Pearl Global Industries Limited (NSE: PGIL) Q3 2026 Earnings Call dated Feb. 07, 2026
Corporate Participants:
Shishir Gahoi — Head of Investor Relations
Pallab Banerjee — Managing Director
Sanjay Gandhi — Chief Financial Officer
Analysts:
Unidentified Participant
Kishore Kumar — Analyst
Bharat — Analyst
Prateek Podar — Analyst
Sunny Vishay — Analyst
Shraddha — Analyst
Vishal Mehta — Analyst
Sahil Sharma — Analyst
Manju Bhashini — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Pearl Global Industries Ltd. Earnings conference call for Q3 and nine months FY26. As a reminder, all participants line 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shisher Gahoy, head of Investors Relation of Pearls Global Industries Limited. Thank you. And over to you sir.
Shishir Gahoi — Head of Investor Relations
Thank you very much. Good morning everyone and I am delighted to welcome you all to our earnings call for Q3 and 9 month FY26. I hope you all had an opportunity to review our press release and the investor presentation which are available under the investor section of our website and the same are uploaded on BSC and NSC websites. To discuss our results we have with us our managing director Mr. Pallav Vaynerjee and our group CFO Mr. Sanjay Gandhi. They will take you through our results and business performance after which we will proceed for the question and answer session.
Before we start I just want to highlight that this call may include forward looking statements based on the company’s current views and expectations. Actual results could be different as future performance is uncertain and involve risks that are hard to predict. I will now hand over the call to our MD Mr. Pallav Banerjee. Over to you Pallavji.
Pallab Banerjee — Managing Director
Thank you Shisher. Good morning everyone. I welcome you all to our Q3 and the nine month of financial year 26 earnings call. We continue to deliver growth in top line and bottom line despite the challenging and uncertain macro environment driven by our focused execution and a multi location presence. Our nine month revenue stands at 3,711 crore. It grew by 13.2% year on year and the EBITDA stands at 333 crore which grew by 14% year on year since 2%. And if we exclude the tariff related costs and the incremental ramp up cost, this EBITDA margin is standing 1%.
Here is an update on the key positive developments in our industry. For an apparel manufacturer like us, the major markets with size and scale are European Union, usa, Japan, UK and Australia. All our manufacturing location countries are working to readjust to the new world tariffs agreements that’s happening across the World A major and long awaited development was the India US bilateral trade deal which reduces the tariff from 50% to 18% significantly enhancing India’s textile export competitiveness. Above development is followed by following the recently signed India European Union Free Trade Agreement and the India UK FTA which was signed in July 2025.
Now India if you see India concluded the BTA’s and FTA’s negotiations with all major markets that Pearl Global is selling its products to. These are the European Union, us, Japan, UK and Australia. With the total market for these countries approximately about $250 billion that we have seen historically. Bangladesh and Vietnam already has the advantage of tariff free access into European Union, United Kingdom, Canada, Australia, Guatemala has a zero tariff access to the USA and also is a near shore for our usa. Indonesia has the duty free access to Australia and Japan. And as you can see.
With the. Latest world that we are living in, Pearl Global is very strongly positioned to grow and take advantage as we maneuver through the ever changing geopolitics. Now let’s speak about the outlook for each geography starting with India. The 9 months profitability has improved despite the discounts extended to the US clients tariff for the tariff and we maintained our strong relationships which had a temporary. This particular move had a temporary impact on our margins. And this improvement was driven by the cost restructuring during the nine month of our India operations were mainly you know impacted with this US tax deal signed.
operator
Sorry to interrupt you Pallav sir, sorry to interrupt you but we are losing your voice in between. Can we talk from the backup?
Pallab Banerjee — Managing Director
Okay. Is this better?
operator
Yes, you can talk from the backups.
Pallab Banerjee — Managing Director
I see now. Is it clear now?
operator
Yes sir, it’s clear now. You can go ahead.
Pallab Banerjee — Managing Director
The current contribution. See the India business is operating at an annualized revenue run rate of about 1100 crore. And we have built up the capability to generate revenues which can exceed even 1500-1600 crores. The current contribution of India revenue is our group revenues almost 22 to 24%. With the US trade deal and the FTAs with UK and EU and the existing trade deals of Japan and Australia. We expect higher volumes, increased sourcing from India and growth in our India operations from 2027 financial year onwards. Moving on to Bangladesh. Bangladesh operation has well consolidated the last year 30% plus growth and orderbook has is showing now further growth.
Our capacity expansion plan remains on track for completion by second quarter of financial year 27. This will lift the capacity by about another 6 million pieces in Bangladesh positioning us to scale further and deliver sustained value. Since the regime change. Our operations have been very smooth in Dhaka, Bangladesh as a country is blocking a year on year growth in garment exports and we expect it to grow on its strength and we have a mature operation which is running two major customers just got added in our portfolio in Dhaka and we expect to continue our growth trajectory in Indonesia.
As I have been updating all of you, we are undergoing a ramp up in our business volume after the new factory got commissioned. We are confident of this growth in top line and bottom line from our Indonesia operation. Vietnam as a country experienced a slight degrowth in its garment exports in terms of dollar value, our operations have only become stronger. Some of the most well placed brands and the fastest growing specialty brands of North America have consolidated their business with us. Our Hanoi operations have demonstrated strong momentum in recent quarters with factories operating at optimum utilization.
We are also very comfortable and confident and we are well prepared for the future growth. Gautamana we continue to remain focused to improve the efficiencies and reducing our losses in this new operation. USA has declared this week that it will waive off even the 10% baseline tariff that Trump administration had implemented on Gotham other in 2025. So that means it will again become a zero tariff to USA with a positive outlook. We expect further progress and also better results in the coming financial year. With that I will now hand over to Sanjay Gandhi, our group CFO to share the financial highlights.
Sanjay over to you.
Sanjay Gandhi — Chief Financial Officer
Thank you Pallav welcome to our quarter three and nine month financial year 26 earning call. I will now take you through our financial and operating performance. 9 month financial year 26 consolidated performance in 9 month FY26 our consolidated revenue rose to rupees 3711 crore reflecting a growth of 13.2% year on year. This strong performance was driven by high value added product sales growth in Vietnam and Indonesia. Adjusted EBITDA excluding ESOP expenses stood at rupees 333 crore up by 14% in nine months. FY26 adjusted EBITDA margin stood at 9% excluding tariff impact of rupees 31 crore and incremental ramping up cost of new operation of rupees Adjusted Ebitda margin adjusting for these adjustments stands at 10.1% for nine month FY26 PAT.
