Dollar Industries Limited — Call Transcript 2019

Feb 19, 2019

19.02.2019

BSE Limited PhirozeJeejeebhoy Towers, Dalal Street, Mumbai – 400 001 Scrip Code :541403

The Secretary, National Stock Exchange of India Ltd., Exchange Plazza, C-1, Block 'G', Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051. Symbol - DOLLAR

Dear Sir(s),

Reg: Transcript of 'Earning Call' on 13.02.2019

A copy of the transcript as received from Edelweiss Securities Limited, being the organizers of 'Earning Call' made on 13.02.2019 on the financial results of the Company for the Quarter and Nine months ended on 31st December, 2018 and other matters is enclosed.

This may please be informed to all the concerned.

Thanking You,

Yours faithfully,

For Dollar Industries Limited

Abhishek Mishra Digitally signed by Abhishek Mishra Date: 2019.02.19 11:19:05 +05'30'

Abhishek Mishra Company Secretary

Encl: As above

"Dollar Industries Limited Q3 and 9M FY2019 Earnings Conference Call"

February 13, 2019

• ANALYST: MR. NIHAL MAHESH JHAM - EDELWEISS SECURITIES LIMITED
• MANAGEMENT: MR. ANKIT GUPTA VICE PRESIDENT (MARKETING) -DOLLAR INDUSTRIES LIMITED MS. SHASHI AGARWAL - SENIOR VICE PRESIDENT -CORPORATE STRATEGY & INVESTOR RELATIONS -DOLLAR INDUSTRIES LIMITED

Moderator: Ladies and gentlemen good day and welcome to the Dollar Industries Q3 and nine months FY2019 Earnings Conference Call hosted by Edelweiss Securities Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal in operator by pressing "*" then "0" on your touchtone phone. I now hand the conference over to Mr. Nihal Jham from Edelweiss Securities Limited. Thank you and over to you Sir!

Nihal Jham: Thank you Nina. On behalf of Edelweiss I would like to welcome you all to the Q3 and nine months FY2019 conference call of Dollar Industries. From the management, we have Ms. Shashi Agarwal, Senior Vice President, Corporate Strategy & Investor Relations and Mr. Ankit Gupta, Vice President (Marketing). I would now like to hand over the call to Mr. Ankit Gupta for his opening remarks. Over to you Sir!

Ankit Gupta: Thank you Nihal. Good morning and a warm welcome to everyone on the earnings call of Dollar Industries Limited for Q2 2018-2019.

I would initially want to start with the recent interim budget 2019, which was announced a few days back on February 1, 2019. As we all can see the presented budget was the much promising budget for the common man living in increased disposable income. The government also proposed measures to help boost the MSME sector as well. This would in turn help our consumers move up the ladder to the aspirational brand in the respective sector. Overall this should help the hosiery industry to grow as well.

The company is glad to share that this time winter was strong and as a result sale of thermals was better than the last year. Increase in demand for the trendy products with quality materials has provided an opportunity to the company to fulfill customers demand at reasonable price. The company has remained focus on improving the quality of product and supplying more fashionable product at an affordable price.

I am also happy to share with you that the company has been awarded best clothing in men hosiery by Times Business and the best clothing in men hosiery segment. Our newly launched products by the joint venture companies Pepe Jeans Inner Fashions Private Limited has received good market response in Southern India in oities like Chennai, Bengaluru, Hyderabad in trade channel as well as Pepe Stores. The company is working hard to make its product available in northern and westem zone soon. There are more than 35 styles covering men's innerwear and athleisure. This is all from my side and I now hand over to Ms. Shashi to talk to you about the financial performance of the Company.

Shashi Agarwal: Thank you Ankitji. The Company's total revenue for the quarter ended 2018 stood at 245 Crores as compared to 222.8 Crores last year. The nine months total revenue stood at 732.46 Crores as compared to 654.57 Crores last year.

EBITDA of the company for quarter ended 2018 was 37.90, which is 15.43% as compared to 36.91 that is 16.57% whereas the nine months ended result was 102.76 Crores coming up to 14.03% as compared to last year 92.87, which was 14.19%.

The PAT of the company for quarter was 19.35 Crores that is 7.88% compared to last year 17.96 Crores that is 8.06% whereas the nine months ended result was 53.16 Crores coming up to 7.26% as compared to last year it was 45.34 Crores, which was 6.93%.

Now moving onto the revenue breakup. Bigboss stood at 42%, Champion at 0.50%, Force Go Wear at 4.5%, Force NXT 2.5%, Missy 8%, Thermal 9%, economy range of products stood at 33.5%.

This is overall a short synopsis of the performance of the Company. I will now open the forum for O&A.

Moderator: Thank you very much. We will now begin the question and answer session. The first question is from the line of Himanshu Nayyar from Systematix. Please go ahead.

• Himanshu Nayyar: To start with just to understand this quarter a bit better. If you can just give us some more colour on the demand conditions and what sort of volume growth we have been able to get this quarter and secondly on the margin side other expenses have moved up very significantly, which has impacted our EBITDA margin, so just wanted to understand the key heads where we have seen a increase in cost there.
• Shashi Agarwal: I will answer your first question in terms of what has been the demand. This was a good winter, I would say that whatever we produce in thermals we have post that and if I have to look at the numbers in terms of how it stood be at nine months ended probably I would say my overall volume growth had been 6.5%, value growth being at 11.5%, but being very specific to thermal because this particular quarter talks only sells thermals in this quarter majorly the major billing comes only from thermals, so increase has been 23% whereas the pieces the volume increase was 6.5% again there. The next question in terms of the increase in the other expenses, so yes there has been an increase in other expenses and there were two particular prominent categories, which has actually taken up that extra space there, one being the advertisement expenses and the other being my sales incentive. If I really look at the comparison in terms of last year what we were doing for the particular quarter if I have

to talk about I have overall spended 13 Crores more in a quarterly basis, 9 coming from the advertisement, 6 was going into the sales and incentive bracket. The reason for the sales meentive going up is because we had come out with the promotions very, very specific to again for the consumer end and we had some specific promotions for the retailers and the distributors this season. We also wanted to enhance the sales of my other categories of product that the Brief and Vest generally which is very, very low this particular quarter, so that is the reason we were running a lot of schemes and again incentives to the distributor, retailers and the consumers. So probably that is one of the reasons for the number to be high. Advertisement now we have actually spended something very soon you will be seeing one particular launch of TVC Akshay Kumar where he is talking about Bigboss Brief. Till now Akshay was only promoting the Bigboss Vest, you he did not talk about brief, but we just made that commercial and very soon we will be launching in this particular quarter. So those are the expenses, which have been incurred here, that is probably the reason there has been a little shooting up in terms of the advertisement cost.

