Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
KDDL Limited (NSE: KDDL) Q4 2026 Earnings Call dated May. 20, 2026
Corporate Participants:
Yasho Vardhan Sabhu — Chairman and Managing Director
Sanjeev Masson — Chief Financial Officer and Executive Director
Pranav Sabhu — Managing Director and Chief Executive Officer
Analysts:
Pritesh Cheddar — Analyst
Unidentified Participant
Ganesh Gupta — Analyst
Yash Sonthalia — Analyst
Devanshu Bansal — Analyst
Sujal Janwar — Analyst
Pranjal Mukhija — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to KDDL Limited Q4NFY 26 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. 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 the date of this call. These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict.
Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Yasho Vardhan Sabhu, Chairman and Managing Director of KDDL Limited. Thank you. And over to you sir.
Yasho Vardhan Sabhu — Chairman and Managing Director
Thank you. Good afternoon everyone. Sorry to keep you waiting a bit. Thanks again for joining us on the KDDL Limited Q4 and FY26 earnings conference call. I hope you’ve had the opportunity to review our financial results and investor presentation recently posted on the company’s website and stock exchanges. I’m joined today by our CFO and Executive Director, Mr. Sanjeev Masson and SGA, our Investor Relations Advisor. I’m especially pleased with that today. Mr. Pranav Sabhu, Managing Director and CEO of Ethos, is also with us.
Last year, after the end of FY25, which had seen a major correction over the previous year, we had promised you of a recovery in FY26. I’m very glad that despite the challenging business environment, we have done even better than expected with very good results which I’m sure you have noted. It is in our nature, in our DNA, to be cautious in our promises, but aggressive in our performance. We always feel happy to deliver better than expected results. As is known to all of us. The global economic environment during FY26 remained uncertain and volatile and this is continuing even now.
The global watch industry also operated in a challenging environment during the year. Weak consumer demand in key luxury markets, particularly China and certain parts of Europe, continue to weigh on industry growth while global brands remain cautious in rental planning and procurement decisions amid uncertain macroeconomic conditions. Despite these near term challenges, and I say they are near term because I’m very hopeful that things will change. We remain very confident about the outlook of our businesses.
Global customers are increasingly prioritizing supply chain diversification, reliability, consistent quality standards and long term strategic partnerships. This creates meaningful opportunities for companies like us with strong manufacturing capabilities, strong manufacturing capabilities, execution track record and trusted customer relationships. At the same time, the domestic market environment India continues to remain encouraging. Rising premiumization, increasing localization opportunities, strengthening manufacturing ecosystem and healthy consumer demand are supporting growth across multiple segments.
About the Watch components business which is Dials, Hands and Bracelets despite the difficulty in the international watch scenario, our watch component business Dials and Hands forged a recovery during the second half of FY26 after a quiet first half. Even though Swiss watches continue to face headwinds in several markets, we expect H1FY27 that is this year to remain relatively stable for the export oriented business. With growth being more visible during the second half of the year. We expect the domestic business to continue to remain robust supported by healthy demand trends and increasing localization opportunities within India which will show up in our growth numbers.
Our continuing growth in a subdued market speaks volumes for the strength of our performance and our capabilities. Over the last few quarters we have intensified our customer diversification efforts beyond Switzerland. These customers operate at different price points compared to traditional Swiss luxury brands and represent a very good medium to long term potential for us. We believe the benefits from these efforts will become increasingly visible over the coming years. The bracelet division continues to deliver strong performance driven by its export business with deliveries being executed in line with the planned volumes.
Bracelets are not covered under the Swissness criteria for Swiss watches and this provides an advantage to manufacturing of our bracelets in India in the long run. Based on current visibility, we expect the bracelets business to continue delivering good revenue growth in this financial year and the next financial year. Though margins may be moderated in the near term due to lower price points of newer customers which are fueling growth now to Eigen the Precision Engineering Division FY26 has been an extremely successful year for the precision engineering business.
Revenue grew by more than 35% year on year to around rupees 200 crores supported by strong momentum across export markets and increasing customer confidence. We remain highly optimistic about the medium and long term prospects of this business. Export markets will continue to remain the primary focus area for high growth potential. Our strategy remains to deepen relationships with existing customers, adding new customers and expanding our capabilities selectively. We are undertaking further expansion in this division with backward integration and process enhancement together with some capacity addition.
About the Packaging Division or NAPAC here also we witnessed encouraging progress during FY26 with revenue growth growing by over 35% year on year. The growth in this business is primarily focused on the domestic needs of international brands, although we expect business to grow in all the segments that we are in supplies to customers. International brands who are sourcing our packaging for the domestic market, that is The Indian market have already convinced and the initial response has been very encouraging.
While the business currently is showing a loss at its ramp up stage, we expect the division to become profitable during the second half of the current financial year. A few words about Ethos as you know, Ethos declared its results a week ago and they have been in the public domain, so I’m sure those of you who are interested will have gone through the numbers there. As I mentioned, we have Mr. Pranav Sabu, Managing Director and CEO on this call and I’m sure he would be pleased to take any questions that you may have.
With regard to Ethos. I would like to add my comment that Ethos has done extremely well in FY26 once again after recording and I am sure in this year with strong growth in number of stores, sales, profit and visibility. Finally, about Silver City Brands. As you know, this is a company in Switzerland that owns and operates the Favor Luba brand. I’m sure many of you have already seen the amazing market success of Favor Luba Watches internationally and the amazing stories of satisfied customers, including some top celebs who have chosen Fibre Luba Watches for their use and their collections during the end of the year.
Sorry, at the end of the year Favor Luba was already present in over 20 countries with more than 80 points of sale. Sales is much better than expected in the last fiscal and most stores are actually short of stock while we are ramping up production, but this takes time and effort to maintain the quality and the amazing watch pieces that are produced. We expect to more than double the sales in FY27 and greatly expand our global footprint with exciting new product launches. All of this has been possible only due to the outstanding and unique vision of of the brand guardians, including Pranav and including Patrick Hoffman, the CEO and Chairman of Silver City Brands.
