The company hosted a conference call on February 13, 2025. In the conference the company was represented by Mr Pallab Banerjee- MD and Mr Sanjay Gandhi-CFO.

Key takeaways of the call

The growth momentum which the company built in the first half of the fiscal year further carried forward in Quarter 3, helping the company achieve the highest consolidated Quarter 3

and the 9-months revenue, adjusted EBITDA and profitability.

During 9MFY2025 revenue grew by 28.1% YoY driven by healthy growth in sales volume across all geographies.

Adjusted EBITDA grew by 25.5% in 9MFY025.

This success showcases the strength of the company’s leadership and the operational efficiency, reinforcing its position as a prominent global manufacturer. The company’s consistent growth is attributed to its ability to leverage key strengths such as multi-country footprint, diverse product lines, in-market design proficiency and strong customer relationships.

Performance for the quarter has been largely fueled by strong volume growth from the existing customers and growing the wallet shares with the clients acquired over the last 5 years.

Industry overview

The textile and apparel market are showing signs of recovery after the challenges faced in the

2023 and part of 2024. The key factors driving this rebound include improving consumer

sentiment, steady rise in the demand for casual and athleisure wear and easing of supply chain disruption.

The US apparel stores showed notable resilience in 2024 with estimated sales hitting $29.5 billion basis of 2024 December numbers, which is 6% higher on a year-on-year basis. Consumer spending to remain robust and steady throughout this year ahead. Over the past

few years, the US market has experienced an annual growth rate of 2%-5% and this trend is

likely to persist in the next few years.

As of November 2024, the year-to-date apparel imports into the US has risen by a percentage

point compared to the previous year that stood at $73.9 billion. The year-to-date apparel imports into the European Union has also risen by a percentage point as of November 2024, while UK and Japan have experienced declines.

Gautemala: The company continues to attract increasing interest and inquiries from its  customers as the transit time to US is just over a week. However, the overall capacity of Central America and even for the company in Guatemala remains limited and is only a fraction of what the company does out of Asia.

During Q3FY2025, the company witnessed some impact in the regions performance as it  incurred additional cost in operations at Gautemala facility as it had increased its production lines up to 12 lines  which demand additional manpower, employing business heads, training cost, etc. Looking ahead, the company expects a significant improvement in this Gautemala facility by next year with a cash breakeven point anticipated.

Bangladesh:

Bangladesh underwent a period of unrest followed by a change in government and had faced a curfew shutdown. Despite the political unrest that ensued in 2024 till the month of August, the company continued to witness the highest shipment volumes during this period from its factories and with zero delays in its deliveries and the growth momentum continued in Q3FY2025. The company reported robust performance from its Bangladesh operations and

Its order book continues to be very strong.

All  teh company’s facilities are running at optimum utilization, and the company is witnessing a greater willingness amongst its partner’s factories for even greater collaboration with the company.

Vietnam:In Vietnam the company witnessed strong growth and continues to see the upward trajectory. The company has entered into a new partnership factory, and it expects to see growth in Vietnam next year as well.

The company will expand in Vietnam at a steady pace with exceptional service for high end customers.

Indonesia is expected to get back to earlier performance levels after a decline for the last 2 years. The company’s new factory is fully operational and the recovery is expected to drive a 20% plus growth in both volume and value in the coming financial year.

India: the company has witnessed robust performance in the Indian operations which grew by 49.5% YoY in Q3FY2025 and 26.1% YoY in 9MFY2025.

The company added capacity in Metro of Bangalore, Gurgaon and Chennai in the last 10-12 months and in the process of adding new capacities in Tier II cities like Mirzapur, Bhubaneswar and Indore.

Historically, Q4 is generally the best quarter for Indian operations. The company aims to achieve  high single digit EBITDA in India and is making  significant efforts to march towards the same.

Financials:

Consolidated

Revenues stood at Rs 1022.5 crore in Q3FY2025 a growth of 45.3% YoY.

Revenues stood at Rs 3277.2 crore in 9MFY2025 a growth of 28.1%.

The revenue growth was driven by strong sales performance in key market across  geographies supported by robust order book and healthy growth in sales volume.

Capacity: The company had capacity of around 84 million as on March 31,2024 and plans to expand it to 90 million pieces by March 31,2025. Further, the company plans o increase the capacity to 105-110million pieces  by FY2025 and to 125-130 million pieces by FY2027.

Rupee depreciation: Rupee depreciation is expected to add to both topline and bottom line of the company. The company has a hedging strategy where it takes forward cover on a calibrated manner. It hedges its 20-30% of the order book. The rest because of the depreciation in the currency is kept open which result in a higher realization.

CAPEX: The company has committed Rs 35 crore CAPEX. Large part of CAPEX will be committed in FY2026 to take the capacity to 130 million pieces.

Outlook:

The company is increasing the demand by increasing the wallet share of the customers.

The company targest EBITDA margin in the range of 10-12% by FY2028.

Management commentary:

Commenting on the Results, Mr. Pulkit Seth, Vice-Chairman & Non-Executive Director, said , “We are delighted to share that the strong growth momentum from the first half of the fiscal year continued, leading us to achieve our highest-ever consolidated quarter three and nine-months revenue, adjusted EBITDA, and profitability. This exceptional performance was fueled by robust sales volume growth across geographies. We remain optimistic about Bangladesh’s long-term potential, and we remain confident in the region’s sustained growth and robust performance.

Backed by a strong and diverse customer base and an extensive geographical presence, we are well-positioned for sustained growth in the years ahead."

Commenting on the Results, Mr. Pallab Banerjee, Managing Director, said, “We are pleased to report robust set of numbers while continuing to sustain our growth momentum. Our Bangladesh operations maintained strong performance in Q3 FY25, and we are pleased to report that all our facilities in the region are operating at optimal capacity utilization. With a healthy order book, we are confident in sustaining this positive momentum and are actively exploring value-accretive capacity expansions to capitalize on growth opportunities.

India is expected to maintain sales growth momentum, supported by the upcoming summer and spring seasons. Additionally, we are making significant progress on our capacity expansion plan in Bihar, which will further contribute to our growth from the next fiscal year.

n summary, strong order book combined with steady progress across all our initiatives gives us confidence in successfully executing our three-year strategic roadmap.”