• Himanshu Nayyar: Madam just a followup on these two points. We had I think budgeted that we have a fixed amount of budget for ad spend, so I think we will be overshooting that budget this year now with this spend and secondly wanted to just crosscheck these incentive I think have netted off from sales right or there is still some chunk coming in other expenses?
• Shashi Agarwal: Yes these meentives as you rightly said that as per Ind-AS 115 now everything needs to go, needs to get netted off from the topline and that is precisely the reason there has been a revision in to the financial year numbers as well for the last year if you look at, but there are certain expenses like that would not go, so the retail schemes would not go to the netting off. The consumer schemes will not go up to the netting off. Only distributor schemes, discounts, cash discounts, trade discounts, any likewise, which we pass it on till the distributor level will be netted off, but not the retail and the consumer ones.
• Himanshu Nayyar: And on the ad spend budget for the year?
• Shashi Agarwal: Yes ad spend of the budget of the advertisement yes slightly that we have crossed, but yes Q4 we will be keeping at a little low, but then again you have IPL and the World Cup coming in the third quarter, which generally happens in April you will see them happening in March, so a little kind of in the planning. I would say that which would have been mitially scheduled us later to be spend in the first in April and May would now actually gets spilled over in March also. So there is some kind of an overshooting of the budget I do agree to that, but still we are trying to work out and marketing team to keep it at the minimum possible.

Himanshu Nayyar: And my second and final question would be if you can share some update on our project with Vector Consulting and in light of the progress there what sort of guidance we can share on growth and margins for next year?

Shashi Agarwal: I will restram from sharing any kind of guidance in the light of Vector because the pilot, which we have started we started in December two months, we took across the December January we had a lot of network to do with the team so the training of the candidate, the entire architecture on this teamwork, they actually implement the entire project of this had to be prepared, so it is all the prep work was going on for the last two months. In February itself we have hit the market, so let me first update you onto the area in which we are running the pilot. So we are rinning the pilot in Bengaluru a very specific area Scuth Bengaluru we have picked up one of the distributors there and this particular distributor was serving around about 300 to 400 retailers and I would see on a yearly basis that number was a little more, but yes when I have to say that it has to be active distributor wherein these distributors retailers were being served on a monthly basis the number would be much lower so round about 200, 250 is retailers that the distributor was serving. So these guys has gone ahead and mapped each and every mdividual shop in that particular area in locality they probably can place in as well, which we never thought about as well. So for the women segment, for the men segment, for the kids and the number was quite amazing and really we were amazed to see that kind of a number. So once we have the mapping done, let the team out there, they are going to each particular retailer they are taking asking them to enroll with us and then to the telecallers we are taking the call orders from them. So this looks though just maybe 12 days into it, looks very, very promising to us, very, very happy to see that, if this really works out should get completely revamp of our existing systems. So currently what we do, we sell it to the distributor, we help them to reach the retailer, but nonetheless we do not have any control over how the distributor work, but if we implement the system, this would be complete overhaul of the system in terms of we would be connected to the retailer, we know what distributor is selling, what kind of stock is he carrying, what kind of a dispatches and the services he is giving to the retailer a completely revamp of my existing system. So looks very, very promising as of now, till the time I do not actually close my pilot I will reach each one of them, see that they are giving me the orders on the continuous and a repeat basis consistently I would say it would be too early to comment, but as of now with 12 days my team my boys into the market looks very promising.

Moderator: The next question is from the line of Pratim Roy from Stewart & Mackertich. Please go ahead.

• Yum" Ray: My larst duestabn ls that what ls the segmental revenue abntrabutabn that ybu have mentabned the number that was nme mbnths ended nghL sb ¹ want the quarterly numhzr lf ybu aan urbvade thatv
• Shuhl Aglrml: sbrry Prahm ybu want the duantatatave numhzrs7

Yum" Ray: Quarterly abntrabutabns bnly Q3 bbntrabutrbn here ybu urbvaded nme mbnths nghU

• Shuhl Aglrml: Raght sb Q3 wbuld be 37% blmy Bagbbss chamuabn wbuld be arbund abbut ^o 50% than rbrae GD Wear 2% rbrae NXT 2% Mlssy 9% burregulars arbund abbut 27% and 2% lrbm Thermals
• Yum" Ray: okaybeaause at ls ^a wmter seasan nghtl
• Shuhl Aglrml: Absblutely sb wmters we have ^a hlg sales sb all really havetb talk abbut my number thrt ls tbtally 23% has been an bveral gbwth lbr the nme mbnths ended ln thermal and 40% ln terms bl my quarterly number
• Vuhm wbyv And my sebmd nlwdlml l: that what l: the vnlume gvmmh m the hvvmd Mluy find the rbrbe NXT' yearrmryeafl
• Shuhl Aglrml: Seevbbme gbwth lberssy has been t9% and bverallvaluebas been 32% gbwth bnrrne mbnths ended numbers
• Yum" Ray: And lbr NXT7
• Shuhl Aglrml: Pbst whaah we dld talk ab but lt lbrt mm as well that there wlll be sbme mternal rwamp ln terms bl gb tb market strategy lbr rbrbe NXT sb there has been ^a deahne bl arbund abbut 20% ln terms blmy value and 9%. anterms blmy vblume
• Yum" Ray: wa nuah d2fllm2vnlum27
• Shuhl Aglrml: vblume has been sbrryl just rut the number wrbng lf rbrbe whaah ls amund abbut 5% deblane ln value and 9% ln vblume
• Yum" Ray: And what ls the strategy that ybu have just mentabned that ybu are ahangang ybur strat lbrthrs brand what ls the strategy ybu have taken ngatnbw means what ls the ahangev
• Shuhl Aglrml: lmmlly when we were tallnng abbut that rbrbe NXT ls ^a brand where we wlll nbt attaah Dbllar and at wbuld have tb stand m ats bwn we traed wbrkang m tb that but when ybu are

