Doms Industries Ltd (NSE: DOMS) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Rahul Shah — Chief Financial Officer
Analysts:
Unidentified Participant
Aniruddha Joshi — Analyst
Sneha Talreja — Analyst
Aradhana Jain — Analyst
Jinesh Joshi — Analyst
Kunal Vora — Analyst
Jaiveer Shekhawat — Analyst
Percy Panthaki — Analyst
Priyank Chheda — Analyst
Akash Shah — Analyst
Mosam Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call of DOMS hosted by ICICI Securities Limited. Before we begin, a brief disclaimer. The presentation which DOMS Industries Limited has uploaded on the stock exchange and their website and the discussions during this call contains or may contain certain forward looking statements concerning DOMS Industries Limited’s business prospectus and profitability which are subject to several risks and uncertainties and the actual result could materially differ from those and such forward looking statements. 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 then zero on your touchstone phone. I now hand the conference over to Mr. Aniruddh Dajoshi from ICICI Securities Limited. Thank you. And over to you sir.
Aniruddha Joshi — Analyst
Yeah thanks Shruti. On behalf of ICICI securities we welcome you all to Q1FY26 results conference call of DOMS Industries. We have with us today senior management represented by Mr. Rahul Shah, Chief Financial Officer. Now I hand over the call to Mr. Rahul Shah for his initial comments on the quarterly performance and then we will open the floor for question and answer session. Thanks. And over to you Rahul Bhai.
Rahul Shah — Chief Financial Officer
Thank you Aneguchi. Thank you team. Good morning everyone. It is a pleasure to welcome you all to the earnings conference call for the first quarter ended June 30, 2026 2025. Joining me on this call is the team from Madison Capital, our investor Relations advisor. I hope everyone had an opportunity to go through the investor presentation and the results release that have been uploaded on the exchanges and our company’s website. Our results for Q1FY26 reflect a sustained growth trajectory with continuous positive momentum in sales. This performance also reflects the enduring benefits from our timely capacity addition strategic initiatives and the deepening trust in our brand doms.
During the quarter we witnessed growth across our balanced and diversified product portfolio supported by renewed positive sentiment in the domestic market and encouraging international demand trends. During the quarter we have continued to expand our product portfolio with introduction of new products across all our product segments. Notable additions were made in our core categories of Scholastic stationery, Scholastic art materials kits and combo packs, paper stationery and office supplies. We have also witnessed encouraging response for the new products introduced in the hobby and craft segment, baby hygiene segment and the back to school segment. Further, we successfully completed the acquisition of Supertread Private Limited, strengthening our delivery capabilities in the eastern region of the country and enhancing our paper stationery production capacity by getting us closer to our customers in that region, allowing us to capture larger market share in the paper segment.
We remain steadfast in our pursuit of growth and are progressing steadily on an expansion trajectory with our 44 acre project positively on track featuring timely construction milestones including the delivery of building by end of Q3 for installation of plant and machinery. This complemented by a timely brownfield expansion initiative within the adjoining areas as well as the new land and building purchase during March and April of 2025 will help us increase capacity, positioning us strongly to capitalize on the demand for our products. Export of our own brand products have also contributed positively to our growth with our existing markets responding favorably to our product offerings.
Our partnership with SILA for international distribution is also gaining traction with promising feedback from markets where we are leveraging their network for distribution of dom’s branded products. We would like to thank our consumers and channel partners who have been our driving force, continuously inspiring and motivating each and every one of us. We continue to work towards strengthening our connect with our consumers and are proud to have grown our YouTube family to 3 million plus subscribers and our Instagram followers base to over 100,000 followers. Showcasing our strong social media engagement, our channel partners have also been instrumental in our growth, effectively showcasing our products to our consumers.
We are optimistic about the domestic demand on the back of growing optimism around consumption driven growth. While we remain watchful of external uncertainties, we are positive about the optimism in the international markets for dom’s products. Our strategic efforts lay a strong foundation for medium to long term success and moving forward we continue to focus on our core strengths of broadening our product portfolio, boosting our production capabilities and profitable growth. Now coming to the details of our financial performance for quarter ended June 30, 2025, consolidated operating revenues for Q1 FY26 stood at 562.3 crores, a growth of nearly 26.4% compared to the same quarter last financial year.
This increase in sales was predominantly on account of volume growth aided by marginal increase in average selling prices due to change in product mix. Sequentially too we saw growth in our operating revenues. Operating revenues grew by 10.5% from 508.7 crores in Q4FY25. This growth is attributed to increase in volume due to capacity addition and the growth in export sales. The Consolidated EBITDA for Q1FY26 grew by 14.3% to 98.7 crores as compared to 86.4 crores in Q1FY25. The EBITDA margin for the quarter stood at 17.6%. Profit after tax for the quarter stood at 59.1 crores with 10.5% fat margin.
This performance alongside EBITDA margins of 17.6% trending towards the upper end of our guided range of 16.5% to 17.5% demonstrate the strengthening of our business model and our ability to maintain operational efficiency. During the quarter we have done a capex of approximately 70 crores including capital advances and full year capex is expected to be in the range of 210 to 225 crores. These investments were primarily towards purchase of additional land, building adjacent to our current flagship plant, ongoing construction activities for the 44 acre project and purchase of plant and machinery across different product segments. These investments are expected to drive growth in the current and upcoming financial year.
