KDDL Limited (NSE: KDDL) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Yashovardhan Saboo — Chairman and Managing Director
Sanjeev Masown — Chief Financial Officer
Analysts:
Amit Agicha — Analyst
Vijayaram — Analyst
Rohit Mehra — Analyst
Devanshu Bansal — Analyst
Rishi Maheshwari — Analyst
Ajay Surya — Analyst
Unidentified Participant
Mehul Panjwani — Analyst
Presentation:
Operator
Thank you. Sam Ladies and gentlemen, good day and welcome to KDDL Limited Q4 and FY25 earnings conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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. Yashavardhan Savu, chairman and Managing Director. Thank you. And over to you, Mr. Savu.
Yashovardhan Saboo — Chairman and Managing Director
Thank you and good morning everyone. Many thanks for joining us on the KDDL Limited Q4 and FY25 earnings conference call. I hope you’ve had the opportunity to review our financial results and the investor presentation which was posted on the company’s website and stock exchanges recently. I’m joined today by our CFO and Executive Director, Mr. Sanjeev Masson and SGA, our Investor Relations Advisors. I’ll start with a few words about the macroeconomic situation. Over the past year the global and economic environment has been marked by a clear and concerning increase in volatility and slowing growth. As we moved into FY25, rising geopolitical tensions and shifting policies have added to the uncertainty. With the global economy facing renewed pressure from such uncertainties, tariff and non tariff barriers and fast changing alignments in the global financial and trade infrastructure, we see this transformation rather as an opportunity and our strategies are now designed to meet the evolving market realities and expectations.
Let me begin now with the watch component business. As many of you are aware, the Swiss watch industry has experienced a prolonged slowdown, largely driven by inventory situation which has been corrected, subdued consumer sentiment and tightening discretionary spending across all major economies. The contraction in demand was heavily influenced by China and Hong Kong, which are among the largest markets for the watch business, where the market declined by 25.8 and nearly 19% respectively over the previous year. The total volume of watches exported by Switzerland declined by 9.4% or 1.6 million units. Export volumes were at a historic low of 15.3 million watches exported. The volume decline was witnessed in watches for all price points. While the export environment for Swiss watches remains challenging and consequently also for us, we are monitoring the situation closely and remain optimistic about the future. Based on current indicators and market feedback, we anticipate a gradual revival beginning in the second half of FY26.
At KDDL, we have responded strategically to these headwinds, which I may mention is not for the first time we experienced. Something similar several years back in 1516. We’ve responded to these by expanding our product offerings in mid to high value segments. This conscious pivot towards value driven categories is showing encouraging traction. While overall export volumes have declined, our approach has enabled us to strengthen our relationships with existing clients and also open opportunities or higher margin growth in new geographies. For example, we are actively exploring expanding our reach beyond the Swiss markets to other European countries to further enhance our export strategy. With four decades of delivering precision, consistency and quality, KDL is now well positioned to engage with a broader set of global watch brands.
We are leveraging this reputation to explore and initiate relationships with emerging non Swiss customers in various European and non European countries where we see significant future promise. In the domestic market, the outlook remains strong and consistent. Demand visibility continues to be positive supported by healthy consumer sentiment and strong order inflows across key product lines. Our volumes have remained robust and we are seeing an encouraging rise in average realization. A combination of selective price adjustments and a focused premiumization strategy is driving this improvement. Our emphasis on value added segments reinforces our position as a trusted partner in the domestic watch component ecosystem. The recent Indian rupee to Swiss franc currency fluctuations have been favorable for our company. The total revenue of our watch component business comprising of watch hands and watch dials declined by nearly 20% compared to the previous year, majorly due to a decline in export revenue by 28% whereas the domestic market revenue grew by 13% during the year.
Our precision engineering business which I will discuss now continues to demonstrate very healthy momentum, largely driven by a robust export demand and a consistent track record of exceeding customer expectations. We have fortified our already strong reputation in both the established and emerging international markets. I am pleased to share that in FY25 we recorded a 55% year on year growth in revenue taking our top line to 147 crore rupees. This solid performance reflects the strength of our business fundamentals and the trust that our global clients place in us. Importantly, the momentum remains strong and we are optimistic about our growth trajectory moving forward in anticipation of future demand and to support our. Growth Ambitions we have secured a 28,000 square foot shared on lease in Bengaluru not far from our existing facility.
This new location, currently under development, will be operational in the second half of FY26. We continue to focus on sectors that offer high entry barriers and long term growth potential like alternate energy comprising of electrical vehicles and energy storage systems, aerospace, automotive and electrical segments. These sectors not only allow us to align with our technical strengths but also offer robust export opportunities. Exports, I may repeat, remain a central pillar of our growth strategy and we are confident that our proactive approach will yield substantial benefit in the years ahead. Our Bracelet Division is integral to our export driven strategy and continues to gain strategic importance within the group dedicated exclusively to the export market. This division reflects our commitment to building a globally competitive manufacturing footprint in the WATCH ecosystem. At present, the capacity utilization stands at about 50% indicating substantial headroom for growth. With continuous improvements in operational efficiency and recovery of the market conditions. We anticipate capacity utilization rising to about 65% in FY26. We are confident that this division will emerge as a key contributor to our export portfolio in the coming years.
