DOMSNSEQ2 FY'26November 15, 2025

DOMS Industries Limited

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94turns

9analyst exchanges

2executives

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Management on call

Rahul Shah

CHIEF FINANCIAL OFFICER – DOMS INDUSTRIES LIMITED

Aniruddha Joshi

ICICI SECURITIES LIMITED

Key numbers — 40 extracted

24%

T 2.0 transition, we continued our growth momentum in Q2 FY '26 with an increase in sales of over 24%, marking yet another milestone in our journey, showcasing the resilience of our business model an

rs,

on some of our core products creates a level playing field between organized and unorganized players, providing better market penetration opportunities and shift in demand towards branded products.

INR567.9 crore

the details of our financial performance. Consolidated operating revenues for Q2 FY '26 stood at INR567.9 crores, a growth of 24.1% compared to the same quarter last financial year. This increase in sales was

24.1%

performance. Consolidated operating revenues for Q2 FY '26 stood at INR567.9 crores, a growth of 24.1% compared to the same quarter last financial year. This increase in sales was predominantly on acc

18.5%

rage selling prices. Our international business continued its steady growth trajectory, recording 18.5% growth in gross product sales year-on-year during the quarter. During this period, the domestic

28%

les year-on-year during the quarter. During this period, the domestic gross product sales grew by 28%. The consolidated EBITDA for Q2 FY '26 grew by 15.8% to INR99.5 crores as compared to INR85.9 c

15.8%

od, the domestic gross product sales grew by 28%. The consolidated EBITDA for Q2 FY '26 grew by 15.8% to INR99.5 crores as compared to INR85.9 crores in Q2 FY '25. The EBITDA margin for the quarter s

INR99.5 crore

omestic gross product sales grew by 28%. The consolidated EBITDA for Q2 FY '26 grew by 15.8% to INR99.5 crores as compared to INR85.9 crores in Q2 FY '25. The EBITDA margin for the quarter stood at 17.5%. Th

INR85.9 crore

ew by 28%. The consolidated EBITDA for Q2 FY '26 grew by 15.8% to INR99.5 crores as compared to INR85.9 crores in Q2 FY '25. The EBITDA margin for the quarter stood at 17.5%. This consistent maintenance of E

17.5%

9.5 crores as compared to INR85.9 crores in Q2 FY '25. The EBITDA margin for the quarter stood at 17.5%. This consistent maintenance of EBITDA margins towards the upper end of our guided range of 16.5%

16.5%

17.5%. This consistent maintenance of EBITDA margins towards the upper end of our guided range of 16.5% to 17.5% demonstrates our operational efficiencies and a robust business model of balancing

INR60.9 crore

growth-led approach with prudent execution. The profit after tax for the quarter stood at INR60.9 crores with growth of 13.4% over the same period in the previous financial year. The PAT margin for the

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Guidance — 20 items

Rahul Shah

opening

“We believe these reforms, coupled with the income tax reductions introduced in budget 2025, will have a long-term positive impact by increasing the disposable income and uplifting consumer sentiment, thereby creating a favorable environment for business growth and boosting demand, coincidentally aligning well with the planned commercialization of our flagship 44- acre expansion project.”

Rahul Shah

opening

“Coming to our expansion initiatives, we are progressing steadily on our expansion trajectory with our 44-acre project, albeit with slight construction delays on account of prolonged and intense monsoon conditions.”

Rahul Shah

“Again, it's very specific to our consumer, towards our target audience of children.”

Rahul Shah

“But going forward, certain orders have been postponed and that have -- the capacities for that have been diverted to other growing markets.”

Rahul Shah

“perspective, in the current quarter and going forward, there will be an impact until the tariff issue is not resolved.”

Rahul Shah

“So now with the new 44-acre plant soon coming into production, we definitely intend to get into manufacturing of tips.”

Rahul Shah

“But going forward, GT will continue to be close to about 75% of our overall sales.”

Aradhana Jain

“And going forward, where do we see that increasing to in the near-term or is this the level at which we'll be operating?”

Rahul Shah

“So now you see right now, like I said, the next large chunk of the infrastructure that we will have is from the 45-acre project where the first building we're going to use it for expanding our capacity for pencil and after that, we'll again start increasing capacities for other writing instruments like pen, highlighters, markers, sketch pen.”

Rahul Shah

“So it will always -- yes, so it will be linked to capacity, Aradhana.”

