Banswara Syntex Limited (BANSWRAS) Q4 FY23 Earnings Concall Transcript

Banswara Syntex Limited (NSE:BANSWRAS) Q4 FY23 Earnings Concall dated May. 16, 2023.

Corporate Participants:

Ravi Toshniwal — Managing Director

Rahul Bhadauria — Senior Vice President & Head of Business

Analysts:

Keshav — RakSan Investors — Analyst

Nirbhay Mahawar — N Square Capital — Analyst

Surya Narayan Nayak — Sunidhi Securities — Analyst

Naitik Mohata — Sequent Investments — Analyst

Navneet — Individual Investor — Analyst

Sandeep Dikshit — Arjav Partners — Analyst

Tanya Gupta — Green Portfolio — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Banswara Syntex Limited Q4 FY ’23 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performances and involves risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Ravi Toshniwal, Managing Director from Banswara Syntex. Thank you and over to you, sir.

Ravi Toshniwal — Managing Director

Right. Thank you. Good afternoon and welcome everyone to our quarter four FY ’23 earnings conference call. On this call, I have been joined by Ms. Kavita Gandhi, who has been appointed as our CFO. Ms. Gandhi is a chartered accountant and has over 30 years of experience in the field of accounts, taxation and finance. Joining us also on this call, we have SGA, our Investor Relations advisors. And it is with great pleasure that I highlight the remarkable performance of FY ’23 for Banswara.

In the wake of the pandemic, the West as in EU have adopted the China Plus One strategy leading to a decline in demand for textiles produced in China. Consequently, India has emerged as one of the more favorable destinations for long-term manufacturing outside of China. India’s share in the textile market is projected to increase in the coming years with textile exports from India expected to reach approximately about $20 billion. Recognizing this trend, the Indian government has introduced initiatives such as a PLI scheme for textile and the PM MITRA initiative. As part of these efforts, the establishment of seven mega textile parks in India with a combined investment INR70,000 crores will further incentivize manufacturing and boost exports.

We have observed a rising demand for our textiles from global customers because of this development. Hence, the future of the textile industry in India appears promising. Given the opportunity that textile as a sector is presenting, we are looking to steer the company in the direction of growth and achieving larger scale of business. Keeping this in mind, we are strengthening our leadership team within the organization in line with our future growth plans. The promoters of the Board have collectively started tracking business from three of our divisions individually and these divisional perspectives are for yarn, fabric and garment business separately. This strategic move aims to improve the realizations and enhance both the top line and the bottom line of each segment.

To implement this decision, we have appointed three separate business unit heads for our yarn division, fabric division and garment division. Mr. Vireshwar Joshi will head the yarn division. He has 30 years of experience in the textile industry across various companies in India, Nigeria and Uganda. He has demonstrated the ability to manage large scale manufacturing operations with a focus on improving efficiency and productivity. Coming to our fabric division, Mr. Shailendra Pandey will head the fabric division. He has M.Sc in textile chemistry and an MBA in production and operations and he owns over 27 years of experience in textile manufacturing industry, including poly viscose suiting, automotive textiles, worsted fabric and home furnishing.

Our garments division finally will be headed Mr. Rahul Bhaduria. He is a graduate in garment manufacturing technology from MIT and has over 24 years of experience in the industry. Previously, he held positions in Arvind Limited, Welspun India, Creative Garments and Must Garments. Further, to strengthen our core leadership team, we have onboard Mr. Devendra Pratap Mishra, our Chief Technology Officer, our CTO. He has over 29 years of experience in the field of information technology with specialization in SAP, ISO/QMS, quality management systems, VMS, TQM and 5S. He also holds a M.Sc in mathematics, an MCA and he is a Bachelor of Law.

Mr. Swapnil Srivastava is our Deputy General Manager for Corporate Human Resources. He has over 15 years of experience across all domains of HR such as recruitments, HR and IR systems and audit, HRI’s implementations, HR strategy and policy design. And finally, Mr. Yugalkishore Agrawal has been appointed as a Vice President, Internal Audit. He has working experience of 20 years with reputed companies like Godrej & Boyce, then in company Kores, etc. He is vastly experienced in the entire gamut of internal audit investigations and controls yarn division.

Coming to the divisional performance for quarter four FY ’23. Yarn sales dropped 18% in the last quarter to INR126 crores versus INR154 crores in quarter four FY ’22 owing to a slowdown in the general market condition. During quarter three FY ’23, yarn demand was weak. The company decided to shutdown certain ring frames due to lower demand in the market. However, during quarter four FY ’23, the company started production of running quality for optimum utilization of the machine. Hence, production has increased by 6%. However, the sluggishness in the market conditions continues and the yarn sales for quarter four FY ’23 dipped 1% versus quarter three FY ’23 from INR128 crores to INR126 crores for FY ’23.