About our Packaging Division this division continues to enhance revenue by adding new customers and segments. During the year, the revenue improved by 13% compared to the previous year. Our initial focus is mainly on the domestic market where we see a robust demand and steady inflows of RFQs. In parallel, we are targeting international brands with a presence in India offering premium packaging solutions tailored to their requirements in India. This enables us to meet their quality expectations while offering the advantages of a reliable domestic supply chain. While the business is still in its early stages, we are seeing promising traction. Export opportunities are also on our radar and we are actively building capabilities and partnership to support this next phase of growth in the immediate future. In conclusion, while FY25 was a year of correction in some of our segments, KTDL stands at a strong and strategic inflection point. Each of our business divisions, be it WATCH components, precision engineering, bracelets or packaging, is. Is aligned with our long term vision of sustainable, export led, diversified and profitable growth.
As we step into the next phase of our journey, we remain confident of our ability to scale new heights and deliver greater value across customers and markets. In FY26 we expect our revenue to grow in the range of 15 to 20%, majorly driven by recovery in the international watch market, growth of our precision engineering business and enhancement in the utilization and growth of the bracelet and packaging businesses. I would now like to invite Mr. Sanjeev Mason to update you on the company’s financial performance. Thank you, Thank you Mr. Sabu. Good morning everyone. Let me take you through the company’s standalone first of all the standalone financial performance during the quarter four our revenue was 102.3 crores and the overall for the year the revenue was 384 crores. Compared to the last year revenue of around 359 crore, EBITDA for quarter four stood at 19.4 crores with an EBITDA margin of 19%, while for FY25 full year the EBITDA was 88.5 crores and EBITDA margin of 23.1%. PAT for the quarter four was at 8.2 crores and for the full year FY25 the FED was at 49.2 crores. Profitability during the year as already shared by Mr. Sabu was majorly impacted due to shift in the product mix, the decline in the watch component export revenue and the increase in the precision engineering business revenue. During the last year. Financial year 25 we incurred a capex of around 30 crores and in the coming year we expect to do a further capex of around 35 crore. Moving to the consolidated financial performance, the total income for the quarter four FY25 was at rupees 431 crores and for the full year it was rupees 16.95crores. EBITDA for the quarter four at a consolidated level was 75.9 crores with an EBITDA margin of 17.6% while for the full year FY25 EBITDA was Rs. 307 crores with an EBITDA Margin of 18.1%. Price for quarter four was at rupees 31.6 crores and for the full year at rupees 142.3 crores. With this I open the floor for question and answers and I request all the participants to kindly restrict the questions to the KDD and manufacturing business. As for the retail business already. A separate investor call is held where the detailed answers are given with this the floor is open for the.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Amit Ajicha with HG Hawa. Please go ahead.
Amit Agicha
Good morning, sir. Am I audible?
Yashovardhan Saboo
Good morning, Amit. Yes, you are.
Amit Agicha
Yeah. Thank you for the opportunity. Sir, can you share some visibility of revenue mix and order like from the precision engineering segment.
Yashovardhan Saboo
Sorry, say that again. Amit, why don’t you ask all your questions so we can answer them all at one go.
Amit Agicha
Okay. Okay. And so the second question was connected precision engineering only. Like what are the EBITDA margins for the current year and what are you planning the EBITDA margins for the Precision segment for FY26?
Yashovardhan Saboo
Can you just repeat your first question again?
Amit Agicha
Can you share the revenue mix and order book visibility from precision engineering business?
Yashovardhan Saboo
Okay, so these are your two questions.
Amit Agicha
Yes.
Yashovardhan Saboo
Okay. Sanjeev, that you answer them.
Sanjeev Masown
As we have already shared in the Mr. Zabu’s speech that the revenue of precision engineering in the last year was 147crore. And regarding the order position, in our earlier calls we have given a long term indication for the precision engineering business where the growth of business will over the longer period will be in the range of 25%. So we still maintain that. And accordingly the order positions for getting that type of growth in the coming year is already there. Regarding the EBITDA margins here the EBITDA margins are in the range of 19 20%. And we expect that these type of margins will be maintained in the coming year.
Amit Agicha
Thank you for the reply and appreciate it. Thank you. And all the best for the future.
Yashovardhan Saboo
Thank you.
Operator
Thank you. Next question comes from the line of Vijaram, an individual investor. Please go ahead. Mr. Vijayaram, please go ahead with the question.
Vijayaram
Yeah. Hi Mr. Sabu, can you hear me?
Yashovardhan Saboo
Yes, I can. Vishum. Good morning.
Vijayaram
Morning. And first of all have been an investor for a long time. So very well done and love the way you hedging your businesses in terms of managing all the downturn, everything else. I just had a question on Padre Nuba. I mean I’m a shareholder in both ethos. And kddl. But just want to know where does Favor Luba sit and can you shed some light in terms of production of Fabraluba and the plan for 26.
