Page Industries Ltd (NSE: PAGEIND) Q3 2025 Earnings Call dated Feb. 05, 2025
Corporate Participants:
V.S. Ganesh — Managing Director
Deepanjan Bandyopadhyay — Chief Financial Officer
Karthik Yathindra — Chief Executive Officer
Analysts:
Anuj Sonpal — Founder & Chief Executive Officer
Avi Mehta — Analyst
Videesha Sheth — Analyst
Devanshu Bansal — Analyst
Gaurav Jogani — Analyst
Sameer Gupta — Analyst
Sabyasachi Mukerji — Analyst
Arpit Tapadia — Analyst
Ravi Naredi — Analyst
Bharat Shah — Analyst
Prerna Jhunjhunwala — Analyst
Rahul Agarwal — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q3 and Nine Months FY ’25 Earnings Conference Call of Page Industries Limited.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal in operator by pressing star 90 on your touchstone phone.
I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you, and over to you, Mr. Sonpal.
Anuj Sonpal — Founder & Chief Executive Officer
Thank you. Good afternoon, everyone. Very warm welcome to you all. My name is Anuj Sonpal from the Investor Relations team. On behalf of the Company, I would like to thank you all for participating in the Company’s earnings conference call for the third-quarter and nine months ended of financial year 2025.
Before we begin, a quick cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today’s earnings call is purely to educate and bring awareness about the Company’s fundamental business and financial quarter under review.
Let me now introduce you to the management participating with us in today’s earnings call and hand it over to them for opening remarks. We have with us Mr. V.S. Ganesh, Managing Director; Mr. Deepanjan Bandyopadhyay, Chief Financial Officer; Mr. Karthik Yathindra, Chief Executive Officer.
Without any further delay, I request Mr. V.S. Ganesh to start with his opening remarks. Thank you, and over to you, sir.
V.S. Ganesh — Managing Director
Thank you. Thank you, Anuj, and ladies and gentlemen, good afternoon and welcome to the earnings call for the third-quarter of FY ’25. As Anuj said, I’m joined by Deepanjan, our CFO, with us today, and additionally, I extend a warm welcome to Mr. Karthik and congratulation on his promotion to CEO designate. I’m pleased to inform you that Karthik would assume the role of CEO effective April 1st.
Before delving into the detailed financials for the quarter, I will provide an overview of our Q3 performance. In Q3, the operating environment faced challenges due to subdued demand conditions. Although early Q3 festivity suggested a resurgence in growth, this momentum did not persist in the subsequent months. Despite all these obstacles, we achieved satisfactory revenue growth through strategic management of operating expenses and targeted investments in personal technology and processes aligned with our strategic objectives.
Our modern retail, including exclusive brand stores and e-commerce exhibited inclusive growth, significantly enhancing consumer reach and experience. Our premium category gained strong consumer acceptance offer enhanced products and improved fits. Similarly our move range in demonstrated a very encouraging growth supported by effective market penetration. Our unwavering focus on optimizing operating expenses and maintaining a good health as far as the inventory is concerned contributed to robust profitability and profit growth.
For Q3, we recorded a 7.1% increase in revenue and an impressive 34.3% growth in a 34.3% growth in profit-after-tax. For the nine months ended December 31, ’24, we achieved a 7.3% increase in revenue and a 22.6% growth in profit-after-tax. We have continued to expand our consumer reach by increasing our retail touch points. As of the end of December, our network comprises of over 110,000 NBOs, 1,400 plus NBOs and 1,212 LSS outlets. Our strategic focus includes both metropolitan areas and type-2. The e-commerce channel continues to experience significant growth compared to the previous year. I look-forward to further engaging with you along with my team.
Before that, I request Mr. Deepanjan to provide an in-depth review of the quarter’s specifics, and then we’d be more than happy to address any of the queries that you may have. Thank you.
Deepanjan Bandyopadhyay — Chief Financial Officer
Thank you, VSG. Good afternoon, everyone, and welcome to today’s earnings call. I hope you’re all keeping well.
I’m pleased to share the results of Q3 FY ’25 and for the nine months ended 31st December 2024. To take you through the key financial highlights for Q3, we recorded sales volume of 57.8 million pieces, which was a growth of 4.7% year-on-year. Revenue in Q3 was INR13,131 million, which was a growth of 7.75% Y-o-Y. EBITDA for the period was INR3,025 million, which was a growth of 33.8% Y-o-Y. EBITDA margin was 23%, stability in raw-material costs, sustained higher ceiling efficiencies and controlled operating costs have contributed to strong EBITDA margins. Profit-after-tax was INR2,047 million, which was a growth of 34.3% year-on-year.
Inventory days was 59 as against 93 days in the end of FY ’24. Focus on healthier inventory in distribution network has resulted in maintaining optimum inventory level. Working capital days was 55 days against 75 days in the end of FY ’24. We continue to be debt-free.
For the nine months ended 31st December ’24, sales volume was INR170.4 million pieces, which was a growth of 4.6%. Revenue was INR38,368 million, resulting in a growth of 7.3%. EBITDA was INR8,273 million, which was a growth of 19% year-on-year and EBITDA margin was 21.3%. PAT was INR5,661 million, which was a growth of 22.6% year-on-year.
To summarize our financial performance in-quarter three, we have continued to build-on consumer reach through diverse channels while investing in latest technology and digitization. While subdued consumption has constrained volume growth, we are well-poised to capitalize on the improvement in-demand situation.
We can now discuss any queries that you may have.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and 2. All participants are requested to use handsets while asking a question. Ladies and gentlemen we will wait for a moment while the question queue assembles.
Our first question comes from the line of Avi Mehta from Macquarie. Please go-ahead.
