Dollar Industries Limited (NSE: DOLLAR) Q4 2025 Earnings Call dated May. 16, 2025
Corporate Participants:
Ankit Gupta — President of Marketing
Gaurav Gupta — Vice President of Strategy
Ajay Patodia — Chief Financial Officer
Analysts:
Deepali Kumari — Analyst
Resha Mehta — Analyst
Shreya Baheti — Analyst
Unidentified Participant
Prerna Jhunjhunwala — Analyst
Shaurya Yadav — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Dollar Industries Limited Q4 FY ’25 Earnings Conference Call hosted by Arihant Capital Markets 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 the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded.I now hand the conference over to Ms Dipali Kumari. Thank you and over to you, ma’am.
Deepali Kumari — Analyst
Hello and good afternoon, everyone. On behalf of Capital Markets, I thank you all for joining into the Q4 FY ’25 earnings conference call of Dollar Industry Limited. Today from the management, we have Mr Ankit Gupta, President, Marketing; Mr Gupta, Vice-President of Strategy; and Mr Ajay Patoria, Chief Financial Officer.
So without any further delay, I will hand over the call to the management. Over to you, sir.
Ankit Gupta — President of Marketing
Thank you. Thank you, Dipali. Good afternoon, everyone, and a warm welcome to you all. Thank you for joining us today for the Dollar Industries Limited Q4 FY ’25 and Full-Year FY ’25 earnings investor call. Gaurav and I will walk you through the business and operational highlights of the quarter and the full-fiscal year, while our CFO, Mr Ajay will share the financial metrics.
Before we delve into the financial results and operational highlights for Q4 and the full-fiscal FY ’25, I want to extend our sincere gratitude to our shareholders, analysts and stakeholders for being with us today. Your ongoing support and engagement are invaluable as we navigate the opportunities and challenges in our industry.
Also, I would request and draw everyone’s attention to the safe-harbor statement in the earnings call presentation. I request each one of you to go through the same before the Q&A starts so that you are aware of the same.
In Q4 FY ’25, our operating income stood at INR549 crores, representing a robust growth of 9.8% year-on-year and 44.2% quarter-on-quarter. For the fiscal year 2025, operating income reached rupees INR1,710 crores, reflecting a steady year-on-year growth of 8.8%. Volume for FY ’25 grew by 4.6% over FY ’24. I’m pleased to share that our premium segments delivered exceptional performance. Dollar Protect, our guard segment recorded an impressive volume growth of 40.3% year-on-year basis, Force NXT registered a 13.4% year-on-year volume growth, while our thermal segment grew 21% in volume over the same-period.
The high-margin and premium categories have contributed about 29% to our overall revenue in FY ’25. These results reflect our strategic focus on driving growth through premiumization and increasing the revenue-share of high-margin products, which is positively impacting our average selling price. Further, stable raw-material prices will help us sustain and grow our margins. Additionally, in FY ’25, advertising expense was around INR100 crores, keeping in-line with our annual target of about 6% of our top-line.
Out-of-the INR100 crores, 60% was contributed by ATL activities comprising of television and digital media and the remaining 40% by BTL activities consisting of retail branding. Thank you. Now Gaurav will provide further details on the business and operational highlights of the quarter.
Gaurav Gupta — Vice President of Strategy
Good afternoon, everyone, and a warm welcome to all of you. We are pleased to share that our strategic investment in the partnership is beginning to yield positive results.
The joint-venture with Pepe Genes recorded a profit-after-tax of in FY ’25, a significant turnaround from a loss of in FY ’24. This strong performance was primarily driven by growth in the modern retail and quick commerce channels. Aligned with our long-term strategic vision, we will be introducing a broader range of products under the JV in the coming months, further strengthening our portfolio and the market presence. Moving on to the channel-wise performance of dollar Industries in FY ’25, the modern trade and e-commerce channels demonstrated remarkable momentum with value growth of 63% and volume growth of 67% year-on-year. These channels contributed 8.2% to total revenue as against 5.5% in the previous year, marking a 274 basis-point increase.