going to the market and you are not giving any kind of an support, which is why would a retailer and distributor work onto this brand until how will you convince the consumer, so these things we did not understand that these challenges would come. So now when we are working we are trying to say that is fine it is coming from the house of Dollar, but it is a superior brand, it is in a better trand and for that we are trying to reach especially we want to target the southern market now mitially. So those are sustained kind of a strategy we are working with the team and we are hopeful that we would need some at least three to four quarters to work around and make a turnaround in this particular brand. So purposefully we have come down a bit, we have just introduced athleisure into Force NXT so you will see the product in the market by end of this quarter. We have started taking orders from the distributors and then again we are trying to place the Force NXT into the large format stores as well. So there are certain many parameters on this, so we want to create a consumer connect of the brand with the consumer to make them aware, so there are lot many other things, which we are working internally. A complete brand architecture is being worked upon with my team, so where we are saying that we have so many different kind of plan, so all this put together this would help us align our strategy for Force NXT.

• Pratim Roy: Yes, that means that you are introducing Force NXT also under the Dollar connect touch point right so that the Dollar brand can provide some traction on the Force NXT brand?
• Shashi Agarwal: Not really, I would say that see even today when you buy a Force NXT you will see that manufactured by Dollar Industry Limited, so it is always there, but we were absolutely limiting itself has been not even talking about it to the distributor that is coming from house of Dollar or the retailer how they should be looking at it, but now we were just trying to educate them it is not that it is standing by its own, the whole company was working with this brand. It is just that initially we did not, when we went to retailer we did not talk about Dollar Industry, but now we are telling them that it is Dollar Industries is there, the company would built the Boss is also building Force NXT in that way helps to understand the brand, we are not saying that it is the brand logo would be launched this Force NXT would be launched mio the brand logo of Dollar. We are not doing any such thing. It is just about educating them.
• Pratim Roy: And one last question is that what is the revenue contribution that we are getting from the Pepe Jeans JV means right now absolute number what is the contribution earning from that particular thing, if you can mention that number?
• Shashi Agarwal: It is just a mere 97 lakhs of billing, which has happened with Pepe the product launched in October against 1 lakh pieces, which we have stored to them round about the ASP for us comes around a bill Rs. 80.

Pratim Roy:	This 97 lakhs revenues means total revenue right?
Shashi Agarwal:	Total revenue from Pepe, are you talking about remanufacturing in Dollar or you are talking about the revenue of the Pepe joint venture?
Pratim Roy:	Pepe joint venture.
Shashi Agarwal:	Pepe joint venture I will not be able to get the numbers right now in the call because again we need to have some certain formalities with the joint venture company because this is something I cannot publicly talk about it because it is a private thing and we have whenever we make any kind of an announcements we have to have approvals with them, I will not be able to put those numbers right now.
Moderator:	Thank you. The next question is from the line of Shiva Kumar from Unifi Capital Private Limited. Please go ahead.
Shwa Kumar:	Shashi when you said that incrementally the other opex was higher by 13 Crores this quarter, so 9 Crores of the moremental 13 Crores was from ad expenses right and the rest in the former sales incentives?
Shashi Agarwal:	Yes that is correct.
Shwa Kumar:	And should we expect these sales meentives to continue further or is it a onetime phenomenon?
Shashi Agarwal:	I think this should be just for this quarter I do not think so that should really reflect in my Q4 because currently we are not increasing any schemes this particular quarter we have not come across with any schemes or no schemes in this quarter. We did a lot of launching in the last particular quarter itself. I do not see that to be on rise much, but added something I am little worried about, I would be very honest here because I see that advertisement expense from April getting preponed too much, so there is some kind of worry that how do we mitigate that. That is something discussion is all within the company that what do we do because as it is we have also did our budget and we see those preponement of advertisement expense from April to March so we are trying to mitigate that.
Shwa Kumar:	And are you seemg good traction in Missy especially after you onboarded a new brand ambassador for the product and you spend some ad expense for Missy particularly. So how has been the market response for that, do you see any traction there?

Dollar InduSlHZS lelted February 13/ 2019

• Shuhl Aglrml: On ^a quarterly basas an lbbk at my Mlssy numbers ¹ have ^a guwth bl 4% mm ara vblumes ever raarae mbraths eraded ³² 5% an terms blvalue and \9% an terms blvblume l wbuld say at as gbbd tb resabrad whaeh ¹ am rebeavarag desaate the labtbr as stall db rabt have that kmd bl arabbme the pmdubtrarage whera I talk absent the lburagewear massarag {mm my prbdubt pertlblab Penple are abreptarag at and whera we have gerae tb the market saebalabally wath respebtave team we are seearag allthas bbmarag ara lbr Mlssy leggarags ^a let Sb ¹ wbuld saythat at as erabbbragarag aradwe are hupeful wath thas brarad
• Shlu Kumu: And shashahbw has beera the wurklng babatalthas quartzfl
• Shuhl Aglrml: Thls as samalar tb last quarter sa ¹ have rabt made aray pmgess ara terms bl deereasarag my debtbr days but araveratbay as slaghtly hagher by lave days that as brae bl the reasbras beeaase thas athleasure has beera lauraehed Athleasure we have started ballarag lrbm Fehnmry mad and we have started ballarag tb the dastrabutbr arad belbre we start ballarag tb the dastrabutbr we raeed tb have ample stbek sb that as ^a let blstbbk paleup lbr my athleasurebrarad sb brae bl the reasbras ara thas pmmular quarter ¹ have ^a lattle stbek paleup sb aust tb gave yen uraderstaradarag geraerally the splt bl raw materaal tb the m remaaras at 55 tb ⁴⁵ an Q1 but thas tame at as reversed sb at as 5; and 42' sb 5s remaaras my m and ⁴² as wath raw materaal SD athleasure as gavaragmy stuckmvznmry levels
• Shlu Kumu: sb athleasure alsb wallbe sbld t: the same ehararaels nghm
• Shuhl Aglrml: Yes absblutely
• Shlu Kumu: And an terms bldebtbr days are they stall at \00 days whabhybu hadrepmed ara Q27
• Shuhl Aglrml: Yes they are stall at \00 days
• Shlu Kumu: And db ybu see sbme easarag blpressure an the dastrabutbr ehararaelwhereara dastrabutbrs are lallarag ara larae ara terms bl dbaragthe busaraess mere wath pmperhllls and all at the last male hasmallw
• Shuhl Aglrml: Yes shaval am rabt sure whmh ^s whatwe dad dasbuss
• Shlu Kumu: Yes basabally ¹ was askarag whether pbst the GST therewere sbme habbups an the last male whether retaalers have had tb regaster fur GST get everytharag ara place belbre they ran agaara puttarag raew brders sb that has beera amraed but Just warated sbme up date an thatl
• Shuhl Aglrml: lwas stall beratarauarag rabt sbmetharag whmh we lwbbld say at as llke bbmaletely hagh arbaed but The prDCESS as an prbgess we are tryarag tb wbrk arburad at but rabtharag very