Risks & concerns — 10 flagged

I'm happy to share that despite the impact of GST 2.0 transition, we continued our growth momentum in Q2 FY '26 with an increase in sales of over 24%, marking yet another milestone in our journey, showcasing the resilience of our business model and reflecting the strength in demand of our products.

— Rahul Shah

It's really difficult to quantify as such how much we would have done better if this transition impact was not there.

— Rahul Shah

So overall, I don't see a significant impact of this on the margins of the company.

— Rahul Shah

So in the last quarter, specifically, we did not see any significant impact of U.S.

— Rahul Shah

Aradhana, see, if you look at first half of the year and compare it with the first half of the previous year, a significant growth in the first half in the current year was due to the consolidation of impact of Uniclan.

— Rahul Shah

So, Priyank, it's very difficult to quantify because see something, like I said, we've had a significant increase in our sales team also.

— Rahul Shah

So it becomes a little difficult to quantify as such.

— Rahul Shah

So today's numbers already include the impact of the ramp-up of the brownfield investments.

— Rahul Shah

It’ll be very difficult for us to give, because all of our products have different capacities.

— Rahul Shah

So for us, at a product level, having capacities defined is a little difficult and challenging.

— Rahul Shah

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Q&A — 9 exchanges

Congratulations on great numbers once again. Just 2 questions from my end. Firstly, I think in the opening remarks, you were mentioning that, of course, there was GST impact a few days because a lot of your products, GST gone down to 0-odd percent. Just wanted to understand, would we be able to quantify where exactly in which particular segment impact would have been higher? And more importantly, if that was not the issue of destocking, where we would have landed up with respect to sales?

Rahul Shah

So in terms of the product categories where GST has come down from 12% and 5% earlier to 0%, it currently contributes about 45% of our overall sales if we look at FY '25. And then there is baby hygiene segment, which in FY '25 was about 6% of our total sales, where the GST rate reduction has come down from 12% to 5%. So overall, between 45% to 50% of our total products have been impacted by this GST transition. It's really difficult to quantify as such how much we would have done better if this transition impact was not there. But we believe that if this transition impact would not be there, o

Thanks for the opportunity. First question is advertisement in the past, but are now advertising on KBC. What is the change in thought process, which products would you look to push through marketing, what is the incremental cost which you're looking at and how has the response been to your marketing campaign?

Rahul Shah

So Kunal bhai, so KBC was not specifically for any particular product, but it was more for the overall brand. So it was just that the entire DOMS brand and our entire range of scholastic stationeries, scholastic art, office supplies were distributed to the kids who were coming to that show for a specific period of time. So it was just an opportunity we got through our marketing references and there's nothing like a planned thing or something. In terms of how it helps is something which will come to know in the mid- to near-term. But overall, it adds value to the brand's aspirational value. Oka

Thanks for the opportunity. Sir, my question is on pens, I mean, if I remember right I believe we do not have the capability to manufacture nibs and the full backward integration advantage in this category is missing. So, just wanted to know, I mean, has it got to do with the...

Rahul Shah

Which category I missed that? Nibs we don’t manufacture, right. Nibs, yes. So just wanted to know, I mean has it got to do with the technical capability or is it related to the missing key advantage and once we achieve a desired production perhaps, we can consider exploring in-house manufacturing. So that is one. And secondly also if you can share how much typically does a nib cost in the overall cost structure of a pen? So, Jinesh to answer your first question, definitely, it is nothing to do with capabilities. As you know that for DOMS our constraint has always been in terms of capacities. T

Hi, thank you for the opportunity. Just to continue with the previous participant's question on the pen segment. Sir, what was the capacity of pens a year back versus where are we right now as on 1H, given that you said that the increase in the office supply or sales has primarily been on the back of pens and that has happened because of the capacity expansion. So could you just highlight how much capacity has expanded on the pens side in the last 1 year? That's my first question?

Rahul Shah

Aradhana, on the pens, so if we just talk about the ball point pens where we've added a significant capacity. I think about a capacity increase of 1 million pens a day has been added. But Aradhana, this has been through the period. So it's not that on day 1, 1 million was added. So incrementally, as soon as the infrastructure is ready, we install like 5 machines and another 5, 5, 5. And that's how the capacity buildup has happened. So today, we should be close to about 3 million to 3.25 million pens a day in terms of our pen manufacturing capacity. And going forward, where do we see that incre

My question is on the employee cost. It has gone up significantly. And in general, of course, with the Uniclan sales consolidating, I'm aware. With the sales growing even ex of Uniclan sales growing at 20%, we don't find that operating leverage playing out in our EBITDA margins. Why would be that so? And also, on the question on the employee cost quarter-on-quarter inching up?

Rahul Shah

Hi Priyank. So, Priyank, the employee cost as a percentage of sales increased by over 1% sequentially and 0.85% year-on-year during Q2 FY '26. The key reason for this increase in employee expense was due to the overall increase in workforce, both in our sales and production team. As we plan to ramp up our production activities, the hiring has to happen a little in advance. And similarly for the sales team because there's a lot of training and all they have to go in -- go through. And also because of this disruption in sales due to this GST transition which happened in the month of September. W

Congratulations on the good set of numbers. So I just have one question. The revenue grew by 24% year-on-year. Can you give a breakup about how much is this volume and value growth?

Rahul Shah

Manan, it is majorly volume growth, again, in key categories of office supplies, paper stationery, adhesives and kits and combination packs. And only a very small portion, about 2%, 3% of this growth comes from ASP increase. Got it. And another question is like what the EBITDA margin does the company expect from this 44-acre project expansion? Is this the same margin the company is operating, or the company expect some other higher margin from this capacity? The company's margin philosophy for DOMS has always been same. For every product, it's like cost sheet driven. We draw up our cost sheets

Congratulations on a decent set of numbers. I just wanted to know that because of the GST 2.0, earlier you mentioned there had been some postponement in the orders. So do you think that influx will be, what do you say, shown in the next quarter in the same or what is your opinion on that?

Rahul Shah

Coincidentally, the GST reforms was clubbed with the onset of the festive season also. So typically, otherwise also, you know, during the Diwali period and all, which was in the Q3, the sales get impacted a little. So, you know, the channel clearance that happened was -- that happened a little faster in the month of September, which otherwise we'd anticipated would happen in October. And the restocking at the distributor and the retail level will be an ongoing process and coincide with the back to school period, which will start from December. So you'll not see something significant in the thi

So I just wanted to ask more clarity on the GST side, right? So most of the scholastic stationery product has seen 0% GST rate, right? I'm assuming pencil and stuff like that. But if you sell this product in kits, do we have a GST rate on kits as a basket?

Rahul Shah

So basically, what the GST law says is when you bundle products, you need to first check whether it's a mix supply or composite supply. Most of our kits fall under the category of mix supplies. And in mix supplies, whatever is the highest GST rate in that mix supply needs to be applied. So most of our kits and combination packs are sold at a GST rate of 18%. And for the 0 percentage items that go in that kits and combination pack where you're actually charging 18%, you become eligible for input tax credit. So it complexes the entire process having different GST rates and with a lot of products

Thank you, everyone. Thank you once again for joining us. We appreciate your continued support and confidence in our journey. Should you have any further questions, clarifications, please reach out to our Investor Relations team. Thank you, and have a great day ahead.

Management

Speaking time

Rahul Shah

Moderator

Aradhana Jain

Priyank Chheda

Kunal Vora

Jinesh Joshi

Ansh

Sneha Talreja

Preeyam

Manan

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Opening remarks

Aniruddha Joshi

Yes. Thanks, Shravani. On behalf of ICICI Securities, we welcome you all to Q2 and H1 FY '26 results conference call of DOMS Industries Limited. We have with us today senior management represented by Mr. Rahul Shah, Chief Financial Officer. Now 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, and over to you, Rahul bhai.

Rahul Shah

Thank you, Aniruddha bhai. Good afternoon, and a very warm welcome to everyone to the conference call for Q2 and H1 FY '26. We hope you all had a wonderful time celebrating Diwali with your loved ones and take this opportunity to extend our best wishes to all for a prosperous new year. Joining me on this call is the team from Marathon Capital, our Investor Relations Advisors. I hope everyone had an opportunity to go through the investor presentation and the results release that have been uploaded on the stock exchanges and our company's website. I'm happy to share that despite the impact of GST 2.0 transition, we continued our growth momentum in Q2 FY '26 with an increase in sales of over 24%, marking yet another milestone in our journey, showcasing the resilience of our business model and reflecting the strength in demand of our products. A notable highlight for the quarter was the government's announcement of GST 2.0 reforms, slashing rates across some of our key product categories.

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