Dollar Industries Limited

Ankit Gupta

PRESIDENT, MARKETING, DOLLAR INDUSTRIES LIMITED

Ajay Patodia

CFO, DOLLAR INDUSTRIES LIMITED

Shreya Baheti

ANAND RATHI SHARE AND STOCK BROKERS LIMITED

77.13%

performance in terms of revenue as well as volume growth. Our total revenue has shown a growth of 77.13% year-on-year, led by volume growth of 54% year-on-year. Our EBITDA has shown a growth of 9.71% in

54%

lume growth. Our total revenue has shown a growth of 77.13% year-on-year, led by volume growth of 54% year-on-year. Our EBITDA has shown a growth of 9.71% in comparison to the same quarter last year,

9.71%

of 77.13% year-on-year, led by volume growth of 54% year-on-year. Our EBITDA has shown a growth of 9.71% in comparison to the same quarter last year, but EBITDA margin has declined on account of increas

INR 35 crore

n the raw material prices, which is still very dynamic. In current quarter, we have spent around INR 35 crore on advertisement, whereas it was INR 14.65 crore in the same quarter last year. This expenditure w

INR 14.65 crore

dynamic. In current quarter, we have spent around INR 35 crore on advertisement, whereas it was INR 14.65 crore in the same quarter last year. This expenditure was mainly sponsoring IPL 2022, launching of our n

5%

quarters. For the FY'23, we are maintaining the target of our advertisement expenditure at around 5%, 5.5% of our total revenue. Our domestic sales showed a growth of 81%, while export sales was 36%

5.5%

ters. For the FY'23, we are maintaining the target of our advertisement expenditure at around 5%, 5.5% of our total revenue. Our domestic sales showed a growth of 81%, while export sales was 36% and mo

81%

isement expenditure at around 5%, 5.5% of our total revenue. Our domestic sales showed a growth of 81%, while export sales was 36% and modern trade e-commerce sales showed a growth of 112% on a year-o

36%

5%, 5.5% of our total revenue. Our domestic sales showed a growth of 81%, while export sales was 36% and modern trade e-commerce sales showed a growth of 112% on a year-on-year basis. Apart from ou

112%

d a growth of 81%, while export sales was 36% and modern trade e-commerce sales showed a growth of 112% on a year-on-year basis. Apart from our flagship brand, Dollar Man and Dollar Always, we have se

95%

th the brands have given a good growth in terms of volume. Force NXT has given a volume growth of 95%, whereas Dollar Woman has given a growth of around 65%. During the quarter, the number of distrib

65%

ume. Force NXT has given a volume growth of 95%, whereas Dollar Woman has given a growth of around 65%. During the quarter, the number of distributors under Project Lakshya increased to 174 versus 14

“We have continued on our growth path and the tone set in the previous year for growing our revenue, growing distributors under our Project Lakshya, expanding our channel financing scheme to the distributor and increasing our EBOs.”

“For the FY'23, we are maintaining the target of our advertisement expenditure at around 5%, 5.5% of our total revenue.”

“During the quarter, the number of distributors under Project Lakshya increased to 174 versus 142 as on 31 March, '22.”

“We have also started rolling out this project in the state of Orissa and Bihar.”

“We have received positive response of 250 dealers, out of which 160 dealers are already onboard, and the others will be onboarded within a short span of time.”

“We expect to onboard several more distributors every quarter, and we'll continue to improve our receivable and overall working capital requirement.”

“We are aiming to add 25-plus EBOs during the year.”

“So since our margins have been lower in Q1 because of higher advertisement and higher raw material costs, so given this fact, what kind of full year margins you are targeting now in this year versus your earlier guidance of around 17%?”

“Ankit, the thing is that with regards to EBITDA margin, our initial guidance was somewhere around 16.5%, 17%.”

“We still aspire to be there on a yearly basis.”