Dollar Indusmzs Lamxtad Fabmmy 13/ 2019

anaaaragang ragat haw sa wa Ire stall anta at stau aduaatang tham and txyang ta wad! an hand anhand waththam sathat wa wall saahattar aasults

• Sh!" Kumu: And shasha haw has haan tha pmgess an tha madam made ahaamat haveyrm mhnarded any haw p armzrs m that partaaular ahannah
• Shuhl Agumt: Sawa aust sagled tha agezmem wath 1ndaa ramaty Maat and tha Catyhght 1asttama Wa wan staat husanass wath tham saan We have a1sa daspatdhad ta Amazm Us tha hast 1at atrmaa er satas tha athleasure and tha mnzzwear Sa there havehezn sama1waa1d say nathang haw hut whales/2r wa were tatkhg ah aat thasa are gattang aataanad upm
• Sh!" Kumu: And haw much as tha {w anua amtnhutaan {mm ^a madam trade currentlw
• Shuhl Agumt: Appaammataty 3% all put tagathaa 3% as madam aataat and Erwmmzme hath

Sh!" Kumu: Bath put tngethzr gent 1wa11 aamtha duaaa Thank yau

• Mndzntm: Thankyaa vary mudh Tha naxt duastaan as {mm tha hna arshashaaak Palm {mm Radkstud napatat vtaasa gn ahaad
• Shuhmk Palm: Madam ¹ naadad sama ataraty on tha anhna husanass sa tha thang as wa hava haw wa saa Pzpe as a1sa anhna and even sellngnllsrundzrwean annaawaaa Justwantad ta knaw what as tha maagm pmfile afyrm ga aaahna damp aaad ta what wa dnthmugh dastaahutaasv
• Shuhl Agumt: Sa hare] wauld saa tha margansthaaa waald ha twa part M at whan wa have an taams attha pnmng and tha mhzr waald ha h taams attha mvenmry narrymg an tha dehtrx days Sa fur anhnatha dehmrs ¹ waald say as aaahzahla aasaly haaausawathan 32' ⁴⁵ days yaa aaahzatha dahtars hut huwevzr yau datanataly marry tha anvmmry fur ^a muah lmgzr panad haaaasa hare anaa yaa daspatdh an tha dastsahutaan ahaaanal anaa yau dasaatdh tha mvmmry 'Ifiu huald and tha mvmmry passes an {mm yrmr haaks ta thaar haaks hawavaa m tha m ana wa da hat have an numght sa1a sa thay ha1d tha anvmmry fur Dnllar Industsaas and am thay arahauangta tha cusmmzfcmsumzr that aswhan at as ^a sa1a renamed sa dataaaataly fur us tha anvmmry aamyang wau haaama ^a htt1a lmgzr Sa that as hasaaauy aamaansatad ta what wa have and that as hasaaany wa have ^a lmgzr mvznmry days langaa dehmr days fur tha dasmhutmn ahanaaals and aa far as tha pnmngs aaa aaaaaamad thaaa as hat muah at ^a daffzmnce as ataaaw haaausa wa aaa stau Lryangtn gamzr a1at nf sa1as an taams nfpammtlar segment as aanaamad Than yrm have axtaa axpansas an tam: nf daspatahas that as mdav adua1 paakmg has ta ha damtdhad ta tha wunzn ata ' sa1 wauld say at as mare a: ass samalarthzre as natmuah M ^a da'raranaa

