Doms Industries Ltd (NSE: DOMS) Q4 2025 Earnings Call dated May. 20, 2025
Corporate Participants:
Rahul Shah — Chief Financial Officer
Analysts:
Aniruddha Joshi — Analyst
Mehul Desai — Analyst
Priyank Chheda — Analyst
Akash Shah — Analyst
Shrenik Bachhawat — Analyst
Arpit Shah — Analyst
Unidentified Participant
Jinesh Joshi — Analyst
Sneha Talreja — Analyst
Aradhana Jain — Analyst
Mosam Shah — Analyst
Resha Mehta — Analyst
Presentation:
Operator
Please wait while you are joined to the conference. The conference is now being recorded ladies and gentlemen, good day and welcome to the Industries Limited Q4 and FY ’25 Earnings Conference Call hosted by ICICI Securities 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 touchstone phone. The presentation which Industries Limited has uploaded on the stock exchange on their website and the discussion during this call contains or may contain for certain forward-looking statements concerning Dom’s Industries Limited business prospects and the profitability, which are subject to several risks and uncertainties and the actual result could materially differ from those in such forward-looking statements. I now hand the conference over to Mr Aniruda Joshi from ICICI Securities Limited. Thank you, and over to you, sir.
Aniruddha Joshi — Analyst
Yeah, thanks,. On behalf of ICICI Securities, we welcome you all to Q4 FY ’25 and FY ’25 results conference call of Industries. We have with us today senior management represented by Mr Rahul Shaha, Chief Financial Officer. Now I hand over the call to Rahul for his initial comments on the quarterly as well as annual performance. And then we will open the floor for question-and-answer session. Thanks, and over to you, sir.
Rahul Shah — Chief Financial Officer
Thank you. Thank you, Anirud. Thank you, Shuti. Good morning, everyone. It is our pleasure to welcome all the participants to the earnings conference call for the 4th-quarter and the financial year ending, 31 March 2025. Joining me on this call is our team from Marathon Capital, our Investor Relations Advisor.
I hope everyone had an opportunity to go through the investor presentation and the results release that we have uploaded on the exchanges and our company’s website. Our to our financial year 2025 results, driven by steady sales momentum showcases our resilience and ability to thrive and navigate through challenging market conditions. Through our relentless focus on execution and operational excellence, we’ve achieved a revenue growth of nearly 25%.
This growth momentum was driven by consistent performance across our core categories, successful new product launches and the integration of UniClen, which collectively contributed to this performance. In recognition of this performance, we are pleased to share that the Board has recommended a dividend of INR3.15 per share subject to shareholders’ approval. Coming to some notable updates at our subsidiaries.
Pioneer Stationery and microwood continue to expand capacities to capitalize on growing demand for paper stationery products as well as packaging requirements of doms. Healthcare, our subsidiary focused on baby Hygiene segment 2 has delivered positive results, validating the effectiveness of our strategic initiatives. At Skido Industries, we launched our maiden range of branded school bags for the ongoing back-to-school season and the initial response has been very encouraging. Our growth trajectory is fueled by strategic expansion initiatives.
The proposed acquisition of a majority stake in Private Limited is aimed towards increasing our manufacturing capabilities and expanding our paper stationery infrastructure. This would enable us to reach consumers more effectively and enhance our competitiveness, especially in the eastern markets of India. This investment aligns with our vision to deliver unique differentiated products at competitive pricing — prices, leveraging our growing brand reputation and extensive distribution network.
Further, we continue to focus on expanding our manufacturing capabilities so that we can quickly and effectively cater to the increasing market demand for our products. Our capex strategy prioritizes such expansion initiatives. During the financial year 2025, at a consolidated level, the company has invested over INR213 crores towards capital expenditure, including capital advances. These funds were primarily invested for the construction activities and purchase of plant and machineries.
Further, our ongoing 44 44 acre expansion project construction is underway in-full swing with anticipated possession of first building by Q3 FY ’26 and beginning of commercial production slated in Q4 FY ’26. On a consolidated basis, our working capital stood at around 60 days. This increase in working capital days is primarily on account of increase in debtors on account of — to keep pace with the demand coming from the market. Further, the impact of acquisition has also resulted in higher trade receivables.
However, we believe with growing operation as well as full integration of UniClen for the full-year, we will be able to maintain our working capital cycle at around 55 days. The Indian growth story continues to be domestic consumption driven and on back of this, we continue to prioritize our growth in the Indian markets with focused distribution network expansion. On exports front, we believe our distribution agreement with FILA will enable us to leverage their group network and infrastructure in their existing territories, helping us to smoothen our export business expansion and to navigate complex export environment.
While we remain watchful of external uncertainties, we are optimistic about a gradual recovery in the domestic demand on the back of growing optimism around consumption-driven growth. Our strategic efforts lay a strong foundation for medium to long-term success. And moving forward, we’ll continue to focus on our core strengths, which are broadening of our product portfolio, boosting our production capabilities and scaling our distribution network to drive sustainable and profitable growth.
Now coming to the details of our financial performance for quarter and year ended, 31, 2025, our consolidated revenues for operations for Q4 FY ’25 grew by 26% to INR508 crores as compared to INR43 crores in Q4 FY ’24. This sales growth was backed by growth in EBITDA from 75.9 crores in Q4 FY ’24 to INR88.3 crores in Q4 FY ’25, growth of 16.2%. EBITDA margin for Q4 FY ’25 stood at 17.3% as compared to 18.8% in Q4 FY ’24, which is higher than our guidance range of 16% to 17% as provided during our previous conversations.
PAT for Q4 FY ’25 grew by 9.3% to INR51.3 crores as compared to INR46.9 crores in Q4 FY ’24. PAT margin for Q4 FY ’25 stood at 10.1% as compared to 11.6% in Q4 FY ’24. On a sequential basis, our PAT dipped quarter-over-quarter, primarily due to lower other income resulting from utilization of cash reserves for ongoing capital expenditure. Additionally, it was impacted by a INR2.3 crore of additional amortization expense considered in Q4 FY ’25 related to brand value post-acquisition.
This is a non-cash item, but there will be an impact of — on the profitability to the tune of around INR4.5 crores annually for the next few years. We believe keeping other factors constant, on account of these reasons, we’ll be able to maintain PAT levels of around 10% in the forthcoming financial year. In terms of our performance for the financial year 2025, we are happy to share that our consolidated revenue from operations grew by 24.4%, in-line with our guided range of 23% to 25%.