Sales remains flat at rupees INR558 crores versus INR556 crores in FY ’22. So yarn business has been more or less flat with no top line growth. EBITDA margins for the yarn division stood at about 10.9% for FY ’23. Overall, value-added sales within the yarn division for FY ’23 stood at INR43 crores. Capacity utilization for this division stood at about 87%. We invested INR38 crores in modernizing and capacity increase for FY ’23 and we expect to do somewhere around INR40 crores capex for FY ’24 to boost production and efficiency. We are exploring and targeting the growing making in weaving yarn demand in Southern India. As a new domestic market opportunity, we are targeting 8% to 12% growth in revenues by FY ’24. That’s it for the yarn division.

Now move on to the fabric division. And talking about our fabric division for quarter four FY ’23, fabric sales grew by 3.7% to INR141 crores versus INR136 crores in quarter four FY ’22. Since the order book position of fabrics was lower in quarter three FY ’23, the company decided to cut production in quarter four FY ’23 as compared to the previous quarter. Thus, on a quarter-to-quarter basis for quarter four FY ’23, fabric sales saw a dip of 5% from INR149 crores in quarterly three FY — to INR141 crores in quarter four FY ’23. However, for FY ’23, fabric sales actually increased 41% from INR397 crores to INR557 crores. This growth can be attributed to increased demand, post COVID restrictions and low base effect and the expansion of production lines with [Indecipherable]. EBITDA margins in the fabric division stood at about 12% for FY ’23.

Overall value-added sales within the fabric division stood at about INR87 crores. Capacity utilization in the division stood at about 89%. INR20 crores were invested in modernization and capacity increase for FY ’23 with an expected INR12 crores capex for FY ’24 to boost production and efficiency. This new domestic brand acquired from Italy, we have successfully developed and launched a two way and a four way stretch, 100% polyester new products and we are expanding sales of premium fabric especially woolen, worsted, blended. Company is targeting 11% to 14% growth in revenues in the fabric division by FY ’24.

Lastly, I’m coming to the garment division. And coming to our garment division for quarter four FY ’23, garment sales grew by 41% to INR97 crores versus INR69 crores in quarter four FY ’22 on a kind of a strong order book owing to a revival in demand. During quarter four FY ’23, garment division increased its production. And the division as for orders in hand because the good orders in jackets, we did increase production in jackets. However, trousers production was less than the quarter three FY ’23, which is actually a plus because the jacket business is more profitable than the pant business.

On a quarter-to-quarter basis, for quarter four FY ’23, the division witnessed an upside of 10% which is INR97 crores versus INR88 crores in quarter three FY ’23 on account of strong order book and exports from the previous quarters. For FY ’23, garments division has had the highest ever increase of 85% to INR368 crores versus INR199 crores in FY ’22. This was due to the product diversification, demand revival and a strong order book from previous quarters and the EBITDA margins for the garment division stood at about 7.24% for FY ’23, which is lower than the other two divisions. Overall value-added sales within the garment division for FY ’23 stood at INR68 crores. Capacity utilization for garment division stood at just 69%.

The INR35 crores we invested in modernization capacity increase for FY ’23 with an expected INR28 crores capex for FY ’24 is to boost production and efficiency further. We are emphasizing on manufacturing expertise in formal suits and trousers with diverse blends and investing in made to measure capacity for formal suits. We are also setting up a product development center Daman to collaborate with the marketing team and drive business growth from existing and potential customers. The revenue for the division should grow by 12% to 16% in FY ’24.

Exports. Exports sales grew 3% to INR193 crores in the garment division against INR187 crores in the last year. Exports contribution grew from 47% in quarter three FY ’23 to 52% in quarter four FY 2’3. Garments took the lead with 32% increase followed by yarn rate of 18%. The export sales contribution increased from 45% in FY ’22 due to 48% in FY ’23 showing an increase of 35% where the domestic sales increased by 19%. So a small growth in exports and domestic in the garment business. The major reasons behind this change area — behind the same are — behind the increase is one of the low base effect as two quarters of FY ’21 and ’22 were impacted by COVID and hence demand was lower. So B, the pent up demand in FY ’23 once normalized returned post-COVID. And C, the garment increase of 143% in exports and 58% in domestic was on account of larger orders from good international brands.

To capex. On a company level, during financial year ’23, we incurred a total capex of INR97 crores versus INR22 crores in FY ’22. Going ahead, we should incur a capex between INR120 crores to INR150 crores for the next financial year and to mitigate uncertainties associated with power procurement for our three manufacturing units. We also spent about INR54 crores in setting up power generation. Credit rating, I’m happy to state that the India ratings and research INDRA has upgraded Banswara Syntex Limited to BSL bank facility ratings to A stable financial performance.