A key driver of this growth has been the Quick Commerce segment, which continues to open new avenues for consumer engagement. We remain highly optimistic about its future potential as well. Additionally, modern trade and e-commerce channels continues to enable us in expanding our SKU offerings, contributing to higher ASPs and supporting our ongoing premiumization strategy. Region-wise, Northern India contributed to 47% to our total operating revenue, followed by the Eastern and Western regions with 24% and 21% respectively. The Southern region accounted for 8%.
We are also pleased to announce that the Board has recommended a final dividend of INR3 per share, resulting in a dividend payout of 18.7% subject to shareholder approval.
Thank you all. I will now hand over the call to our CFO, Mr Ajay, to discuss the financial matrices.
Ajay Patodia — Chief Financial Officer
Thank you, Gauroji. Good afternoon, everyone, and I appreciate you all joining us for our quarter-four and full-year FY ’25 earnings call. Before we open the floor for the question-and-answer session, I’d like to take a moment to walk you through a brief summary of our financial performance for the quarter. I trust you have had a chance to review the earnings presentation and press release. While Ankit and Gauroji have already shared their perspective on the broader macroeconomic environment, I will now focus on our financial highlights for the quarter and the full-fiscal year.
In-quarter four FY ’25, our revenue from operation rose by 9.8% year-over-year, reaching to INR549.13 crore. For the full-year FY ’25, revenue stood at INR1,710.46 crores, reflecting an 8.8% increase year-on-year basis. Our gross profit for quarter-four FY ’25 came in at INR163.40 crores with a gross margin of 29.8% for the full-year, gross profit reached to INR567.40 crores, making a 12.2% year-on-year growth.
The gross margin for FY ’25 improved to 33.2%, up from 32.2% in FY ’24 and expansion of 100 basis-point. Our operating EBITDA for quarter-four FY ’25 was INR56.52 crore with a margin of 10.3%. For the full-year, operating EBITDA stood at INR182.67 crores, representing a 15.1% year-on-year increase. The EBITDA margin for FY ’25 expanded by 59 basis-points year-on-year, reaching to 10.7%.
Finally, our profit-after-tax for the quarter was INR29.25 crores, translating to a PAT margin of 5.3% and for the full-year FY ’25, PAT stood at INR91.04 crores. I would quickly run you through the brand wage contribution for the quarter, our dollar main category consisting of big boss contribute around 39%. Our economic segment dollar alwayser contribute around 39% for the full-year and our premium segment NXT contribute 4.2%.
Our segment contribute 8%, our thermal segment dollar thermal contribute around 6%. Our segment dollar contribute 2% and socks also 2%. We remain firmly committed to our strategic priorities and growth initiatives aimed at driving long-term sustainable profitability. Our focus on premiumization supported by rising contribution from modern trade and e-commerce position us well to deliver strong revenue and profit growth this fiscal year and beyond.
Thank you all. With this, we will now open the floor for the question-and-answer.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star in one on their touchstone 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. Thank you. The first question is from the line of Resham Mehta from Green Edge Wealth. Please proceed.
Resha Mehta
Yeah. Thank you. So the first one is, you know, what would be our guidance for 20 — FY ’25, ’26 in terms of revenues and margins.
Ankit Gupta
So without factoring in any price increase, we are very confident of achieving a volume growth of around 11% to 12% with an EBITDA margin in the range of 12% to 13%.
Resha Mehta
Okay. And so what exactly is going to be leading to this EBITDA margin expansion? In the past, you have spoken about one lever, which is the A&B spend. So that I think we are planning to cap it — cap that number in absolute terms. So would that be one of the drivers? And if yes, what would the A&P number be?
Ankit Gupta
So overall, this year also for FY ’26, we are capping our advertisement expense somewhere around 5% to 5.5%, which will be around INR90 crores again this particular fiscal. So that will — that will give us 1% support in terms of increasing our margin level, plus there will be a rationalization of a lot of fixed-cost and we are also working towards reducing our overall working capital. So that should release a cash and decrease the burden of the financial cost that we are bearing right now.
Resha Mehta
And any guidance you would like to provide or comments on gross margins or are we seeing any input cost pressures?
