SP APPARELS LTD (NSE: SPAL) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
P. Sundar Rajan — Managing Director
V. Balaji — Chief Financial Officer
S. Chenduran — Joint Managing Director
Analysts:
Prerna Jhunjhunwala — Analyst
Rehan Laljee — Analyst
Raman KV — Analyst
Aabhash Poddar — Analyst
Unidentified Participant
Rahil Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q3 FY ’25 Earnings Conference Call of SP Apparels Limited. [Operator Instructions]
I now hand the conference over to Ms Prena Jinjanwala from Elara Capital. Thank you, and over to you.
Prerna Jhunjhunwala — Analyst
Thank you, Mike. Good afternoon, everyone. On behalf of Elara Securities Private Limited, I would like to welcome you all for Q3 FY ’25 post-Results Conference and business update call of SB Apparels Limited. Today, we have with us the senior management of the company, including Mr P. Sundra Rajan, Chairman and Managing Director of the company; Mr S. Chenduran, Joint Managing Director; Ms S. Shantha, Joint Managing Director; Mrs S., Executive Director; Mr; Chief Executive Officer; and Mr V. Balaji, Chief Financial Officer of the company.
I would now like to hand over the call to the management for opening remarks. Thank you and over to you, sir.
P. Sundar Rajan — Managing Director
Thank you very much. Good morning. Good afternoon, everyone. I welcome you all to the post-earnings conference call for Q3 and nine months FY ’25 of Limited. Before I take you all through the performance and updates on the company in various segments. I would like to state before you some industry developments and dynamics, which has placed us in an advantageous position. The Indian textile and apparel industry has consistently shown resilience with the evolving global trade dynamics, driven by a combination of key recent developments, supportive government policies and increasing global demand, the next few years will be transformative for the industry, positioning India as a leading supplier of appearance globally. The recent Union budget has demonstrated a clear commitment on strengthening India’s test sector strategic initiatives aimed at boosting cotton productivity, duty restructuring on textiles and push for domestic manufacturing.
In the broader context, the international market dynamics are also aligning in our favor, influenced by the China Plus strategy, tariffs imposed by Trump government on China and political instability in Bangladesh. These macroeconomic developments have put India in a sweet-spot. Coming to our business performance, I’m happy to share that our new Sea project is operational now and we have started receiving inquiries from our customers. During the quarter, we have successfully added a new customer from the US. This is a resultant of cross-selling activities from newly-acquired yen brand apparel. The Sri Lanka’s operations have been showing strong traction with commitment from reputed customers. Overall, the current consolidation is on right path and we are gearing up for strong growth ahead. Now I would like to move towards business updates on our segment. Spinning division, despite facing challenges in the past-due to volatility in the cotton prices, the situation has recently turned in our favor as cotton prices have decreased over the past few months and yarn prices have remained more or less stable.
The newly announced budget has placed an emphasis on enhancing cotton production, which will stabilize the availability of raw-material thus lowering fluctuations in the cotton prices and the on price — in cotton prices. Our printing and dying — printing, dying and embroidery divisions are running at full capacity. Commenting on the government division during Q3 FY ’25, the capacity utilization grew to 85% as against 78% in Q3 FY ’24. We are witnessing huge demand from our customers and thus to meet this growing demand, we are actively looking towards acquiring lucrative factories in terminal orders to further expand our existing capacities. Our current order book stands at INR474 crores as of now. On the Sri Lankan operations, we see a significant potential for growth given the govern is the current geopolitical trade shift, our customers are eager to place more orders with us. Also, we are receiving traction from all our existing customers to begin the production from Sri Lanka factories.
The audits have been under process and orders of one of our customers under production also out of Sri Lanka over the next two years we plan to increase our capacity approximately 200 missions in Sri Lanka sorry 2,000 machines in Sri Lanka. With regard to young brand apparels, over the course of the quarter, we have effectively merged operations and integrated our team to enhance efficiency. Our clients are satisfied with our deliverables and we are building strong relationships with them. Customer demand has been rigorous with request to double our capacities to keep up with their increasing needs. Nevertheless, as we are in the process of integrating the newly-acquired company, we are cautiously scaling up our capabilities. By upcoming financial year, we anticipate installing additional machinery to meet these demand. With regard to SP UK, our revenues for Q3 FY ’25 was GBP2.31 million and GBP5.22 million in nine months FY ’25. Our current order book is valued at GBP3.2 million. The business model at SPUK is proving to be effective after a year of transition that included relocating our office and team restructuring.