Our revenues from operations stood at INR1,912 crores as compared to INR1,537 crores in FY ’24. EBITDA for FY ’25 grew by 27.8% to INR348.4 crores as compared to INR272.7 crores in FY ’24, resulting in expansion of EBITDA margin from 17.7% in FY ’24 to 18.2% in FY ’25. PAT for FY ’25 grew by 33.7% to INR213.5 crores as compared to INR159.7 crores in FY ’24. PAT margin for FY ’25 rose to 11.2% as compared to 10.4% in FY ’24.
With this, I would now request to open the floor for question-and-answers. 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. Thank you.The first question is from the line of Mehul Desai from JM Financial. You may proceed.
Mehul Desai
Yes. Hi,. A few, just one or two questions. Firstly, on the top-line front, while we have grown 25%, if I look at organic growth excluding UniClan, it is around 14% in the core stationery business, which looks on a moderate side versus what we have seen in the first 3/4. So if you could explain what has led to this, especially in the scholastic stationery and scholastic art material given that there would be some shift of that sales to kits and combos, your kits and combos has done pretty well.
So if you could explain this what is — what has happened in these three categories? And from a FY ’26 perspective, how do you see these two large segments on a steady-state basis going for you? So that’s the first question.
Second question, if you can just give us one roundup on what kind of capacity additions — I mean, in which segments did the capacities got added in FY ’25 and where were the capacity constraints which can — which will be addressed in FY ’26? And third is on UniCLAN. I think if UniCLAN has done phenomenally well in this quarter also.
I think while when we acquired the reach was, 30,000, 30,000 outlets. What is the increase in reach for the UniClan brand that we have seen? So if you could address these three questions, that would be helpful. Thank you.
Rahul Shah
Hi,. Sure, sure. We’ll definitely like to., for your first question with respect to the performance of our core business, if you look at the growth of the core stationery business on a year-on-year basis, we have grown in this financial year-by close to 17% — more than 17%, which is in — close to our targeted guidance of 18% to 20%.
If I have to specifically speak about the scholastic stationery and scholastic material division and combine it with the kits and combo pack, we would really draw your attention and would like to suggest that you should probably see all these three categories together to see the growth in these three categories because kits and combo pack, if you’ll see, has grown by over 40% and these combo packs are largely made from individual items in the scholastic stationery and scholastic art material.
There is an increasing trend that we are seeing in the market where people are preferring combination packs rather than buying small or single individual items. So that’s driven the sales of kits and combo pack. So if I — you know, if we see the overall gross sales of Scholastic stationeries, Scholastic Art and kits and combos together, in Q4 of FY ’24, these three segments accounted for close to INR325 crores and this year also the sale has been similar or in-line with that number.
And if you see on a full-year basis, which is like FY ’24, the gross sales of these categories was around INR1,261 crores, which grew to INR1,360 crores on a full-year basis, which is like a 7.75% 11.75% increase. So it is — this increase has been despite not adding any capacities — significant capacities in these segments, it’s purely come from a increasing of efficiencies where volume on an overall basis have grown by about 3.5% and ASP has increased by another 3%, 3.5%. So on an overall basis, when you put all these three segments, we’ve demonstrated about 8% — close to 8% growth.
Yes. On the –, on the next question with respect to capacity, so during the last financial year, as we had informed you all that the company is actively looking at increasing its capacity in writing instrument segments, which includes pens, markers, highlighters and other products. So we’ve added capacities there. Also in our paper stationery segment, we’ve added significant capacities.
Capacity at Pioneer stationery almost grew by close to about 20% and that too before the back-to-school season. So that’s worked very well for the company. So during the entire financial year, like I said on the opening remarks, we had invested close to INR213 crores. Out of this funds were primarily about INR113 crores were invested towards the expansion of the 45 acres plant. In addition to that, we invested close to INR100 crores — INR100 crores in our core business of stationery and about INR10 odd crores increase at.
So that’s where capacities have been added. And going-forward in FY ’26, we believe that we’ll be — the total capex planning that we’ve done is around INR225 crores to INR250 crores. This will be primarily for setting up the buildings at the 44 acre facility as well as you know, land parcels that we’ve acquired recently adjacent to the current flagship unit. This will enhance our capacities for pencils, writing instruments, paper stationery, etc.
The 44 acre building first building is expected to be readied by the end-of-the current calendar year and by the last quarter of the financial year, we expect to start commercial production. So that’s with respect to the capacity additions that have happened and that are planned.
In terms of, so UniClen has definitely helped us to — it’s been a surprise for us as well while we had earlier thought that seasonality impact would come in during the — say the 4th-quarter where in the last 45 odd days sales typically go down. But due to the network integration with DOMs to some extent. And also with respect to addition of capacities that happened at, the performance has been positive.
If you look at the sales number for Q4 FY ’25, cropped revenues of INR48.1 crores. The company’s current run-rate in terms of sale is around INR7 — about INR15 to INR17 odd crores per month and we believe EBITDA margins to be about 8% to 9%. The company’s current capacity, they’ve also commercialized their own manufacturing plant during this quarter towards the end-of-the quarter. So sales from also will be added, significant sales would be added in the current financial year.
Mehul Desai
So and any color that you can give on what is the distribution reach now for UniClan versus when you had acquired because you said network expansion.
Rahul Shah
No, no. So, the distribution reach has more or less been constant. It’s not changed significantly because what we’ve been trying to do is integrate some of our channel partners in the areas of operations in which UniClenn focuses in order to strengthen their focus on the business. So you wouldn’t see a significant increase in the reach. Today still has about 70 plus stockished, but this includes the old as well as the integrated stock from the channel of close to 1,000 plus distributors and reaching about 35,000 plus retail outlets.
Mehul Desai
Understood. Understood. Got it. Okay. Yeah, that’s all from me. I’ll come back-in the queue. Thank you all by. Thank you.
Operator
Thank you. The next question is from the line of Priyanka Chheda from Capital.
Priyank Chheda
Yeah, hi, this is Priyank Chheda from Capital., my question was again on the same. We have added, I think capacities in the stationery within pencils where our capacity went up from 5.5 million pencils per day-to 8.5 and even in-office supplies, the pens capacity went up as well as in the pencils we have added.
So something which is not reflecting in when it comes to quarterly sales growth, I think we have added in last quarter itself. So some highlight on that. And when it comes to, say, FY ’26, within core stationary business, as you mentioned, 3.5% was the volume growth. What should we expect going ahead in FY ’26 from the core stationery business?