Yashovardhan Saboo
Right. Questions, Viju?
Vijayaram
I’m sorry,
Yashovardhan Saboo
Are there any other questions? I’m just requesting if the other questions.
Vijayaram
Okay. And the second, the second question. Sorry, the second question is really around your guidance of 15, 20% just in terms of where does it stem from? I mean, you have mentioned the slowdown and I think everyone gets that. Where is the confidence for the 15, 20% coming from? If you could just shed some light. I know you did mention some of it in your opening speech. Thank you.
Yashovardhan Saboo
Okay, so let me answer the Favanuba question first. It’s a slightly long answer, so I will request everyone to bear with us on this. Right. So Favaruba is on the one hand, a very strategic new sort of business, but it’s a business that we are pretty much familiar with. So Favor Luba on the one hand requires knowledge about distribution and about watch brands, which we have in our subsidiary company etos. And the large part about launching a new brand with products and Switchmed is about being able to design and create products components for it. Again, where on the back end we have a huge experience with dial hands, which are, by the way, very important because a lot of the creativity and the value of a premium watch comes and dial hands and bracelets. The very important part of it, watch cases is the part that we are not doing, but in future, it’s a strategy that we will make watch cases as well. So Pagodupa really brings in the point where we are starting as a company to own a Swiss brand and not only own it, but actually to be able to control both sides and therefore the entire value chain from manufacture of components eventually to manufacturing the watch and its distribution, its distribution in India we are very familiar with. We will get, we will know and we will learn about distribution globally through the Silver City brand, which is establishing the global network for power, Luba. And over time, I just want to say, over time, look what it allows us to do. It allows us to understand and learn fully the entire value addition chain of a watch brand, of a Swiss watch brand. And this is, this puts us in the same sort of league as many of the other groups in Switzerland in the Swiss watch industry, which are verticalized. Richmond. Group is one of them. And similarly so, you know, they understand the distributions, they understand the manufacturing, the back end, and we are on the way to do that. And what this means is obviously once powerluba is established and we understand the various edges of it, it gives us the opportunity to expand the brand mix, perhaps for a higher end brand, perhaps for a lower priced brand than Pavlova. So it’s the start of a very, very exciting and a very, let’s say, story with a great potential going forward. It’s not going to happen overnight. It will take its time. But to create anything meaningful, it needs time because we don’t want to do it superficially, like everything we do, we want to get to the root of it and do something that really adds value. So these are just a few thoughts about what is the underlying strategy of Power Lova now. How is it going? There’s a great response. You know, distribution has started in India, it has been launched. We are actually falling short of the product. So I think there was an underestimation of the kind of response the market would give. So in India we are, we are doing very well. We are actually rushing to establish, you know, to shore up the supply chain for Swiss watches. It’s a rather, it’s somewhat of a long process because the quality and the design requirements require that time. You can’t really take off things off the shelf and put it together. It’s not like a quartz watch which you just put together in a kit. Everything has to be designed, it has to work perfectly and it has to work perfectly for 20 years. But it’s happening. You’re going to see, you’re going to see a lot of in India and everywhere in the world in the coming 12 to 18 months. And I think our plans are extremely robust for. I don’t know if that answers your question, but if there’s anything more specific, I’m glad to answer that. As far as the guidance of 15 to 20% is concerned, a lot of it, not a lot of it, but one part of it of course depends on when and how the international watch market revives. I think we are probably close to the bottom and therefore our anticipation that in the second half of this year things will start to look up. It’s not going to bounce back like very, very strongly, but it’s going to be a clear and a definite sort of recovery. That said, we are already, as I mentioned in my earlier remarks, we are already sort of working on expanding our offering to some geographies that are not as impacted as the Swiss watch market, for example, the German, you know, the emerging watchmaking in Germany, in Scandinavia, and some other interesting geographies. These will be small compared to the Swiss market. But nevertheless, these are hedges. And you are right. One of our underlying strategies has been to be able to hedge risks. In every business, there will be a downturn. From time to time, there will be some risks. But our strategy and our skill as managers and as leaders of a business lies in being able to understand that this will happen. And when this happens, are we hedged, are we flexible to be able to not only ride this downturn, but actually come out stronger? So I believe 15 to 20% is a good range. If things recover quickly, as expected, we’ll be closer to 20%. If they are a little bit delayed, they’ll be closer to 15%. But that’s pretty much the range that we can give at this number.
Sanjeev Masown
I would like to add into this that as you may be remembering, in the previous year, our bracelet business and the packaging business started in the second half of the financial year. So this year the full impact and the revenue of that will be there. Plus there is an increase and enhancement in the capacity utilizations of both these businesses.
Vijayaram
Great, thank you. I just had one other question around Sabraluba. In terms of economic interest, how does it split if Sadaluba is to sell in India? Now obviously there’s a distribution with E Power, but in terms of economic interest, how much flows to KDDL as a company?