As mentioned earlier, our performance for the quarter was in line with our expectations and we believe that we will be able to achieve our guidance of 18 to 20% for FY26 with this I would now request to open the floor for question and answer. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their 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. The first question is from the line of Sneha Talreja from Nuama. Please go ahead.
Sneha Talreja
Just couple of questions from mine. Just wanted to understand what would be our share of exports from US and are you seeing any impacts on the tariff size or the items to low ticket item to basically see any impact? Any color on this would be helpful.
Rahul Shah
Hi Sneha. So Sneha, basically our exports to us, you know is roughly about 5.5 to 5.8% of our gross sales. The current tariff on one of the core products that we export to US is about 6.5% which is now expected to grow to about 50.65% once the additional 25% tariffs also kick in. But considering the sales is only about 5.8% of our total sales, we do not see any significant impact of sales to us on our overall sales. The potential decline in sales to us, we believe shall be offset by increase in export to other countries where DOMS is witnessing growth, growing brand acceptance Also we are positive about the demand scenario in the domestic market and hence we do not see a significant negative impact of US tariff on our business performance.
Sneha Talreja
Thanks. Thanks for that. The secondly, just wanted to understand, of course, you know, you believe in conservatively guiding and even this particular quarter what we’ve seen is you’ve grown by 26% against your guidance of 20% and your margins have also come in against 17.6% against you know, 16 and a half to 17 and a half that you guide for. Do you think any reason of, you know, revising this upwards? Along with this also you, in your opening remarks you highlighted that market around is uncertain. Could you explain how is it in terms of demand and how are you able to get this amount of pull in the market? Thanks.
Thanks for this.
Rahul Shah
We mentioned that we are uncertain about the export markets considering the especially with respect to us but otherwise at the domestic. In the domestic market we are seeing positive demand scenario being built up for our products. So we are confident that we will be able to achieve our guided range in terms of overall sales growth to about 18 to 20% this quarter. Particularly you see the growth numbers being a little higher is primarily on account of uniqlen acquisition where you know, in the base quarter previous year the Uniqlen numbers were not consolidated. And in terms of margin, you know, we always believe that the range of 16.5 to 17.5% is something which we are confident of achieving and therefore would continue with this guidance range at least for, you know, a quarter or so more.
Once we have a little more visibility of how the year is progressing, then if required, we revisit our guidance. But as of now, like I said, we are confident of achieving our FY26 range or sales growth range of 18 to 20% with EBITDA margins of 16.5 to 17.5% and SAT margin of 10 to 10.5%.
Sneha Talreja
All the best team.
Rahul Shah
Thanks Miha.
operator
Thank you. Our next question is from the line of Aradhana Jain from BNK Securities. Please go ahead.
Aradhana Jain
Hi. Thank you for the opportunity and congratulations on the good set of numbers. Couple of questions from my end. First I wanted to understand what is the reason for the muted performance in Scholastic stationery and the Scholastic Art category. I mean, we’ve added capacity, I believe in these two categories. In spite of that, there’s been a muted performance across both these. In fact, in the last quarter also there was a degrowth so what is the reason behind that? That’s my first question.
Rahul Shah
Yeah, so. Hi Aradna. Good morning Aradna. Basically, if you see Scholastic stationery has shown a low growth of about 2% while scholastic art when compared to the previous year same quarter has been flat. There are primarily two reasons for this. First and foremost, has not been any significant capacity addition in these categories that could drive increase in volumes and thus growth. Second, as we mentioned in our previous discussion also the performance of Scholastic stationery and Scholastic art should be evaluated along with the performance of kits and combo segment as well. If you see the sales of kits and combo 52% compared to FY20 first quarter FY25.
And if you combine the overall growth those presentations.
operator
Sorry. Sorry to interrupt sir. Sorry to interrupt. Rahul sir, your voice is muffled. Your voice is dropping.
Rahul Shah
Okay. Can you hear me now? Is it better?
operator
I can hear you. Yes. Yes, it’s better. Please go ahead. Thank you.
Rahul Shah
So other if you combine the overall gross sales of Scholastic stationary, Scholastic art material and kits and combos together Q1 FY25 these three segments accounted for around 347.2 crores of gross product sales while compared to 369.5 crores of gross product sales in the current quarter which is a growth of roughly 6.4%. But like I said earlier, there have been not any substantial capacity additions in this segment and hence the growth has been a little lower than the overall growth in sales.
Aradhana Jain
So do we expect capacity addition during this year? The210,250crores of capex that we are planning to do. Will that also lead to some addition in this category in terms of capacity?
Rahul Shah
Yes, definitely. Like we mentioned earlier, we are in the process of increasing the capacity of our core product which is wooden pencils. Like we mentioned earlier, the capacity, you know, wooden pencils is a slightly complicated manufacturing process where you need to add capacities at three different processes. Significant processes. Out of that, you know, we’ve already done the additions for two of the processes. Now the only capacity addition spending to be done completed is for finishing of the pencils. This is expected, you know, as soon as the first building from our 44 acre project is handed over to us.
So which is expected by Q3FY26 and you know, about 90 days from there on to start the commercial production. So we are targeting to at least have the new. You see substantial capacity addition coming in, wooden fences which will drive growth of this segment.
Aradhana Jain
Understood. Just two more questions from my end. One is on the office supply that’s grown phenomenally at like 77% year on year. How much of the contribution in the office supplies has been because of pence and within pence, what is the revenue mix of rupee 5 and rupee 10?