Rahul Shah
So again, sorry, but I think like we said, the growth in capacities in pencil is something which is underway. It had not started in the previous quarter. So in fact, as we speak, the first phase of pencil capacity, which is the wood processing and seasoning, which is one of the most critical parts in pencil manufacturing is now complete and ready in-line with what our targeted increase in capacities of pencil is going to be.
Phase-2 and Phase-3, which is predominantly woodworking and finishing of pencil, for that construction work is in-full swing, you know, due to certain delays in-construction due to monsoon and recent climate changes also where we had unexpected rain flight possession of those infrastructure is something which will come in the coming few months and then we’ll do the installation and production.
So during the last financial year, there has been absolutely no increase in the capacities, whatever 3 odd percent of volume growth that we’ve done in our pencil business, you know, is purely on basis of efficiency from the same capacity having more output coming in. So that’s what we meant when I said 3% business coming from scholastic station pencils.
So we’ve actually not added any significant capacities. That is something which is still a plan of action. If you see the growth in the last financial year, that has come majorly from the significant increase that has happened in-office supplies, which is for pens, highlighters, markers where we’ve increased our capacities and paper stationeries. So these two segments have resulted in majority of growth.
Now if you compare every from Q3 to Q4, like I said, there has not been any significant capacity additions that have happened in this quarter. So the revenue has been more or less — the growth has been more or less not as per like a 20% sort of a growth. It’s been about 7% to 9% growth.
Priyank Chheda
That is clear now, Rahul. So now what I’ve understood is pencils, I think if you can clarify the capacity, we are expanding it from 5.5 million pencils per day-to 8.5 and that would be the growth vector for FY ’26 as the capacity goes — goes onboard goes live. Well, when it comes to other segments, be it art material, kits and combo papers or even office supplies after the growth that we have seen, what can be the organic volume growth that we should — we should think of it when it comes to FY ’26?
Rahul Shah
So Priyan, I would really not want to you know, say a number for the volume growth. Like I said, overall for the business, we are expecting a close to 18% to 20% of revenue growth for the coming financial year at a consolidated level. In terms of pencil growth, yes, our plan is to increase the capacities from 5.5 million to 8 million, but that will come up in phased manners.
Right now, our existing infrastructure and resources are being focused on, you know, growing our capacities in our writing instrument and paper stationery category where we have seen very positive traction coming from the market and the trade overall. And I think that is like a honestly like a low-hanging fruit available to capitalize on this positive response.
So right now, the focus has been more on these segments. But overall, all put together, we expect the company’s growth in revenues to be around 18% to 20% in the coming financial year-on a consolidated basis.
Priyank Chheda
One last question on — within exports, if you can quantify how much of that was to the Group or the affiliated clients from the FILA Group within the exports for this year as well as for the last year.
Rahul Shah
And also in terms of FY ’25, our exports to FILA was about 166.5 crores and exports to other 3rd party customers in other countries where we sell doms was about INR108 crores
Priyank Chheda
Hello yeah, this sales to Group hasn’t grown for last two years. Any reason for this is — do we have a capacity constraints also over here?
Rahul Shah
Yeah, absolutely. See, Priyan, if you look at what are the key items that we sell to and Group affiliate that have been majorly, you know, fences, others to stationary items. And then if you can stop typing, that’s a little — that noise is too loud, sorry. Yeah. So it’s about, you know, know we sell majorly pencils, others scholastic item and scholastic art material.
These are the three key products, key categories from which sales to FILA and FILA group companies happen. And in this categories, we’ve not seen any substantial significant increase in capacity. So once you know the pencil capacities increase, then I believe this again you’ll see a positive growth in the FILA business. It’s more to do with the product mix.
The key products which have driven our revenues over the last couple of years, not a lot of them are sold to FILA and FILA Group companies. For example, writing pens and these are new categories for us where we would really want to prioritize on our sales in the domestic market rather than focusing on export.
Priyank Chheda
Perfect. Thank you for answering all the questions.
Operator
Thank you. Before we 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 Akash from UTI. You may proceed.
Akash Shah
Hello, am I audible, sir?
Mehul Desai
Yeah. Hi, Akash.
Akash Shah
Yeah. Hi, thank you for the opportunity. Sir, just wanted to ask regarding paper stationery. So CEO, we have made an acquisition in this segment. So just actually the — my question was, we don’t have the backward integration in this particular segment. I mean, I’m referring to the paper pulp manufacturing. So, sir, any thoughts on how we are going to compete with the incumbents in this segment?
Rahul Shah
So Akash, yeah, we do not have backward integration to the level of paper pulp or we don’t even make our own paper. There are very good companies in India with good capacities who make very good paper. We’ve partnered with them. You know, our relationship with them goes back a long way.
And you should also remember that it’s not only a relation with respect to paper, but with a lot of packaging material that we use. We work very closely with this paper and paperboard manufacturers. So we have strong relationship with them. And therefore, we do not see paper to be a challenge in the scheme of things or the expansion plan within the paper stationery segment.
Currently, as we speak, while in around October, we had increased the capacity at Pioneer stationery by about 20%, we are also in the process of purchasing a fourth fully automatic book machine line at Pioneer. It should be delivered at a plant in the coming month and should be ready for commercial production by June-end.
So there we are adding capacity, plus our recent acquisition of Private Limited, which is a company based in Eastern India in Siliguri, West Bengal, that will help us to increase our capacities by another 30 odd percent. So you know, overall, we believe we’ll now have good infrastructure to you know capitalize on the positive traction that we are seeing in the paper stationery segment.
I don’t know if you’ve got a chance to look at the newly-launched paper stationery books that we’ve come up. It’s something for the first time sort of designs and layout that have been launched in India. It’s been extremely loud by our consumers. You know, while the value addition in the product and in terms of designing can be really seen, if you like, like just pick the product and compare it with others. So we are very hopeful in this segment. We believe it to be one of the key contributors to growth in the coming financial year.
Akash Shah
Sure, sir. And on pricing front, how would our pricing be versus competition?
Rahul Shah
And see paper pricing, we are you — I would say we are rightly priced for the product that we are delivering, the quality that we are delivering and the specifications that we are giving to our consumers, we are rightly priced our products and that is why we are seeing so much such significant growth in this segment.
In paper, it really depends upon the GSM of papers which are used in manufacturing of books. So while we are maintaining our standards and quality, we are rightly placed. There might be different players having offering higher, lower GSM papers and being differently priced. So it’s really difficult to compare on a company to company basis. It really depends on the quality that you are giving.
