Flair Writing Industries Ltd (NSE: FLAIR) Q4 2025 Earnings Call dated May. 23, 2025
Corporate Participants:
Vimalchand Jugraj Rathod — Managing Director
Alpesh Porwal — Chief Financial Officer
Mohit Rathod — Whole-Time Director
Sumit Rathod — Whole-time Director
Unidentified Speaker
Analysts:
Devansh Dedhia — Analyst
Shraddha Saurabh Kapadia — Analyst
Atul Mehra — Analyst
Jaiveer Shekhawat — Analyst
Sneha Talreja — Analyst
Resha Mehta — Analyst
Aradhana Jain — Analyst
Unidentified Participant
Megh Shah — Analyst
Sahil Doshi — Analyst
Naitik — Analyst
Ashok Shah — Analyst
Dipesh Sancheti — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Flair Writing Industries Limited Q4 and FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Devanj Dedia. Thank you and over to you, sir.
Devansh Dedhia — Analyst
Thank you. Good afternoon, everyone. Welcome to the Flair Writing Industries Q4 and FY ’25 Earnings Conference call. Today on the call, we have Mr Vimal Chand, Managing Director; Mr Mohit Ratod, Whole-Time Director; Mr Sumit, Whole-time Director; and Mr Alpesh Purwal, the Chief Financial Officer. Short disclaimer before we start this call. This call will contain some forward-looking statements, which may be believed, which may be based upon our beliefs, opinion and expectations of the company as of today. These statements are not a guarantee of future performance and will involve unfortune risks and uncertainties.
With that, I would now like to hand over the conference call to Mr Vimal, the Managing Director for his opening remarks. Thank you, and over to you, sir.
Vimalchand Jugraj Rathod — Managing Director
Thank you. Good afternoon, everyone. I want to express my gratitude to all the participants who have joined the call. I hope everyone had the opportunity to go through our investor presentation and press release that we have uploaded in our exchange. It gives me immense joy to inform for the first time, our company has crossed INR1,000 crores in revenue in FY ’25.
During the quarter, we have kept building on our key product segments with new and attractive product launches catering to a wide spectrum of consumers. We continued our growth during the quarter and over the broader second-half of the financial year with our PEN division leading the front supported by growth momentum in our diversified segments of creative and steel bottles and elsewhere. The foundation of revenue continues to come from Our very strong portfolio of owned brands. Amongst the other important highlights of the quarter and financial year was our announcement of strategic investment in Flomax for building an renewed focus on pencil category, we have also undertaken a distribution partnerships method from its stationary products. Is one of the largest European stationary brand and we are hopeful to deepen our business relation with them in near-future. I am happy to announce that the Board of Directors have recommended a dividend of INR1 — that is 20% of face value per share for the financial year ’24-’25. I now hand over the call to Mr Alpesh Porwal, our CFO, to discuss the financial performance. Thank you.
Alpesh Porwal — Chief Financial Officer
Good afternoon, everybody. Moving to the consolidated performance of the company for Q4 FY ’25. Revenue from operations for Q4 ’25 was at INR298 crores, an increase of 19.2% year-on-year compared to the corresponding quarter of previous year. Gross profit for the quarter was INR145 crores, which increased by 16% on year-on-year basis corresponding quarter of previous year.
Gross profit margin came in at 48.6%, down by 130 bps year-on-year. EBITDA for the quarter was INR47 crores. Margin was at 15.7%. Profit for tax for the quarter was at INR31 crores, margins at 10.3%. Moving to the FY ’25 results, consolidated performance of the company for FY ’25. Revenue from operations for FY ’25 was INR1080 crores, an increase of 10.3% year-on-year.
Gross profit for full-year was INR548 crores, which increased by 11.1% on year-on-year basis. Gross profit margin came in at 50.7%, gross profit margin remained stable over the year. EBITDA for the full-year was INR185 crores, declining by 3% year-on-year. EBITDA margin was at 17.1%. Profit-after-tax for the period was at INR119 crores, remaining stable year-on-year.
Profit-after-tax margin for the year was at 11%. On the qualitative front for the results, the employee expenses and other expenses have increased at a higher pace compared to our revenue during the financial year. This was primarily due to an expanded employee team as we invest to build capability for accelerated growth in the upcoming financial year.
Manufacturing expenses remained elevated on account of higher expenses due to job work and other-related expenditures as we ramped-up our workforce due to volume demand. Utility expenses rose due to higher manufacturing activity as highlighted above. As a counterbalance, we have undertaken a major sustainable green initiative with installation of rooftop solar-powered projects at our manufacturing unit in in Daman, which on completion will be about 1.85 megawatts. We shall share with you all the accrued benefits of the renewable power project in the upcoming call.
The total employee expenses for the year increased by INR26 crores from INR146 crores to INR172 crores for the financial year, which is 18% year-on-year. Our growth this year, our growth this year has been significantly supported by continued investments in our people. We have strategically expanded our workforce, which is a critical pillar as we scale.
The expansion of workforce was undertaken across functional teams of sales and marketing, R&D, administration, et-cetera. These steps align with our commitment — these steps align with our commitment to remain competitive in the talent market and to recognize the valuable contributions of our employees.
Going-forward, we are confident for these costs to normalize at the same levels and we should get benefit of operating leverage from ’25-’26 onwards. Our working capital cycle has reduced by 33 days quarter-on-quarter to 113 days and has been lower compared to the average working capital cycle for FY ’25.
First, the inventory days. As a growth-oriented company, we constantly introduce new products in the market. Every new product launch is followed by a demand discovery and feedback phase wherein during this period, we must keep our inventory for those products at a certain level to be able to cater to the demand for our newly-launched products.
Post the market feedback, these inventory levels get adjusted based on inputs and forecasts of demand by our sales and marketing team, which completes the cycle of a new product launch. On the debtors front, export sales and high share of mid-premium and premium production sales contribute to a typically higher credit period.
Our credit period in export sales ranges from 90 to 100 days. Thus given the nature of our operations, debtor days and inventory days have historically remained a little heightened and thus contribute to an overall larger working capital cycle. Going-forward, we hope to optimize our working capital by increasing our payable days, rationalizing our inventory levels both at factory level and at product segment level.
Overall, our efforts are towards reducing working capital cycle by five, 10 days for the coming year. Our capital expenditure for FY ’25 stood at INR131 crores. We continue to invest in our fixed assets and expanded the base of operational assets with investments in-plant and machinery and molds. We envisage a capex program of INR80 crores to INR90 crores in the next financial year for setting up a new unit in for writing instruments, fund capex for our subsidiaries and for potential growth opportunities.