• Shuhmk Palm: But gmng laxwaral we wuld see that at wrmld he better lax us al Erwmmzme staats ta mnease an am ^a axtlaalaaat
• shuhl Aguml: Y2: atwaxalalhut at as stall ^a laxagwayta waxkbeaausel neeal at least saxne gaaal amaxant an teams aal my valumes are aaxaaemeal A: alnaawl waulal nathave that aapaaaty ta mnease an margans l waxalal nat be able ta :10 that ugh! naaw l neeal at least \0% al my aeveaue aaxnang lnxn axalane anal themalemaetaalthenl aan aleananal ^a betteamargan stall lax mel neeal ta estahlash at as the banal xanal
• Shuhmk Palm: And just my seaaxaal auestaan waxalal he mastly m the mama level Sa ¹ wanteal ta undzrstand lake sathe thang as m quarterly hasas we have alaxae neaa abaxat um anal m nne maxath hasas anthempllne hasaa wehave alaneneaa abaxat lzwbut what we haal guaalea as thatwe are abaxat \5% as vey muah aaxnlaxtahle Na alaxaht even analustay hasheen slaw lax thesenaneanmthshutthenhaaw alayaxaseegaanglaxwaralwhataaulalhetheassueanallaaw aan we resnlve thas axwhat as the aatlaak gmng aheaal m the taalane hast: per ⁵²⁷
• shuhl Aguml: Taalane see ^l m ta \2% alelanately be what we have aahaeveal lax nane manths ¹ am sure that year enaleal we waxalal b2 \2% as the manaanuan but yes that we waxalal alelanately wrk tawams \5"/t'z anal lax the mummy as ^a whale Q» as always the hlghest 521mg Drdzr lax all the cannula: anal we arewlxklngmwards thas sa thatwe aae snmzwhzre amunal l waulal say lm ta lm appmxaanately hat as whatwe are waxkang aal
• Shuhmk Palm: llyaxa ala nat manal aanl squeue ^a last auestaaxa Regaralang the aal spenal haw :10 we see that aaxatxallang beaause see lax us the aal spend as alxeatly aelatang ta axx part that as the mly majlx expanse that we ala per se but al the valumes :10 net kaak an haw alae; at matenalazeta use sa an that nmtixt shantlal we aaxatml anaxe aal Expense beaause the valaxnes arenat aaxnang anal we are stall gmng at the analustayaate alaang an aalalataaxaal aal spend law waxalal at help us7
• Shuhl Aglrml: l aamaletely undzrstand anal that as axae al the aeasaxas we haal talked abaxat aaxatxallang aax aal spenal but as] talal ylm thas was ^a partlcularreasnn an teams ankshay talkang abaut the hnel nfDnllar as well whaaht ll naw he was just talkang abaxat thevest alDallaa Sa has TVC has mmeased that paatanalaa aal spmds here an the segnmL but gmng aheaal as we talked abaut we waxalal want ta maantaan that levels whaah we are talkang ab amt anal as la- as the cmvzrsmn as aaxaaemeal yea cmvzrsmn alaes happen at as net that the aaxaveasaaxa dues nat happen but yes the level x whaah at happens we neeal ta undzrstand the nugnzan. al that anal keeaang that an manal we wall get up» but yes gmng aheaal we have ta b2 vlgl ant abaxatthe aalv eatasement expendltum

Shuhmk Palm: okay madam lell getbaek ln the queue ler addrtrenal euestrens Thank yrm

• Mbdeutm: Thank yrm The next duestren ^s frem the hne en>rakash Kapadra lrem Anrved meulln Management Please ge ahead
• Yuk-sh Klpldu: Srrtwe euestrens Empleyee expanses are up 22% 23% rnnrne menths se eeuld yrm glve us serne sense ln terms elnumber el empleyees where are we seahngversus last year and hew sheuldwe leek at the addrtren gmng {Warm
• Shuhl Aglrml: ll we leek rnte year te date basrs expenses had been mere er less statre as ^a pereentage te sales they have been mere er less staggenng areund 3% te ³ 5% that ls what rt ls hee Yearly numbers has been ² 82% ler nne menths ended 2m and nrne menths ended 2mg rt ls ³ 34% se the rnerease hasbeen beeause number ene we had eur new cro Jnlmng ln then we are alse prelessrenahzng eur sales team where we are havrng the RSM Jmned ln {er the partreular vertreal gettnrg mere and more pmlessrenal peeple en ward new and speerally at ^a senrer level Se thrs has aetually rnereased the eest ^a httle apart lrem that dehnrtely at the Junlnr level and as lar as the peeple en the shep l'leer eeneemed they are mere er less marntarned There has net been mueh el an rnerease
• Yuk-sh Klpldu: Marnly at the mad levelbeeause elwhreh we have tskzn
• Shuhl Aglrml: Mld and the senrer levels there has been an rnerease
• Yuk-sh Klpldu: ¹ am sayrng last lew quarters pest hstrng we have seen velatrle revenue guwth ene qurtzr elhrgh gewth then ene quarter ellew guwth averagrng te areund l3% se what arewe derng te gew eensrstently en ^a yearrmryear basrs beeause as ^a eensumer eempany we sheuld behavrng at shghtlybetter and eensrstent sales guwth nghm
• Shuhl Aglrml: rrrst elallthrs partreular rndustry rtsellrs very seasenal sueh
• Yuk-sh Klpldu: ¹ am talkrng nfyearrmryear grewth ¹ am net leekrng at QrmrQ gewthv
• Shuhl Aglrml: Yearrmryear gnwth agarn ever the pest hstrng there has net been mueh ela devratrer se 20l7 we get hsted se new Justmeresults have been ler 2on2 and 522mg l3% gumh and belere that rt was areund abeut l l% te l2% guwth there and belere that the guwths were klnd el ^a httle statre l weuld say that
• Yuk-sh Klpldu: Seby September quarter we gew 25%7
• Shuhl Aglrml: Are yrm talkrng ab eut yearrnnryeafl

Yuk-sh Klpldu: sharba Aguml: Yuk-sh Klpldu: sharba Aguml: Pnkuh Kay-an, sharba Aguml: Yuk-sh Klpldu: sharba Aguml: Mndzutm: Nluv Slvu: Yes ¹ am talkang abeut yearrmrvear lam net gettang yeur euestaen Qm'znt. quarter eur reveraues are up 5% en ^a yearrmryear basas an September revenues were up 24% an June reveraues were up ³ m an Marah reveraues were up 4% an Deaerrber reveraues were up 40% These are very very quarter speaalaa new yeu have te start leekang at these sel weula ge ante Nevember 20|5 therewas ^a alernenetasataen then aemang en we have ^a enset eleT the entare eaenemy ashavang ats ewn alynamaas lerthe last twe years where yeu are gettang ampaateal all the analustraes are gemng ampaeteal far that se alelnately thereweulal be same ahanges an terms er the quarterly guwth are aenaerneal anal mere se ever my analustry as agaan very very eyelaa an nature Fer Example Deaember quarter as aempletely aleperarerat en alamataa aenalataens yeu have ^a aelalerwanter yeu lanal thermal gmng well the wan.ers are malal yeu askang as alrep» an: as at as we ale net have yeur sales fur annerwear anal taera generally the alastrabuters ale net take up steak {all We haa ^a gnnd waater ttghL waatea thas tame was raaly geeat That as the reasera we are havlng ^a better results my numbers have been better an termr el my thermal grewth are aenaerneal at as areunal abeut 23% ler nane meraths eraaleal And baseal en the palet by when ale yeu thank ever the next quarter er se we wall have rrere alanty te take that te ether regaens gmng lerwaral anal what as the reaalmap as at erae years twe year er eurreratly we have aast slgled {er the palet anal enae the palet as aaaepteal therawe slgl ^a lermal eentraat wath the eensultants hew alees at wmk7 Yes se that as hew at as werk wath the aensultants as that we eapeet the palette be eve an anether marandrarhalnn twe rrenths se by Marah eraal erApral maal l wallbe an a aenalataen te knew that hew the palet has laaeal eut what as the eutaeme hew as at gmng te benelatthe aempany se enae we have establasheal that thas as the way te gn lerwaral as then when we slgl the aanael anal {anal ageemerat wath them se we plan te saale at up pan lndlz te unalerstanalang the eratare pres anl aens anal then takang at up lrem there Thank yeu The next euestaen ar lrem the lane annv Savaa trem JMrananaaal Please ge aheaal If we Exclude thas thermal grewth then what as the grewth lfynu ean have ^a llkErtnr lke