In nine months FY26 grew to rupees 189 crore, a growth of 14% on a year. On year basis. Quarter three FY26 consolidated performance for quarter three FY26 total revenue stood at rupees 1,170 crore, an increase of 14.4% year on year and this is the highest ever revenue registered in the last five years. In quarter three by Pearl Group adjusted EBITDA excluding ESOP expense at rupees 97 crore up by 4.4% year on year with a margin at 8.3%. Adjusted EBITDA margin excluding tariff cost and incremental ramping up. Cost of new facilities stand at 9% PAT rose to rupees 52 crore marking 6.88% year on year increase.
Now talking about standalone financial performance 9 month FY26 standalone performance in 9 month FY26 total revenue stood at rupees 777 crore. Adjusted EBITDA stand at rupees 43 crore grew by 64% year on year with margin at 5.5% up by 220bps year on year mainly due to cost restructuring. Adjusted EBITDA margin excluding tariff cost of rupees fourteen crore stand at 7.3%. Pads stand at rupees fifty five crore comparable to rupees thirty two crore in nine months. FY25 reflecting a robust growth of 72.6% year on year. Quarter 3 FY26 standalone performance for quarter three FY26 total revenue stood at Rs.
246 crore a growth of 4.6% year on year. Adjusted EBITDA stand at rupees 12.6 crore EBITDA margin at 5.1% improved by one hundred and forty year on year excluding tariff cost of rupees five crore. EBITDA margin stand at 7.2%. Pads stand at rupees fourteen crore. Update on capex capacity expansion in Bangladesh Construction of apparel manufacturing unit is targeted for completion by quarter two. FY27 out of rupees 110 crore allocated rupees 66 crore has already been committed. Capacity expansion in India Capacity expansion in Bihar is completed and commercialization is in progress. The entire CAPEX which was allocated has been already committed.
Incurred sustainable laundry capacity expansion Construction of the laundry facility is targeted for completion by quarter two. FY27 out of rupees 90 crore allocated to P crore has been committed. Solar power installation is completed for all brands in India and all five plants in India and power generation has started. This will help us in achieving our goal of sustainability. Other capex for replacement and efficiency improvement. These are capex which are incurred on ongoing basis out of total 25 crore allocated or planned so far rupees 14 crore has already been Committed. Other highlights. We are pleased to announce that our founder and chairman Dr.
Deepak Seth, Dr. Deepak Kumar Seth was honored with the Global Leadership Award for building the world’s largest apparel supply chain company From India for FY 2324 and FY 2425 presented by Mr. C. P. Radhakrishnan, Honorable Vice President of India at the AEPC Excellence Honor Ceremony in New Delhi. We are happy to share that the company has achieved a notable improvement in its credit profile with the long term credit rating upgraded from ICRA BB stable in 2021 to ICRA A stable in 2026. Concurrently, the short term rating has advanced to ICRA A1 underscoring our robust liquidity and operational resilience despite the challenging economic environment.
In summary, our 9 month FY26 result reaffirm the strength of Pearl Global diversified business model which has enabled us to sustain growth even in an uncertain environment. With this, I now hand over to the moderator to open the floor for questions and answers.
Questions and Answers:
operator
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. The first question is from the line of Kishore Kumar from Unifi Capital. Please go ahead.
Kishore Kumar
Thanks for the opportunity. Good morning sir. I hope I’m audible sir. On the ramp up cost of 9 crore for Q3 is that pertains to Bihar facility or Guatemala facility? Can you give us some sense on this and is it expected to continue in the coming quarters as well?
Sanjay Gandhi
Yeah. Thank you Kishore for this question as this. So this is a incremental ramping up cost. It is for largely right now it is for Bihar but some part of for Guatemala operation is also there. We expect this cost to go down substantially from next financial year onward. We will see a reduction in this cost in quarter four. But it will come down substantially from financial year 27 onwards.
Kishore Kumar
Can you give us some sense on the capacity addition from these facilities as well?
Pallab Banerjee
Yeah. Pallab, would you like to. Yeah. So Bihar we have planned for 900 machines as of now already 500 is already installed and we are you know. Hiring all the people and trained. Most of the people is already getting trained at this point of time and we have started the bulk production. So that’s over the next few months we should be able to hit the higher number in terms of hiring more people and getting it fully operational.
Kishore Kumar
Got it sir. My second question is on the US demand sentiment. I mean now it’s actually 20 percentage average tariff across the major exporting countries for the apparels. And what proportion do you think has been passed on to the consumers? End consumers. And is there any variation that you are seeing in the high end fashion apparels with a general clothing? Also, how is the inventory setting up with your customers? Hello?
Sanjay Gandhi
Yeah, Palab.
Pallab Banerjee
Oh sorry, sorry, I was on mute. The first part of the question that you asked is about the price ticket increase for the end consumers due to the tariff. Now this what we are seeing is that there is an increase in the US market in terms of price ticket but it has been done surgically. It is not done across all product, across all retailers. So wherever the retailers are seeing that they can get that price, they have started increasing that price. And for the rest, for example some core products and all where they feel that they want to see how the overall all competition is going to increase the price or not.
So they still wait and watch, a game is still going on. So what we see is that there are certain products where the prices have started inching up. The second part of the question was about the inventory. So if the customer, if these retailers and brands are increasing the price ticket. So accordingly they are also seeing, what we are seeing is a slight decrease in the buying numbers so that their overall buying budget is still being maintained. So I think they are assuming that if the consumers are spending a little bit more money, they might buy slightly lesser number of pieces.
Now whether what percentage and how this will play out, that is yet to be seen. But these are the early signs that we are seeing in the behavior of our customers.
Kishore Kumar
So just a follow up on this. For an economy with 2,3 percentage of inflation, if brands pass through like 78 percentage of the cost to the customers, will it impact the demand in the coming quarters? What do you think on that aspect?
Pallab Banerjee
As I said like you know, 20% full pass on we are not seeing from any retailer as of yet. They are doing it surgically on certain pieces, but not the full 20%. There is always a pressure on bring some part of the cost by, you know, improving their efficiencies at the retailers end. And as you have seen, like they had asked for the suppliers also to share part of it earlier. Now I think it is becoming a norm. So slowly we will see some increase. And mind you, like you know, if I talk about the cost of goods, the 20% increase should result anywhere between, you know, 30% of it or up to 50% of it depending on what retailer that we are talking about.
So yes, there would be some, I don’t know, percentage wise you can calculate like if they have to pass on these 20%, 30%, how much increase they have to do if they have to completely pass it on. But because we have not seen that entire effect as of now to play in the market, so it’s difficult to say. So let’s wait and continue to observe how this plays out. But yes, most of the agencies or the the surveys are saying that the consumer sentiment has been low or decreasing. The numbers have not shown so far.
But yes, everybody is cautious at this point of time.
Kishore Kumar
Got it, sir. Got it. Understood. One more question if I can squeeze in. So so far actually in the last few years the growth has been driven by the customer addition in both existing as well as new geographies. And now we are adding almost 10 million pieces in Bangladesh and India together. Coming up in the next financial how are we placed in terms of new customer additions or wallets are increased with the existing customer for these incremental facilities? That is coming up. How are you placed on that aspect, sir?
Pallab Banerjee
Yeah, so I think that’s the confidence that we have been sharing with you repeatedly. See, we are a growing organization and the way that we have placed ourselves by having five different country of manufacturing and at the same time five markets that we are catering to. Four years back we were completely, almost completely dependent on US market. Today we have been able to share all the five major markets and plus we are looking at other markets also. So that journey we continue to do, we always look out for the major growing retailers or the growing brands who are gaining their market share.
As I just mentioned that if you talk about these five economies, that is European Union, usa, Japan, Australia and uk, that itself gives us an apparel market of close to about 240 to $250 billion. So I think the pie is quite big. Yes, we know that we have to be aggressive, we have to show our strength and gain market share from our competition. I think that’s a journey that we have undertaken very consciously. And so far as you see that whatever promise that we have made to you in terms of our growth percentage, we are in that range.
So every moment we are seeing which are the other big retailers who are gaining market shares and if we can start working with them. So that’s still continuing. As I just mentioned in my earlier speech that we have added recently to market in our mix. So we’ll continue to add that and look for that opportunity.
Kishore Kumar
Got it, sir. Got it. I’ll join the queue, sir. Thank you so much.
Pallab Banerjee
Thank you.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to three per participants. The next question is from the line of Bharat from Dalal and Brocha. Please go ahead.
Bharat
Yeah, thank you for the opportunity. Hope I’m audible. So just trying to understand that the Bangladesh capacity that will come up by 2Q FY27, when can we expect the full ramp up for that capacity to take place? If you can throw some light on that.
Pallab Banerjee
So you see, Bangladesh, what we feel is a much more mature market and because it’s concentrated more in Dhaka and the regions around Dhaka, I think we have seen that to ramp it up is much smoother and much more easier compared to when you start a new factory in countries like India. So this construction should be ready in 2027. We should be able to ramp it up in the year of 2027, 28 for Bangladesh manufacturing part. And we are also, as we have shared with you, we have, we are making one of the washing project out there that I think should be ramped up much faster.
Bharat
So just to understand that the capacities that we’ll add next year in 27 to take up to take our production pieces to 112 million approximately those capacities will take a typical amount of time of how much to ramp up, you know, to our optimum utilization levels.
Pallab Banerjee
So in apparel industry, if you see like, you know, once you have the factory and the machines already, then we start hiring people and then training them. And as we train, you know, if you are taking fresh workers, then they need a proper training. If we have experienced workers, then it becomes faster. And then once the factory starts operating, it starts with a low efficiency and then over a period of six months to a year, the efficiency continues to grow. So that’s what we have been experiencing. So specifically like, you know, for every project to say, okay, this is the exact date by which it will be working optimally is little difficult.
For example, like if I talk about these two projects, like one is in Bihar. This is something as a new state or a new location that we have started, so it’s comparatively slower. A project that we are doing in Dhaka will be comparatively faster. So that’s how we are seeing it.
Bharat
All right. And just to you know, follow up on that point only. So do we expect to see or you know, operational losses come in in our mature region as well. Or is this just a phenomena that we are seeing in Bihar because it’s a new region?
Pallab Banerjee
As Sanjay just mentioned, its operation losses is just because we are ramping it up for this quarter. But I don’t think that’s a prolonged part in most of our operations. Yes, when we did Guatemala, Guatemala was again a new country. So it took a couple of seasons or I would say maybe like more than a year to get a complete handle of it. But Dhaka kind of place which is a very mature market or a Vietnam place which is very mature in production center there we have seen or experienced much faster return.
Bharat
All right, I got it.
Sanjay Gandhi
Yeah, sure. Thanks. Thanks Prana. Just to add that for Bangladesh factory which will garment factory and the laundry which will get likely to be completed, construction completion and commercialization by end of quarter two of FY27, we see a significant contribution should come respectively from this factory in a financial year 27, 28. I think five to six months should be the time to ramp it up. And generally we have seen in the past when we started prudent four years ago in 2021, in the first year itself it was at an EBITDA break even and the next year onward it started contributing significantly to the bottom line and the top line.
So we believe that the same trend and the pattern should follow for Bangladesh the new factory which is under construction.
Bharat
All right, I got it. And just on our margins, just trying to understand.
operator
Sorry to interrupt you. Y
Bharat
eah, I’ll get back in the queue.
operator
Yeah, thank you so much. The next question is from the line of costume from ICICI Direct. Please go ahead.
Unidentified Participant
Yeah, good morning sir. Thanks for giving me the opportunity. So my question is on your earlier comments, you mentioned that the deep trade deal with us and you know, the FDA signing with EU and UK has increased the opportunity for us and you are guessing a market of around 250 billion opening for us. But in that context we should also be ready from the back end point of view, like we should have that production capacity to cater to the demand which will be opening up in this market. So just want to understand that whatever capacity expansion we add three, is it good enough or you need to add some more capacities in some of your existing markets, especially in India.
Because you know if you have, if you are adding clients or if you’re getting orders from the existing client, you should have that capacity with, with you to cater to this client. So from that point of view do you expect, you know, capacity addition over the Next two years. And if it is then what would be your, you know, capex plan going ahead?
Pallab Banerjee
So I can start this and then Sande can add the second part of your question. We do have a continuous growth plan so which we have been saying that we have a compounded growth of anywhere between 12 to 15%. So that’s the growth that we have factored in in our business. And that kind of capacity addition has been a continuous process for Pearl Global. As I just said that, you know in India we were expecting these trade deals and the implementation as much faster. So we have already built up some capacity. That’s why I said that, you know, even we are doing a business of around 11 and 100 crore at this point of time.
We do have capacity ready to do at least about 1600 crore. So as the only requirement is to put in the people as and when we start getting the business and maybe a very minor kind of, you know, charges like you know, addition a few machines here and there. So that kind of readiness we have in India then this is not the end definitely for the next years, the future years. Again we continue to grow so that we will continue to update you what kind of projects and what kind of, you know, plans that we have and for the rest of the other countries.
Sorry.
Unidentified Participant
Yeah, so just wanted to understand this 12 to 15 growth while you’re talking about it is it is considering the trends, what we have signed with us and is it or you you are expecting.
Pallab Banerjee
Yeah, yeah. So you specifically if you’re talking about India, yes, if India wants these trade deals are implemented, for example, European Union would be implemented in 2027 and the UK FDA is expected to be operational within this. But financially like you know, in the maybe March or April, let’s see like when, when it gets start and the US bilateral agreement is I think operational now. So this kind of, that’s why we said like this particular readiness we were predicting so that we thought that 2026 should have been the year where we would get a jump.
But it got delayed because of various reasons and we all know that in the news that it’s coming. So this particular year we lost that opportunity. But that readiness we already have for India. But definitely if you talk of the total impact of it, that will be definitely much higher and that we continue to grow. We do have two partner factories already ready with us in India which we have not considered in our capacity as of yet. So that’s something that we have continuously we have been working upon in countries like Bangladesh and Vietnam which is more mature market where we can easily work with our partner factories.
We have been taking that advantage even before putting our own plants at that rate of growth. So like this washing plant that is coming up, we have this business already happening with us. So naturally further growth that comes in as soon as our washing unit is ready within this next two quarters we should be able to immediately make it operational and also expect to break even quickly. So that kind of planning we continue to do. There are opportunities that come in. For example, the regime change in Bangladesh gave us a good opportunity last year. So we saw a major jump in terms of volume.
So similarly, like, you know, this kind of, whether it’s a trade deal or these other things, like if there’s certain jump is required, we try to be at best ready for it. But yes, really to plan in a long term compounded growth that we have planned around 12 to 14% for a tough time.
Unidentified Participant
So my second question is on the impact of the, you know, U.S. tariffs. So this quarter we have seen it is around 31 crores. Now since the tariff has reduced to 25% because 18% would be somewhere from mid March when actual tinting will be sun. So this 31 crores, I believe that in quarter four there would be some, some impact which will be there because retrospective date is 7th Feb. So there will be that impact will be there. But from quarter one, should we expect it to be zero or since it is 18 still there will be some negotiations with the retailer over there and you know, they will be asking you to, you know, take some hit on your margins.
So just, just an understanding from that.
Pallab Banerjee
This 50% tariff that we had was putting us in a disadvantage. Similarly the European Union and the UK fta, these are some of the disadvantages that India as a country we had. If you compare with the other countries like Bangladesh, Vietnam, Indonesia, neither they had that 25% penalty tariff that India had nor they had this, you know, they also had some kind of advantage like LDC or a comprehensive treaty in these other countries. So they were not subject, their goods were not subjected to tariff in European Union and uk. So what India has done now is at least from that perspective, like these disadvantages that were there for Indian exports that is getting removed.
Yes, it’s happening part by part. And specifically for now for us, we have been to maintain the business of US customers shipping from India, we had to absorb part of this tariff, especially the penalty tariff. So what happens is the immediate effect, this penalty tariff is waived off. So that gives some kind of Advantage to our bottom line and then the rest is more like a competitiveness. So let’s say if the same goods they are going to source from any other country which is subjected to 20% and maybe for next couple of weeks it is 25 in India and then it comes to an 18.
So that will give India an advantage of maybe like 1 or 2% better compared to these competing countries. So those are the things that the brands will negotiate from all the vendors across all these countries. So that’s the competition game like who gives the best price and more sustainable price for them. That’s what they get the business from. Strategically when these customers are talking to us, they have invested with us to train us, train our factories to get that product and that consistency in their products and all. I’m talking about these market retailers. So naturally they would like to continue to use those facilities for their own benefit.
So this disadvantage that they had temporarily in US market and UKU that they have been having for a long term that is getting removed from India. In India we definitely need to grow certain other trends like the variety of fabrics which are available in other markets and all so that I think now better investments and all would continue to come in into India to make it much more competitive overall. So it’s a good time I think for India that is coming up.
Unidentified Participant
And my question about CapEx.
Pallab Banerjee
Yes, sorry, no, no, hold on. Capex is something that he asked earlier only. Sanjay, would you like to reply to that?
Sanjay Gandhi
Yeah, sure. Just to very quickly come on the capital expenditure. So as Pallav mentioned, I think your question is specific to India. In India we do have a capacity ready and two for 1600 plus kind of a top line which is in house. There are plus two partnership factories also which Pallav mentioned that you know are also not ready but not included in this capacity of 1600 plus crore turnover. Now on the further CapEx we keep evaluating and we will do the evaluation. We have got a land parcel allocated to us in Madhya Pradesh and we have stated earlier also as we see how the progress on Bihar commercialization takes place, we will be definitely evaluating it and committing the capex well ahead of the time.
You know, when we have the order in hand and we want to execute it. So as far as current run rate is concerned, I think we are good for 25% CAGR but the opportunity may come very fast. So we, we may have a good growth coming in India in the next two year basis. The FTA which has been done, we will evaluate the CapEx at that point in time and we’ll do it much ahead of of the requirements. So that’s where I would just like to mention.
Unidentified Participant
Right sir, thank you. I will get back into. Thank you.
Sanjay Gandhi
Thank you. Thank you.
operator
Thank you. The next question is from the line of Prateek Podar from Bandhan amc. Please go ahead.
Sanjay Gandhi
Yeah.
Prateek Podar
Hi sir, could you just help us? I mean you just talk about. But just on India it looks like if I, if I look at your financials ex India, the growth has been quite phenomenal and it is only India which is dragging you. But with the three FTAs which have been signed with UK, EU and US how soon can you ramp up India operations and get the India margins back to let’s say company level margins. Right. Because there’s a substantial difference between the global company average versus India even on an adjusted basis. I’m not seeing report basis just on an adjusted basis also.
So there’s a big drag in India. How soon do you think you can reach the 1600 crores kind of a business? That’s question number one.
Pallab Banerjee
Definitely we are seeing a very positive movement in our order books. There are two things that was, I would say two if I have to club the problems of India into two parts. One was that it definitely had some disadvantages of these trade agreements and the lack of raw material, variety of raw material apart from cotton. So I think if the trade deals are there, what we have seen in the budget also is positive comments to diversify the fiber base and other things. So I think this is something which should get resolved in India very soon as a country for Pearl Global.