Now on to the business segment highlights we achieved healthy year-on-year growth across all business segments. Our own brand sales. Own brand sales have continued their strong upward trajectory with consistent growth across the domestic market. Overall, owned brand sales grew by 18% year-on-year to INR251 crores.
For full-year, this number stands at INR940 crores, registering a 12% growth. Domestic market has been a constant source of strength and underscores the favorable market positioning of all our products. OEM sales. OEM sales showed strong momentum for the second consecutive quarter across both geographies with total quarterly OEM sales growing by 26% on a Y-o-Y basis.
It pleases me to report that we are able to maintain the OEM contribution at INR139 crores for the full financial year despite challenging market conditions. Coming on to the product segments, first, the business. The PEN segment grew 8% year-on-year to INR22 crores for Q4 FY ’25. The segment also reported a 4% growth on full-year basis to INR828 crores, which was heartening to note given the stable performance during H1 FY ’25.
We are pleased to report impressive growth of 9% year-on-year in our business in second-half of financial year. Our robust performance in second-half boosts our confidence on maintaining this growth trajectory for the upcoming years. During this year, we released 65 new pens, of which 43 are targeted to mid-premium and premium segments and 22 new pens launched in price category of INR10.
We continue to execute on our premiumization strategy with two-thirds of new releases geared towards the mid-premium and premium segments. Creative segment, the Creative segment achieved impressive growth of 48% year-on-year growth for Q4 FY ’25 and 18% for FY ’25. The revenue contribution stood at INR48 crores for the quarter, that’s Q4 and INR171 crores for the full financial year.
We expanded our product portfolio by introducing nine fresh offerings under the creative range during the quarter and overall 34 new products during the financial year. We established a wholly-owned subsidiary under the name of Monte Rosa Stationery Private Limited, which will cater to the business of distribution of creative products of. Is the biggest French stationary brand. It’s a specialized stationery focused brand with A strong legacy and an extensive global footprint. Products will augment our mid-premium product segment and improve product basket within the creative offerings. We also forayed into a strategic venture through incorporation of a step-down subsidiary called Stationery Private Limited. In this subsidiary, the company has partnered with other experienced industry partners to manufacture polymer pencils, wooden pencils, sharpeners, erasers, etc. The facility for this subsidiary is based out of Surat and an annual production capacity of 130 million pieces. The existing expertise of both partners, shared manufacturing skills and deeper consumer knowledge will enable creating quality and innovative range of new stationary products, particularly aimed towards pencils. Pencil is one of the biggest product categories underwriting instruments and we will now be addressing and servicing this category with a renewed focus. We have invested INR14 crores in fixed assets with potential to generate revenue of 2 times asset turnover within the first year itself. Coming to Steel bottle segment, we continue to scale the Steel bottle segment as a revenue contribution for the quarter increased by 74% year-on-year to INR12 crores for the corresponding quarter in the previous year. On full-year, the segment generated sales worth INR44 crores in revenue, providing us with substantial growth delta. During the year, we have added 30 new SKUs, more than doubling our existing SKU count, which now stands at 52 SKUs for the financial year and we look towards two key levers for growth in the business, expanding portfolio and increasing distribution reach in the general trade as well. Our outlook on the upcoming year remains quite optimistic with aspirations of broad-based growth across all segments. This will be driven by new product launches, enhanced manufacturing capability, efficient distribution for effective granular reach. Capacity addition of 0.2 billion pieces will operationalize in the next financial year. This 10% rise in installed capacity and given typical capacity utilization levels in the business, which is 7% to business — 7% to 7.5% increase in effective capacity will be a key lever for growth within the writing instrument segment. We will also once — we will also actively scout opportunities for increasing our export sales. We remain steadfast to our core strategies for sustainable growth. These include: first, innovation and feedback-driven portfolio expansion, addressing market requirements across price points. Second, deepening distribution throughput from our existing network. Third, exploring partnerships and new avenues for growth. Both focusing on quality operations with a greater share of in-house manufacturing. Fifth, concentrated efforts for successful execution of premiumization policy. Thank you, and I request moderator to open the floor for question-and-answer session.
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 your 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 assembled the first question is from the line of Saurab Kapadia from Smith. Please proceed.
Shraddha Saurabh Kapadia
Hello, I’m not hello.
Operator
Yes, ma’am.
Alpesh Porwal
Hi.
Shraddha Saurabh Kapadia
Okay. Yeah, sure. Thank you for the opportunity. So I have a few questions. So firstly, what is the domestic and the export mix for the current quarter and the full FY? And in the past, the management has mentioned the plans to enhance the in-house manufacturing. So how should we think about EBITDA going-forward in light of this? Additionally, are there any key levers expected to drive the EBITDA margin improvement in the coming quarter?
Mohit Rathod
Yeah. So answering your first one, which is about the revenue from operations. So in Q4, the domestic top-line was at INR240 crores, which was up by 27% of corresponding quarter in ’24. And the export revenue was at INR58 crores, which was lower by 5% compared to last year Q4. And the overall revenue grew by 19% at INR298 crores compared to INR250 crores in year 2024. And when we talk about the overall yearly revenue, the domestic revenue increased by 13% to almost INR900 crores and export revenue was at INR182 crores, which was stable compared to last year and overall revenue grew by 10%, which is at INR1,080 crores. And which was the other question,?
Shraddha Saurabh Kapadia
You mentioned that plans to enhance the in-house manufacturing. So how should we think about the EBITDA going-forward? Are this, are there any field awards which are expected to drive EBITDA margin improvement in the coming quarters?
Alpesh Porwal
Okay. Hi. So, yes, the increase in capital expenditure, capex which we talked about, is closely linked to our strategy for driving future EBITDA growth, though it’s important to understand the timeline and the nature of these investments. Currently, 70% of our creatives are now produced within our in-house manufacturing facility, marking a strong step towards backward integration. This has been due to constant efforts and focus towards realizing the same.
As we continue to scale the capacity and efficiency of this in-house setup, we expect to see gradual improvement in margins from this segment. The strategic benefit of backward integration lies in our ability to gain tighter controls over-production costs, improve quality, consistency, reduce reliance on third-party vendors and streamline our supply-chain operations.
So as we expand our in-house capabilities, we anticipate lower per unit costs, faster turnaround times from ideation to commercialization and greater flexibility in responding to-market demands. So over-time, with increased volumes and optimized resource utilization, we are confident that the creative segment here, for example, will increase its margins across products.
This — this transition not only enhances profitability, but also strengthens our overall competitive position by ensuring that we retain more value across the entire production and distribution cycle. So in essence, expanding in-house manufacturing is just not a cost-saving measure. It’s a strategic enabler that positions us for long-term sustainable growth and improved EBITDA performance.
