers with respect to additional land and anything coming in?
Priyank bhai, this entire project of 45 acres, starting from t he land that we purchased to full development of the construction and full development of plant and machinery, the total CapEx would be close to INR 850 crore-INR 1,000 crore. We've done a substantial part of it from the proceeds that we raised from IPO. There'll be certain other investment that we'll continue to do from our internal accruals. Eventually the total investment in this plant over the next, you know, considering we bought this land in June, sorry, January 2023 to another three odd years of complete development would be close to INR 850 crore-INR 1,000 crore.
Phase one is, what you said was INR 550 crore, right? INR 290 crore plus INR 250 crore.
No, no. We started investing in this plant. INR 290 crore is the total CapEx that we've done at the company level. This includes a lot of capital expenditure that happened in our current infrastructure, capital expenditure that happened at our subsidiary levels, and capital expenditure that happened in the 45- acre project, plus the new land that we purchased also in both Umbergaon and Jammu. At a company level, we did INR 292 crore. You know, it's not that separately. This 45 acres is like a separate project why we are discussing, because it was a part of our IPO document, where the object was to raise funds for the development of this land.
Got it. One last question on exports to F.I.L.A., which has fairly remained flat over last two- three years, while the third-party exports have grown this year. How should we look at this element of exports to F.I.L.A. as well as third party with new capacity coming in, over whatever timeline if you want to guide?
Yes, exports to F.I.L.A. were a little lower than expected in the last year. You know, the key reason for that was at least the initial period was on account of the higher tariffs that were imposed by the U.S. government. A large portion of intercompany exports happens to U.S. plus there was some amount of, you know, decline in demand in European countries also, and these economies also struggled a bit. Overall, the intercompany exports were a little lower. Having said that, you know, the outlook with now tariffs being done away with, our, you know, entity, F.I.L.A. Group entity in U.S. also recalibrating their pricing structures, we believe this business to pick momentum again, so these exports would increase.
Also with the new capacity additions that we are lining up, especially for the wooden pencil segment, where a lot of goods are sold to F.I.L.A. and F.I.L.A. Group companies, and the capacity addition in wooden pencil will also help in the F.I.L.A. Group intercompany exports.
Thank you. The next question comes from the line of Badal Rawat with TrustPlutus. Please go ahead. Badal, please go ahead with your question and kindly unmute your line in case if you are on mute.
Yes, hi. Hello.
Yes, Badal, please go ahead.
Actually most of my questions got answered. Yeah, that was related to capacity utilization. Thank you so much.
Thank you.
The next question comes from the line of Aradhana Jain with 360 ONE Capital. Please go ahead.
Hi. Thank you for the opportunity again. Just a couple of more questions. One, the CapEx that you plan to do of around INR 500+ crore for the next two years, would we continue with the stance that all of that will be funded through internal accruals, or we plan to take some debt for it? We see that this year we've already reduced our debt quite a bit compared to last year. How would the CapEx be funded going ahead?
It would, you know, depend upon one, the utilization of funds that we generate as free cash flows for the company. You know, if there are free cash flows available, we'll definitely want to utilize them for capital expenditure rather than distributing it as higher than our stated policy of 10% of standalone profits to be distributed as dividends. First that. And there's a lot of headway available to take a little bit of additional debt if required. It will be a prudent decision-making depending upon, you know, the capital allocation and how the company sees the use of funds.
Okay. The reason I was asking is because this year we were not able to generate any free cash flow.
Because of the CapEx. You know, we did a little higher than expected CapEx. If you know, when we started the year, we were looking at around a figure of INR 225 crore-INR 250 crore, which eventually got increased to about INR 290 + crore. There were certain, good assets, in terms of land parcels which were available in absolute vicinity of the company's operations, which we believed were strategically, made sense to acquire them. So that's why it was a little higher.
Understood. Second, on SKIDO and Seven S.p.A., if you could throw some light as to how has the performance been on SKIDO, specifically this quarter because of the back-to-school season. Second, where are we progressing on the Seven S.p.A. JV and, so how is the performance been?
SKIDO's revenue for the quarter was about INR 4.5 crore as compared to INR 2.8 crore in the same period previous year, which is a 60%+ year-on-year growth. This growth was primarily on account of the successful launch of backpacks that we did in SKIDO last year for the DOMS branded products. As we go ahead, we are now, you know, the Seven team and SKIDO team have started discussing multiple projects together. At the same time, we plan to do some amount of additional capital expenditure at SKIDO in terms of buying new land and constructing new factory premises to increase our production capacities there significantly.
For a full year sort of a basis, if you look, the revenues increased from INR 9 crore to INR 14 crore. We are, you know, still learning this business. The management of SKIDO has exceptional talent in terms of product design and product engineering, using the DOMS brand, the DOMS design philosophy, and the distribution reach. We believe this business will grow significantly in the coming few years and benefit from the association with Seven S.p.A. also. In terms of our JV, you know, formation with Seven S.p.A., we are in the process of formation of the joint venture entity, and this should be completed before the end of June 2026.
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
Thank you. Thank you once again for joining us. 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 once again, and have a great day ahead.
Thank you, sir. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.