Ankit Gupta
So currently, the raw-material prices are stagnant. And in terms of gross margins, we are currently — on a yearly basis, we are standing somewhere around 33.5% and there might be improvement of 0.5% or 1%, but yeah, nothing more than that as of now.
Resha Mehta
Right. And also if we look at your presentation, the number of active luxury retailers, they’ve been flattish at around 74,000 over the last two years. So any particular reason why we’ve not been seeing traction there?
Ankit Gupta
So we are getting good traction in Lakshya project and we are very optimistic about it as well. And with respect to the — if you see that number of distributors that we have enrolled in this particular fiscal is — in totality, our distributor numbers are 317 with respect to 290 last fiscal, like last March 2024. And currently our active number of retailers is somewhere around 78,000.
Resha Mehta
Because your presentation mentioned around 74,000, which is a flattish number. So that’s where my question was, specifically for the retailers, not for the distributors.
Ankit Gupta
I’ll — I’ll get it checked, but currently it is it is at around 78,000 right now. And the retailers are showing
Resha Mehta
Yeah, yeah. No. On the working capital, right, so see, to reduce the debtor days, so we are at around 120 days and I think we have outlined the aspiration to reach at around 80 to 90 days, right? Lucks, of course, a lot of a lot about it has been spoken. But the other lever, as I understood was the dealer financing, right, to reduce the debtor days. So how much of a push is this dealer financing going to provide in terms of reducing your debtor days? So let’s say from one — the journey from 120 days to around 80 days, how much of that would be contributed by the project that we have undertaken and how much of that would come through the dealer financing?
Ankit Gupta
So with respect to Lakshay project, so currently our overall company-level debtor days, it’s around 111 days. So from Lakshya distributors, it’s somewhere around 85 days and 80, 85 days and for non-Lakshya distributors, it is coming somewhere around 120 days. So we are very optimistic that we’ll be able to reduce it with the help of distributor financing scheme as well as the more-and-more distributors getting enrolled into project as well. Plus, we are also tightening the non-Lakshya distributors in terms of the payment cycle and everything so that our overall debtor days gets reduced.
Resha Mehta
So why I’m asking this question is because we’ve been talking about luxe for a very long-time and demand has generally been challenged over the last couple of 1.5 years almost, right? So — but you know, despite all the efforts, the bottom-line is that our debtor days are working capital is not coming down. So probably whatever benefits we are seeing from the Laksha project are more than being offset by the distributors, right? So ultimately, where do we see this number settling? And is there a firm timeline that we have defined and are we confident of achieving that?
Ankit Gupta
So am I audible?
Resha Mehta
Yes.
Ankit Gupta
Yeah. So the thing is that when we started-off with our Laksha project at that point of time, if you see at our net working capital cycle, it was somewhere around 176 days that we — that we were at, right? And over four years time period, we have reduced it to around 160 days — 155 to 160 days currently — sorry, 156 days to be precise. So this has — this has been done like we got a real big help from the Lakshay distributors also through this particular project.
And as I said that we are very optimistic about this project in the sense that at a company-level, we saw a growth of around 9%, but for Lakshya distributors, we saw growth of around 13% overall. So it is giving us a higher-growth, a greater market reach. Our visibility in the market is much more higher and the data we have been collecting is immense like we are able to use that data to reach our retailers and to actually target them on-brand basis as well, whether — which category retailer he is or he is able to keep the other category or not.
So in terms of increasing the reach and range, this project has helped us a lot. I know like as you said, the project has been going a bit slow. But we have to keep in mind the overall markets in adeo industry challenges also that we have seen in the last four years like the cotton prices — the non-stability of the raw-material prices and the overall competitive landscape that is changing day-by day. So all of these taken together, we have been working on a on a strategy right now. And yes, we are very hopeful and very optimistic that in years to come, we’ll be able to reduce our overall working capital cycle to around 125 days to 130 days.
Resha Mehta
Okay. Fine, I think the working capital question probably I’ll take it offline because my numbers do not show an improvement in working capital. So anyways, so the next one is on the Pepe. So what has been the full-year FY ’25 performance in terms of revenues and margins? And we have pivoted here to modern trade e-com channels, right? So how has that helped us, if at all?