Coming to our financial performance on a standalone basis. Revenue for quarter four FY ’23 remained flat quarter-on-quarter and year-on year at INR369 crores. Employee existed at INR78.1 crores versus INR62.2 crores in quarter four FY ’22. Employee benefit expenses have risen marginally by 3.6%. The increased employee cost is majorly on account of one-time special incentives to employees of about INR4 crores. Since we had such a good year, we distributed it to our staff.

Efficiency improvement during the current quarter for power and fuel cost is due to the reduction in average coal consumption cost by about INR680 per ton. The operating margin for quarter four FY ’23 stood at 14.9% versus 13% for quarter four FY ’22. The profit after tax improved from INR19.4 crores in quarter four FY ’22 to INR27.8 crores in quarter four FY 23. The earnings per share stood at INR8.1 versus INR5.7 in the last year. On a full year basis, total Income for FY ’23 increased by 26% to INR1,498.8 crores, almost INR1,500 crores versus INR1,189.8 crores for FY ’22, which is about a 26% increase in sales.

Employee cost for FY ’23 stood at INR286.6 crores versus INR219.2 crores. For FY ’23, the power decreased by 0.5%. This is due to the general easing of coal prices and the operating margins improved from 11.5% in FY ’22 to 14.1% in FY ’23. Margins improved due to one, the reduction in power costs and fuel costs as the per ton cost of coal reduced by INR680 per ton resulting in a saving of about INR1.6 crores and the garment division sold more jackets and fewer orders were on higher margin as compared to the previous quarter which has better margin. PAT for the year stood at INR111.4 crores versus INR46.8 crores in FY ’22. For FY ’23, EPS for FY ’23 was at INR32.6 per share.

Guidance. So we had happy results. But given the challenging global inflationary environment and the headwinds faced by the sector, we anticipate a muted quarter one FY ’24. However, going forward, our goal is to achieve revenues between INR1,550 crores to INR1,700 crores by FY ’24 driven by steady revenue growth in all the business divisions.

And thank you. And with this, we now open the floor for question and answers.

Questions and Answers:

Operator

[Operator Instructions] Our first question is from the line of Keshav from RakSan Investors. Please go ahead.

Ravi Toshniwal — Managing Director

Hello.

Keshav — RakSan Investors — Analyst

Hi, good afternoon, sir. Firstly, congrats for an exceptional performance. Sir, firstly, like one of our garmenting peers spoke about the lack of availability of good quality local synthetic fiber for exports…

Ravi Toshniwal — Managing Director

Fiber or fabric?

Keshav — RakSan Investors — Analyst

Some of the fabric, sorry. My bad.

Ravi Toshniwal — Managing Director

Okay.

Keshav — RakSan Investors — Analyst

So what’s your view on the domestic synthetic ecosystem in that regard in terms of quality? Is it too few players offering good quality fabrics in comparison to the scale required for markets like EU and U.S.?

Ravi Toshniwal — Managing Director

Well, I would say yes, I agree with that. There are few players and it’s not just about offering good quality. It’s about offering good quality at the right price. Competitive — our competitiveness as compared to say Taiwan or China is not maybe as good or has not. And we are improving.

Keshav — RakSan Investors — Analyst

So sir, say, we are in talks with a big fast fashion brand and we have done our been a bit of work on reducing the lead time. So congrats for that again. We can offer — say, we can offer them garments as fast as a Vietnamese player can, but they require very large volumes. So would they not require the overall country-wide ecosystem to be meaningful and of good quality to justify taking even as onboard as a vendor because they have to shift or build new supply chains. And if the country-wide volumes are not there, so would that not restrict us to the Indian supply for garments for those very players?

Ravi Toshniwal — Managing Director

What do you mean only Indian supply, why not. Access is always there for imports when you want to export garment.

Keshav — RakSan Investors — Analyst

So sir, basically, if they require a lot of volumes and our bottleneck is lying somewhere around in the fabric to garment…

Ravi Toshniwal — Managing Director

Yeah. But bottleneck means what? We are still talking global trade. If you want to export garments, you can always import. Exports doesn’t happen without imports. And it’s all free and available, duty-free.

Keshav — RakSan Investors — Analyst

So sir, basically would it be — I mean, if we are banking on the garment growth for next four to five years and a lot of work has gone to reduce the fabric and the garment cycle times also, so are we basically…

Ravi Toshniwal — Managing Director

Cycle times from China are pretty good. So what is the harm import in the EU or in the [Indecipherable]. India has to grow like a garment story with or without its own supply base on synthetics and fabrics. If it has the supply, it is great and it is growing and it is happening. But if it doesn’t have a little import to fabric, what’s the big deal?

Keshav — RakSan Investors — Analyst

Right, sir. Okay. So sir, second question on labor availability for garmenting. So that is another one thing I’ve noticed, this has been a major issue for garmenters especially for scaling up. So there are different cost dynamics for different use of course. So on the cost and availability front, how are things for us in Daman and Surat?

Ravi Toshniwal — Managing Director

Daman and Surat availability of the labor is fine, no problems for us. We pay them well, we look after them, good HR and I have practices, no problem.

Keshav — RakSan Investors — Analyst

So sir, when we plan to scale garmenting capacity, so we are putting a INR50 crores capex in garments and I guess that’s a decent enough number. So would there be — can we be rest assured that there won’t be any issues with scaling up in terms of labor? Because we’ve seen that with other companies that they’re putting the capacities, but years pass on and they can’t really scale that capacities.

Ravi Toshniwal — Managing Director

No. I don’t see a challenge with that. Rahul can answer it better, Our garment division head and you could probably talk to him later. He is listening-in on this conversation. So you can schedule a call through with him to understand it and you can even go down to Daman and have a look yourself.

Keshav — RakSan Investors — Analyst

Sure, sir. Sir, lastly the Uniqlo partnership or whatever we are doing in Southeast Asia, so is that strategy to stick to fabric versus garments because they would have the own garmenting ecosystem there or we target both?

Ravi Toshniwal — Managing Director

Well, I mean, what do you mean stick to fabric versus garments?

Keshav — RakSan Investors — Analyst

So sir, I mean, do have…

Ravi Toshniwal — Managing Director

We would want to spend — increase both fabric and garment. Why one or the other? I want to grow in both. The garment will be made in Sri Lanka, Bangladesh because of the duty advantages in garment free zones, which India doesn’t have until it gets its FTAs and whatever happens, right? So this is dependent on the FTAs, whether the garment growth from India begins to happen in a better way or not. You get my point?

Operator

Thank you. Sorry to interrupt. May we request that you return to the question queue for follow-up questions as there are several participants waiting for their turn. Thank you.

Ravi Toshniwal — Managing Director

Sorry, Keshav.

Operator

[Operator Instructions] Our next question is from the line of Nirbhay Mahawar from N Square Capital. Please go ahead.

Nirbhay Mahawar — N Square Capital — Analyst

Yeah, congratulations for good set of numbers, sir. Just wanted to have a slightly longer-term outlook. Last two,-three years, we have seen significant shift towards fabric and garment in our revenue mix. Do you see…

Operator

Mr. Nirbhay Mahawar, sorry to interrupt. I would request you to use the handset.

Nirbhay Mahawar — N Square Capital — Analyst

Yeah. Hello. Am I audible now?

Operator

Yeah, that’s better. Please go ahead.

Nirbhay Mahawar — N Square Capital — Analyst

Yeah. So last two, three years, we have seen significant growth in the fabric and garment segment and our revenue mix is moving in their favor. Do you see this trend continuing?

Ravi Toshniwal — Managing Director

Yes, we do.

Nirbhay Mahawar — N Square Capital — Analyst

Okay. And does it mean that we will have much lower capital intensity for growth? We would…

Ravi Toshniwal — Managing Director

What do you mean capital intensity? No, yeah, obviously because garment is low capital intensity, not necessarily fabric. But also fabric won’t have that much capital intensity as yarn has, so yes.

Nirbhay Mahawar — N Square Capital — Analyst

Yeah, that’s what I — I mean, as we are moving — selling to fabric and garment probably the capital intensity should reduce?

Ravi Toshniwal — Managing Director

Right.

Nirbhay Mahawar — N Square Capital — Analyst

And our margin profile will also be much more steadier, sir, because yarn is much more cyclical in comparison to…

Ravi Toshniwal — Managing Director

Yes.

Nirbhay Mahawar — N Square Capital — Analyst

And on the receivable side, again, we have seen some increase. So is it because of the same reason which we have mentioned in earlier quarters or there is some…

Ravi Toshniwal — Managing Director

Receivables side?

Nirbhay Mahawar — N Square Capital — Analyst

Yeah.

Ravi Toshniwal — Managing Director

Yeah. That’s partly because of the domestic garment credit clients that we give to the brands, yeah, but it’s secure like I explained last time.

Nirbhay Mahawar — N Square Capital — Analyst

So how much is the incremental thing that has because of that particular reason, what is the total quantum of additional value we have given it to?

Ravi Toshniwal — Managing Director

I don’t know. My CFO can answer that.

Nirbhay Mahawar — N Square Capital — Analyst

So shall I take it offline or he can answer right now?

Ravi Toshniwal — Managing Director

I don’t know. You have to ask SGA.

Nirbhay Mahawar — N Square Capital — Analyst

Fair enough. I’ll follow with regarding that. And in spinning side we…

Operator

Sorry to interrupt. Mr. Nirbhay, may we request that you return to the question.

Nirbhay Mahawar — N Square Capital — Analyst

This is the last one. On the spinning side, we had seen some kind of moderation in revenues. So do you — because of this Turkey thing. So is it picking up now or how is it?

Ravi Toshniwal — Managing Director

Marginally, other countries are picking up. So yes, yarn is more under pressure than the fabric and garment business, but overall, we don’t have that big in yarn capacity. So I don’t see it not being used. So we’ll be fine. We’ll be more or less where we are, maybe a little bit growth, not as much as in fabric and garment.

Nirbhay Mahawar — N Square Capital — Analyst

Great, sir. Thanks and all the best.

Ravi Toshniwal — Managing Director

Thank you.

Operator

Thank you. Our next question is from the line of Surya Narayan Nayak from Sunidhi Securities. Please go ahead. Mr. Surya Narayan, your line has been unmuted please go ahead and ask your question.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Yeah, sorry. Congratulations, sir, for good set of numbers. Thanks for the opportunity. Just to understand that beyond the K3 new unit that is coming up in Daman, what is our plan beyond, let’s say — because that will be coming off in next six months. So what is the plan ahead for the garment side?

Ravi Toshniwal — Managing Director

For the garment side or you want my capex plans overall?

Surya Narayan Nayak — Sunidhi Securities — Analyst

No, K3 is done, merely it is committed. So after K3, what is the plan?

Ravi Toshniwal — Managing Director

After quarter three or…

Surya Narayan Nayak — Sunidhi Securities — Analyst

No, K3 unit.

Ravi Toshniwal — Managing Director

K3 and…

Surya Narayan Nayak — Sunidhi Securities — Analyst

Yeah, K3B.

Ravi Toshniwal — Managing Director

Yeah. Okay. So again, in specific, I can tell you that we will be spending about INR54 crores power generation. We would be spending INR145 crores.

Surya Narayan Nayak — Sunidhi Securities — Analyst

INR95 crores for FY ’24?

Ravi Toshniwal — Managing Director

No, we have already invested in FY ’23 INR95 crores in the garment division and we intend on investing further. I think I need help from Kavita. I won’t give you wrong number. But Kavita, can you say how much we are planning to invest in the next FY ’24 — FY ’23, FY ’24 in the garment division, please, [Indecipherable]?

Rahul Bhadauria — Senior Vice President & Head of Business

Hello, can you hear me?

Surya Narayan Nayak — Sunidhi Securities — Analyst

Yes.

Ravi Toshniwal — Managing Director

Yeah, yeah go ahead, Rahul.

Rahul Bhadauria — Senior Vice President & Head of Business

For FY ’24, the [Technical Issues] garment division is INR28 crores.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Okay. INR28 crores?

Rahul Bhadauria — Senior Vice President & Head of Business

Yeah. And for next year is — stance for next year is — for FY ’24 is about INR145 crores.

Surya Narayan Nayak — Sunidhi Securities — Analyst

And sorry, FY ’24 you said INR28 crores in K3, right, that is the K3B?

Rahul Bhadauria — Senior Vice President & Head of Business

That will be for the garment division.

Surya Narayan Nayak — Sunidhi Securities — Analyst

So for the…

Rahul Bhadauria — Senior Vice President & Head of Business

That will include K3 plus some efficiency improvement [Technical Issues] as well.

Surya Narayan Nayak — Sunidhi Securities — Analyst

So how much that will get? Beyond INR28 crores, how much, sir?

Rahul Bhadauria — Senior Vice President & Head of Business

I think beyond INR28 crores, total capex for garment division is INR28 crores.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Okay. So my question is that nearly we’ll be phasing the Daman expansion. So for FY ’24, so beyond FY ’24, what is the plan?

Ravi Toshniwal — Managing Director

We could look at acquisitions. We’re even looking at acquiring a garment company in Sri Lanka, but all of this is in the air. So I can’t commit to any anything.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Okay. So any kind of ballpark figure so that now we can enter for it…

Ravi Toshniwal — Managing Director

Nothing for the moment. Except to say whenever we get a good opportunity to seize it.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Okay. And sir, my second question is that just now you have spoken, you were sort of mentioning to other competitors that India is lacking in the synthetic textiles. I mean, what is the — what is at our end — what does it require that we can produce the vaucluse synthetic textiles that we are importing from outside? I mean, that can be a I would say margin enhancement in our case. So what is the requirement?

Ravi Toshniwal — Managing Director

Well, we just need to upgrade our technology for the time and learn from the Europeans how to finish fabric better and like the Chinese didn’t learn all this on their own. It was the Italians and the French who taught them.

Surya Narayan Nayak — Sunidhi Securities — Analyst

So I mean, are we going to change the quality in let’s say FY ’24, ’25 or it will be on the steady state manner?

Ravi Toshniwal — Managing Director

No. Quality improvement is a continuous process. It’s got to happen. It’s going to happen more and more.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Okay. So…

Operator

Sorry to interrupt. Mr. Surya may we request that you return to the question queue…

Surya Narayan Nayak — Sunidhi Securities — Analyst

Follow-up question only, sir. Follow up question on the… So Mr. Toshniwal, if you can tell in the fabrics, how much value addition we have achieved for last one year or two year?

Ravi Toshniwal — Managing Director

We gave you a figure, right? We told you how much percentage when I made my speech of value-added fabric we sold in the last turnover of that INR550 crores. And I don’t remember it from the speech right now, but the Kavita? [Technical Issues] again and — otherwise, Rahul can read it off the speech. We already answered that.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Okay. I will take from Rahul sir.

Rahul Bhadauria — Senior Vice President & Head of Business

Value added is for the yarn segment more about INR43 crores. Within the segment, it was INR87 crores and for the garment segment, it was about INR68 crores.

Operator

So — okay. So I mean, those are the absolute figure. Rahul sir, if you can give some percentage figure so that we can understand that our company is able to value add?

Rahul Bhadauria — Senior Vice President & Head of Business

So if you look at it, the FY ’23 by garment sales is about INR368 crores, of which INR68 crores was value added sales. It is available on the segment slides of the presentation.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Because we don’t have the volumetric figure. So that you tell because those are at your end. So if you can tell the per meter basis what is the valuation we did?

Rahul Bhadauria — Senior Vice President & Head of Business

So I will have to come back to you with volume numbers. We do not have it handy right now.

Surya Narayan Nayak — Sunidhi Securities — Analyst

Okay. Thank.

Operator

[Operator Instructions] Our next question is from the line of Naitik Mohata from Sequent Investments. Please go ahead.

Naitik Mohata — Sequent Investments — Analyst

Yeah. Thank you and congratulations on the great set of numbers. So a couple of questions from my end. Starting with — so our existing capacity, what kind of peak revenue can we expect from our existing capacity?

Ravi Toshniwal — Managing Director

Well, I’ve always been saying that getting to that INR1,700 crores mark with existing capacities is possible given the capacity utilization that currently exists in possibility to also use job work of capacities outside. There’s a lot of capacity in the country.

Naitik Mohata — Sequent Investments — Analyst

Okay. And sir, coming on this capex front, so you have mentioned segment-wise capex numbers for FY ’24 in your presentation, INR40 crores for yarn division, INR12 crores for fabric and INR28 crores for garment. So taking a total of INR80 crores, this is the full year capex that we can expect in FY ’24 or are we planning more? And do we plan to raise any debt for the same thing?

Ravi Toshniwal — Managing Director

Yes. We will be raising debt for sure. But right now, for the year, I’ve given you the capex indication. I don’t want to tell you more about what will happen next year. And if anything changes, we will come back to you in the next quarter.

Naitik Mohata — Sequent Investments — Analyst

All right, sir. And so basically this capex of INR80 crores that we plan to take for FY ’24 and as you mentioned that INR1,700 crores mark as our peak capacity. So where can — where will this push our peak revenue capacity to like I think these are planning INR1,000 crores top line from each segment as a target for next three to four years. So till where will we able to achieve that?

Ravi Toshniwal — Managing Director

Well, let’s say, two or three years. We’ll try. I can’t say that it should happen.

Rahul Bhadauria — Senior Vice President & Head of Business

So I think for now, we have given in FY ’24 guidance to you or our projections and estimates that we have given in the presentation. So standing today it would be difficult to comment on beyond that, beyond any number. But yes, our longer-term vision is to achieve INR1,000 crores of revenue across each division. But we’ll be in a better position towards later part of this year to give any guidance on that.

Naitik Mohata — Sequent Investments — Analyst

Yeah, sir. My question was like this INR80 crores capex that we planned for this year, well, where will that capacity push us like from a INR1,700 crores mark to a INR2,200 crores to INR2,500 crores mark probably?

Ravi Toshniwal — Managing Director

No, no. We have said INR1,700 crores for the next financial year, right, as the upper limit.

Naitik Mohata — Sequent Investments — Analyst

Yeah, I’m saying from this — right, sir. Secondly, on the margin front, so how confident are we of maintaining this 14%, 15% margin that you have done in the last couple of quarters?

Ravi Toshniwal — Managing Director

Margins will go down slightly in the next financial year because of the headwinds and whatever. But we expect that we might be able to get similar profit level or EBITDA level total amount with a higher turnover. So we want to maintain at least the total EBITDA not going down, even if margin percentage goes down.

Naitik Mohata — Sequent Investments — Analyst

Okay. And sir, last question. As you mentioned in your opening remarks that we have acquired some new domestic brands from Italy in the fabric division.

Ravi Toshniwal — Managing Director

[Speech Overlap] We’ve acquired an Italian brand, not a domestic brand. We’ve acquired an Italian brand that we are in the process of paying for and acquiring completely, but we will owning the brand, which is up like 1875 brand with a lot of history and the Italian gentlemen who started it, they are still running it or selling it to us and will be our brand ambassadors and will bring that brand to India and make it as famous, if not more famous eventually than Raymond’s.

Naitik Mohata — Sequent Investments — Analyst

Okay. That’s really nice, sir. And, sir, any update on the Uniqlo view that you were planning to manufacture for?

Ravi Toshniwal — Managing Director

Uniqlo continues, but Uniqlo is not as exciting as building your own brand. Uniqlo is like doing a lot of work for little money.

Naitik Mohata — Sequent Investments — Analyst

Right. Thank you, sir. Thank you and all the best.

Ravi Toshniwal — Managing Director

Okay. Thank you.

Operator

Thank you. Our next question is from the line of Navneet [Phonetic], Individual Investor. Please go ahead.

Navneet — Individual Investor — Analyst

Hi. Good afternoon, Mr. Toshniwal. I have two questions. First is FY ’23 was a good year in terms of growth for Banswara. I think over our pre-pandemic peak there, we did about 10% to 12% lower and we’ve been stuck in the INR1,200 crores to INR1,300 crores range for a number of years before FY ’23. So the question is that if you could disclose what will [Indecipherable] for us this year and what gives us the confidence that the good work could continue in the years to come?

Ravi Toshniwal — Managing Director

So your question is really about whether have we achieved escape velocity from the rate of growth?

Navneet — Individual Investor — Analyst

Yeah, absolutely.

Ravi Toshniwal — Managing Director

Yes, the answer is yes. And why? The answer is because we really have the capabilities and we’ve learned everything and the opportunity exists now. Whatever is the feel good factor about working with India that everybody has.

Navneet — Individual Investor — Analyst

Okay. So over a five year period you are saying that we are a lot more confident today of achieving let’s say a low double-digit growth than what we have done in the past, maybe a low single-digit growth in terms of top line?

Ravi Toshniwal — Managing Director

Correct. I would agree with that.

Navneet — Individual Investor — Analyst

Okay. That’s good to hear. And my second question is on your working capital. So our debtors and inventory together, we have about INR550 odd crores over there. So in terms of number of days is there any scope to have more efficiency here or would this be a normal working capital level?

Ravi Toshniwal — Managing Director

There’s always scope to have better efficiency there and that’s what we’ve hired Kavita Gandhi for. I’m sure she will help us doing that.

Navneet — Individual Investor — Analyst

So are we looking — do we have some internal targets for this year as well or this is…

Ravi Toshniwal — Managing Director

You should take a separate meeting with our CFO and discuss that.

Navneet — Individual Investor — Analyst

Okay. Fair enough. Okay. That’s all that I had. Congratulations for good quarter and all the best for the future.

Ravi Toshniwal — Managing Director

Thank you very much.

Operator

Thank you. Our next question is from the line of Sandeep Dikshit from Arjav Partners. Please go ahead.

Sandeep Dikshit — Arjav Partners — Analyst

Hey. Thank you. Just had a clarification on the margins. FY ’23 last two quarters were probably far better than the last — the preceding few quarters. Is this — should we look at — as the other things stabilize in the sector, are these margins something that we can expect going forward or you expect some softening?

Ravi Toshniwal — Managing Director

So like I said, I mean, I just explained that in the previous conduct. Yes, we expect a little bit of softening. But given there’s a ratio of fabrics and garment business which is of higher EBITDA margin than what we have achieved in yarn, we don’t expect the overall to be too bad, but a little softening with an increase in turnover would still mean that we might be able to preserve hopefully the total EBITDA even in a bad year as it appears to be for the first quarter of the FY ’24. The first quarter is not great on the visibility. But we hope that from the quarter two and quarter three, quarter four and the momentums that we’ve built-up and all of the networking we’ve done and the story around the Indian brand and various other acquisition stories around garment capacities, we will be able to do much better than most others and we are still bullish.

Sandeep Dikshit — Arjav Partners — Analyst

Got it. Thank you.

Ravi Toshniwal — Managing Director

Okay.

Operator

Thank you. Our next question is from the line of Tanya Gupta from Green Portfolio. Please go ahead.

Tanya Gupta — Green Portfolio — Analyst

Good afternoon. Thanks for the opportunity and congratulations on good set of numbers. So my first question is as you know you mentioned about the Italian brand that we just have acquired. Is my understanding correct that we want to have a momentum for Banswara Private Limited or are we acquiring [Indecipherable]. Yeah, so you have mentioned that we have an Italian brand…

Ravi Toshniwal — Managing Director

Correct.

Tanya Gupta — Green Portfolio — Analyst

All right. So is it to push Banswara Brands Private Limited as the [Indecipherable] that we have opened for the online part to gain the momentum?

Ravi Toshniwal — Managing Director

No, no. This is not connected to Banswara brands. That’s a separate story and that is around building a garment brand for the domestic market, which continues. This is about building a fabric brand and competing with the likes of it.

Tanya Gupta — Green Portfolio — Analyst

Okay. Thank you. Could you just — what is the capex for the Banswara Brands Private Limited? How is the response that we are getting there?

Ravi Toshniwal — Managing Director

It’s slow, it’s online, it’s not dramatically active, nothing to report yet.

Tanya Gupta — Green Portfolio — Analyst

Can you just highlight some of the [Indecipherable] that can bring up the opportunity for the future?

Ravi Toshniwal — Managing Director

I didn’t get that question, Tanya.

Tanya Gupta — Green Portfolio — Analyst

Can you just elaborate further, I mean, what is going on, on the ground, like how small the progress is that each gets count? So if you can [Indecipherable] work on Banswara Private Limited?

Ravi Toshniwal — Managing Director

Banswara Private Limited?

Tanya Gupta — Green Portfolio — Analyst

Banswara Brands Private Limited.

Ravi Toshniwal — Managing Director

Banswara Brands is owned fully by Banswara Syntex, by the way.

Tanya Gupta — Green Portfolio — Analyst

Okay. So I just wanted to know the projects that you said that it’s not substantial below.

Ravi Toshniwal — Managing Director

Yeah, nothing to talk about right now. We’re just the beginning story and I really don’t want to say much more.

Tanya Gupta — Green Portfolio — Analyst

Sure, sir. Second question is share of profit from joint venture has increased. So if you can put some color on to that? How has the value and the profits of,,,

Ravi Toshniwal — Managing Director

Yeah. The automotive apart of our joint venture with Tresca [Phonetic] has been better in its profitability.

Tanya Gupta — Green Portfolio — Analyst

Joint venture with? Sorry, I missed that.

Ravi Toshniwal — Managing Director

With Tresca, the French…

Tanya Gupta — Green Portfolio — Analyst

Tresca, yes. So in future outlook, you can comment on that?

Ravi Toshniwal — Managing Director

It’s good. It’s doing well.

Tanya Gupta — Green Portfolio — Analyst

And sir, since we have the inflationary pressure and how the global market is phasing out, so — and rate of exports of garments from Government of India is also less promising. So since you are doing [Indecipherable] and they are also doing sales. So are there any — sorry, sir.

Ravi Toshniwal — Managing Director

No, no, go ahead.

Tanya Gupta — Green Portfolio — Analyst

Sure. So what are the opportunities that are in our favor and what part of the business is giving you the most profit right now?

Ravi Toshniwal — Managing Director

The most — what part of the business is giving us the most what?

Tanya Gupta — Green Portfolio — Analyst

Trouble.

Ravi Toshniwal — Managing Director

Well, the yarn part I would say.

Tanya Gupta — Green Portfolio — Analyst

So since you have mentioned in the beginning that we are thinking for the South expansion. So can it be — is it right to say that it will be a substitute or [Indecipherable] that you have in the yarn part?

Ravi Toshniwal — Managing Director

Well, we are not substitute. It’s not the right thing to say, it depends. Sometimes the situation in yarn changes and then fabric changes and garment changes, brand changes. So we will invest wherever we see a return is good. Now that’s the job of the CFO to decide where to put the money. The divisional heads will present their budgets and then we will decide.

Tanya Gupta — Green Portfolio — Analyst

So we are looking…

Ravi Toshniwal — Managing Director

[Speech Overlap]. We’ve given a projection between INR1,500 crores or INR1,600 crores and INR1,700 crores, I’d say, okay. Let’s hope that’s conservative. Let’s hope we cross it. I don’t know.

Tanya Gupta — Green Portfolio — Analyst

Thank you.

Ravi Toshniwal — Managing Director

Bye.

Operator

Thank you. Due to due to time constraints that was the last question of our quarterly…

Ravi Toshniwal — Managing Director

Yeah. I was just going to ask you when is the last question.

Operator

I would now like to hand the conference over to Mr. Ravi Toshniwal for closing comments.

Ravi Toshniwal — Managing Director

Right. Okay. So thank you everyone. It’s been a very interesting dialog, enjoyed the conversation thoroughly and I look forward to interacting with you all in the next conference call after our next Board meeting. And I will be traveling for a month between the U.S. and Europe. I’m leaving probably at the end of May and then back in the end of June. So I hope to catch up with you all then. Meanwhile, of course, our CFO is available and she can set up things along with SGA for you all to even talk to the divisional heads separately and they have listened in this time. But next time, we’ll hope they be able to interact with you all as well. So we look forward to keep on the dialog and thank you very much for your attention and your interest in Banswara. Bye.

Operator

[Operator Closing Remarks]