The rising share — secondly, one more thing, the rising share of mid-premium and premium products in our pens category, which attract higher margins is expected to have a direct and positive impact on our EBITDA margins. These products typically offer better pricing power and contribute a higher gross profit per unit sold compared to that mass-market offerings which we have.
So as their proportion in our overall sales mix growth, the blended margin improves, leading to enhanced operating leverage. Since many of the fixed assets costs related to manufacturing, distribution and administration will now remain constant, which I mentioned earlier in my opening speech also that we see this has reached its levels and plan to continue at the same levels going-forward.
The — since it will remain constant, the higher revenue contribution from these premium segment scales more efficiently, allowing us to retain more of every rupee earned at the EBITDA level Your voice cannot hear anything
Mohit Rathod
Hello,
Shraddha Saurabh Kapadia
Yeah, am I audible?
Mohit Rathod
Yeah,
Shraddha Saurabh Kapadia
Yes. So I also wanted to understand that is the company still targeting the EBITDA margin of 19% to 20% or is there the division to that? And also if you could give a basic guidance in terms of the revenue for future, that would be great.
Alpesh Porwal
So as we grow now, we are investing as I explained you. And we are investing in capex. We are investing in-human capital plant and machinery. There’s a lot of backward integration going, new products being launched. And hence the cycle of — and the number of new products you will see where we have grown, for example, from creative, in-house manufacturing has gone up, which we were doing at 40% 45% is now up to 70%.
So all these things will start, the investments will start paying-off after one or two quarters of in-house manufacturing. And hence, the EBITDA levels which we say today will improve marginally or maybe a little more in the coming quarters. However, two years down the line where we say that keeping everything constant and which is not going to happen, but that we are not going to have additional segments or more investments. If everything remains constant in this way, the growth rate at which we are going, we will go back to the EBITDA levels of earlier levels.
Shraddha Saurabh Kapadia
Sure, thank you so much. I’ll fall-back in the queue for questions.
Vimalchand Jugraj Rathod
Thank you.
Mohit Rathod
Thank you.
Operator
Thank you. The next question is from the line of Atul Mehra from Motilal Oswal. Please proceed.
Atul Mehra
Yeah, hi, team. Good afternoon and thanks for the opportunity. My question is on-top line growth. So as you head into the current financial year, what are the various levers you see on-top line growth and what should be the expectation for the current financial year in terms of growth that you are targeting internally?
Mohit Rathod
Yeah. Hi, hi,. So yeah, you know, we are sticking to our overall for target of 15% to 16% growth in the coming year with growth coming from all three divisions, which is 10, which we are targeting about 10% because if you look at the second-half of the year ’25, you know, we have almost grown by 9% to 10% Q3 and Q4 as well.
So keeping that momentum going-forward, we are very confident that 10% growth is achievable in the coming year. As far as creative is concerned, there were a few hiccups in H1, which we overcame in Q3 and Q4 was much better in terms of sales because a lot of products we started making in-house and those projects, which we are launching one-by-one are giving us the fruits.
So going-forward also, we are expecting at least 40% growth in this division alone from the coming year. And also to accelerate the growth in creative. The main reason why we invested in Flomax was to help us in creative for better growth in terms of the basic range of pencils, polymer pencils, wooden pencils, eraser, sharpeners, which will help us to accelerate the growth in creative. And when it comes to bottles, of course, we have grown to the level of INR44 crores in last year.
Coming year as well, we will keep the momentum and the — a lot of you know verticals within the bottle segments are coming up in the coming — this quarter and Q2, where the growth will further accelerate and we are very confident that to cross about 50% growth in bottle segments, steel bottle segments as well. So overall, it will be around 15% to 15% growth year-on-year.
Atul Mehra
Yeah. And just — yes, please go-ahead.
Alpesh Porwal
Yeah. Just to add to what Mohit said now, as our steed bottle segment beginning — began scaling meaningfully over the past financial year, I’m pleased to share that it has now turn EBITDA-positive, a significant milestone is its growth journey. So this turnaround marks the — marks the transition of the segment from an investment-heavy phase to the one that is now contributing positively to the company’s operating profitability?
Atul Mehra
Got it, got it. And thanks for that. Secondly, in terms of EBITDA margins, say, for the current financial year, would it be safe to assume that it would be accretive given large part of opex investments have been already made. So the 17.1% where we ended the current financial year at versus say 19.5 the previous year would it be safe to assume that we would see an expansion, maybe not to the fullest quantum that could be achieved maybe over two, three years. But from here on, margins should be on the higher side versus where we ended?
Alpesh Porwal
Yes. It’s certainly all our calculations also point towards the same things. We have planned out and the numbers will certainly go up. Like I’ve been — I put up earlier also, I see — I would not use — like to use the word plateaued, but yes, we have reached the peak of all our expenses when it comes to investment in manpower and other expenses. So we have plateaued out there. Now this is just an accretion out here. Any additional rupee earned will be added to the EBITDA numbers.
Atul Mehra
Got it. Got it. Sure. Thanks for your company and all the best
Vimalchand Jugraj Rathod
Of the company to answer that in, yes. It will be aggretive.
Atul Mehra
It will be accretive. And one final question, if I may, on the working capital side, so this financial year, there has been slight increase in working capital days. So what is the outlook for that in FY ’26?
Alpesh Porwal
So working capital, what we see out here is this year also we have increased — improved on the working capital front like on quarter-on-quarter, if I see from 146 days to 113 days is where we move. And our endeavor is out here is the next financial year, we improve this further by around 10 days out here. Given the nature of our business and our credit policies and in the industry, a good 10% would be a good improvement in the coming year. Our 10 days. 10 days.
Atul Mehra
10 days. Yeah. All right. Thank you and all the best. Thanks.
Alpesh Porwal
Thank you.
Mohit Rathod
Thank you.
Operator
Thank you. The next question is from the line of Jair from Ambit Capital. Please proceed.
Jaiveer Shekhawat
Sure, thanks and congratulations team for crossing INR1,000 crore milestone. I think I just wanted more clarity on the margin side. So the decline that we see on the gross margin side on both a Y-o-Y and Q-o-Q basis, is that also in-part because you might have increased your trade margins for pens in order to counter-off the competition because we’ve also seen your competitor has aggressively scaled-up in pens and also what will be your strategy to protect and grow a market-share here? That will be my first question.
Mohit Rathod
Yeah. Yeah. So to answer that, I would say it’s more to do with the product mix what we have sold-in Q4. As we’ve mentioned earlier, we’ve launched about 22 products in the entire year in Mars segment and particularly INR10 segment, which is doing exceptionally well for us. And also, you can say you know, as we have re-entered in the INR5 rupee segment, we have launched five to six models in that category as well and it is picking-up.