Our medium and long term vision for the brand remains very ambitious and we hope that you will continue to enjoy the success stories and numbers from this brand in the quarters and years to come. From an overall capital allocation perspective, we have planned capex of approximately rupees 50 crores across businesses during FY27. This includes both maintenance capex and growth oriented investments aimed at strengthening capabilities, improving efficiencies and supporting long term expansion opportunities across our businesses.
With this I would now like to request Mr. Sanjeev Mason to take you through the financial performance of the company.
Sanjeev Masson — Chief Financial Officer and Executive Director
Thank you Mr. Sabu. Good afternoon everyone. Now let me take you through the company’s financial performance. Initially I’ll be sharing the standard one financial performance total income for quarter four FY26 stood at rupees 145.3 crores and it grew by almost 42% y o y over the last year same period and for the full year the revenue was 506 crores and which grew by almost 31.9%. When I say 506 crores it includes only the operational profit and not the non operational income which is there. EBITDA for the quarter four was at rupees 36.4 crore and it grew by 87.6% yoy while for the full year FY26 the EBITDA was 116.9 crores representing a growth of 32.2% yoy EBITDA margin for quarter four was ever highest at 25.1% and for the full year EBITDA is 23.1%.
PAD for quarter four stood at rupees 19.8 crores with the PAT margin of 13.6% and for the full year FY26 PAT stood at 76.6 crores with a margin of 15.1%. During the year the company invested approximately 34 crores for the capex in the various divisions. And now coming to the consolidated financial performance, total income for the quarter four FY26 was at rupees almost 585 crores and it grew by almost 35.6% IO Y and for the full year FY26 the revenue was 2207.8 crores and it grew by almost 30.3%.
EBITDA for the quarter stood at rupees 95 crore growing by 25.2% YoY while for the full year EBITDA was at 363 crores representing 18.3% growth over the previous year. EBITDA margins for quarter four at a consolidated level was 16.3% and for the full year almost at a similar level of 16.4%. PAD for quarter four was at rupees 34.5 crores with a PAT margin of 5.9%. And for the full year PAD was at rupees 135.2 crores with a margin of 6.1%. Now when we exclude the ethos consolidated in the consolidated financial results the watch component business in the manufacturing reported revenue of almost 240 crores as compared to 200 crores in the previous year.
So registering a growth of almost 20%. Yui. In the precision engineering business the revenue during the year is 200 crores compared to the previous year revenue of 147 crores reflecting a growth of 35% plus y o y on a pack where the base is much lower. The last year revenue was around 17 crore. And during the current year we reported 23 crores representing a growth of almost 37%. And with this now I open the floor for the questions and answers. You are free to ask questions which you feel are relevant.
Thank you sir.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press charn1 on the Touchstone telephone. If you wish to remove yourself from the question queue you may press chart and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Pritesh Cheddar from Lucky Investments. Please go ahead.
Pritesh Cheddar
Sir. The bracelets is a part of the watch components in the 240 crore or should we report should have a number separately?
Sanjeev Masson
No, but bracelet is separate. No, not part of the two body.
Pritesh Cheddar
Okay, so can you give the bracelets revenue
Sanjeev Masson
Around 40 crores?
Pritesh Cheddar
Okay, the other question is on the two capacities that you’ve put. One is for packaging and the other for bracelet. What kind of peak revenues is possible from those capacities?
Yasho Vardhan Sabhu
Sorry, what do you mean by peak revenue? Can you.
Pritesh Cheddar
Why
Yasho Vardhan Sabhu
Don’t you ask all your questions at one go so we can tackle them all.
Pritesh Cheddar
So my second question is on the peak utilization of these 2 capacities or 2 businesses, bracelets and packaging. What can be the revenue on peak utilization? My other question is if you could share the outlook on the growth in precision components. What kind of visibility or backlog or growth that you see in precision? Is the other question, sir.
Yasho Vardhan Sabhu
Okay, so you know it’s a little bit hard for us to sort of define what is the peak utilization. Because both capabilities and capacity in our kind of businesses they expand incrementally. When a capability expands are actually our capacity in terms of value. Also expands. So let us say I had one machine today. It gives me a new capability to make a slightly higher value bracelet or a different type of bracelet which also adds to the value. So it’s hard to say that, you know, and add to that the fact that we are continuing to do the capex required for our, you know, better capability and quality and capacity enhancement, as I told you, both in packaging as well as in bracelets.
So it’s hard to speak about what can be the turnover at peak utilization. I think what is important is to speak about what we expect the turnover or revenue to be from these businesses in the current year. And this brings me also to your second point as to how do we see the outlook for the precision engineering business for both the businesses,
Pritesh Cheddar
Sir, you may want to give them the outlook for all the three precision packaging and bracelets.
Yasho Vardhan Sabhu
So for bracelets and for precision engineering, we believe medium term to long term, we, we find it hard to predict as to what’s going to happen in 1/4 or 2/4. But in the medium and long term, both these businesses have, we believe they will grow at about 25%. CAGR, the watch component business will probably grow a little bit less than that. But again, a lot depends on how the macroeconomic environment changes. It could well grow faster as well.
Pritesh Cheddar
Just clarifying, 25% is for precision packaging and bracelets. All right.
Yasho Vardhan Sabhu
Yes.
Pritesh Cheddar
Okay. Any color on the margins based on the product mix or any changes on the gross margin when one segment vis a vis the other. It’s
Yasho Vardhan Sabhu
Very hard to say that in today’s environment. It’s extremely hard to say that Pritesh. As you will know, we are facing very challenging environments in markets with our customers and so on. If we need to compromise margin a bit for strategically gaining market share and gaining new markets, we have always sort of, we’ve always used that tool in our strategy kit. We try to protect margins, but we also protect the growth of our business. So it’s hard to predict which way it’s going to go. You have seen the margins have remained stable.
What we can say is that we do not expect any great change in the margin or in the margin picture over this year.
Pritesh Cheddar
So last, what’s the size of Favre Luva brand now and these capexes that you put every year, usually at what asset turn these capexes are put. And these are my last.