Ankit Gupta

11

Dhananjay Mishra

8

Ajay Patodia

2

Bajrang Bafna

2

Moderator

2

Shreya Baheti

1

Ankit Babel

1

Dhiral Shah

1

Shreya Baheti

Good day, ladies and gentlemen, and a very warm welcome to the Dollar Industries Limited Earnings Conference Call hosted by Anand Rathi Share and Stock Brokers. 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 ‘*’ then ‘0’ on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Shreya Baheti from Anand Rathi Share and Stock Brokers. Thank you, and over to you, Shreya. Thank you, Ali. Good morning, everyone. On behalf of Anand Rathi, I welcome you all for Q1 conference call for Dollar Industries. From the management side, we have Mr. Ankit Gupta, President, Marketing; and Mr. Ajay Patodia, CFO. We will start with opening remarks from the management and then go forward with the Q&A session. Over to you, sir. Dollar Industries L

Ajay Patodia

Thank you, Shreya. Good morning, ladies and gentlemen. On behalf of the entire management team at Dollar Industries, I welcome you all to the first quarter FY'23 post-results conference call. We have continued on our growth path and the tone set in the previous year for growing our revenue, growing distributors under our Project Lakshya, expanding our channel financing scheme to the distributor and increasing our EBOs. The company has given robust performance in terms of revenue as well as volume growth. Our total revenue has shown a growth of 77.13% year-on-year, led by volume growth of 54% year-on-year. Our EBITDA has shown a growth of 9.71% in comparison to the same quarter last year, but EBITDA margin has declined on account of increase in the advertisement expenditure as well as the fluctuation in the raw material prices, which is still very dynamic. In current quarter, we have spent around INR 35 crore on advertisement, whereas it was INR 14.65 crore in the same quarter last year

Ajay Patodia

around 46%; Missy, around 9%; our regular brand, Dollar Always, contributed around 39%; and Dollar Socks, around 1.5%; and our premium brand, around 3.5%. I now open the forum for question and answer. The first question is from the line of Ankit Babel from Subhkam Ventures. Please go ahead. Sir, a couple of things. So since our margins have been lower in Q1 because of higher advertisement and higher raw material costs, so given this fact, what kind of full year margins you are targeting now in this year versus your earlier guidance of around 17%? Ankit, the thing is that with regards to EBITDA margin, our initial guidance was somewhere around 16.5%, 17%. We still aspire to be there on a yearly basis. But the market has been so dynamic, and there has been a lot of fluctuations in terms of cotton prices and the yarn prices. Plus, in the first quarter, we advertised a lot, due to which the margins are looking a bit on the lower side. So we aspire to be there on a yearly basis. We still ar

Ankit Babel

Okay. And sir, have you taken any price hikes recently? Or are you planning to take any price hike? Because we have high-cost inventory. Dollar Industries Limited August 11, 2022

Bajrang Bafna

We already take the price hike in the 1st week of April. We have fluctuation in the cotton pricing and yarn prices. We don't think another price hike will need to be taken in the 1st week of July. But due to price hike in April, we already get our gross margin increased by 1.5% from last quarter, March quarter. Yes. So in the coming future, it will depend only on the movement of the raw material cost, actually. No, I understand. Why I was asking because you would be having some high-cost inventories. So can it impact your gross margins in Q2? No. Because basically, in a thermal year, our winter-wear products, the product margin level is more than the normal. There will be no such decline that we see in the gross margin levels in Q2. The next question is from the line of Bajrang Bafna from Sunidhi Securities. Please go ahead. Congratulations for the good growth that has been achieved during this quarter. Yes, we have certain disappointment in terms of margins, but as you highlighted, th

Ankit Gupta

See, the target to get the Woman segment in prominence is our focus point. Definitely, it's our focus point. But the thing is that on a volume basis, so the volume for Big Boss, Dollar Man and Dollar Always, like the regular economy range of products, is so high that the percentage change which has been seen is not much. It is non-differential, I would say, even though we are at 9.5%. But like by FY'25, we are hoping that we'll make this a INR 200 crore, INR 250 crore business, the Dollar Woman. But when we see it as a percentage of sales, it will be somewhere around 11%, 11.5%. Okay. Got it. And any development on this JV side which you could highlight, both on the export side, how our strategy is going to pay off and this JV development? That's all from my side. So on the JV side, towards the end of the third quarter, only the new partner came in, G.O.A.T Brand Labs. And for the first quarter revenue, we have seen 175% kind of a growth, from INR 1.29 crore in the first quarter last y