eemp arasen Excludlngthzmlal far thas auartert

Shashi Agarwal:	That is the number, which I have to work on Neerav, but then again as I told you this particular quarter is a season where you do not sell anything other than thermal.
Nirav Savai:	Yes, this was an exceptional quarter when winter was very good so if we can just know that apart from thermals how is the rest of that?
Shashi Agarwal:	That is the number I have to work out again and because my total calculation includes thermal thing to it so that I have to exclude and then work it out.
Nirav Savai:	And another question is about this margin improvement where do we see this margins going on m, in the next one or two years because if you have seen for the first nine months it is roughly about 13.8% do you see this improving next year and what is the guidance if you can just help us out of that?
Shashi Agarwal:	This year definitely I have been talking about 13.5% to 14% margins.
Nirav Savai:	So you see about last year it was roughly about 12.6% and you say about 14% for this year?
Shashi Agarwal:	So as I told you the numbers have been revised here because of that Ind-AS analysis.
Nirav Savai:	Yes right.
Shashi Agarwal:	So 12.9% now becomes 13.5% approximately, so 14%, 14.5% is what we are talking about, 50 to 75 bps I am working on that.
Nirav Savai:	So roughly about 50 to 75 basis points for FY2020 and you see this continuing going forward or you feel that this is?
Shashi Agarwal:	That is FY2019 and going ahead again I would see another 75 bps going up.
Nirav Savai:	75 bps for the next year you are saying and what was the key growth driver for that do you think that price rises is something where you will target?
Shashi Agarwal:	There has been morease in terms of the price mix, there has been increase in the prices, and so all these are the elements, which going to help me that is the key driver that is what we are focusing on right now.
Nirav Savai:	So that is where you see the margin improvement would be coming from and do you

Dollar InduSlHZS errted February 13/ 2019

• Shuhl Aguml: slappbsedlyl erad up wath lm er l3 5% gumh thas year br \2% guwth thasyearl am sure that thas as the way we have hem wbrkang wath br we are explbrang the palbt ¹ am sure that the numbers wbbld anerease an the bbmang year Sb ¹ wbbld bbntanue wath the next lave years as we have been spesklng abbbt that lave years band an terms blthe szall and |5% bapatal gumh
• Nluv SIVIIZ okay madam that as at lrbm my sade Thank ybu
• Mbdeutba: Thank ybb The next duestabn ar lrbm the lane leagvarPauzdar Slngh lrbm CEAT Market Capatal Please gD ahead
• Jlgvu Fun db. shagb: Y2: Lux has name but wath the 1umh2rs yesterday sb raw materaal bbst as dbwn an the rase DfLux and at as up an the base bldbllar sb why sb mubh dallererabe an theraw matenal bbrtl
• Shuhl Aguml: Thas as sample lwbbld be able tb answer the puestabn lbr my ebmpanyl wbbld nbt be zble tb answer bra behall bl Lux IndLsmes Lamated and lbr mysell all have tb talk abbbt my aaw matenal bbst l wbbld see ^a bbnsasteraby an terms bl my raw materaal bbst as ebnberned lbr min" the quarters arbbnd abbbttlm as subh lbr mysell but] wallnbtbe able tb take at lbr the ether ebmpanaes Sn
• Jlgvu Fun db. shagb: okay thanks madam

Mbdeutba: Thank ybu Thenext duestabn as lrbm the lne bl Hamanshu Nayyar lrbm Systematax Grbbp Please gD ahead

Ham-nab" beyu: Madam wbuld ybu ^{b e} able tb share the lree bash l'lbw numb er lbr the nane mmths7

Shuhl Aguml: Thas tame ¹ had sbme bash llbw bbmang an lrbm my bperatang abtavataes arbund abbbt 3| Crbres whereas ¹ had anvested arbund abbbt ⁹ Cmres an terms bl bapatal asset hulldlng' rbl wbbld nbt say the bapatal asset kand bl replabemerat bl my bertaan exastang mabhaneraer br addatabn bl bertaan assessang plant reduared bertaan new mabhaneraes tb be replaced tkere spbmattang mabhanes takera up ED these kand bl stulls reduared arbbnd ab but ⁹ Crbres there 4 Cmres was anvested an terms bl the Pepe we have been talkang abbbt the anvestmera. bl Pepe tall nbw lbr thas partabular yearwe have anvested mmh2r4 Crbres and then agaan klnd bl thas my lungrtzml hmuwmgs ¹ had brbbght at dbwn by anbther ⁴⁰ Crbres whabh was repaad and the shunrtzm'l bbrrbwangs have anereased arbbnd ⁵⁰ Crbres sb bveralll wbbld say bperatang bash has been 3| Crbres

And lanally bn bbr anbrganab plmts what as the status have been able tbs have we have been able tb shbrtlast any pbtentaal abauasatabn bandadates br that as stall wbrk an prbgessl