So if we see overall as a pen — as a category, our volume has gone up by 9%, which is a positive sign in terms of market-share what we have taken from others. And at the same time, you know, it’s going to continue the same momentum going-forward. And also to add here is the Hauser Exo, which is also at INR10 price points is now, I think one of the largest selling product in Penn at INR10 segment in India. So it’s also to do with that where the — there is a little contribution coming from that as well intent.
Jaiveer Shekhawat
And so what I understand is because you’ve also reentered into the INR5 price point that has also contracted some of your margins. So how large do you expect that segment to be out of, let’s say, the INR900 crores of revenues that you’re targeting next year from PEN.
Mohit Rathod
So we are targeting not more than 5%. So we are going to restrict ourselves to 5% in that category, not go further.
Jaiveer Shekhawat
Sure. On the steel bottle side, I mean, if I see quarterly revenue run-rate that has been flat over the last 3/4 at around INR12 crore INR13 crores per quarter. So have there been any challenges either Either probably from the government side or possibly in terms of reception of your product in the market? And then, of course, we’ve already guided for the outlook, but seems somewhat reduced versus the earlier guidance. So any challenges there?
Mohit Rathod
So no, there are no major challenges. In fact, if you see, there has been a drastic increase as compared to last year and even for the coming period, we have — almost in the last quarter, we have launched almost 30 new products, for which the momentum majorly into the domestic and the MT and the e-commerce market will show in the coming quarters.
And also now that we have stabilized the distribution network to almost 55 distributors, that will help us penetrate in the — in this particular segment.
Jaiveer Shekhawat
Sure. My last question is on your OEM business. So it seems like there’s a good pickup that has happened. So if you could help me understand what has happened there and then how has been the pickup across more domestic and exports?
Mohit Rathod
So overall OEM business compared to last year has been stable at INR139 crores, where in export, we have seen a rise of almost 9% because of the demand coming back, you know, globally customers. And at the same time, you know so domestic, the sales have gone down by 9%. So more or less, we are at stable.And going-forward also this looks to be stable and export will grow further in OEM business.
Jaiveer Shekhawat
So this 4Q — I mean, should I call the growth that you’ve seen in 4Q on a Y-o-Y basis, is that more of an aberration? And you expect this OEM business to remain stable? Is that understanding right?
Mohit Rathod
Yeah. Yeah. P
Sumit Rathod
Rimarily in export because domestic we don’t consider any major increase coming from that segment we were dealing with.
Jaiveer Shekhawat
Sure.
Sumit Rathod
But export is increasing in the OEM.
Jaiveer Shekhawat
I mean, are there any geographies, particularly, let’s say, Africa, Middle-East countries or US? I mean, I understand you also do business in New L, but any specific geographies which are doing well or is it largely new.
Mohit Rathod
So it’s majorly US and South American market. And I to number your question.
Jaiveer Shekhawat
Understood. Thank you so much and all the best.
Mohit Rathod
Thank you.
Operator
Thank you. The next question is from the line of Mehar from Nuvama. Please proceed.
Sneha Talreja
Hi, good afternoon, team. Just couple of questions from my end. I think largely in extension to the previous participant’s question. We have seen a sharp jump-in OEM this time, both in our own brand business as well as export OEMs. What’s the most sustainable number? It’s your own brands and I mean on the exports OEM front?
Mohit Rathod
You yeah. Hi,. So going-forward, when we talk about OEM, exports OEM is, as I mentioned earlier, it’s going to grow further, whereas the domestic, we don’t see any growth happening there. But overall OEM is going to be at the current level where we are.
Sneha Talreja
The best quarter is increase of domestic OEM, we can see that coming back to the original level.
Mohit Rathod
But that’s very, very nominal. If you see it’s only a few crores, it’s not much, it’s only INR6, IN crores. So looking at the overall — yeah, of course, in percentage, it looks bigger, but overall number-wise is not that great.
Sneha Talreja
Understood. Just secondly on the steelbots business also, we’ve seen roughly around run-rate of about INR12 watt crores for the consecutive 3/4 now. And of course, we are building around 40% to 50% growth is what I think you mentioned for next year, 50%. So what would likely lead to that? And is there any seasonality that we’d be seeing that from the second-half of the year or do we start seeing it from the next quarter itself? So any — what are you doing basically to achieve that 50% odd growth number here?
Sumit Rathod
Yeah. So there are multiple things that we are doing in this particular category. We have like mentioned earlier, we have increased the number of SKUs, which more or less in the Q1 and Q2 will show you start showing penetration in the domestic front in all the categories, which is GT, e-com, MT and also a little bit in the quick commerce.
Going-forward, we are also adding a couple of other categories in this particular segment to help us achieve that 50% growth target that we are, you know, aiming for. So over and overall, with the stabilized distribution network, I think we are quite confident with the range that we are adding that we’ll be able to achieve that number.
Sneha Talreja
Understood. And especially on the own brand domestic sales now 10, if I take your own branded business and reduce your creative and the steelbottles part, the growth is actually not very meaningful. What can actually lead to your own branded domestic business growing? I mean, what’s something which has been a challenge here in case you can speak about the challenge? And what can lead to your growth coming back here?
Mohit Rathod
Thank you. Yeah. So if you see overall, so see, there is not no major challenge as we mentioned earlier that we have grown in terms of volumes by almost 9%. The overall, if you see the Q3 and Q4, the pen as a category, we have grown at the rate of 10%, which is majorly because of the domestic sales. So it is picking-up. H1 was a little sluggish, but H2 has changed and I think the momentum is going to continue in the coming year as well.
Sneha Talreja
Understood. Understood. And on the margin front, if I’m not wrong, you said that anything over and above 17% is what you’re looking for FY ’26. Is that understanding correctly?
Sumit Rathod
Yeah. With all the economies of scale coming in from the capacity increase and the operating leverage that been just explained by the CFO, this should be further going up from the last number.
Sneha Talreja
But the original 18%, 19% levels will only come back-in the next. How many
Alpesh Porwal
So we should be there by the end of say next financial year, which is ’26, ’27. However, I said we can — it can also come in prior to that, but by next — and end of next financial year, we’ll be there. Looking at the current scenario and the investments and the kind of segments which we are in and the products which we have introduced.
Sneha Talreja
Understood. Thanks a lot, team, and all the very best.
Alpesh Porwal
Thank you.
Mohit Rathod
Thank you.
Operator
Thank you. Thank you. The next question is from the line of Resha Mehta from Green Edge Wealth Services. Please proceed.