Yashovardhan Saboo
Well, the distribution in India is powered over the contract with Ethos as an exclusive distribution arrangement. So that is that Otherwise favor Luba as a company under the Silver City brand is managed by the Swiss team who are doing a fabulous job. And as you know, KDDL owns a majority and Ethos has a minority position in that Minority Shareholding.
Vijayaram
Got it
Yashovardhan Saboo
Sorry.
Vijayaram
All the profit that is earned by Fabre Luba will obviously, to the extent of shareholding of KDDL will come into KDDL India. This year’s book.
Yashovardhan Saboo
Yes. On a consolidation level. That’s right.
Vijayaram
Super. That is. That’s really good. Again, Mr. Sabu, thank you very much for your clarity and all the very best.
Yashovardhan Saboo
Thank you. Thank you. Thank you. Vision.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Rohit Mehra with SK Security. Mr. Mehra, please go ahead with the question.
Rohit Mehra
Oh yeah, thank you for the opportunity. My question is what kind of demand trends and customer responses are you seeing in the domestic and international packaging business?
Yashovardhan Saboo
Any other question,
Rohit Mehra
Just follow up question that what is our long term vision in terms of revenue in the segment.
Yashovardhan Saboo
Sorry, revenue in this segment?
Rohit Mehra
Yes,
Yashovardhan Saboo
In the packaging segment. Okay. Is that all? These are the two questions. Great.
Rohit Mehra
Yeah, yeah.
Yashovardhan Saboo
So you know, in the, let’s say packaging or luxury packaging, which is the segment that we are focusing on, there is a robust demand coming from. Of course, the main part of it is from the Watch segment. There’s the jewelry segment. And I don’t have to tell you where branded jewelry is going in India and abroad. So we are seeing a very strong demand. Hello,
Operator
Ladies and gentlemen, the management line has been disconnected. Please be on hold while we quickly get them reconnected. Foreign Ladies and gentlemen, the management line has been reconnected. Please go ahead.
Yashovardhan Saboo
Hi. Sorry for the disruption. Rohit, I was going to answer your question. So as I was saying, there is a robust demand from the watch. You will be another segment in the luxury packaging. And at an international level too, there is the demand. As I mentioned in my speech, there are many brands, international brands that are now selling in India and many of them are still bringing their packaging from the Far east to China or wherever. And obviously it makes a lot of sense when certain volumes have already developed in India. To actually procure the packaging in India, you save a lot of money and it’s cheaper and it’s, of course, a lot less logistics involved. And this is a market that we are getting a great response from. Of course, we have to meet their design quality and all their homologation and ESG conditions. So that is happening. But we are seeing the impact of that and you’ll see the impact of that in the numbers this year. The revenue numbers again we are looking at growth upward of 20% CAGR. And I think this is sustainable for a good five to 10 years in the future anyways. Because we see currently a great demand in India from domestic and international brands but also direct export to Europe as well as to the Middle East. Remember that there is a huge jewelry market or a market for branded jewelry in the Middle East. And almost all of them are importing all their packaging from China. And our goal is to actually take a share of the market from them. Can you hear me?
Operator
Thank you. Next question comes from the line of Devanshu Bansal with Emkay Global. Please go ahead.
Devanshu Bansal
Hi sir. Good morning sir. Hi sir. You’ve provided a 15 to 20% growth outlook for FY26. And whatever I understand is that the revenue mix shall shift towards categories like bracelet, precision engineering and packaging. Given this changed revenue makes, what is the margin expectation for FY26? That is question number one. Second is on Silver City Brands in FY25. What is the exit run rate of some of the operational loss as of now and what is the expectation of this loss in FY26 for complete year? And last question again on Silver City. Any Capex investment that you plan to do within that subsidy in FY26? These are my three questions.
Yashovardhan Saboo
Okay, I’ll let Sanjeev answer the question on the margin expectations. Let me answer first the question relating to Silver City brand. There is no major Capex planned in Silver City in this year. And in terms of loss, I think on FY25 we were below the budgeted loss. Remember that in FY25 there was a delay in the launch so we were not able to deliver the product. I had mentioned that challenges in developing the supply chain fast enough. But after March it has started coming. So I think our numbers for this year will pretty much be on target. We are actually trying to do better than what we budgeted. There will still be a loss for sure. I am not able to quantify the loss exactly but it is as planned. It’s part. To be honest, there will be a loss this year and there will be a diminished loss next year. But that’s part of building a brand globally. And I think from FY28 onwards we’ll start to. The loss will disappear but it is. As per budget and I can, I’ll have to check with sinwarcity exactly what is the loss, but it’s meant to be smaller than the loss that was originally budgeted.
Devanshu Bansal
This is encouraging. Any specific market apart from India that we are targeting from Silver City in the next two years per se?