Dollar InduSlHZS Lamated February 13/ 2019

• Shuhl Aguml: We wall wbrk amund that Hmnshu last quarter very very aggesslvely' but alter eertaan findmgs we deeaded net tb gD wath that mmuany SD the hands as stall m wmklng tax the nght mmuany waththe nght valuatlm tn the mmuany and tbthe anvestaxs
• Hnmnihll leyu: Gm. at madam Thanks and allthe best

Mndeutm: Thank yDu The next duestab—a as {mm the lane bl Prerna Jhunahunwala {mm B&K Seeuntaes Please gD ahead

• Yum: Jhunjhunwlll: ¹ wrmld lake tb understand the amuaet bl deelane an ebttun uraees m uur numbers Cmtm unees have emeeted an the last me meeandeaehallmmths SD what as the amuaet bl at an thas quarter and gmng furwarc"
• Shuhl Aguml: Prams as Dfnuw' as yrm raghty saad that the panes stabalazed abaaut Dr started deelanang amund abaaut January SD raghtnbw we are aust keeuang the unees as as net uassang at m aerbss but stall we mntanue dezllmng and thas as ^a weskzr amuart then we maght have ta pass at m tn the dlsmbumr an the channel but aust me marmdrarhalfmmths ¹ db net see mueh althe amuart SD yes ¹ wmld see ^a lattle guwth an my margans that at as kmd al ^a very vety lahelytb gtve ebueaete mswet as Dfnaw beeause ttwtll ebmbletely depend law they elearly tends up an
• Yum: Jhunjhunwlll: But what kmd blanventny thatwe had atthe end bl 3Q and haw arewe bualdang at up an current duarterl
• Shuhl Aguml: Nae SD we dad nut ualeuu muah bl ebttun thas tame SD generally what we db as by the December end we buy ^a let nfcmm and the yam because agaan at as ^a ebttun seasbn and db the suannang aetavataes as well sa we have net dune that but yes nght nuw we are Lrylng tb buald up ^a lattle bl mv eratny SD thatwe can get the beraelat
• Yum: Jhunjhunwlll: Madam seemd questlm what wallbe the tetalvalume guwth and the pane gmwth lerthe quarter an tetalaty and what kmd blunee hlke al at all at unee nuts we have taken an has quartz"
• Shuhl Aguml: Net mueh SD my quarterly gewth has been an value as s 5' whaeh as suuubrted by 3% as valume the rest name an {mm u-aee and thas wrmld be because althe reasms ¹ sbld mare bl vnlume blmythermal sb thas as basaeally aunee anerease an terms bathe urbduet max
• Yum: Jhunjhunwlll: okayumduet max ehange

• Shuhl Aguml: Only 3% gets udntrrbuted by thermal lur thrs quarter and lur thrs reasunl am talklng m duarterlybasrs
• Yum: Jhunjhunwlll: nght madam ^I understand that 2nd vulume guwth ulm ls alsu drlvzn by thermals mly7
• Shuhl Aguml: Nut really su l have ^a vnlume gawth ln Mrssy l have wrthrn Brgbuss l have wrthrn my regulars and ^l have wrthrn Thermal whruh has been negame tu extent by Fume m and chamurun
• Yum: Jhunjhunwlll: Madam what wuuld be the ^v ulume gumh ln Blghnss and Regulafl
• Shuhl Aguml: Blgh uss guwth v ulume ls 9% and regular has been 4%
• Yum: Jhunjhunwlll: And madam uutluuk as yrm sha-ed bat that lurthrs year at wrmld be aruund lm guwth lur thrs year umeut all heard at udrrertlyv
• Shuhl Aguml: Yes \2% m HM: ls whatwe arr luukrng at
• Yum: Jhumhunwlll: And an ^a lmgizm'l hasls7
• Shuhl Aguml: Thls \5% CAGerveyears su rnuludrng thrs year lur the next luur years ¹ wrmld say agaln the CAGR wrmld stand aruund 5%
• Yum: Jhunjhunwlll: And any gurdanue m margrn lmprw ernent and where at wlll uume tram beer the next lave years where we are lunklng 3U
• Shuhl Aguml: Margrn lmprwemznt delrnrtely lnlmlly wrmld be ^a uruduut mlx uhange whruh we uan see rthauu erunngssy ls mareaslng nextwe need sume tame but agarn Fume NXT wuuld lelu us lmprwe the margrn there number une su that ls bur urrme thrng and apart lrum that tlll ratrenahzatrun bl uetarn exuenses whruh we have been talklng abuut {er the next ¹ am talklng abuut the next lave years hunzun delrnrtely advertrsernent exuenses wrmld be me bl them 1nuentrves ls sumethrng agarn we need tu klnd bl luuk aruund that huw we :an ratrenahze that agarn Nut rmmedrately agarn ln the nexttwu three years hunzun ls whatwe wrmld have tu wurk that but thebudget aruund rt agarn Rrght new at ls currently llnked as ^a ueruentage bl sales that needs ta gu away These are the twubasru parameters llwe are lauk rntu my balanue sheet there the Jlgger numbers nrxmng' my expendrtures gues there rest bl them are klnd ulratrunahzed 1n am able tu take uare ulthese twul thrnk su l wrmld hare ^a betterbalanue sheet ^m terms bl the margrns

• Madeaatm: The next duestaen as lrem the lane el shava Kumar lrem Unala Cauatal Pravate Lamated Please ge ahead
• Shlu Kuanu: Just wanted te elanly en the gess margan asueet se the anerease that we see yearrmryesr as at eratarely dravera by sales mlx ehange er anythang ²¹⁵²⁷
• sbarba Agarml: Thls uartaeular quarter shava at l; mere elthe sales mlx
• Shlu Kuanu: And gaven that there has beera an extended wanter» whaeh panned eut ever Q4 sheuld we expert the gas: margans te kmd elsustaan an Q4 315m
• sbarba Agarml: Ne shrva here the tragedy eut hare as that we ge wath ^a fixed kmd ela ureduetaen The kmd er the velume yeu are geang ta ureduee the thermals as are deeaded erad er June and the eratare three menth eyele by Serternber erad yeu are ready wath the steek Beeause at really takes lL at as ^a lerag ureeesses at takes areund abeut twe meraths te ureduee the thmnal ureduet Se henee whatever as rmdueed as uredueed and we sell at ell Past that we denet ureduee and we de net dasuatah ler us the last ballang er thermal happms areund abeut January \5' 20m we de net bal beyerad that Se wath any lew balls trust me the dastrabuters net geaag te pay let that he wttl keep rt en held and stun ltke that what abeut extenied wanter as there at mlght benelat the dastnbuter te pass at ente the retaaler but net te the Cemuany There as ^a kmd er fixed ballang eyele ler us fixed umduetaen eyele whaeh we lellew the addataenal er extended wanters de net de ^a sangle ueant rather at harruer us beeause my sales ler annerwear dees net eeme an se net geed lerme
• Shlu Kuanu: And shasha ean yeu gave us seme serase as te hew the uenetrataen an terms elnumbe. el retaal teueh u eants yeu have been able te aeeess has anereased ever the last nane mmths7
• sbarba Agarml: Retaal teueh ueants as 01' new we were talkang abeut sernewhere areund abeut 95000 eutlets se enee we started talkang wath these eensultants we were werkng areund at se ¹ weuld say there has been anerease but netvery sub stantaal anerease that the number has gerae beyend multaule ueants beeause what ¹ have understeed that we started talkang te these cmsulknts at as net abeut that ekay that uaataeular retaaler was wath yeu an the ballang system but lew eensastently was he ballang wath yeu as mere ambertant Se ¹ weuld raght new held ente these numbers rather than Just gave yeur number and say that ekay these are the uents whaeh we have teuehed raght new my target as te make sure that whatever retaaler lhave an my ambatl needtebuald them regularly eensasteratly en ^a menthly basas

Shlu Kuanu: Get at Thank yeu

Moderator: Thank you. The next question is from the line of Shashank Palan from Rockstud Capital. Please go ahead.

Shashank Palan: I wanted to ask this as you mentioned you cannot give any coating numbers for Pepe I just wanted to understand briefly in subjective terms how is it going for us after we have infused money and what is the outlook subjective as compared to as we have placed at above Pepe Industries and their products so how do we see it panning going ahead.

• Shashi Agarwal: Currently Shashank what we have done is we launched the product of Pepe in southern region that was the major cities that was Bengaluru, Chennai, Hyderabad, and this particular quarter we were working in terms of taking it deeper to penetrating the southern market as we have already started working with the team to take the launch in northern and the western zone. So west and north is the second priority for us probably we should be able to launch the product there by the end of the March or early as April that is our target right now. Acceptability people like the product it is around about the same as you rightly said it is little above Jockey and notch ahead of Jockey. Since the fashion trend is in little playful little fashionable we expect a good response people, positive feedback have been received from the retailers and the consumers as well to whom which we have been able to touch this and small survey was ruled out. So we are very, very hopeful in terms of launching this product, but that the number speak once we are about to close the year we will have the numbers and then we can talk interms of value, the numbers are concerned.
• Shashank Palan: Definitely we will have better margins in Pepe compared to what any of the dollar products would make right is that understanding?
• Definitely because here the multiples are higher than what the demand outflow in Dollar Shashi Agarwal: mdustry, but just to let you know that this would be coming as an kind of an comprehensive moome it would be not be a part of, so whatever the profit could be 50% of it would be getting added to the dollar industry balance sheet as a comprehensive item.
• Shashank Palan: Yes, but 50% was slow in part because you have consolidated right?

Shashi Agarwal: Yes absolutely but I will be too hopeful if we are looking for a positive this year Shashink because six months we had there without any sales we made the sales have only started post October. So I would not be very hopeful in terms of positive number is flowing in from Pepe this particular year.

Shashank Palan: Okay madam and the other thing that you had mentioned that for kicking in and getting that product mix actually worked for us and expanding our margins we were targeting various

MBOs and direct stores through which whom we can supply and distributor would not be a part, how has that turned out and what do you see going ahead because I think you gave names to Amazon US and two more names, but in terms how is it going with bigger ones that you are telling?

• Shashi Agarwal: So we have supplied this Dmart, we supply to Brand Factory, Reliance Trend, More, Unlimited, we have added India Family Mart, so these are in terms of the large finance stores are concerned. As far as the online platforms are concerned we have literally everyone in India, US Amazon was the latest ad where basically Dollar product would be showcased when if it is there on the US side you will see US Amazon would have post next for us, so this is kind of a split, but if you are trying to ask me split in terms of the volume in each particular platform or each particular large format I do not have that data readily were available we can get connected to me offline and then we need to talk about it.
• Shashank Palan: Yes, thank you for that, but I would like to ask you that overall you said it is 3% but this 3% you see it going ahead you said modern trade is 3% right that includes MBOs9
• Shashi Agarwal: Sorry I did not get your question Shashank.
• Shashank Palan: You said 3% is modern trade, which includes e-commerce and modern trade is 3% so that meludes MBOs also?
• Shashi Agarwal: MBOs does not come into these modem retails, so when you see large format stores these stores, which we are talking about 3% includes large format store and e-commerce and I am not including any of the MBOs here in this particular bracket.
• Shashank Palan: So I was trying to get whether MBOs have percentage of revenue has that increased or do we see it going forward going to increase?
• Shashi Agarwal: MBO is 93%, 7% of my business in that way I am getting my business increment from 3% is very smaller number to impact my total revenue growth.
• Shashank Palan: Okay madam. That is from my side. Thank you.
• Moderator: Thank you very much. As there are no further questions I now hand the conference over to Ms. Shashi Agarwal for closing comments.
• Shashi Agarwal: I thank everyone for taking time out and joining in understand the results of Dollar Industries Limited. Thank you all for the participation and have a good day ahead.

Moderator:

Thank you. On behalf of Edelweiss Securities Limited that concludes this conference. Thank you for joining us. You may now disconnect your lines.