Akash Shah
Sure, sure, sir. Sure, sir. Thank you. Thank you so much.
Rahul Shah
Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant.The next question is from the line of Srinik Bachawat from Mahindra Manual life. You may proceed.
Shrenik Bachhawat
Hi, Rahulbai. Congratulations on good set of numbers. So just wanted to understand how where do you see certain gaps in our portfolio versus the demand as a market where we can look to buy smaller companies going ahead in the next two, three years. Where do you see the portfolio gaps currently?
Rahul Shah
So Shrenik, honestly, in terms of your capacity gaps, if I have to talk, then there is obviously gaps at almost all categories that we are present in. The ideal more scenario for us would have been that if we could have everything ready as tomorrow and be able to add capacity across all our product categories, but that’s staying in a wonderland sort of a thing.
So there are gaps every — in all capacities. In terms of product portfolio, if you say, then there are a lot of product categories like we mentioned in the past that we would really want to enter and we believe with our brand and network, we can do good in those segments, especially BTS back-to-school segment where we are, you know, where we consider compass boxes to fin boxes, school water bottles and all these segments.
That’s one category. Office supplies, except for writing instruments and markers highlighters, we are — you know — we do not have any presence. There are segments like files, folders, say plus, calculators, host of other things. So all these we see seem to be category gaps of how do we go about these companies is something you know, whether it would be organic or inorganic can be evaluated on a case-to-case basis.
You know, we would want to expand our presence in these product lines, which are know associated with the growing years of kids and children you know we love to partner with technocrat people who have good understanding of manufacturing and if there’s anything interesting, we will keep evaluating them, but there is nothing planned as such, this will happen through organic route or this will happen through an inorganic route. It will be on a case-to-case basis.
Shrenik Bachhawat
Sure. Sure. And you already highlighted that 18% to 20% growth we expect in FY ’26. Can you highlight what is the EBITDA margin range we expect in FY ’26 and what is the capex plan for next two years?
Rahul Shah
And so, in terms of EBITDA margin, we expect it to be between 16.5% to 17.5% and PAT margins to be around 10% in the coming financial — in the current financial year FY ’26. In terms of capex, it’s about like I said, we are planning to invest between INR225 crores to INR250 crores.
This will be primarily towards the construction activities at the 44-acre plant as well as the new land parcels that we acquired adjacent to our current flagship plant in Umergau in terms of capex, the year-after, I believe it to be in a similar range because then the phase of machinery, plant and machinery installation will be going on in-full swing.
Shrenik Bachhawat
Okay, thank you so much. This is it from my side.
Rahul Shah
Thank you.
Operator
The next question is from the line of Arpit Shah from Asset. You may proceed.
Arpit Shah
Hello. Yeah, am I audible?
Operator
Yes, sir.
Rahul Shah
Hi, Arpit.
Arpit Shah
Yeah. Hi, Raul ji. I just wanted to understand the guidance for FY ’26 that we are guiding about 18% to 20% revenue growth. I just wanted to pick your brains on that. We still have two quarters of consolidation, which is left on the unique landside. And if I just — if I just use that number for FY ’26 about INR200 crore odd, our organic growth is not looking very encouraging at least for FY ’26.
Are you — are you on those numbers or how is it because also our capacities come in-quarter three of this year from our new plant. How should we look at the revenue numbers from there on? And every on the PAT margin side, I think about 10%, that is majorly because of the unique integration, but our client integration is going — we’re going on value about on INR50 crore kind of around that quarterly. So how should we think about margins on that front?
Rahul Shah
So Arpesh, firstly, let me clarify, we expect in the 44 acre plant capacity addition to be get the possession of the building in the 3rd-quarter of the current financial year with commercial production starting in the 4th-quarter. So in this year, we will not have substantial revenue coming in from 44 acre plant. With respect to, see,,
If you look at what we’ve consolidated at UniClen for the 6.5 months that we’ve acquired this company is about INR112 crores of sales. And if you look at the sales for the complete financial year FY ’25 was about INR166 crores. This business has seasonality, like we’ve said, you know, the first-quarter is very weak because in summer, because of the climatic conditions, you know, the to urinate reduces significantly.
So the first-quarter is weak and then the business picks up from middle of the second-quarter once the rains settle in throughout the country, right? So what we believe is we’ve already consolidated two-third of business, one-third is spending. So there wouldn’t be much significant addition. Like you saying, you cannot double it and say that there is significant that will come from unique length. So it will not be double, it will be there is one-third addition
Arpit Shah
Got it.
Rahul Shah
And in terms of — and in terms of core business, including more, that’s why we are seeing we are expecting close to 18% to 20% and we’d like to be always a little conservative. You know we — that’s how we’ve been — if you see even for the previous year, we said that on a consol level, we do about 23 to 25 and we came close to that — towards the upward range only.
Also it’s prudent to be a little conservative see because what we’ve experienced during the last year is because of this change in climatic conditions that we are seeing with certain spells of coming in off-season also, construction activities are getting impacted a little.
Right. So it’s better to be — that’s why a little conservative. See, in terms of PAT margin,, the reason for PAT margins to decline has been purely for two key reasons. One, our other income is decreasing. See, when we did the IPO, we had a lot of cash on the books, which were parked as fixed deposits and a lot of interest income, which was categorized in other income was realized by the company.
So these fixed deposits are now coming down because we started utilizing this cash for the expansion for the purpose that we can raise this cash. So as we move forward, this cash would further come down, right? And hence would our other income. So like I said, our EBITDA margins are expected to remain in our guided range. But because of this reduction in other income, there will be impact to the PAT and plus because of this unique land acquisition where we had to do a purchase price allocation, where certain value was recognized towards the brand and other intangible assets, there will be an additional depreciation charge over and above for what we have generally for our tangible assets.
There will be an additional depreciation charge on an annual basis of close to INR4.5 crores. So because of this, we believe the PAT margin, you know, but this is a non-cash item amortization. But because of that factor, the PAT margins would be around the range of 10%.
Arpit Shah
Got it. Got it. Fair enough. So let’s say by FY ’27 where we would not be let’s say, constrained by capacity. So what kind of growth then will you all be building it for? Because FY ’27 will be a big year when the capacity kicks-in, at least from the new plant because you’re struggling with the pencil capacity.
We are probably not struggling with the pen capacity, the scholastic stationary and all of that. So once you’re not constrained by capacity, what kind of growth you would be looking at? And just one last question, what kind of — if you can just highlight or put a light on what is the new agreement with FILA, with the promoters? What is it to do with — is it a shareholder agreement or is it a distribution agreement? If you can just put a light on that?
Rahul Shah
Yeah. So with respect to capacity, I think the way we are seeing the business being built-up and the momentum we see in the market, I think next few years will continue to be remained with capacity constraint. I think once we increase our capacity for pencils from 5.5 million to 8 million.
We are optimistic that we’ll be able to achieve that growth in sales also very fast and again come to a position where we are constrained for capacity. And we’ve seen this historically also when we were increasing our capacities in from 4 million to 5.5 million, we were like this will be now enough to serve the requirement, but markets always surprise us and cut wood and we expect the markets to continue to surprise us.
So capacity additions will be an ongoing process of what capacities for what products at what point of time as management, we would want to be a little flexible with this because you know one of the key trends and reasons for us to achieve significant compounded growth in the last 10 odd years has been our ability to adopt to-market requirements very soon. So we would really not want to get limit by saying something today, which might probably result in a lack of flexibility.
So we believe capacity addition will be an ongoing project at least for the next five to seven years. With respect to the FILA agreement, the company, the Indian promoter shareholders and FIRA entered into a shareholders agreement and also the FILA and the Indian promoter amongst themselves entered into an intersey agreement.
The essence of the shareholder agreement has been giving each other certain, you know, giving the promoter shareholders a certain nomination and representation rights, there are certain reserve matters on which you know the promoter shareholder group has a — has a say and one of the key components of the shareholder agreement has been the decision between the promoter shareholder group and the company to give FILA an exclusive right to distribute DOM’s products in the geographies where they are currently present.
If you look at FILA, is present in over 100, 100 plus 150 odd countries today and very strong in-markets like US, Europe, Latin-America, so these are all countries where they have a very strong network already established. They have infrastructure, which is already established and what we started as a pilot where we started selling branded stationery in Italy, where FILA is the largest stationary company.
There what we saw was while FILA continues to be the largest stationary company there, the second or the third category, especially which was taken by Chinese supplies were slowly being able to — DOMs was able to enter those segments and do decent business. So that is the reason why we wanted to replicate some similar sort of a model in other regions where FILA has strong existing presence and infrastructure.
So in this way, we do not even cannibalize the existing business of FILA. At the same time, we are taking away business from other companies, especially the Chinese suppliers and with the new capacities that will come up, especially for once the 44 acre full plant has started, so we’ll be able to get access to these large developed markets. So we believe this to be an exciting agreement with FILA.
Arpit Shah
Got it. Just a follow-up on this. So would they have an allocation in terms of what distribution or the exports could look like and the margins would be similar to what the company makes or it will be a bit higher since it’s exports?
Rahul Shah
So see, from a margin perspective, we’ve always had a similar sort of a philosophy that you know we need to sell the right product at the right price, keeping margins similar across all our product categories. So I wouldn’t say there would be substantial increase in our margins because of this export and that took to a developed country. But yes, exports do have a slightly better realization, so there might be certain positive impact to the margin, but not substantially.
Arpit Shah
And what this number could grow up to, let’s say, so we were at INR155 crores in FY ’25, what this number could grow up to, let’s in the next couple of years for this agreement?
Rahul Shah
So right now, we are at about 166 on a gross total sales perspective. So this potential is high. It still depends you know when capacities come in. And, I will be very honest with you, while we’ve always wanted to expand our business association with HELA and Hila Group companies, you know, domestic market continued to be our focus and somehow whenever new capacities were added, domestic market was prioritized because we wanted to build our brand and here.
But this time, we believe that the capacity expansion is significant, so we’ll be able to fulfill the demand of and Group companies reasonably well. In terms of number, I really don’t know or would want to put a number that how much go through, but let the capacities come in, then we’ll have better visibility.
Arpit Shah
Got it. Got it. So, you just mentioned.
Operator
Arpit, can you please go back to the queue for your follow-up we have several participants waiting.
Arpit Shah
Sure.
Operator
Thank you sir. The next question is from the line of Akawat from Ambit Capital. You may proceed.
Unidentified Participant
Sure. Thanks for taking my question. Rahul, my question is on your office supplies high. Sir, you’ve done very well on the office supply-side. I mean almost double the revenues there. So wanted to better understand what has really driven that your strategy there? And then what’s the outlook here with respect to pen markers and everything else that’s included within office applies? That will be my first question, sir..
Rahul Shah
Javi, like you said, office supply has done well because we’ve been able to add capacities there. And during the last — almost for the last 1.5 years, almost six quarters, we’ve continuously kept adding capacities in our office supply segment, which is largely — comes from pens, also added and introduced recently high range of highlighters, markers, which we had in that new product launches have also come in. So as a result of this, overall the office supply segment because of capacity additions and new product launches has done very well and this is something on expected lines.
Unidentified Participant
And sir, given that the market potential is quite large, I mean, what’s your expectation of growing this segment over the next two, three years?
Rahul Shah
So like I said, you know, right now it seems to be a — you know, the response that we’ve got from the market in this segment is very encouraging and that is why right now our current infrastructure, new infrastructure that we are getting, the resources that we have. We are prioritizing further investment in writing instruments as well as paper stationeries because we are confident that this business provides a good growth opportunity for the company.
Unidentified Participant
And sir, with respect to the current capacities do you have, how much of that would already be utilized on the pen side and how much further are you adding? And when will that capacities come in.
Rahul Shah
Yeah, so Javir, it’s a process, capacity addition, there are lot of things that happened who also visited the plant. You’ve seen a lot of you know-how things are happening, but you know, and I wouldn’t really want to compare or say exactly when and how much it will happen because it will come in phased manner. And as and when it comes, we’ll keep informing you all about it.
Unidentified Participant
Surely. And sir, on the diaper business, that will be my last question. Given that over there as well, I think with tie-up, you seem to have been now gotten the distribution right, the product also seems to be meeting a lot of product market fit. So what’s your expectation of sort of scaling that business over the next two, three years?
Rahul Shah
Yeah. So Javir, I would really say that we still do not have — we’ve not got the distribution of the channel right. It’s still work-in progress. There has — there is a lot of work to be done. It’s just that when you add something or change something, you see some significant changes in the short-term, but to keep that momentum going, there’s a lot of work that we still need to do in terms of channel,
In terms of understanding this business, how it operates, what sort of pricing mechanism works more from a long-term growth perspective. So that’s still work-in progress. We’ve — like I had mentioned in our previous call also, we are integrating to the extent possible our distribution or channel strength to the benefit of UniClen where UniClen already has an established network or a channel partner there, we are trying to put in the best practices in terms of sales, in terms of pricing to get things right.