Ankit Gupta
Gaurav, you want to take that question?
Gaurav Gupta
Yeah, sure. So as you know, the joint-venture company of Pepe was running into losses until last year. So what we have done in this year is especially we kind of focused mainly on the online channels and the e-commerce and the e-commerce segment and put all our efforts and energy towards that. And we have got great results in that and which led to a very good amount of profit that we have generated this year and we focus on continuing to do so for even this financial year.
Resha Mehta
So would you be able to share revenues and margins for FY ’25 and also the guidance between
Gaurav Gupta
The revenue the revenue stand at about 34 cr and the PAT is at about 5 cr CR.
Resha Mehta
Yeah, right. And lastly, so project to how many other new states are we targeting for this financial year? And also we were planning to launch kidswear in the zero to three year age group. So is that something that’s already been done?
Ankit Gupta
So with respect to the kidswear, we have — we have given out samples to a few of the states like Punjab, Haryana and then some of the samples have been given out to Rajasthan also to check and get the feedback about the product and this year will be like manufacturing the kids zero to three years products also and deliver to the market, and we are also making a separate distributors for the same
Resha Mehta
Okay, and Lakshya project being expanded to how many new states in this financial year.
Ankit Gupta
So this financial year, we are — we have taken-up the project to. So we… Yeah. So we’ll be completing, which was started last fiscal year. So we’ll be completing that particular state for times.
Ajay Patodia
Other than this, we also completed the Orissa and Bihar in this year and also try to start the MP, for this during this year.
Resha Mehta
All right, fine. Thank you so much. All the best.
Ankit Gupta
Thank you.
Gaurav Gupta
Thank you.
Operator
Thank you. Before I take the next question, I would like to remind participants that you may press star in one to ask a question. The next question is from the line of Sreyab Bahiti from Anand Rathi Institutional Equities. Please proceed.
Shreya Baheti
Hi, sir. Am I audible?
Ankit Gupta
Yes. Hi, yeah.
Shreya Baheti
So sir, my first question is on Project Lakshy. So our contribution from Project Lakshay for FY ’25 stands at around 30%, which was around 26% in FY ’24. And sir, we had earlier guided that we are targeting around 65% to 70% contribution in FY ’26. So sir, how will that be possible like because we have to almost double the contribution. And also on the distributor addition front-end project Lakshya, so we added around 27 distributors in FY ’25, which was around 61 additions in FY ’24 and 87 in ’23. So sir, why is the addition so slow this year? And how will we reach our given targets?
Ankit Gupta
So as I told before also that we are very optimistic about the project and we really want to be aggressive about it. But given the intensified competitive landscape, we are actively reviewing the situation and getting our strategies changed a bit. So that’s why you are seeing a slow paced addition of the distributor. But again, I’m — we are very — at a company-level, we are very optimistic about the project and sooner or later, we’ll complete the Lakshya project pan-India basis.
Shreya Baheti
So for this year, will we be revising our target for the project Laksha contribution?
Ankit Gupta
Yeah. So we’ll come back with a we’ll come back with a definite guidance on — with respect to the Laksha project in the next call.
Shreya Baheti
Okay. And sir, also on the working capital front, like our working capital for this year is again slightly higher versus the last year, mainly led by a slight increase in the inventory and receivables. So sir, as you have said that with Project Lakshay and the distributor financing and everything, we’ll be reducing our working capital days. So sir, can you put a timeline to this? And by how much will we be reducing our inventory and distributors also — sorry, debtors, days.
Ankit Gupta
So this year, we are targeting to reduce our overall net working capital days by around 10 to 12 days. So this year we’ll be doing that. And in a couple of years, I think we should reach somewhere around 130 days.
Shreya Baheti
Okay. And sir, how much can you bifurcate that for the inventory in data days? Like what is our optimal level that we are targeting to reach.
Ankit Gupta
See, the optimal level for our industry debtor days should be somewhere around 80 to 85 days. Inventory days will always be between 95 to 100 days. And with respect to creditors, it would be somewhere around 55 days.
Shreya Baheti
And sir, what will be our capex guidance for FY ’26?
