Indo Count Industries Limited

K.R. Lalpuria

EXECUTIVE DIRECTOR AND CHIEF EXECUTIVE

K. Muralidharan

CHIEF FINANCIAL OFFICER – INDO COUNT INDUSTRIES LIMITED

rs,

e keeping safe and healthy. I have with me Mr. Muralidharan, our CFO and Strategic Growth Advisors, our Investor Relation Advisors. Happy to connect with you all once again to discuss the Q1 FY23

1%

ases. However, as per the latest retail sales data by NRF, US Retail Sales in June 2022 were up 1% from May 2022 and up 8.4% on a year-on-year basis. The domestic demand for home textiles in Ind

8.4%

e latest retail sales data by NRF, US Retail Sales in June 2022 were up 1% from May 2022 and up 8.4% on a year-on-year basis. The domestic demand for home textiles in India is also expected to con

Rs.50 Crore

solidated financial performance. Kindly note that Q1 FY22 financial includes ROSCTL benefits of Rs.50 Crores for the period of January 1, 2020, to March 31, 2021. We will compare our performance therefor

Rs.722 Crore

will compare our performance therefore excluding this income of prior period. Total income is Rs.722 Crores in Q1 FY23 versus Rs.709 Crores in Q1 FY22, an increase of 2%. Gross profit of Rs.455 Crores

Rs.709 Crore

erefore excluding this income of prior period. Total income is Rs.722 Crores in Q1 FY23 versus Rs.709 Crores in Q1 FY22, an increase of 2%. Gross profit of Rs.455 Crores in Q1 FY23 versus Rs.386 Crores

2%

riod. Total income is Rs.722 Crores in Q1 FY23 versus Rs.709 Crores in Q1 FY22, an increase of 2%. Gross profit of Rs.455 Crores in Q1 FY23 versus Rs.386 Crores in Q1 FY22. Gross margins stood

Rs.455 Crore

s Rs.722 Crores in Q1 FY23 versus Rs.709 Crores in Q1 FY22, an increase of 2%. Gross profit of Rs.455 Crores in Q1 FY23 versus Rs.386 Crores in Q1 FY22. Gross margins stood at 63.1% in Q1 FY23. This h

Rs.386 Crore

Rs.709 Crores in Q1 FY22, an increase of 2%. Gross profit of Rs.455 Crores in Q1 FY23 versus Rs.386 Crores in Q1 FY22. Gross margins stood at 63.1% in Q1 FY23. This higher gross profit is attributable

63.1%

ross profit of Rs.455 Crores in Q1 FY23 versus Rs.386 Crores in Q1 FY22. Gross margins stood at 63.1% in Q1 FY23. This higher gross profit is attributable to higher contribution of value-added

Rs.144 Crore

ze over subsequent quarters. .1,. ). 4. INDO COUNT Complete Comfort"I. EBITDA Rs.144 Crores in Q1 FY23 versus Rs.128 Crores in Q1 FY22 an increase of 150 bps. EBITDA margin stood at 19.

Rs.128 Crore

.1,. ). 4. INDO COUNT Complete Comfort"I. EBITDA Rs.144 Crores in Q1 FY23 versus Rs.128 Crores in Q1 FY22 an increase of 150 bps. EBITDA margin stood at 19.5% in Q1 FY23 as compared to 18%

“see that we gain more market shares going forward in the value-added business.”

“K.R Lalpuria: This we will be able to provide you later, but that we will provide offline.”

“Going forward as you rightly mentioned that levels are being quoted for December futures at 65,000; we are waiting and watching the situation very closely and we are updating our customers, communicating with them more and more to see that they have a full track of the trend which is following and we take them into confidence to see how we can jointly make a business plan and scale up our business to gain their market share in their own market.”

“The US market do have inflation, but we all believe that the inflation will be tackled by the respective government going forward in FY24.”

“We all feel positive going forward as far as the demand is concerned in some of our major markets like US and the other developed markets like EU, UK, Australia, GCC countries, South Africa, and Latin America.”

“So, we feel quite confident that going forward, as a country, as a company we are well positioned and should do well.”

Ria

4

Riya

1

Riya

Thank you for giving me an opportunity. I wanted to ask two questions. First would be what would be percentage of the value-added products this quarter and how much margin or how much EBITDA would be attributed from that and how much would be inventory gain for us? K.R Lalpuria: We had reported in our earlier Con-Call that our fashion bedding business is almost 17% of our business, which is the value-added business. Secondly we are doing 10% of branded business in our revenues which also overlaps in our fashion bedding businesses. Our e-commerce business would scale up to 8% plus where we have an opportunity to promote license brand business. Our domestic brands businesses both Boutique Living and Layers are scaling up to 3% plus going .1,. ). 4. INDO COUNT Complete Comfort"I. forward. All these branded businesses, distribution business, omni channel etc., are providing us the necessary value addition. As I mentioned in my earlier statement that our focus is entirely to fragment our bu

Ria

Okay, that would be great. My second question pertains to what would be percentage of inventory gains in this quarter? K.R Lalpuria: This we will be able to provide you later, but that we will provide offline.

Ria

Okay, but if you could just give a directional sense on it? K R Lalpuria: As you know that there is a sluggish offtake and in order to service business, we need inventory and as a company we have been investing into inventories. Secondly, we have advantage getting reflected into our quarter also in form of gross margin, which you can observe very well. Next, in order to service the business also like for example when we promote e- commerce we need inventory, when we promote domestic business, we need inventory, when we promote distribution in the US we need inventory, .1,. ). 4. INDO COUNT Complete Comfort"I. when we promote in the UK distribution we need inventory. We have to service the businesses where we need to invest into inventory to provide the necessary supply chain security to our customers, that is what is making us as a company to invest into the supply chain. We are looking up to this as an opportunity to build business and to improvise our competitive advantage overall; p

Ria

Yes, completely understand. Also, directionally since you are saying that the cotton future prices are reduced at 65,000 odd levels whereas the current levels of 86,000 – 87,000 the current prevailing levels, are you seeing any orders or any .1,. ). 4. INDO COUNT Complete Comfort"I. enquiries at these current level because industry says there is no such order booking which is happening right now. What is your take on it? K R Lalpuria: As I mentioned earlier we are hedged for the next two quarters and this has arrived lower levels than what the current candy price is. Going forward as you rightly mentioned that levels are being quoted for December futures at 65,000; we are waiting and watching the situation very closely and we are updating our customers, communicating with them more and more to see that they have a full track of the trend which is following and we take them into confidence to see how we can jointly make a business plan and scale up our business to gain their market shar

Ria

Okay, and from demand perspective I wanted to have a sense on since US is drying up, US and Europe we are seeing some slump. In this coming next one – two quarter apart from inventory getting .1,. ). 4. INDO COUNT Complete Comfort"I. clustered, what other headwinds or tailwinds do we see in the export market? K R Lalpuria: As I mentioned, even in the US, the retail is doing well; only the discretionary purchase is not there, which the end customer was doing sometimes back. The inventory built up happened because of the mismatch in the supply chain because the goods arrive delayed post the holiday seasons and that is why they carried up and then the third wave of the covid knocked down a couple of months’ sales and this accumulated inventory they are getting a traction, as of now, as we speak, slowly and the demand, we can see that getting revived in the third quarter hopefully, this is for the US market. The US market do have inflation, but we all believe that the inflation will be tac