Ladies and gentlemen, good day and welcome to the Page Industries Limited Q4 FY 2022 earnings conference call. 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 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 over to Mr. V.S. Ganesh, CEO of Page Industries Limited. Thank you, and over to you, sir.
Thank you. Thank you so much. Good evening, everybody, and hope all of you are doing fine. It's my pleasure to be with all of you today and look forward to our interactions today. At the outset, I'm delighted to inform you that we have registered a robust sales growth, which is aided by good growth across all our product categories. The growth was broad-based across distribution, modern trade, and e-com. The enablers for this growth are our retail expansion, new product introductions, focus on digital initiatives, the innovations which we had on an overall in our business and the resilient and agile supply chain. Our Q4 revenue grew by 26.2% year-on-year, and the volume grew by 8.7% year-on-year.
Our FY 2022 revenue grew 37.2% year-on-year, with a strong year-on-year volume growth of 28.9%. As of end March, we are present in 10,548 MBOs and 1,131 EBOs, and we continue to aggressively grow our retail footprint. I'm happy to inform you that the supply chain is back on track despite having huge challenges during the last two years. During the quarter, we also faced a very high inflation rate trend which impacted nearly all the cost, including the price of cotton, packaging, logistics. However, we delivered better margins due to measured price increase and of course backed by strong budget and expense control measures and optimum use of our inventories.
Our expansion plans are very much in line with the accelerated sales growth that we are seeing, and this is also supplemented by strengthening our relationship with our supply chain partners, be it the raw material supply partners and the garment supply partners. We will continue to focus on growing all categories as each one of them has a tremendous potential to grow. As regards our retail expansion, we continue to have equal focus for tier three and four towns as we have for metros and for tier one and tier two. I'm also very happy to inform you that our Speedo business has now started to pick up, and it's getting back on track as the pools are now getting opened up.
I would like to take this opportunity to thank the 27,000+ team members of ours for all the hard work which they have done to deliver such an amazing result. Our channel partners were working very closely with us during these very challenging times. To our supply partners, without whose help our supply chain would not have been in this situation, and it has seen a very quick recovery. Overall, it was a fabulous performance by the team and, you know, we are thankful to all the team associates for contributing to where we are today. The outlook continues to look very, very bullish, and we are firing all cylinders to continue and sustain our growth. I look forward to your questions after our CFO gives further insights on our Q4 financial performance and the FY 2021, 2022 performance.
I am also joined by Mr. Gagan Sehgal, our Chief Sales Officer, and by Mr. Rahul Shukla, our Chief Retail Officer, who will be more than happy to answer any questions that you may have in their domain. Thank you once again for joining into the call today, and I will now request Mr. K. Chandrasekar to take you through the Q4 financial results and the full-year financial results for FY 2022. Over to you, KC.
This is the operator, sir. We are not able to hear you.
Thank you, Mr. Ganesh. I'm audible now.
Yes.
Yeah. Welcome once again to the Page earnings call. I'm extremely happy to report the best ever performance in a financial year again by Page, the best top line and bottom line in history. In Q4, we have about INR 11,111 million revenues.
Which compares with about INR 8,808 million, Q4 of last year, a growth of about 26.2%. The EBITDA has been at 24% which is INR 2,671 million, and compares with INR 1,698 million of last year Q4. This is a growth of 57.3%. As far as the Q4 PAT is concerned, it is again 17.1%, which is INR 1,905 million compared with INR 1,156 million in Q4 of last year. This is again a growth of nearly 65%. The gross margins as we compute post the subcontract costs and direct manufacturing costs are at 43.1% as compared with about 44% in Q4 of last year. More or less we are maintaining the gross margins even in Q4.
For the full year FY 2022, the revenues are the best ever, as I said, INR 38,865 million compared with INR 28,330 million, which is a growth of 37.2%. The EBITDA is 20.2% compared with 18.6% of FY 2021. In absolute terms it is INR 7,857 million and compares with INR 5,266 million of last year. This again is a growth of 49.2%. FY 2022 PAT is at INR 5,365 million, which is 13.8%, and compares with INR 3,406 million of last year, a growth of 57.5%. The last year PAT was 12%.
The gross margins for the whole of the year is 40.1%, which compares favorably with 40.9% in FY 2021. The cash equivalent at the end of March 2022 is down at INR 2,835 million, which compares with INR 4,350 million at end of last year. Last year, I mean, this year we have built up inventory levels, and we have been investing in good quality inventory. We are purchasing ahead. With the fluctuation in the raw material costs, we have been investing in inventory. The liquidity continues to be robust and very strong as usual. The net working capital because of inventory at the end of March 2022 went up to INR 6,317 million, comparing with INR 5,128 million at the end of March 2021.
The net working capital days has actually come down because of revenues to about 60 days. Inventory has gone up to about INR 9,749 million as against INR 5,549 million at the end of March 2021. This is again 92 days against 71. We are happy with the kind of inventory buildup, which is, you know, definitely a lever for giving us the growth in Q1 and beyond. With that, I hand over the session for Q&A please.