Ankit Gupta
So no new capex is being planned and for next two to three years, we are not planning any major capex in the company.
Shreya Baheti
Okay. So even if you look at the maintenance capex for whatever EBOs we would be opening, sir, what will be the capex?
Ankit Gupta
So for your view so for EBO, we don’t require any capex because it is on FIFO model for FOFO model. And with respect to repairs and maintenance, it would be very minuscule 5%. INR5 crores to INR10 crores.
Shreya Baheti
Okay, sir. And sir, just one question, sir, what will be our revenue guidance for FY ’26 and ’27?
Ankit Gupta
So we — so overall, we are very confident that we’ll achieve a volume growth of around 11% to 12% this particular fiscal. But for FY ’27, we’ll come back with a more definite guidance in the next quarter or the next call.
Shreya Baheti
Okay, sir. And sir, just one thing. So this year, if I look at our gross margin, which is only COGS and not the subcontracting expenses, then sir, there has been a dip of in Q4, there was a dip of around 256 bps. So — and if I consider the subcontracting expenses, then gross margin saw a dip of 86 bps. So sir, why is that?
Ajay Patodia
Actually you have to count gross margin including subcontracting because subcontracting is a part of inventory only. And the cost of inventory is adjusted with the increase and decrease of inventory. So without taking a subcontracting cost in — you don’t — you cannot calculate the gross margin.
Shreya Baheti
So sir, even if we take the subcontracting expenses, then also gross margin saw a dip of around 86 bps. So sir, is there any particular reason for that?
Ajay Patodia
Due to — in this quarter, there is some intensified competition in the industry and we have to offer in this quarter extra incentive for our distributor to complete the target due to this. Otherwise, our other raw-material cost is overall normal. And this is only for this quarter. We hope this — we are — we again get the increase in our gross margin in this quarter — current quarter.
Shreya Baheti
Okay, sir. And sir, any — sir, how is the demand that you are seeing in Q1 so-far?
Ankit Gupta
So as always like after the festival of, the — there is a dip or it’s a leaner period in the market. So April was a bit lean as usual, but again, we are seeing good demand from the market like from Tier-2, Tier-3 cities especially, there has been a good demand in the market and we are very hopeful about our projections for this particular fiscal.
Shreya Baheti
Okay, sir, thank you.
Ankit Gupta
Thank you.
Operator
Thank you. Before I take the next question, I would like to remind participants that you may press star in one to ask a question. The next question is from the line of Sharma, an Individual Investor. Please proceed.
Unidentified Participant
Hi, sir. I’m I audible?
Ankit Gupta
You’re audible, sir.
Unidentified Participant
Thank you, sir. Thanks, sir. Sir, I have two questions. So what is the contribution of premium in the last year FY ’25? This year you told it was 4.2%, right?
Ajay Patodia
In premium segment, we have NHT brand. So last year, Force NHT.
Unidentified Participant
Yes, sir.
Ajay Patodia
So this year we have the 14% growth in the Force NHT premium segment and the contribution amount around 4.2%. Last year it is around 3.8 something.
Unidentified Participant
I was listening to the same question I’m talking, sir, sir, like I was listening to one of your competitor whose premium brand is going and he was talking about saying that the premium brand is what the market like and the consumer. That is what he was saying actually. Why is the contribution is less than 4% or 5%,
Ajay Patodia
Can you beat louder.
Unidentified Participant
Can you please repeat the question?
Ankit Gupta
We couldn’t hear it properly?
Unidentified Participant
I’m really sorry repeating. One of your competitors was saying that premium brand was growing faster in the range of double-digit, but for us that in the range of high-teens, that is what you were saying. But for us it is less right, I was asking why
Ankit Gupta
So our premium segment grew by 14.5% this particular fiscal, which is a double-digit growth. And there has been a good demand for our premium products in terms of Tier-1 and Tier-2 cities that we are seeing, people do aspire for premium products now. And the kind of visibility we have created through Lakshya project or the kind of visibility the marketing we have done for Force NXT and the new TVC coming in, we have seen a good advantage and demand in the market for the product
Unidentified Participant
Demand in the market in the product. Okay. My second question, sir. What is the — like we are doing almost like INR95 crore to INR100 crore advertisement, right? Do you measure what is it bringing back? Like you measure this much of advertisement is bringing this much of revenues or something like that or do you have any measure like the measure for that particular thing.