Yashovardhan Saboo
A lot of markets, a lot of markets we are targeting. I mean of course India will be an important market obviously because we, we know this market the best as a group. But a lot of markets are being targeted and a lot of markets have already been signed up and products are there. So I think Japan it is there. In the uk, we are in discussions. In Italy, it has been signed up. In the Middle east there has been a sign up. So there have been a lot of signups already. End products and we will see. As I said, you know, we underestimated the kind of market response that there would be. So now for the products as they are coming in, there’s a bit of a, there’s a bit of a struggle as to who’s going to get the product because Ethos obviously wants the products because the sellout is extremely good. But we’ve also got now the whole international structure. We’ve exposed the brand to retailers and they want it as well. So actually the real effort right now is to get more product online as soon as possible.
Devanshu Bansal
Understood. And on the margin expectation,
Yashovardhan Saboo
Would you like to offer on the margin expectation
Sanjeev Masown
Regarding your question of the margin expectations for the coming year, the last year our EBITDA margins was around 23% and with the growth estimated in the range of 15 to 20% and majorly driven from the precision engineering recovery into the watch component business as well as the bracelet and the packaging business, we expect the EBITDA margins to remain broadly in the similar range in the coming years.
Devanshu Bansal
Very clear, sir. Can I have one follow up question on Silver City if you allow?
Yashovardhan Saboo
Sure.
Sanjeev Masown
Yes
Devanshu Bansal
Sir. Also wanted to understand the current price positioning of the brand launch as of now. What is the price band that we have launched? In which category of luxury watch the new models have been launched? So these are the two questions that I have.
Yashovardhan Saboo
That’s a great question and you know, basically to answer it simply, it’s in the price point of 2,000 to 4,000 Swiss francs. 2,000, let’s say dollars. Okay, 2,000 to $4,500. This is the price range in which we have, we have launched it. This compares. This is below Tag Oil. This is around the same price range as Oris or something like that. Now if you know the brands. You know what I’m talking about. What is it? Interesting is not only to compare the price. What is interesting is to compare what power Luba is delivering at this price. What is the movement we are delivering an La Joupere movement for watch lovers that is like, you know, you have a fabulous movement, whereas every competitor has a much not an inferior movement. None of the movements are inferior. But in terms of specifications they are not as good as La Joupere movements. In terms of the case design, see through back a plated, a machined or an engraved rotor, customized rotor, customized crowns, a fantastic, you know, designed and executed products in dials, hands, cases. So if you do a like to like comparison what we are offering for let’s say 4,000 francs, most competitive brands, you will find that between 5,000 and 6,000 francs. So like to like comparison on a brand when you do quality and specifications, we are 20 to 25% cheaper than most other Swiss brands in this category. So and that has been commented upon by all international media. Great value for money, great quality. And that’s the reason why we’re getting this great response.
Devanshu Bansal
Very encouraging to hear, sir. I totally agree. Product value proposition is a very key point in terms of gaining traction and we are seeing very good examples of such brands doing very well in India as well. So thanks for taking my questions, but this is really.
Yashovardhan Saboo
Thank you, thank you, thank you,
Operator
Thank you. Next question comes from the line of Rishi Maheshwari with AKSA Capital. Please come in.
Rishi Maheshwari
Hi. Thanks for taking my question. This is very heartening to know your optimism given the opening remarks of, you know, a slight back ended recovery. So my question was related to understanding the Precision Engineering Department division. While you mentioned, you know, in the 15, 20% growth is also a result of the bracelet division accentuating their growth in this year versus only half of last year. So is the precision engineering also expected to grow at about 15 to 20% in DPS? Help us understand what are the areas of growth given that the other, you know, in auto ancillary, for instance, we are not other companies are not showing as much optimism as perhaps you are showing or other divisions. If you can throw some light on. My second question is on certain numbers that you had earlier given. In earlier calls, the bracelet manufacturing division had a capacity of 75,000 bracelets. Are we looking to enhance it given that you’re saying next year you will be closer to higher utilization. And the third part was to understand the packaging. This had a capacity. Capacity of 1000 units as well, as far as I understand goes. So if there is, given the heightened growth that you’re looking over there, is there any reason to believe that there is capacity enhancement that you’re looking at it? Thank you.
Yashovardhan Saboo
Okay, I’ll answer the last two questions and then invite Sanjeev to answer the first one. On the overall growth, I think in capacity of bracelets, it’s right, it’s 75,000, but. And there are plans to enhance it using some balancing equipment. But it’s important to understand that it also depends on the product mix a lot. Right. So if you have simple bracelets or simpler bracelets, this you could easily make 90,000 or 100,000. For the kind of bracelet that we have currently, it’s probably closer to 90,000 than 75,000. But there is a plan to enhance it probably by the end of this fiscal year. And we expect that the capacity utilization will go to about 65% of this 90,000. The packaging unit. I’m not sure if we have a capacity of $100. Much more than 100,000. Sorry, new unit. The new unit. Only the new unit. Yes. So the new unit has been established which came into production I think in October and here I think we will get also close to 60 or 70% capacity utilization during this year. And that is going to help in of course contributing to the overall growth.
Sanjeev Masown
Rishi, basically in these type of business, either precision engineering or packaging or bracelet, it’s not a question of capacity creation and the heading of the capex mainly it is a question of how we are able to satisfy the customers, bring the product range through their quality certifications and the sustainability of the product. So this is a long process. Similarly, in the packaging, as we have recently put up this capacity, once we reach to the near to the capacity levels, the new customers and the new product range, then we will think of another round of the capacity increases. Regarding the precision engineering business, you have asked whether there also the growth will be in the range of 15 to 20%. Our expectations are there that it will be more than that.
Rishi Maheshwari
Very encouraging. If I can just briefly ask one more on the bracelet now, how many customers do we have in the bracelets division?
Yashovardhan Saboo
In the bracelet division,
Rishi Maheshwari
Yes.
Yashovardhan Saboo
If you’ve been part of earlier calls, you know that this, the bracelet division was set up in collaboration with one customer who supported us to set up. That is right. And right now we have that customer. We have that one customer. As our production expands, we are free to go to other customers, provided this one customer to meet or we produce more than the needs of this customer, which could happen this year. But let’s see how much this customer will actually lift. So I believe in the years to come we will work with multiple customers. This year we will be mostly with this one customer or some other customers of the same group because this customer is part of a large group, the LVMH group and they have more brands than just one. And they are also looking at starting to buy from us.
Rishi Maheshwari
Wonderful. The last question would be on fair value. In a small conference that you held earlier, you mentioned that your aspiration to go There is about 100,000 units per annum. That is a kind of aspiration at some point in time. Does that aspiration still hold given the early demand trends that you’ve seen? You’ve spoken very highly.
Yashovardhan Saboo
Absolutely
Rishi Maheshwari
Indicative timeline. Do you think that is possible by say FY30 or so?
Yashovardhan Saboo
That’s. That’s hard. That’s hard to say. But you know, I also don’t want to say, yeah, it’s going to be in the distant future. So you know, FY40. No, we’re going to do it fast. But you know, building a global brand, it’s hard to predict, you know, very precise timeline. Two years from now we should be able to predict that more accurately.
Rishi Maheshwari
Thank you sir.
Yashovardhan Saboo
I think a lot will depend on how long it takes us to get to 10,000.
Rishi Maheshwari
Right, right. Absolutely. All the best. Great wishes for you. Thank you.
Yashovardhan Saboo
Thank you. Thank you.
Operator
Thank you. Next question comes from the line of Ajay Surya with Nivesha. Please go ahead.
Ajay Surya
Thank you for the opportunity and congratulations on the performance. Despite the overall environment and the commentary is really positive. I have a few set of questions, sir. If I look at our business mix, so last year Precision was around 25% and this year it has increased to about 40%. And margin profile as you mentioned that in the precision segment is a bit lower than the Watch division. And if I look at our gross margins have declined significantly this quarter. So I wanted to understand the reason behind this and is it kind of a one off or. Just wanted to know more on that. Second question is. Yeah. Second question is sir, in the Watch component division as well the Watch break. Bracelet division has been increasing and it has started to contribute from this year itself. From the data which we have even to gather internally we are providing I guess two SKUs in the watch bracelet. But the pricing which we get there is a stark difference of maybe a 10 times difference in the two SKUs which we provide and in the recent quarters maybe the lower price band has been of much more volume. Just wanted to understand more on this part. Like how many SKUs going forward are we planning to do and what price band are we targeting? Next question is in the opening commentary you mentioned that we are also now moving to maybe non Swiss geographies and the Europe or the non other part of the world. So I wanted to understand like if you can highlight how is the watch industry overall progressing like is it moving away from the Swiss watches or is it losing its job or is it that newer geographies have higher growth which is why KDDL is targeting kddl. Standalone business is targeting that segment. And someone last question on the precision engineering. The way we have grown over the years is quite robust and we are expanding further in this and if I get the amount right close to 35 crores. Sir wanted to understand have we cracked any new customer or new segment under this like maybe the aerospace or the automobile site because again is that like one cost, one single customer is driving this division for us as of now. So just wanted to know your thoughts. Is there any risk of customer concentration on this?
Yashovardhan Saboo
Ajay, we got that. I’ll answer your two questions and then I’m going to let Sanjeev answer the first and the fourth bracelet data. I think you are misleading the data. There are SKUs. I think the lower value SKU that you’re talking about is probably a component of the bracelet. The bracelet consists of the main bracelet of two end pieces. Those are the end pieces that link to the watch case and then there is a buckle. So they are shown as separate SKUs but eventually they all get together to form one bracelet. Right. So I don’t think you can come back and say you know there is more volume of lower priced and so on. In the very early stages we were not providing the buckle. The buckle was provided by the customer. Now we are providing the buckle as well and the end pieces and therefore you see this. But eventually they all, you know get into one sort of bracelet. Currently we are doing, we are doing three models of bracelets. So but this is going to grow. Of course it depends on what the customer wants right now. So as I said, we are right now dealing with one customer. But these will grow. So I hope that clarifies the question about SKUs and pricing. Now there’s not that much difference in prices but on the bracelets when you take it as a overall one set which comprises one bracelet. Second point was about watch markets in other countries. It’s not that Switzerland is declining other countries. There are some brands and some watchmakers who also now are coming up. Remember that the watchmaking tradition it was not exclusive to Switzerland. Watchmaking tradition started in UK watchmaking as a history. It started in UK and France and then it spread to Switzerland, it spread to Germany and it spread to Scandinavia. So so these countries are now reviving some of their watchmaking traditions. And of course don’t forget Japan. Japan always had a watchmaking tradition and that is also reviving. And from Japan it’s going to some other countries. USA by the way had a strong watchmaking business in the 20s and 30s and some of the brands are also now reviving in USA and obviously now the making make America great again is a philip to some US brands. So that is what is happening on the Switzerland still remains by far the most important and the most valuable market for luxury and premium watches. Sanjeev, the other two questions can answer
Sanjeev Masown
Are you regarding your question of lower margins in the quarter four of the financial year 25 yes, to some extent you have rightly captured that the precision engineering business revenue in the previous quarter was around 40%. That is one reason of lower margins at the overall level. Number two in the quarter four the watch component business revenue is broadly in the range of 50%. The other revenue is from the bracelet and the packaging business which are at the nascent stages of the ramp up where the costs are there and there are. So the margins are lower as we move up in the coming quarter. This recovery and the normalization will be there and the this the margins which you have seen in the quarter four are like a one off cases. You will see the improvement over there. Number two, at the year end there are there are some one off expenses which are accounted only at the year end. Regarding your question of the new customers being added into the precision engine business. Yes, this is part and parcel of the business. We keep adding new customers, new segments, new geographies think it is not dependent only on one customer. Just at some point of time some customers have a larger share or the larger revenue for the business so. But I will not be in a position to disclose the names of the customer. But we keep adding the new customers from the different geography.
Ajay Surya
Got it, sir. Thanks for answering all the questions in detail. All the very best. For future.
Operator
Thank you. Next question comes from the line of Jagdish Hot Topo with JAPA Investment Advisors llp. Please go ahead.
Unidentified Participant
Yeah, good morning sir. Thank you for this opportunity. I would also, you know, refer to your presentation in December 24th on business outlook. So my first question would be back then you had stated that China 1 is positive but waning. Now we are in May. So much has happened in between in terms of trade, tassel and all. So what’s the outlook, you know, is China plus one still remains positive or it’s become stronger, still winning? So that’s question number one. And you also mentioned, you know, America is also, you know, wanting to invest in their watchmaking industry. So in that context, if you could explain a little bit with little bit more color. Now my question number two is if I refer to your slide, you know, in your presentation of the business outlook there are I guess 7, 4 market segments were mentioned and 3 main product group were mentioned. Now in the segment along with aerospace, it’s mentioned defense as well. And in EE it is mentioned electrical and electronics as well. I would not like to go to the product group as of now. But I would like to know, I mean out of this four segment, I mean which were the segment that outperformed this year and contributed to the most in terms of the revenue in that particular segment, engineering segment and which are the segment also you look the most promising outlook for the next few years. Third is basically, you know, suggestion. I mean you had recommended that if somebody wants to visit your factory, they are welcome. So I would also like to visit along with some of the analysts. I mean if you could suggest when is when it can be arranged or and what’s the, you know, the process for the same. Thank you so much and best luck to you.
Yashovardhan Saboo
Thank you. Thank you. Jagdish. Yes, we will organize visit to our factories. We very much like to welcome analysts, shareholders. I think it’s important to understand the business and it makes the whole interaction much more meaningful. So we will plan that with SGA and I’m sure they will get in touch with you. Regarding the segments of the business of precision engineering, Sanjeev will answer that. China plus one, you know, there’s not a situation that changes every quarter or every six months like that, right? China plus one is a reality now. Suddenly it has become because of, you know, the Trump policies and so on, it has become hot again. Tomorrow there may be a deal between China and America. It will cool down again. So we can’t really go on a quarterly basis. I think in general, businesses across the world are realizing that over dependence on any one geography. In this case, China is a situation that should be de risked and therefore they’re looking at alternatives to China. Is India an alternative? Of course it is. And therefore, if India can come up to the mark, China plus one is a reality and it will continue. We are already seeing the traction of that. However, if India, for whatever reason, we are too slow, business is not, you know, for whatever reason the technology is not coming fast enough. We are too slow. We are not able to think put fast enough, you know, approvals take too much time. Whatever be the reason, I’m not going into that. Other countries will take it out. And my sense is that there are other countries who are taking it out. For example, Vietnam is spoken about in other Southeast Asian countries. There are also Eastern European countries. However, India has a great opportunity, but we have to move fast to do that. We are trying our best to do that. That’s as far as that answer is concerned. Please. Sanjeev
Sanjeev Masown
Jagdeeshwar, you asked about the. In the precision engineering business, the different segments where we have the presence that which segments contributed to the major growth in the previous year. In the last couple of years the major traction has been from the alternate energy segment which comprises the EV and the battery energy storage system. And that continued in the previous year. Also the strong growth and the order position were there. Coupled with that the aerospace which post Covid for some period for a couple of years it was on a downturn and the slowdown was there that also witnessed a decent recovery. And the second segment is from the aerospace industry.
Yashovardhan Saboo
Thank you.
Unidentified Participant
Thank you. Thank you so much. Thank you. Thank you.
Operator
Thank you. Next question comes from the line of Mehul Panjwani with 40 Cents. Please go ahead.
Mehul Panjwani
Thank you so much sir for the opportunity. These are my questions. Am I audible, sir?
Yashovardhan Saboo
Yes, you are.
Mehul Panjwani
Okay, these are my questions. Sir. I am new in tracking our company so just would like some clarity on some very trivial questions. One is how much is the jewelry segment contributing, if at all to the revenue of the company that is one secondly. What are the. The Silver City brands? Is it just the Fabre Luba or is there any other products which are being added through that subsidiary? And third, is that what I mean? I. Whatever I heard in the conference call, I can understand that we are in a very niche business. But you know, if I would like to understand how many competitors would we have which are based out of India.
Yashovardhan Saboo
Thank you so much. We are in different businesses, Mehul, so it’s hard to say how many competitors. We have competitors in various businesses. And frankly I don’t differentiate competitors in India or competitors abroad. Today 75, 80% of our business is coming from export and therefore we look at international competition and their competition is a reality. In all our businesses we have competition and we are able to grow faster than the competition because somewhere we are better than them. So it’s hard to answer your question about number of competitors. As far as Silver City brands is concerned. At the moment we have only one, one brand that is favor Luba. In future there is a plan to add brand but as of now there is nothing specific so I cannot comment on that. And as far as jewelry is concerned, in our company we are not really manufacturing anything for jewelry except packaging and packaging at the moment the jewelry segment is small for us. The main segments are outside jewelry. But it will be one of the fastest growing segments in the years to come. Based on the kind of responses that we are getting from jewelry companies in India and globally.
Mehul Panjwani
Right. Sir, one follow up question. So in terms of the watch component, because I think that is one of the very niche areas of your business. So for that I would rephrase my question. How many competitors would be there globally?
Yashovardhan Saboo
There are a lot. And again remember that we are making several components. Not every watch component maker makes so many components as we do. There are dial makers, there are hands makers in dial makers. I could easily say there are probably 15 to 20 well established dial makers in Switzerland, in Europe, in Japan, in China, in Thailand and of course we are in India handmakers. There are fewer, maybe six or seven in the world. And on bracelets again there are plenty of so.
Mehul Panjwani
Right. Sir, I’m very quite curious about the pedigree or pedigree of our company because you know we are. To the, to my little knowledge, you are in a very highly niche and precision oriented component manufacturing. So what has, how did we get into this kind of a business mode? I mean I know that our company is quite old. But
Yashovardhan Saboo
Mehul, I don’t think we can answer that question on an earnings call. I mean that’s something if you. There’s a lot of information on our website. And that’s the history of 40 years. It’s hard to sort of summarize that over two or three minutes. But why don’t you next time one on one group meet. Not one on one but a group meeting at one of our factories. Why don’t you join in for that and you can get a better sense of you know, 40 years of the company.
Mehul Panjwani
Definitely, sir. Thank you so much. 1. Just one last question. If I can just chip in one last question. So what is the reason for having Bangalore as the production. I mean for all the factories after we have had in Chandigarh. What made us move to Bangalore? I mean, why was it because, you know. Anyway you are exporting move to
Yashovardhan Saboo
Bangalore. Bangalore has been one of our bases for more than 30 years. So it’s not a recent move.
Mehul Panjwani
Okay. Okay, sir. Thank you, sir.
Yashovardhan Saboo
Diversified strategy. We didn’t want to put everything in one region.
Mehul Panjwani
Right? Right. So it was. Was it because of some labor benefits or. You know, we moved to Bangalore.
Yashovardhan Saboo
Again, I’m saying there is no question of move. We have been in Bangalore for more than 30 years. And we’ve been in existence for 40 years. So again I’m saying that we believe in de risking and you know, hedging our bets. And one of them is having. Not putting all your manufacturing in one location.
Mehul Panjwani
Right. Agreed, sir. But you know, since we were primarily.
Yashovardhan Saboo
I can’t answer more. I can’t answer more.
Mehul Panjwani
Sorry, sir. Thank you so much.
Yashovardhan Saboo
I don’t remember what was the reason but the basic philosophy is to hedge against and to diversify.
Mehul Panjwani
Appreciate, sir. Thank you so much.
Yashovardhan Saboo
Thank you.
Operator
Ladies and gentlemen, due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Yashovardhan Saboo
Thank you everyone. If you need any further clarifications or any questions please contact the SGA team, our investor relations advisors. And we’d be happy to connect and answer what we can. Thank you once again for joining in this earnings call. Thank you everybody.
Operator
Thank you. On behalf of KDDL limited that concludes this conference. Thank you for joining us. You may now disconnect your line. Sa.