Additionally, I am pleased to share that we have successfully expanded our customer-base at SPUK by securing two new customers, increasing our total customers to five and with another two more potential customers currently in discussion. With this positive momentum, we are confident about FY ’26 and expect a robust year for SP UK. In the retail division, SP Retail Ventures reported revenue of INR18.7 crores during the quarter compared to INR14.9 crores in Q3 FY ’24. We are in the process of expanding Angel and Rocket, the UK-based brand. Consistent with our previous communications, we are exploring equity fundraising options to fuel growth within our retail business. During Q3 FY ’25, the total saw a revenue of INR16.2 crores and stood at INR2.44 crores. The general outlook, in summary, our government division is experiencing robust demand and are adding customers at a healthy rate. We are proactively seeking to expand our capacity in Tamil by acquiring well-established and operational factories.
Our Sri Lanka operations have successfully passed the audit chase and potential customers are pleased with our facility, positioning us to start receiving orders. The integration of Young Brand apparels is completed and the brand is poised for future growth as we prepare to meet the rising demand. SPUK is on an upward growth path and we expect the retail division to recover moving forward. With these developments, we believe to experience a 15% to 20% growth in the top-line revenue.
Thank you and over to Mr Balaji, our CFO.
V. Balaji — Chief Financial Officer
Thank you, sir. Good afternoon, everybody. I will just run you through the financial performance of the company on a standalone basis for Q3 FY ’25, adjusted total revenue stood at INR233 crores, which is a growth of 3.6% year-on-year. Adjusted EBITDA stood at INR38.8 crores, which is an EBITDA margin of 16.6 percentage and PAT for the current quarter stood at INR18 crores, which is a PAT margin of 7.7%. Our EPS stood at 7.2 per share for the current quarter on a standalone basis. On a consolidated basis, our total revenue for the current quarter stood at INR362.2 crores, which is at the growth of 40.9 year-on-year. And our EBITDA for the current quarter stood at INR53.8 crores and an EBITDA margin of 14.8% and the PAT stood at INR24.8 crores, which is at a PAT margin of 6.8 percentage. Our EPS for the current quarter stood at INR9.9 per share on a consolidated basis for the current quarter. On the segmental performance, our end garment division stood at INR319 crores as against INR225 crores.
So going-forward, government division will also include the brand apparels revenue. So when you look at Government division performance for the current quarter, we have achieved INR319 crores, including. And for the nine months ended, we have achieved INR947 crores as against INR684 year-on-year. At the EBITDA level on the government division, we stood for the current quarter, adjusted EBITDA stood at INR54.22 crores as against INR38.71 crores. For nine months, adjusted EBITDA stood at INR153 crores as against INR127 crores. On the SP UK vertical, we have delivered a INR25 crores of revenue for the current quarter as against INR13 crores year-on-year. For the nine months ended, we have achieved INR57 crores as against INR43 crores year-on-year. Our EBITDA margins is 0.02 negative, which comparably is flat. On our retail performance, we have achieved a revenue of INR18.66 crores as against INR14.87 crores quarter on — year-on-year. For nine months ended, we have achieved a INR56 crores of revenue as against INR57 crore year-on-year. Our EBITDA margin for the retail division stood at minus 8.7 lakhs — sorry, INR87 lakhs which is which is a very bad. We are looking at flat EBITDA margins going-forward. So other details, our current debt position as on the standalone basis stood at INR208 crores gross debt and the net-debt is INR187 crores. Other information are available in the presentation and we can get into the question-and-answer session. So would you like to begin the question-and-answer session?
Questions and Answers:
Operator
Ladies and gentlemen, we will now begin the question-and-answer session. Participants who wish to ask a question may press star and one on your Techtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Rehan from Equitree Capital. Please go-ahead.
Rehan Laljee
Hi, thanks for the opportunity. Am I audible?
P. Sundar Rajan
Yes. Yes, please.
Rehan Laljee
Hi, sir. I wanted to understand the impact of ForEx on the realizations of SP Garmenting division because I believe 80% hedged and 20% unhedged. So if you can help us understand the same, do we get any benefit with the depreciation of the currency or how does it work-out for us, hello.
Operator
Gentlemen, the line for the management are disconnected. Please stay connected. We will connect the management shortly ladies and gentlemen, we have the management back connected. MR. Rehan, if you could repeat your question once more.
Rehan Laljee
Sure. I just wanted to understand the movement of the ForEx on our realizations, if any, because I believe we’re 80% hedged and 20% unhedged. So considering the rupee depreciation, any benefit do we see going-forward.
V. Balaji
So realization and rupee depreciation doesn’t have any correlation. So whenever we get the order, we cover 80% and 20% is kept open. This — this realization is only with — because of the product mix changing. Nothing to do with be it dollar appreciation or currency depreciation.
Rehan Laljee
Okay. Got it. So I — over the last eight quarters, if we see the ASPs which are reported in the presentations, there has been a degrowth of almost 10%. So the — in Q3 FY ’23 is to report ASPs around the range of 150 and now this quarter you reported around INR130 mark. Can you help us understand what has led to such lower ASPs because this is really hampering the top-line performance of the standalone entity. We’ve been flattish for almost eight quarters. So I mean, product mix change can only be to a certain extent, you’re still selling similar products, but can you help us understand better what — anything we’re missing?
P. Sundar Rajan
Yes. Just to give you how we work on the costing, we work on the costing based on the current market yond rates. So when there is change in the yond rates, definitely there will be a reduction on the realization also. So when you have looked into the numbers 10 quarters before, yarn prices were at its peak. So my realization also will be on the higher side. Now I guess we have settled down as the Chairman was saying that the prices have corrected considerably both in terms of cotton and yarn. The prices of realization also have come down. But I think this — we are at a bare minimum in terms of — I mean the lowest line of the cotton and yawn, I don’t think there’ll be any change in the yarn prices going-forward. So it is all depending on the yarn prices, I mean.
Rehan Laljee
Okay. Then even if I use that logic and I use — then I calculated EBITDA per piece, over the last four to six quarters, your EBITDA per piece has come down, so that is a contra view to the same. I mean, I can exclude the last two quarters because of the elevated employee cost that we’ve had for, I mean that’s completely understandable. But still there has been a huge delta and difference. So that’s still not adding up. Is — are you — I mean there’s something that.
P. Sundar Rajan
When you look at Q4 and Q1, we had significant amount of air price that was happening because of inefficiency of the fresh labor force that has come. So that has pulled down our EBITDA. If you look into the transcripts of Q4 and Q1, we ended-up somewhere around INR3 crores INR4 crores of rights that happened and that is why there was a pull-down on the EBITDA — EBITDA percentage.
Rehan Laljee
Exactly. I’m not talking about the last two, 3/4, I’m talking about six quarters back.
P. Sundar Rajan
No, I think EBITDA for Q3 was more than 18%. So EBITDA for Q4 FY ’24 was around 17 percentage and Q1 also there is a reduction in percentage. So only two quarters we have reduced the percentage because of and Q3, Q4 is purely because of our inefficiency in the new labor force that has come up.
Rehan Laljee
Okay. The — so keeping all this aside, how much do you budget from and the Sri Lankan entity that the company is expanding into at their respective peak revenues like from Siwaka Sea and Sri Lanka at peak I mean not initially because I understand it takes time to ramp-up the business and it’s not easy, but what do you — what do you see in FY ’26 you can achieve from both these entities.
V. Balaji
Is something that’s a brand-new factory with all fresh workers. So it will take its own time to pick-up. We have to fill the factory, train the people and bring up the efficiencies. So that will start showing the results only after about 12 to 18 months’ time. So that is only for the future, that capacity. But in order to quickly grow the capacity we have opted for the Sri Lankan capacity where the factories are good and the workforce is available and skill-set is very good.
So what we are — as I — as I mentioned, I think few quarters before, this will — now it’s real and the operations up and running and we are we are negotiating about 2-3 more new factories so probably for so which means that we expect in our FY ’26 that Sri Lank Corporation alone, we will be able to run about 1,000 machines, which can bring about INR200 crores as an additional business in the top-line and you’re not budgeting anything for FY ’26, is that correct?
P. Sundar Rajan
Very, very normal, very. And so we don’t want probably about INR10 crores of business.
Rehan Laljee
Understood. But after 12, 18 months, what’s the peak revenue that unit can generate? INR150 crores.
P. Sundar Rajan
Probably after the 18 months, it can generate about, say, about INR50 crores. Okay, okay. As I told you strategically see the challenge is only the capacities where we have been able to fill, but the efficiency is a problem because of all pressures and trainees all migrant and there are always challenges with regard to attrition and other things. So we always have new projects, acquisition of factories within Tamil Nadu. And the third one is putting up I mean increasing the existing sales and the third one is offshore production. So we had these four options. All the four we are working towards. So we have new projects, we acquired Yen brand and we are increasing our existing capacity by bringing in migrants and we are already up and running in Sri Lank operation. So I think we are very clear in our direction.
Rehan Laljee
Understood. Thanks for that clarity. MD, sir, you had mentioned that you are also evaluating in and Tamil Nad any opportunities that you can acquire units. So recently about two weeks back, there was a sourcing company in our country that actually acquired a apparel exporter that caters to the same product mix, same client as you guys and that capacity is about 40 million pieces per year. Any reason we didn’t look to go and get into the same. That is you’re talking about PDS from London.
P. Sundar Rajan
Yes, you know, let’s see that the outlook of management it differs from company to company. So we want to move away from cluster because we feel it’s always a challenge to increase the capacity over here. There is going to be only increase in inflation of wages and poaching, only these things can happen because it’s a cluster, is a cluster. So only thing is you have to bring in more workers into this cluster. You cannot know, you cannot get anything more locally. So — but probably it’s a — that company has thought this could be ideal one because it’s a running one to invest in this company. But whereas we believe in moving away from cluster to the rural side, where we can take trust people, train them for the future and acquire the in different places. That is our strategy. So it is completely different outlook.
Rehan Laljee
Understood. Thanks for that clarification. That was very helpful. Balaji, sir, if you can help me understand the EBITDA contribution from spinning for the quarter spinning division, EBITDA for the quarter, please.
V. Balaji
In terms of number, I guess it should be anywhere around INR4.8 crores to INR5 crores for the current quarter.
Rehan Laljee
Okay. Got it. Understood. And MD, sir, one last question.
Operator
May interrupt you, request you kindly come back-in the queue for follow-up questions.
Rehan Laljee
Sure. Thank you.
Operator
Thank you. We have the next question from the line of Raman KV from Sequent Investments. Please go-ahead.
Raman KV
Hello, can you hear me, sir?
V. Balaji
Yeah. Yeah.
Raman KV
So I just want to understand on the Young Brand division’s FY ’26 revenue, how much are we expecting?
V. Balaji
In terms of absolute exports, it should be around INR310 crores to INR315 crores is what we are budgeting. And on the total revenue front, it should be around INR350 crores. That is what we are budgeting now.
Raman KV
INR300 crores to INR315 crores absolute exports.
V. Balaji
Yeah, yeah. This is including other income and local sales et-cetera.
Raman KV
Okay. And I also have with doubt with respect to SPU case. So SPUK, we have been getting orders and you said we have added two new customers. So — and yet we are not able to have EBITDA-positive. So can you give any guidance on that particular aspect.
V. Balaji
Whatever customers which we have added are all current, I mean like last two quarters we have added. So the overheads because of the change in the team, change in the place or will absorb once we reach 2.5 million top-line. So I guess going-forward, because of the additions of new customers, our revenue will definitely grow beyond INR2.53 million and we will be able to do EBITDA-positive going-forward.
Raman KV
So INR2.5 million per annum, right?
V. Balaji
Northees rupees 2.5 million pound.
Raman KV
Okay.
V. Balaji
So once we reach the current quarter is 2.31 million for the current quarter.
Raman KV
Okay. And sir, I want to understand the — how are you planning to scale your retail division and gain some market-share or increase the revenue aspect on that particular front? And how to — how do you plan to improve the profitability? Because even that is, I guess from what I have seen from the PBT that is also EBITDA negative.
P. Sundar Rajan
Nothing that Joint Managing Director will be able to answer, please.
S. Chenduran
Yes. Can you hear me?
P. Sundar Rajan
Yeah. Yeah.
S. Chenduran
So I mean in terms of the EBITDA level, we have reached close to EBITDA breakeven. And with regards to the expansion going-forward, as we said earlier in the call that we are looking to raise equity and there’s been conversations which have happened over a few months. And until we get that in, we are going to expand only with around 20% of growth because we want to maintain consistency in terms of breaking even at the EBITDA level and be careful in terms of working capital and increased inventory. So at the moment, without raising equity, our growth plan is around 20% and the primary growth is going to come from the wholesale and distribution where we sell-in terms of Crocodile, we sell our athleisure and undergarments across the country. So currently, we’ve expanded only in the two states in the South, which we started last year, but that’s growing well. We’ve got a good response from the MBOs on the tertiary sale. So slowly we’ll scale-up across all the four states and then east and west of the country for the next two years.
Raman KV
Okay. So you’re expecting that by FY ’26, you will be — the retail division will be profitability?
S. Chenduran
Yeah, definitely, definitely. We are already on our way. We are almost — there’s been a few issues from the long-term receivables, which I mean with — I don’t want to mention the company, but Future Group and we’ve been still fighting for that.
Raman KV
So those are — can you come again with the Future group?
S. Chenduran
So there’s been a long outstanding from the future group with central — I mean, central and brand factory stores. So that is still — all of the brands are still fighting with them and you know what happened with Future Group. So some money outstanding, which we’re trying to recover and that’s something we are yet to know. But going-forward, once that’s addressed, there is no issues in terms of the profitability. We will definitely be making EBITDA breakeven each quarter.
Raman KV
Okay. Thank you, sir. Thank you.
S. Chenduran
Thank you.
Operator
Thank you. We have the next question from the line of Aabhash Poddar from Aionios Alpha Investment Management. Please go-ahead.
Aabhash Poddar
Yeah, I hope I’m audible. Thanks for the opportunity. Sir, first question is on and if. Yeah, is it there now?
Operator
MR. Would request you kindly go off the speaker phone. Your voice is barely audible. Color.
Aabhash Poddar
Am I audible now?
P. Sundar Rajan
Yes, we can better.
Aabhash Poddar
Yeah. So just my first question was understanding on young brands. Sequentially there has been a margin improvement despite an absolute revenue decline. So if you could just talk about how we think about young margin in Young Brands for Q4 and for the entire year because I understand you had already guided that long-term you’re looking at 18% margins over a period, but you’re already there in this current quarter. So just your thoughts on Young Brands margin performance for Q4 and in general for the full-year for FY ’26 would be helpful.
P. Sundar Rajan
The yen brand margin will be more or less the same in terms of EBITDA percentage. Only thing because it’s already matured the production, the factory, the business is matured. So the EBITDA value terms will increase only by increasing the capacities and one second. Yeah, we’ll be planning for increase in the capacity. We can go up to INR400 crores of business in the existing setup over a period of about two to three years’ time. So there will be a growth of at least about 30% to 40% next 2% to 3%, which in-turn will improve the EBITDA margin in terms of percentage and the value.
V. Balaji
We support one point, we have been guiding for 15% of EBITDA margins in N Brands. However, this quarter, we find that the EBITDA margins have increased purely because of the realization in terms of dollar because we don’t have an hedging policy there. So currently, whatever funds that we are receiving is getting in at the current market dollar rate. So that is why the realization is on the higher side and our EBITDA margins is on the higher side. Going-forward, our hedging policy, we will align with the current parent company and try to move towards the same hedging policy. Currently, we don’t have a hedging policy there. That is why the realizations are on the higher side. You will find the exchange gains on the higher side. So we will maintain 15% of EBITDA and in over a period of two years time, we can go up to INR400 crores.
Aabhash Poddar
Understood. That’s very clear. And second question was just a bit of a clarification when earlier you said you’re looking at 15% to 20% growth from here on. This was only implied for the standalone government business and this is more on the — and this is more value growth and not volume, right? Is my understanding correct here?
P. Sundar Rajan
Yeah, it’s only the 15% to 20% growth is only on the SP Apparel Limited government division growth. Standalone debt.
Aabhash Poddar
And for more for the value front and not the volume because there is a difference in the volume and value. So just clarifying, is that realization challenge or realization because of product mix anniversarized and from next quarter onwards, volume and value would be — value growth would be similar. Would that understanding be correct?
P. Sundar Rajan
See, actually, as Balaji said, the unit value has got two — two factors to decide. One is the raw-material prices and the exchange rates. Another one is the product mix. So it is something we are almost always in the tight prices only. So if at all the realization value changes, it will be due to the raw-material and exchange rate and the product mix only. So otherwise, you know we have no issues in growth rate only by the capacity and the output efficiency everything by adding Sri Lankan operations that is going to definitely give a big support to the existing business and we’ll take it to the next level because the efficiency is much, much better than India and the — the availability of capacities are much better than India. So we are very confident that as I told you before that in the next two years’ time, we will be running 2,000 missions and in addition. So currently, we are running 500 missions here standalone basis, leaving 1,300 missions of young brands. So this 5,000 plus 7,000 missions we will be expecting FY ’27.
Aabhash Poddar
Okay. Perfect, perfect. And sorry, just if I squeeze in one more. Just to understand on the Sri Lankan operations, if you could just reiterate how does the P&L or our investments look like. So if we are doing, say, INR200 crores of revenue in FY ’26 on the Sri Lankan side, what is the typical PA, how does the EBITDA look like in that business? Because I’m assuming it’s lower considering we have to share it with the partner? And what is the investment that we’ll have to do, whatever that amount may be. We will just finally clarify on that front.
V. Balaji
So the supporter, currently, we are only looking at a job work kind of conversion kind of work on a CMT basis. Going-forward, however, if we are going to invest on the capacities in Sri Lanka, then the Matrix will change. Currently, we are looking at only a job worth kind of a mechanism with the Sri Lankan factories where it will be on the EBITDA level, you can look at around 10 percentage on the EBITDA for the business that comes from the Sri Lankan factory. If we are setting up our own factory, then the metrics will change because we are not sharing the EBITDA margins with the existing factory setup, then it could be at the same level of 18 percentage and we enhance our investments in this year. And we are looking at investing into 1,000 missions going-forward, not beyond that. It could be around INR50 crores to INR75 crores.
Aabhash Poddar
Okay. Perfect. That’s very clear. Thank you so much and all the very best.
V. Balaji
Thank you.
Operator
Thank you. Thank you. Participants who wish to ask a question, we press star one on your touchstone telephone. Participants who wish to ask a question may press one on your telephone. We have the next question from the line of [Indecipherable]. Please go-ahead.
Unidentified Participant
Hi, am I audible?
Operator
Yes, we can hear you.
Unidentified Participant
Sir, just one clarification. So you said young brands should be able to do around INR350 crore revenue next year, right?
V. Balaji
Yeah. Yeah, correct. We are budgeting for INR350 crores.
Aabhash Poddar
And at peak capacity it will be INR400 crores.
V. Balaji
No, that full utilization level, it can go up to INR400 crores.
P. Sundar Rajan
The entire capacity of 1,350 to 1,400 machines, then it can touch 400 crores.
Unidentified Participant
Okay, and this will be over and 15% to 20% growth, right, this time Sri Lanka.
V. Balaji
20%.
P. Sundar Rajan
Sorry, a little come again, please.
Aabhash Poddar
So you said you are expecting 15% to 20% growth. So this will be over and above that, right?
P. Sundar Rajan
Yes, this is for including — this is only from standalone of SPR Funds Limited. Including Sri Lanka operations, we expect 15% to 20% growth in the next two years time.
Aabhash Poddar
Okay, including Sri Lank opportunities. Thank you.
Operator
Thank you. We have the next question from the line of Rehan from Equitree Capital. Please go-ahead.
Rehan Laljee
Hi, thanks for the opportunity again. I just wanted to understand the order book currently for APL. YBA order book is YBA Chandra. Do you have any idea? Order book?
V. Balaji
I think that three months of 40 crores.
Rehan Laljee
It is a lot more than that, sorry, sorry, the order book is around INR85 crores.
P. Sundar Rajan
Okay, INR85 crores.
Rehan Laljee
Yeah. Okay. So this year, when I extrapolate the numbers, it becomes around the INR300 crore mark. It’s like excluding plus Q1, we had that by the time we got the consolidation benefit, it took some time. So are we seeing only a single — high single-digit kind of growth from YB APL because I think we’ve done about INR170, INR180 kind of crores in the last two quarters and if you see Q1, that is another INR60 crores. So that’s INR230 and even if I use the same number and I extrapolate from the current.
V. Balaji
We would be at INR305 crores to INR310 crores for this year. So as you said, this is the first year where we took over effectively from the second-quarter and effectively only after this year can we look at how much of growth we look-forward for the next year because we’ve not even had the full-year and it’s a macro utilization of the machines and the order book is quite good. But this year, I don’t think talking about the growth compared to like-for-like last year would be ideal, but we should take this as the benchmark and look-forward to the next year.
Rehan Laljee
Okay, understood. Thanks for that clarification. MD, sir, the 15% to 20% growth on the standalone business, I just wanted to understand that you mentioned it was over two years over.
P. Sundar Rajan
Two years because we are adding up Sri Lank operation. So it’s coming it is coming right away. Right immediate effect because it’s up and running factories.
Rehan Laljee
Understood. No, because primarily my concern from our — from our standpoint is that at 85% utilization in the standalone business, we do about INR1,000 crores, INR1,100 crores of top-line. And even if we push that utilization to 90%, which is our ambition and I see clearly that we are getting there. That is not going to change the delta more than 5%, 7%, 10% with Sri Lanka coming on, that also adds only about that much. So — and assuming — I’m assuming purely current realizations, I’m not pricing in for realizations. So — and but your parent entities, your customer-base have been indicating slowdown Primark, Tesco, other companies have been revising their guidance. So can you help us understand from the demand point-of-view, are we seeing such robust demand?
P. Sundar Rajan
Yeah, of course, see. See, as we mentioned many times, this anti-China thing and the Bangladesh unstability, even yesterday, we had a customer who has shown that you know with an American customer who has been playing product — getting huge production from out of Bangladesh has shown me a video in the factory where they are producing their orders, they are in a terrible situation. They said that in six months’ time they want to come out of Bangladesh. This is just one customer statement. So it was previously, everybody, the retailers were under the impression, they will not add more business to Bangladesh, which means it was Bangladesh plus one, which means they will not increase the business in Bangladesh, but they will maintain the business what they have been currently doing. But today the scenario is the political situation is so bad, they want to pull out the business and completely come out of Bangladesh. So the immediate destination for them is only India, which again the back door of India is Sri Lanka. So the Indians are mostly going to have the Sri Lankan operations. So we Call-IT as India, Sri Lanka is one country. That’s the kind of the outlook we have. So naturally, the order book will never be an issue. Yesterday when we spoke to that customer American customer, within five minutes, you said, yes, we are okay, go-ahead with Sri Lankan production. Whatever capacity you take, we are ready to feed the capacity, no issue. So all our existing customers, all the four and five existing customers have given a consent to take the orders for production out of Sri Lanka and already one customer already we started production and shipments have started going from Sri Lanka. So we are very, very — the reason is the customers are forcing us to take Sri Lanka production. So that’s the way it goes. So there is — I don’t see any risk in terms of filling the capacity.
Rehan Laljee
Understood. Thanks for that explanation. Bharajee, sir, one last question.
Operator
Request you currently come back-in the queue for follow-up questions.
Rehan Laljee
Okay. Thank you.
Operator
We have the next question from the line of Raman Kevi from Sequel Investments. Please go-ahead.
Raman KV
Hello, can you hear me?
V. Balaji
Yeah. Yeah, we can hear you.
Raman KV
Yeah. Sir, I just wanted to understand the number of machines that Shivkar see currently has and what’s the has by the end of FY ’25 and what is it planning to add-in FY ’26?
V. Balaji
Currently the field capacity is 440, machines. 50 missions currently. By March ’25, we should expect it to reach 70 and March ’26, we should see around 225 machines. 225 machines and the capacity is 440 machine every month about 20 mission.
P. Sundar Rajan
Every month you are planning to add 20 machines more. Yes. And what — and you said something 440 machines in the starting.
V. Balaji
What is the field capacity.
P. Sundar Rajan
That’s install capacity. So our installable capacity is 440. So when are we planning to reach this mark? Two years time? Okay. One more year to go. By next year-by now we can’t be able to reach the — by FY ’26 end, right? Yeah. Okay. 27 months 27 March, which is like FY ’26 end.
Raman KV
Yeah. Yeah. And sir, with respect to Sri Lanka, what is the current capacity and what are we expecting? You said you are planning to add 2,000 machines more in two years time, right?
P. Sundar Rajan
Four years. So all-in all, that’s the proposal. We are working towards that there must be a lot of numbers, but we don’t see any difficulty in that. Currently, we are running about 300 and close to 300 machines. Already the orders are running. From August onwards, we will be running about 800 mission, 800 missions.
Raman KV
Okay. And sir, in, my understanding, if I understand is correct, we are manufacturing young brand growth, right?
P. Sundar Rajan
No, no, no. If we are manufacturing this parently parent company factory. Oh, okay, parent company.
Raman KV
So sir, then what is the average price per this thing. Can you give a figure rough figure? What is the average price per unit of plot sold?
P. Sundar Rajan
Yeah, it’s at the moment it’s INR135.
Raman KV
Okay, thank you, sir.
Operator
Thank you. Participants who wish to ask a question may press star and one on your touchstone telephone. Participants who wish to ask a question may press star and one on your touchstone telephone we have the next line of Rahil Shah from Crown Capital. Please go-ahead.
Rahil Shah
Hi, sir. Can you hear me?
P. Sundar Rajan
Yes. Yes, please.
Rahil Shah
Yes, yes, sir. Sir, from what I understood based on your guidance outlook you’re giving, is it fair to say you will reach INR1,600 crores or more in the next year, financial year? Overall for the group level?
V. Balaji
For the group, yeah, we should — we should reach 1,600.
Rahil Shah
Okay. And for quarter-four and the next financial year, any EBITDA margins outlook you can share, if not like exact numbers, but given the current prices and how do you expect them to?
V. Balaji
We don’t — we don’t give EBITDA margins for a company as such. We give EBITDA margins for the verticals. So for the government division, we are expecting 18% EBITDA margin and retail, we are expecting it to be flat in terms of EBITDA? And yes, UK, it should be around 4% to 5% of the EBITDA margin. This is you expecting for the next year, correct?
Rahil Shah
Correct, correct. Will it be also be the same for next quarter as well, quarter-four. So quarter-four, see, for the whole nine months, we have done a 17% EBITDA.
V. Balaji
We have been guiding for 18 percentage. However, I think we will fall short for the whole year, if you look at, we should be falling short by-40, 50 bps.
Rahil Shah
And the material pricing will only have upwards from here, right? They have bottomed-out, you said.
P. Sundar Rajan
Which on material cost?
Rahil Shah
Yeah, the raw-material prices.
V. Balaji
Yeah, yeah. We feel that the cotton prices — yarn prices have come to the bottom. We hope that it should stabilize for next at least for three, four months now at least.
Rahil Shah
And then if it moves upwards, then it will only help our realizations, correct?
V. Balaji
Yeah. Yeah, correct. Correct.
Rahil Shah
Yeah. Okay, got it. Okay. Thank you and all the best.
Operator
Thank you. We have the next question from. Please go-ahead.
Prerna Jhunjhunwala
Hello. Sir, I have two questions. One is what is the revenue-share between kids and adults now.
V. Balaji
Revenue-share between kids and others?
Prerna Jhunjhunwala
They ask you and adultswear that you begin?
V. Balaji
Kids, kids should be 80 and adultswear should be 20.
Prerna Jhunjhunwala
Okay. And do you see further improvement in this mix towards adult way going-forward?
V. Balaji
No, it can — it can move-up and down, but we feel that it will be 70-30 going-forward. If the and operation kicks-in, then it should be 70-30.
Prerna Jhunjhunwala
Okay. Okay, understood. And what will be the overall capex for FY ’25 and FY ’26 for the company as a whole?
V. Balaji
For — FY ’25, we have done nine months. So I think the data is available in the exchanges. But for FY ’26, I guess we are looking at if we add-up capacities in Sri Lanka, then the capex could be on the higher side, anything around INR70 crore INR80 crores of capex for the FY ’26.
Prerna Jhunjhunwala
Excluding Sri Lanka.
V. Balaji
This is including Sri Lanka.
Prerna Jhunjhunwala
Including Sri Lanka, okay. And FY ’25, how much we won for nine months because we don’t have balance sheet for nine months.
V. Balaji
I guess it should be around INR70 crores for the current year.
Prerna Jhunjhunwala
Okay. Okay. Understood, sir. Thank you. Thank you so much.
V. Balaji
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question. I would now like to hand over the conference to the management for closing comments.
P. Sundar Rajan
Thank you okay, so I trust that we have addressed all of your queries with clear responses. I would like to express my gratitude for your active participation in this conference call and for your keen interest in the company’s progress. I just want to reiterate our commitment to excellence and our focus on delivering long-term value to our stakeholders. We are optimistic about the potential for growth in the garment industry. With this in mind, we remain confident that our narrative of revenue growth is robust and that we will see margin improvements going-forward. We are confident that the strategic decisions we are making will yield positive results in the upcoming quarters and the years ahead. Thank you.
Operator
[Operator Closing Remarks]