Ankit Gupta
See we advertise in television or if you advertise in digital media you get some kind reports or information as to how many people are seeing that particular ad and in digital media it is much more detailed that how many people clicked on that ad and how many got converted into sales. But when you talk about BTL activities, it is more about awareness, it is more about getting into people’s subconscious mind and with the help of holdings and the retail branding that we do. It is hard to assertain that how those are getting converted, but it really creates a lasting impression on the consumer when we are visible at a point-of-sales thing.
Unidentified Participant
Okay. So my question like same question on the things like we are like we are am I audible, sir?
Ankit Gupta
Yes.
Unidentified Participant
Sorry, really sorry, sir. Handset problem. So I’m asking that we are advertising through a lot of superstars, right, like big players in the thing., do you think they contribute much to our revenue in the way of branding and all these things?
Ankit Gupta
Definitely. Since majority of our sales comes from Tier-3 cities and rural part of India, people do relate to their ideal who is a — like a celebrity face and it gives them a kind of assurance with respect to the product and everything because in urban market, it wouldn’t make much of an impact having a celebrity as your brand ambassador. But yeah, in Tier-2, Tier-3 cities, when we talk about, it do create an impression, it gives the assurance to our consumer that the product quality would be good and the overall packaging, like we say in marketing,. So in the packaging, if you have a celebrity face endorsing your product, people do get convinced and influenced and do purchase it.
Unidentified Participant
Okay. Sir, my final question is like, sir, it’s a datakeeping question. The question is like in H1, our trade receivables has gone down meaningfully compared to FY ’24. But in FY ’25 end which we submitted the — when which we released phase, and we have trade receivable has gone back up by some percentage, right? Why is it, sir? Like we thought it will come down meaningfully in this year, but it came back to the certain level. So what happened in the two quarters? Any problem though?
Ankit Gupta
Yeah if you look at our debtor figure, it is — it is at INR539 crores, right,
Unidentified Participant
Correct. Correct.
Ankit Gupta
If you look at our sales for the quarter, it is at around INR550 crores. Correct. So it is basically the last quarter sales that we are talking about, which —
Unidentified Participant
No, sir. No, no, no, no, no. I think as we specifically say in FY ’25, our receivable was INR493 crore and it in H1 FY ’20 — H1 FY ’25, it was INR485 crore, right? It has reduced. Now it came back to INR559 crore. Why is that? That is my question, sir.
Ankit Gupta
Right. So that’s what I’m trying to explain you that in our industry, 4th-quarter is very heavy for all the companies. Right. Okay. It is basically the sale of the last quarter only. If you look at if you look at in the way of debtor days, obviously H2 is heavy and you’ll see the — in an absolute amount, you’ll see it growing the data days. But if you look at that in a way that we have only covered our 4th-quarter sales. So the debtors is — the debtors in an absolute amount is less than the quarterly sales that we did in Q4.
Unidentified Participant
Okay. Yeah. Fine, fine, sir. Sir, and our guidance on INR2,000 crore revenue in FY ’27, are we on-track, sir?
Ankit Gupta
So we really do aspire to be at INR2,000 crore revenue, but without factoring any price increase, we are very confident that the volume growth that we’ll be achieving is around 11% to 12% for this
Unidentified Participant
11% to 12% was one humble suggestion sir. On what happened is like we are over-delivering — over-promising and under-deliving sometime. So please what is that to do that, sir. As an investor, we think we want more — our company to achieve more. That’s what we are. Just that is the one suggestion, sir. That’s from my side, sir.
Ankit Gupta
Yeah, definitely, definitely, sir.
Unidentified Participant
Definitely. And another thing, we are not able to see multiple digital advertisement when compared to the things, right, right? So we are not into there. So if possible, give us the digital advertisement breakup also in the investor presentation. And also as like I asked advertisement curve, what is the benefit we are getting from this because we are spending INR100 crores. It’s like a huge money, but we are not — our sales are growing in the single-digit. That’s the only thing I would give you again another suggestion, sir.