Resha Mehta
Yeah. Thank you, team. So, see, clearly, the high-growth is coming at the cost of deteriorating working capital as well as margins, right? So just wanted to understand on the margin side, right, that whatever investments in terms of adding people to R&D, sales and marketing, all of that has happened necessarily only on the new categories, creatives and bottles or has it happened even for pen?
Mohit Rathod
So it’s all across. It’s all across, even for riding assumements because since we are targeting almost 10% growth to achieve that number we have added in all the categories.
Resha Mehta
And what would be the capacity utilization for our creative and bottles plant?
Sumit Rathod
So for the creative range, as you know, we have increased the in-house capacity the earlier the trading that we used to do from third-party. Now we have increased the in-house capacity to almost 70% of the goods being manufactured in-house, steel bottle. And for the steel bottle, like we had said that still the capacity in overall turnover, we are still — it’s a long way to go, but currently, we are almost achieving almost 40% of the capacity.
Resha Mehta
Okay. So that’s at 40% and what can be the optimum utilization level here?
Sumit Rathod
So it can range in the 80%. It can range in the range of 75% to 80%.
Resha Mehta
And sorry, I didn’t get the utilization for
Sumit Rathod
75% to 80% utilization can be optimum. But if you talk — in terms of revenue, it can — this capacity can take us in the range of INR120 crores approx
Resha Mehta
Right. And the creative, what is the current capacity utilization? I understood that 70% is in-house sourcing, but what would be our capacity utilization for creative?
Mohit Rathod
So all the newer capacity is fully utilized and you know, so it’s going to go increase further. So it takes time since the installed capacity is say 100 slow — gradually it’s increasing. But yes, it’s almost about 70% utilized and going-forward also this is going to continue to at least 75% to 80%.
Alpesh Porwal
So it should peak at — we are endeavor has always been and our experience has been that it picks up at 75% to 80%. And what just mentioned was that the new capex Which we are doing is gradually goes up and picks up to that those levels going-forward.
Resha Mehta
Right. And also, can you just break-down the INR135 crores capex that we did, it was for which segment, how much has that enhanced our capacity by across different segments?
Alpesh Porwal
So segment-wise I’ll tell you the additions during the year, the breakup of INR131 crores majorly it is into buildings, planting machinery and malls and the other expense is electrical and sources.
Mohit Rathod
So that category can come? Yeah, INR110 crores is only in buildings, plant, machinery and molds, out of which almost 60% of the investment is done on creative front, where also we need to consider that most of the capacity what we are building are fungible. The machines can be used for both for writing instruments as well as creative division.
Resha Mehta
Okay. And the balance 40% of INR135 crores that’s into more like
Mohit Rathod
Installations than riding instruments.
Resha Mehta
Okay, okay. And the INR80 crores INR90 crores capex that we are planning for the current financial year, that will be in which category?
Sumit Rathod
That will be primarily new building which is under-construction that will take about INR51 crores and plant and machinery will be about INR24 crores — INR24 crore 25 crores.
Resha Mehta
So this is a unit, right?
Sumit Rathod
Yes.
Resha Mehta
And what are we planning to manufacture here?
Mohit Rathod
Both are creative and writing instruments.
Resha Mehta
So basically the creative and writing instruments are fungible in terms of their capacity is. Okay, okay. And you know, so this — because we continue with our capex, right, and our investments with the INR80 cro I crore capex that we are going to be doing this year, which effectively means that we’ll probably have to make further investments even in terms of people and some additional overheads, right? So the path to reaching a bit — expanding our EBITDA margin. So when you said you will essentially see an uptick from here. So when you mean here, do you mean the quarterly 15.7% margins that we did or do you mean the full financial year margins that we did, 17%.
Sumit Rathod
So see it will be from a full financial year, but also when you talk about the investments, major part of the investment in terms of the manpower, more or less like Alpesh mentioned, it’s already peaked in that department. But the major investment that — which will come in the near-future will more be towards guided towards automation and the new category addition in terms of increasing the product range.
Resha Mehta
Right. But I mean, as we proceed quarter one, quarter two, basically we will see an uptick from the margins from the current level of 15.7%.
Sumit Rathod
That’s why more or less you will see more in H1 and H2 comparison rather than just quarter one because lot of these categories we have just invested recently. So till they get installed and they come to its full-grown production cycle. So I think more fair comparison will be from H1 to H2 comparatively.
Resha Mehta
But if we are at around 70, we are close to the optimum capacity utilization in creatives and bottles is a small part, right, and bottles we have achieved EBITDA breakeven, which means creatives is still not EBITDA-positive?
Alpesh Porwal
Creative. Creative is a positive. Bottles the specific case which we mentioned that this is turn EBITDA-positive now considering the investment which we made earlier. So that has become EBITDA-positive. Creative.
Mohit Rathod
We have been creative has been long EBITDA-positive and with the in-house manufacturing, the EBITDA margins only will increase over the next two, 3/4 as we see with more-and-more in-house manufacturing now getting into the operationalization.
Alpesh Porwal
And one more thing when we say now just to add because you made a statement about capacity utilization that we have reached 70%. There is still scope for the new machineries. The new machineries and molds which we bought for new range, we still have the space to grow-out here because we have still not reached the optimum level of capacity
Sumit Rathod
Even if you see from the angle of Flomax investment, which is just a recent one, I think that whole capacity will also add to the creative range in terms of production and top-line plus MAPED. And also.
Resha Mehta
And for the next three years —
Operator
Sorry to interrupt, ma’am. May we request you to return to the question queue for your follow-up question as we have several other participants waiting. Thank you.Thank you. The next question is from the line of Aradna Jain from B&K Securities. Please proceed.
Aradhana Jain
Hi, thank you for the opportunity. A couple of questions. First on the steel bottles, the 50% growth that we are expecting in FY ’26, that is going to come entirely from domestic consumption or are you also planning to do export and where are they on the export side?
Sumit Rathod
So definitely, it will be a combination of both where the major contributor will still be the domestic front, but we have already started initiating certain areas for the export market as well, because I think in the long-term perspective, we would like to grow our brand in this particular segment, even in the export market.
Aradhana Jain
So okay. Okay, so the 50% growth we are considering both domestic and export?
Sumit Rathod
Yeah, it will be a combination. But major concentration is still the domestic business.
Aradhana Jain
Okay. And a second on the mechanical pencils, is the supply constraint issue over? Are we able to now supply the pencils across Pan-India or where are we on that?
Mohit Rathod
So we haven’t launched Pan-India as well as yet. But yeah, in coming months, we will be gradually leasing, sorry and catering the entire demand what’s been there in the market. So we are scaling up the production. So it’s going to be — it’s going to take another couple of months till we reach the — to the level where we would be able to suffice the demand?