Yasho Vardhan Sabhu
I’m not sure if we would like to share those numbers with you right now. Those are confidential numbers which we would. Yeah,
Pritesh Cheddar
But
Yasho Vardhan Sabhu
As I said, Parvaluba Is doing excellently well. The results have been better than expected. We are selling more quantity than we expected. Stores have less than the stock they need. And we are doing everything possible to ramp up the supplies. It takes a little bit time to ramp up with this quality and the kind of components that we use. But yes, you will see a very strong growth. We will see a very strong growth in numbers as well as the footprint of the brand globally
Pritesh Cheddar
And asset turn of the Capexes annual Capex that you do. Let’s say this year you said 50 crores. That’s
Yasho Vardhan Sabhu
Not a number that we can share unfortunately. Thank you. Thank
Unidentified Participant
You very much sir. Thank you.
Operator
Mr. Kunal, your line has been unmuted. Please go ahead with the question.
Unidentified Participant
Yeah. Hi. Very good afternoon sir. And congratulations on this amazing set of numbers. I have three questions. One, the first one is how much has been the volume growth versus value growth in this quarter versus and also in the full year for the standalone business for
Yasho Vardhan Sabhu
Which, which. Sorry, for which company are you talking about?
Unidentified Participant
For the stand which business are you
Yasho Vardhan Sabhu
Talking about?
Unidentified Participant
The standalone business which includes the watch component and the Eigen.
Yasho Vardhan Sabhu
Okay,
Unidentified Participant
Yeah. The second question is the capex 50 crores is for Bosch components, Eigen Saver, Luba, everything included or it’s just for the standalone business that is watch components and Eigen and all the pack. And the third question is in the bracelet division which currently is about 40 crore. How do we plan to grow at 25%? Currently we are doing steel bracelets. Are you going to diversify from steel to other materials also or is it going to be only steel bracelets? These are my three questions. And one more is on the EBITDA margins as well.
If you can throw some light on that.
Yasho Vardhan Sabhu
So Kunal, first of all, volume in the manufacturing business is something that we actually don’t really combine and take it up because these businesses make a very diverse range of products. Hands are produced in millions. Boxes are produced in thousands. Dials are produced in lakhs.
Unidentified Participant
Sir, I’m not asking the unit, I’m asking in terms of percentage how much has been. So if we are. So again I’m
Yasho Vardhan Sabhu
Saying that because the volumes are so disparate.
Unidentified Participant
Okay. We
Yasho Vardhan Sabhu
Don’t really. We don’t. We don’t. It doesn’t make sense for us to combine them because today we are making, you know, small quantity of very expensive products and you know, it may morph to larger quantities. So quantity is not something that we count really. Maybe individual businesses at an operational level they may be doing but at A financial level, we don’t really sum up the volumes. So I’m not sure I can answer that question meaningfully at any time. As far as the capex is concerned, the 50 crores that I mentioned is in the standalone business.
In our businesses it includes bracelets, it includes watch components, it includes the precision engineering as well as packaging. So it’s across that it does not include investments made by subsidiary companies such as Inverse City brands, Club or Luba and so on. And bracelets, look, 80% of the metal bracelets in the world are steel. So while we are not ruling out going into other metals, but right now there is a huge scope in development of steel bracelets and there’s a global need for that. So as that, and we are experiencing that need.
So that’s why we believe that 20 to 25% growth in the bracelet division is quite, quite easily possible.
Unidentified Participant
Okay. And sir, any new, you spoke on a new customer outside Switzerland. Can you give some flavor on which geographies are we targeting?
Yasho Vardhan Sabhu
So look outside. You know, first of all I want to say that Switzerland is still by far the largest in terms of value. So it’s like I don’t want to give the impression that you know, other countries are out there, you know, taking major market shares. But there are other countries where watchmaking is developing and some of them, some of these countries, watchmaking was already there in the past and it is seeing a revival. Germany has always been had strong sort of traditions of watchmaking. So it is reviving in Germany, it is reviving in France.
What is little known is that watchmaking in the world actually originated, originated in UK and UK is seeing a strong revival in watchmaking. The US which had some very well known brands in the past is seeing a revival. And of course for us, we have not been present in the Japanese market. Everyone knows Japan’s strength in watches. So we are seeing that also as a potential future market.
Unidentified Participant
Okay. And sir, in Eigen we have done a commendable job. Maybe you can. Sure, sir. Okay, I’ll come back.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question from the line of Ganesh Gupta from SM family office, please go ahead.
Ganesh Gupta
Yeah, sir, I’m audible.
Pranav Sabhu
Yes.
Ganesh Gupta
Yeah, great to speak with you. My first question would be to Mr. Pranav. As post IPO commentary in the conference call he said about 10x revenue in the next 10 years and I would like to hear him Go on brief about that. Second question would be how do you think about onboarding ultra high?
Yash Sonthalia
Your voice is echoing.
Ganesh Gupta
Yeah, now it’s fine.
Yash Sonthalia
Yes.
Ganesh Gupta
Yeah, I’m asking about onboarding ultra high horology brands like Patek and AP given their preference for mono brand retail. Okay, any
Yasho Vardhan Sabhu
Other questions? Any other questions?
Ganesh Gupta
No sir, those were the two questions. Okay,
Yasho Vardhan Sabhu
Great. Pranav, would you like to answer them?
Pranav Sabhu
As I had mentioned that we are at the time that we listed the company, we had mentioned our goal of growing 10x in 10 years. And I think that we are ahead of that vision that requires us to give a 26% CAGR, 25.9 or 26% CAGR. I think we’ve been delivering that through times that are through the good and the bad times. And I don’t think that our vision has changed. I’m committed to delivering that vision and I feel very confident that our teams have the resources, the partnerships and the energy to be able to deliver that vision on time.
We have crossed 100 boutiques this year and I do believe that if things go well we should be doubling our network of boutiques in the next three years. And we are well within our. We are executing as per our vision of the 10x in 10 years given at the time of listing of the company talking about ultra high end brands. Our vision is to serve the Indian customer through whatever means or whatever routes or formats that serve the customer and the brand the best. Our job is to be able to create stakeholder value for everybody.