Ankit Gupta
Okay. Yeah. So out of this INR100 crores, 60% we spend on television and digital media and
Unidentified Participant
Pure digital. I just want pure digital cost of INR100 crores.
Ankit Gupta
Okay. So out of INR100 crores, around INR15 crore to INR17 crores we have spent on digital media. Okay. And out of that also we have spent a lot on YouTube, Instagram and Facebook.
Unidentified Participant
Okay. So that is what I’m saying, sir, these are really comparatively, that is the reason I’m saying because out of INR100 crore, because if you are putting in big celebrities, it will like it will go only to certain package. It will not go for all, right? That’s what I’m saying. That’s — because INR15 crores to INR17 crore out of INR crores is only 15% of the advertisement. That is my humble suggestion, sir.
Ankit Gupta
Yeah. Sure. Thank you. Thank you so much.
Unidentified Participant
Thank you so much, sir. Thank you so much. All the best for the FY ’26, sir.
Ankit Gupta
Thank you, sir.
Gaurav Gupta
Thank you. Thank you.
Operator
Thank you. The next question is from the line of Junjunwala from Elara Capital. Please proceed.
Prerna Jhunjhunwala
Hello. Thank you. So just wanted to understand the competitive intensity in the market, how it is — how it was in FY ’25, are we seeing any improvement or deceleration over there in your product segment?
Ankit Gupta
So hi,. The thing is it is not sustainable to be never-ending so it will subside eventually and things are getting better day-by day.
Prerna Jhunjhunwala
But how is it I mean is it is it similar to what it was in FY ’25 currently or do you see improvement coming up?
Ankit Gupta
It will — eventually it will come,. Currently, I’m unable to comment on that right now, but eventually it will — it will subside.
Prerna Jhunjhunwala
So sir, what gives you confidence for this 11% to 12% volume growth and margin improvement? Because if competitive intensity continues to remain high, then despite subdued raw-material prices,
Ankit Gupta
So that’s why last year, if you would have remember, we gave an guidance of 13% to 14% for our EBITDA, in which we were very confident that we would be able to achieve 13.5% kind of a thing. But that’s why we reduced it by 1%. So we are giving a guidance of 12% to 13% in EBITDA, which is quite achievable because at that level of revenue, we are still — will be still spending around INR90 crores in our advertisement. That will give us around 0.75% to 0.8% saving plus a rationalization of our fixed-cost that we have. So overall, from 11% to 12% to 12.5%, it’s quite achievable given the current scenario as well.
Prerna Jhunjhunwala
And in this what kind of mix improvement are you assuming to get this number?
Ankit Gupta
So this particular fiscal FY ’25, if you would see, we did a volume growth of around 4.5%, but the rest 4%, 4.5% came from value growth, which was not due to the price increase, but due to the change in the mix. So our high EBITDA products that we have, like we are very optimistic about thermals because the channel does not have any stock for the thermals. We are very optimistic about NXT as a brand and it will definitely grow by around 20% that we are targeting this particular fiscal.
Then we have Rainware, which is doing really good, although the base is a bit small, but yeah, we are getting good response from the market. So all these things are taken together, there will be some changes that we’ll see in terms of the volume mix also.
Prerna Jhunjhunwala
Okay, understood. And in terms of working capital, what kind of improvement can we see in this year FY ’26?
Ankit Gupta
Around 10 to 12 days that we are targeting for this particular fiscal
Prerna Jhunjhunwala
10 to 12 days
Ankit Gupta
Okay
Prerna Jhunjhunwala
And in terms of markets like South has started improving it had — but we don’t see any major improvement in FY ’25. Improvement in FY ’24 was definitely visible due to Laksha project. How do we see the market contributions changing with the project and your efforts in other markets apart from North and East?
