Pearl Global Industries Limited (NSE: PGIL) Q4 2025 Earnings Call dated May. 21, 2025
Corporate Participants:
Unidentified Speaker
Pallab Banerjee — Managing Director
Sanjay Gandhi — Group Chief Financial Officer
Analysts:
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Perk Global Industries Limited Earnings Call for Q4 and FY ’25.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 this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Gahori, Head of Investor Relations of Pearl Global Industries Limited. Thank you, and over to you, sir.
Unidentified Speaker
Thank you. Thank you very much. Good afternoon, everyone. And I am delighted to welcome you all to this earnings call for Q4 FY ’25 and financial year ’25. I hope you all had an opportunity to review our press release and the investor presentation, which are available under the Investors section of our website and the same are also accessible in the BSE and SE website.
To discuss our results, we have with us our Managing Director, Mr Palab Banerjee; and our Group CFO, Mr Sanjay Gandhi. They will take you through our results and business highlights, after which we will proceed for the question-and-answer session. Before we start, I want to highlight that this call may include forward-looking statements based on the company’s current views and expectations.
Actual results could be different as future performance is uncertain and involve risks that are hard to predict. I will now hand over this call to RMD, Mr Pallab Benerjee. Over to you,.
Pallab Banerjee — Managing Director
Thank you,. Good afternoon, everyone. I welcome you all to our quarter-four and financial year 2025 earnings conference call. Since we came out of our pandemic years of COVID, our Group has remained sharply focused on driving operational efficiencies and enhancing overall profitability.
Operator
Hello, sir. Sir, are you there? Ladies and gentlemen, we seem to have lost the connection with the management. Please stay connected ladies and gentlemen, we have the management back online with us. Sir, you may continue.
Pallab Banerjee — Managing Director
Yeah. So I will start from the beginning of my. Since we came out-of-the pandemic years of COVID, our Group has remained sharply focused on driving operational efficiencies and enhancing our overall profitability. This strategic focus has resulted in continuous growth for over last 16 quarters and translated into our best-ever financial and operational performance, both for the quarter-four and for the full-year of 2025.
We have implemented a series of measures aimed at strengthening our execution, optimization of our costs and improving our productivity across-the-board. We will continue this journey, that is to grow, to improve our operations, become more green in our ESG initiatives and resilient to potential macro factor shocks and thus delivering as per our objectives and the promises that we have made to all of you. In financial year 2025, our consolidated revenue reached INR4,506 crore, marking a robust 31.1% year-on-year growth and reflecting a CAGR of 31.9%.
This growth has been accomplished by a significant improvement in operating efficiencies. Our adjusted EBITDA has risen to INR411 crore and a PAT after minority interest adjustment reaching to INR248 crores. Thus, our adjusted EBITDA and PAT have grown at a CAGR of 61% and 94.7% respectively.
This clearly highlights the impact of our strategy, our business model and the governance and efficiency that approach that we have adopted. Our return ratios have also improved dramatically. Rose has surged to 30.5% and ROE has climbed to 20.1% this year, again demonstrating our improved capital efficiency and the value-creation.
Operationally, financial year 2025 was also a standout year as we recorded our highest-ever shipment volume of 74 million pieces, a significant jump over 57 million pieces the prior year. The performance reflects not only the strength of the customer strategy, but also our ability of enforcing manufacturing capabilities and the supply-chain resilience that we have.
Aligned with our commitment to delivering a shareholder value, we continue to adhere to the disciplined dividend policy, where the company declares a dividend of at least 20% of consolidated PAT annually. For financial year 2025, the total dividend payout is INR52.7 crores, representing a 22.8% payout ratio.
Now let’s talk about the industry, our business model and our markets. Over the past three years, or ever since the pandemic, the global landscape has remained highly volatile, marked by a series of macro factor challenges. We have witnessed inflationary pressures in all the developed markets, shortage of freighters and containers, local conflicts becoming a full-frigid wars under and over-inventory situations in countries like US, fast-changing geopolitics and all of these has resulted into significant amount of continuous disruptions in the global supply chains.
As a result, the business seemed to be — and finally, when the business seemed to be stabilizing and growing in the last few months of 2024, we now got hit by the imposition of reciprocal tariffs by the US administration. In such a dynamic environment, our key strength of multi-geography presence has enabled us to remain resilient and we continued delivering the strong performance.
Our biggest market, USA, if I speak about it, specifically on the recent US tariff development, while a 90-day pause has been announced, an additional baseline tariff of 10% is active from all the countries, which is exporting to US. China has an additional 20% of so-called fentanyl tariff and this is added to the baseline of 10%, totaling to 30%. All countries which are training partners to USA are now engaged in negotiating a bilateral trade agreement or a free-trade agreement with the US administration.