It will remain a work-in progress for at least next couple of years. But like you said, this opportunity seems very good. The market size, the market potential seems very-high. See, about 30 — a significant portion of the revenues of UniCle comes from e-commerce sales. And these sales, when we analyze deeper, we come to know that this is happening on a pan-India basis.
So it at least validates that the product is accepted at a pan-India level. So it’s now carefully getting things right in terms of the network and pricing and reaching the best counter from where we believe sales can be generated, but it will remain work-in progress, but we are excited about this opportunity.
Unidentified Participant
Sure, sir. Thank you so much and wish you all the best.
Rahul Shah
Thank you.
Operator
Thank you. The next question is from the line of Jinesh Joshi from PL Capital. You may proceed.
Jinesh Joshi
Thanks for the opportunity. Sir, I have a question on our distribution reach. I think we have some 4,750 distributors. And in the PPT we have mentioned that the touch points are about 1,35,000. Now if I compare this with our 3Q numbers, the distributor count was 5,600 and the touch point number was close to about 1,40,000. So any specific reason for contraction in the distribution reach?
Rahul Shah
No, no. So basically what happened — you know, those numbers in the 3Q included UniClen also where there were 1,100 sort of distributor. So we basically corrected by presenting both reach differently. So there has not been any contraction in the distribution reach.
But at the same time, there has not been any significant expansion also, because right now, like I said, Jinesh, you know, earlier also we always focused on maximizing the throughput each store. Now we’ve reached a reasonable number of counter spaces and we would want to first now maximize our throughput in these stores by adding the new products that we are launching, especially paper, stationery and.
Jinesh Joshi
Got that. And sir, secondly, I was just having a look at the balance sheet. The intangible asset number is at about INR41 crores and this figure was negligible in the last year. So what is the reason for rise in the intangible assets? And secondly, our receivable days have increased to about 26 presumably due to the high credit given for the hygiene business.
And you mentioned that going ahead, perhaps our working capital cycle will come down from about 60 days to about 55 days. So if we are trying to restrict the credit in the hygiene business, is the growth not expected to suffer over there?
Rahul Shah
So, in terms of your first question with regards to the impactable assets, like I said initially on the call, you know, post the acquisition of UniClan, we were supposed to as per regulation. Yes, if you could stop typing in-between that noise is very loud for sorry.
Jinesh Joshi
Sorry, sorry.
Rahul Shah
So because of the acquisition, we were required to do a purchase price allocation and we had time to do this until the end of 12 months from the time we acquired this company. So that purchase price allocation happened during the end of this financial year FY ’25 as a result of which we recognized intangible assets with respect to brand network, et-cetera to the tune of about INR42 crores. And because of that you see the intangible assets on the balance sheet increasing significantly as compared to the previous year.
Jinesh Joshi
On the receivable side, if you can just answer that part.
Rahul Shah
So if you look at the receivables, like I mentioned in the opening remarks, there has been an increase in the working capital days, primarily on account of increase in debtors. And this increase in debtors is attributed both to the acquisition of UniClen because we consolidated only two-third of UniClen’s full financial year sales, while you know the debtors were consolidated at the year-end at the full level.
And at the same time, I would also want to highlight that in order to meet the demand of the market and the size and scale of business, we’ve also extended at credit period to our channel partners. So in our previous interactions, we’ve always mentioned that our paper stationery is one segment in the overall stationary space where the market is accustomed to credits and now with a higher focus on paper stationary space increases, we also had to increase the credit, which we give to our channel partners. As a result of these factors, the debtors have increased at the company-level — consolidated level.
Jinesh Joshi
In. Sir, just one last question from my side. I know this was asked earlier, but wanted some clarification on this. This 18% to 20% growth guidance, this is ex of UniClan or including? Because I was confused when it was asked earlier.
Rahul Shah
No, it’s including UniClen at a consolidated level because now is already consolidated in our numbers. So at a consolidated level, we believe to grow at 18% to 20% in the coming financial year. So that’s including.
Jinesh Joshi
Okay, sir. Thank you. Thank you so much.
Operator
Thank you. The next question is from the line of Neha Talreja from Nuvama. You may proceed.
Sneha Talreja
Yeah. Firstly, congratulations team for strong set of numbers. Just two questions from my end. One is, of course, you mentioned 18% to 20% growth for FY ’26. This is including all the capacity constraints that we have for this year. Our major capex comes in Q4 FY ’26. So just wanted to understand what could be the real growth of the company from FY ’27 and beyond if capacity is a real constraint like you said that we are almost optimally utilized across the segments. So just a broader question, for the next three, four years, you could provide us a vision that what are our plans for the new 44-acre plant? Thank you.
Rahul Shah
So with respect to the growth for this year, like I said, the 18% to 20% growth will come from the existing infrastructure plus the additions that we’ve done in the existing infrastructure. So this does not account for any substantial revenue contribution coming in from the 44 acres, you know, there has been capacity additions even at Pioneer, our subsidiary plus this acquisition that we did will help us in augmenting our capacity in paper stationery for writing instruments, there is the infrastructure and resources are being and being ready and so these things will drive the growth for the current financial year.
Going-forward,, you know-how much growth will happen once the 44 acre capacity addition happens should be in a similar range as we are guiding now because you also need to keep in mind the base number is increasing year-on-year. You know that will not — and the expansion at 44 acres will also come on a phased manner.
The total project is about 1.8 million to 2 million square feet. In the first phase, we expect to get possession of 600,000, then it would be another 7,000 and then in the last phase another 700,000. So therefore, the growth in capacities also will come in phased manner and hence the growth in revenue from the 44-acre plant will also come in a phased manner?
Sneha Talreja
And in the same way, what could be the margin trajectory given that we are currently all more than 17%? Of course, I understand is coming with lower base, you know lower margins of about 8%, n but still we are guiding a conservative 16.5% to 17.5% range. What happens with new land coming into play?
Does our margin actually remain subdued for quite some time because of the new land and the new setup or is there any value addition that we can go about and take the margins higher? And of course, with improvement also taking into place simultaneously?