Rahul Shah
So Arana, while we discuss on a very granular, granular detail, but yes, in the office supply segment the key growth drivers have been pens. Along with that we are also seeing positive response to the range of highlighters that we’ve launched under this segment. Both these products are driving growth of the office supply segment with some more capacity addition coming in this financial year. Also in this segment, we believe this segment to continue to perform well for us. And in terms of the price point, we continue to sell major pens at the 5 rupee MRP segment.
But there have been new SKUs which are launched in the 10 rupee segment as well.
Aradhana Jain
Understood. And this last bit from my end on the Uni clan business, just wanted to understand the seasonality aspect of that business a bit more. I mean while the business was not there in the last year or this quarter, but there’s been a sequential decline in the revenue growth in this quarter. So given that monsoon came early, wouldn’t that have led to better numbers like given that winter was the reason for fourth quarter to have done well for unique land, similarly, wouldn’t first quarter as well should have been good from that aspect. And secondly, in terms of EBITDA margins, if we were to see for Uniqland, what would be the steady state EBITDA margins that we can consider because last year, again last quarter it was around 8.59% closer to those numbers.
This year it’s closer to a 7%. So on a steady state basis, what could be the margins to be considered? Yeah, that’s it from my side. Thank you.
Rahul Shah
Uniqland clocked in revenues of about 36.1 crore in Q1. Q1 is structurally a weak quarter for diapers. But as you mentioned because the onset of monsoon was a little earlier, definitely we saw a little bit of positive due to that aspect on our baby hygiene business. You know, while Q1 FY25 sales of Uniqlen was not consolidated, but if I have to just shed some light on it, we’ve grown our business compared to Q&FY25 by about 40% in Uniqlen. This has been because of both some capacity additions that have happened, especially in the wet wipe segment which was commercialized in Q4, FY25 as well as season setting in a little earlier in some parts of India.
Both these factors help in achieving higher growth for UNICLEN on a quarter over year on year basis. And from an EBITDA margin perspective, we still believe that the right EBITDA margin for this business would be 8 to 9%. Because right now the focus would definitely be on ramping up sales and the distribution network. I will be comfortable with the company doing about 8 to 9% EBITDA margin for the full year basis.
Aradhana Jain
Understood. Just one last question on this distribution network bit so on a sequential basis, if I look at your unique land brands network, there’s been a decline in the retail outlets and the sales personnel number on a sequential basis. Any reason for that? And what could be the aspiration for the full year in terms of reaching out in terms of the retail outlets for Uniclan?
Rahul Shah
At Uniclan, like I said, you know, we are in the process of building a distribution, you know, a robust domestic distribution network for uniclean. There have been some decisions taken by us to rightsize the network, you know, ensuring that the effectively reach our consumers. The focus has been more on driving more secondary sales than just primary sales. So it is a process that we are doing right now. So there will be some type sizing also that might happen in terms of the sales team as well as our distribution and retail outlet reach. But we believe this to grow gradually.
Some existing channel partners of our stationary segment have already been appointed as channel partners for the hygiene segment also. So slowly we’ll focus on strengthening this network. But it will be a gradual process. We would not want to put any sort of target in terms of where we want to reach because we’ve never followed that even for. We just want to maximize the throughput to each of our channel partners before getting into that number game of increasing the channel strength.
Aradhana Jain
Understood. This is helpful. I’ll join back in the queue. Thank you.
operator
Thank you. Our next question is from the line of Jinesh Joshi from PL Capital. Please go ahead.
Jinesh Joshi
Thanks for the opportunity. Sir, I have a question on our revenue mix. If I look at the northern belt, I mean historically the contribution used to be at around 30% plus. But in this quarter it has come down to about 20%. So any specific reason for the fall to come through? And also secondly, if I look at our channel, the revenue is up by about 90%. So just wanted to know, I mean have we penetrated newer stores or is it that we are able to extract more throughput from the existing stores? Yeah. So these two questions please, if you can help some.
Rahul Shah
Hi Dinesh. Dinesh. I heard the first part of your question clearly, which was why this proportion of sales from north India has come down. Second part I couldn’t hear. Well, so let me first answer the first part of the question and then if you could Please repeat the second part. Jitesh, basically see what has happened is almost 35% of sales of unique land comes from E Commerce. And you know the company does all of this sales from their plant in Jaipur, Rajasthan. So all these sales currently get absorbed in western part of India. And that is the primary reason why you are seeing the western part increasing.
Also certain merchant exports done by doms have you know, increased. So which is also accounted in our factory sales from Gujarat. These are the reasons why, you know, western region is showing stronger. But otherwise, you know, if you look from overall at the customer level, you know the sales are pretty much in line. You know what they were previously where north accounts the highest followed by west and then south and east.
Jinesh Joshi
Empty channel growth, the modern trade channel.
operator
Sorry to interrupt. Janesh. Sir, could you please repeat your question because you are not audible to us.
Jinesh Joshi
Yeah, am I audible now?
operator
Yes, now you are.
Jinesh Joshi
Yeah. So my question was on your modern trade channel growth which has come up at about 90% in this quarter. So just wanted to know, have we kind of penetrated newer stores or is it that the throughput from the existing stores has increased meaningfully.
Rahul Shah
The year on year growth in modern trade, e commerce, switch commerce that you see is again linked to Uniqlen in the base quarter. Uniqland was not consolidated and like I said, almost 35 plus percentage of Uniqlen sale comes from E Commerce. That is the reason why you are seeing that the modern trade has grown significantly when compared year on year. So that’s the primary reason. But having said that, you know, modern trade, e commerce, big commerce is something which within the stationary segment also is witnessing growth because our existing relationships, the demand for these products on these channels also continue to increase.