Thank you very much. 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. Reminder to the participants, anyone who wishes to ask a question may press star and one at this time. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. The first question is from the line of Gaurav Jogani from Axis Capital. Please go ahead.
Thank you for the opportunity, sir, and congratulations on a good set of numbers. My first question is with regards to, you know, the change in inventory figure in the Q4 numbers. If you see the change in inventory goods, it's around, you know, INR 153 crore. My question is with regards to how much of this has, you know, helped us, the lower price inventory has helped us in the margin expansion in Q4 and how much inventory do we have, you know, as you mentioned, that will help us in Q1 as well.
Gaurav, thanks for asking the question. You know, during the pandemic, we did have. We had to dig into inventory reserves, you know, because we did have operational issues. You know, the factories were not operational. Our outsourcing vendor partners were not fully operational, and there were disruptions in even raw material supply chain. Like many other industry, you know, we were digging into inventories and we had to rebuild. There were also tremendous growth which we saw. When we were increasing our capacities, the sales was also keeping similar pace. We had to aggressively rebuild our inventories. That's where we are seeing this healthy sign. I should thank the entire supply chain team for working together.
As Mr. Chandrashekar rightly said, this is a strategic move wherein we are seeing huge potential. We thought it is good to invest on inventory. Most of this buildup is on very healthy inventory where we, you know, the bias is more on the core sides of ours, which are the high selling sides. We also have built up some strategic stock as far as raw material is concerned. This is to enable us to insulate to some extent from the volatile input price and the inflationary pressures which we are facing as the inputs are concerned, especially in cotton. This is really helping us for Q1 as well, you know, because we now don't have the kind of sales loss or opportunity losses which we had in the past because of lack of supplies, even though we did good numbers.
This is actually helping us to build the momentum and bring in more overall efficiency to the system. KC, if you would add anything?
Yeah, I think it is perfect. Also, I think there is nothing more to add to this. Unless you have a further question, Mr. Jogani.
Yeah, sure. I have just one follow-up question on this, actually. If you can just help us, how much of the price increases have you taken further in Q4 beyond the, you know, 8% price increase you announced in December? Just as an add-on to this is that, given the raw material stock that we have, would we need further price increases to be taken given the inflationary pressures seen in the cotton prices in Q4 and Q1 now?
We didn't have any further price increase other than what we had in December. We have maintained the price. You know, we are closely monitoring the situation. You know, there is so much we can build as far as strategic stock is concerned. And as KC rightly showed, you know, the number of days of inventory is around 90 days. It's not that it will help us for the long term. We have been closely monitoring the situation. If there is a need, we will be touching the prices to ensure that EBITDA is around the 20-21% mark. However, I should thank the efforts taken by the teams as regards to rationalizing the expenses are concerned, the budgetary controls which are put in place.
All this is partially helping us. You know what we are seeing as far as input prices are concerned is very unprecedented. Far things are under control, but we are closely monitoring the situation.
Sure, sir. Thank you. That's all for me.
Thank you. The next question is from the line of Devanshu Bansal from Emkay Global Financial Services. Please go ahead.
Yes, sir. Thanks for the opportunity. Just wanted to check our gross margins have dropped by about 200 basis points in Q4. Still our EBITDA margins have expanded by nearly 500 basis points. What are the cost sort of savings that we have achieved in Q4, if you can throw some light on that?
Q4 is largely, you know, driven by the price increase of about 8% at the end of Q3. The gross margins are, as I told you, about 43% in Q4, and about 40% for the year as a whole. 40% is also in the shadow of the Q1, about 40-45 days was abundantly accepted in Q1 of FY 2022. Typically, if you go historically, when I talk of gross profit, it includes material consumed, and then the subcontract costs and the other manufacturing direct costs, like labor and so on. So we are quite happy with about 40% gross margin historically that has been achieved. As V.S. Ganesh said, about 20%-21% EBITDA margin is also obtained.
Does it answer your question?
No, my question was slightly different. I was talking about our gross margins in Q4 are at about 43% versus 45% last year. While our EBITDA margins in Q4 are at 24% versus 19% last year. Despite 200 basis points decrease in the gross margins, our EBITDA margins have actually expanded by about 500 basis points. This 700 basis points.
True, true. That is a good question. Because of the much higher volume we have in Q4 this year, obviously, you know, the OpEx as a percentage of the revenue has gone down. We also are not letting the OpEx go, you know, haywire. We keep a strict control of the OpEx. These are basically better recovery compared with last year, where the revenues were much lower.
Sure. Also, volume check, if you can share the volume growth for the quarter and full year?
The volume for last year, I mean, the Q4 of last year was 46, and the volumes for this year, Q4 is 50.
Okay.
The volumes for the full year last year was 148, and this year it is 191.
Sure. In addition to this, sir, we are coming out of two years of pandemic, which has seen a change in our revenue mix also. As a one-time exercise, I would request if you can share the mix of men, women, athleisure, kids, Speedo, et cetera, for FY 2023, if that's possible.