Rahul Shah
So what will happen with the margins it may have when we are in this growing phase, we always have to also add-up to the fixed-cost before the new capacity addition comes in commercial production, right? So you know those fixed costs then get started, absorbed once the commercial production start, like for example I need my team to be ready before the commercial production starts.
I need to have my plant head, the project, the plant managers, all are on our payroll, we need to train them. So because of these things, the fixed costs typically increased before commercializing a plant and now that every quarter we’ll be adding capacities from 44 acres plant.
So this will come be like a cycle only and therefore, we believe that margins should remain in that range of 16.5% to 17.5%, plus Neha ESOP expense also, like I said is something which has had an impact on our margins. That was also expected to continue because ESOP is like a five-year plan. We’ve just given out ESOPs to the tune of 10% of the total options that we plan to give.
So even those factors will come in. So looking at all these factors, I believe margins of 16.5% to 17.5% is something we’ll be comfortable guiding for the coming year and later also. But we’ll keep on evaluating. We’ll see next year how things pan-out. If there’s any change in terms of guidance or something, we’ll definitely communicate to you all.
Sneha Talreja
Understood. Understood. Lastly, if I may or you know Skido’s response in the market.
Rahul Shah
Good you. You should also visit some stores and give us some first-hand information, but it’s been good response you know, I happen to speak to a shopkeeper and he said the first lot of bags that he received. He was able to sell about 50% in 5, 6 days but you know it’s still early days you know, I really would appreciate if you all also could go to the market, pick-up the bags, seal the bag, give us your feedback. You know that’s really important.
Sneha Talreja
Sure, understood. Thanks. Thanks. Thanks, Rahul.
Operator
Thank you. The next question is from the line of Aradna Jain from B&K Securities. You may proceed.
Aradhana Jain
Hi, thank you for the opportunity. Just wanted to understand a little more on the Super Thread acquisition that we’ve done. So we’ve acquired 51% for INR6 crore of consideration. What is the revenue potential that we expect from this particular acquisition?
And given that the company has been there for two decades now, so what is the current run-rate that they have revenue run-rate and given that the salience of this particular brand or the company is more in the Eastern India portion, so are we also trying to target like cross-selling of other products through that region because our revenue consideration coming from that region has been lower than North and West. So thoughts on that?
Rahul Shah
I’ll just answer the last part of your question first. In terms of our geographic mix, you know East currently contributes to almost 18% of our gross product sales, while it seems to be lower than what North and West do, but it’s important to note that our sales mix on a geographic basis is very much balanced with respect to the population of these regions.
In East, you see lower sales because the population on East of India is on an overall basis is lower when compared to North and West. So it’s not that East is not doing well and there would be any cross-selling opportunities, we are doing very well in East region, justifying the population and the requirement of the market.
And with this acquisition, we believe we’ll be able to do better because we’ll be able to reach our consumers in a shorter time and more importantly, effectively and efficiently because in paper stationery, if you see the logistics, the delivery logistics cost is very-high. You know. So by having operations in East of India, our — we’ll be able to effectively reach our consumer for their paper station in a better way.
Giving you a background about Super Treads, Super Treads is basically — has been in existence for almost over two decades, but it has been purely an OEM sort of a manufacturer. So basically you know, has been doing job work for primarily for ITC for a very long period of time and other few brands, they never had their own sort of a brand. They have a very small brand, which they use only for the local market in, but nothing significant in terms of sales network or anything that they had.
So it’s basically a job work OEM sort of a player. In terms of capacity, they have a capacity of about you know, processing about 300 metric tons of paper, you know for different types of books that they can manufacture in the current infrastructure. And in terms of potential, this infrastructure can translate to a monthly sales of about INR2.5 crores to INR3 crores working at full optimal capacities per month.
But right now, we will — once the acquisition is complete, we will start by you know first getting the infrastructure changed in terms of the requirement of our current product portfolio, there might be requirement to add some more machines and ancillaries, which are required for the type of book that we manufacture. And post that, we believe that we can reach that potential in terms of revenue potential.
And Eastern market does have that much opportunity and as a region in East India is strategically located because Northeast is also closed. West Bengal key markets are also closed. So is Bihar and Orissa. So strategically also, they are in a good geography and can help us expand our paper stationery business in East India at a faster rate.
Aradhana Jain
Understood the second question is on the stance that we’ve been taking is that
Rahul Shah
The hello. Hello.
Aradhana Jain
Crores of capex. Hello, am I audible?
Rahul Shah
Sorry, we missed you in-between.
Aradhana Jain
Yeah. So I was asking that the capex guidance that you’ve been giving of INR200 plus odd crores for the next two years.
Rahul Shah
But your voice is backing. We again missed you in-between after the guidance word we missed.
Aradhana Jain
Am I audible now?
Rahul Shah
Yeah. Yeah.
Aradhana Jain
So I was wanting to know that the capex that we plan to do of around, say, INR400 crore INR450 odd crores for the next two years, is it fair to assume that the entire capex will be funded through internal funds or is there a scope of us to take external funding for the same?
Rahul Shah
So we — out of this capex, irana, we already have some amount which we raised during the IPO, which is still unutilized about INR165 plus crores as on 31st March, which continues to remain unutilized from the IPO proceeds that we raised. So that could be used. And rest of all should be funded through internal accruals.
And if required, our balance sheet today also supports raising some more debt funds if required. But right now, we don’t see any significant requirements of raising debt, internal accruals plus IPO proceeds should be good enough to fund the expansion for the next couple of years.
Aradhana Jain
Understood. Just last question from my end on the — the brands that we have DOM, Fix, areas, how has the performance been? Has DOM stops picked-up for us? Any thoughts on that?
Rahul Shah
Okay. So these are — as it is not categories which — or I would say product lines which are going to grow significantly or meet the requirements of our others material, because it caters to a very niche market, very small range of kids typically used by kids from the age group of two to three, 3.5 years after that they start using our regular crayons or regular.
So you will never see this to grow in terms of brand — in terms of sub-brand very significantly, but they are very important to fulfill our product portfolio. And Thoughts especially with what happens is we are able to reach our consumers faster. Earlier our products used to — kids used to start using from three to four years and now they are able to use it from two years, right?
But the — it’s otherwise not something which will grow substantially in terms of absolute revenue numbers. In terms of Amaris, if you see in the fine art product segment, if you see year-on-year, we’ve done a growth of over 50% and that has predominantly come from the increase in sale of the fine art products manufactured and sold by manufactured and sold by dorms under the brand-name of Amaris.