But there’s nothing other than that that we primarily seeing de growth in other segments and therefore focusing more on modern trade E commerce. It’s not that, it’s just primarily on account of the Uniqlen acquisition.
Jinesh Joshi
Got that. And secondly, I mean you mentioned in your opening remarks that we have started selling branded products in exchange export markets via the distribution agreement with pillar. So can you just talk a bit about.
operator
Could you please distance your device from yourself so that we can hear you clearly because your voice is sounding muffled.
Jinesh Joshi
Is it, Is it better now?
operator
Yes sir, please go ahead.
Jinesh Joshi
Yeah, so the question was on the branded Products in export market via the distribution agreement with Fila. So I just wanted to know if you can just talk a bit about the opportunity size over here. I mean, what was the FIDA’s revenue when it was dealing in these markets on its own via white labeled products? Or is it a new market for Fida as well whereby now we have got the lead to sell our own products versus their own product?
Rahul Shah
The distribution agreement with Sila was, is only for those markets where Sila has an existing network infrastructure and are continuing to do business. So it’s not new markets for Sila also. These are existing markets like I said in the opening remarks. Also we started, you know, selling Dom’s branded products in a couple of markets where Sila is already present. But it’s still early days, you know, it’s where the goods have reached the destination countries and the marketing and sales activities have started. So we still need to understand the response from the end consumers, what it has been before we can say and think about what is the potential of the business in these regions in terms of Sila doing sales in this market.
Honestly, we’ve not looked at those numbers because Dom’s products are not going to be competing with Sila’s products. They are basically we are selling in as a secondary brand along with the Fila brands where both the brands are going to be positioned differently. So you know, it wouldn’t be correct to look at the opportunity perspective of the sales that Fila is doing in the existing markets from Sila products. This is going to help Sila also to expand their sales in these geographies.
Jinesh Joshi
Understood, Understood. So just one last question from my side. Given this quarter was the back to school season for us? I mean is it possible to share what was the revenue in 1QFY 26 and where are we trending in terms of the annual run rate?
Rahul Shah
Absolutely not able to understand the question was a back to school season.
Jinesh Joshi
Okay, I’ll get back in the queue. No problem.
Rahul Shah
Yeah, okay. Okay, thank you.
operator
Thank you so much. Next question is from the line of Kunal Vora from BNP Paribas. Please go ahead.
Kunal Vora
Yeah, thanks for the opportunity and good quarter. All right. On the end business, what is the market where you are right now? Is the competition reacting in any way to your market share gains and at what level of sales would you expect a slowdown in the pen business?
Rahul Shah
Hi, Kunal Bhai. Kim, Jonath Bhai. Basically, you know, we are still a new entrant, relatively a new entrant in the segment, you know, we started with the conventional ballpoint pens about two years back. It’s been just two years but we are happy with the response that we got from our consumers which is healthy scale up the business to a pretty decent level.
But from a market share perspective, I don’t have the exact number but my feeling is that we’ll be still lower, about 3 to 4% which gives us a big Runway to grow in this segment. We see the opportunity being there with the capacity additions that are expected to come in this segment coupled with pipeline of the new products that we are going to launch. We are excited about this segment and I think we’ll be able to grow our market share in this segment quite well.
Kunal Vora
Understood? Understood. Any reaction from the competition so far and would you aspire for double digit market share here?
Rahul Shah
A spiration wise? Definitely. You know, doms as always, whenever we’ve entered any category, you know, we’ve always entered with the intention of being amongst the top players. And for almost most of the categories that we are present today, we’ve achieved that seat. So, you know, not only in pens or office supplies but in all the new categories that we are entering into. That’s the aspiration and we hope we’ll be able to come through to our aspirations in terms of competition.
Kunalbha, you know, you studied terms very well. You know, as a company we look more at ourselves in terms of where we want to be, how we want to reach there. We really don’t look at what the competition is doing or not doing for that matter. We believe we should continue to focus on our own core strengths which is product, product designing, product engineering. And if we bring the right product to our consumer at the right value, I think we see success in all the segments that we are present and intend to get into.
Kunal Vora
Understood. Thanks. Second one is, can you talk about hobby and cap? There seems to be a sharp increase. Led by diesel sales. How large is the market like whether we should expect the current run rate or further acceleration. How should we look at hobby and craft.
Rahul Shah
Could? I mean, you know, hobby and craft basically for us constitutes of modeling material, craft material, glues, adhesives, gums. During the previous year we had added capacities primarily in the adhesive segment. Introduced the product with a very differentiated sort of a product which slowly, gradually is seeing positive response from the market. And hence you see that the hobby and craft segment has grown significantly both from, you know, compared to the previous year as well as sequentially difficult to get the size of the adaptive market because you know, our focus there is mainly on scholastic addresses and blues, you know, we intend to get into the B2B adhesive segment so that bifurcation is not available.
But having said that, we believe in the scholastic adhesive segment, you know, considering the differentiated product offering, our distribution reach within the stationary segment and our deepening trust from our consumers will help us to grow this business to a decent level.
Kunal Vora
Understood.
Rahul Shah
So there is no one off in this quarter. And we should be building in further improvement in sales sequentially from here. So, yes, now the capacity utilizations are improving in this segment because there was new capacities that were added in the previous year. Utilizations are improving. So we should expect this gradual increase in this segment as well.