Avi Mehta
Hi. Am I audible?
Deepanjan Bandyopadhyay
Yes.
Avi Mehta
Yeah. Hi, team. Thanks for this. Sir, my first question was on the EBITDA margin. So, congratulations on this third-quarter performance. If I look at the run-up or how EBITDA margins have panned out, it seems to be a lot more on cost-control. And given that is the case, you think there is an upside to the 90% to 1% EBITDA margin range that you were looking at for FY ’25, given that most of the IT spends also have started to pan-out? So, would love to understand.
Deepanjan Bandyopadhyay
If you can just repeat the question slightly.
Operator
Sir, your line is not that clear.
Avi Mehta
Sorry. On — my question was on FY ’25 EBITDA margins, given that 3Q has seen a much healthier performance and the drivers of it are a lot more cost-control driven and not one-off. So is there an upside risk to that 19% to 21% range that you had shared with us in the last quarter?
Deepanjan Bandyopadhyay
No, I think while we have got good margins, which is I think beyond the 19% to 21% range that we typically target for. I would say that is more a unique phenomenon in the last two quarters. But for the FY ’25 as a whole, we are quite confident still be within this 19% to 21%.
Avi Mehta
Okay, sir. So what — why would you say that, sir? Because most of the spends also have — you said you had seen some of that come…
Deepanjan Bandyopadhyay
The spends…
Operator
Avi sir, your line is breaking.
Avi Mehta
Yes, sorry. I was just trying to understand, sir, why are we concerned about margins moderating from this 23% level given that what could be the cost or spend which we are expecting to bring out?
Deepanjan Bandyopadhyay
So there are several things. One is definitely the IT cost which has just started coming in, which is part of our digitization efforts. We have just started the business process reengering study, which is kind of playing out now. So we will preferately see a higher eliminated cost as far IT is concerned in the coming up quarter. There are also certain other expenses planned on the marketing in other areas, which is why we feel that while we’ll still be under the — within the 19% to 21% range, it may not be as high as 20% to 20% as we have seen in Q3.
Avi Mehta
Okay. Got it, sir. And sir, the second question was on the sales side. Nine months sales growth is at 7%. With the tax reduction in the budget, how long do you think it would take for us to move back to that 15% level that we have seen on a normalized basis?
Deepanjan Bandyopadhyay
I think there are two separate aspects, while tax reduction for the income up to 12 lakhs is definitely very welcome step-in the budget. Our target consumer view is slightly different than this particular segment where the tax reductions have happened. But in general, this tax reduction is expected to create certain buoyancy in the market in terms of higher valid share of the consumers. But how exactly will it affect the demand pattern that is — we have to see how it evolves.
Avi Mehta
Okay, sir. Okay. That’s all from my side. I’ll come back-in the queue for the other questions. Thank you.
Operator
Thank you. The next question comes from Videesha Sheth from Ambit Capital. Please go-ahead.
Videesha Sheth
Hi. I hope I’m audible. Hello?
Deepanjan Bandyopadhyay
Yes.
Videesha Sheth
Yeah. All right. So my first question was on the growth bit. If you can just help us understand the 7% growth profile better, which segment led the growth in terms of versus athleisure? And in tandem to that, what drove the lower utilization improvement of 2%?
V.S. Ganesh
On the growth, I think all categories showed growth. I can’t see any category coming under pressure, though the growth has been muted. One of the trends I can say, which we are able to see is that the premium product ranges in all of our categories have done comparatively better.
Videesha Sheth
Understood. And would it be fair to say that given that we are one month into the quarter, largely the tepid growth trends would have sustained?
Deepanjan Bandyopadhyay
We will not comment on the current quarter.
V.S. Ganesh
[Speech Overlap] It’s early stage to project that.
Videesha Sheth
Understood. Got it. And the second question was, if you could just touch upon the channel level inventory bit, what is the situation now? And would it be fair to assume that secondary sales growth would be primary?
Karthik Yathindra
Yeah. I think from the beginning of the year to now, we’ve seen about five days reduction in inventory across the channels where we are today holding about 17.7, almost 18 million pieces of inventory as far as the channel is concerned. Some of our large contributing businesses such as innerwear, I think our inventory levels are already at the optimum level. What we had initiated with the ARS process, we’ve come to that kind of a optimum level of inventory. There is still scope for us to bring down inventory in the space as well as, let’s say, businesses like juniors. But these in volume are smaller contributors to our overall business. So largely, largely we are there in terms of what we had set-out to reach in terms of inventory levels in the channel.
Videesha Sheth
Thank you. I’ll join back the queue.
Operator
Thank you. The next question comes from the line of Devanshu Bansal from Emkay Global. Please go-ahead.
Devanshu Bansal
Yes, sir. Hi, thanks for the opportunity and congratulations on a good margin execution. Sir, among regions, few players have indicated muted trends in the southern region while rest of the regions are doing better. So is there a growth difference across regions for you as well? So if you’re — if you can comment on this, please?
Karthik Yathindra
Not really. I mean, there is obviously a difference between region’s performance, but we have not seen South particularly perform lower than the rest of the country. There is always going to be a top-performing region and bottom-performing region in terms of relativity, but the gap in performance is not significant.
Devanshu Bansal
Understood. And from previous participant question, so I also wanted to understand the reason for drop-in realization growth. In Q2, it was about 4% and in Q3, it is about 2% despite Q3 being a winter quarter for us, right? So is it that target-based trade incentives, et-cetera sort of have affected the realization and it should normalize in the coming quarters?
Deepanjan Bandyopadhyay
No, I think realizations differential is largely because of the category mix which varies from quarter-to-quarter. As such our schemes or promotions that we have, it’s well within our plan, so there is no significant variation there. Whatever variations we see in the realization, that’s more because of the category increase.
Devanshu Bansal
Understood. And related question, we have not touched prices for a significant amount of time. So do you foresee this happening sometime in FY ’26?
Deepanjan Bandyopadhyay
Too early to answer this question. So definitely, this year we have not taken any price increase and even in the next quarter it’s unlikely. But for FY ’26, we are just in the midst of the budgeting session. So once we have kind of finalized the budget, then we’ll be in a better position to address this question.
Devanshu Bansal
Okay. Understood, sir. Thanks for taking my questions.
V.S. Ganesh
Yeah. So just to add to what Deepanjan said and in fact one of the first questions, which was also asked by Mr. Avi Mehta also. Devanshu, I think as the said, it’s early days, we are just preparing the however the current EBITDA levels gives us comfort to be at the 19% to 21% percent EBITDA range as we move forward. That is our comfort zone, you know. So we want to be somewhere there and therefore, even if we had to touch prices this would not put much pressure on us to have a very strong pricing presumption but we will have clarity about this after we improve our budget.
Devanshu Bansal
Thank you, sir. Thank you.
Operator
Thank you. The next question comes from Gaurav Jogani from JM Financial. Please go-ahead.
Gaurav Jogani
Thank you for taking my question, sir. Sir, my question is again with regards to the margins. Now if we look at the cost breakup here, the employee cost have hardly moved. On a nine months basis also, it’s up only 1% Y-o-Y. And the gross margins, if you look at it, it’s not very-high versus the historical level. So your guidance for the 19% to 21%, is it also for the coming years or only this is for this year? And if it’s also for the following year, what expense line-item you really feel that you would see pressure on the margins?
Deepanjan Bandyopadhyay
Okay. So when we say about 19% 21%, more specifically, it is for the next — the upcoming quarter which we quite sure, quite confident that we’ll be able to maintain the range within 1921. And also if I look at FY ’25 as a whole, given the performance still now and the expectations for Q4, we are quite sure we’ll be in that range. For the upcoming year, I think there are several factors at play, definitely the question whether we have to touch prices. That is one factor which, as we said, will evaluate further or will have more clarity once we complete the budgeting exercise. The other factor which definitely will have a play is the usual increase in manpower costs that will come in.
And as we said, we have gone into significant digitization initiatives, which will come into full play from next year onwards. So combination of all these factors can impact the EBITDA margins to say, I mean, marginally, we don’t expect a major change happening there. So with all our planning and with all our followers expected operations, we still feel it should be still within this 19% to 21%, but yes, quarterly there can be some variations, but largely should be within that range.
Gaurav Jogani
So just one clarification here. At least on the gross margin front, you are quite comfortable, right, given there is no inflation in the cotton prices and you are in such a comfortable position that you also need not the pricing. So one can you comfortably assume that at least the margins level, gross levels can pertain at the current level?
Deepanjan Bandyopadhyay
Yes, the way things are, I think we are not expecting any major upward movement in raw-material prices and our production cost is quite well within our planned levels. So we don’t expect any significant change in our gross margin levels for sure.
Gaurav Jogani
And sir, my last second question is with regards to the overall volume value growth gap. Now if we look at it, largely we believe that the entire of the space of innerwear is now stabilizing. So what really — which segment do you really see the pain that is keeping the overall revenue growth below 10%? And possibly what could you lead this growth to a double-digit growth or the 13%, 14% growth that we were envisaging earlier or rather that used to be our earlier guidance?
Karthik Yathindra
Well, overall, yeah, the overall performance as far as the top-line is concerned is a reflection of consumer uptake. And there we’ve not seen a significant difference between the various categories that we are operating with or with any kind of a regional bias towards any particular part of the country. So it is a function of how our consumer optics improves across channels. Right now, this year also there was a little bit of an impact of higher inventory level at the channel, which we’ve come to a fairly good position by the end of Q3.
So what has kept us from delivering beyond what we had delivered is largely attributable to how consumers have responded and to an extent attributable to the inventory levels that we were holding. But the inventory levels are now in a much better shape than when we started-off the year. So going-forward, what will it take for us to deliver a higher-growth rates will be a mere reflection of consumer opex.
Gaurav Jogani
Sure. And sir, just one clarification here. This is nothing to do with the competitive intensity, right? You would — we would assume that the competitive intensity is normal and nothing towards?
Karthik Yathindra
We’ve not seen evidence of loss of shelf share in the general trade market, which is a significant portion of our business. And the rest of the business that we operate with are anyway exclusive stores, which is in a way isolated from competition. So I wouldn’t attribute much to competition. Of course, we’ve also not seen the results of other players within the industry. We are among the first ones to publish our results for the quarter. So that is something that we will have our eyes on. But from the ground, we’ve not seen anything much effect from competition.
Gaurav Jogani
And sir, just lastly, if I can squeeze one more is on the e-commerce growth. You have been consistently highlighting that the e-commerce channel continues to grow at a very good pace. So would it be fair to assume that you know the distribution or the GD channel in that sense would be growing in low-single digits, would that be a fair assumption?
Karthik Yathindra
Yeah, that’s a fair assumption. I think the highest-growing channel for us has been e-commerce, followed by modern retail and then general trade.
Gaurav Jogani
Sure, sir. Thank you for taking my question. That’s all from me.
Operator
Thank you. The next question comes from the line of Sameer Gupta from IIFL Securities. Please go-ahead.
Sameer Gupta
Hi, sir. Good evening and thanks for taking my question. Firstly, I noticed that the volume growth has moderated this quarter and I would assume that the competitor — or the overall consumer dynamics in terms of subduedness, that has remained constant. So just trying to understand the reason for this moderation, is it just a festive mismatch? So we should look at 2Q plus 3Q together to gauge the current volume growth trajectory for the business. Is that a current correct understanding?
Karthik Yathindra
Sameer, thanks for the question. But if you look at it from a YTD point-of-view, 3/4 put together and the performance for quarter three is consistent, both in volume as well as value growth. Again, like I said, our quarter two was better than quarter one mainly because inventory has gotten better because what we are reporting here are primary numbers, which is a function of the inventory holding in the channel as well. With replenishment now acting in-full swing, you would see variations quarter-after-quarter based on the inventory levels held by the channel partners. But otherwise, if you see it either for Q3 or for YTD Q3, both volume and value performance has been exactly the same and change in maybe the second decimal, that’s about it.
Sameer Gupta
So, basically the 5% volume growth this quarter is a better indicator of overall secondary growth in terms of volumes?
Karthik Yathindra
Yeah. Also, quarter three is a quarter with festive, unlike quarter two. So that’s also a little bit of a traction that you’ve seen. But I wouldn’t attribute too much of it to revival because the delta is not significant between YTD and…
Sameer Gupta
Got it. Got it. Secondly, sir, there is a change in the management structure now with Mr. Karthik as the CEO. Just wondering if there is any change in the way the organization structure organization functions from here on, just can you just elaborate a little bit on the thinking behind this change in the structure?
V.S. Ganesh
Well, Karthik has been with us for close to a decade has been heading various functions right from product management to product development, marketing, supply-chain management and we have been very much part of the core management team and as a culture, as an organization we take consensus decisions so he has been in the of all the activities of the organization and therefore it’s a natural growth for him which he well deserves and as far as the delegation of authority is concerned, yes, effective 1st April, Karthik is the new CEO. So obviously he will have the authority along with the responsibility which is given to him, but be guided by all of us.
There is no other change in the senior management and we guide each other and we discuss each other and work very closely together. As an organization we have very, very ambitious plans to transform the organization, improve the technology, improve the operational efficiency and this has been going on for some time. In fact, the results which you are seeing today is a result of all those work which we have been putting in. And Karthik has been an integral part of those decisions, execution, all of those aspects of the business.
Sameer Gupta
Just a follow-up on this, sir. I believe the senior management, the whole team is a little relatively new in this role. I just hope or want a clear commentary that the structure is going to be stable for a decent time in future?
V.S. Ganesh
Yeah, I bet to differ. All of us have been at a senior-level have been here for a long-time. Karthik, as I told you, has been with us for more than a decade. I have been there for more than a decade. Deepanjan has also crossed a decade. So, we have been with the organization for a long-time. In fact, we pride that we have a very strongly stable leadership team. So I so I don’t think that is something which we need to worry about. And as a growing company, we blessed with a very, very strong talent pipeline and there can be growth opportunities to many of us associates as the brand growth as the company grows.
Sameer Gupta
Got it, sir. That’s very, very helpful. One last question, if I may just squeeze in, it’s more bookkeeping one. I noticed that there is a gross margin expansion — large gross margin expansion this quarter and other expenses also flattish. And you said that raw-material prices are mostly stable and there is an ASP moderation. So just trying to connect the dots as to what is really happening?
Deepanjan Bandyopadhyay
I think when we compare year-to-year, definitely the gross margin has expanded. The reason as we said is two. One, definitely the raw-material prices have remained stable. In fact, on a year-to-year basis, raw-material prices slightly improved over the last year. The efficiency of truck — the ceiling efficiency is significantly increased and that increased ceiling efficiency is also reflecting as a lower labor cost in our — in our product cost components. So these two factors largely taken together is what is resulting in a higher gross margin.
Sameer Gupta
So when you say RM prices improved, you mean they’ve decreased Y-o-Y?
Deepanjan Bandyopadhyay
Yes.
Sameer Gupta
Okay. Got it. Got it, sir. That’s all from me. I’ll come back-in the queue for follow-ups. Thank you.
Operator
Thank you. The next question comes from Sabyasachi Mukerji from Bajaj Finserv AMC. Please go-ahead.
Sabyasachi Mukerji
Yeah, hi. Thanks for the opportunity. The first question on the volume growth moderation in-quarter three. So just wanted to understand the secondary and tertiary level trends. Are we seeing moderation in those level as well? If you could explain a bit?
Karthik Yathindra
Sabyasachi, thank you. As far as quarter three is concerned, our tertiary growth rates have been better than our primary as far as our EBO stores are concerned. And general trade as well, our secondary numbers are slightly better than what we are reporting as primary numbers in terms of growth rates. However, with general trade, like I said earlier, large portions of our business which contribute to volume are now stabilized in terms of inventory level. We are at an optimum level of inventory at the channel partner. So going-forward, it will be a mere reflection of how our secondaries perform. But for quarter three in specific, yeah, our secondaries as well as treasuries have been slightly better than what’s being reported as primary results.
Sabyasachi Mukerji
When you — so when you say better, is it on the absolute number of pieces or is it the growth rate you are both?
Karthik Yathindra
Both, because there has been inventory which has come down. Our inventory holding at the partner level has come down and hence both when you compare primary with secondary, secondary volume has been slightly better. Even from a growth rate point-of-view, the growth rates have been better than primary growth rates.
Sabyasachi Mukerji
Got it. My second question is again on the demand environment of any sense, I mean, what are you reading from the on-ground feedback probably from the distributor or retailer levels that probably when will it recover? Any sense any things you are I mean reading on that?
Karthik Yathindra
Well, Sabyasachi, in terms of when it will recover, reading from the retailers is going to be a crystal ball gazing exercise. What we can look at is, has there been month-on-month improvements in our like-to-like growth for the EBS business, which contributes close to 30% of our business to representative of the business that we handle. There is no great improvement in our like-to-like growth rates when you track it month-on-month. So retail and consumer demand has remained subdued. We did see like the Managing Director mentioned in his address, we did see some level of uptake during the initial portion of the quarter, largely attributed to the festive. However, November and December has remained subdued.
Sabyasachi Mukerji
Got it. And also if you can highlight the demand trends across, let’s say, Tier-1, 2, 3, you know, is there any large difference or gap where probably Tier is doing better or metro Tier-1 is little slower. Any color on that?
Karthik Yathindra
Yes. So definitely the tier — I mean, as we go deeper in the country, the growth rate seems better. Again, these are not like-for-like, it’s also because of inorganic expansion in these areas. But all put together between metro, we break-up our business into metro as one, Tier-1 and 2 as another and Tier-3 and 4 as a third. And as we go deeper, the growth rates are better again, the difference is about a couple of percentage points as we go deeper in each of these tiers.
Sabyasachi Mukerji
This is like-for-like you are saying, I mean…
Karthik Yathindra
Not like-to-like it. It’s at an overall level levels because Tier-3 and 4 also gives us the opportunity where we’ve experienced some level of inorganic growth further expansion.
Sabyasachi Mukerji
Got it. Okay. Thank you. That’s all from my side. Yeah, all the best.
Operator
Thank you. The next question comes from the line of Arpit Tapadia from IGE Indian Family Office. Please go-ahead.
Arpit Tapadia
Yeah, hi. Thank you for the opportunity. I just in continuation with the earlier participant’s question, how do you see growth to be panning out in, let’s say, medium to long-term from here?
Deepanjan Bandyopadhyay
Sorry, can you repeat your question?
Karthik Yathindra
Can you — yeah, could you please repeat your question?
Arpit Tapadia
Yeah. So I just wanted to ask, how do you expect the growth rate to be panning out in medium to long-term from here?
Karthik Yathindra
Yeah, so that’s a — that’s a tough one to answer, Arpit, like we are all seeing from the budget, which has been published, we are hoping consumerism improves. There is some level of uptick in terms of disposable incomes and hence retail picks up. But it’s very hard for us to put a number on it and say what is the growth rate we are expecting. What I can definitely say is that in terms of preparedness meet revival in retail, I think we are there. Any kind of revival in consumer offtake with everything that we have put in terms of optimum inventory holding, the right inventory at the right place, availability of inventory or the tech to capture that, we are preparing ourselves for that. So as and when we see some level of uptake in consumer offtake, I’m sure it will translate to better business for us. But it’s going to be hard for us to put a number on this.
Arpit Tapadia
Got it. And what has been the impact of ARS what we have implemented into our channel?
Karthik Yathindra
By impact, what do you mean? I mean, our inventory levels for the distributor have been optimized by about five working days. So that’s much more working capital freed up. Today, close to 93% of our overall business is on ARS, which has been a significant improvement from where we started. And month-on-month, we’ve seen more portion of our business come under the ARS scope. So almost 84% of our distributors who contribute to 92% of our business are now under ARS. And everywhere that we’ve come into ARS, we’ve seen better optimization of inventory levels for the distributor, better availability, which is showing in better order fulfillment at the secondary level.
Arpit Tapadia
Got it. And do you expect it to further optimize from here or this is the optimum what you expect?
Karthik Yathindra
So like I mentioned, I think for larger volume businesses like our innerwear businesses, I think we’ve reached a fairly optimum level. There is this scope for us to improve and optimize further when it comes to our athleisure business, juniors business, socks business. These are some areas where there is still scope for us to further optimize.
Arpit Tapadia
Got it. Thank you.
Operator
Thank you. The next question comes from the line of Ravi Naredi from Naredi Investments. Please go-ahead.
Ravi Naredi
Yes, sir. I would like to ask how much capacity expansion on guard for next three years, or we believe more on job that’s his work?
V.S. Ganesh
Mr. Ravi, we’re now expanding and have in fact bought a complete a project in Odisha and it should start its operations by end of March, early-April. And we also have a sewing capacity coming up in a place called which is near in Karnataka. So all these expansions are happening based on our long-term growth plans and by keeping in mind that the outsourcing to announced balance is around 65% 35%, give or take 2%, 3%. So that is what we always work on, so that two-third is produced, one-third is outsourced. And that balance will continue. So it will always be in-house capacity organization as the business grows and also outsourcing.
Ravi Naredi
So just my question in different ways, how much capacity expansion we will do in next three years?
V.S. Ganesh
Yeah. So these two factories is around 2,000 sewing machines. And with that, I think our requirement for the next three years will be met with these two factories. In fact, plant has the ability and opportunity to work-in two ships also. So our idea with these expansions, we should be able to manage our requirements for the next three years.
Ravi Naredi
Next three years. Okay. Thank you very much.
Operator
Thank you. The next question comes from the line of Avi Mehta from Macquarie. Please go-ahead.
Avi Mehta
Yeah, hi, sir. Thanks for the opportunity again. Sir, first, I wanted to understand if you could give us a sense on the incentives likely from the Odisha plant if that is now that clarity is available?
V.S. Ganesh
Pardon, can you repeat the question, please?
Avi Mehta
So, any state-level incentives or incentives that are likely to accrue because of the Odisha plant once that comes to commissioning? Is that something that we can expect?
Deepanjan Bandyopadhyay
Yes. Yes, there are several subsidies which is planned from plant. One major part is definitely the state subsidy on account of wages. So there are significant wages subsidy for employees on roll for next five to six years. That is definitely a big contributor. And apart from that, there are subsidiaries in power, in water usage, even local GST. So there are several subsidiaries in pipeline. Even to some extent capex subsidy is also there. So once we — once the manufacturing starts, then we will be eligible for all the subsidiaries.
Avi Mehta
And sir, any quantification there is what I was looking for that how should we see it flowing through? One is operational, which I understand, but other is also capex incentives. So any quantification of what is the likely number that can come in?
Deepanjan Bandyopadhyay
No, we are still in the process of actually estimating it because as we said, the operations in Orissa will start scaling up in phases. So in the initial few months, four to five months, the scale of operations is quite restricted. So our scale of subsidies will also be these similarly following the scale — scaled-up operations. So we are in the process of estimating the exact quantum financial year-wise.
Avi Mehta
Okay. Got it. Got you. And just another bit, I wanted to just check bookkeeping. What is the secondary sales growth in the quarter, if you could give us some — what is the number like?
Karthik Yathindra
Giving away the number, Mr. Mehta, let me just say there has been a slight improvement in the secondary growth when compared to the primary that we have reporting.
Avi Mehta
Okay. So it’s — so exactly, I was just trying to get that it’s 7% primary, is it like 10%, 12% secondary, but I get what you’re trying to do, sir? And the…
Karthik Yathindra
Yeah, please go-ahead.
Avi Mehta
No. So, Karthik, my question was then that if I were to understand your comments in the — to the earlier participants, what you were alluding to is for you to move from the current level of secondary upwards, you need a market pickup or is there any other levers that we have which we could apply? And this is both to both you and VSG, if you could kind of give us some?
Karthik Yathindra
Yeah, see, there are two-ways in which growth would come in here. The organic growth will have to rely to an extent on-market picking-up and consumer offtake improving. And then there is the expansion, which is purely increase in number of those in which we’re going to be present. These are the two pieces that will contribute to the overall growth. And yes, there is also some level of opportunity where we introduce more number of products per store that already available at, right? So what I was in a way referring to was the large portion of the growth, which needs to see some level of uptick will have to come from the organic growth, which is heavily dependent on our consumer offtake.
Our expansion plans are in-line with what’s always been there, how aggressive we’ve been over the last four to five years, whether it is with exclusive brand stores or with multi-brand stores expansions. So that I don’t think there’s any put off the gas over there. We continue to expand at the rate we’ve been expected.
Avi Mehta
Got it. Got it. Very clear. Thank you very much. Thanks. Thanks for this. That’s all from my side.
Operator
Thank you. The next question comes from the line of Bharat Shah from ASK Investment Managers Limited. Please go-ahead.
Bharat Shah
Yeah, hi. First thing first, many times over several periods, we mentioned that we are very ambitious plans for the future in terms of the growth. And Mr. Genomal also many times laid out is likely business in the future, the level. But whenever we discuss the quarterly outcomes in the business, we typically ascribe it all to the consumer sentiment and general environment. And if everything is going to depend upon just the sentiment or belief of the customers, then how are we seeking to achieve the so-called ambitious plans in the projects?
And because you also mentioned that internally you are well-prepared, technology, people investment, brand portfolio, production assets, distribution channels all are in-place. Then the picture one gets is that of a kind of a helplessness to the externality and rather than having a number or a targeting mind which needs to be driven to.
V.S. Ganesh
Yeah. So, Mr. Shah, thanks for asking that question. You know if you see our growth over the last five years, years it has been decent. Of course if you look despite even the pandemic and all those disruptions, if you see the last few quarters everybody has been struggling and in fact I think even the government was ceased for that matter and that’s why they also done what best they could do to improve consumption. So what, what we should notice we have done better than our peers and that shows the strength of the brand and the acceptance of our products with our consumers. And that definitely is what gives us hope for the future because we continue to be the preferred brand.
And if you see the pace at which the — if you look at medium-term or even on long-term, the speed at which the economy is likely to grow and the accelerated growth of the middle-income and the way urbanization is happening and the way our retail is getting organizing — organized more-and-more, especially the efficiencies and scale the e-com side of the business is building over the years, all this goes very well for us and we are very happy that we have been able to actually see this is how many brands can command a good bottom-line without touching the prices for three years running that shows the resilience and the capability the organization has and these aspects definitely gives us the courage and confidence that the future looks good.
So, to put it in a nutshell we are in the right place at the right time, the right country, the fastest-growing economy and powered by a dominant brand which has great products, good price, good talent and an amazing partner network. And we…
Bharat Shah
All of that with really muted outcomes period after period. And if the externals are favorable, internals are well-aligned, then why are the outcomes we are so cautious about outlining?
V.S. Ganesh
So, Mr. Shah, what I was trying to tell you is, yes, the externals have huge pressure and we have done better than what the markets have done. If you see some of the other very iconic FMCG brands also, the pressure they are going through, we are no exemption, but the good thing is we have done much better.
Bharat Shah
No, but last year also, when the economy did well, everything was in a far higher-growth mode. We still — our revenues declined compared to the previous year. The FY ’24 revenues declined by 4% compared to FY ’23. And generally these — this is a very basic and primary article of consumption. It is not easy if — and we are saying it is underpenetrated category. We are in affordable premium product with a great brand and all of that. And one gets almost a sense of helplessness about our destiny. Pardon my saying so, but that’s a picture I get when I hear on the coal period after period.
V.S. Ganesh
Sir, that is definitely not the sentiment which we have. If you — if you really look at it, we are very, very optimistic and that’s why we continue to stay invested and we are making some very aggressive investments to modernize, embrace the best of the technology and continue to be a market-leader and dominate the market. In fact we have been taking all the initiatives which are necessary and we have not taken any shortcuts because we want to build and run a marathon rather than looking at immediate quarter or two. For us, we look at the quarter as 25 years from three months and therefore, we have not taken short-term measures to buy sales-through promotions or discounts or — abnormally high schemes, we have stayed focused, built the brand, made us foundation stronger and we are very, very optimistic and pretty happy.
In fact, for us, as an industry, when I look at the peers also, last year was much tougher than this year. This year at least everybody is showing recovery, we also recovering, but it is not at the level at which we would like the market to be at, but at least it is turning around. Last year was very tough for all of us.
Bharat Shah
One last bit on this. This. In terms of margins, over 14, 15 years that I tracked this business off Page, I’ve generally seen that we have a kind of a range of margin in mind and we want to remain within that bank, which means even if margins in a particular period can go up beyond that range due to operating leverage due to some other cost synergy or benefits that we may derive, we still would prefer margins to remain in that rather than go up. Is that still the settled thinking of the organization and therefore, we prefer to remain within 19% to 21 margin or if I’m not talking of quarter-over quarter, I’m talking in general for a year and longer duration, are we — are we kind of reluctant are margins for our margins to expand if they are otherwise in a fortunate position to go up?
V.S. Ganesh
We are not — not definitely not reluctant, but we are comfortable at that — that range so that we can actually improve our rupee EBITDA by augmenting better top-line and make sure that we continue to be an affordable premium brand, an aspirational brand which gives quality product but still an affordable premium and we don’t end-up outpricing ourselves.
Bharat Shah
But if the margin [Speech Overlap]
V.S. Ganesh
We actually got, Mr. Shah, is that for three years, we were able to maintain our margins, more or less maintain our margins without touching the price. And that means we have been passing on the best-value to our consumers. In fact, we have been upgrading our product without touching prices and making sure that we dominate the market and actually this is one of the biggest barriers which the competition may face because of this particular strategy of ours.
Bharat Shah
Which means basically we will prefer margins to remain in our targeted range?
Operator
Mr. Shah, may we request you return to the question queue for…
Bharat Shah
I’m just finishing that question only, and I’ll end it. So we’ll prefer our margins to remain in a targeted range, strategically speaking?
V.S. Ganesh
We are comfortable in that range. Historically, we have been comfortable. We were able to balance growth and expand rapidly and also reinvest in the business and take care of investors with those kind of margin levels. And we will continue to review and revisit that, sir. But as of now, we are very comfortable in our 19 to 21 range.
Bharat Shah
Got it. Thank you. Thank you very much.
Operator
Thank you. Thank you. Participants, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have any follow-up questions, please rejoin the queue.
The next question comes from the line of Prerna Jhunjhunwala from Elara Capital. Please go-ahead.
Prerna Jhunjhunwala
Thank you for the opportunity, sir. Just wanted to understand in this kind of gross margin and EBITDA — high EBITDA margin scenario, you — how are you investing into various categories for growth of men, women at leisure and could you give some color on how the growth rate — what challenges you are seeing apart from subdued demand in, you know, getting higher-growth rates?
V.S. Ganesh
Karthik, you want to take that?
Karthik Yathindra
Yeah. In terms of investments for each category, I think there’s a lot of organizational investments that are happening, which is going to benefit all the product categories that we are operating in today and large portion of this is going into tech. We need to understand that we are revising our ERP system which is about a decade and a half which comes in with a lot of work, lot of investment to keep us ready for the next decade. We are revamping the entire distribution management system that the — that our distribution network works on today, which is again a massive project, not something that comes by very often. Again, we are looking at projects which will hold us in good stead for a good next eight to 10 years.
There is a lot of work happening on the product side in terms of PLM and other technology coming in. So these are fundamental investments that is happening at an enterprise-level just to up our infrastructure, which will help the entire organization as a whole, right, right from our entire supply-chain system in terms of better availability, which is the ERPP, the DMS, which will make it a lot more intuitive and informative for our sales team on-the-ground to sell better or our PLM, which is going to help us improve our product range. So large portion of the investment that’s going back into the organization, which both and spoke about is at a fundamental infrastructure level.
Now specifically for categories, again, there is no disparity in approach. We might have — we do have better consumer penetration levels across categories. Of course, our men’s in aware is a lot more penetrated when compared to women’s in aware or outerwear. But the approach for increasing refreshment within the product portfolio is being consistent across categories. All efforts being taken to make sure that the products that we are offering are the best that it can be. Every single style undergoes a very detailed eye of evaluating whether it is the best it could be in terms of material, in terms of fit or in terms of aesthetics twice a year. So that process continues for all of our product portfolios. So that’s a constant effort which goes in.
As we stand today, we believe that the headroom might be higher for the women’s portfolio or purely from the numbers that we see in terms of our penetration in the market and hence some level of disproportionate investments in terms of products, in terms of marketing, in terms of content will be going towards that area.
Prerna Jhunjhunwala
And how is the category doing and investments over there?
Karthik Yathindra
Yes. So, the category has actually seen decent revisal. It was a bad year for last year considering we were coming back from the the huge momentum that the category got immediately after the pandemic there was some level of correction that had happened over ’23, ’24. This year, athleisure is trending better than how it did last year. So in terms of performance of the category, yeah, it’s been promising. In terms of investment as far as product is concerned, like I said, I think the same might that we go up in every category, you’ll see something similar in athleisure as well.
Prerna Jhunjhunwala
Okay. My second question is on the category-wise performance. I know you don’t share that, but can we see athleisure women wear categories performing much better going-forward due to these kind of investments that you are doing? And also about penetration levels, how your penetration levels have improved over the last one decade, you have been talking about 5% penetration in the women’s category and how is it today?
Karthik Yathindra
Yeah. So today, women’s innerwear as a category is between 6% to 8%. In specific for bras, we believe our share is about 6%, whereas in the panties business, we are higher at about 8%, which has gradually improved over the years. I do remember when we were coating 5% as the number. Today, this is where we stand. However, when I compare it to men’s innerwear, it’s a lot more dominant trending between 18% to 20% as our penetration levels. So still a long way to go as far as the women’s in other business is concerned, there is headroom.
Athleisure, for us, is about 6%, but again, it’s a much larger market and also a lot more number of players in that market, right, because it’s very difficult to clearly de-market between alone and the rest of the casual wear that’s out there, denims, casual shirts, all of these fall under the outerwear business of which is a portion. And there is usually a good transition between one and the other in terms of market size. So it’s very difficult to put a specific opportunity only for athleisure. What we know is that space is ballooning and hence it gives us a lot of opportunity to do better.
Prerna Jhunjhunwala
Thank you and all the best. Thank you.
Operator
Thank you. The next question comes from the line of Rahul Agarwal from Ikigai Asset Management. Please go-ahead.
Rahul Agarwal
Yeah, hi, sir. Good evening. Thank you for the opportunity. Sir, a couple of questions. Firstly, if I have to really look at 2030 from here. And breakdown page industry into three categories, mainly from a product perspective, right? I mean, one category would be the matured category where that has the highest revenue salience or followed up with growth categories where you see maximum growth. And third is the evolving emerging categories where you think the base is very small, but they’re growing obviously fastest in the overall scheme of things. If I take our next Five-Year view, what would be these categories in terms of your own opinion and internal analysis? And given the revenue salience change, which we should expect over the next five years, does this change the EBITDA margin profile of the company five years out? That’s my first question. Thank you.
Karthik Yathindra
Rahul, thank you for the question. See, even though I understand where you’re coming from, I mean, internally when we look at it, we probably seem like we are a lot more mature in the men’s innerwear business when compared to the rest. But even in the men’s innerwear business, what we define as our addressable market, we are only about 18% 19% there, which means even in a in a category where a large portion of our business has contributed from we see a big headroom to grow, right? And this addressable market has been defined in a very, very tight manner. And hence we truly believe there is no leakage there possible, which means all of those — that audience that we define as addressable market are truly addressable by Jockey, the brand, right? So even there, we are at about 18% giving us a very, very-high level of headroom. And it makes it even more promising for the rest of the category, whether it’s women’s in aware, athleisure, juniors, all of them where it is currently at a single-digit penetration against a tightly defined addressable market.
So, keeping — especially with a long-term horizon, right, 2030 you mentioned, we should be going after each of these categories with the same kind of intent and momentum to grow and not confide in saying one is mature over the other and hence, we will look at interest. Keeping that view, the way we structured the organization is also at a category level. So today, whether it is the sales team that is going after the revenue or whether it’s the product team or our marketing team, they operate like companies within a company. So men’s in aware is a separate organization within the company. Women’s in aware is a separate organization.
Outerwear is a separate organization and juniors and accessories put together is a separate organization. They all operate with internally with independent P&Ls, with investments going into each one of them and dedicated resources for all the functions for that particular category. That is truly because we believe there is a huge headroom from a long-term point-of-view in all the categories.
Rahul Agarwal
Right. So, in terms of growth rate, if I have to differentiate next five years, should I have a differentiation or you think broadly each category — obviously the smaller categories grow faster percentage-wise, but just from a revenue salience perspective, what do you think will dominate the business five years out?
Karthik Yathindra
No, we don’t think the outlook will be very different because all these categories provide a promising future in terms of what we can garner from the market, right? And because there are dedicated resources and investments for each of these categories, all of them should go at a good pace. Of course, the lesser penetrated ones will have some level of inorganic advantage when compared to men’s. But the way we look at it, men’s in aware will probably open up new doors, which will become possible inorganic expansion opportunities for the other categories in the future. So we’ll have to go all-out in all the categories that we have.
And in terms of EBITDA, our difference in categories is very, very low in terms of profitability. Yes, there are some portions of our business which is more profitable than the other, but those would be in decimal maximum up to one percentage point. So irrespective of what growth rates we deliver from which portions of the category, I don’t see a big change in EBITDA because of the category mix.
Rahul Agarwal
Got it, sir. And secondly, I had a question on the capital expenditure. You mentioned Orissa plant coming up and the swing facility. Just wanted to know what was the overall capex on both these facilities separately and incremental sales they can support or the output if you have to quantify?
Deepanjan Bandyopadhyay
So I think for Orissa plant, we have an outlay of around INR254 crores, which is from the infrastructure, land, the buildings, those kind of things and another 60 crore INR70 crores is more towards machinery in phases. So that’s broadly the outlay for. We are more or less closer to finishing the project and hence the more — the entire spend is likely to happen within March.
For KRPAT expansion, I think the outlay has been around INR30 crores, which is again most of the expansion — most of the infrastructure. There are slight delays in the projects. So it will phase-out in next year. But yes, that’s the range that you’re thinking about.
Rahul Agarwal
And fiscal ’26, the capex number is?
Deepanjan Bandyopadhyay
Sorry?
Rahul Agarwal
Fiscal ’26, any capex budget would you like to share please?
Deepanjan Bandyopadhyay
Not right now, as we said that, yes, the budgeting is in-progress. So once that reaches the conclusion, then we’ll be able to share some numbers.
Rahul Agarwal
All right. Thank you so much and all the best.
Operator
Thank you. Ladies and gentlemen, we’ll take that as the last question for today. I now hand the conference over to the management for closing comments.
Deepanjan Bandyopadhyay
So, thanks, again. Thanks for everybody to participate. It has been an interesting session and lot of insights and questions. We will definitely look-forward to further interactions. Thanks for participating again.
Operator
Thank you. On behalf of Page Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.