So yes, that is doing reasonably well. Again, with respect to fix, if you see our hobby and craft segment, that’s also grown by almost close to 25%, where growth has predominantly come from the scholastic segment product lines, which are sold under the brand.
Aradhana Jain
Understood. This was helpful. Thank you so much and all the best.
Rahul Shah
Thanks,.
Operator
Thank you. The next question is from the line of Shah from Wellsguardian. You may proceed.
Mosam Shah
Hello. Hello. Congratulations. Hi, congratulations on a good set of numbers and thank you for the opportunity. I just wanted to ask, as you mentioned about the pencil capacity of 5.5 million pencils per day and pens to be at 3 million tons per day. So I just wanted to ask what is the capacity for paper excluding the acquisition that we have done? And also about the bags and wet whites.
Rahul Shah
Okay. Paper, our capacity today is upward — a little upwards of 1,000 tons per month. And with the new machine that we are coming up, which will be installed at Pioneer very soon, this will increase by another 15% to 17% and this excludes the new acquisition and with respect to you know the capacity of that we have is about 1.7 crore packs per annum.
But it’s, important to note that currently also generates some amount of sales from sale of they used to buy from outside and sell. It will now be something which will they make in-house and then sell. So it’s not something which will add to the revenues completely. It’s just some amount of that would replace the existing trading business that they used to do.
In terms of bags, you know, our capacities right now are limited and bag capacity is driven more by stitching capacities. The bag manufacturing operations are located in, which is like a hub for sports, wood and bags where you also have the ability to increase the capacity with a minimal sort of investment and infrastructure requirements is possible.
So depending upon how the bag business and how the feedback that we get from the market, we’ll decide on how do we want to increase our capacities at bag — for bags. But right now the capacities are limited.
Mosam Shah
Okay, okay. And what about the art section now in the portfolio?
Rahul Shah
So in terms of revenue
Mosam Shah
Capacity-wise
Rahul Shah
We’ve not added any material capacity to our scholastic arts segment. There have been some capacity additions that have — that have happened in the fine arts segment. Right now, like I said, looking at-the-market demand and requirements, we’ve prioritized our capacity additions in writing instrument, paper stationery.
This will — this will be followed by increase in scholastic stationery. During the last year, we also increased our capacity for mathematical boxes significantly from about 75,000 to more than 100,000 boxes a day. So depending on the market requirements,, we are, you know, being flexible to get the pulse of the market and increase our capacities accordingly.
So right now, the focus areas have been this. Going-forward, writing instrument capacity additions will happen, there will be capacity additions for pens, there will be capacity addition for pencils, for paper stationery and then we’ll probably look at capacity additions for scholastic art material. Capacity additions are something which are an ongoing process.
Mosam Shah
Thank you. Thank you so much and all the best.
Operator
Thank you. Thank you. The next question is from the line of Resha Mehta from Deanage Wealth Services. You may proceed.
Resha Mehta
Yeah. Thank you,. Just a quick clarification. So the — those scholastic art stationery — scholastic stationeries, scholastic art materials and kits and combos, these three segments have grown by only 4.5% in value terms in FY ’25, so this low-growth is purely due to the capacity constraint or is it also the market demand?
Rahul Shah
So,, see, you are you know if you look at a gross product sales perspective, the revenue — probably what you all are doing is multiplying the category-wise sales you stated with the revenue from operations. But if you look at the gross product sales, which is pre-discount schemes and other rebates.
Then these three segments put together have grown by about 8%, 7.7% to be precise. This growth has predominantly come about 3 odd percent volume growth and the rest is value growth. Like I said, we’ve not added any significant capacities in this segment. So whatever value growth — volume growth also we are seeing is purely because of improving efficiencies where we are able to manufacture more quantities in the same infrastructure.
So yes, the growth in this segment has been limited because of lack of available capacities, additional capacities.
Resha Mehta
So we see the incentives and the discounts have also kind of increased?
Rahul Shah
Yeah. So incentives and discounts have increased, but if you see it’s not something which has impacted our profitability, these have increased because now with a larger bouquet and portfolio of product, a lot of cross product selling we do by introducing schemes and discounts where on a particular product, you give some new products in the market to get feedback.
So yes, on an absolute number basis that have increased. Also, it is important to note that in UniClen, where you know, a majority of their business comes from e-commerce and e-commerce typically have this entire thing where you know the gross sales cost is higher and then you pay them a incentive.
So we started netting it off. So as a result of this because of some additional schemes and discounts given by dorms and also the impact of consolidated, the absolute number of schemes and discounts you see has increased significantly. But something which is not impacting the profitability.
Resha Mehta
Right. And the guidance for the consol revenues for your current financial year is 18% to 20%, but what would that be for the core stationary business excluding hygiene or
Rahul Shah
Similar line similar line.
Resha Mehta
Okay. And lastly, just a macro question on the exports, right? So because of the uncertainty, you know, especially in the US, how has been the demand for exports to the US market for stationery overall?
Rahul Shah
The demand has been pretty much similar. We’ve not seen the you know, when the tariffs were raised and all we have not seen any orders being canceled from FILA because in US we do sales only through the FILA network. So we’ve not seen any orders or anything canceled. But yes, what we understand from them, there is some uncertainty because nobody expected this sort of a reaction even in US, but things are getting stable now. Our shipments as planned, there has been offtake, there has not been any cancellation of orders. And with increasing capacities from pencils coming in, we believe our sales to US to increase going-forward?
Resha Mehta
Okay. And the outlook for the US exports, so I mean, while you have not seen any cancellations so-far, but going-forward, have your orders kind of reduced because of the uncertainty or something of that, sir?
Rahul Shah
No, no, no, absolutely not. Not. Like I said, in US, our business is only through a FILA, we sell to a FILA Group company there, manufacture goods under are brand and sell to them and we’ve not seen any cancellations or anything from them. If you see last year also, our business to US had grown by about 6%, which is in-line with our growth of our Scholastic Stationery and scholastic Art business.
Resha Mehta
All right. Thank you so much and all the best.
Rahul Shah
Thank you. Thank you.
Operator
Thank you. Due to time constraints, that was the last question. I now hand the call over to the management for the closing comments. Thank you, and over to you, sir.
Rahul Shah
Thank you, everyone. On behalf of, I would like to thank you all once again for joining us on this call today. We hope we’ve been able to answer most of your queries. Please feel free-to reach-out to our Investor Relations teams for any further clarifications or queries that you all may have. I 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.