We also had another drag because all our investments were in the metros. That means Lungao, Chennai and Bangalore. So as we have been mentioning that we are now trying to expand to the locations which are lower cost as well as can be ramped up because the availability of the force would be better. So I think we have started both these journeys right. From a country level also and at Perth level also. So I think these two years we should be able to see a huge improvement and movement in this two direction. Yes. Proof of the pulling would be the order books and all we are seeing positive movement already.
Understood. So that’s helpful.
Prateek Podar
And the second question, sir, just a clarification. The other segment in the segment format, that’s Guatemala.
Pallab Banerjee
Yes. Okay.
Prateek Podar
So sequentially I feel see the PBT losses increasing.
Pallab Banerjee
Right.
Prateek Podar
I don’t know whether that’s the right way or one should just look at YOY because there’s seasonality involved but sequentially I saw the losses increasing. Is that more to do with seasonality or something else?
Pallab Banerjee
So you see this, this season you have to see because the, every season is different in terms of what kind of product. Like winter seasons are always northern market is northern, western market is much bigger market. So naturally the outerwear and jackets goes in in the first quarter and the fourth quarter. So that way like you know, every quarter becomes important. So I think for us for apparel trade, you should be looking the corresponding quarter of last year versus this year.
Prateek Podar
And so profitability in the sense that’s also.
Sanjay Gandhi
Yeah, please go ahead.
Prateek Podar
No, no, I’m just saying because there are two big drags in your financials. One is India and you just talked about that next two years India will be on a healthy growth path and with growth obviously operating leverage will play out. The second was obviously Guatemala where obviously losses are declining on a year, on year basis. I just wanted to know the path to profitability for the Guatemala division.
Sanjay Gandhi
Yes. So we, we are working very aggressively and we are chatting out a plan where you know, Guatemala losses should reduce substantially in FY27 onward or it should reach a breakeven in the next financial year itself. Contributing to the bottom line thereafter will be our strategy. Our complete focus right now is to really stem the losses and you bring it to the breakeven point which we are confident in the next financial year we should be reaching there.
Pallab Banerjee
Yeah. Just to give a perspective on Guatemala, it will be always a small production center. So you see, like Guatemala is near shore. The raw material availability is a constraint there. So there are two ways that you can do business in Guatemala. You can import the raw material from Asia and manufacture there. That doesn’t give the benefit of the tariff advantage for usa. Only if you source the raw material from Guatemala or that region, Caribbean region, then only you get the tariff advantage. But the raw material is scarce out there. So that’s the reason for which the market has never been a big one.
But it’s an attractive one because you know, we, for example, since the time that we have taken this small facility in Guatemala, almost every marquee customer wants to walk in. Everybody is having a conversation with us. So that brings a lot of attraction for the near shore. But yes, how to make a good amount of profit seems to be a puzzle at this point of time. So we are also watching it very closely. Our main goal is to not to lose money there. And then yes, if we can make some money that will be excellent.
So that as Sanjay mentioned, this close watch and control is being put in place at this point of time.
Prateek Podar
Understood. And just to summarize, essentially what you’re saying is that even though the top line growth will be 12 to 15% because of the movement of this incremental growth coming from India, Guatemala, you will see margin expansions, right? It’s just not top line growth coupled with margin expansion. And I’m saying adjusted on the base of adjusted ebitda. That’s a fair understanding, right?
Pallab Banerjee
Normal maths.
Sanjay Gandhi
Yes, yes, that’s a fair understanding.
Prateek Podar
Okay, last question. Sorry, just Bangladesh, right? Again, on a y o y basis we have seen some dip in profitability. Not material, but any comments over there.
Sanjay Gandhi
You see, you’re referring to the segment report, I guess that’s correct, sir. Yeah, the segment report. You know, as we mentioned that you know there is a part of the revenue which is, you know, build to ship to model as per the contractual terms with the customer. Which means the invoicing take place from the our entity in Hong Kong right now. So which means when you look at Bangladesh profit, some profit will be definitely, you know, by virtue of following the contractual term will be there in other entity as well. So when you. When we evaluate Bangladesh profitability we add it all the things to really see how they are faring compared to the previous year performance.
And when we add this, I think they are fearing very stable performance in Bangladesh and we expect them to continue to improve. So that is from the regulation perspective which we have to really just comply. We have to comply with those disclosure requirement. And if you see the less intersegmental revenue, intersegmental reduction, you know, the. This is where the necessary transaction between the related party get get knocked off and eventually you arrive at a total profit which is there at a group level. So we need to take care of those related party intercompany transaction to really arrive at the final number.
So that’s where it is. Whereas inter segmental will show transaction all the.
Prateek Podar
So just to summarize that there are only two countries which are below company average in terms of margins today, which is India and Guatemala or even Indonesia.
Sanjay Gandhi
No, no, no. Indonesia also have been much below their capacity utilization and the margin profile is also not what they were delivering. You know, let’s say two, three years before. I think there is a ramp up of capacity as well as improvement in the gross margin and the beta margin in Indonesia. We should, we are expecting and hoping that you know, it will deliver in next year and year after.
Prateek Podar
What’s the broad Indonesia range today versus I mean I don’t get much.
Pallab Banerjee
So. Bit of margin will be still in a single digit. We expect it to be double digit in the next year and hereafter.
Prateek Podar
Fantastic. Super. Thanks. Thanks. Thanks a lot. Thank you.
Pallab Banerjee
Thank you.
operator
Thank you. The next question is from the line of Sunny Vishay from Access Securities. Please go ahead.
Sunny Vishay
Yeah, thanks for taking my question and congratulations on a good set of results. So my question is kind of follow up on whatever discussion has happened earlier. So as you rightly said, there are multiple positives for India’s texture industry that are happening which place India on a cusp of a golden era going ahead. And Pearl Global especially has taken steps which will enable them to benefit it from it strongly going ahead. But at the same time it also means that Bangladesh, which had a competitive advantage against us or many other countries, they are somewhere losing out, out on it.
Plus there are some challenges that are going on there in the domestic industry on the raw material side, etc. So how does that affect our strategy in Bangladesh? Does that change anything for us or what are your thoughts on how you would plan to handle the possible negatives or the risk that comes with this?
Pallab Banerjee
So, yes, slightly different from our perspective, slightly different from what you just mentioned. One thing we have to see first of all is that India had some disadvantage. India as a country, I think again my perspective was more focused on domestic industry compared to the exports. Whereas countries like Vietnam, Bangladesh have been more export oriented economy. Especially like you know, if you talk of Bangladesh, they have really focused on the garment exports. So the kind of readiness, kind of infrastructure that they have been able to build up in the last 15 years is, is way ahead.
As a result, if you can see the numbers only speaks like they are close to almost about $50 billion of garment exports compared to a small country like Bangladesh, compared to India, which is large resources also like we are doing only about 15, 16 billion dollars. So there is definitely a catch up things to do. Bangladesh had the advantage of LDC and a lot of investment had come in and a lot of other interests. You know, large manufacturers of garments have been looking at Bangladesh or Vietnam more positively over the last two decades. So as India is coming into all these BTA’s and FTA’s, plus if they can, if we can improve certain other things like you know, labor laws or the ease of doing business and other things, then definitely we should be able to compete with these smaller nations which have been totally dependent on the export economy.
And the other thing that you said is the geopolitical or not geopolitics But I think their own political problems. Now these third world countries always have some kind of disturbance. Like if you go back in the Bangladesh history for the last two decades, yes, that period, there was a period of about 10 years where we saw less amount of disturbance because only one party was ruling there. But whenever we have seen a party change, if you go back the last 30 years, whenever there has been a party change from BNP to Awame, there has been a disturbance for few months or even up to a year politically.
But that has not disturbed the garment exports or the industry of government. And the second part of your question is also about the import restrictions or certain other things of raw material that is going on. So that I think you mean that there was a strike that was called and finally called off about the yarn manufacturer, the yarn spinners in Bangladesh. They were trying to say that if you are importing yarns from India and other countries then the local industry will get wiped out. But you see like the bigger revenue and the bigger, more important part of Bangladesh economy is the garment exports and yarn manufacturing is a very small portion of it.
We have been doing business there since 2002. We are not buying any local yarns. So most of the yarns are imported and then converted there for the price competitiveness. So I don’t see a big change in that. So nothing is changing from our side or nothing is changing from the customer side? Yes, the investment that went in for spinning yarn in Bangladesh is facing a little bit of financial issues and also that government is addressing, maybe giving them some kind of incentive to be more competitive locally. So that’s how we are seeing this part. I hope I answered all of your questions.
Sunny Vishay
Yeah, just one small part. So on the pricing side, you don’t assume that we’ll have to take some hit to be competitive against India after the removal of the additional duties.
Pallab Banerjee
As of now Bangladesh is much more competitive than India and there, you know, because it’s an export oriented economy. I said so their import, you know, importing goods and raw material and then exporting, they had built up a much more robust and smoother way of functioning that which India needs to do a catch up. And being a small country and only one location, only one port. So definitely there are certain things that they have done much, much better at this point of time. So yes, India we would be, we look forward to seeing that improvement as we have done these FTA and there will be more investment coming in all form.
So I think we would catch up soon. In terms of Bangladesh, the Only risk that I see is many retailers have a very high exposure. So for example, Bangladesh is today known for the denim manufacturing within engines. So if I talk of any big retailers of European Union or UK, they have almost like 90% or 100% of their business coming up from one country. And they were stuck because the price difference was very high from Bangladesh to any other country. Now in these last few years, like Vietnam, has the Comprehensive Treaty done. India is getting onto these treaties so they will have more choice for their business in Bangladesh.
So that could be an interesting phase to see like which country gains. Historically in the last few years, China plus one was being talked about. So the country like Bangladesh and Vietnam really gained out of it. We could not gain, but I think now we are in much better shape to gain more. So let’s see how it plays out. I don’t see an immediate impact on Bangladesh, but yes, there will be this competition as these countries like India and all really ramps up their act, then definitely there should be some competition in Bangladesh, but still some time to before that.
Sunny Vishay
Perfect. Perfect. Best of luck for the future performance. Thank you.
Pallab Banerjee
Thank you.
operator
Thank you. Ladies and gentlemen, you are requested to limit your questions to to two per participants. The next question is from the line of Shraddha from Asian Market Securities. Please go ahead.
Shraddha
Yeah, hi. Congratulations on a good quarter for two questions. Vietnam, it seems, has had some minimum wage hike starting the first of January. So how has that done our operations and margins in Vietnam?
Pallab Banerjee
Every country will have regular annual wage hikes and so is for Vietnam at least it’s much more predictable for a country like Vietnam, what kind of wage hike that they have been doing year on year. So yes, to compensate or to mitigate that, there is a continuous effort towards improving the efficiency countries like China, Vietnam and all, we are seeing much more automation, much more robotics that is coming in because the wages are quite high out there compared to countries like Bangladesh and India. So even at Pearl also we continue to invest in those technologies and upgradation of our machinery and automation as well as robotics.
So that’s the only way that we can produce similar kind of have similar kind of productivity at a similar kind of cost in this competitive world. So we continue to do the same thing. We have continuously invested in automation and robotics in a country like Vietnam. So that continues to happen, but that.
Shraddha
Would reflect gradually numbers. So in the near term, do we expect margins to take a beating in Vietnam on a sequential basis?
Pallab Banerjee
That’s what exactly I was trying. Yeah, that’s what exactly I was trying to say that, you know, this is something which is predictable and a country like Vietnam, we have seen the predictability as very high. And that’s the reason for which certain markets like us and all have been really going to all these customers goes to Vietnam first. So that predictability is high. And so we could plan that out. Okay, this is the year how much of cost will go up and how to compensate that. So that’s something that we have been actively working. We don’t see a major challenge, the overall geopolitics or suddenly some kind of other FTEs happening in other countries and all.
So that will continue to happen. I think all of us have to be really nimble at this point of time to mitigate that. But this, the local wage hike of a country like Vietnam, that’s something which is predictable and plan for.
Shraddha
Got it. And so another question which is not related to this quarter in specific, but if I look at our payable days and compare it to our peers, that seems to be almost double of the other peers. So why is it that payable days are so high relative to competition?
Sanjay Gandhi
I saw payable days has been around 45 to 50 days. And this all actually follow as per the credit terms which we have, you know, with all our suppliers. So many of them are backed with letter of credit. So letter of credit allows you to enjoy those credit period and it is in line with our working capital cycle period. So in terms of the networking days, when you look at it, we are, you know, hovering within 35 to 40 days time period only, which is I think the lowest net working capital days compared to peers in India or internationally.
So I mean you have to look at overall net working capital days to really see the efficiency in managing the working capital.
Shraddha
That’s true, sir, but I was just a bit curious as to how have we been able to negotiate better terms with our suppliers versus our competitors.
operator
Sorry to interrupt you, Shraddha. Can you please rejoin the queue for more questions?
Shraddha
Yeah, it’s just a follow up on my audio question.
Pallab Banerjee
Yeah, it’s a follow up question. You can answer that.
Sanjay Gandhi
Yeah, so the, see the long term relationship which we enjoy with all these suppliers, you know, whether it’s a Bangladesh procurement or Vietnam procurement and there is a much more stability also and they see the volume growth coming over a period of time. So it’s a relationship which is built, you know, I think a number of years and as the business grows and our payment terms, our payment, we have never, you know, delayed payment to any of our stakeholder whether it’s a supplier or employees or any statutory compliances. I think these all built a lot of confidence and they really then are able to, you know, collaborate with us for a symbiotic relationship to really grow business together.
And that has been working well for us and we intend to continue working on those best practices.
Shraddha
Sure. Thank you.
Sanjay Gandhi
Thank you.
operator
Thank you. The next question is from the line of Vishal Mehta from IISL Capital. Please go ahead.
Vishal Mehta
Yeah, hi. Thanks for taking my question and congratulations on a good setup. Most of the questions have been answered but a couple of questions probably from my side would be, you know, I just wanted to understand a bit on technicals of these US tariff reduction. Now then the joint statement for 18% tariff is out and you know, there’s also an executive order for withdrawing all tariff also in which you know it’s written that good ship probably pushed 7th of February would be attracting lower duties. So for us now, you know, going forward, you know, all the good stip, you know, for that the discounts automatically get withdrawn.
So. So how, how does it work?
Sanjay Gandhi
Yeah, sure. So on the technicality perspective, I just spoke to, you know, before, you know this call in the morning itself to our forwarding and custom agent that you know, any filing which is done from seventh onward will be after seventh onward, which will be considered as a consumption entering into. For entering for consumption in America will attract. Will not attract this 25% penalty tariff. Now which means that you know, the shipments which has already sailed will have those pricing which is on the. Which will be. Which has the risk of 25%. But going forward, as soon as we have the proof of the tariff really going out and the burden is not there on the importer, we will be able to get credit of all the extra tariff which was presumed to be there but actually it is withdrawn from the dead date of 7th of February.
In all our future shipment we are already engaging with our customer to really make necessary amendment in the purchase order. Exact nitty gritty of that is still under discussion. But yes, the expectation and discussion following the earlier understanding has been withdrawal of the same as soon as you know this restrictions are lifted or the penalty is removed.
Pallab Banerjee
Okay. So when the customers had asked for these discounts they had said that if, if the tariff gets reversed then, then this discounts also would be reversed. So I think that’s something which is coming into effect now.
Vishal Mehta
Okay, but there won’t be a further need for doing a second round of negotiations. The discounts just probably get reversed.
Pallab Banerjee
Not on these, not on these Orders for the fresh order that they’re placing, they will continue to be, they would like to be competitive across the globe. So if Indonesia, Vietnam, Bangladesh, we had that disadvantage. India had the disadvantage so far. So I think now it’s more like a level playing ground. Of course India has an additional advantage of 2% but yeah, that’s what it is at this point.
Vishal Mehta
And just a clarification on, you know, the tariff related discounts. Till now in our PNL we were setting it off against our revenues or realizations or booking it as a separate expense line.
Sanjay Gandhi
Yeah, sure, thank you for asking this. Basically it’s a combination of both. In some part it is revenue reduction and in some part we know where the it is going as a part of the other expenses. Also this all depends as I mentioned that you know the exact technicality of that will be in discussion with the customer. The same has happened in the past as well the way you know the customer, the contracts have been tracked. It is, has been taking, reflecting in the pnl. So part of it is in sales reduction and part is part of the other expenses.
Vishal Mehta
Also. Could you, sir, could you quantify, you. Know, the proportion how much.
Sanjay Gandhi
I will share the detail, you know, later offline with you.
Pallab Banerjee
Okay. Okay.
Vishal Mehta
And, and just the last question if. I can squeeze in is what is your current EU presence And you know, how are we ranked on the sustainability aspect? As you know this market is much more conscious about that. So your thoughts here would be helpful.
Pallab Banerjee
Yeah, so we have been supplying to EU because presence of our Bangladesh operations and that has been quite a substantial amount. So as I speak, I think our EU based customers were already 17% plus or moving towards 20% kind of thing. If I talk about total import into the country of eu so then most of our production is EU ready in terms of government traceability in terms of the ESG that they are looking for. Yes, there are some few changes like you know, countries like India and all which was low that also we have been investing and making it ready especially for the water, solar, renewable energy as well as waste management.
So we are I think ready in all our facilities to execute EU business.
Vishal Mehta
Okay, so EU was, is around 17, 18% of your overall revenues right now. And you’re saying that Bangladesh, you have already been EU market ready. India, there are some more investments.
Pallab Banerjee
Just to summarize, India also we have been shipping to eu. We have been shipping. Now this ramp up is going to happen. So let’s say out of our eight owned factories in India there were already four were already Approved for eu. The balance for also is now getting approved as these numbers are going up. So that kind of thing. So it’s a very minor thing, not any kind of major investment or anything is required. So that’s where we are ready for the EU and uk. Yeah. Bangladesh, Vietnam always was ready. India also. Now we are ready.
Sure. Thank you. Thanks.
operator
Thank you. The next question is from the line of Sahil Sharma from Dalmas Capital Management. Please go ahead.
Sahil Sharma
Hi. Thank you for the opportunity. So sir, like you mentioned that Europe. You’Re targeting about 1500-1600 crores from India. So could you also share the revenue target from other geographies as well?
Sanjay Gandhi
So I think we have been mentioning about 12% to 14% revenue CAGR at a group level we will, we are still maintaining that guideline and we are always trying to really beat this number as far as India is concerned. This number become relevant from the capacity readiness perspective. What we mentioned, our capacity is ready in house, capacity to do a top line of 1600 plus crore. And with FTA in place, I think the opportunity to accelerate that is there in front of us. So we are ready to have those scale up the revenue from a current run rate of 1100 or odd crore to 1600 plus crore turnover.
And that’s why the reference came. Overall at the group level we are looking at a 12 to 14% revenue growth in the next two, three years. That’s what we have stated and we always strive to really beat that number.
Sahil Sharma
Understood.
Pallab Banerjee
I must add one thing out here is that because this India FTA is coming into action, so everything has to be made from India. That’s not a compulsory thing for pearl movers. We do have, you know, the options of servicing the customer from Bangladesh and Vietnam as well in the same without any tariff. So naturally like wherever we see that the best advantage is there for us as well as the customer, we will continue to do that. Yes, India, we are ready today to have that, you know, to ramp it up to that number. That’s the main point.