If a brand feels most comfortable in a mono brand environment, which is an environment that is exclusive to them, then we will deliver on that as well. In our network we have a lot of brands that have mono brand boutiques and we perform very well with them. At the same time we want to be, we want to ensure that our business is not built on only upon supply constraint brands. And we want to make sure that in our vision supply doesn’t become a constraining factor for our growth. However, we have respect for all these brands that want to come in and we believe that we will be able to represent many of them to the best of our ability and really be able to set benchmarks around the world.
Ganesh Gupta
Many congratulations on the century of boutiques. You hit with ethos and I want to know anything about the connection with Audemars and Patek particularly going on. Thank
Pranav Sabhu
You sir. I will not be able to answer similar in particular brand wise connection.
Operator
Thank you. The next question is from the line of Yash Sonthalia From Edelweiss Public Alternatives. Please go ahead.
Pranav Sabhu
Hi. Hi team. Thank you for taking my question and congrats on good setup numbers. So my questions are
Yasho Vardhan Sabhu
There is an echo in your.
Pranav Sabhu
Yeah. Is it clear now?
Yasho Vardhan Sabhu
Yes.
Pranav Sabhu
So my questions are regarding KDDL majorly. So first of all can you, can you help me with standalone revenue and EBITDA for Q4 and full year exist for currency, currency moments and impact of currency. Second, I want to understand like our ambition or our goal of 25% CAGR in Eigen, can you give us some color about the how we are aiming to do that by adding more customers or getting more wallet shares of the customer or something else. Third, follow up on the dials business like in the PPT you have given a growth number and also like we are saying, if the headwinds on the industry from China and some other markets revives, we can have a better growth.
So this 11 12% growth, what we try to. I want to understand is it including that headwinds or if those headwinds goes away, where can this growth can go? And last on Fabral, like you said, we are expecting to double our sales. So can you give us some quantitative numbers like the new watches which we sold on new plus old and how much we are ambitious for next year in volume terms. If you can help me for them. Thanks.
Yasho Vardhan Sabhu
So I’m going to let our CFO answer about currency. I’m not sure if that’s a number that we can easily share. But Eigen, actually the answer is very simple. All of the things you mentioned, all of them deepening and I mentioned this in my short address as well. Deepening existing customer relationships, new customers and new products and capabilities. So the growth has come from these steps and it will continue to come from these steps. I want to point out that actually our market share in the business of precision stamping is extremely small.
So there is a huge headroom for growth. And so I believe all the three avenues will be used for the growth. As far as dials is concerned. It’s not only dials. I mean I always talk about dials and the watch components and all in general. And yes, if the environment in the global market for expensive watches for our export, the brands that we export to, if that improves, then we expect that the growth can go higher than 11 or 12%. As far as Faber Dubai is concerned. I’m not sure if we can share exact numbers, but as I told you, we have sold more than we were projecting and we expect to double the sales in the next in this quarter.
Sorry, in this financial year currency. He said the currency corrected.
Sanjeev Masson
What is actually your the question regarding the currency? This I have not understood. What do you mean by this?
Pranav Sabhu
So I wanted to understand existed for any gains or losses for currency. What is our revenue growth and EBITDA margin?
Sanjeev Masson
We do not calculate adjusted with the currency especially at a console level. Broadly it gets out because in KDDL where the exports are there, we stand to gain. In the third house where mainly the imports are there, there is a forex loss. So at a console there is. Continue.
Pranav Sabhu
Yeah, sorry. So my question was more on standalone like we have seen a huge jump in EBITDA margin and my understanding is some part of it is because of currency. So. And
Sanjeev Masson
That has nothing to do only with this exclusively with this quarter. So over the year as such this currency movements have been there and with the we exporting mainly to Switzerland and the Swiss franc being a strong currency, we do stand to gain. But I think going forward also it will expected to remain similar levels or the stronger. And it’s difficult to quantify that. Okay, one rupee of Swiss franc leading to how much of my EBITDA margin.
Pranav Sabhu
Thanks. Thanks for answering all my questions.
Yasho Vardhan Sabhu
Thank you.
Operator
Thank you. The next question is from the line of Ajay Surya from Navasha. Please go ahead.
Pranav Sabhu
Thanks for the opportunity. So my questions are primarily on the precision engineering business. So sir, we were to come up with the new capex in Bangalore. So wanted to ask like has that commissioned or will this commission in Q1 and also the new capex which we are talking about if you can give the breakup like will that be more on the precision engineering business or on the phase two of bracelet division which we were to maybe do it sometime after the success of our first phase one also. So the second question is on the bracelet division.
You mentioned that current revenue for this year is I guess if I heard it right around 40 crore. So maybe if you can help us understand the utilization level for bracelet division at this moment and how are we expecting that utilization to ramp up going forward and on the customer win for the bracelet division. I guess it was just one customer who was driving this segment. So if we are winning any new customers or any progress on that, that will be helpful. Third question is on again, again the precision engine.
Yasho Vardhan Sabhu
Sorry there are a lot of participants waiting so maybe you can limit your questions to two please and come back later.
Pranav Sabhu
So just last one if I can explain. So just on the precision engineering, I mean majority of the revenue is Being driven by a global OEM for which we were supplying the Bus Bar product. So wanted to understand like is that like we are putting up this Capex backed by the orders maybe or confirmed visibility from the OEMs or we have one new customers also on that. So maybe on that if you can just add something.
Yasho Vardhan Sabhu
So let me answer your questions. On the bracelets we are adding new customers. Capacity utilization on the capacity that was existing was about 75 to 80% this year. As I told you, we are continuously adding to capacity and it doesn’t happen with one big jump. We are incrementally adding capability and capacity all of which leads to a revenue growth. So this will go up this year and it will go up not only you know to that but also due to the addition of new customers. As far as Eigen is concerned it’s.
I will let Sanjeev answer that. And you had one question on CapEx
Yash Sonthalia
Which also
Yasho Vardhan Sabhu
I think Sanjeev is going to answer. Yeah.
Sanjeev Masson
Hi Ajay.
Yasho Vardhan Sabhu
I think you asked few questions regarding
Sanjeev Masson
The cafeteria.