It continues to be a dynamic and evolving situation and we are fully prepared to adapt as things progress. We are confident that the structure of our business model with a diverse geographic footprint, supported by a strong customer relationship And a robust order book positions us well to navigate such uncertainties and continue to perform effectively irrespective of the changing tariff regimes, a significant proof of the customer’s preference in our business model is being proven time and again. I’m also happy to share that last week, we were recognized as Vendor of the Year. This award was given to us by a prominent US retailer, who is also amongst our top three strategic customers. Such an accolade normally was always going to the global giants from South Korea or from Taiwan. We are now one of the first South Asia or Indian subcontinent region vendor to get this — get into this fall of frame. Recognition was for our contribution as global vendor with multi-country, multi-product execution excellence and beating the expectations in partnering with this retailer in their supply-chain strategies. This recognition does boost our confidence and brings more customer interest in our operations. Now talking about the European Union, as a consolidated market, this is one of the largest market in the world today. European Union is engaged in a FDA discussion of free-trade agreement discussions with India and we expect to conclude this within the next two quarters. Countries like Bangladesh, Cambodia, Turkey and Vietnam already enjoys this free tariff benefits or either full or impartial. We are currently engaged with customers from Spain and Denmark. As you know that we have a design showroom and are actively engaged with our Spanish customers very closely. Inditex is one of our top three strategic customers from Spain. We do expect a lot from this market and other EU states in near-future once this FDA is signed. Moving on to United Kingdom, India and UK have recently finalized a free-trade agreement, eliminating up to 12% of duties on Indian governments, which is entering into the UK market. This makes us significantly more competitive as a country, putting India at par with other countries like Bangladesh, Cambodia, Vietnam and Turkey, which already have been enjoying this duty-free access to UK. With nearly 50% of the UK’s apparel imports coming from China, Bangladesh and Turkey, and if you notice that China’s share has been continuously dropping from 35% it has in 2020, it has dropped to almost 21% by early 2025. We are well-positioned to gain more market-share amid this global shift away from China. I mean India is well-positioned to gain this market-share as it moves away from China. The UK market contributes around 5% of our total business at Pearl Global, primarily serviced from Bangladesh. We now look-forward to significantly growing our share from India as well. We forecast that UK revenue from India will grow minimum 3x within the next two years. As you already know, we have an office in London servicing our UK customers and we have been engaging post this FTA scenarios with our existing and the new customers. Moving on to Australia and Japan as markets. On the front, we continue to increase our market-share steadily with Australia and the Japan customers. Please remember that both — both these countries — for both these countries, India enjoys a free-trade agreement. Japanese customer also need a very good-quality, almost a zero defect quality standard and thus significantly improves our manufacturing standard as well. The market dynamics in Japan are very difficult as compared to the Western markets and this adds to our expertise and the skills to tackle to our diversified customers from diversified markets. We expect a significant growth in both these markets over coming years. To give you a perspective of the market-share, our last year — last three years, we have significantly reduced the dependence from the US market. It used to be more than 86% of our top-line in financial year 2021. Now by the end of 2025, this number has come down to 64% of our total business share for US. European Union approximately adds to about 16% of our total revenue, followed by Japan around 7%, Australia and UK are around 5% each and Canada approximately 3%. Although our US-based customer contributes to 64% of our top-line however, a significant amount of goods are shipped and sold outside of US. I mean these brands which are taking from us, the goods, US-based companies, but their sales are happening outside of US as well. So when we look at this number, what is the number that is moving into the country of USA, that number is standing between 46% to 50% of our total revenue, and not 64%. Now let me speak about our manufacturing basis. Let me begin with India. We are pleased to report an improved performance for the financial year 2025. Our standalone India revenue for this year reached INR1,196 crores, reflecting a year-on-year growth of 25.4%. This solid top-line momentum has been complemented by a significant turnaround in profitability. India EBITDA stands at 10.2% for this quarter of quarter-four of 2025. On the infrastructure front, we have already added capacities and multiproduct capabilities in our existing facilities that are located in the metros of Gurgaon, Bangalore and Chennai over the last two years. Our India revenue, okay. So this India revenue of INR1,196 crore and we have already have built-up a capacity to execute more than INR1,600 crore, thus giving us the preparedness to accelerate the India business as the free-trade agreements of UK and potentially from European Union and US are signed within this year. Our further incremental capacities are getting added, but across the Tier-2 cities of India. Our Bihar factory is operational now and we will be scaling it up within this financial year. We have also secured additional capacity through partnerships in Orissa and Andhra Pradesh. Moving on to Bangladesh. We are now in the 4th-quarter of operations since the unrest and the government transition that happened in Bangladesh last year. It has consistently delivered exceptional results for us. We recorded our highest shipment volumes in-quarter four with zero delays and with very robust operational performance and a healthy growing order book. We remain optimistic about further improvements in the coming quarter. All our facilities are running at optimal capacity with growing collaboration from partnership factories, European Union and UK customers remain strategically engaged and reinforcing our growth path. Once again, let me reiterate that Bangladesh continues to benefit from several structural advantages, including competitive cost, high productivity, skilled labor, experienced operational management and favorable trade agreements with the key markets such as European Union, UK, Canada, Australia and China. Now all these trends position Bangladesh as a consistently competitive player in the global apparel industry. Bangladesh has started its talks intended for a free-trade agreement with USA, which could be an important step forward for a trade between those two countries. To harness the growing demand, we are actively pursuing value-accretive capacity expansion opportunities, we are also assessing potential acquisitions in Bangladesh. Now shifting our focus to Vietnam, the country remains bullish on its manufacturing, actively engaged with the US administration for the potential FDA or a bilateral trade agreement has already become a member of Comprehensive Trans-Pacific Trade Pact in December 2024, thus adding nine plus countries with zero tariff access, including major markets like Canada and UK. We recorded a strong growth from Vietnam this quarter and we remain optimistic about sustaining this momentum. We added one of our fastest-growing retailer in the premium segment that is headquartered in out of Canada and is growing very fast in its market-share in the USA as well. Our New partnership factory has been established, laying the groundwork for future expansion. We anticipate that this move will drive meaningful growth over next year as well. Our focus remains on growing steadily in this market, while consistently delivering a high-quality service to our premium customer-base. Moving on to Indonesia. Our new factory is now fully operational and receiving strong interest from both existing as well as new customers. We plan to scale-up the production over these coming quarters, positioning ourselves towards a significant increase in volume and value in the next financial year. Strong customer demand and continued focus on premium clients supports this recovery very well. And finally, about Guatemala. Customer interest in the Central American operations continues to grow, largely due to the reduced transit times to the US just over a week and with zero WTO tariff. While these are the clear advantages, manufacturing capacity in this region, including ours remains modest compared to our more established Asian operations. In Guatemala, we expanded rapidly from three to 12 production lines, which brought short-term operational challenges and required significant investment in staffing and training. However, with the appointment of a new CEO, it has led to a notable improvement in efficiency and the shipment performance. Despite these initial setbacks, our focus on reliable service ensured the continued customer trust in Guatemala, which is now translating into a repeat business with a productivity, which has to improve like which is currently has improved up to a 46%, 47% and we are aiming to achieve about 70% to 75% very soon. We are confident of a strong turnaround and achieving a cash break breakeven within this coming year. So now I will hand it over to Sanjay, our Group CFO, who will provide you a detailed overview of our quarter-four and the financial ’25 numbers. Sanjay, over to you.
Sanjay Gandhi — Group Chief Financial Officer
Thank you,, and good evening, everyone. Welcome to our quarter-four and FY ’25 earnings call. I will now walk you through our financial and operating performance for the quarter and year ended 31st March 2025. Starting with our quarter-four FY ’25 consolidated financials, we are glad to report our best-ever consolidated performance for both quarter-four and full-year FY ’25, setting new records across all key financial indicator revenue, adjusted EBITDA, profitability.
In-quarter four FY ’25, our revenue reached INR1,229 crores, making a substantial year-on-year increase of 40.1%. Adjusted EBITDA, excluding ESOP expenses came in at INR119 crore, up by 41.7% year-on-year with margin at 9.7%. Excluding for losses in operation at new facilities, Guatemala, Bihar, adjusted EBITDA for quarter-four FY ’25 stand at healthy double-digit 10.5% and PAT after minority interest stood at INR68 crores, marking a growth of 32.9% year-on-year.
We have reported strong EPS at INR15.1 in-quarter four FY ’25 compared to INR11.82 in-quarter four FY ’24. Coming to consolidated performance for FY ’25, in FY ’25, our consolidated revenue reached highest-ever of INR4,506 crores grew by 31.1% year-on-year compared achieved sales value and volume growth across geographies.
Adjusted EBITDA crossed INR400 crore mark rising to INR411 crore, up 29.8% year-on-year. Excluding ESOP expenses, our EBITDA reflects sustained financial spend. PAT after minority interest stood at INR248 crore, up 42%. For FY ’25, we have reported EPS of INR54.96 compared to INR40.26 in FY ’24. Please note that FY ’25 include an exceptional gain of INR5 crore due to gain on-sale of non-core — non-core assets.
Operationally, FY ’25 was also a standout year as we recorded our highest-ever shipment volume of 74.3 million pieces, a significant jump from 56.9 million pieces in FY ’24. This performance reflects not just the strength of the demand from our customer, but also our enhanced manufacturing capability and supply-chain resilience. Turning to our standalone financials for quarter-four FY ’25, revenue touched all-time high, closing at INR397 crores, a robust 24.2% growth year-on-year.
Revenue for FY ’25 stood at — grew by 25.5% — 25.4% year-on-year to INR1196 crore. Adjusted EBITDA excluding ESOP expenses for quarter-four FY ’25 nearly doubled to INR40 crores compared to INR21 crore in-quarter four FY ’24, which is strong 96% year-on-year growth. Notably, India operation alone are now delivering a double-digit EBITDA margin of 10.2% in-quarter four FY ’25. For FY ’25, adjusted EBITDA stood at INR66 crore, a 34.9% robust growth on a year-on-year basis with margin of 5.6%.
PAT for quarter-four FY ’25 grew by 5.2% to INR23 crores. For FY ’25, PAT increased substantially by 94.4% year-on-year to INR55 crores. We have reported EPS at INR5.14 in-quarter four FY ’25 compared to INR2.74 in-quarter four FY ’24. For FY ’25 EPS stands at INR12.15 compared to INR6.5 in FY ’24. Key financial indicator at Group levels are net-debt to EBITDA has reduced to minus 0.4 times for March ’25 from 3.43 times in March ’21, indicating a strong financial position and higher ability to cover debt.
Cash and bank balance, excluding cash earmark for LC payment is INR513 crores as on 31st March ’25. Net working capital days are 38, well below our targeted number of days. Increase in inventory is in-line with increase in revenue, inventory number of days of 57 and are in-line with our estimates considering sale plan for coming quarter. Trade table are in-line with the credit terms in respective geographies.
Return on capital employed improved from 28.2% in March ’24 to 30.5% in March ’25 due to prudent capital allocation policy, strong profitability at a group level and efficient working capital management. Other key highlights of the year, the company has received a credit rating upgrade, reflecting its strong financial position and continued operational resilience. ICRA has assigned long-term rating A stable and an A1 rating for short-term obligations, reinforcing the company’s credibility and ability to meet financial commitment efficiently.
Enhance Board strength with the induction of two independent Directors, Mr Rahul Mehta, Narendra and Mrs Joti Arora, reinforcing governance excellence and strategic oversight. The company has appointed Deloit Church as its obstatutory auditor for Pearl Global Hong-Kong Limited for FY, strengthening financial transparency, regulatory adherence. Hons Yang actively oversees internal audit for India, Bangladesh and now expand its role to Vietnam for FY ’26, enhancing compliances in key markets.
Update on capex. Here under review, that is financial year ’25, the company has incurred capex of INR135 crores, which includes INR75 crores towards capacity expansion, sustainable laundry capacity expansion in Bangladesh. So capacity expansion is across geographies whereas the laundry capacity expansion is in Bangladesh. INR22.5 crore towards the land acquisition in Bangladesh for future capacity expansion, INR12.5 crore in Vietnam to our securing partnership capacity.
The remaining capex is for replacement and efficiency improvements. It’s worthwhile to note the land acquired in Bangladesh can add factory — factories having capacity from 2,500 to 3,000 machines. We have earlier upgraded regarding land in Madhya Pradesh, India, where we can set-up a factory for capacity up to 1,500 machines.
With this, we have opportunity to expand capacity in India and Bangladesh, Simon said. For FY ’26 capex plan, the plan company plans to incur INR250 crores for the year, out of which INR130 crores for capacity expansion in Bangladesh and India of INR on Bangladesh of INR110 crore and India 20 crores respectively. INR90 crore is for sustainable laundry capacity Expansion in Bangladesh, INR5 crores for solar power installation at all the factories in India. Our remaining capex is for replacement and efficiency improvement. The capacity expansion capex, which is highlighted above, will lead to enhancement of capacity by approximately 8 million pieces, 5 million to 6 million in Bangladesh, 2.5 million to 3.5 million pieces in India. Our in-house laundry capacity expansion, as mentioned above, will reduce the washing cost significantly and also reduce the water consumption, leading to sustainability in capex, generating a return on capital employed of 18% to 20%. All CapEx projects being undertaken by the company across geographies are with highest standard of sustainability by optimizing water and energy consumption, minimizing environmental impact and supporting green initiative. In brief, we have delivered an exceptional performance in-quarter four FY ’25, reinforcing the strength of our business model, backed by a robust and diversified customer-base and a well-established global footprint. We are strongly positioned to build-on this momentum. Looking ahead, ahead, we remain confident in our ability to accelerate our static milestone for FY ’28 and unlock sustained value for our shareholders. Now we can open the floor for question-and-answers.
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 telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant.
Thank you. Ladies and gentlemen, we will wait for a moment while the question queue assembled the first question is from the line of Bhavia Gandhi from Dalal and Bracha Stock Broking. Please go-ahead.
Unidentified Participant
Yeah. Hi, thanks for the opportunity and congratulations management on a great set of numbers. Sir, my first question is regarding the revenue potential for the full-year basis for Indonesia and Vietnam and Guatemala assuming maybe like 85% capacity utilization, what could be the full-year revenue potential from three geographies
Pallab Banerjee
So if you see like in Mauritia the capacity that we have built-up we should be able to cross a $30 million $35 million easily. It might go up a little bit more over the next two years. Similarly, Guatemala as of now is a smaller capacity. We should be doing about 10 million to 15 million is the maximum potential that we have, what we are foreseeing and then which is a continuous head in Vietnam. Vietnam, we are almost nearing $100 million. We should be comfortably crossing that mark in Vietnam.
Unidentified Participant
$100 million, right?
Pallab Banerjee
Yeah.
Unidentified Participant
Okay. Okay. And sir, just if you can provide some ground level feedback with respect to how are the purchase orders being placed by retailers, especially after this 10% tariff introduction and some ground level feedback on how things are happening?
Pallab Banerjee
So especially about US market when you’re talking about. So in the US, what we find is that there was lot of confusion because with the US administration coming in bits and pieces, initially they put a 10% and then they said that they will put the reciprocal duty which was put for a day and then was taken off for 90 days. And again, China was implemented with 145% tariff and then it has been taken down to 30%.
So a lot of moving parts in US at this point of time. So when the tariff was high, for example, China at 145%, which definitely brings in lot of these goods which are sold-in the holiday season. That means all the Christmas gifts, Christmas items, decorating items, a lot of accessories and all. So those kind of was a big concern for most of the retailers and which has been now avoided by decreasing the tariff to 30%.
Now as these moving blocks were happening, there was definitely a conservative approach from the retailers. So they were trying to save money from here and there to make sure that even some product of Christmas and all should be there in the store. Now with this moving away from this 135% tariff, 145% tariff, it gives a good relief to the US customers.
So-far, we have not seen a big trend difference like a reduction on order booking and all. We are not seeing that. Yes, the press had come up with a lot of numbers and figures of consumer sentiment coming down and there could be a situation of empty sales. So-far, nothing of that we have seen.
April has been a good month of sales in US and May also beginning, we saw that the sales have been started well. Let’s see how the whole month of May goes. So-far, most of these retailers are getting sales as per their target so they should be open-to-buy, which is normal. So let’s see. They were a little bit conservative in terms of placing the holiday numbers, but not a big change as of it.
Unidentified Participant
Fair enough. And just one last thing, what would be the customer addition for the quarter and the full-year, if you can provide any new customers added on the retailers or the as a —
Pallab Banerjee
As a group, we are continuously adding customers like we are approaching new customers as our name is more well-established among the customers across the globe that we are a global supplier with multi-country, multi-product and doing well with the very reputed ones. So we are able to move-in with the new customers.
As you know that in this industry of ours, the entry barrier is high. Normally, the — it’s very difficult for a vendor to acquire a customer. But so-far at Global, we have been able to maneuver through this quite well. And even in the last five years, we have added a significant amount of business from the new customer-base that we have been building up.
And this exercise is on, even like in this year also, in this last year 2024, ’25, at least two very significant customer has got added to our list. And so we expect more to do in this year. By significant, I mean like somebody who has the potential to do more than $20 million, $30 million.
Unidentified Participant
Fair enough. Fair enough. Really helpful. That’s it from my end. Thank you. Thank you. I’ll get back-in the queue.
Operator
Thank you. The next question is from the line of Ash Mehta from Electrum Capital. Please go-ahead.
Unidentified Participant
Hello, am I audible?
Operator
Yes, please.
Unidentified Participant
Yeah. So sir, just few questions on my side and thank you for the opportunity. So just wanted to know that with the tariff that is now in-place and that we are expecting some margin impact, what would be the share of added cost that we would be absorbing versus passing on to the brand? Just wanted to know that.
Pallab Banerjee
See there, as the tariff got added, most of the retailers were looking into opportunities of mitigate this tariff. One of the opportun — one of the method that some of these retailers followed is to ask the vendors to burden share with tariff. That means the tariff burden that they have got, a portion of it can be shared by the vendors. And that’s the negotiation that was happening and you may have heard about that.
Now that doesn’t mean that each and every vendor has come back with this kind of request. And this is not the only formula that is working. So as a company, Pearl Global, we have been engaged with these customers. So one of the method is, yes, some kind of burden share. The second method is as they are, you know, mitigating their risk to move from a country like China, which was slapped with about 145% duty and they needed an emergency other help, so we could come to the action and do that.
And in some cases, like there have been ways that their costs are high when they take the goods and ban them in US, that means I’m talking about the freight, insurance, logistics handling, blah, blah, blah. So that portion like if we can land the goods for them in US and mitigate some of those extra costs from them without affecting our bottom-line. So those are all the three methods that so-far we have used and a few more in terms of negotiations with the raw-material suppliers and other things.
So all this combination is something that we are operating. But if you are specifically you’re looking for what kind of you know discounts or burden share that these customers have been asking, that was varying from anywhere from 1% to 4%. For us, like wherever we have agreed to, it’s not more than 2%, 2.25% is something that we have agreed to in some of the cases, not in all. And as I mentioned, about only about 45% to 50% of our total turnover is landing into USA where this thing was valid. So I don’t see a big Impact on this. So that is why it’s not a major feature for us.
Unidentified Participant
All right. And my second question would be now with the India blocking the RMG trans shipment that we’ve seen and I think the lead times would be increasing via Bangladesh, right? So like how is impacted in terms of supply-chain efficiencies and delivery timelines, if you can just ask.
Pallab Banerjee
So what I know that India has limited that the Bangladesh garments can be brought into India, not through the land route, but can be done only through the of and Mumbai. So that means the retailers in India, when they are buying goods from Bangladesh, they have to — they bring the goods out of Kolkata port or for the Mumbai port, which means that their transit period — their transit time goes up by couple of weeks.
Now this particular ruling doesn’t impact us because we — none of our production of Bangladesh was coming into India in any way. So we are not in any kind of impact or effort effect on this ruling before us.
Unidentified Participant
Okay. So my last question is
Operator
Sorry to interrupt ma’am, but I may request you to rejoin the question queue.
Unidentified Participant
Sure, sure. Thank you. Thank you.
Operator
Thank you. The next question is from the line of Dwanin from iWealth Fund. Please go-ahead.
Unidentified Participant
Hello, sir. Congratulations on a good set of numbers. Am I audible?
Pallab Banerjee
Yes.
Unidentified Participant
Sir, just on the first one on the industry side, right now with the UK FTA are coming in, right? And as far as we are present in the other geographies also, right? So if you can just give us some understanding how do you see the overall India demand shaping up? And in terms of cost also now, sir, against Bangladesh, how would we be placed?
Sanjay Gandhi
So UK FTA is a good news for India overall. India, if you see like out-of-the $16 billion, close to about $16 billion — $15 billion $16 billion of apparel exports that India does, almost about, I think between $1 billion or $1.5 billion is going to UK. Now I think that number will grow significantly.
Because we had a 12% extra 10% to 12% extra duty that we have been — our goods have been paying as it was entering into UK. So that definitely for the retailers or the brands, it was not very not a good proposition to import out of India. So only the goods which were like something unique for India or something very fashionable which other countries cannot do was only coming into India. Now that this level-flying field is there where we will not be charged this duty.
So naturally the Indian manufacturers can compete much more than along with this Chinese or the other big players. China was having a big — big share, almost 35% is a drop to almost 21%. That’s because of the anti-China feeling or basically like more of decoupling from China.
But that market-share can India also can gain quite a lot. Initially, it was going to other countries like Bangladesh, Cambodia and Turkey. Now India also can compete in that sphere. Now if you’re talking about India versus Bangladesh, Bangladesh will continue to be cheaper because of all the other factors that I just mentioned. Well,.
Yeah, cost of cost of manufacturing, the efficiency level, everything is better in Bangladesh. So still like apples-to-apple comparison of product — same product if I’m shipping out of Bangladesh factory and from my India factory. Bangladesh would be cheaper by almost about anywhere between 5% to 7% might be cheaper. But earlier that 5% to 7% plus this 12% duty it was impacting was 17%.
So now that number comes down significantly. So yes, there should be some significant growth even like some of our vendors and some of our low-cost center factories in the — in the Tier-2 cities and all, we should be able to compete with Bangladesh.
Unidentified Participant
Okay. And on the others geography, sir, Vietnam, Indonesia. So now India would be on the level geography?
Pallab Banerjee
Yes. So see UK the — Vietnam got the benefit only by December 2024. So there is not a significant business of UK in Vietnam. And so definitely now India and Vietnam would be more like simultaneous, we can grow. And Cambodia and Bangladesh had a major share. So those are the ones like we should be competing now and we are in a much more level-playing field, including Turkey and all.
So Turkey still enjoys the faster transit because from Turkey to UK is hardly about a week and also. So that’s the advantage that Turkey will still continue to have. But otherwise, like India is in a much better place to compete.
Unidentified Participant
Okay. And sir, my second question was on the — on the overall capacity now, right? So I think Q4 we were at 88% utilization. And going ahead, sir, with the overall expansion plan, right, I think we would be adding close to 8 million pieces this year, right? So which is kind of 8%, 10% of capacity extra we are doing, right?
So in terms of our, sir, overall vision which we had and with the INR130 million INR140 million capacity expansion, by when do you think that will happen and what kind of capex broadly, sir, we would be using? And then in terms of geographies, the incremental capacities will go-ahead, which of the
Pallab Banerjee
— yeah. So first of all, like one thing to make clear, we had given you a snapshot of where we wanted to be in 2028. So we said that we want to export or we want to ship 100 million pieces by 2028. Now to ship that 100 million pieces, we thought that no — and that’s not the last year of our operations and that’s not the final goal.
We want to be a much bigger organization. So we continue to invest in our capacities every year. So by 2028, we thought that or we had a plan or we still have that plan that our capacity should be in the range of about 130 million pieces by that time. And we still should be comfortably shipping 100 million pieces.
Now how does it correlate? Capacity means that we build the infrastructure. And as we ramp-up those infrastructure by hiring the full strength of people, that takes a little bit more time. So as we make an infrastructure of, let’s say, 130 million to use this 130 million might take about more than one year or two years to get to that full capacity. But our capacity will be ready by that 100 million by the 2028, when we will be shipping 100 million. So I think so that is the reason for which we will always see that our utilization is about 80% or 79% or 81%.
That will always be like that because continuously we are growing the capacity for the demand for the future. Now last year, for example, in India, we continued to grow, although like everybody else was shutting down the factory because there was an overinventory situation in US and the order book was less.
But we knew that, okay, this is a year that things would be happening and we would need this capacity, so which we continue. So as a group, we continue to expand on our capacities, keeping in mind the future strategies that are going to be enacted by us. So that’s the capacity front. In terms of where this capacity will be allocated or created, that will depend on the business ROI and ROE — ROCE and ROE.
Like these are the things like which Sanjay and his team continuously continue to monitor. And that’s how that drives our investment in the locations. So-far, it seems like Bangladesh is a very competitive country. India is getting a good potential because of these potential FTAs, which we have to encash upon. Vietnam, Indonesia are more specialization on higher-end of the product.
So naturally, it will be lesser than the India and Bangladesh, which is more of a mass merchant dies in the mass-market that we cater to. And Guatemala would be very, very restricted because that’s just more of a showing a feather in our cap to our customers because that’s a very expensive country and not so efficient country.
But yeah, yeah, because of its location and all, we have to showcase that to our customer that we have a presence out there. That’s the kind of overall plan.
Unidentified Participant
So, sir, so next two, three
Operator
To interrupt, sir, but I may request you to rejoin the question queue for follow-up questions.
Unidentified Participant
So those is the only continuation of what. Okay, I’ll come back
Operator
Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Rudrak from iThought PMS. Please go-ahead.
Unidentified Participant
Yeah. Thanks for the opportunity, sir. Congrats on good set of numbers. My question pertains to our customer acquisition. We already cater to big players like Walmart, Target, et-cetera. Let’s say, if you want to start a new engagement, could you help us understand the timeline and different stages in-between acquiring a new client and reaching a sizable commercial scheme of orders.
Pallab Banerjee
So yeah, first of all, a little bit of correction. When you say Walmart and Target, both for both these, we are not catering to US market. We cater to target of Australia market and Walmart for Canada and Mexico market as of now. But yes, like in terms of acquisition of a new customer, yes, it depends on both the customer and us, like how we are positioned. For example, Walmart or a target kind of customers, it’s very, very difficult to enter those kind of customer-base because there are many, many players from across the globe who are always vying for it and they have a huge waiting list in terms of adding to their base but yeah this kind of when such a I would say disturbance that happens or basically the whole resetting due to the tariff and situation like this comes up, then there is an opportunity at that point of time this definitely opens up. So that might speed-up the process even for a customer like Walmart and a target. Otherwise, like you know what we do, we are in touch with many good customers, we think that is different potential where we can serve them. And what is that particular category, what they are looking for or the region that they’re looking for where they have a, I would say a white space or a gap or a whole. So if I can strategize and pitch myself on that front that, okay, I’m strategically, I can immediately provide you a solution that you are looking for, then that speed-up the whole process. Otherwise, like if I just go, okay, I’m a vendor in India and I have a factory in India and at least give me an opportunity, it can go on for years without getting an entry. So you see like there are not a simple answer to the question that you have asked. If you can really know the strategic intent of that customer and the category that they are looking for, where there is a white space and you can fill it up then it’s like you know very smooth like a knife on a butter and it can go very quickly so I don’t know if that answer satisfies you or not but that’s how it operates
Unidentified Participant
And just hypothetically, how quick are we talking about like six to 12 months or even lesser than that?
Pallab Banerjee
Yeah, we have experiences in which we could build-up a significant amount of business. For example, I mentioned in my speech about a very good fast-growing customer of Canada-based and retailing in US. Now that particular customer had a need. So once we started speaking, within months, we have started shipping to them. Okay. So that’s because they had a particular need and we could fulfill that and we were absolutely prepared. We have been watching them or we knew that as soon as this opportunity comes, we start speaking to them. So as these things started happening, so from the first date of communication to execution and order happened very, very quickly.
And there have been cases like another customer in US, which we are trying to open and they have given the that they want to work, they find that our factor is good and product good and all, but this conversation is going on for more than a year. We haven’t seen a conversion as of yet.
So again, like it varies. Now if I have one per country kind of factory and a general factory or a traditional factory, then I have to prepare the factory, I have to prepare the systems, process and all. For a company like Pearl, where we are located in multi-country and awareness of the need because we do cater to more than 30 top-line customers across our countries.
So we do have that preparedness and the readiness level, which is very-high. That’s one of the reasons that you’ve seen like some of the — our competition in India and all have to acquire a company to add customers, whereas we can approach a customer and develop the business. So there’s a different strategies that each of us play to get a new customer.
Unidentified Participant
Understood, sir. Sir, my second question is on our US business. An Indian textile service provider with a very good reputation has grown in US in last two years. So are we seeing any increase in competitive intensity there,
Pallab Banerjee
You mean that Indian vendor have gone to US and taken a position? I didn’t understand your question.
Unidentified Participant
Yeah, yeah. Indian player, a very good player with stellar reputation in global markets. They have expanded their businesses in US for last two, three years. So are you seeing an increase in competition in the US markets?
Pallab Banerjee
See, US market is always a high competition because the volumes are big, it’s an attractive market and English-speaking customers and all. So definitely there is always a competition. The major players in US are the South Koreans, the Taiwanese, the Chinese, I’m not too sure about India, like India has a very small segment among all the US customers.
So if one in or two Indian customers get — Indian vendors get added up, I don’t think it makes a big difference because the big players are still belongs to these other countries and we find our main competition is against them.
Unidentified Participant
Understood sir. Thank you.
Operator
Thank you. All participants are requested to limit their questions to two per participant. The next question is from the line of Path Patel from Unifi Investment. Please go-ahead.
Unidentified Participant
Yeah. So thank you for the opportunity, sir. And I think I think congratulations with Global team for consistently delivering over last I think two quarters, right, good growth. So my first question is, so can you give us a broad sense in terms of — in terms of top-five or top-10 strategic clients of Global. So what is the revenue contribution from those clients in FY ’25? Thank you,.
Pallab Banerjee
First of all, you are asking me about the top-10 customers and what is their market-share that they have?
Unidentified Participant
What is — what is the revenue contribution from our clients. So basically —
Pallab Banerjee
So top-five should be about now around 60 — yeah.
Sanjay Gandhi
Top-five should be 60% and top-10 will be around 80%, 78% to 28% to 80%,
Unidentified Participant
Yeah. So my second follow-up question to that is, okay, what be Paul Global wallet share in those top-five or top-10 clients.
Pallab Banerjee
So for those, let’s say, I’m talking about top three, let’s talk about. So I have a customer like where I belong to almost in the top three, basically from their side. Normally their exposure in one particular vendor would be in single-digit, maybe about 5% to 7% maximum. We talked about three vendors that they have.
So my share are for them like I would be only about that much of percentage. Then I have got, let’s say, PVH group, so that also belongs to one of our top three customers. So similar number, maybe like little higher percentage. Whereas we also supply to Inditex Group a significant number. They’re in our top three, but they are such a big customer, the big volume that they buy. I may not be even 1% or 2% for them. So depending on the size of the customer, our goal is that the top three or top four should be in the $100 million range and then the next year should be in that about $15 million range.
So like that, we have classified how we will approach them.
Unidentified Participant
Okay, sir. And then my second question, I think so the last annual report, you have mentioned that you have an in-house — I think in-house design team, right, across the four different locations of around 75 members, right. So maybe explain how the — how the in-house design team helps in the core business or what the design team is more working toward a kind of a new ventures like Paul Unlimited in US for the brand licensing business.
Pallab Banerjee
Yeah. So we have designers in across all the locations where we are manufacturing so that we continuously design and show the product where the strength as per our strengths. And also we have design teams in the bigger markets, markets like US, UK, Spain, this is where we have design team and our own showrooms where we can engage ourselves with the — with the customers design teams and we can co-create the product together or always have a know what is going on in their mind and be prepared much, much more.
So that’s the intent that we have. If you see like how do we do our planning and manufacturing, almost about 70% to 80% of our business, we would like to have more of an automode where we have these top clients as we just heard, like this top-10 clients. So they are the ones like where we are talking about strategic and long-term vision that we have.
So more or less there is some kind of guaranteed business or which we can expect that will come season after season or year-after year. So that’s something is we have to secure ourselves. And then there is another we set-out that could be, let’s say, even if 70%, 65% to 70% of our business is like that.
And that another 15% to 20% we should be continuously showing them the design and make Sure that this capacity is completely full. So that’s the reason for which we continue to give the design inputs to our customers. And we are proud that almost about 40% to 50% of what we finally manufacture comes from our own designs.
Unidentified Participant
Okay, fair enough. Thank you. Thank you. That’s it from my side.
Operator
Thank you. And the next question is from the line of Pulkit Singhal from Dalmus Capital Management. Please go-ahead. Please go-ahead.
Unidentified Participant
Thank you for the opportunity and congrats to the management team for a good set of numbers. The first question is regarding capacity expansion. I mean, your commentary is largely positive driven by various FTAs and whatever you’re seeing on-the-ground. And we have grown volumes at 15% CAGR over the last five years.
Now given that we are already operating at an optimum 77% utilization, one would assume that even for a 15% volume growth, you have to add easily 14 million 15 million pieces every year. But you are adding only 8 million and I’m just wondering why is the capacity addition lagging good figures.
Pallab Banerjee
First of all, thank you, Pulkit. See, we — when we talk about the capacity addition, we are all this capital allocation, it is more of the investment that we are directly doing. Keep in mind that always we have a combination. We have certain capacities that is we are investing upon and directly making it and there is some partnership.
So the partnership is always a flexibility that I have, which I can grow as per the need that I have. And if you see like we have done 74 million pieces this year and we already have with us 93 million which is ready and we would be going comfortably much above than 108 million, which is — sorry, 103 billion that we have planned from INR93 billion to INR8 billion, that would be 101 billion.
But yes, there will be now — I told — also I mentioned in my speech about certain partnerships that we’re doing even in India along with Bangladesh and Vietnam. So that would be some — there would be some other further additions to it. So this is the directional that which we can see and we are sure of because we are investing this money., you want to add something on this?
Unidentified Participant
Yes. So I mean from 74 million pieces, if we take you know, let’s say, 15% also growth, we’ll be looking at 85 million of shift pieces. With the current capacity 93.1 and the rest 7, 8 getting activated during the year, we will be comfortably placed to have those — have those numbers achieved during the financial year as we are saying that 12% to 14% volume growth even in this current financial year FY ’26, we are pretty confident.
And during the year, we said there are other projects also which are under discussion. As of now, we have done this active evaluation and on this project, which will be starting implementation, but the rest of the opportunity will come. And during this commentary also, you mentioned there are some outsourcing facilities in India, which are also under evaluation.
So even if we take INR93 billion, I think there is a good headroom for us to really cover in the next 12 months time period. But there will be addition, which will happen during the year also, which will take us to a number which is higher than that. And from 130 million is what we have stated by FY ’28, I guess we should be — by early part of FY ’28, we should be looking at this 130 million pieces. If I understand.
Pallab Banerjee
And if I may add, like I think I think the last three or four years, we have done much, much better than 14% growth. And yes, our plan is definitely have a stable-growth of CAGR of 14%, but yes, we are always ready even to do more 25% to 30% also and you have seen that time and again.
Unidentified Participant
Okay, I was referring to volume growth actually. Value growth is definitely higher. Sir, my second question is on margins. I mean, last two years, if I look at it, our business has grown 50% broadly and — but margins have gone from 8% EBITDA to 9%. And in fact, even last year, despite a 30% revenue growth, 9% has remained flat.
So I’m just wondering, I mean, with scale, one typically assumes some kind of margin expansion, but then there is an element of mix, et-cetera. So how are you seeing things in terms of margins? I mean I thought that you would have achieved double-digits, but it seems to be a bit elusive so-far..
Pallab Banerjee
So if you look at our quarter-four financials, India, we are at 10.2% and if you look at the group number also for quarter-four, excluding the new facility losses, I think we are at 10.5% at the Group level also. So clearly, with this revenue stream and with this excluding the — once a new facility stabilizes, we are already at that mark of double-digit EBITDA, which means that after doing this demonstration, in the medium-term, we are pretty confident of achieving this 10% plus, you know it can be higher also between 10% to 12% is what we have stated in the medium-term to achieve this.
Why we specify this range is because there are multiple levers which we are working on aggressively. Three or four levers which we can mention is Guatemala losses, we should be converting into the breakeven and then generating a profit. Indonesia full capacity utilization with UK FTA and other FTA with India coming in, the capacity ramp-up in India.
I think these levers are — will come — will materialize at different point in time. And once the convergence take place of all this lever, we are definitely looking at much ahead, better than 10%. So that’s why we’ve given a range of 10% to 12%. So just to mention that in the medium-term, we are pretty confident of achieving this double-digit EBITDA margin.
We have very well demonstrated this. I think this can give us a queue in terms of the leverage which potential which is available even with the existing facility — existing operation as of now.
Unidentified Participant
What is the expectation this year?
Pallab Banerjee
So as I mentioned that there are multiple levers. We are working on it. And I think we should be looking at — we are looking at a moderate — in the medium-term, we are looking at a double-digit EBITDA margin.
Unidentified Participant
Understood. Thank you and all the best.
Operator
Thank you. Thank you. Before we move on to the next participant, the participants are requested to limit their questions to two per participant. The next question is from the line of from Elara Capital. Please go-ahead
Unidentified Participant
Hello, am I audible? Hello.
Operator
Hi,.
Pallab Banerjee
Yeah. Congratulations, sir on a strong set of numbers. Sir, I missed the US commentary. The question that I had on US was how are the clients talking about in terms of volume growth and in terms of tariff sharing during this 90-day fall and we know that? So volume growth, if you look at US market over the last four to five months, the volume growth is quite good.
In fact, even in the first two months of — first two or three months of this year, you can see that the US imports are on the double-digit increase. So I think that should have continued, little bit of skepticism and all this is coming up because of this tariff uncertainty. But I think overall market is not suppressed as of yet. So let’s see how things goes. Things news are very different every morning.
We have a president like — who speaks quite differently within the morning and even. So I think so-far people are accepting him and I think the life continues. In terms of this tariff, which is a baseline additional tariff of 10% that has been implemented. So there have been trials from the customer side — basically the retailers and the brand side to increase the price tickets.
So if somebody is doing it publicly, they are getting reprimanded by the President and his group, but — but still like ultimately, there will be — it will be find out, some balance will come up. In the short-run for this 1/4, which is taken by surprise, so some of the retailers did come back with kind of what kind of alternate solutions can be done.
As I just mentioned, some people ask for some kind of burden share. Others ask for some logistical solutions. The third group of customers wanted help. So they thought that if we can share that kind of help, then it is good enough for them. So all combinations are going on.
So it’s not that we are like really stuck and we have to give a very hefty discount and that we cannot manage and it will go to our bottom-line. So we don’t see — we don’t foresee that kind of challenges of the fate. And whatever the challenges would be for this 1/4 where we have done the costings and already orders were in-place in which like you may have to give a small discount and all.
So that’s the kind of — it’s more of a tactical negotiations and discussion that is going on, but not a, you know huge speed bump or I would say a big impact on-bottom line or other things as of yet.
Unidentified Participant
Okay. So we don’t foresee any major hit on our profitability because of US tariffs or as of now, at least in the medium-term. Okay. Sir, my second question is on profitability again. You mentioned that you always keep on investing into new capacity also and some of the capacities will definitely be lying idle because you are investing ahead of demand. So reaching a double-digit margin, I mean, near 12% would definitely require something more than just higher utilization.
Can you just help us with some of the levers that could play eventually this time to improve your margins?
Pallab Banerjee
Yeah, absolutely. Absolutely. Sanjesh,.
Sanjay Gandhi
Yeah, yeah. So Prainab, as I just mentioned in answer to my — in answer to the previous question that there are levers which are already-existing, which can really play-out. In addition to the demand, you rightly mentioned about additional — in a volume growth, let’s say, Guatemala starting from that, we are currently making in a stabilization phase.
So there are losses in the operations and we are pretty confident of turning it around in the near quarters. So that will help in terms of the improvement. Assuming other things remains constant, there will be improvement in EBITDA. Second, the facility utilization in Indonesia is at 50%.
The overheads and our — our structure is prepared to deliver double the volume what we are doing in Indonesia. So that’s another lever operating leverage will kick-in. Third is we mentioned about India also, the capacity which is we have in terms of the revenue, it’s around INR1,600 crore-plus.
Currently we are doing only INR1,200 crore. Now that ramp-up can definitely bring in and it is well demonstrated if you look at quarter-four number of India where we have done INR397 crore and deliver 10.2%, it clearly demonstrates that as we scale it up and bring the efficiency improvement across the factory, the leave — the targeted EBITDA margin can in double-digit can be met in a very medium-term.
So the foundation across the group has been set to really achieve double-digit EBITDA margin on a sustained basis once our new facility and operations stabilizes.
Unidentified Participant
Understood, sir. So thank you for your responses. I’ll come back to the question queue. Thank you.
Operator
Thank you. The next question is from the line of Vignesh Ayer from Sequent Investments. Please go-ahead hello, are you there, Mr Vignesh? MR. Vignesh.
Unidentified Participant
Hello. Am I audible now?
Operator
Yes, sir.
Unidentified Participant
Hello. Yeah, sorry, sir. Thank you for the opportunity, sir, and congratulations on a great set of numbers. So I have two questions from my end. Firstly, more on a broader — to get a broader idea. I mean last month there was certain jurisdiction placed on import of yarn from India.
I mean the — so I wanted to understand how — what has been the impact on the industry, I mean, in terms of lead-time in procurement of yarn and how — how well are we placed at the moment and import of yarn from West, sorry, I didn’t understand. So basically, there is no restriction on import of yarn from India to Bangladesh in last month through road route, if I’m not wrong.
And dependency of Bangladesh textile is big on input of yarn from India. So on that matter.
Pallab Banerjee
So-far we have not seen any impact none of our business has been impacted out there. In fact, you have seen that our business in Bangladesh has significantly grown. We are already experiencing almost about a 35% growth year-on-year in Bangladesh at this point of time.
So we have not seen any impact as of yet.
Unidentified Participant
Okay. And
Pallab Banerjee
I think there are enough stockies and enough other routes of yarn into Bangladesh. So we are not seeing any impact in fact.
Unidentified Participant
Right. Got it. And sir, could you share the number of when it comes to utilization only for the quarter-four for the Indian unit as well as the Vietnam unit
Pallab Banerjee
I think yeah. So quarter-four India unit has been — utilization has been almost 90% plus. And Vietnam generally H1 is higher utilization, because we produce product category in Vietnams are largely outerwear, which are for fall and holiday season. In-quarter four, the utilization in Vietnam will be around 65% of the available — available capacity.
Unidentified Participant
Okay. Yeah. That’s all from my side. Thank you.
Operator
Thank you. Thank you. Ladies and gentlemen, in interest of time, this would be our last question. I would now like to hand the conference over to the management for closing comments.
Pallab Banerjee
Is thank you all the participants. In FY ’25, Well Global showcase strong resilience and strategic focus, delivering record shipment volume and robust financial performance. Our ongoing infrastructure investment across all regions supported by expansion reflect our commitment to long-term capacity building and position us well for future growth.
Backed by strategic partnership and a clear vision, our FY ’26 capex plan aimed to enhance efficiency, advance sustainability goals and reinforce our leadership in global apparel manufacturing. As we look-ahead, we remain focused on delivering sustainable value, strengthening global competitiveness and driving continued success that drive portfolio and strong momentum. Thank you very much.
Sanjay Gandhi
Thank you.
Operator
Thank you. On behalf of Pearl Global Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Sanjay Gandhi
Thank you. Thank you