Kunal Vora
Understood? Understood.
Rahul Shah
And in terms of the new plant, I would assume that benefits will only start coming in the fourth quarter. So with that, what are the early estimates for how does FY27 look like? Because you have continued new capacity additions coming in starting fourth quarter. So any thoughts on, like, how we.
Kunal Vora
Should be looking at FY27?
Rahul Shah
Basically, we intend the target to have the first billing for the new plant happening in the fourth quarter. Real capacity addition impact on meaningful impact on sales will start building in from quarter one of FY27. So it would be a little too early to, you know, determine how much we would, you know, get benefits in FY27. But historically we tried to maintain our growth rate, you know, at that range, about 18 to 20%. And given the capacity additions that are planned, as well as, you know, the market sentiment, we believe that we should be able to reach it.
But we’ll come back to you all with the proper guidance once a couple of quarters closes.
Kunal Vora
Sure, sure. And lastly, domestic retail outlets.
Rahul Shah
There was a slight dip last quarter. This time looks like you added 10,000 outlets. Also you added a little honest here. The number which were given in the domestic distribution network for doms in the last quarter, there was a typo error in it. The number of retail outlets have increased. Q4 also and Q1 of FY26.
Kunal Vora
Understood? Understood.
Sneha Talreja
Okay.
Kunal Vora
Yeah. Okay. Okay. Okay.
Rahul Shah
That’s it for me.
Kunal Vora
Thank you.
Rahul Shah
Thank you.
operator
Thank you. Thank you. Our next question is from the line of Jaivir Sheikhawat from Ambed Capital. Please go ahead.
Rahul Shah
Sure.
Jaiveer Shekhawat
Thanks a lot for taking my question. Raul, my first question is with respect to office supplies. I think we have continually seen the way you have grown the revenues there. Could you just talk about in terms of distribution network, how well spread is that at the moment? Have you covered all the retail outlets that you supply? The rest of the stationary with via these office supplies. And then what kind of throughput increase do you expect from the existing distribution channel? Possibly by the end of the year.
Rahul Shah
We’ve not been able to still ramp up our sales in office supplies to the entire network. There are still quite a few regions where we are still to enter because we still have a constraint in terms of capacity. Once the new capacity additions which are planned for the current financial year come into production, we will be able to ramp up our production. Our sales and distribution of lighting instruments sends to the entire universe that we are servicing today. Should happen once by the end of this year or probably with the new capacities that are planned for the coming years.
If you could repeat the second half of the question, I think it was.
Jaiveer Shekhawat
Just in terms of the throughput increase that you expect from the same channel. So as per your understanding, will it be 50% of the channel that you’ve covered? 60 percentage? Is there any number in your mind that you’ve covered in terms of distribution network?
Rahul Shah
No, there’s no specific number or a target in mind. It is going to be a gradual process as and when the capacity additions happen. We want to increase our reach with the pens and a lot of other new products that we have launched. But definitely the focus continues to remain on increasing our throughput in each of the current stores that we are present. So, you know, we will gradually start selling pens and other items, new products in these existing stores as and when new capacities come.
Jaiveer Shekhawat
So my second question was in respect to your scholastic stationary art material and kits and combos. So if I say sequentially, I think there has been a good growth that has come in. I was under the impression that there were not a lot of capacity that has been added on the stationary and art material segment. So has there been some outsourcing that has happened or is there a demand pickup from those segments that have happened? Could you explain what has been driving that sequential growth from versus the last fourth quarter to first quarter?
Rahul Shah
So sequentially there’s a little bit of impact that happens because of the back to school season. So you tend to see a little more sales picking up in this the first quarter for these categories as well as what happened was certain export orders which were partially ready in the fourth quarter were serviced in the first quarter. So there was this slide at a product mix level. When you see specifically at a product mix level, this impact was seen. And also what you see sequentially, you know, kits and combos have done a little lower and individual items of scholastic stationery and art material have done Slightly better.
So these are the key reasons why you see the sales growing. It’s not that there have been any meaningful capacity additions that have come in.
Jaiveer Shekhawat
I think that’s helpful. So last question is in terms of new capacity expansion for the 44 acre one, so what sort of a headcount increase overall approximately would you expect and also the overall employee cost that you would expect possibly for the next year once it comes online.
Rahul Shah
Basically 44 acres is going to be a large project where eventually we’ll have operational area of about 1.8 to 2 billion square feet. When this entire project comes in, we believe we’ll require about 12 to 13,000 people, similar to the workforce that we have right now. So it’s going to actually double once the project is completely operationalized. But it will be gradualized and when new buildings come under production, you will gradually increase your workforce strength. Our employee cost, you know, right now is close to about 14% we believe. And if you see historically this number has been, you know, coming down slightly and that primarily because of economies of scale.
So that benefit will continue to get, but we will continue to have a large workforce also. So it’s going to be a significant cost for the company. Sure.
Jaiveer Shekhawat
Thanks a lot and all the best.
Rahul Shah
Thank you.
operator
Thank you. Our next question is from the line of Aniruddha Joshi from ICICI Securities Ltd. Please go ahead.
Aniruddha Joshi
Yeah, so just two questions. So in terms of pen business, we see there is a vacuum at the medium end or the top end of the market when there are brands like Pilot or to some extent Parker or Mont Blanc. But still there is a good amount of vacuum and potential to grow in the top end of the market too. So any strategy that DOMS has got to in a way expand in this medium end or the top end of the market for pens, that is one. And secondly, if you can indicate about the current distribution structure of Pens and how it will shape up in let’s say FY27 and beyond also.
So that is question number one. And then question number two, the way DOMS is growing obviously means like literally doubling revenues in three years. So the company will definitely require a lot of investments in new management bandwidth as well as technology also. So what is the strategy over here to invest in terms of the or strengthen the management as well as the strengthen the internal technology spends also? Yeah, that’s it. Two questions from my side.
Rahul Shah
Thank you. So Aniludhai, firstly to answer your first question, if you look at doms, you’ll appreciate that our primary customers, consumers are Scholastic children and college students. And if you look at the demand or the products that they use is mainly your entry level price point sales like rupees 5 rupees 10 rupees 20. So this is going to be the primary segment that we’ll be focusing on in the near to midterms going forward. We might, you know, it’s a little early to say when we will enter the premium segment. And in the premium segment also, at what price point, something like a Moblank or something is like a very, very high price point pen which is also sold in a very different sort of a distribution network.
So our product strategy will revolve around our consumer and our distribution channel where we are already present. So gradually we definitely move up in terms of introducing at the higher price point, the rupee 5 and rupee 10 pence would predominantly be larger share in the overall. To answer the second part of your first question, in terms of the distribution of fem, like I mentioned earlier, there are certain regions where we still not introduce the fence because of the constraints that we have in terms of capacity. As and when new capacity additions come in, we’ll want to introduce this throughout the country.
In terms of the distribution channel, these are sold in the same distribution channel where we are present right now. It’s going to be the same distribution network that we leverage for growing our fence business further. To answer your second question, definitely with the increase in the production capacities, we are also mindful of the fact that we require higher manpower, higher management bandwidth and active steps are being taken in terms of identifying people within the organization structure, taking them towards higher position to manage activities efficiently. Also, what will happen is once you start having a larger manufacturing base in a single location, the efficiency of the people also improves because it becomes easier to oversight the operation.
So we are in that process of continuously hiring from outside as well as promoting people from within the organization based on their performance. And with respect to systems, that is something which is like an ongoing process. This is not only for production activities, but even for market activities. Even from a DMS and Salesforce automation software that we use, we are continuously enhancing all these systems to meet our requirements. The systems that we already use are something which are best available in the market, for example, SAP for our as a scalable platform. With increasing overall turnover volume, these software will be able to scale up and the company continues to improving and enhancing the features of the existing systems to meet our requirements.
Aniruddha Joshi
Okay, surely this is very, very helpful. Many thanks.
operator
Thank you. Our next question is from the line of Percy from IIFL securities, please go ahead.
Percy Panthaki
Hi Rahul. Congrats on a good set of numbers. My question is on the 44 acre land, what is the total capex that we have done till date, till let’s say 30th of June, what is the total capex? It might not be showing up in the gross block because it might be in cwip. But what is the total excluding land, the gross block plus CWIP if you can tell me for the 44 acre plant.
Rahul Shah
So first of all, what we would have done for the 44 acre plant can be bifurcated into two parts. One is for the construction activities and the other is for ordering of plant and machinery. And some of those plant and machinery we’ve also got in our factories and started production at some alternative location in between. But having put all together, the capex that we would have done for this would be close to 150 crores.
Percy Panthaki
Okay, got it. And how much more will happen in the next nine months?
Rahul Shah
The total capex outflow that we planned for this financial year is about 210 to 225 crores. Out of this, like I said, we’ve already invested about 70 odd crores. The balance of about 160 crores predominantly go into the 44 acre project.
Percy Panthaki
Okay, so by the end of this year we would have invested about 300 crore in the 44 acre project. Do you expect this entire 300 crore to be capitalized or there would be still a material part in cwip.
Rahul Shah
There will still be a material pattern CWIP because you know there are multiple buildings which are being constructed together. So only the buildings which will, you know, we’ll get possession that will be capitalized one by one. The way the entire project is planned is once we get the possession of the first building we would want to get the possession of the next building in another three months because that is the time that we will require the 90 day period in between two possessions to set up the commercial production of that particular first building. So the way the activities are planned is every quarter keep getting one, one, one building.
And that is why not everything would get capitalized.
Percy Panthaki
So what I am trying to understand is that like how much turnover you can generate from the new plant in FY27. So let’s say about, let’s say about 150 crore or 200 crore would be let’s say capitalized by the end of this year. Putting a 3x sort of asset turns on that. Can we say roughly about 500 crores can be at least from supply side. Demand side is a different thing. But from a supply side you are prepared to supply 500 crore worth of products in FY27 from the new plant. Would that be a fair estimate?
Rahul Shah
Personal module, what is also happening is in the new CapEx that is happening for 44 acres, a lot of CapEx is happening towards the building of the utilities and infrastructure for the entire plant. So let’s say, you know, let’s say utilities in terms of power and all the entire. As soon as we start using power, we’ll capitalize the entire amount that has been invested. But this is going to be. It’s been invested till that size and extent which will fulfill the requirement of the entire project, right? So on that you will not be able to see like a 3x on the year first also year one also.
So it wouldn’t be like 3x. Eventually we would want to reach like a 3x sort of a number. But to start with, I think it would be fair to assume we’ll start with like a 2.2.25 and gradually move towards 3x. There is existing project where we continue to do capacity addition in terms of modernization. Like in the early part April and late March 2025, we added some infrastructure also. So you know, all these things would aid in terms of achieving our growth target for FY27.