Yasho Vardhan Sabhu
Let me tell you as far as the Eigen
Sanjeev Masson
Capex is concerned which we started last year that is still under progress. Hopefully in the next three to four months this backward integration of the some of the processes which we are planning to do through this Capex will be commissioned and we will start utilizing the facility going forward for the next year. When we have shared the that approximately approximately 50 crores is planned to be invested in the capex. It is spread over all the businesses. But the major part will be for the precision engineering and the bracelet.
And as we progress and based on the need and the development in the market, the investments will be done. You also asked about something about the bus bars and exports the
Yasho Vardhan Sabhu
Customer
Sanjeev Masson
For us. I think you need to understand Iagon as such is not a product selling company
Unidentified Participant
For either. It
Sanjeev Masson
Does not matter whether it’s a buzzfar or is it some other component for some other application. We continue to remain a capability selling company and we will continue to focusing into that. So there are avenues, there are opportunities into the different products and to the different segments. And that has been our strategy and that will continue to remain our strategy for the going forward also. So it does not matter whether we are supplying Busbar or tomorrow. The customer changes and sometimes else comes up.
We will keep selling our capability.
Unidentified Participant
Thank
Sanjeev Masson
You.
Operator
Thank you. The next question is from the line of Devanshu Bansal from MK Global. Please go ahead.
Devanshu Bansal
Yes sir. Hi, congratulations on. Hi sir. Sir, congratulations on very strong performance across both KGBM Standalone as an EPOS as well and ethos specifically because you have the team has achieved the key milestone of 100 stores plus the format has been sort of delivering significant growth at outperformance versus the other consumer names. Just three questions from my answer. Do we have anything significant demand elasticity to inflation as we are entering into that phase going into FY27. So based on your historical experience do we have any evidence of maybe some growth impact due to higher inflation?
Second on margins I wanted to check from P and L perspective. Last year our store expansion was quite aggressive so that impact of new store editions is already in the P and L now. So can we assume that the worst is behind us from a margin perspective and incrementally from here on we should see margins improving. And thirdly quite a commendable performance on working capital fund. There is a sizable optimization that has happened in FY26 so wanted to check if we could highlight few key initiatives as well as whether we can expect a continued improvement on this front going ahead and then so yeah these were my questions.
Yasho Vardhan Sabhu
I let Pranav answer the questions on ethos as far as demand elasticity is concerned. I think you mentioned you’re talking about price elasticity is demand is if inflation goes up, will demand suffer? You know we made to order products so they are made specifically for customers specific needs. So it’s not really going to be impacted if there is inflation and there is if some of this has to be passed on to the customer, it doesn’t usually impact. But in the end it also depends on how much is the overall general inflation.
Right. If there’s overall inflation and uncertainty and you know the demand globally in the let’s say growth globally dips, then everyone starts to make corrections in their stocking, in their inventory, in their purchases. So that is a different thing where the global demand drops. We don’t see that impacting us right now. Even last year was uncertain and quite a heavily impacted year. We all know that. But we have seen the growth that has happened and we believe that if things moderate from year on and stabilize we will be pretty much on track.
So there is not that much of an issue if there is a little higher inflation on our demand. That’s what I wanted to say for the ethos questions on margin and working capital. Pranav, will you take them please?
Pranav Sabhu
Thanks for the questions. I think our focus as you know right now will remain upon increasing our network because we believe that the opportunity in India is massive and I believe that no one else is Better equipped to take on this opportunity and deliver customer excellence as we are. Our focus right now is an acceleration, is a further acceleration on store openings. Yes. This has been the most expensive, this has been the most accelerated development this year. So are costs getting baked in? Yes.
However, setting directionally for us to be able to double the network in the next three years is my goal. Maybe it will take four years. My goal is to double the network in the next three years. I do believe from a margin perspective, a little bit depends upon currency fluctuation. I think that if currency is stabilized, we are in a good position and I think it’s hard to say whether it’s bottomed out or it’s going to be better, etc. Our focus is to keep it, to keep making sure that it becomes better.
If I know that if the Swiss franc or when the rupee stabilizes, the full price will be passed on. And I don’t see any, I don’t see any impact on volumes. If price of luxury prices or price of luxury price, product is priced on. It’s just that we take, we do it every six months and in luxury we want to make sure that that price, once it’s, let’s say a certain currency has reached a certain stage, we do it after we feel that fundamentally it’s there to stay. We don’t want to be correcting our prices.
So therefore there’s a time gap in it. Once it stabilizes, I do believe margins will become better. Is there costs that are increasing in making sure our foundational costs, foundational layers are better? Yes. Today we want deeper relationships with our brands. For example, we have dedicated brand managers, et cetera. Those are the costs that have come in already. Little bit may come in. As I mentioned earlier in my interactions as well, we’re going through this three year investment cycle after which it will start to pay off very, very well.
This year, April was a fantastic month. In fact one of our best months in terms of growth. And we are continuing to focus on growth over everything else at this point of time. In terms of working capital, we are making massive investments into our merchandising teams, into our processes and into strengthening our relationships much more with our brands so that they understand deeply what sells, what doesn’t sell in India and to be able to cater products specifically for this market. We’ve gone from nearly 247 days of inventory to 221 days at cost.
Right. It is something that we’re going to be focusing on. I had announced that we are Doing an AI lab. AI labs is an internal thing to be able to help all our departments make better decisions in terms of pace, in terms of capability. And our biggest focus area will be on ordering better. So we do expect that in mature stores, working capital will be looked at much more efficiently and will be looked at at a much more granular level with the team sizes increasing and their KPIs being linked to.
Pritesh Cheddar
Thank you. Yeah, okay,
Operator
Thank you.
Pranav Sabhu
Thank you.
Operator
Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Pranjal Mukhija from GR Ventures llp. Please go ahead.
Sujal Janwar
Right, yeah. Am I audible?
Yash Sonthalia
Yes.
Pranav Sabhu
So thank you for giving me this opportunity. I have a couple of questions. The firstly on the bracelet side, maybe two, two and a half years back,
Pranjal Mukhija
I got an opportunity to visit the plant. So around then we were talking about, you know, that the current capacity of bracelets will be close to 70, 75,000 units per year and you know, will incrementally increase it to a much larger number given the fact that a lot of the Chinese players, I mean the smaller players are also doing some 300,000 units capacity. So like can you just like share some roadmap on the, like how this capacity will increase here?
Pranav Sabhu
The
Yash Sonthalia
Second question.
Pranav Sabhu
Yeah, the second question is on Eigen basically just wanted to understand like now that we’re further expanding the capacity here. If you could just provide the capacity before the addition and what would be the total capacity post expansion. And secondly, like you mentioned that, you know, we’re also thinking of backward integrating here. So does that mean we are thinking of entering into forging, casting, that kind of a setup. And one question in this I wanted to understand currently in Igen, what kind of metals are we dealing with?
It are dealing with it’s primarily steel or like some other metals also we’re dealing with because of the other industries like aerospace and you know, global consumer electronic, the electronic industry and all. So these are my two questions.
Yasho Vardhan Sabhu
So second question first. I’ll just have a go at it. Sanjeev, you can supplement it again. You know, it’s hard to specify or calculate in terms of capacity. I know you want to plug in a number in your model over there, but if you, if you remember seeing the Eigen factory or the bracelet factory, maybe you saw both of them. There are very many different products that are made. And how many products we can make really depends on what is the mix of orders that we get. We can get orders, three orders for, you know, a million pieces or we can get 20 orders for much smaller numbers.
So we don’t know. So it’s. We don’t really calculate quantity in terms of what is the, you know, kgs of production or units of production. We really tend to see it in terms of value. And as we have said that we expect value to grow at about 25% CAGR. As far as the bracelet is concerned, you are right. 75,000 was the approximate kind of capacity. As I told you, we are at about 80%. It is true that China has larger plants. Many of the larger plants actually make a much lower quality. So that has to be taken into consideration.
This is a fact across businesses in every industry. The Chinese factories are larger than Indian factories and it’s not easy for Indian factories to match the scale of China. I’m not saying anything new. That’s unfortunately a reality of manufacturing in India. However, our plan is to compete with China not always on price but on quality and producing and delivering the best value. Our goal is not really to race with China on producing cheap parts but to race with the best in the world on producing higher quality and delivering high value.
So the expansion in wasted. I’ve already spoken about it earlier so I’m not going to say that again. Okay, so I hope that answers your questions.
Pranjal Mukhija
The expansion front, if not in terms of what is the output. Actually this is a follow up. Like my question was not answered completely.
Yasho Vardhan Sabhu
So as I told you, we tend to look at. It’s important that we understand that we look at our. In terms of value, what is the value of production that we have given and that value,
Pranav Sabhu
Not the sales part. If you could just provide like how much the production area has increased or the facility has increased and a little bit on the backward integration. But what exactly what are we thinking of doing in backward integration?
Sanjeev Masson
The backward integration is a plating process which we were getting it done outside. Now for further ensuring the quality and the consistency as well as the ramp up of the volumes which are happening, we want want to bring this process in house. That’s a backward integration of it. And you asked about the earlier these revenues which Mr. Sabu has already answered and the capacity in terms of prices or the. It becomes very difficult. We make parts which are two paisa and we make part which is 200 rupees.
Going forward, the only thing which has to be seen is what is the growth possible.
Unidentified Participant
Quantify in terms of size, how big is the facility.
Yasho Vardhan Sabhu
We cannot, we Cannot quantify.
Sanjeev Masson
We cannot quantify.
Yasho Vardhan Sabhu
And you are welcome to. You know, whenever we are visiting, next time we organize a factory visit, you are welcome to come there and we can show you why it is difficult to quantify.
Unidentified Participant
It doesn’t have. It doesn’t
Yasho Vardhan Sabhu
Mean anything. If we were to say 5 million components. It doesn’t mean anything.
Unidentified Participant
Thank you. Thank
Yasho Vardhan Sabhu
You.
Operator
Thank you. The next question is from the line of Sujal Janwar from Opportune Wealth Advisors Private limited. Please go ahead.
Sujal Janwar
Good evening sir. Am I audible?
Yasho Vardhan Sabhu
Yes, you are
Sujal Janwar
Sir. First question is on the part of side my bracelet division that if you are expanding and increasing the capacity, are we like on the bracelet part of division increasing the capacity or doing the record integration? And my second question is in the part of said like the precision engineering that in the part of how much capex we are doing for the precision engineering. And this is for also record integration. Am I right?
Yasho Vardhan Sabhu
So these are your two questions.
Sujal Janwar
Yes. Yeah,
Yasho Vardhan Sabhu
Just hang on a minute. Increasingly bracelet and the record integration.
Sanjeev Masson
So I. I think somewhere you have not understood properly the backward integration is being done in the precision engineering business, not in the bracelet.
Sujal Janwar
Okay.
Sanjeev Masson
So that is the rating process for the precision engineering business. As far as the bracelet business is concerned. There we are planning the some capacity increase in line with the market requirement. But more is your specific question regarding the bracelet.
Sujal Janwar
So for the bracelet you are doing expansion in the baseline division. So how much increment capacity are you bringing for the bracelet?
Yasho Vardhan Sabhu
Again we, you know, you tend to look at it in terms of quantities. We tend to look at it in terms of values and capabilities. But if I were to say that I think we’re going to expand from the current of from the original level of about 75,000 over the next 12 months to about 110 to 120,000.
Sujal Janwar
Okay, sir. And sir, one last question. On the part of overall revenue part on the standalone kddl, is it more of volume growth or realization increment happening that on the top? This is my last question. The
Sanjeev Masson
Same question with the different shades of the volume. And for us we are worried and always concerned about the value growth. Whether it comes through a mix of the segment growth, whether it comes through the volume or whether it comes to the average realization. So neither we voltage nor we feel that’s important to.
Sujal Janwar
Okay, thank you.
Sanjeev Masson
Thank you.
Operator
Thank you. The next question is from the line of Pratik from Bandhan amc. Please go ahead.
Sanjeev Masson
Hello, Prateek.
Operator
Mr. Pratik, your line has been unmuted please with the question.
Unidentified Participant
Hello Am I audible? Yes, sorry sir. All my questions are related to ethos. The first question is performance of new stores which we have opened in the last year which is around 24,5. How are they performing in terms of payback experience? That is question number one. The second is ASP in on FY25 versus FY26 has kind of flattened. So how should we think about that? And last year on CHF cover, obviously look, the CHF is now 122 versus it was 106 when you had the analyst meet. So how. How much have you covered for and what’s the journey left?
Yasho Vardhan Sabhu
Pranav, would you answer those questions please?
Pranav Sabhu
I didn’t understand the last question.
Yasho Vardhan Sabhu
How much of the CHF exposure do we cover?
Unidentified Participant
No, no. I think that was not the question. The pricing. So essentially look, versus rupee CHF was 106. Now it’s like 122. And obviously we passed this increase in prices gradually. So how much have we passed on and how much is left to be passed on which is hitting our gross margin. Understood?
Pranav Sabhu
Understood. We have. I got it. It’s different for different brands, but I’ll answer it. So the first question was on how the experience on new stores. It is as per expected lines. It is exactly what we thought it would be. We are monitoring this. As you go into tier two cities, it takes a little bit longer but then costs are also lower. So it is as per expectation. And year one of an accelerated expansion gives us the confidence to continue our acceleration. And as I announced that we will be opening many more stores this year, in the next three years we are signing on aggressively locations because we are confident on how well we are doing with these boutiques.
Is it sometimes a mixed bag? Yes. But is it ever horribly wrong? No. Till now we are not a single decision. Are we regretting some may take a little bit longer than the other. So a store like Srinagar may be may reach its year one goal or its annual running rate of year one in six months. Someone a city like Kanpur has already exceeded it in the first month. So it’s a good mix. None of them do we regret. The second question was on. I forgot the second question. ASP is going to. We are not focusing on ASP increase.
That is not our focus. As we go into tier 2 and tier 3 cities, it is natural that volumes will increase faster because the kind of stocking we do over there is different. We were in the first three years after the listing we had taken more luxury positions. Our luxury expansion will be More calibrated because of the fact that we feel we are the ultra luxury. Because of the fact that we feel we are well exposed over there, well or well entrenched over there. It’s not that we’ve covered, but the growth is on the ultra, ultra luxury where we’re talking 50 lakh, 1 crore etc.
The growth on the price where the brands are more in the 1 and a half to 3 and a half 4 lakh rupee price point. That will be an. That will be an aggressive rollout over there. And it’s into tier 2 where it matches better tier 2 customers. Will they also order a 1 crore rupee Jacob or a 1 crore rupee worth once in a while? Yes, but we don’t need to stock that over there. That can come in from our main network and be fed in from there. We will also be launching a format. We believe that the threat from wearables is over and that allows us a lot of expansion back in a price point between 25,000 and 2 lakhs.
And that will be a new format that we are working on. It’s very exciting and it will further give us growth into the future. And as for your
Unidentified Participant
Format is a part of your doubling guidance which you just gave.
Pranav Sabhu
It may not be significant part, but it will be definitely. We are going to be launching this year a new format over there which is going to be very exciting, very different from what we have. But we had earlier believed that, you know, 10 years back or seven, eight years ago when Apple Watch had launched, we had decided to go slow in that sector. We believe that threat is over and that there is a lot of expansion possibilities over there as well. For us Brands want to work with us over there. They’re welcoming us over there.
We’ve tied up contracts already so there’s a lot happening over there. This is to specify on your question on asp, I think for US revenue growth and margin is important. Again, not so much the average selling price per watch. That’s going to be an amalgamation. All verticals are essentially growing. Some may grow faster than the other and therefore you might see a dipping over here or there, but you’ll see very strong volume growth coming in as well. Your last question on Swiss Franc. I think averagely we are.
There is a room for improvement of 7, 8% easily over there. Right now we’re definitely 7, 8% below what we need to be right now. In general now, it takes time to pass it on for two reasons. One, it is not one brand that is deciding. It is 50 brands that is deciding. Everybody looks at the industry. There is comparative. It is comparative in nature. Typically happens once in six months. And secondly, nobody wants to be raising prices and dropping prices because that erodes customer confidence. And at no point of time do I want to erode customer confidence because there’s a volatility in currency whether it is one, two or three years.
We’d rather win over customer confidence. That’s the difference that I would see. But yes, 7, 8% depend. Even if the Swiss franc doesn’t move anymore.
Unidentified Participant
Sir, when you said expected lines would 12th month exit from the start of a score mean we break even? I’m saying exit month may have 12 months. Can we move
Yasho Vardhan Sabhu
Into other days? Because there
Pranav Sabhu
Are a lot of. But yes, yes, but we can. We can move on from there. Yeah.
Operator
Thank you. The next question is from the line of Naman from Sanghi family office. Please go ahead.
Pranav Sabhu
Hi. Thanks for taking the question. Most of the questions are answered very good set of. Just wanted to understand that in precision components, business side, which of these sectors are witnessing the fastest growth? You know, the ev, aerospace, defense, auto components. Could you give us some light on that part? That which or any visibility in these segments that we are getting for the next year?
Yasho Vardhan Sabhu
Okay. Do you have a second question? Naman?
Pranav Sabhu
No. Majorly it was on electroplating, but that is not answered right. So we are already activated that part, correct?
Yasho Vardhan Sabhu
Yeah, yeah. Would you like to answer that? Okay. I think, you know, so actually the way we look at it and, and the way we are experiencing it, all these sectors that you name, they’re actually very robust. So we have to decide where we are going to put most of our focus on. Obviously ev, the energy storage. These are sectors where we’ve got momentum, we have relationships. There’s a lot of scope to expand that. So that is growing on electronics. Again, there is a lot of momentum. Our market share in some of these is very small.
So as we actually get into these segments and we understand the needs of customers and we marry and we sort of tally our capabilities with that. It’s like, you know, you are standing at the beach and looking at an ocean ahead of opportunities. Now, which direction you want to lift. Ocean is large everywhere because compared to our size, the ocean is very large. So we have to decide which areas we want to focus on. And as I think we’ve spoken earlier, also our focus because of the momentum that we are getting is in the ev, the energy storage and the electronic components.
We have customers in other segments as well. And if opportunities come up, we will of course examine them. But the strongest growth we see are in the sectors I mentioned.
Pranav Sabhu
Okay, thank you. I’ll just come back in the queue. Yeah,
Operator
Thank you. The next question is from the line of Shreyansh from Swan Investments. Please go ahead.
Pranjal Mukhija
Hello. Yes. Yes. Two questions. One is on the ethos. So when we’re targeting 2x revenues stores, in three years, all these stores are going to be Coco, or do you sort of look at a franchisee way of expanding stores? Because you spoke about getting into tier two and below. Right. And my second question is when I look at the standalone P and L, sir, last five years our revenues would have doubled. But if I just look at the other OPEX bit, that has grown higher than your revenue gaggers. Right. So I’m just trying to understand.
Your majority of your portion is exports. Revenues is exports. So you’re earning in maybe dollars or chf, but you’re spending in inr. So shouldn’t there be some kind of operating leverage that sort of plays out? And you know, when I look at your breakup of other opex, it’s largely consumables and job work expenses. So I’m just trying to understand is this volume specific pay that you give to your contractual labor, number of volumes that they do or it’s, it’s a fixed salary or how does that work?
Because I was, I was expecting some kind of leverage in that line item.
Yasho Vardhan Sabhu
So, I mean, obviously leverage is a part of the business, you said. Right. We earn in dollars and we spend in rupees. But don’t forget that the inflation in India, including wage and manpower cost inflation is far higher than abroad. Right. In Switzerland, I’m not sure if you are aware, but in Switzerland, the annual increment that a person gets usually is between half to 2%. In India, 10 to 11% is pretty much the norm. So it’s, you know, it’s, it’s not. Yes, there is operating leverage in that way, but it’s.
We should not overplay it. Right. You can’t really rely on that because costs in India escalate much faster, which is one reason why the Indian rupee keeps depreciating. Right? I mean, that’s, that’s basic economics, which I’m sure you are familiar with. As far as the arrangements on labor and contractual, they are a mix of arrangements, right? Sometimes it is dependent on volume, sometimes it is a combination of volume and time. And in some skills it can only be time, it cannot be volume. So it is Really a combination of many things and overall leverage comes from the way you approach the business.
We don’t see the, you know, breaking it down into segments like that.
Sanjeev Masson
I would like to add into that. You have looked only into the one side of that. We earn in the dollars or in the foreign currency. But we do have a lot of import and lot of expenditure for the market and the business promotion in the foreign currency. So to that extent we have exposures into that. And number two, in the last five years the growth of the different business segments have varied. The watch component growth has been lower than the other businesses where the margins are different. So this is a mix of all those things with difficult to point out that ok, only because we are in the currency and then according to the margins should improve.
But overall, if you plot the last four, five years the margins have been either stable or it has been growing. Yes, there is always a possibility of going. But more than the what we have grown.
Yasho Vardhan Sabhu
I’m going to. Sorry, due to time constraints, we’re going to take one more question. It’s already, you know, one hour ten minutes so my
Pranjal Mukhija
Ethos answers yet pending the first question.
Yasho Vardhan Sabhu
Sorry, you had said which one? Yeah, I can answer that quickly. We have not done anything other than coco. We are not ruling out anything in the future but at the moment we are really focused focusing on company owned, company operated stock
Pranav Sabhu
Also. I said between three and three years. Yes, between three. I just want to make sure that we underline that.
Operator
Thank you. Ladies and gentlemen, in the interest of time. That was the last question. I would now like to hand the conference over to Mr. Yashavadan Sahu for closing I
Yasho Vardhan Sabhu
Just announced. We’ll take one more question if you don’t mind
Operator
The next question. One more question from Lucky Investments. Please go ahead.
Pranjal Mukhija
But the sequential and yoy increase in
Pranav Sabhu
Margins this quarter,
Pranjal Mukhija
How
Pranav Sabhu
Should we understand the sustainability of this?
Yasho Vardhan Sabhu
I can answer that. You know, it’s hard to sort of look at one quarter performance and I would judge anything by that. You have to look at years and you have to look at a slightly longer term. As I mentioned in my speech, we expect revenues grow 20 to 25%. We expect margins profile to remain within a closed band. Again, it depends how the product changes. There are some segments where margins are higher for revenue grades and somewhere margins, sorry, margins are lower and revenue growth is higher and vice versa.
So it’s, it’s hard to really take a thing based on one quarter that’s. I wouldn’t sort of throw it based on a quarter
Pranjal Mukhija
So just to follow up on that, in that case, if you could help us understand what drove margins in this quarter.
Yasho Vardhan Sabhu
Sorry,
Pranjal Mukhija
What drove. Say that again. This quarter
Yasho Vardhan Sabhu
There is some eco problem. We are hearing our voice and your voice is echoing again.
Pranav Sabhu
Is this any better?
Yasho Vardhan Sabhu
Sounds better now. Yeah, looks better,
Pranav Sabhu
Right? 6% increase in margins. If you could break it down in terms of operating leverage, better product mix, currency benefits. So that we can sort of make something
Sanjeev Masson
Difficult to answer. There are different business segments, export, domestic mix changing and the growth of the opportunities in the different segments. But the more or less the. We have already shared the indications of the revenue growth, the EBITDA margins and the overall margins will be in the same same bank. It’s not going to change dramatically, either upward or on the downward.
Pranav Sabhu
All right. Thank you. Thank you for answering my question.
Sanjeev Masson
Thank you.
Operator
Thank you. Ladies and gentlemen, in the interest of time. That was the last question. I would now like to hand the conference over to Mr. Yashabo for closing comments.
Yasho Vardhan Sabhu
Thank you, everyone. I hope we’ve been able to answer your questions as pure satisfaction. If you need any further clarifications or want to know more, please contact sga, our Investment Investor relations advisors. Thank you once again for being part of this call. And thanks, Sanjeev. Thanks, Pranav. Bye. Goodbye.
Operator
Thank you on behalf of KDDL Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.