Aradhana Jain
Okay. And in the theaters segment, how much of the revenue contribution is currently coming from Disney and going-forward from and Disney and mechanical pencils, any color as to how much revenue contribution do we expect? And what is the major contributor in the creative segment?
Mohit Rathod
So in Disney, we have launched only a couple of, you know products, which is mainly to do with the kits for gifting. So it’s not — so we don’t have a separate revenue breakup as such, but yes, going-forward, Disney is we are adding few more products in Disney and Disney range in different verticals like geoboxes and kits of course, more new kits and also some basic coloring range for students.
And when we talk about, yes, it’s just started and we’re going to get — it’s mainly to do — see, it’s — the business is going to be starting only in next two to three months, although we have started distribution in a few states of maple.
Aradhana Jain
And in terms of margins across all your categories, the margins would be similar, right? Be it tanks, creative, any of the creative products or steel bottles or is there some bit of margin differential?
Alpesh Porwal
So mostly the margins are same. So within the segment, there can be a complementary or a supplementary product which we work-out with, but the overall margin for that group or a batch would also remain the same. And at segment level, obviously, we aim to get to the same margins.
Unidentified Speaker
So just to add to, what Alpesh has said is that the writing instrument and the creative margins are — have to actually come around the same levels because the production facilities are the same. And with in-house manufacturing, the margin accretion will definitely happen. On the steel bottle, it will gradually come to that level of the company-level average.
Aradhana Jain
Okay. And are we planning to also increase our export contribution going-forward or it’s expected to be in the current level?
Mohit Rathod
Sir, of course, export is going to grow. We are expecting export to grow in double-digits in the coming year.
Aradhana Jain
So the contribution of export, which currently would be at around 18% to 20%, so going-forward for the next two, three years, would it be in the similar range or should that similar range?
Mohit Rathod
It’s going to be in the similar range.
Unidentified Speaker
Well, the combination will be similar, but year-on-year export growth, we expect to grow over the normal average we are speaking of 15% overall company guidance, exports should do little better than that in the current
Aradhana Jain
For exports, how much delta is there vis-a-vis domestic or
Mohit Rathod
So it’s more or less the same, because as we don’t have a separate balance sheet for domestic or export, but looking at the prices that what we are selling is more or less at similar levels.
Aradhana Jain
Got it. Thank you so much. That’s it from my side.
Mohit Rathod
Thank you.
Operator
Thank you. The next question is from the line of Hitesh Parmar from Limited. Please proceed.
Unidentified Participant
Hello ma’am, my company — my all the company has been clear. Thank you very much.
Operator
Thank you. The next question is from the line of Shah from Prospero Tree Asset Management. Please proceed.
Megh Shah
Hello. Hi, hello, am I audible?
Alpesh Porwal
Yeah, yes.
Megh Shah
Thanks for the opportunity. Sir, my question is very simple. Sir, this year our revenue grew by the INR100 crores and the GP is averaged 50% to 51%. So we are making a gross profit of INR50 crores. But at the same time, our employee cost increased by INR26 crores and other expense by INR36 crores. The sum of these two expense is INR62 crore. So we are losing at the EBITDA level by INR8 crore to INR10 crores. So how these — how the — generally the growth in the revenue generates the higher profit at the EBITDA level, but in this case, the EBITDA has degrew. Yeah, I understand that we are increasing our staff strength to expand our position. But when the EBITDA growth will be higher than the revenue growth, I want to understand that thing.
Unidentified Speaker
Yeah. So basically, it is about the operating leverage. As we have invested in the manpower, for example, in the sales team alone, we have increased about 160 people. On the workforce level, there has been a lot of rationalization, including bringing contract labor into the mainstream, lot of other costs that all that has happened in the last quarter. So this will give a positive effect in the coming quarters. So if you want a very detailed explanation, you can write to our CFO, he can take care of it.
Megh Shah
Yeah, I understand that. I understand that you increased the workforce and contract levers are converted into the permanent employee or whatever it is. But am I expect that in the future, the revenue growth will lead to the higher EBITDA growth?
Unidentified Speaker
Yes. Yes, absolutely.
Megh Shah
And because we consider that or anybody can consider that the salary is a fixed-cost and if that will remain the same and our revenue will not grow, then it will impact our EBITDA also. In our case, currently, the EBITDA is de-grew because we have increased our workforce in the anticipation of the higher revenue growth. And in the future, I expect that the company is thinking that the revenue will grow faster than the cost increase. Is it correct understanding?
Alpesh Porwal
Yes, yes, we agree with you on this. So what has happened is the investment is for future. When we invest in people, we invest in facilities, this is our investment for future. And like you rightly said, this — any incremental revenue will be more than the incremental cost which we’ll incur in future. So hence the EBITDA will start improving on that front.
Megh Shah
So the more or less the employee cost will remain flat for the next at least one to two years.
Alpesh Porwal
One to two years is something which we cannot comment today, but yes, looking-forward for the next couple of quarters, we see it as flat. Unless we have a change in our plans to kind of introduce new products, new facilities, new things, something which changes will be. But yes, the incremental revenue will be more than the incremental —
Unidentified Speaker
It will outpace. In fact, the contribution to the EBITDA margin will outpace the growth which we have seen already in this segment.
Megh Shah
Okay, sir. So for next quarter, there will be an EBITDA growth higher than the revenue growth.
Unidentified Speaker
Yes.
Megh Shah
Okay. Thanks. Thanks. Thank you.
Unidentified Speaker
We are talking of next few quarters, it will be — the operating leverage takes time to accrue, it will come over the few quarters.
Megh Shah
But does the company has any policy of incentivize the employee which generate the higher business for the company or it is a fixed model, fixed salary model, irrespective of their performance?
Mohit Rathod
So we do have incentives place for the — sorry, revenues of the sales and marketing?
Megh Shah
Yeah. Because in the many pharmaceutical company provide the incentive to their MR and the MR who generate the higher witness are incentivized. So in our case, we suppose we have increased our sales workforce, then there should be something like that, otherwise our fixed-cost will remain fixed.
Mohit Rathod
Right, right, right. No, no. So we have incentives in-place.
Megh Shah
Okay. Okay, sir. Thanks..
Operator
Thank you. The next question is from the line of Sahil Doshi from ThinkWise. Please proceed.
Sahil Doshi
Good afternoon, sir. Thank you for the opportunity. Just one first clarification when you said PEN’s volume growth is 9%, this is for the full-year, right, sir?
Mohit Rathod
Yeah. For the full-year.
Sahil Doshi
So that essentially means our realization has degrown by 4% and we’ve seen a volume growth of around 27% in Q4. Is that understanding correct?
