Mallcom (India) Ltd. (NSE: MALLCOM) Q3 2025 Earnings Call dated Jan. 31, 2025
Corporate Participants:
Rohit Mall — Associate Vice President
Shyam Agarwal — Chief Financial Officer
Analysts:
Vikram Suryavanshi — Analyst
Rushabh Shah — Analyst
Aradhana Jain — Analyst
Anand Mundra — Analyst
Bijal Shah — Analyst
Ankit Gupta — Analyst
Zaqi Nazeer — Analyst
Priyankar Sarkar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Conference Call of Malcolm India Limited.
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 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, 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 Vikram Suryavanji from PhillipCapital India Private Limited. Thank you, and over to you, sir.
Vikram Suryavanshi — Analyst
Thank you,. Good morning and very well — welcome to everyone. On behalf of PhillipCapital, I’m pleased to welcome you all on the earnings call of India. We are happy to have the management with us here today for question-and-answer session with the investment community. Management is represented by Mr Vohit Mal, Associate Vice-President and Mr Shyam Sundar Agarwal, Chief Financial Officer.
We’ll begin with the opening remarks from the management, followed by the interactive question-and-answer session.
With this, I hand over call to Mr Rohit. Over to you, sir.
Rohit Mall — Associate Vice President
Thank you. It’s a pleasure to welcome you all to our earnings conference call for the 3rd-quarter and nine months of the financial year 2025. Let me first start by thanking our host, PhillipCapital, for hosting today’s earnings call. I’ll begin with some operational highlights for the 3rd-quarter of the financial year 2025, after which our CFO, Mr Shyam Agarwal, will provide a detailed brief on the financials.
We had a strong performance in the 3rd-quarter across the financial parameters. This was possible through our relentless efforts on growth and cost optimization. On the capex front, our greenfield expansion at Sanam Gujarat, which is being set-up for the manufacturing of protec gloves is almost complete. The trial runs have also started expecting commercial production by next month. The company has already invested about INR80 crores in the project against an estimated total investment of INR90 crores.
The greenfield project at Chandipur to manufacture industrial safety shoes and a DIPP approved design studio is also nearing completion. The factory building, which measures almost 50,000 square feet is almost completed and the installation of plant, machinery and fittings is in-progress and expected to be completed in the next 15 days. The trial run for this unit is planned to commence from March 2025.
I’m also happy to report that during the quarter, the company was awarded the prestigious Great Place to Work certification as well as the Outlook Business Spotlight Safety Leadership Award. In-line with our commitment to expanding the product range, we launched a new range of wider tow cap single density safety shoe, shoes called Docker and Doxide.
Now I will request Mr Shyam Agarwal, our CFO, to brief you on the financial performance of the company.
Shyam Agarwal — Chief Financial Officer
Thank you, Rohit, and good morning, everyone. Let me brief you on the consolidated financial performance for the 3rd-quarter and nine months of the financial year 2025.
On a consolidated basis, the quarterly operating revenue stood at INR118 crores, reflecting a growth of 23% year-on-year. EBITDA for the quarter was INR150 crores, a growth of 31% year-on-year with EBITDA margins of 12.91%. The net profit was reported at INR9 crores, a growth of 32% year-over-year with PET margin of 7.65%.
Over a nine-month period, the company’s operating revenue grew by 17%, reaching INR349 crores. EBITDA grew by 10% year-on-year, reaching INR45 crores. The EBITDA margin was reported at 13%. The net profit for the period grew by 13% year-on-year, reaching to INR28 crores with PET margin reported at 7.93%.
Thank you. With this, we can now open the floor for the question-and-answer session.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star in one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star in two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rusab Shah from Rock PMS. Please go-ahead.
Rushabh Shah
Yeah, hi, thanks for the opportunity. Sir, I had three questions. Sir, our vision of.,
Operator
Could you be a little louder, please?
Rushabh Shah
Yeah, am I audible now?
Operator
A little louder, please.
Rushabh Shah
Hello.
Operator
Yes, please go-ahead.
Rushabh Shah
Yeah. Sir, our vision of INR1,000 crores top-line by FY ’27, you said that the growth will mostly be denominated by the domestic market. But historically, we have mentioned that in exports we have great margins and there is huge opportunity in exports also. So could you please explain me how we reach to that vision I can take this so I don’t know if the two things that you mentioned are related because the idea is still to reach INR1,000 crore mark and we see a lot of potential in the domestic market for sure. So we are expecting a higher-rate of growth from that market to reach this target.
And profitability-wise, I think we’ve always said that it — it depends on the product category, it depends on the market. It’s not very linear that private-label has or exports as more or less profit than the domestic market. And that depends completely. But our idea, how we are envisioning, there is definitely scope for growth in the export market as well and we are pushing for growth in both the markets. But the expectation is that the domestic market will grow at a faster pace because of the fact that the country is growing. There’s a lot of tailwinds and there’s more predictability in that market. That’s what we are envisioning. Okay, fine. Sir, my next question is in the past two to three years, how many new products have you invented and how are they being readily accepted by the market?
Rohit Mall
So firstly, we are not inventing, we’re developing products so you know it’s nothing like you know that new is being created. We are developing new products every 3, 4 months we are launching something new because we have a wide array of product categories in which we would like to develop. So I’m expecting every year at least three to four major product launches are happening. And it depends on some products are launched for certain markets. Some products are launched for certain industries. Some products are launched to cater to certain specific white-label customers. So with the view in mind that it gets widely accepted elsewhere as well. So we keep doing this exercise and we have had a fairly good response and that’s why it’s encouraging and that’s why we keep reinvesting into product development.
Rushabh Shah
Okay. And sir, sir, my next question was company had introduced this new nitride glove range, which was launched a few years back. But does any other player make these kind of gloves and how cost-efficient are you in making these gloves as compared to others?
Rohit Mall
So in the world, there are a lot of players who are making these gloves. In India, I think hardly two or three players probably who are making such gloves and nitrile gloves also have a wide range. So it depends what kind of nitrile glove you talking about the ones we are producing, I think the biggest competition that we face is from China. They are definitely cheaper in those kind of products. But it depends on the quality as well. So I think the fact that we are — we are still accepted in the market, both international as well as the domestic market as we seen as a quality player says that, okay, the quality to price ratio is acceptable for the market.
Rushabh Shah
So just leaving aside China and the other players in the domestic market. So the quality which Malcolm produces, how cost-efficient are you than those two to three players? So it’s difficult to just compare it like that. I would still like to say that the price to quality ratio for us is good and acceptable to the market and that’s why we are experiencing decent growth for these product categories in the domestic market. And we are going to be more into it.
Shyam Agarwal
Yeah. To just add-on what we have done in case of that the maximum backward integration to minimize the costs and the scale of our presence also we are trying to achieve. So keeping these two things in mind, we would like to be a cost-competitive and maybe we can compete with the cheaper Chinese imports also. This is our plan.
Rushabh Shah
Fine. Thank you, sir. I’ll get back-in the queue.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Arathna Jain from B&K Securities. Please go-ahead.
Aradhana Jain
Hi, thank you for the opportunity and congratulations to the company for the good set of numbers. I have a couple of questions. The first is, if you could just highlight what were the drivers for the 23% top-line growth? That would be my first question.
Rohit Mall
Sure. So as we were expecting from — as compared to last year because we had supply-chain issues in certain places. So we had a some loss of revenue. So we were able to recover that and that’s why it shows this kind of growth. The other is that newer markets and newer customers have opened up like our push towards a North American market has been — is going-in the right direction. So we have had some newer clients add-up as well. And definitely in the domestic market the growth as we had expected is coming. So it’s a combination of marketing efforts, ensuring supply-chain issues are ironed out and new, newer launches in addition to the product category.
Aradhana Jain
Is this better?
Operator
Yes, much better.
Aradhana Jain
Yeah. Sir, my second question is on the contraction in the gross margin that has happened. When I was comparing your product mix as on 3Q versus the last year, I witnessed that the safety shoes contribution has reduced from 61% to close to 40% this year, while the garment contribution has increased from, say, 13% to 35%. So could you throw some light on how your product category-wise gross margin stands.
Shyam Agarwal
Yes, so Rohit, let me answer this. So what we know and the figures which we have said is like the safety so contribution remains almost similar what it was the last year Nine-Month period. But definitely we have grown into garment segment. So as Rohit concerned, we had some supply-chain issue last year and which we could iron out this year and this has led to some volume loss there and leading to this the growth which we could achieve. And margin-wise, I would say that both the products will have EBITDA margin of around 15% and we had some you know additional cost which we have incurred into marketing expenditures and some consultancy charges also we have been paying. So that hedge, you know lead to some marginal profit erosion, otherwise, it is almost similar to previous period.
Aradhana Jain
Sure, but I mean 400 bps of compression would be because of product mix inferior product mix this quarter or nine months or like the marketing cost that you’re seeing that would be having an impact on EBITDA margin, right? I’m just trying to understand.
Shyam Agarwal
We don’t see any 400 bps in any of our margin — any of the product. I don’t know from where you are picking-up the figures.
Aradhana Jain
So I’m comparing — I’m comparing 3Q FY ’24, the gross margin for 3Q FY ’24 was around 43.4%, which this year is 39.4% so that comparison I’m doing
Shyam Agarwal
No we need to see them because that figures are not in front of us, we need to check that because we don’t see those figures. So we need to check on that and we can revert to you separately then.
Aradhana Jain
Sure, sure. The last question from my end is on the export market. So if you could just throw some light on how the export market trends have been during the quarter and what is the outlook given that now Trump has come in. So any change in your export market contribution or anything, any thoughts on that?
Rohit Mall
Export market has been fairly better as compared to last year, I would say. And also our — because you know of our supply-chain also, we have been able to address the market also better and faster as compared to last year. It has — the order book has looked healthy and still is healthy as far as the export markets are concerned. So I think we are experiencing a growth in most of the major markets in which we are by increasing volumes with the existing wallet share and also adding new expanding our market presence and market-share also.
With Trum coming in, it’s too early to say because a lot of comments have been made but not enough actions. So it’s everybody is vigilant. Some people are definitely proactive, some Americans especially are proactive and some Europeans are also following suit where they are exploring dual sourcing options to China and — but it’s not a — in a very aggressive manner that they’re doing it. It’s a more you know, look and watch and act kind of manner in which it’s happening. So we are also waiting for the big push to happen. And also we don’t know what will the stance be with China, with India. So that’s why it’s a little tricky right now. Europe, we are seeing it’s again this year maybe slowing down a little or that’s what people are saying, but we have yet to experience that and usually first the markets experience and then it comes to us later. So we are also being watchful and as always, we are trying to open up newer customers, newer territories to ensure that we don’t have erosion of our revenue.
Aradhana Jain
Understood. That is helpful. Thank you and all the best.
Rohit Mall
Thank you.
Operator
The next question is from the line of Anand Mundra from. Please go-ahead.
Anand Mundra
Yeah. So thanks for the opportunity and congratulation on good results. Sir, I’m new to this company. Just wanted to understand how large is this market, sir and who are the key players?
Rohit Mall
So globally the market is almost probably 60 billion market and there are some couple of billion-dollar companies also operating in this market, companies like Bunsal and TIP and you have Ansell and some multinational companies also operating in it, and then most of it is being serviced by China as of today, I would say 70% of it.
Anand Mundra
Okay, and in India, particularly, sir, which which are the other players?
Rohit Mall
So in Indian context you have players like Bhata Industrials and Liberty also you have players like Karam players like Super House, these are some of the players which are also Honeywell and and 3M, they also operate in this market.
Anand Mundra
Okay. And sir, how do we do our sales? Do we do it directly to distributors or we have our own salespeople because I’m assuming that we would be selling it to corporates only B2B sales. So how are we doing sales?
Rohit Mall
Two separate markets in how two separate go-to-market ideas and one is where we are producing for white-label, which is happening in Europe, North, South America, Russia and Australasia. And then in the Indian subcontinent, Middle-East, Southeast Asia and Africa, we have a distributor network through which we service and we also have our sales team which is doing the technical sales with the distributor to-end users.
Anand Mundra
Okay and how many distributors would be there in India?
Rohit Mall
In India there would be around 70, 75 distributors as on today.
Anand Mundra
Okay. And sir, this export business is all white level.
Rohit Mall
Like I said, in Southeast Asia, Middle-East and Africa, we export under our brand-name and rest as white-label.
Anand Mundra
Okay. What is the breakup, sir, how much would be white level out of INR100 revenue which we generate through exports,
Rohit Mall
60% would be white-label. Like so out of practical reasons, the entire export almost 95%, 97%.
Anand Mundra
Okay. And sir, are you seeing any traction of growth in export because of China plus one that people are giving you more orders or there are more inquiries?
Rohit Mall
Yeah, that’s what I was mentioning earlier. So because of China Plus One, definitely there has been more movement in the market for Indian or non-Chinese suppliers. And we are yet to see larger inquiries being coming here and converting into orders. We have seen some movements and we have been able to convert some of such customers. But one is the scale at which China is operating, I don’t think India is ready for it. So even if we start getting a lot of huge, I don’t think we can service it because of the capacity and the raw-material ecosystem. And also it’s not easy to shift the supply-chain. So it’s early days and we’re still witnessing it and we are still trying to convert some of these.
Anand Mundra
Okay. And what would be the price point difference between your product pricing and Chinese product pricing for white level export?
Rohit Mall
Difficult to answer. It depends on the product, depends on the market.
Anand Mundra
So as a percentage, for example, sir, we are not able to compete with Chinese because of the price point at which Chinese players are supplying.
Rohit Mall
So again, depends on the product. We have a varied product category. So it depends on which kind of product. So some products India is competitive, some product — products India isn’t. For our kind of quality, some places we are very much competitive. So it depends lately.
Anand Mundra
Okay. And sir, as an Indian economy, do we import also low-priced products from China? Not you as an industry,
Rohit Mall
Sorry?
Shyam Agarwal
No, no. No, no, we are — we are importing some of our raw-material requirement, that’s all otherwise and that to some technical textile which you know, through the nominated vendor of some of our customers. Otherwise, the entire primarily the sourcing is from India only. Not import.
Anand Mundra
No, are there any traders there who import from China and sell it in India? Finished products?
Rohit Mall
Yeah, yeah, there are lot of people who import from China and sell it in the Indian market.
Aradhana Jain
Okay. And so what would be that content in terms of size of the industry? How much would be the import percentage?
Rohit Mall
That’s difficult. I don’t think we have the data, but a lot of it is unregulated players also unorganized. And since India does not have standards or requirements for some of these product categories, so the data is also not clear.
Anand Mundra
Okay. And sir, are there any chances like in other export — other industries where BS4 was implemented where it’s difficult to import from China. Is there anything possible in our industry also?
Rohit Mall
Yes, it is. That’s what I was mentioning that if we have the required certification by BIS, then it will start getting more difficult to import. So in the products which there are certification required, it is — is the imports are far, far lesser than in products where no certification is mandatory.
Anand Mundra
So okay, within your segment, you’re saying in some products the — it’s mandatory, some product it is not mandatory, right, sir?
Rohit Mall
Yeah, right.
Anand Mundra
Okay, okay. And has — has this happened in the last two, three years because of which we are seeing some growth
Rohit Mall
Has what happened
Anand Mundra
In the BIS, BIS implementation, has this happened in the last two years? Or is a years-old phenomenon.
Rohit Mall
So BIS is continuously updating the certifications, adding some new certifications as well. But for our product range, no, the ones which don’t have it, nothing has happened in the last three, four years and the ones which have BIS have been there for a — for quite a few time — for few years, yeah.
Anand Mundra
Thank you, sir. And sir, now on gross margin, wanted to understand what is the gross margin difference between our white-label business and branded business.
Shyam Agarwal
So it is not — as we also mentioned earlier, it is not depending upon white-label and branded. It depends on the product category. So on average, it is in the range of 15%. So maybe in case of leather gloves, we have lower-margin, but in case of weather like garment and safety source and deep gloves, we have almost similar regimes both for white level and branded products.
Anand Mundra
Okay. I was talking about gross margin, you’re saying EBITDA margin is similar you’re saying. Correct.,.
Operator
I would request you to rejoin the queue so that other participants get an opportunity to answer your question.
Anand Mundra
Yeah. Thanks a lot, sir. Thanks a lot.
Operator
The next question is from the line of Rishab Shah from Buggle Rock BMS. Please go-ahead.
Rushabh Shah
Thanks for the opportunity. Sir, in the previous call, you mentioned that import into India isn’t easy because different industries work-in different manner and there’s a lot of unit to see as well in the country. But if there is no standard, then anyone can order anything like 100% order. So how difficult is to deal with this and how difficult to deal with all these things like no standards and everything for?
Rohit Mall
So, there are for the products where there are standards and certification, it’s difficult to import and/or it’s mandatory for the importer to ensure that it meets the requirement. And also in some cases, the supplier needs to have that kind of certification. But in products where the standards do not exist in the Indian context, it is far easier to import. And that’s one of the bigger challenges we face in the Indian market that cheap Chinese imports and completely non-certified products are being imported. And that’s what we hope and expect that we as will come out with the Indian standard for such product categories and make support to support the local manufacturers
Rushabh Shah
These kind of products we might not be having a problem in exports, right?
Rohit Mall
Sorry,
Rushabh Shah
Eat quality the key quality China co-box, you may not be having a problem in the export market.
Rohit Mall
No, no, exports. So Europe, US, everywhere, they have their standards and certifications in-place. So unless your product is certified, you can’t export into those countries.
Rushabh Shah
Since we are in the — my next question is, since US was never a big market for us and in the past also we have stated that we are putting all our efforts, but it was a slow-growing market. Market and also entry into such market is very difficult. But once you enter these kind of markets, the customer sticks with you for a very long-time. So my question is, have we progressed into the US markets and we will be track to US.
Rohit Mall
Yes, we have been — our efforts are also going toward it and we have been able to crack some customers from that market and that’s why that market is showing a growth — good growth for us. And like mentioned earlier, it’s a slow and steady kind of operation. So you have to keep building on to the relationship to the particular client and expect to increase volumes with them. So yes, we have been able to crack that market.
Rushabh Shah
So since you’ve been able to crack that market, how — sorry, what percentage?
Operator
I would request you to rejoin the queue if you have any further questions. Thank you. The next question is from the line of Vijal Shah from RTL Investments. Please go-ahead.
Bijal Shah
Yeah, hi. Thanks a lot and congratulations on good set of numbers. I have one question. So you have given a guidance or an aspiration about INR1,000 crore kind of revenue. So how confident are you of achieving that and that would mean a very meaningful acceleration in growth. So are you confident of — are you seeing already that the growth is set to accelerate in coming quarter or coming year?
Rohit Mall
So we would still like to stick to the guideline and we would like to put that — that keep that pressure on us going and that’s why we are taking all the measures necessary to ensure our bases are strong, supply-chain issues are solved and the go-to-market strategy is properly laid out and the efforts are towards ensuring the targets are being met. So we are still hopeful about that target and we are working towards it.
Bijal Shah
Okay. And should we see an acceleration in growth? I mean, you have done a lot of groundwork already, so the factories have come online and commercial production is also set to start. So should we see some acceleration in growth or it is going to be slow?
Shyam Agarwal
Yes, that has to be. So there is no alternate to that because if you are looking for INR1,000 crore tonover in FY ’28, so there is a minimum requirement of growth, which we need to achieve. And this is what we are saying that the target is set, we are following it and there is a ground work already done. So you know, then we need to work on this and try to achieve it.
Bijal Shah
Okay. Thank you very much and sir, all the best.
Operator
Thank you thank you. Participants, please restrict yourselves to two questions. If you have any more questions, I would request you to rejoin the queue. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go-ahead.
Ankit Gupta
Yeah. Thanks for the opportunity and congratulations for a good set of numbers. Sir, my first question was on, we have been trying to trying to sell our products to call contract manufacture white-label products to some of the large MNCs and also trying to increase our product basket with them. So if you can particularly talk about how has been the progress there with some of these large MNCs which have — which will have procurement of billions of dollars. So how has been the traction there for us and how do you see this building up over the next two to three years?
Rohit Mall
Yeah. It has been fairly going well and it’s — so also you have to understand with these kind of customers, you have a lot of suppliers approaching them and trying to get into their radar. So we are also — because we already have touch points and already are a supplier to them. So it makes it a little bit easier to get access and the results are there is good and with these customers also they have their own idea and agenda of how they want their supply-chain and where do they want to, you know, put it, how much country risk, how much supplier risk do they want to put. So they are wary of, you know what percentage are they getting from which kind of suppliers. So they also try and restrict of how much business you can do with them in a particular product category. So — but I’m not saying there is no chance of growth. There is a lot of scope and we have been able to be on good terms with them and have been able to increase our business with them, but it’s — because it’s a large corporation — these are large corporations, it does not happen overnight, it takes longer gestation period. But that’s happening. We are confident of these accounts.
Ankit Gupta
Sure. And my second question was on our top-line, if we look at last December FY ’24 Q3, the numbers were impacted because of the supply-chain issues as we know that. But you know, last two to three — last three to four quarters, our top-line has been in the range of around INR120 crores to INR130 crore per quarter and despite some scale-up, our margins have also not improved. So two questions there. So basically, when do you see this top-line crossing this barrier of INR120 crore INR130 crore and like why hasn’t the increase in our scale of operation resulted in improvement in margins, which normally should have happened given our scale and some operating leverage should have come in.
Shyam Agarwal
So let me tell you how it is happening that the volume which you see of 125 to 120 to 135cr is the volume which we have been doing all these years for last two, three years. And you know now as you know that all the facilities are ready and these were the facilities we did investment into capacity building like adding floor area. So now we are increasing our capacity also putting new machines and increasing capacity slowly. So it cannot be done overnight. So definitely, we see that out of these new investments which we are making into machinery, now capacity building for production, that should add-up to turnover going-forward. And regarding the margin age, you know that in our type of product category, the scope is not much there because whatever margin we have like 15% 16% margin we operate. So almost 60% goes into raw-material in most of the products. So there is hardly much scope. Maybe with the increase in the of presence, we may see some margin increase, but there is not much scope there.
Zaqi Nazeer
This is surprising thing is we have in fact seen some decline in margins over the past two quarters
Shyam Agarwal
And so that is happening because of our effort to increase our volume and branding and product awareness. So we are investing into two things basically, one into marketing efforts and second is to streamline the operations also, so increase the production efficiency also. So, yeah, these are the efforts which we are putting in. And going-forward, we should see results out of this. So with the increased capacity and you know lesser cost on this account with some margin improvement is possible.
Ankit Gupta
Sure. And just last question on our target for reaching INR1,000 crores by FY ’28. You know, given like we have put in lot of capexes over the past three years and we have been trying quite a bit to enter into large accounts and increasing our product basket with them. So do you think we’ll start seeing acceleration in growth from next year onwards, let’s say, this year we might end-up with — if you look at our nine months numbers, we are up 13% and for full-year basis also, if we look at it, we’ll end-up somewhere around INR480 crore INR90 crores kind of top-line for this year from that base to double our top-line in three years seems to be a bit of steep task. So like will we start seeing 20%, 30% kind of growth from FY ’25 — ’26 onwards or it will be more of a back-ended kind of growth which will come in ’27, ’28 or how do you think about it?
Shyam Agarwal
So it should start improving. So I mentioned that first for that current year, we should be targeting around 15% growth. And from next year onwards, definitely the additional volume will come up with the investment we have done. And yeah. So that would not be immediate gradual only and we keep adding and we look at which we keep looking for the newer market newer customers also. And in our type of industry, yes, it is possible that capacity addition can be done like installation of on period, notice and that we will keep doing based on our demand scenario.
Ankit Gupta
So thank you and wish you all the best.
Shyam Agarwal
Yeah.
Operator
Thank you. The next question is from the line of Zaki Nazir, an Individual Investor. Please go-ahead.
Zaqi Nazeer
Sir, congratulations on a strong set of numbers., I would like to understand that in the last quarter gone by and the current quarter going ahead, do you see any pull on the general industry front and orders not going-in because of slowdown? What about the export and the domestic part of it, sir.
Rohit Mall
So on the export part, not yet. We are yet to see that there is a pullback and orders not coming as expected. But definitely, when you when looking at the projections that the customers have shared, it is lower than previous year in the export market for wherever we are seeing, especially, you know, the Europeans and others. So that is what we have seen, but we are yet to experience it when we start getting and introducing the orders. So that’s on the export market. And on the domestic market, there has been some slowdown with the auto industry and some key industries. But I don’t think it’s a major slowdown that will — we have to start raising eyebrows and question. And I think the scope of growth and the market is still huge and it’s still not left on the table to capture. So I don’t think it should be a worrying cause right now for the domestic market.
Zaqi Nazeer
So and Roy jeep, what white-label good we supply? Are these designs given by their principals or these are primarily Malcolm designs which are labeled under their head, sir?
Rohit Mall
So happens both ways and also some are standard designs. So it depends on the product as well. So usually for workwear and footwear, the customers would like to share their design or they ask us to design something. And when we give them, they made their changes to the design. And for gloves, it’s largely common designs, which are used across. There are some specialized specific gloves which people would like to do it, then there’s some other customizations on the printing, packing, etc. that they would also like to do. But happens both ways, I would say for footwear and work there.
Zaqi Nazeer
And do you think by 3rd-quarter of next year, these capacities which are — which we have put up will reach their optimum capacity, sir?
Rohit Mall
Yes. It should definitely for the new Chandipur Phase-2 that we are definitely hopeful because that’s a product category that we know and we have been into it. So we are aware. In Sanan, the is a new category of — that we started manufacturing now. And that is a place where we have to really put in the marketing effort to ensure that it reaches its optimum level. So that is what we have to — once or leaves once we start having the samples and the trial run completed, we’ll be able to know and go to the market and check whether this — how quickly we’ll be able to reach at optimum capacity and a larger chunk of it should come from the Indian market.
Zaqi Nazeer
Thank you, sir. Thank you and best wishes to you and the team.
Rohit Mall
Thank you.
Operator
The next question is from the line of Priyankar Sarkar from Square 64 Capital Advisors LLP. Please go-ahead.
Priyankar Sarkar
Hi, good afternoon, sir. Sir, just a basic question. How long does it take for the customers to approve products? That’s one. And does the approval time vary between products, for example, between governments and,
Rohit Mall
For a white-label customer, the approval can vary. So if the customer’s need is immediate, it can happen very quickly. If they are just looking at something, just comparing, benchmarking some larger organizations have like a 10 weeks of just having price benchmarking, quality benchmarkings and the supply rating and things like that. And even larger companies will have to onboard you, so they’ll have a visit to your facility before they finalize anything, they will need updates and things like that. So the gestation period can take from, let’s say, a month-to two years depending on the size of the customer and the product category. For gloves because these are — a lot of the gloves are standardized. This approval comes earlier because usually it’s the same thing, which is being supplied for workwear and shoes definitely it takes longer time and sorry, I missed your second part of the question.
Priyankar Sarkar
I think products also do the time vary for example between garments and for example, foods.
Rohit Mall
Yeah, yeah. So yeah, correct. So for garments and footwear, because this is more customizable and this is more brand-oriented, also has a fashion element to it. So this takes usually longer time. But gloves are fairly standardized. Most of the gloves, I would say, 70%, 80%. So those happen faster than the footwear and the workwear.
Priyankar Sarkar
Okay. Sir, if I may ask another question. You mentioned that US — I mean, I just want to ask, is the USA picking-up faster than EU, though you mentioned that you are not yet to see slowdown in EU because that’s very comparative to what we have been reading in the media and the international newspapers and magazines. So just wanted to get your sense. US is still going faster. Yes, because we are starting from a smaller base also in the US. So for us, it’s growing faster. Maybe for the entire economy and the larger mass, it’s not, but because even we had a very small presence for us that faster. And for Europe, because we have a order books which we see two, three months, you know in the pipeline. So that till the time we are executing those, it’s okay. And like I said, the projections definitely have come lower than the last year’s numbers from the customers. But because we have not yet reached that cycle, so we have not experienced the slowdown. So once based on the projections, once we start getting the orders, we’ll know, okay, it’s really a slowdown because it happens — the news happens first there and for them to push it to the supplier, it takes a cycle of which takes two, three months. So there has — there will be a lag in this case. Perfect. Thank you very much and wish you all the best.
Rohit Mall
Thank you.
Operator
Thank you. The next question is from the line of Shah from Buggle Rock PMS. Please go-ahead.
Rushabh Shah
Yeah. Thanks for the opportunity again. So since the PP World Market size is INR60 billion and most of it is catered by China approximately 75%. So in the past four to five years, have you seen a shift from the PT Wallmark is mostly denominated by China to other countries as well
Rohit Mall
Yes, there has been certain shifts because of you know, whatever has started happening in the global economy and this has happened to all the other Asian non-Chinese countries. It has also happened during COVID and post-COVID, some people have started manufacturing in places near their countries. So you know countries like Turkey for Europe, countries like Central America and Mexico for US, so that has also started happening and all these capacities are being taken from — largely from China but since the volumes and the scale of operation is huge in China. I think no other country in the world is ready to take even, let’s say, 10% of market-share from them so quickly. So I think it’s a question of how fast we can build the infrastructure to — and the raw-material ecosystem to ensure that we’re able to take the market-share from China significantly.
Rushabh Shah
Okay. So that’s not so quick, but going further — going down the road next five to six years down the road, do you see India? India contributing to portion of market?
Rohit Mall
Yeah, that would be my guess that, yes, India should be able to contribute you know more for supplying PP to the world, especially with regards to leather, with regards to textile, technical textile, yes, there should be more, you know, market-share of Indian suppliers in the world PP market.
Rushabh Shah
Fine, sir. Thank you so much.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing comments.
Rohit Mall
Thank you all for participating in this earnings conference call. I hope we were able to answer your questions satisfactorily and at the same time, offer insights into our business. If you have any further questions or would like to know more about the company, please reach-out to our Investor Relations Managers at Valorem Advisors. Thank you. Stay safe and stay healthy.
Operator
Ladies and gentlemen, on behalf of PhillipCapital India Private Limited, that concludes this conference. You may now disconnecting. You may now disconnect your lines.