Ankit Gupta
So in South India, we have we had taken Mahesh Babu as our brand ambassador for the South Indian market and we have seen very good result in Telangana and Andhra states. But overall, the percentage is a bit muted in terms of the contribution coming in from South India, but we are very hopeful that it will start improving. But to make a significant change in the percentage value, we require a lot of volume change that should happen because it’s a low ASP product. So all the game would be on the volume. So even if we get a 15% — 17% kind of a growth from South India, it won’t really make a significant change in the percentage contribution coming in from South India, right?
Prerna Jhunjhunwala
Yeah, right, understand.
Ankit Gupta
But South India is ought to grow at a faster rate than the other parts of the country
Prerna Jhunjhunwala
Okay so are we expecting this growth to continue given that has been set-up for growth for the South India
Ankit Gupta
Or expan India as a whole?
Prerna Jhunjhunwala
South India. So in South India, are we expecting a little higher-growth than overall
Ankit Gupta
We are expecting a better growth in South India. And overall also for next two to three years, we are expecting that we should grow by like 12% to 13%. A minimum.
Prerna Jhunjhunwala
Okay. And how many EBOs are we planning to set-up this year?
Ankit Gupta
So this year, we have changed some strategies in our EBO also. We are trying to open seven to 10 EBOs, but it would be like mix of FOFO model plus FICO model. So in FICO model, it’s franchisee invested and company-operated model. So we are trying that also with let’s say, having a 1,000 square feet store on a high-street. So we will take that we are doing some sample stores for that like three to four stores on FICO model this particular fiscal and we’ll see how it does.
Prerna Jhunjhunwala
Okay, okay, understood. Thank you, sir and all the best.
Ankit Gupta
Thank you.
Operator
Thank you. Before I take the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Shariya from Pinpoint Capital. Please proceed.
Shaurya Yadav
Hello. Am I audible?
Ankit Gupta
Yeah, audible.
Shaurya Yadav
Yeah. I’ve been looking to add more products under Force and exchange. And my second question is, are we looking to reduce our borrowings going ahead?
Ajay Patodia
With — we have only working capital loan from the bank and we have the target by FY ’27, ’27-28 we convert ourselves in the net positive free company
Shaurya Yadav
And sir are we looking to add more products under and exchange
Gaurav Gupta
To answer this question, we have already launched socks in the recent time, that’s been just about a year and the activewear category also. So pretty much we have covered a lot of product segments already in this brand. So we do not see a lot of scope in adding any new category, but in the existing category, definitely more products that we always keep on adding every year to year.
Shaurya Yadav
And sir, what’s the reason we are opening less EBOs in North India in comparison to South?
Ankit Gupta
So currently all our EBOs that we have is in North India itself, like few are in Madhya Pradesh, Gujarat than we have in Delhi, we have a couple of stores. In East India, we have it in Odisha, Katak. Punjab, we have some UP, we have two. Rajasthan, we have one. So we are well distributed. In South India, we have not opened any store as of now but we’ll be will be opening this four sample stores in south of India only two in Telangana and two in Karnataka.
Shaurya Yadav
Okay, understood. Thank you.
Ajay Patodia
Thank you.
Operator
Thank you. The next question is from the line of Shreya Bahiti from Anand Rathi Institutional Equity. Please proceed.
Shreya Baheti
Hi, sir. Just a follow-up. So sir, the discounts and incentives that we gave to the retailers or distributors for the year, sir, can you quantify it as a percentage of sales for FY ’25 and ’24?
Ajay Patodia
It is around overall it is around 8% to 9%.
Shreya Baheti
Sir, this is for ’25
Ajay Patodia
This is for ’25.
Shreya Baheti
And sir what was this in FY ’24?
Ajay Patodia
For FY ’24 it is around 7.5%.
Shreya Baheti
And sir, also this 8% to 9% that is for FY ’25, so sir, how much of this was in Q4? Did Q4 have the major part of it?
Ajay Patodia
Yeah. Due to Q4, it is increased by 1 basis-point.
Shreya Baheti
Okay, sir. Okay. Thank you, sir. Thank you.
Operator
Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Ankit Gupta
Thank you everyone for joining the call. And if you have any other further questions, you can get back to us and thank you for joining the earnings call. Have a great day. Thank you.
Operator
On behalf of Arihant Capital Markets Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines