Shall we open the line for questions?

Yes.

Thank you. We will now begin the question-and-answer session. The first question comes from the line of Ashutosh Joytiraditya with ICICI Securities. Please go ahead.

Yes, hi. Thank you, sir, for the opportunity. So, I have two questions. First one is on the volume growth trajectory. So, I believe like in Q4 what you have highlighted that we are focused to deliver the double-digit kind of a volume growth going ahead, but I don't understand like what was the miss there. And second question is on the pricing thing. So as far as I remember, last quarter the management said that in January the price hike that was taken, it was mainly to improve the product quality and they were anticipating that there will be some calibrated price hikes going forward to mitigate the ra w material impact. But again, on that front also, what I can understand is that the management seems to have missed the outlook what they have given. Yes, two questions. Thank you, sir.

Thanks, Ashutosh, for the question. On the volume side, I think we still remain committed towards the goal of a double-digit growth in terms of volume for the financial year. This is going to be phased across quarters. And with regards to the quarter 1 deliveries, there were two major pieces that has affected the volume delivery. One is a planned one, which is structural in terms of how we are planning our growth across quarters. With the ARS now fully in place, we're also not front-loading our performance like it used to be and hence, schemes and incentives for the trade has been designed in a way that it is better distributed between quarters. So structurally itself, you will see a difference between performance between quarters. However, the annual goal remains unchanged, which is to aim for a double -digit growth in volume. The second bit which has affected the quarter delivery has been essenti ally our undelivered billing. So, unlike the last year Q1, this year we've had extraordinary volume that

has not been delivered in spite of being billed. That's because of the disruption we have experienced in the logistics and manpower towards the quarter end. This is what was narrated also in the MD's commentary. These two have impacted volume growth reported for quarter 1, both of which we believe one planned, the other is temporary and hence should be absorbed going forward. With regards to price increase, you're right, the January price increase was largely to enhance the product itself and was not linked to input cost. We have undertaken a price increase partially to absorb the input cost in quarter 1. This was done sometime in mid of May. However, the full gains of the price increase has still not been realized and that's something that we'll be realizing in quarter 2 purely because of the FIFO principles that we operate in our billing. So large portion of what was invoiced in quarter 1 was the previous pricing and the gains from the price increase, which was taken in quarter -- in the mid of May would be realized in quarter 2.

Okay. And sir, just on your reply on the volume growth so as per my understanding, like you are saying that for the remaining 3 quarters, we should be seeing like 11%, 12% kind of average volume growth and how confident you are -- sorry?

Fairly confident given how the demand atmosphere has been in quarter 1. So we should see recovery for us to make up for lost ground in quarter 1.

Okay, fair point, sir. Thank you. Thank you for the opportunity, sir.

Thank you, Next question comes from the line of Videesha Sheth with AMBIT Capital.

Yes, hi. Thank you. Sir, my first question was on the comment made on the new product lines. So which segments would it be focused towards besides the younger consumers who grow our licensed merchandise, if you could help on that, please?

So, we've got product introductions across the category. Some of it has hit the market in quarter 1. Some of them will go through in quarter 2 before the festive season is upon us. Quarter 1, the big ones were Groove 3, which is our street fashion line, wa s launched in the month of June. This is our third line. If you recall, we had launched this as a proposition starting quarter 1 last year. This year, the collection was taken to close to 500 exclusive brand stores across the country and has been received very, very well and our sell-through numbers look very good. So this is the large one. Other than that, we've had specific products that have come in across the portfolio. Another big piece is the collaboration with Disney and Marvel to bring in character merchandise. But this again while the go-to-market was planned towards the end of June, a large portion of revenues from this will be realized in quarter 2.

Okay. So just two follow-ups to this. One is that in this license merchandising piece, it's quite a competitive space with multiple D2C players already present. So what is the differentiated

opportunity that Jockey as a brand has? And the second would be fair to assume that new product lines will be dedicated to the athleisure space rather than the innerwear space?

Okay. So specifically on the character merchandise, you're right. I think they're prevalent across many brands, both D2C brands as well as legacy brands. We are looking to differentiate this with the design aesthetic and the signature handwriting that we have the opportunity to put out in the market. Of course, this is backed by the trust and the quality that you can expect with Jockey merchandise. These two pieces I believe will help differentiate our product offering when compared to the rest of them in the market. And the start is this with Disney and Marvel. This also opens up a window for us to collaborate with other licenses in the character merchandise space going forward. As far as the second question is concerned, there will be upgrades as well as newness across the portfolio. But the large pieces, which will be backed with marketing investments, new propositions, etcetera, is going to be in the athleisure space.

Got it. And the second question was on the inventory level. So further reduction of inventory days from 73 to 66 or 67, could that also lead to loss of sales to some extent? So what's the thought process here in bringing down inventory levels all the more?

No, right observation. I don't think our intention is to bring down inventory levels any further. And we should admit there has been some level of lost sales opportunity in quarter one as well because of non-availability, and this was largely attributed to some level of disruptions we've had on the supply side in quarter one. But I think we've reached optimum level of inventory both in the value chain as well as the inventory at Page level. In fact, we are now looking at augmenting capacities, investing above plan in terms of manufacturing to make sure that both in-house as well as out -source, to make sure that we're able to do justice to the demand that's coming our way.

Got it. And just last bit, if I may, would it be possible to give a ballpark range in the difference between primary and secondary growth in this quarter?

We don't give away secondary numbers, but I can say that secondary growth performance has been much better than primary, this largely because of the undelivered inventory and hence us not reporting it as primary in quarter one.

Sure. Thanks for that. I'll get back in the queue for further questions.

Thank you.

Thank you. Next question comes from the line of Saurabh Kundan with Goldman Sachs. Please go ahead.

Yeah, thank you very much. So Karthik, my question was actually around the logistics disruptions only. If you could just double-click in on exactly what these were and some idea on the quantum of the undelivered volume will really help.

And related to that question, does this mean that for the year you said double -digit volume growth is your target, could it be a little bit higher in 2Q because 2Q will have this undelivered volume and then also whatever the underlying volume is there in 2Q? And could you please double-click exactly what manpower issues and what logistics issues these were? Thanks.

Yeah. So, this was actually disruption because, partly to be attributable to the rumors around escalation in fuel prices, availability of fuel itself, and hence with -- and all of our logistics are third-party, and the third-party labor having a concern given the SAR drive that was undertaken through the month of June. We had disruptions in the last mile delivery with our distributors towards the end of June. That's what has impacted deliveries and without -- I mean, I cannot exactly quantify it, but what I can say is roughly and ready, about three days of billing went undelivered when compared to normal. So typically, every quarter we have – quarter ending we have about three to four days of billing that does not get delivered and gets pushed to the next quarter. This year, that moved to about seven days. So, a delta of about three days of invoiced revenue -- invoiced billing, was not reported as revenue this quarter one. So that's what has impacted. And on your second observation, largely yes, majority of this should be reported in quarter two. And anyway, the next three quarters, given that our goal is to hit a double-digit volume, should see above-average volume growth to make up for the shortfalls in quarter one.

Okay. Just one more question, the difference between value and volume this time is a little bit lower than it was in let's say the previous quarter, which is basically the price and mix. So pricing ideally should have been slightly higher than previous qua rter because we took something in May. So what changed that the difference should shrink a little bit if you can just let us know, and what's your outlook going forward? Yeah.

Yeah, so two pieces there. One is the product mix like you rightly pointed out. We've had some of our lower ASP products like accessories and socks, in a way, again this is by design in terms of scheme design, seeing above -average performance in quarter one, which has in a way contributed to a lower ASP. And the second is the price increase taken in May like I mentioned earlier, not much of it we've realized in quarter one in terms of benefit. That's something that will flow in from quarter two. So, the outlook going forward will definitely be much bigger difference between volume and value performance than what we've seen in quarter one, purely attributable to mix as well as the price increase in May which will start kicking in by quarter two.

Right. Thank you.

Hi, thanks for the opportunity. Couple of questions. Given the rise of e -commerce and digital channels in our mix, how are you leveraging real -time data analytics to harmonize let's say channel pricing, maintain margin parity, and also build some sort of KYC on the consumer base as well?

Thanks, Tejash, for this question. On pricing parity, see, because there is no real -time data required, because we anyway don't -- unlike most other brands, our pricing, we follow a uniform consumer pricing principle, irrespective of the channel of purchas e. So there is no quick deals or flash sales or any kind of markdowns at any given point in time for the end consumer, irrespective of where that consumer is shopping. However, to your larger point of about how we're leveraging data, we are probably in the apparel consumer space, we are best positioned to leverage consumer data given the large set of consumers that we serve. And in terms of D2C, our avenues today is jockey.in as well as EBOs, where we have direct first-party information. We are trying to synthesize this data -- first-party consumer data by building a CDP, a consumer data platform, which is largely in place. We should be going live by the end of August. We are now ensuring that we're being completely compliant with the DPDP Act and ensuring that all forms of consent in usage of this data is being secure. Once that is done, we would be in a position to leverage it. Now leveraging this data is on two fronts. One is the direct impact on revenue in sense of cross-selling and up-selling products. The second and more importantly and a little bit more strategic i s about understanding consumer buying behavior, having cohort -level analysis of what is being bought and feeding that back into our category management and product design teams to better make informed decisions on what to launch, how much to launch, etc etera. So that's something that we're building as a foundational capability within the organization.

Super. And just one follow -up there. At what stage do you expect this digital investments to kind of become a source of efficiency tailwind also to let's say unlock operating leverage and specifically the DMS improving inventory turns and replacement cycle also across the distribution network?

Yeah. So the DMS is underway, but we've not yet completely moved ahead. It's still a very small portion of distributors who are on DMS today. But the goal is by end of this year or latest first quarter of next year, all of the distributors in our network should be on DMS and then give it about a quarter more to stabilize as a tool and thereafter you will start seeing efficiencies coming into the system.

Great. Thanks, and all the best for coming quarters.

Thank you, Tejas.

Yeah, hi Karthik and hi team. Sorry, just two bits I wanted to understand on this growth outlook. You know, the way you essentially witnessing and just clarifying, there should be in the next quarter, there should be a benefit of this lost billing days as well as the underlying sales sequence strength which we saw. I just wanted to clarify that part. And that should rationally flow in the next quarter only, right? Is that a fair expectation to have?

That's correct. I think that's a fair expectation to have.

Perfect. And just on the input cost bit. See, I mean, if I recollect there was some low -cost inventory benefit that we had in this quarter despite that gross margin did come under pressure. Wanted to just appreciate how are we placed now? And should we see sequential margins kind of more or less now improving or is there some pressure in the near-term that we should kind of build in? And in turn, how do you see the full year EBITDA margin guidance? Would you retain that at 19% to 21%? Thank you.

Yeah. As we stand….

So…

Yeah. As we stand….

Okay, go ahead. Deepanjan, please go ahead.

Okay, so mid of last quarter, yes, we did see inflationary conditions in the input cost, especially cotton and nylon and even synthetic packaging. In fact, fabrics also went up and as well as any synthetic products that we are buying, which is petroleum ba sed. There also there was a significant escalation. So while we did pre-positioning of supplies, we couldn't fully absorb the extreme increases that happened. But yes, end of June and even now, the situation has to a large extent normalized and going forward we expect things to be stable. Of course, if there is again an escalation in the Middle East situation, it can happen differently. But as of now, we expect things should be stable. And with that, our annual outlook on EBITDA margin will still be within this 19% to 21%.

Sorry, Deepanjan, just clarifying. You have -- the price basically what I'm trying to understand is the price hike that has been taken passes on the current input cost and hence kind of gets us back to earlier gross margins. That understanding is clear, I wanted to confirm.

You're right. So we did initiate the pricing piece as Karthik said in mid of May. It didn't absorb the entire impact of cost input increase. Now that will completely flow in Q2 and with that we should start getting the civilization in the gross margins.

Got it. Got it.

If I may just clarify Avi, sorry. Let me just clarify. I think the price increase that we have taken does not completely absorb the input cost. If the input costs continue to be or resumes to the level of what it was in April and May, then the quantum of price increase will not be enough to absorb the complete input costs. We have taken, and I think that's what MD also mentioned in his commentary, we've taken a very measured approach, keeping in mind not to out -price ourselves and keeping competitiveness in the market in mind. We have partially absorbed the input cost increa ses in the form of MRP increase. Believing that, many of these both the raw material increase as well as operational costs through, you know, logistics, etcetera are temporary in nature and should in a way stabilize going forward. So we've not in a way attempted to completely absorb the i nput cost in the form of MRP increase taken in May.

Got it, very clear on this Karthik. Karthik, I just had a bookkeeping and if anyone could just clarify the Speedo, the drop in MBOs, is there anything that we should be aware of? That’s all. Thank you.

Yes, I think we've gone through a consolidation, especially in the swim business in the offline space, given how quickly that business has moved from offline to online. