Sportking India Ltd (BSE: 539221) Q1 2026 Earnings Call dated Aug. 05, 2025
Corporate Participants:
Unidentified Speaker
Sandeep Sachdeva — Chief Financial Officer
Munish Avasthi — Chairman and Managing Director
Analysts:
Unidentified Participant
Param Vora — Analyst
Prerna Jhunjhunwala — Analyst
Madhur Rathi — Analyst
Deepak Kumar Ajmera — Analyst
Saransh Gupta — Analyst
Ankit Gupta — Analyst
Presentation:
operator
Ladies and gentlemen, you have been connected to Port King India Ltd. Q1FY26 earnings conference call hosted by MUFG In Time India Private Limited. Please stay connected, the conference will begin shortly. Ladies and gentlemen, you have been connected to Sport King India Limited Q1FY26 earnings conference call hosted by MUFG In Time India Private Limited. Please stay connected, the conference will begin shortly. Ladies and gentlemen, good day and welcome to Sports King India Limited Q1 FY26 earnings conference call hosted by MUFG In Time India Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during 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 Ms. Darshi Jain from MUFG in Time India Private Limited. Thank you. And over to you ma’. Am.
Unidentified Participant
Thank you. Good afternoon everyone. Welcome to the Sport King India Limited Q1FY26 earnings conference call today. On the call we have Mr. Munish Abashi, Chairman and Managing Director. Mr. Sandeep Sachdev, Chief Financial Officer and Mr. Lavlesh Varma, the Company Secretary. A short disclaimer before we start this call. This call will contain some forward looking statements which may be based upon our beliefs, opinion and expectations of the company as of today. These statements are not a guarantee of future performance and will involve unforeseen risks and uncertainties. With that I would now like to hand over the conference call to Mr.
Sandeep Sachdev, the Chief Financial Officer for his opening remarks. Thank you. And over to you sir.
Sandeep Sachdeva — Chief Financial Officer
Good afternoon everyone. First of all I would take you through the financial performance of the company. For the quarter ended 30 June 25 for Q1 FY26 Sport King India Limited achieved revenue from patients of INR 585.8 crore and gross profit stood at INR 157.2 crores with an increase of 2.1%. On y1 month basis. Gross profit margin expanded by 254 basis points year over year and further 21 basis points quarter over quarter. The gross margin for the quarter stood at 26.8%. Gross margin for the quarter was by stable and softer input cost given largely range bond cotton prices over majority of the foregone quarter enabling better inventory management, operational EBITDA stood at 70.5 crores. EBITDA margin expanded by 40 basis points on YOY and 22 basis points over the sequential quarter to 12%. Profit after tax was 35.2 crores seeing an increase of 10.5% year on year. Profit after tax margin was 6% experiencing a margin expansion of 98 basis points on yearly basis and 26 basis point on quarterly basis.
Share of export in the revenue was approximately IMF 341 crores. For the quarter the company had another quarter of strong showing over the export front with an overall mix of sales from export of easing to 58% in Q1FY26 from 47% Q1FY25. Overall quarter exports have increased by approximately 18% year on year. Capacity utilization at 95% remains at the same level as the quarter one FY25. Both quartering and production and quarter sales remain marginally higher in Quarter 1 FY26 coming in at 20.9 thousand metric ton. Sorry, 20.9 metric ton and 20.3 metric ton respectively. Thank you all.
Now I will hand over the call to Mr. CMD of the company for his remarks on the results and outlook.
Munish Avasthi — Chairman and Managing Director
Thank you Sandeep Good afternoon ladies and gentlemen. I hope you have an opportunity to go through our press release. As highlighted by our CA for this quarter we maintained our trajectory of margin growth delivering broad based growth across all key partners. On the business front, exports remain robust in spite of a lot of geopolitical tension around the world. On the macro front, despite the Indian cotton being largely stable over the quarter, we observed it to be inching up slowly as the quarter drew to a close. This rise in prices was caused by a combination of factors such as high inventory with Cotton Corporation of India, lack of fresh supplies in the market as well as bitumen support prices driving prices higher for buyers.
The international cotton prices remain at a discount to Indian prices and this gap is further accentuated by Levy Earth and Co of 11%. Most of Indian textile players are at a relatively disadvantageous position from the point of view of landing down below cost. Progress of the new cotton season is satisfactory with almost same area planted as last year and with good mosses. Early predictions are for good quality and that we the other key event was the recent declaration of 25% tariff on Indian goods by the USA. The USA is a very important end user market as far as Texa and TI’s are concerned.
Additional 5% tariff differential as compared to 20% tariff levied on operation payers will have some adversary effect on Indian fares. Price in the Edge While we remain hopeful in amicable settlements being achieved soon, I would also like to highlight that we have very limited direct exposure to the US markets but have a relatively larger indirect exposure to the US market through our international customers who are currently better placed in the local players under the post tariff structure. About the progress of our ongoing programs, first of all, our SPV for solar power is on target to deliver us the contracted power from the 1st of March.
We are also committed to close our integration of our apparel manufacturing and diehouse within this company in next six to eight months. Our confidence in our business fundamentals as well as the potential of the overall Indian textile sector remains undeterred. We’ll be undertaking a CAPEX plan of approximately 1000 crores as a part of greenfield capacity addition program to increase our spindle count by 150,000 spindle with significant capacity expansion to document design count of 3.8 lines. Existing capacity utilization is already at 95% and thus upcoming capacity provides substantial headroom for growth and meeting growing demand for complete products.
The timeline for this project is 12 to 15 months and we are confident to wrap up the operations within this time frame. The CAPEX outlay will be funded through mix of internal improvements and terminals. The proposed spinning units will be set up in the state of Odisha and we have first ever situation outside the state of Punjab. The geographic location of the upcoming start will enable the company to better serve the market of the country enabling a diversified presence as well as better to serve the international market given proximity to ports. Amid ever changing market conditions, our focus continues to be on producing quality products and building operational excellence.
I thought on the call to the moderator to open the floor for question and answer session.
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 must 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. The first question is from the line of Param Gora from three Netra asset managers. Please go ahead.
Param Vora
Hello, good afternoon and thank you for taking the question. So what I wanted to ask was that regarding the ongoing tariff situation with us. So since we export to the US so can we expect a turnaround like you know, decreasing the share of export to that country and focusing on the new geography.
Munish Avasthi
Thank you for the question. First of all, we don’t have any exports to us as a company. So there is no question of, you know, diversifying the exports when you don’t export to the tech country.
Param Vora
Oh sorry, I must have misunderstand something. And my second question was regarding the proposed merger. So how do we anticipate the contribution to new value added segments and company overall revenue and profit margins.
Munish Avasthi
So that as we mentioned that we are confident of achieving the integration of our parallel and dying capacity with us in next six to eight months. So definitely there will be the top line increase in the first year. Should be around 200 crores. And the beta in that business is slightly better. So it will give us a better.
Param Vora
Okay, that answers my question. Thank you so much.
operator
Thank you sir. The next question is from the line of Deepak Ajmera from IGE India. Please go ahead. Yes.
Deepak Kumar Ajmera
So my question related to the chat. So can you explain the ramp up and its utilization?
operator
Your voice is breaking.
Deepak Kumar Ajmera
Hello.
operator
Yes sir, please go ahead.
Deepak Kumar Ajmera
So my question is related to the capex that you are doing 4,000 comes that I just wanted to know about its ramp up and its realization and timeline for the.
Munish Avasthi
Yeah. As I mentioned in my opening statement that. That we expect to finish, you know to be. To finish to come up with the commercial production within 15 months from now.
Deepak Kumar Ajmera
Okay. And how much optimum revenue can expect from this?
Munish Avasthi
We are expecting a revenue of around thousand crores from this thousand to twelve hundred crores from this new expansion.
Deepak Kumar Ajmera
Okay.
operator
Thank you sir. The next question is from the line of Prena Junjunwala from Elara Securities. Please go ahead.
Prerna Jhunjhunwala
Hello. Thank you for the opportunity. So this wanted to understand the premise of this expansion. Huge expansion. Given that you know the profitability in the yarn business continues to remain under challenge. So what gives you confidence that you know you’ll make decent returns on this investment? And what kind of expectations do you have from this investment going forward? Do you expect the profitability of the spinning business improving over the next, you know, year or two? Kind of a situation where you know this return, the return provided by this capex is strong enough.
Munish Avasthi
Thank you for the question. So I will put it into two parts. First of all these are one of the times for textile industry filling industry per se. With a lot of headwinds we are facing from internally and externally. Externally meets with all the tariff uncertainties and internally with MSP and import duty levied on the imported cotton. So in spite of all this we are doing pretty well. We are maintaining double digit profitability for the last so many quarters. And we are working at almost fully utilized. So we see, we see these things on this time will not last forever.
I think 12 to 15 months. We see a lot of resolution happening over next 12 to 15 months. So we are pretty confident and about this particular investment we have. So we have. Most of our capacity has been preserved. So the incentives in Odisha are much better. And we are, we see a jump of 4 to 5% in the retail level because of the incentives and the geographically diversified portfolio. And there’ll be many products which we don’t make, which we’ll be making which are a little bit more profitable. So we are very optimistic about this.
And so we are a conservative company. We took a lot of thought over the last one year and then we went forward. We are pretty confident that this will help us in improving the overall EBITDA of our company by at least two to 300 points.
Prerna Jhunjhunwala
That’s great, sir. So could you help us understand what kind of incentives you will be getting from government and what kind of synergies we are looking forward to with this investment?
Munish Avasthi
First of all, other than the incentives which we can make you separately, there’s a big list of that. Other than that, you know, we are, you know, we are based out of north India and this gives us an access to Kolkata market and Bangladesh market which is closer to Odisha and even the South Indian market which is closer to Odisha. More access to those markets where we are not functioning right now. Secondly, Odisha is a cotton surplus state, one of the few cotton surplus states left in the country. And third is the proximity to the ports.
So all these factors made a lot of sense to us to venture into Odisha for our new.
Prerna Jhunjhunwala
How far this project is from Odisha Textile park as that could be also good market for. For us to serve.
Munish Avasthi
Yeah, thank you for reminding me. So the this, you know, we see a lot of investment outreach investments coming in Odisha. So when we signed an MoU there were many governmental from Tirupur and very big governmentals from India who are putting up their plants in Odiza. So we see that as another opportunity to cater to that market also. And we are in the proximity of 50-100km from all of them.
Prerna Jhunjhunwala
Oh, that’s wonderful. Do you have any plan to further forward integrate into fabric given as a next step in Odisha, ma’?
Munish Avasthi
Am? Definitely. Right now we are undergoing an exercise to integrate our Garmin facility with this company. And I think we will be able to put it off within this fiscal. And we want to scale. We have the opportunity to scale that business up initially in Punjab as it is. And then of course we have the plans to go once we, we realize the full potential of our existing capacities. And those plans are of course there.
Prerna Jhunjhunwala
The last question on US tariff I understand you don’t export directly to the market but your clients might be exporting eventually to those markets. Have you seen any kind of pressure from the clients to share any kind of tariff?
Munish Avasthi
See ma’, am, this is something which is just two to three days old, you know, four days old. And though the first round of tariff happened and everybody knew what was coming so I don’t think so anybody is asking for to share any tariff and all. But how the new dynamics work, how the new costings are done and how the new orders come is anybody’s guess. But I know one thing for sure that after these uncertainties are over that with China being at 55% and being the major exporter across the world. So I think other countries might not feel as much pain as expected.
But right now definitely it’s very uncertain. The statements change every day. So definitely the sentiments around the world are pretty pessimist and people are just not taking any decisions. So everything. But I think in next two months we see a lot of clarity and everybody wants this tariff talk to die down, whatever the tariffs. Everybody wants to know what tariffs are finally. And it’s been going on for last five, four, five months. So we expect some normalcy to come back, you know, in the business in next one 30 to 45 days.
Prerna Jhunjhunwala
Oh that’s great. Thank you for the detailed answers. I’ll wait for your email on the Odisha facility benefits to come in. Thank you so much and all the best.
operator
Thank you ma’. Am. The next question is from the line of Saransh Gupta from Swan Investments. Please go ahead.
Saransh Gupta
Good afternoon. Thank you for the opportunity.
Munish Avasthi
Sir, you’re not audible please.
Saransh Gupta
Yeah, now it’s clear. Yeah.
Munish Avasthi
Better.
Saransh Gupta
Understand on the demand perspective and the Fed perspective now since the end plan that we are tax at the higher tariff. So how someone looked at the spreads in the near term, I agree from the medium to longer term you seems to be more bullish and beyond which we are also increasing a capex. But in the near term we look at the situation in terms of the spread.
Munish Avasthi
I really didn’t get your question very well but anyway I’ll try to answer with whatever I got. So I think you have been asking about the spread going forward, right?
Saransh Gupta
Yes, sir.
Munish Avasthi
So the spreads, you know, initially what we have seen, you know, in this quarter, the first month we have been pretty at the similar run rate where we were in the last quarter. But going forward it’s very difficult to assess the situation with so much of uncertainty around us. So we are well protected with as the cotton prices have gone up. So we are well protected as we generally have a tendency to stock our cotton for the season. So we are protected from that angle. But how the market behaves and how this tariff uncertainty pans out in next two to three months, it’s very difficult to answer how the spreads look going forward in the next two to three months.
Saransh Gupta
And in terms of your fresh investment that you are doing in Odisha. So you indicated that the Profitability will be 200 to 300 pips higher than what we are doing right now. So is it including the incentives that we’ll be getting it from the government or is it just the technology or the application of the technology that we are using it that will help us? And what data on the expansion?
Munish Avasthi
So it’s a combination of everything. I think the technology, of course the new technology will be putting in will also help in improving the margins. Incentives is one second. And the third is the geographical advantages we get with Odisa with proximity to port and different markets which are major markets where we are not working right now. Or the combination of all three we expect will help us in improving our margins by 2 to 300 basis points. Sorry, we have not yet worked on that.
operator
The line for the management seems to have disconnected. Please hold while we reconnect. Then.
operator
Ladies and gentlemen, the line for the management teams have been connected. Thank you. And over to you sir, the next question is from the line of Raman from Sequent Investments. Please go ahead.
Unidentified Participant
Hello sir, I just have a few doubts. So what are the major countries to which we export and if possible can you give percentage breakup?
Munish Avasthi
Most of our export, more than 50% of our export goes to Bangladesh. Then we export. You know that all of the countries are in single digit. So like China, Latin America and European countries. So we can give you a breakup. You know, we can send you by name.
Unidentified Participant
So what about uk? How much percentage does do we export to uk?
Munish Avasthi
We don’t do anything directly to uk.
Unidentified Participant
Okay. So there won’t be any substantial benefit for us with respect to the UK India Free Trade Agreement. Right.
Munish Avasthi
The benefit will only be indirect with all the parent manufacturers within India who are exporting to uk. If they get more orders, they need more yarn. So that is the benefit we are going to get.
Unidentified Participant
Sir. And with respect to you again on the export part, with respect to Bangladesh how are the working capital or payments from. From the companies to which we export yarn to.
Sandeep Sachdeva
So we export. We export under lc. All our exports to Bangladesh are under LC and we get paid on time. That’s it.
Unidentified Participant
Right.
Munish Avasthi
So it’s just LC business. We don’t do any CAD efficiency there. All the deals are paid on time by the bank as the LC matures.
Unidentified Participant
Okay. And so my last question is with respect to your weekly capex which. So you’re. You are adding about 1.5 lakh splendors additional which will generate about thousand to twelve hundred crores of revenue. Additional revenue. So I just wanted to understand this plant. This is a new plan. So can we expect the margins of this plan to be higher than the existing plant’s margin?
Munish Avasthi
Yes sir, I think we have. I have discussed it in the previous question, addressed this in the previous question that we expect our margin to be better with this plant because of different reasons like geographical advantages, new technology and of course the better incentives given by Ruby system.
Unidentified Participant
Can you give any ballpark figures with respect to how much cost saving will it be with respect to traveling as well as the incentives provided by government.
Munish Avasthi
So we said that we are expecting a margin expansion of 200 to 300 basis points on our total overall company after we invest, after we come up with that first exposure. So this benefit can be seen by FY27N. So we will be coming in production by 27N. So the. I think the real benefit will start showing in 27:28.
Unidentified Participant
Okay, thank you.
operator
Thank you. Sir. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go ahead.
Ankit Gupta
Yeah, thanks for the opportunity, sir. Given how situation is currently, you know, given the uncertainty on the tariff part and higher cotton prices prevailing in the Indian markets, do we expect our margins will go down from the current level? So we can expect at least 10 to 12% of EBITDA margins to remain over the next few quarters.
Munish Avasthi
Very difficult to say, sir, but we are committed. I think this has been the case for last two quarters as well. Things have been, things have actually deteriorated from macro point of view in last few days. But yeah, we can expect the margins, we expect the margins to stay in double digits. Information quarters.
Ankit Gupta
Okay.
Munish Avasthi
Under the present circumstance.
Ankit Gupta
Okay. Okay. And, and on the, you know, some, let’s say tariff thing, you know, some clarity emerges there and rates are reduced. Will the cotton prices parity, disparity that India has or disadvantage that the Indian spinners have compared to the, you know, global peers. So that will continue to impact your Overall margins or if things emerge or if the tariff reduces from the US part, some kind of improvement can be expected.
Sandeep Sachdeva
So there are a lot of things happening. You know, the government is also contemplating to, you know, do away with the import duty. Then, you know, we have, we have broke the ministry many times and it seems they are serious now and then, you know, there are different permutations and combinations. You know, how to manage your raw material, you know, with less impact of duties and all. So we try to change our mix. Then, you know, there is a murmur that there is a, you know, bilateral trademark agreement with us. Then the duties, you might get to board US cotton free of duty.
So it’s all in the play. So we really don’t know what’s going to happen till it happens. But there are many things which are happening. We just say that things can’t be worse than what they are right now. We expect, you know, something to happen. Good. In the foreseeable future with this, to do away with this imbalance which has been there for last two years.
Ankit Gupta
Okay, okay. Okay. Thank you. Thank you.
operator
Thank you, sir. Ladies and gentlemen, to ask a question please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Madhurati from Countercyclical Investments. Please go ahead, sir.
Madhur Rathi
Thank you for the opportunity, sir. So I just wanted a clarification that the new plan that will be adding up so that will have 4 to 500 basis point higher margin than what we are making at our company level. It is that understanding, correct.
Munish Avasthi
So we expect our overall overall margins of our company to expand by 200 to 300 basis point after we add this 40% capacity.
Madhur Rathi
Got it.
Munish Avasthi
Answer. This would be on our current spread. So if spread improves our realizations.
Param Vora
Okay. Yeah, got it.
Madhur Rathi
So I just wanted to understand on the payback show on operating profit that comes, yeah, five, six years, but if margins improve, spreads improve, the payback could be lower than the 5, 6 years based on the current operating profit level. That we are initializing.
Munish Avasthi
Yeah, I haven’t done the calculation, but I think you, you can do the calculation. I haven’t done it myself.
Madhur Rathi
Got it, sir. So on the fabric and the varminting mojo that we are expecting over the next six to eight months or have we onboarded new customers or have we thought about where should this business go over the next two to three years and so how much incremental margin will be earning on this business?
Munish Avasthi
So yes, we are working. We’ve Already started working on integrating those units. And right now we were just using those units to supply to our own brand. But we are preparing ourselves for by doing the social compliance and everything to do exports as well as to target big buyers. So that all task is ongoing. And we expect in next two to three years to double our garment business within the same capacity with minimal capex. So that is our goal right now. And I think that exercise is already on. And we would like to. Right now our revenue is about 150 crores from those units.
180 crores. And we expect to double it within next two to three years.
Madhur Rathi
Answer on the margin front.
Munish Avasthi
Margin front. Definitely. As you go downstream those margins will get better with the better utilization and better efficiency. So we expect the margins to be better than what they are in our existing business.
Madhur Rathi
So can you expect it to be. The 20% dream like our competitor Kitex or Kval Kiran?
Munish Avasthi
It’s very difficult for me to say right now. So we will be better than what we are, you know. So let’s see where we end up.
Madhur Rathi
So that was from my answer. Thank you so much and all the best.
operator
Thank you sir. The next question is from the line of Aditya Singh from Multi Bagger stock. Please go ahead. Yes sir.
Unidentified Participant
Thank you for taking my question. I only have one question regarding the exports. That is ultimate all microfits is to Bangladesh.
Munish Avasthi
I. I can’t. I didn’t understand your question.
operator
The voice is not audible, sir.
Unidentified Participant
Is it audible now?
operator
Yes sir. Please go ahead.
Unidentified Participant
Okay. I’m sorry if the question was asked before. But I just wanted to know the amount of exports the country makes to Bangladesh.
Munish Avasthi
Okay. So we do. Overall our revenue 58% is exports. And out of that almost 60 to 65% goes to Bangladesh.
Unidentified Participant
Thank you so much.
operator
Thank you sir. The next question is from the line of Anil Kumar Sharma, an investor. Please go ahead.
Unidentified Participant
Thank you sir. And congrats for the great numbers. So my question is. You have mentioned that we are. This is the first phase of 1.5 lakhs. And what is the total? What do you think on those lines? Further expansion. As you are saying this is first phase and out of that it is internal loans. You have said how much is loan component and how much is internal. What you. What is your capital structure will be?
Munish Avasthi
So our MoU with the Disha government is for 300,000 spindles. And the first phase, what we are putting right now is 150,000 market stabilizing. Go for the second phase about the capex of 1,000 crores that I think we will be able to share by the next board meeting that what exactly will be the mixture? But generally our mix is 30, 70 in favor of that.
Unidentified Participant
So overall that equation will not be 0.5 more than 0.5. I think that is your target. I think. And overall that equity ratio will not be more than 0.5%. That is your target, I think.
Munish Avasthi
Yes. Yeah. So we will be going by whatever our targets are as stated before. So that, you know, maintaining, you know, reasonable debt is our foremost effort. And we were going to stick with those numbers that we had given before.
Unidentified Participant
In contrast to that we. Are you getting this weight interest rate that is there or that has been evolved? There are misconceptions about that.
Munish Avasthi
We have never got any interest debate till now. In Punjab. We never had any interest debate. So we don’t get any interest debate right now.
Unidentified Participant
So interest normal rate will be. Normal rates, 9, 10%, whatever it will be there.
Munish Avasthi
Right now the interest. Average interest we Pay is about 7%. So for the new project also it will be similar. But there are many other subsidies which will. You know, which are there.
Unidentified Participant
Okay. That is beautiful. All right. Okay. Thank you. That’s all for myself. Thank you, sir.
operator
Thank you, sir. The next question is from the line of Dheeraj Shah from RJ Investments. Please go ahead.
Unidentified Participant
Hello.
Munish Avasthi
Yes.
Unidentified Participant
Yeah. Firstly, sir, what is the realization profile like between domestic and for the quarter given? A sales volume was essentially the same. Its revenue was down by 8% and sequencing. So would it be fair to assume that the performance and what is the affecting realization? Yeah, what is the affecting realization?
Munish Avasthi
So the revenue, the pricing in international market or Indian market is almost similar. The only thing is is our product mix in our export and our domestic changes. Most of the synthetic and synthetic dominated brands which we make are sold in domestic market. And most of the cotton yarn we make is exported. So there will always be a difference in the percentage and the revenue and the spreads there. What was the second question? I could not get? It was not very audible.
Unidentified Participant
Yes. So actually am I audible now?
Munish Avasthi
It’s breaking. My voice is breaking. But still you can try.
Unidentified Participant
Okay. Yeah. Actually. So it was actually about. Actually it was adding the. Was it a demand issue or higher tiny competition perhaps on the pollster side?
Munish Avasthi
I. I just cannot. You’re not audible, please.
operator
Thank you, sir. The next question is from the line of Preeti Agarwal from SK Associate. Please go ahead.
Unidentified Participant
Yeah. Thank you so much for the opportunity. I would like to know what is the total potential of the capacity addition that can come up in the new Odisha facility. So your exchange filing says that the first phase is of 1 lakh 50,000.
Munish Avasthi
So we actually have signed an MoU with bankruptcy Airpod government for 300,000 spindles. But you know, circumstances permitting and the market permitting and how we do go forward, we can go even further beyond that. We’ll be having enough land to go for even higher if we want to.
Unidentified Participant
Okay, and my second question is that INR 1000 crores is proposed to be spent for CAPEX with a mix of internal approvals and term loans. So what is the target debt to equity that you wish? Or is there any approximate split of funding mix that you are looking at given you would also be needing elevated short term debt for funding working capital.
Munish Avasthi
Our goal is to not go beyond 700 to 800 crores of long term debt anytime in next two to three years. So we’ll stick to that. So there will be, I think our long term debt right now is about 300 crores and out of that I think by the time we take this new debt about 100 crore will be repaid. So that is our thing that it should be below the debt equity has to be about 0.5 to 0.7. You know, that is the maximum that we will go to.
Unidentified Participant
Okay.
Munish Avasthi
And we are not looking at any other instruments. We are right now looking at just the debt as well as internal.
Unidentified Participant
Okay. And what is the update on Bangladesh situation in terms of land based movement restrictions and subsequently how has the demand been?
Munish Avasthi
Demand from Bangladesh continues to be good. The land route is still not working but we expect, you know, the elections, Bangladesh is expecting the whole election in the next three, four months. We don’t expect the land route to open before that. We expect once the land group, once the elections happened and permanent government comes and we expect because even before it had happened and it took about one year for it to open. So we expect it to open finally. But I think it might take six to eight months for that.
Unidentified Participant
And a follow up on that question, are there any other countries you are looking to diversify into?
Munish Avasthi
That exercise is always ongoing. So we keep on looking at the markets where we can sell our material and we. So right now we are supplying to almost 40, 30 by 40 countries and wherever. So this exercise is ongoing. So we keep on looking at more options and with this new springage once it comes we’ll have more capacity. Then we will look at. There’ll be some more different kinds of materials will be making from that facility. So we’ll have more options and more countries try to test.
Unidentified Participant
Okay and one last question from my side. Are there any power or tax incentives being given by Orissa government or for that matter any policy benefits been given?
Munish Avasthi
Yes ma’, am, they have an extent policy, research policy which is open to everyone. So all those benefits will be, will be getting good power benefits are one of them.
Unidentified Participant
Okay, thank you so much. All the best.
operator
Thank you ma’. Am. The next question is from the line of Isha Murthy from MI Capital.
Unidentified Participant
Hello, Am I audible?
operator
Yes, please go ahead.
Unidentified Participant
Hello sir. So what is the. My question today is like what is the update on the proposed merger scheme of the two unlisted promoters entities and also by when do you anticipate it will be launched within the listed companies?
Munish Avasthi
Sorry. Yeah, so as I have mentioned before in my update and a few earlier question. So that is going to happen in next six to eight months. Both the facilities will be integrated with us maximum in next six to eight months.
Unidentified Participant
Okay. And also a follow up question like you have earlier mentioned that you would be looking at capacity expansion into these new entities which are like involved higher up in the value chain compared to the current business. So now with it to be tied up in the CapEx. So does this affect the timeline and the plan for capex within new entities once in common?
Munish Avasthi
Frankly the capex needed to scale up those two entities is not a lot. So that is already, you know we’ve already started doing that in those specific companies and we you know just improving the efficiencies and once we get to merge it with us. So we don’t expect a lot of. And yes, there won’t be any shift in timelines. We still expect to double the revenue of those entities in next two to three years once we get merged with us.
Unidentified Participant
Okay. Okay sir, got your point.
operator
Thank you. Thank you ma’. Am. Ladies and gentlemen, due to interest of time that was the last question for today. I now hand the conference over to management for closing comments.
Munish Avasthi
Thank you everyone for being a part of this call and we appreciate you all being there. And if you have any questions or any queries you can direct it towards the company secretary myself or MUFG ir. See you all next quarter.
operator
Thank you sir. On behalf of MUFG in Time India Private Limited that concludes this conference call. Thank you for joining us. And you may now disconnect your lines.