You know, in terms of the category mix, we do not publish. The mix hasn't significantly changed is something which I can tell you. During the lockdown period, some of the athleisure mix would have changed. The e-commerce mix would have been better. In terms of product category mix, it is by and large been the same because if one were to look at the growth of each of these categories, they have been nearly uniform across, you know, the non-pandemic months of the past two years.
Sure, sir. That's helpful. I'll get back in the queue for more questions. Thank you.
Thank you.
Thank you. Reminder to the participants, anyone who wishes to ask a question may press star then one. The next question is from the line of Avi Mehta from Macquarie. Please go ahead.
Hi, sir. Congratulations on this result. From whatever I heard till now, there does not seem to be any one-off in the 4 Q numbers. In that case, would you not expect it for FY 2023 being higher than the 2021 nominal range and more closer to the 24% seen in 4 Q?
Mr. Mehta, are you talking about the EBITDA margins or are you talking about?
Yes, yes. EBITDA margin, sir. EBITDA margin.
EBITDA margin, we need to, as we discussed some time back, it is something we need to look at very closely based on the input cost. There is huge pressure there, and we actually may have to touch prices if there's a need to do that. We are closely monitoring the situation. As a brand, we always want to make sure that we are a value for money brand, giving superior products to a consumer and make sure that it's value for money for our consumers. We will be balancing between the two and having a close look at it. Whether we can maintain this current number is something it's beyond our control. The market forces, we need to keep a close watch on it. That is what we are actually doing.
If there is a need, we may touch the prices.
Okay, sir. No, I mean, the reason why I said is you said demand was bullish, and you've been very clear.
Of course.
That's very heartening to see here. You know, that's why I was just assuming that, you know, logically the pressure on margins should be lesser. It seems like that. You have inventory also. Sir, is it that, you know, what we used to see peak over that 4 Q used to be a seasonally higher margin because of the way distribution channels work? Is that what has panned out? Should we kind of start as not looking at quarterly numbers, looking more at the 4 Q numbers? I mean, just trying to understand so that we can better understand the way we should kind of analyze it as we move forward. That was the only reason why I was, you know, posing this question, sir.
Yeah. Yes, Mr. Mehta. There are two things which you actually touched upon. To clarify, historically, our Q1 is the best quarter, you know, and Q4 is subdued. We have had an amazing quarter Q4, but generally if you see. Even though this Q4 was the historic second best, Q1 is generally our best quarter, you know. And that is one aspect. And the other aspect which you talked about is partially true. Yes, the demand is good. And as KC rightly said some time back, this will enable us in ensuring better absorption of cost.
You know what we are, but we need to keep a close watch on the raw material prices because, you know, whether it can or our operational efficiencies and cost controls, whether it can offset this pressure is something only time can answer.
Okay, sir. Okay. Any number you could give? That's the only last question, just a bookkeeping. Any number on what is the inflation like or what incremental price hike do we need based on whatever has happened on cotton? Just understanding because we don't have an idea or we are not able to appreciate how much the yarn prices would have gone up, given that is not an open market.
Mr. Mehta, if I look at last 14 months, the yarn prices are actually doubled. That is what triggered the two price increases which we were forced to do like any other brand. With that and with all the measures we have taken internally, we were able to manage. We are still seeing further upward trend in prices. Certain things were factored in our budgets. If, you know, if this continues, then we may be forced to have a relook at it.
Okay, sir. I wish you lots of luck, and thank you very much, sir, for taking this.
Thank you.
Thank you. The next question is from the line of Nihal Jham from Edelweiss. Please go ahead.
Yes, sir. Thank you so much, and congratulations for the strong performance. Three questions from my side. First, I just wanted to clarify to an earlier question that, you know, in terms of the cost initiatives, is it possible to share what has been the change in our sales and marketing spends? Because looking at other expenses, it looks like maybe that is an item which could have, you know, been controlled this quarter.
Not exactly because we have always made sure that, you know, the spend on sales and marketing is not curtailed to a great extent because, you know, the traction is so high, as you can see with our results. We are performing very well. You know, there is also quite a lot which we need to spend, you know, as far as the stores paraphernalia is concerned to support. These are things as we keep doing the retail expansions, these are things which we don't stifle because these are very essential for the brand and to actually capture the shelf space. You know, we are monitoring the marketing expenses very closely. Yes, that is right.
We are not reducing it or controlling it because we are very, very bullish about the market and the growth, and there is no need for us to stifle that. What we have done is to bring in operational efficiencies wherein how can we produce more with less cost, scope for automation, how can we enable the leadership to manage with less management workforce. You know, we have got leaner and smarter on those fronts. We also looked at other discretionary spends like travel and other things which we are making sure that it's all done very essential. We have very strong budget controls put in place now, wherein those spends, which are discretionary in nature, are well controlled. All essential spends wherever required, we are moving forward and doing it, including spending to strengthen our leadership.