And as Sanjay just said that we target to beat this 12 to 14%. But yeah, that’s something that is definitely given that we want to do every category that we want to maintain.
Sahil Sharma
Understood. On the EU and UK fdi, like earlier if I talk about the India operations, we were competing with Bangladesh, Vietnam and some of Europe, it would have been coming into our pricing as well. So now with these FTAs do we see, you know, margin expansion by Europe as we’ll have to provide lower discounts If I’m shipping to any you or UK geography is my understanding correct on that.
Pallab Banerjee
For an Indian vendor who was competing with the Bangladesh competition, they had a disadvantage of this 10% of additional tariff to European Union and UK which from 1st of January has become 12%. So this particular year till the UK FDA comes into effect or the European Union FTA which is expected to come into effect for next year. So we have an additional burden of 2 additional percent compared to last year. That’s because of the finishing of the GSP advantage that we had till 31st of December 2025. So that’s what is happening. But yes, there is a renewed interest from all the customers and the Indian players to secure business and to get on with it.
So yes, if you are asking me like there has to be, if the retailer wants to be getting the best price, then there is a disadvantage of 12% between Bangladesh and India. As I speak, expected to move away from UK maybe like you know, from April onwards and expect it to move away from UU maybe 2027, January onwards. So yes, to really like if the customer insisting that okay, I need the same price of my land aid as Bangladesh, then the Indian vendor have to give that 12% or take a bidding of 12%. Now that will depend on the negotiation, the readiness of the customer to take that extra 12% or not to develop a vendor or an Indian supplier to see that.
Okay, whether we want that business so that we can secure some business for future by taking this extra hit. So these are all negotiation tactics and the relationship that we have now specifically for Pearl Global, as I just mentioned earlier also we have this choice between these three countries and the other two countries definitely have the FDA and the tariff benefit as of now. India is going to have it soon because we have signed the treaty. I hope this makes sense to you.
Sahil Sharma
Yes, absolutely. Yes. And if you could give some color on the volumes from Vietnam and Indonesia and how they have changed. Yes.
Pallab Banerjee
So Vietnam we are experiencing about, I would say more than the 15% kind of growth at this point of time. And Bangladesh we had, sorry, you wanted only Vietnam. Indonesia, Indonesia. Like you know, we, we mentioned that we are in the damper period because we shifted that factory two years back and that we had taken that hit from a 30 plus million dollar that we had our capacity earlier it had come down to, you know, in the 15, 16 region. So that we are ramping it up. So this year we will see a significant growth and next year onwards growth plus the bottom line both significantly higher.
Sanjay had mentioned in the earlier questions.
Sahil Sharma
Right. Thank you so much.
operator
Thank you. We’ll take the last question from the line of Manju Bhashini a from Ask Wealth Advisory. Please go ahead.
Manju Bhashini
Greetings to the management. One question on particular to the Vietnam geography. The growth seems to be very healthy there at 66 odd percent. This these numbers I’m talking from the segmental data that has been disclosed. But the margins for some reason aren’t as positive as the growth is. Any particular reason there?
Sanjay Gandhi
Yeah. Thank you. So in the segmental as I mentioned earlier, the revenue from Vietnam also is also bifurcated between the two countries because we follow the bill to ship to model and all the invicing for the customer of Vietnam is through Hong Kong entity. So you will see the margin basically a combination of the two entities, Hong Kong plus Vietnam to really arrive at only Vietnam revenue. That is what we do. As I mentioned for the Bangladesh seem to hold for good for Vietnam and good for Indonesia as well. So purely segmental revenue when you see it it is only entity revenue and then there is an intersegmental adjustment which happened below that.
And likewise on the PVD part also what you see is what is reported in the local entity and then thereafter there are build to shifting model and there are certain expenses which get incurred in on account of the following. The build to ship to model and the margin profile of different entity but pertains to the Vietnam division will be there. So we have to really combine all this revenue to margin to arrive at a total margin profile of your thumb operation that may require certain discussion to arrive it up and which is what we do our internal evaluation when we really work on it.
Manju Bhashini
Okay, so necessarily you’re saying do not look at the segmental margin on a standalone basis. Just look at India versus all the other geographies and that will give us a better picture of how the profitability has moved for the other geographies other than India.
Sanjay Gandhi
Yes, your understanding is correct because here you know there are related intercompany transaction which requires an elimination. So you may not get the complete overview of the specific geography. However India since standalone accounts are published, you can definitely get a clue about Indian operation directly from there.
Manju Bhashini
And just one more question on for the nine month ended time frame we had these one off tariff related plus ramp up cost accumulating to 42 odd crores. And previously in the conversation you did mention that the ramp up cost will reduce in Q4 but from F27 onwards only we should assume it to be nil. So in that sense there is going to be a tailwind of at least say 30, 35 odd crores from the margin perspective in Q4 versus Q3 is that a correct understanding?
Sanjay Gandhi
This is a nine months number so yeah quarterly impact will be accordingly calibrated. One but yes, but yes it will be. You know it will flow through in the P and L. When you look at a complete full year next year compared to this full year next year there will be a definitely the number improvement on account of operation efficiency or you know setting of the operation which will happen.
Manju Bhashini
Sure sir. And are we looking to increase our margin expectations from the group company level? I think earlier the you had talked about aspirations of reaching a double digit EBITDA margin in the India geography and that will also reflect in your overall group level EBITDA margin trajectory. So would you look to increase this number? Sir, as we are seeing all the headwinds and trade negotiations etc are all behind us now.
Sanjay Gandhi
Certainly our target is to really move to those double digit EBITDA at standalone at a group level and we are definitely working towards it. And all this FTA and the trade barrier going out and one of the costs also getting cooled down next financial year. We are well positioned to achieve this double digit number directionally. We are going in that direction and we are pretty confident we should be able to accomplish those targeted number in the coming quarters.
Manju Bhashini
Definitely. Thank you very much and wish you all the best.
Sanjay Gandhi
Thank you so much.
operator
Thank you. Ladies and gentlemen, due to time constraint. That was the last question. I would now like to hand the conference over to Mr. Sanjay Gandhi for his closing comments. Over to you sir.
Sanjay Gandhi
Thank you to all participants. We have successfully sustained our growth momentum despite challenging macroeconomic conditions with positive developments in the industry more specific from India perspective we are poised for accelerated growth in our India operations as well as across the group. I hope we have been able to address all your queries. For any further information kindly get in touch with Shisher, our head of Investor Relations or Strategic Growth Advisor. Our investor Relations advisor. Thank you.
operator
On behalf of Pearl Global Industries Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines.