Dollar Industries Limited (NSE: DOLLAR) Q3 2026 Earnings Call dated Feb. 12, 2026
Corporate Participants:
Unidentified Speaker
Gaurav Gupta — Vice President
Ankit Gupta
Ajay Patodia — Chief Financial Officer
Analysts:
Unidentified Participant
Anjali Ojha — Analyst
Sameer Gupta — Analyst
Gunit Singh — Analyst
Varun — Analyst
Bhargav Buddhadev — Analyst
Presentation:
operator
Sa. Ladies and gentlemen. You have connected to Dollar Industries Limited conference call. Please stay connected, the conference will begin shortly. Thank you. Sam.
operator
Sa. Ladies and gentlemen. Good day and welcome TO Dollar Industries Limited Q3FY26 earnings conference call hosted by Anandhati Share and Stock Brokers Limited. As a reminder, all participant lines 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 zero on a Touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Ms. Anjali Oja from Anandrati. Thank you. And over to you ma’. Am.
Anjali Ojha — Analyst
Thank you. Hello and good evening to everyone. I thank you all for joining the Q3 and 9M FY26 conference call of Dollar Industries Limited today. From the management we have Mr. Ankit Gupta, President Marketing. Mr. Gaurav Guptas Vice President Strategy and Mr. Ajay Patoriya, Chief Financial Officer. So without any further delay I would now like to hand over the call to the management for their opening remarks. Over to you sir.
Ankit Gupta
Thank you Anjali. Good evening everyone and thank you for joining us today. We thank our shareholders, analysts and stakeholders for their continued trust and support. Your confidence allows us to remain disciplined in execution, uphold strong governance standards and stay focused on long term value creation. I would also request everyone to take note of the safe harbor statement in our presentation. Turning to the operating environment, the industry continues to face intense competition and sustained pricing pressures. In this context, the company has deliberately adopted a margin first strategy anchored in cost discipline and operating leverage. Our approach is not about choosing between growth and profitability but about sequencing them correctly.
Prioritizing earnings quality, cash flows and returns in the current environment. During Q3FY26, demand conditions remained steady. Operating revenue for the quarter stood at 388 crores rupees reflecting a year on year growth of 2%. While top line growth was measured, our sustained focus on cost efficiency, operating discipline and product mix helped us maintain healthy operating performance. Gross profit for the quarter increased by 4.6% year on year to 142 crores. Gross profit margin expanded by 91 basis point to 36.5%. Reflecting the benefits of disciplined sourcing and improved product mix and tighter cost control. For the nine months ended, FY26 gross profit stood at 447 crores rupees registering a growth of 10.7% year on year.
With margins expanding by 72 basis point to 35.5%. Operating EBITDA for the quarter stood at 39 crores and remained largely stable year on year with margin at 10%. This performance reflects our clear focus on protecting operating profitability through efficiency improvements and operating leverage despite a challenging pricing environment. For the nine months ended FY26, operating EBITDA increased by 12.6% year on year to 142 crores. Operating EBITDA margin expanded by 41 basis.2 11.3%, underscoring the impact of structural cost initiative and improved operating leverage as volumes scaled. Given the current industry dynamics, we believe that maintaining cost discipline, leveraging our operating structure and protecting profitability is the most prudent and sustainable approach.
As the operating environment normalizes, growth is expected to follow supported by a stronger cost base and improved operating leverage. For this fiscal year, we reaffirm our revenue growth guidance of approximately 11 to 12%. We expect EBITDA margins to remain stable in the range of 11.5% to 12%. We remain opportunity led on growth with a clear focus on returns and cash flows. Now Gaurav will provide further details on the business and operational highlights of the quarter.
Gaurav Gupta — Vice President
Thank you Ankit Let me now highlight some of the key business and operational trends during the quarter. During quarter three FY26, total volumes grew by 2.4% while for the nine months ended FY26 volume growth stood at healthy 8.5%. We also continue to witness steady traction across modern trade, e commerce and quick commerce channels in quarter three FY26. Collectively, these channels contributed 12.8% of overall revenue during the quarter. For the nine months ended FY26, these channels recorded strong value growth of 36% and volume growth of 38.9%, contributing 11.6% to overall revenue. On the exports front, we delivered a value growth of 10.9% in Quarter 3 FY26 with exports accounting for 5.6% of overall revenue for the quarter.
Coming to our brands force, NXT continued its strong momentum registering a year or year year on year, value growth of 26.5% and volume growth of 48.1% in quarter three FY26. For the nine months ended FY26, Sports NXT achieved a value growth of 16.7% and volume growth of 27.1% reflecting increasing consumer preference for differentiated high quality products. Additionally, Champion Architecture Range recorded a robust performance during the nine months ended FY26 with value growth of 30.5%, year on year and volume growth of 5.8%. Our strategic partnership with goat continues to yield strong results supported by continued traction across modern retail and quick commerce channels.
In quarter three FY26 revenue was 13.71 crores reflecting a 43.9% year on year growth. For the nine months ended, FY26 revenue increased by 50% to post almost 39 crores. PAT for the quarter stood at 1.65 crores, up 45.1% year on year and 57.1% quarter on quarter with a PAT margin of 12%. With that, I would like to invite our CFO Mr. Ajay Patodia Ji to take the financial performance over to you.
Ajay Patodia — Chief Financial Officer
Thank you Gauravji. Good afternoon everyone and thank you for joining the call. Let me take you through the financial performance for quarter 3 and 9 month FY26 for the quarter, operating income grew by 2% year on year to Rs. 388 crore, supported by steady demand and an improved product mix. Gross profit increased by 4.6% year on year to Rs.142 crore with margin expanding by 91 basis point to 36.5%, reflecting better mix and disciplined cost management. Operating EBITDA stood at 39 crore with margin maintained at 10.00%, demonstrating our continued focus on protecting profitability despite a dynamic operating environment.
As highlighted by Yankee Ji earlier, we have continued to maintain stock cost discipline across the organization. Advertisement Spends were rationalized to 6.5% of operating income in 9 month FY26 and we expect this ratio to moderate further in the coming quarter as operating leverage improvement. Profit after tax for the quarter stood at rupees eighteen crore, translating into a PAT margin of 4.7% for the nine month. Indeed, FY26 operating income grow by 8.4% year on year to 1259 crore. Gross profit increased by 10.7% year on year to 447 crore with margin expanding by 72 basis point to 35.5% reflecting continued improvement in mix and cost efficiencies.
Operating EBITDA rose by 12.6% to 142 crore with margin expanding by 41 basis point to 11.3%, driven by operating leverage and structure cost action. Profit after tax stood at 75 crores, registering a strong growth of 21.1% year on year with Fed margin expanding by 63 basis point to 5.9%. The company generated operating cash flow of rupees 60 crores as of December 25th with no major capex commitment. In the near term, the focus Remains on enhancing free cash flow and further reducing debt. Now I would quickly run through the brand wise contribution for the quarter. Our dollar main category big boss brand contribute around 36%.
Our economic segment dollar always lahar brand contribute around 37% contribution. Our women segment dollar women missy brand contribute around 7%. Our premium segment brand four shanghai which contribute which increased during the quarter in volume by 48% is contribute around 5% and dollar thermal our interview product contribute around 12% in this quarter. Overall our performance reflect the impact of discipline, cost management, operating efficiency and improved product mix in a competitive environment. Our focus during the quarter remained on protecting margin, strengthening earning quality and maintaining financial prudence. We will continue to prioritize profitability and operating leverage while remaining selective in pursuing growth opportunities.
As market conditions stabilize, our standing host base and structure approach poison us to drive sustainable and balanced growth. With this we now open the floor for question. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 comes from the line of Sameer Gupta from India Infoline. Please go ahead.
Sameer Gupta
Hi, good evening sir and thanks for taking my question. Sir. Firstly I believe you’ve retreated the full year guidance to 11 12%. Now nine months we are at 8% and this would still imply 15% plus kind of a growth in fourth quarter which is the only remaining quarter. In the presentation you have said that competitive intensity is high with pricing pressures. And your focus is also on profitability in this time. Would it not be a tall ask to go from 3% growth in the current quarter to 15% plus in a matter of a quarter then.
Ankit Gupta
So what happened is third quarter usually is a bit slow because of winter sales and seasonal product sales. And fourth quarter is always heavy for our industry. So we are very hopeful that we’ll be able to do this 15% kind of a growth so that we stand somewhere between 11 to 12% overall growth.
Ajay Patodia
And if you looking after Sumit, you analyze our last previous year turnover in this quarter, you will find that 35% of the total revenue come from this quarter only. And this is the heaviest quarter in our overall in full year. So we are very hopeful that we get our result.
Sameer Gupta
Sure sir, sure. Second question sir. I mean even if I look at the other company results, some of them are yet to report, but Page has reported and they have been witnessing a modest growth all along. Now growth for you is also kind of slowing down. Innerwear as a category, we would really relate it to being a very staple kind of a category. Ups and downs are relatively less so. And in your segment I would say that the typical competitive pressure from the D2C brands or the higher growth brands is also not very high. So just to give you color, what exactly is happening on the ground in this category? Are we really seeing heavy, heavy discounting? And why is that? Because overall is consumption really, really slow? What is your sense?
Ankit Gupta
So thing is that the industry has been growing at a cagrth of around 7% and seeing our nine months achievement like growth achievement, it’s somewhere around 8.5% and we’ll be growing over and above that only. And if you look at the competitors also, like Page operates in a very different market segment. But if you look at our immediate competitors also like we have three in the listed space, two in the non listed space. So overall there are five companies at a similar level with revenues being 15% plus and minus here and there. Right. So past five years we have been one of the fastest growing company in our segment.
And this year also we are very hopeful and we are working towards the guidance that we have given. We are working towards that only and we are very hopeful that we will be able to achieve that 11 to 12% which we promised. Fair.
Sameer Gupta
Sir, my question was on this industry growth of 7%, I mean is this not a little underwhelming that a category like innerwear where there is still a large unorganized piece is Only growing at 7% CAGR I believe you are saying on the organized side the 7%.
Ankit Gupta
That’S the overall industry data that has come in which includes the organized as well as the unorganized.
Ajay Patodia
Actually our industry is very unused organized. Our in men’s segment it is only 60% organized. In women’s segment it is around 30, 40% organized and each segment is 100% unorganized. So the studies done by the Wazir, you get the presentation at the Wazir website. So according to Wazir and some some report also eny doing one survey so they refer that the industry grow around 7 to 8%.
Sameer Gupta
Got it sir. I’ll come back in the queue for follow ups. Thanks.
Ajay Patodia
Thank you.
Ankit Gupta
Thank you.
operator
Thank you. The next question comes from the line of Gunit Singh from Countercyclical pms. Please go ahead.
Gunit Singh
Hi sir, thank you for this opportunity. So you said that the industry is going through a difficult competitive environment. So I would like to understand that you had earlier guided that we should be aiming for about 12 to 13% EBITDA margins and sustainably reach 14% over the medium term. So I would like to understand, I mean in FY27 would be, would be. Would we be targeting better EBITDA margins and if so, what initiatives are we taking in that direction?
Ajay Patodia
So definitely we are working towards that. Like in fact, the entire company has been aligned towards this thing. Only that how we increase our profitability over time. Before COVID hit us, we were already standing at somewhere around 13, 13 and a half percent, kind of an EBITDA. And the highest was 16% which we went in FY22, 16.5%. But that was mainly because of the increase in the raw material prices over time. I think in our industry, the segment where we operate, it would be very, it would be nice to say, or the sustainable level of EBITDA that we look forward to is somewhere between 14 to 15%, keeping in mind the operating leverage that we get at a certain level of volumes.
And so this year we’ll be doing somewhere between 11 and a half to 12% and next year will definitely be better. And in next couple of years I think we should be somewhere between 14%.
Gunit Singh
All right. So I mean, with 11% growth, we would be around 1850cr revenue this year. And you said that patient leverage would start kicking in once we reach 2000cr type of revenue. So I mean, do we expect to reach 2000cr in FY27? And I just would like to understand, are there any initiatives that we’re taking to improve our EBITDA in FY27 or will it just kick in through operational leverage? And I mean, are we taking any price hikes in FY27 or increase in the share of value added or our premium segments in FY27? I just want to hear your take on this.
Ajay Patodia
So it won’t be only driven through operating leverage, but there will be ASP change also in terms of product mix change. As you can see, like last three years, Arforce NXT, which is a premium brand, which has a higher EBITDA, which contributes higher. EBITDA also has been growing around 25 to 30% year on year basis. And this year, nine months ended also it has been growing around 27, 28% kind of a growth we are seeing in that particular premium range. So I think that will also help us in the mix change and gross profit increment plus the new unit that we have put in the spinning unit, the increase in the spindles which we did a couple of years back.
So last year only the production started, just started. So we can see some amount of efficiencies coming in from there as well.
Gaurav Gupta
Also. Can I add something to it? Hello.
Gunit Singh
Yeah, please go ahead.
Gaurav Gupta
So the thing is, you know, I was into your question and you told will there be a price hike or something like that. So see what happens is we’re talking about, you know, next financial year 27. So it’s very difficult right now to predict, you know, how cotton is going to react if the raw material price is going to go up or if it’s not going to go down. Current situation of exports. Also if you see, you know, with the Trump slapping so many tariffs and again going down and all of a sudden now he’s removed the tariffs.
So you know, the market has gone more, more tighter with the, you know, yarn rates coming up. And again so, so the market right now is extremely volatile in terms of raw materials. So until this is a very high rate increase or price increase in raw materials, ASP hike is very difficult given the competitive nature of what industry is going through right now. So there’s a definitely a good amount of change in raw material prices. Then definitely there’ll be a price hike.
Gunit Singh
Got it, got it. All right, thank you very much. So my last thing would be that we do we pay dividends of about 17cr every year. So with the new tax regime, buybacks have started falling under long term capital gains or short term capital gains. So they are being treating as capital gains. So I would request you to consider doing buybacks instead of paying out dividends as their tax evasion and they also extinguish outstanding shares and serve as a reward for long term investors. So I would just like you to consider that. Thank you very much.
Ankit Gupta
Thank you.
operator
Thank you. The next question comes from the line of Varun from Equity Capital. Please go ahead.
Varun
Hi sir, a couple of questions. Firstly if you could provide the trade discounts and the promotion led cost for the quarter.
Ajay Patodia
Approx, all the trade discount incentive around 6 to 6.5%.
Varun
Okay. And secondly you said the industry is growing at only 7 to 8% so how do you think that this will change what would trigger a higher growth and when should that happen? Hello.
Ajay Patodia
So it would be very difficult to say that how the industry will grow at 10 or 11% but surely we can, we can say about ourselves like at dollar Industries we really aim to grow double digit for next two to three years and at least so yeah, so we have been working on that. We have changed our go to market strategy. We are implementing a lot of technological changes in the company. We are limiting our advertisement costs or shifting our advertisement cost to digital media as well. A huge chunk goes to digital media now which didn’t used to go earlier and focusing on our premium products.
So all these things will entering into new categories like Dollar Rain Bear that we started two years back. So all these things taken together will really help us grow at a much much faster rate than any other company or the industry.
Varun
My point was if you think that the industry will grow at this rate only for next two, three years then that will also limit your upside for the growth.
Ankit Gupta
But if you see the other players in the industry also like people are shifting from unorganized market to organized market and then in our segment and space also there are five companies and few of the companies have been going through some issues also won’t be naming the company but so all those market share gain that you can do in the market will really help you grow at a faster rate.
Gunit Singh
Okay, and what is leading to this overall pricing pressure? Is it because some because of competition from unorganized or the majorly from the organized site?
Ajay Patodia
Basically this is due to market condition only. Not. Not any we can note any analyze that whether it is organized or unorganized. But sometime it is due to some issue with industry also. But now it is settled down and from now onwards we hope that we get the good improvement in the pricing also. And already there is some increase in the price yarn prices also. Or we hope that we also increase our SP in the coming future.
Varun
Okay sir. Thank you.
operator
Thank you. The next question comes from the line of prayer from Elara Securities. Please go ahead.
Unidentified Participant
Thank you for the opportunity sir. So just wanted to understand this competitive intensity has been there from a long time and it has been. Is there any sign of easing that off or it continues to remain high as earlier?
Ankit Gupta
No. So it’s not like what we saw nine months back but it’s easing out but it’s still there. So which is causing a bit of a problem. But we are very hopeful that in few months time or maybe two, three months time it should get settled down.
Unidentified Participant
So how are we going to progress on distribution expansion project which is Lakshya with easing competition this year has not seen any major improvement over there.
Ankit Gupta
So yeah, in Lakshya project. Our contribution coming in from Lakshya project has been 32%. This nine months ended. If we look at the nine months ended figure which is up 1% from last year. But yeah, no addition in new distributors. But we are very hopeful as soon as things get stabilized will again restart the project and enter into new states like few of the states which are in WIP like Bihar, Jharkhand, Maharashtra. So we’ll be working on that and we’ll try and complete. But overall wherever we have completed the Lakshya project 100% we are getting good results over there till now and still they are showing good sign of improvement even after the pricing issues that we are seeing in the market.
Unidentified Participant
Could you elaborate on this? This would be really helpful. How much is the growth that we’re seeing in Lakshya project which is 100% complete states and maybe WIP and non Lakshya.
Ankit Gupta
If you see that nine months ended like a few of the states. If you talk about Haryana, if you talk about Andhra Pradesh, Andhra Pradesh grew by around 20%. Haryana grew by 11%. Then if you look at Odisha, Odisha grew by 24%. Maharashtra is growing by 10%. So Maharashtra means Mumbai and surroundings which is 100% completed. So all these states is doing really well and we are very hopeful about the project. So we have not given up on it. It’s just that there’s some delay because of the market situation.
Unidentified Participant
But yeah, so these kind of double digit, high double digit growth rate that you’re talking about which means in our base states are we losing market share or the market is only growing or de growing. Maybe I’m not able to understand the growth rate in detail.
Ankit Gupta
Sorry, I didn’t get your question.
Unidentified Participant
The question is if in Lakshya project states you are getting double digit growth and you’ve grown about single digit in overall sales then your other non laksh states are either single digit, you know, low single digit, 2 to 4% or even make some, maybe even negative. So just trying to understand this math behind this. Like how are we facing.
Ankit Gupta
Yeah, the thing. Hello, am I audible?
Unidentified Participant
Yes.
Ankit Gupta
The thing is that I just gave you the examples of few states, right? There are some states which are growing by 2% also 5% also where we saw some problem. And like in south, if you talk about Karnataka, Karnataka is growing by around 1% 2% up till in nine months ended because of some issues with the distributor. So I just review the overall impact overall nine months ended company level. So with respect to Lakshya we are growing at around 10%.
Unidentified Participant
Okay.
Ankit Gupta
So the growth we are seeing in Laksha project is around 10%. I just gave you some examples where we have completed 100%. What kind of a growth are we? We are still seeing in some of the states which have matured.
Unidentified Participant
Understood, understood. So we’re not losing market share in your opinion in any of the states that you.
Ankit Gupta
Definitely not. Definitely not.
Unidentified Participant
Okay. And to protect that market share, we are holding on to our prices is what is how the things are moving.
Ankit Gupta
So if someone is involved in the deep discounting of let’s say 4 to 5%, we are in like we are giving around 1, 1 and a half percent. We are not going down to 5% kind of a thing. And we are very sure about it internally also that we won’t be doing that.
Unidentified Participant
So in that case you are still gaining getting volumes from your distributors and you are sure that you are not losing market share over there despite this strategy which talks about the brand pool is what I am trying to understand.
Ankit Gupta
So that is being created over time. So it is a process like when we changed our brand logo and the entire overall structure also brand restructuring that we did after that also we got a really good positive feedback from the market. And that time also I told everyone that it’s a gradual process and it will happen. It will create some pull for the brand. And if you see our second quarter also or the first quarter also, now we are seeing that impact in the market that in fact the retailers are the biggest brand ambassador for the companies right in our industry.
MBOs actually act as your brand ambassador and their word of mouth, their loyalty towards your brand really assures the consumers. Yeah, we can go ahead with this particular brand and through Lakshya project we have been able to create that kind of.
Unidentified Participant
So that’s fantastic to know that we are gaining or at least holding on to our market share. All the best and thank you.
Ankit Gupta
Thank you so much.
Unidentified Participant
Thank you sir.
Ajay Patodia
Thank you. Thank you.
operator
Thank you. The next question comes from the line of Bhargav Buddhade from Ambit Asset Management. Please go ahead.
Bhargav Buddhadev
Good afternoon team and thank you for the opportunity. Sir. If you look at the volume growth for nine months of about 8% and in this quarter of about 2% and if you look at your gross margins as well, there has been a improvement both in nine months and this quarter. So in this competitive environment, if you can elaborate a bit in terms of how are you managing to improve cost margins and also continue volume growth, is it more a function of product mix or is it cost savings which you are enjoying through your integrated operations? If you can elaborate a bit on.
Ankit Gupta
That.
Ajay Patodia
Actually you can see that in nine months the gross margin improved due to product mix and due to cost reduction also and last year we started our additional capacity and the machines are very new and imported one and so that the efficiency of the machine is very very much than the old production machines and other than this in last six months we also have the volume growth around in 11% in this thermal also thermal is a high EBITDA margin product so there is product mix also Some the improvement of 90 basis point in this quarter is due to product mix and due to cost control also and in this GP margin you can also that due to some our procurement Due to procurement we procure cotton at good rate and at very reasonable with our competitor because only we have the backward processing in this segment so this extra benefit to our company is reflecting the gross margin reduction improvement.
Bhargav Buddhadev
In terms of operating cash flow the operating cash flow was about 47 crores in the first half is it possible to share what has happened? Would that number be at the end of 9 months?
Ajay Patodia
Currently in 9 month in already I my speech I already told that around 60 crore is the operating cash flow in nine month.
Bhargav Buddhadev
In terms of price size is it fair to say that in the last 18 months including $the industry would not have seen any price in the last 18 months.
Ankit Gupta
Last 18 months in our industry no one took a price hike as such and we are very hopeful that with this tariff thing going down and now Tirupur as an export hub the Yan demand will increase and it will give give some push to the industry with respect to some raw material prices going up and maybe we’ll be able to take a price hike then.
Bhargav Buddhadev
So there is a very high correlation between yarn prices and your end product.
Ankit Gupta
Prices definitely because 50% of our raw material is the yarn total cost, total cost of production 50% is contributed through yarn so that is the main thing which actually lead to price hike or non hike.
Bhargav Buddhadev
Lastly sir, if I look at your subsidiaries in this quarter there seems to be a loss so is it that you have you are on a hiring spree? I think that is mainly your in way of business if you can give a small update in terms of what’s happening there what’s the size, what are your plans maybe in the next two years.
Ajay Patodia
So. So our subsidiary dollar government is basically in the rainwear segment and our segment rainwear segment is the seasonal only the season for the rainwear is from January to June so quarter one and quarter four is the in in this surgery we have the revenue increased and quarter two and quarter three is generally there is no such requirement of the rainwear product. So in this quarter quarter four we hopeful that last year in the subsidiary hour around we have the total turnover around 37 crores is there or. And this year we hopeful that we have the growth of around 12 to 15% in the overall segment.
And already we completed the 15 crore in the quarter one. So balance be covering the this quarter. Other than this we have the target that within two years we reach we cross the three digit in our revenue in this segment. So we very hopeful that we get our target achieved.
Bhargav Buddhadev
And here the margins will also be.
Ajay Patodia
In this segment. Our EBITDA level margin is around 18 to 20%. 18 to 20%.
Unidentified Participant
Thank you very much.
Ajay Patodia
Thank you.
Ankit Gupta
Thank you.
operator
Thank you. The next question comes from the line of Anik Mitra from Phenomic Solution Private Limited. Please go ahead.
Unidentified Participant
Good afternoon sir. Am I audible?
Ajay Patodia
Yeah, yeah.
Unidentified Participant
So my first question is related to that nine proprietary companies which has been absorbed or which is going to be absorbed. So I would request you to throw a little more color into it means how will it matter or impact your overall performance in terms of margin in terms of your revenue growth as well as on your cash flows.
Ajay Patodia
So we already filed the for the merger application with the SEBI and.
Ajay Patodia
We. Are waiting for the approval. The nine companies which are merged into the our industry that is only engaged with the main company only and mostly in out of 9 companies 6 companies are related to the real real estate company which assets used by our dollar industry only like we office and the factory. So once they are merged our rent part which we said at arms length price is also removed. And other than being three in three companies one is the one company is holding the brand. So in our segment in first we are the first hosiery company in which the brand is transportation from in the main company our dollar industry limited.
So our dollar brand is also with our main company and the royalty which we paid to the dollar branch private limited is also removed and from the cost. But and other than this two company is mainly related to job worker related. So job worker cost is also minimized and the overall efficiency in the labor firm and in the production capacity is also increased. Overall we analyze around 5 to 7 crores of expenses is to be rationalized due to this merger and more than this the net worth of the company inner net worth of the company.
Basically because due to the brand coming at very low price book value price so network of the company in a network dollar industries increased.
Unidentified Participant
Okay. Okay sir as you said 7 crore of improvement in terms of your cost. So will it be on quarterly basis or annualized?
Ajay Patodia
Annualized.
Unidentified Participant
Annualized and only 7 crore improvement. Okay.
Ajay Patodia
And basically it lead to corporate governance also because 90% of our RPT transaction are now reduced.
Unidentified Participant
Okay. Okay answer. Any. Any impact on your free cash flow in this transfer or takeover?
Ajay Patodia
Free cash flow? Mainly free cash flow not much affected this. But due to this as I told that we are the first hosieri company which own the brand in our main company other than all the hosiery company in our segment is the brand is owned by other company, other entity and they pay the royalty so we are first in the segment that our brand in our company only. So whenever we introduce new products in our brand so we don’t have to pay any type of loyalty royalty to the and somehow this reduced the ultimate cost to the company.
Unidentified Participant
Got it? Got it. Okay sir, my next question is related to the tariff which you were mentioning probably Ankit was mentioning sir, my. I just want to understand as you said US tariff may increase. The reduction of US tariff will increase the demand of yen prices will go up. So on this context I just want to understand means you will be able to take price hike like will it be beneficial for you as the price hike will be taken just because of yen price hike so it will go to cater the increased yarn prices. So how do you get benefited out of it? Out of the price hike?
Gaurav Gupta
Yeah, I’ll take this up. So. So what happens is you know the US tariffs coming down and everything currently you know what we see in the export market because I stay in Tirupur and you know look after production over here majorly what I speak to you know a lot of exporters is you know that now they have started picking goods which were with them kept in customs department or in their warehouse as of now. So for now we are not seeing a lot of differences in the cotton price it because they want to liquid the old ones and if the export market booms after this because of you know reduction in the tariffs that is where probably after four months or three months you know we’ll come to know anything if there’s a very high price hike in the cotton prices or raw material but we do not expect to that level.
We certainly expect maybe 10 rupees, 20 rupees here and there.
Unidentified Participant
Okay, so 10 to 20 rupees per kilogram in yarn.
Gaurav Gupta
Yeah, approximately. I’m telling about it’s just a ballpark figure that is the yarn industry, you know, speaks it’s like that. So you know, the yarn market might become a little tighter for sure. But we do not expect it to become way tighter. You know, what happened during COVID and everything that the yarn price is shorter by say 30%, 35%, you know. So that is not the situation we are going to get into anymore.
Unidentified Participant
Okay, okay. And like as you were referring, US price, US tariff reduction simultaneously US has already removed the tariff for Bangladesh. So will it impact anyway to our young prices?
Ankit Gupta
So no, not really.
Gaurav Gupta
So what we know latest information, what we have is it might be extended to India also as of now, the same, you know, if you use US cotton, the tariffs go lower. So it might be extended to India, but we are not very sure about it. If it might get extended, we might see a change. And we have a spinning mill of about 45, 46 ounce spindles. So we are very, very well covered with that also for this quarter of the yarn we are much in a better space.
Unidentified Participant
Okay, okay. But in case tariff remains same. But for Bangladesh it is zero duty at this point in time.
Ankit Gupta
So.
Gaurav Gupta
What would be the impact? Like will it again go back to.
Gaurav Gupta
Some demand might get diverted to Bangladesh if the tariffs are, you know, because Bangladesh is a very good country to, you know, manufacture and the price already lower there and with tariffs coming down, I’m sure a lot of people will want to shift there. But that is something that has just happened and I’m sure Indian government will also be working towards the same. So you know that.
Unidentified Participant
Okay, okay. Okay. Take it. Thank you so much.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management of closing comments. Thank you. And over to you, sir.
Ankit Gupta
I would like to thank you for. Thank you all for taking the time out to join the earnings call. Have a nice day. Thank you so much.
Ajay Patodia
Thank you.
Gaurav Gupta
Thank you everyone.
Unidentified Speaker
Thank you.
operator
Thank you. On behalf of Anandrati Share and Stock Brokers Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your line. Thank you.