In fact, I'm happy to inform you that we now have onboarded a CPO to our organization, Mr. Ravi Kumar, our Chief People's Officer, because as an organization, we feel, you know, we need to strengthen these areas, and we need a good mentor, guide and coach. As we keep expanding our businesses, our leadership further requires strengthening. Our current leaders needs to be, you know, building up their competencies. We are looking at Mr. Ravi's contribution on that front, wherein he can strengthen the company further as far as creating the culture of learning and development is concerned, culture of customer focus is concerned, and also to build competencies in our leadership and our workforce. We are not holding ourselves back.
That's helpful. The second question was, maybe because of how it was discussed here, that over the last couple of years, we've seen the expansion of around 45-50,000 retail counters. Just wanted to first get a sense of, you know, how does the productivity of these line up and how is the traction been in terms of repeat orders. Also, what is the universe that we understand? Because that's a varying number, where we hear numbers between 1.5-4 lakh outlets that are potentially available. Wanted to hear from your-
Excuse me, Mr. Nihal Jham. Sir, the audio is very low from your line.
I'm so sorry. Am I audible?
Yes. Yes.
Sir, I'll just repeat the question. My second question was that over the last couple of years, we've added around 45,000-50,000 retail counters. Wanted to get a sense of how the traction has been in terms of productivity and repeat orders from these counters. What is the universe size that we estimate? Because the numbers vary from, say, 2 lakh-4 lakh outlets. Just wanted to get a sense from your, you know, analysis about what this number could potentially be for Page.
Gagan, do you want to take that?
Sure, sure, Mr. Ganesh. Thanks so much for the question, Mr. Jham. Actually this is, I think one thing which as an organization we are very excited about, you know, the entire expansion in retail. Because your question is so right about the productivity, and I think, you know, we took a bet during the first year of pandemic when we opened over 14,000 outlets. These outlets contributed, you know, quite significantly to our overall top line, and especially with people moving back to tier three, tier four. Our entire distribution expansion has been keeping in mind where there is an opportunity. It is not an expansion that has happened because we want to expand and we want to reach a certain number.
It is actually bottoms up, where we feel that, you know, the customer base is there, but our presence is somewhat lesser than what it should be. With a strategic thought process, we go and open an outlet there. Also keeping in mind, can this outlet justify the brand Jockey? Right? Because we are a premium brand. Keeping that in mind, this distribution expansion has been done and the repeat order has been over 80%. The good thing is that all these outlets have come back and not only given repeat orders for the ranges that they've been opened with, but for the other categories and further ranges, right? Their productivity, in fact, in the second year has been excellent.
The growth has been much higher compared to the same store because obviously these are new outlets and we've just seeded them. We are very excited about this because it is giving us good results. What should be the actual base? Our strategy is that we serve our outlets ourselves through direct distribution. We are not into wholesale. As and when the outlets have grown, our manpower has also grown significantly, right? But I can confidently say that the scope is there, and we will strategically look at it where we can expand more. I don't see any reason why we should not take it to upwards of 150,000 outlets in the next couple of years. If that answers your question.
Sure it does. I have a few more. Maybe I'll come back in the Q&A for those. Thank you. Thank you so much.
Sure. Thank you. Thank you. The next question is from the line of Saumil Mehta from Kotak Life. Please go ahead. Mr. Mehta, your line is in talk mode. Please go ahead with your question.
Yeah, thanks. Most of the questions have been answered. Just one question to one of the previous participants. If I look at the other expense for this quarter is about, you know, 11%. The annualized one seems to be about 16%-17%. What particular overheads have you also mentioned, why these trends are not being cut? I'm trying to understand it's what kind of other expenses have seen a moderation in this quarter. You know, is this going to be the new run rate for FY 2023, 2024? Or we should expect a much more normalized 16%-17% operating expenses here.
I can take that, Mr. Ganesh.
Yes, please.
Yeah. There is no moderation as far as the overhead is concerned because we are in a different league this year in Q4 as far as revenues compared with last year. All the expenses have grown in absolute terms. As a percentage of revenue, most of them have come down. In terms of advertisement, it is more a timing issue. For the full year, we have spent close to about 2.5% in both years, advertisement. In absolute terms, there is no moderation. Even the staff salaries have grown. All the other OpEx have grown to keep pace with the growth in volume. At the same time, as a percentage of revenue, they have come down. As I mentioned, it is the operating efficiencies and better recoveries of the overhead.
That is the prime reason why the margins are good. Of course, the major driver has been the price increase, selling price increase in at the end of Q3.
Sure. Now taking from there, I'm assuming the operational efficiencies will obviously be continuing given our mandate and, you know, focus on that. Now with a, you know, a focus on athleisure and some of the premiumization, expecting maybe a higher EBITDA margin than what usually or earlier back was about 20%-22%. 20%-22% is that, you know, possible or, you know, you would want to keep that back at about 20-22 and probably, you know, basically pass on to the customer the extra benefits and gain market share.
No, we will be happy with.
What was the normalized back?
We will be happy with 20%-21% EBITDA given the steep raw material price increase. The selling price has increased by 5% in Q1, another 8% in Q3. We would not want to keep on increasing the price and would partially compensate through better operating efficiency and look at the raw material forecast, which we are about to do shortly, the forecast for the coming year. That is where we will be focusing.
Sure. The last question, sir. Can you talk a lot about the kidswear? You know, we have obviously for the last two years, basically invested a lot into that venture. You know, what kind of target in terms of retail touchpoints we have and, you know, what will be the growth rates over there for the last, you know, 15, 18 months?
Gagan, you want to take it?
If I understood your question, this is about the retail touchpoints that you're talking about. How many do we intend or target?
Sir, I'm referring more to the kidswear business where, you know, we have invested significantly. You know, so what kind of retail touchpoints we have in terms of kidswear, and how has that business grown over the last 15-18 months?
The kids business growth has also been in line with the other categories. We have merged it with the women category so that the expansion in the retail footprint happens keeping in mind that, you know, where the mother is going to shop, she's also going to buy for the kids. After merging this business, we have seen a healthy growth in terms of the retail touchpoints. It's pretty healthy as of now in terms of the total footprint that we have. In terms of percentage, it's anywhere upwards to around 25% of our retailers where our kids is present.
Sure. Thank you.
Thank you.
Thank you.
Thank you.
The next question is from the line of Ankit Kedia from PhillipCapital. Please go ahead.
Sir, just wanted to understand, you know, the growth differential between a metro Tier 1 market and a rural market. Are you seeing some pressure points on volumes in the rural market? At the same time, can you share some like-for-like growth in the EBO store metro versus rural market?
You know, we are seeing overall growth. You know, it be it the category or the tiers or cities. In fact, you know, all product categories and all channels have performed well. We are seeing robust growth on all sides. I don't think, you know, there is a big difference there. You know, the trend is on expected lines. I would request Mr. Rahul Shukla to clarify on the EBO part.
Thank you, Mr. Dinesh. Like you said, across all segments of city, whether it is metros or Tier 1 or Tier 3, Tier 4, the growth has been phenomenal, and it's kind of democratic with the same level of growth. It's just that the opportunities that exist are higher in the Tier 3, Tier 4 towns. You will see a largest growth happening in those fronts. In terms of the same store growth, without getting into specifics of numbers, let me tell you the EBOs have been registering robust
Double-digit growth, you know, quarter on quarter for the last several quarters, except for the period where it was probably affected by COVID. It's been a robust EBO performance, you know, as far as the Jockey retail is concerned. Does that answer your question, Suket?
Yes. My second question is on the differential pricing. You know, for the rural market, we have started to launch products which have, you know, slightly lower pricing compared to the metro markets. How is the response of the consumer, the rural consumer out there, and are you facing some backlash from the metro distributors or in the EBOs in those cities who might want the same product but it's not available?
Well, we don't have any specific products which is targeted for the rural market. In fact, we work on our PG, and they just happen to be in the rural market. You know, the appetite for our products when we see how our products are performing in metros, one, two, three and four, we hardly see any difference. We are not seeing any such impact. In fact, we have not felt the need for coming out with product which is exclusive for rural market.
Okay, because in the market, you know, channel check suggests that we are releasing vests for men, which are at INR 399 compared to in the metro markets, you know, those are at INR 550 or so.
Well, those products are available in all markets. It's not kind of dedicated or focused for the rural market. Actually, those products are performing well across markets.
Sure. Sir, my last question is regarding the international expansion. We are seeing in the Gulf market, you know, we are steadily expanding our EBO presence. From a three-year perspective, if you can just outline your international expansion plans and how do we do business out there? Are the stores on franchise basis how they are in India, and how does the supply chain work for those markets? Okay.
You know, I will ask later on Gagan to explain further, but you know, just to Ankit, just to give you a brief, we are seeing huge potential as well as international market is concerned, and this is one area where we have started working on, and we have now dedicated leadership to drive this market. Of course, yes, you, as you rightly said, our focus is now more on the Middle East because you know, some of our licenses. The situation is not all that good. It's temporary. Now, you know what is happening in Sri Lanka. With those economic situations, you know, we are focusing more on the Middle East side of the business. Our products are well received, and we are seeing huge potential, huge traction there.
Today, the business is around 1%. Our international business is around that much. Since the overall business is growing, you know, this will be around those numbers as we move forward. The growth opportunities are tremendous, and we are focusing on it. Gagan, you want to add more light on to?
No, thanks, Mr. V.S. Ganesh. I think you've actually, you know, covered it. Yes, in terms of opportunity, we do see huge potential in international, and we are currently focusing in Middle East. We did want to, you know, in terms of positioning our brand, we wanted to focus on the number of EBOs. You rightly, you know, observed that in terms of EBO presence, it is expanding in the Middle East. It's gone up from four to eight as of now. We'll continue to focus here. At the same time, we are evaluating our strategy, you know, quarter-on-quarter in the other markets. It is a franchisee-based model as in India.
We work with a partner who can justify the entire Jockey brand and position it in the right manner. Basically, yes, it is the model is more or less same as in India. Just that the partner would manage multiple channels. That's about it.
That's helpful. Thank you so much, and I'll put back to you.
Thank you.
Thank you. The next question is from the line of Bharat Gianani from Moneycontrol Pro. Please go ahead.
Yes, sir. Congratulations for a great set of numbers and. Sir, my question is on the revenue growth side. What is the kind of target that you have for the next two to three years for the revenue growth? And can you please split that number between the volume growth and because of the raw material price? I know it's a bit difficult, but some comments on that side. What could be the pricing growth and any particular category that you would feel that it could outperform as compared to the overall growth rate for the company over the next two to three years? That would be my question. Thanks.
Mr. Bharat, you know, you know, we are looking at $1 billion by 2025, can be safe. If, if, you know, we drive our business the way we are doing it, we may be able to even accelerate that ambition. In fact, we are now looking at $2 billion and beyond. As a management, we are working on those aspirations, and we are very well poised to conquer those heights. We are working very hard on that front. It is easily possible for us to bring and achieve those numbers, because as you know, our penetration is not that high and there's so much headroom for us to grow. If you see the men's innerwear segment, we are 16%-18% market share.
When it comes to women athleisure, juniors, we are single digits. There is so much we need to do. There is so much potential there. We are working and firing on all cylinders on all fronts to achieve those targets. As far as category growth is concerned, and we were also talking about price. Price will be based on the overall input costs and other things. It's very, very difficult to predict how the price movements will happen. In fact, if you see historically, we adjust prices between 4%-5% year-on-year. Last year was unprecedented. For the first time, I think we did two price increases.
This is to do with the raw material and input price pressures which we are seeing and we don't know how long it will last. That part is very difficult to predict as things stand now. However, I do see opportunities and I do see the premiumization happening because even in the men's innerwear category our consumers are preferring more premium products. We are seeing tremendous growth on all categories including men's innerwear. In that we are also seeing higher growth rates on International Collection or International Collections and other higher premium ranges compared to the Modern Classic. You know that is one. You know, since our penetration is lower on high ASP categories like athleisure, bras, obviously it will continue to grow on an accelerated rate and that will bring us some premiumization.
We do keep a, you know, we do work on those very, very closely as those are categories which has huge potential. We are very happy to see that our men's innerwear is also equally performing and it's well received. Our products are well received in the market and clocking very good growth. To answer your question, you know, premiumization definitely yes, it is happening. Price increase as a percentage is dependent on many factors. With the current volatile situation we are unable to predict and give you a guidance.
Okay, that covers very well. Thanks around the list. Thank you.
Thank you. Next question is from the line of Himanshu Nayyar from Yes Securities. Please go ahead.
Yeah. Hi, good afternoon, gentlemen, and thanks for taking my question and congrats on a great set of numbers. Firstly, if you can just talk about our capacities and the utilization rates and the capacity expansion plans, because I believe we were running close to—I mean now we might be running close to optimum capacity. What are our CapEx plans for the next two to three years and whether we need to rely more on outsourcing directly to fulfill the current demand?
Well, capacity utilization is close to 80%, our in-house capacity utilization. We do have a long-term plan. We do have three-year plan based on the business growth. We do make our CapEx plans including expansions in line with our long-term business plan. There are expansions happening at, you know. In fact, one of our major investments which is happening in the state of Odisha, that plant is likely to be operational by Q4 of this year. This is all in line with our capacity expansion. As regards outsourcing is concerned, yes, as business grows, outsourcing will also grow. As I see it will be around 30% of the overall business and 70% will be through our in-house manufacturing.
Even this 30% outsourcing, the growth which will happen will be mostly from our current vendor base because we work very closely with the vendor partners. In fact, they are an extended arm of Page when it comes to quality and standards. We manage it very closely. We outsource operations and make sure the products are exactly as what we produce in-house. You know, close monitoring on the standards, the processes and the quality of the product. It is easier and better for us to grow the existing vendor base rather than explore newer and newer vendors. We have strong strategic alliance with the vendor partners and we have chosen vendor partners who have the ability to reinvest in the business and grow the business along with our growth.
To answer your question, the outsourcing will be mostly around 30%-33% of our overall volume.
Got it, sir. Secondly, you, I mean, made a comment in your initial remarks on Speedo. So if you can just share some outlook on that business and the current, and give us some idea on the current size of that business and in terms of profitability, whether, I mean, that also generate similar profitability to our existing businesses.
Speedo has recovered well. You know, it is mainly because, you know, the pools were closed during the pandemic, and therefore we had hardly had any sales. It has recorded good growth as the pools have started opening up. You know, it is early days as profitability is concerned because as you know, with hardly any sales in the last couple of years, you know, we need to look at it like a new startup and turn this around very quickly, and that is what we are working on. You know, we are looking at this business in as a long-term investment because swimming as a sports activity in India is still in its nascent stage, but it's growing steadily.
You know, in fact, as per the market study done, India is the fastest growing swimming market, and therefore we do see the long-term potential in the brand. We feel it's prudent for us to stay invested, nurture the brand, and reap the benefits by being a bit patient there. As of March, end of March 2022, Speedo brand is available in around 1,340+ stores. Our EBO count is around 26, so it has reduced a bit because, you know, two years of no business was difficult for many of our partners to manage. That is something we are reviving. We entered large format stores spread over 90+ cities.
With this reduction in even in EBO, we are able to actually see the same kind of volumes which we are getting of late in the last two, three months. It is as good as the pre-pandemic levels. When we actually increase our EBO counts and all that, there can be accelerated growth to the Speedo market because swimming market, you know, the swimming, swimwear market in India is going to be the fastest growing market. We firmly believe we should stay invested and nurture this brand. Our outlook as far as Speedo is concerned is very positive in the long term.
Thank you, Mr. Nayyar. May we request that you return to the question queue for follow-up questions. Next question is from the line of Bhargav Buddhadev from Kotak Mutual Fund. Please go ahead.
Yeah, good evening and thank you for the opportunity, and congrats for the good set of numbers. My first question is that, if you look at Page's expansion in FY 2022, the MBO footprint has grown almost 42%, and the EBO footprint has grown by about 21%. Is it possible to share how much of this footprint has been opened in newer markets, and how do we ensure that there is no risk of cannibalization in the existing markets?
Mr. Bhargav, I feel on the MBO, Gagan will be the right person to clarify, and Mr. Rahul would be happy to clarify on the EBO side of that. Can I request Gagan first to clarify?
Yeah. Thank you. Thank you, Mr. Ganesh. Expanding our retail footprint, you know, has been a strategy that we thought we really need. As I mentioned in an earlier question, we did that keeping in mind our existing presence. You know, be it in terms of geotagging all our existing outlets, where we are present, what is our target customer in each city, each town, and are we adequately present there in terms of dealer per lakh. Where we felt that we are under-penetrated or let's say there is an opportunity to upscale, is where we opened a new retail store, right?
It was not to basically reach a certain number which is desirable, but actually, you know, going in a strategic manner where the customer needs our presence, and in order to service the customer in a better manner, we have opened the outlet. To answer your question, these outlets have come out, you know, with a very good throughput, and they've given us repeat orders. At the same time, our other outlets have also continued to grow. We are getting a very healthy and robust growth from our existing stores and at the same time from the new stores. Because as I said, it is not just to reach a certain number and opening one outlet next to another where you're already available, but keeping in mind where, you know, there is an opportunity.
This journey will continue. We further see this opportunity, and the expansion has been equal in tier three and tier four towns as in metros and mini metros. You know, because there is an opportunity within metros as well, you know, to further scale up. It's been done in a bottoms-up approach in a very, very strategic and a scientific manner, if that answers your question.
Sure. Just to continue on that, the geotagging bit, now that you are using a lot of technology, is it possible to know what has been the volume growth in FY 2022 from your outlets which are more than two years old, which includes both MBOs and EBOs?
As I said, you know, we have captured the segment-wide growth in terms of, you know, which outlet gives us how much revenue and how much we have grown. It's healthy across. There is nowhere that we have seen a degrowth or a lesser growth. You know, even our top outlets, you know, the ones who are very, very significant, have also grown with a very healthy double-digit number. At the same time, the bottom outlets have also contributed in a similar manner. We are capturing both the volume and the value, and we monitor it on a monthly basis.
Add to that, again, Mr. Bhargav, to what Praveen has said, you know, the very fact that our same-store performance has been robust and double-digit like over the last several quarters, which demonstrate that we, you know, we ensure due diligence when we go out and open stores. There's a proper scientific process of gap analysis when we open stores. Of course, we are a multi-channel brand, and we exist across e-commerce, MBO, the exclusive brand stores. Our strategy is to, you know, there are consumers who are shopping from various places, and our strategy is to reach out to each channel and occupy a leadership position there.
There might be a little bit cannibalization, but in terms of the overall benefit to all stakeholders is substantial.
Okay. Great. Thank you. Thank you for answering my questions, and all the very best.
Thank you. The next question is from the line of Omkar Kulkarni from Shree Investments. Please go ahead. Mr. Kulkarni, your line is in talk mode. Please go ahead with your question.
The first question is regarding the dividend distribution policy.
The dividend, we try to distribute 50% of the PAT as dividends. In many years, we have exceeded. It's also a function of the surplus cash which we carried in 2019. We declared a special dividend. Overall, the policy is to distribute a minimum of 50% of the PAT.
Okay. Can you talk more about the upcoming expansion which you are doing and the asset turn you are expecting on that?
As at present, the asset turns are close to about 12-13. I mean, the fixed asset turnover ratio, as I call it. Going forward, it will vary depending upon, you know, the capital, the new facility which is coming up in Odisha in a couple of years from now.
That will vary. We will more or less in a stable state, we would be around this kind of asset turns.
Okay. The existing capacity is sufficient enough to take care of the demand with the healthy growth which you are telling.
Which is what Mr. V.S. Ganesh is not answering earlier.
Mr. Omkar Kulkarni, you know, as the volume growth is very healthy, the existing capacity is not enough to meet the demand. This is where we do have expansion plans. We are with our current capacity, we are okay, but for the next year and the long run, we need to expand. That is where the investments are being made, both on increasing the sewing capacity, so producing more products, and also on the backward integration.
Now, the t here is a huge expansion which is happening on the elastic plants of ours. As you know, we produce our own elastics mostly because this is one of the most vital components to ensure the superior quality of the product which we are offering to our consumers. There is investments happening, strategic investments happening on all those backward integration projects as well. Expansions are happening. In fact, even on the expansion by way of capacity, there is also investments happening in further strengthening our technologies, the IT investments, and also in our leadership. In fact, Mr. Kulkarni, we used to tell way back even in years 2018 and 2019 that we are making investments for the future, and we were investing heavily on technology to a lso on leadership, on attracting the best of the talent.
Today, we are enjoying the benefits of that, you know, and we will continue to work on those aspects, and we'll continue to invest to grow the business. You know, as you know, succession planning has always been in the forefront of the strategic plan. The speed at which our business is growing, we are in the process of making the organization future ready. In fact, as I told you some time before, it's not now. We are not looking at billion dollar, but we are looking at a journey which is beyond billion dollar for the second billion and further. In order to be ready for this ambitious growth plan, along with capacity expansion, we need to also create a very robust organization. Okay. What we are trying to do is to t hat's where I told you some time back.
We have also taken our CPO on board, and we are also having a lot of investment being made on our leadership to take full advantage of the rich talent which we have and to optimize the use of the talent within the company at all levels, especially at the senior level. Fortunately, we are very lucky and blessed to have a very strong leadership team full of talent, and many of them can do much more than what they're doing today. We are investing to make sure that they build those competencies and they can take on more richer and higher responsibilities.
We believe this restructuring, which we have been doing all these years, this journey will continue, and this is what is required for us to keep the growth trajectory along with all the investments which we are making on our facilities, the expansion of factories, for garment manufacturing and for our backward integration projects.
Okay. The expansion could be the brownfield or greenfield? Okay.
Pardon? Mr. Kulkarni, I missed you there.
No, I was just asking. You just told that.
Sorry to interrupt you, Mr. Kulkarni. May we request that you return to the queue for follow-up questions?
There is no brownfield. It will be greenfield expansion only.
Thank you. We'll take the next question from the line of Tejash Shah from Spark Capital. Please go ahead.
Hi. Thanks for the opportunity and congrats on very good second half numbers.
Mr. Kulkarni, sorry to interrupt you. The audio is breaking from your line, so please check.
Is this better?
Yes.
Hello. Yeah. Yeah. Thanks for the opportunity.
We can hear you better now.
Yeah. Thanks. So my question pertains to your observation or comment that you made on penetration of add back. Now, very intuitively, someone like me who has followed your product portfolio evaluation in the last 10 years, it seems that we have got more wardrobe share from the same customer, outpacing perhaps the recruitment of the customer. Now, since you track a lot of data at the end now, do you think that our customer base expansion is materially low than our wallet share gain or is this observation misplaced?
Mr. Shah, you know, with the kind of retail expansion which is happening and as we keep opening new doors, obviously we are also acquiring new customers. The wallet share is also increasing because of two reasons. One, the price which we offer and the comfort and fit which we offer and the quality, we have many loyal customers, and it is also supplemented by our product range expansion. We have much more products to offer today, which will naturally mean that the wallet size increases because there are more options to buy for our customers who have been loyal with us for all these years.
I can say it's a combination of the wallet size increase as well as acquisition of new customers, which is happening because of the exciting products which we are coming with and also with the retail expansion which is happening on the ground.
Sure. Just second question pertains to the current scenario in inflation. Then we are hearing from company after company that this has been kind of unprecedented at least in the recent times. Now, keeping that in mind and keeping our longstanding guidance on margins remaining around 20%-22%, do you think that this kind of inflationary pressure might trigger some form of downgrading within the customers and we might have to tactically forego this adherence to this band for a while to retain market share or to support the expansion that we have done in the recent past?
Not exactly because our products, as you know, are not high ASP products. Our products are essential products, and I think Jockey as a brand, we are in a sweet spot because our products are relevant across the year. During these times when, you know, there is a pressure on the wallet of our consumers, they may not prefer to buy seasonal products. In fact, we have products which are multifunctional, multi-utility, so you can wear it in your home. You can also take a one-mile walk with the product, and it's not seasonal. You know, you can wear it year-round.
When we have such offerings and value for money proposition and the trust which we have built as a brand over the years, actually we see this as an opportunity and that is what we are seeing when we see the response from our consumers are concerned.
That's very helpful, sir.
More of an opportunity for us.
Fair enough, sir. All the best, and thanks.
Thank you. Thank you.
Thank you. Ladies and gentlemen, due to time constraints, we will take that as the last question. I would now like to hand the conference over to Mr. Chandrashekhar, CFO of Page Industries, for closing comments.
Thank you very much all the participants. Some really fascinating questions. As always, in every call I learn more about our own business from the various insights that you give us, and keep encouraging us and keep cheering for us. There is still a long way to go. Have a good day. Bye-bye.
Thank you. Ladies and gentlemen, on behalf of Page Industries Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.