Mohit Rathod
Right.
Sahil Doshi
Okay. So just is this the influence why the gross margins have come off in this quarter. Could you just throw a little more light on what is the reason for the reduction in gross margins and incrementally as we enter the INR5 and INR10 category, the realization trends, is it fair to assume that we’ll see a similar kind of realization trends and possibly there could be a pressure on our gross margins.
Mohit Rathod
So as we discussed earlier, it was mainly in Q4 due to the product mix what we have sold during that period. Of course, you know, when we talk about product Exo, which is doing exceptionally well, it is priced at 10%. So we have seen a considerable quantity increase in that. Other than that, also the other INR10 products which we have launched in last two quarters, we have seen a significant growth of that range. So that’s the reason why we have seen increase in increase of 9% quantity growth.
Alpesh Porwal
So in the coming quarters, as we as Mohit earlier also explained that we are going to keep the INR5 in this category around 5% of the overall. So the major part of the sale will be, again, focus almost major — almost 45 products of the 65 we launched were in the mid-premium, premium. So those benefits will continue to grow in the coming quarters.
Sahil Doshi
So just could you possibly help elaborate a little better because what you’ve seen as the gross margins used to be 50% plus and in Q2, Q3 was 52% 53%. This quarter we’ve seen a sharp reduction. So I’m just trying to understand why has this happened? Is it — and if you can quantify what is the mix of INR5 in this quarter?
Alpesh Porwal
So if I were to give you one example over here, which is a major contributor over here. In case of gross margin, we have also launched a lot of new products this time, introduced new products in-house manufacturing. And that has led to a little — see if we kind of come, we stabilize, every production process stabilizes over a period of one or two or 3/4 depending on the kind of product — the complexity of the product.
The last quarter has seen a lot of new in-house manufacturing processes being introduced in our company. And hence, this stabilizes, where you will see the impact again the numbers going back to the previous consumption levels in the — in the coming quarter. See, the strategic benefit of backward integration lies in our ability to gain tighter control over-production costs, improve quality consistency.
And that is what as we expand our in-house capabilities, we anticipate lower per unit cost, faster turnaround times and from ideation to commercialization and greater flexibility in responding to-market demand.
Mohit Rathod
So that should bring back to the margins here.
Sahil Doshi
Okay. So see next two years, at least we are on a growth trajectory where we are adding new products and in creatives, in pens as well as steel. So don’t you think a similar scenario will be there? So what gives us the confidence that gross margin should improve?
Alpesh Porwal
So what has happened as you know, we have — for example, creative, we were doing only 40% in-house. Now we have — the number has gone up to 70%. So when we are already making 70% and when we kind of reached the peak of capacity utilization and also in terms of manufacturing cycle, we will see that this starts giving us the kind of margins which we expect from our other established range of products. So that is what will add-on to my incremental profitability. And like you said , we are — you’re right in one other part that we are going to continuously innovate new products. That is already this cost of innovation of new products and introduction of new products is already factored into our entire margin which we calculate.
Sahil Doshi
Okay, sure. On the other side, on the employee cost, I understand there has been a 16% increase in the headcount. So now that there is no more increase, at what rate — what absolute number do you think you’ll be working with for the next two years, if you can quantify this?
Unidentified Speaker
It will be difficult to quantify at this level, yeah. But a steady increase which normally goes into the employee cost will always be there in terms of inflation adjustment, increment reach we do year-on-year. Otherwise, in terms of the adding of the men’s workforce is more or less has, you know been done to get to the level of growth for next two years, we are there and we’ll continue to do marginal increase in the — both sales and other team as we grow further as the need arises.
Alpesh Porwal
The increase is primarily driven by three key areas: workforce expansion, inflation-adjusted compensation and ongoing talent retention initiatives. We can say we have control now and we are short about numbers on workforce expansion. And we cannot do away with the inflation compensation and talent retention initiatives either.
So to put the number today, fix the number today and say this is going to be the number will be difficult. But more or less there won’t be a sharp increase in — because of expansion of workforce.
Sahil Doshi
Okay. Got it. And on the other expenses, you mentioned about the solar. So could you just quantify what’s our power cost today and what kind of benefits could possibly accrue?
Alpesh Porwal
Will I will take the seed. Yeah, we have in — with this being installed and as we move forward, so the total capacity between Daman and Silvasa, we have done an installation of 1.85 megawatts. And see, we anticipate these initiatives to begin delivering measurable savings in the coming year, which we’ll be able to share as we move forward.
Unidentified Speaker
As we move forward, yeah.
Sahil Doshi
Okay, sir. Thank you so much and best to the team. Thank you.
Mohit Rathod
Thank you.
Operator
Thank you. The next question is from the line of from NV Alpha Farm. Please proceed.
Naitik
Hi, sir. Thanks for taking my question. Sir, my first question is, can you call-out the split between — in our steam model split between branded and private-label that we are doing currently.
Mohit Rathod
So the business what we have done last year is 95% is in our own brand.
Naitik
Right. Right. And sir, my second question is regarding our receivable days. We have seen it increase. So I just wanted to understand, is it because of the newer products that we have launched, we sort of have to give incentivized by giving a higher credit?
Mohit Rathod
Sorry, sorry, come here please?
Naitik
No. So my question is, we have seen our receivable days increase, you know compared to last year. So just wanted to understand, is that increase due to the newer products that we have launched and we have to sort of give higher credit period for those products.
Alpesh Porwal
See, many times we have to kind of give additional credit when we are trying to penetrate the market. Introduction of new products has two impacts. One is in terms of credit — credit for — which we give to — and also the discounts that you give. So because of the high competition, many times if it is a unique product, then it’s a different story altogether where there is only kind of monopolistic, which is not dough, but kind of a situation we are in.
So as we introduce new products just to test the waters, just to kind of create the market and understand the market, sometimes we have to give extra credit. So if you see tomorrow if you’re buying shirts manufacturing shirts of a different brand and you go to the market and you say that, okay, why don’t you house my shirts, you will give some kind of credit for some new engine, since you are a new engine in that category.
Naitik
Got it. Got it, sir. And we expect this to normalize, say, in coming years.
Alpesh Porwal
Yes, these are an ongoing basis, which we see where we at times have to give more credit when we introduce new products. But if you see the numbers this time also quarter-on-quarter, we are improving and we’ll control this thing.
Naitik
Got it. Sir, my next question is regarding Flomax. So Flomax, I just wanted to understand, is there any revenue contribution right now coming from and if we are integrating will it be full integration or
Alpesh Porwal
Marginal revenue. So we started in the last quarter and since it’s a brownfield project, there is a marginal revenue which is coming. This year, we should see a good growth or good numbers coming from this initiative which we have.
Unidentified Speaker
As we mentioned that we had total investment is about INR15 crores and it should give about 2x of the in fixed assets in the current year from this segment. It will add to the overall creative overall data.
Naitik
And we own 51% of this.
Alpesh Porwal
Yes, yes, yes.
Naitik
Got it. Got it. Sir, just my last question, if you could call-out the number or the volume number of 10s for the full-year
Mohit Rathod
Yeah, for the bank, for the full-year, it’s so in terms of value or in terms of volume?
Naitik
Volume, volumes volume.
Mohit Rathod
So volume this year we have sold almost about INR155 crore pieces.
Naitik
Got it. Got it. Got it. That’s very helpful. Thank you. That’s it from my side. Thanks, sir.
Operator
Thank you. The next question is from the line of Ashok Shah from Invesco Family Office. You may proceed.
Ashok Shah
Thank you for taking my question. Sir, we are as a restructuring and to reduce the employee cost, we are replacing employee by the robots. So can you throw some light on it? How many employee it currently are one employee is handling three machine or four machine and the robot will be doing, how much cost-saving we are going to get it and we are also ordering further new robots also.
Sumit Rathod
So when we talk about semi-automation, automation, it’s not only in terms of robot, but it’s also in terms of certain products that we recently brought in-house. And as it scales up to the scope of mass volume, we convert those products into machine manufacturing. So when we — when we say automation, it’s a combination of both. So it is not one-on-one parity between a robot or a machine to manpower, but the overall direction as a company where we are going which we want to you know, divert more-and-more big projects or mass production projects into semi-automation and automation, respectively.
Ashok Shah
So what’s the — what is the
Mohit Rathod
Ability of replacing manpower?
Alpesh Porwal
This is not enough to institute the manpower, but it is more to bring in efficiency,
Ashok Shah
Yeah. Okay. So what is the cost done last year and what will be cost done in the next year to install new robots?
Alpesh Porwal
So see, we don’t have any specific costs like this. So we — it is the processes which we try to automate. So it is included in our fixed assets additions cost. Plant and machinery, it is already included in that plant and machinery. So there’s no specific one-on-one, the robot cost kind of thing which we work on there.
Ashok Shah
So would it improve the quality or the perfectness or the speed and cost will be also saved.
Mohit Rathod
So in certain projects, it’s to improve the quality and in certain product-line, it’s to increase the efficiency and the production speed of a particular product.
Ashok Shah
So does the — does the company will be doing similar adding rewards in the future because currently we are only doing 60% to 70% in-house products and remaining steel we are procurring from outside.
Sumit Rathod
So yes, so as mentioned, as we scale-up a particular product and as the product requires, we will be going on in this direction. And it’s an ongoing activity for manufacturing unit, which for us will continue to pursue in this direction.
Mohit Rathod
Just to clarify, only on creative side, you know, we have some trade purchases, whereas in the pen writing segment, substantial manufacturing is happening inside the credit
Ashok Shah
Okay. Okay. Thank you, sir. Thank you. That’s all from my side.
Operator
Thank you. Thank you. The next question is from the line of Mr from Manya Finance. And due to time constraints, that will be the last question.
Dipesh Sancheti
Hi. My question is regarding the projection of sales growth with the new capex coming in. And will that be at the same ROE because I mean, ROE For this year has been around lower double-digits. So what is your projection on the ROE also going ahead? Hi, am I audible?
Alpesh Porwal
ROE? Yeah, hi.
Dipesh Sancheti
Okay.
Alpesh Porwal
So ROE, which we see from FY ’25 to ’24 — ’25 to ’24, it’s gone down to 11.7% and from 13.2%. The ROE is what we expect is to kind of gradually increase over here in this case because whatever investments which you’re talking about today will start giving us the operating leverage and ultimately will give a positive impact to our bottom-line.
Unidentified Speaker
Yes. And that should take-back us to the previous ROE level.
Dipesh Sancheti
The previous ROE for around 17%, which you had come up with when there was the IPO.
Alpesh Porwal
Yeah, this will be a gradual increase.
Unidentified Speaker
See, we are doing substantial capex over the last two years, including what we explained during the call-in the current year. So all that advantages will start accruing over the next two to three years. At that time, we will see coming back to the ROE to the similar levels, what we were doing pre-IPO.
Dipesh Sancheti
Okay. And with this current expansion, I mean the first part of my question was what is the projected sales growth for the next two years?
Mohit Rathod
So going-forward for next two years, as we mentioned, we’re going to have a stable, steady growth rate of 15% year-on-year going-forward.
Dipesh Sancheti
Okay. So in-line with the ROE, which I should expect that the sales growth as well as the ROE should be around 15% for the next two to three years.
Alpesh Porwal
It will go up to 15%. See, when we are talking about this again, it ROEA — the ROEs is a result of the kind of investments which we do and the kind of top-line which we achieved. And the return on investments, I would say any additional investment, the return is gradual. And hence when we say whatever investment additions we make, it will be a gradual increase going-forward.
Dipesh Sancheti
Okay. My last question is about the marketing expense. Can you just throw a light on how much has been our marketing expense for this year, say, ’24, ’25 vis-a-vis the previous years? And what is — going ahead, how much will it increase or will it remain the same?
Alpesh Porwal
So marketing expenses have marginally gone up gone down in fact rather — sorry. So advertisement experience year-on-year and year-on-year it has been almost the same, only with the difference of a couple of crores out here. This time we were a little slow on marketing, but going-forward, we see an uptick to a little extent in the coming years on marketing. If you could quantify the numbers, please? It will be for the coming year?
Dipesh Sancheti
No, for the marketing expense this year vis-a-vis last year.
Unidentified Speaker
So in FY ’25, the total ad advertisement expenditure was INR14.39 crores compared to INR16.15 crores in the previous year.
Dipesh Sancheti
Okay. This is including hiring, I mean brand ambassadors like Ranvi Singh and
Unidentified Speaker
Of which major part was incurred in the last year.
Dipesh Sancheti
Okay. And going ahead, we should expect this similar kind of numbers or should it increase?
Alpesh Porwal
Similar. Similar numbers.
Dipesh Sancheti
Great, great. Thank you so much team. Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. That was the last question. I now hand the conference over to the management for the closing comments. Thank you, and over to you, sir.
Alpesh Porwal
Yeah. Thank you. Thank you. Thank you everyone for taking some time-out to participate in this call. In case of any queries, reach-out to our Investor Relations Advisor, MUFG Investor Relations. We wish you all the best and hope to interact with you soon. Thank you so much.
Operator
Thank you. On behalf of Flair Writing Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Next year., basically, do you cut the call