Percy Panthaki
Understood? No. The only reason why I’m asking no because when at the time of IPO we had come to the plant, our understanding was that already the old plant is very near sort of reaching full capacity. And even the empty spaces in the new plant was not that much that we can do a lot of green field in the sorry, old plant. I am saying we did not see that much empty space that there can be huge amount of green field in the old one. So just concerned that if basically the new plant does not start contributing soon, then will there be a capacity constraint to growth? Because we need by FY27, FY28, we need let’s say 450 to 500 crore of.
I mean at least 450 crore of additional turnover on a yoy basis. We need that to come. And assuming that the 26 acre plant does not have much more in terms of expanding capacity, that will have to come from the new plant only, right?
Rahul Shah
First thing, your plant visit is now due. You should come to the plant sooner. Because it happened from the time of the IPO till now. You know, joining our current flagship plant where you visited during the ipo, we were able to acquire more space, some on lease and a large portion we purchased. Plus in March of this year we were also able to purchase land in GIDC very close to our existing plant which is. Which has a ready building of about 120,000 square feet. Right now we are just doing some renovations and changes there which are required for our systems.
So all these is also going to age. So it’s not that during from the IPO till now the capex has happened only towards 44 acres. There have been capacity additions that have happened at other parts also. Plus in our subsidiary companies Pioneer, we’ve added production of paper stationery capacity. When you visited Pioneer you would have seen two lines of automatic book managers manufacturing companies that has almost doubled. Plus we acquired super trend recently where we are getting more capacity which will help us in increasing our paper stationery business also. So you know every plan when I’m saying that you know we will aspire to continue growing at this level going forward also.
So for that the required capex and planning already happened. So probably my request to you would be to plan a plant visit very soon so that you could also see in addition to the 45 acre project additional enhancement increase that we’ve done from physical infrastructure perspective.
Percy Panthaki
Understood Rahul, very helpful. And last question from my side is can you tell me what is your capacity utilization in paper stationery and in pension?
Rahul Shah
First of all our capacity utilization is something which we don’t track on from that perspective. Because paper stationery for example is slightly sort of a seasonal business. And plus it’s a very modernized fully automatic manufacturing process which during season time we operationalize for additional time also in the pen segment like I said, we continue to remain constrained with capacity and so we are utilizing what we have right now and. But there are capacity additions which are already planned which are gradually coming.
Aniruddha Joshi
Hello?
Percy Panthaki
Hello. I think we lost Rahul. Operator. Yeah, yeah, sorry Rahul, I could not hear you. Yes, please continue.
Rahul Shah
Yeah, so like in paper stationary I explained that capacity additions came in and it’s a slightly seasonal business. So you know, once the new season starts I think we’ve got enough capacity to meet the anticipated targets that we have for that segment. And for pens our utilization would be optimal right now. But there are new capacity additions which are happening as we see. So you know every quarter we see some capacity additions happening in our existing infrastructure for the pen segment also. And when I say existing it means what you visited plus what we acquired adjacent to our current operations.
operator
The line for the current participant has been disconnected. Our next Question is from the line of Priyank Cheda from Vallam Capital. Please go ahead.
Priyank Chheda
Hi Rahul bhai. Thank you for the opportunity. I just had a question. If we can call out the volume growth and the ASP for the core stationary business like we mentioned in the last quarter.
Rahul Shah
Sorry, cannot hear you well.
Priyank Chheda
Hello, Am I audible?
operator
Yes sir, you audible.
Rahul Shah
The line is not very clear.
Priyank Chheda
You can you hear me?
Rahul Shah
Hello, can you hear him well?
operator
Yes, I can hear him loud and clear.
Rahul Shah
Sir.
operator
Just read your question slow so that management could understand it.
Priyank Chheda
Sure.
operator
Priyank sir. Yeah, thank you. Please go ahead.
Rahul Shah
Sure.
Priyank Chheda
Rahul bhai, my question is would it be possible to call out the volume and ASP growth in the core stationary business for this quarter like we called out in the last quarter.
Rahul Shah
Very difficult to give from a overall perspective. Because you know right now like you saw in this quarter sequentially if you see the volume of hits and combination tag, the value plus volume. Volume has come down a little. Because being a back to school season a lot of individual demand for individual products increases a little. And we have that flexibility in terms of meeting the requirements of the market accordingly. But having said that the majority of the sales growth that you see sequentially at the overall level is predominantly because of volume growth with some part being aided by increase in average selling prices.
Priyank Chheda
Very clear. My second question is on the expansions in the existing plot area not the new 44 acre land. Now we were coming up with a pencil expansion From I think 5.5 million per day to 8 million by when is that expected? And as well as if you can also touch upon the books capacity addition that we were planning to add another 15% capacity over there. The pens capacity also we were planning to add by 50%. So what is the status of all those capacity expansions outside the 44 acre? If you can call out will be helpful.
Rahul Shah
Basically the pen capacity addition like you rightly said is expected to increase from 5.5 million to 8 million. Some of the parts in that expansion have already happened. The finishing from where we’ll be able to make the finished product is something which will happen in Q4 of FY26 and Q1 to mid of Q2 FY27. So probably by same time next year when we’ll be talking we’ll see a substantial part of this capacity addition coming in. In terms of pains, like I mentioned earlier, there are capacity additions that are happening as we speak. And this is going to be a gradual process.
But you should remember that a lot of our capacities especially at the molding part is very fungible. So depending upon the market dynamics and requirements we will adjust ourselves to the requirements of the market. But in addition to pens and pencils, in the new expansion we believe we’ll be adding a lot of capacity for other aspects of the writing instrument segments like markers, highlighters, some of the pencil accessories like erasers, sharpeners. So across the board, as and when we gradually keep getting additional infrastructure we will keep adding capacities looking both in terms of the demand of the market both in India as well as internationally.
Got it.
Priyank Chheda
So for pencil, which is scholastic stationary till the time.
operator
Sir, we have lots of people in the queue waiting. I request you to rejoin.
Rahul Shah
Thank you.
operator
Question. Thank you so much. Our next question is from the line of Akash Shah from UTI Mutual Fund. Please go ahead.
Rahul Shah
Hi. Hi sir.
Akash Shah
Am I audible?
Rahul Shah
Hi Akash. Good morning.
operator
Yes, sir. You’re audible?
Rahul Shah
Yeah, sir, thank you. Thank you for the opportunity.
Akash Shah
So just wanted to ask what are.
Rahul Shah
The key risks that you are worried about in the business?
Akash Shah
I mean.
Rahul Shah
We. We understand certainly the growth potential as well as healthy margins.
Akash Shah
But sir, I mean what are the key risks that.
Rahul Shah
That you see and how you mitigate those? Akash, basically we asked this question earlier as well and probably our response continues to be the same. Where you know, we believe that the key foremost risk that we see in the business is our ability to timely increase our capacity. You know, we believe that the market and the demand both in India internationally is strong for our products. And we would want to capitalize on this demand as fast and efficiently as possible. And this will be. We’ll be able to achieve this only if there is timely capacity additions that happen.
So this in our view continues to be the foremost risk that we see in our business.
Akash Shah
Sure.
Rahul Shah
Sure, sir. And on demand front you are reasonably confident that market will be able to absorb the incremental capacity that we are going to come with, Come up with. Yes, we continue to be very positive about the demand scenario. Toms as a brand continues to see increasing acceptance not only in India but in international markets also. So as soon as our capacities increase we’ll be able to service that demand better. So demand doesn’t seem as good to be a challenge right now. But it’s more of when we’ll be able to service that demand and that’s where the capacity addition will come in handy.
Sure. Thank you. Thank you, sir.
operator
Thank you. Our next question is from the line of Mossam Shah from Wealth Guardian. Please go ahead.
Mosam Shah
Hello. Am I audible? Congratulations on a good set of Numbers. So basically I just wanted to know. Recently there was a news, there was a shortage of poplar wood. That is the primary raw material for wooden pencils. Are we facing any sort of shortage.
Rahul Shah
As of now as we speak? Not really, just that when there was some war like situation because the valley was entirely shut that time, you know, we did face some challenges. But as we’ve always maintained, you know, for some key raw materials which we believe are sensitive to our business, we have a significant stock, sometimes as high as six months of production requirements in stock. So we are not seeing any challenge. And plus we believe that the product, the cobra wood that we use, which comes from the Kashmir Valley region where a lot of government initiatives are being taken to ensure power the farmer there to farm these cultivated wood.
So we believe that supply should not be a challenge. And also in terms of our pencil, there are different types of wood that we use. Poplar is definitely one of them. There is buttawood also that we use which comes from southern part of India. There is also barswood which we import from Europe. So there are multiple purchase destinations also which are there. So we do not see that challenge right now.
Mosam Shah
Okay, that’s helpful. The second question was related sub bags. Because since after introduction this was the. First year where we have introduced bags. So what is the demand scenario and how, how, how we have conquered that.
Rahul Shah
So basically we launched the dogs branded bags in time for this back to school season. It was started with minimal sort of product offering because like I said we still want to test the markets to understand what products work. You know banks in terms of SKUs are always defined in terms of their volume capacity, large number of zips, number of sections holders that they have. So we’ve introduced multiple SKUs. We are getting feedback what is working, what changes they would like to see in terms of the product. We are getting feedback also from Extreme encourages feedback from retailers where they think they want the product packaging to be changed a little so they can probably sell bags also as a gifting article.
So we’re getting those feedback. We are working on it. We are trying to improve our SKUs further. So this business also will continue to grow. I think a couple of years more from then then we’ll be able to cross substantially the back to school segment.
Mosam Shah
Okay, okay, okay. And lastly was so we are assisting SILA in terms of sourcing quality products at competitive prices. So are these raw materials or the products that doms make?
Rahul Shah
This is product that DOMS manufactures and sells to Fila and Fila Group companies across the, the world.
Mosam Shah
Doing any raw material sourcing for them, right?
Rahul Shah
No, no we don’t, we don’t. We don’t do that trading sort of a thing like buy here and sell to feed. I don’t know, there might be certain times where you know, for testing purposes and sampling purposes we would have done it but it’s not like a business segment or anything like a key business.
Mosam Shah
Okay, thank you so much and all the very best.
Rahul Shah
Thank you.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to the management for closing comments. Over to you sir.
Rahul Shah
Thank you everyone. On behalf of doms, I would like to thank you all once again for joining us on this call today. We hope we’ve been able to answer your queries. Please feel free to reach out to our investor relations team for any further clarification or queries that you may all have. Would also request all of you all to probably take some time out to visit our facilities in Umergaon to see what new additions and new infrastructure is being built up there. Once again, thank you so much. Wish you all a good day. Thank you once again.
operator
Thank you on behalf of ICICI securities limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.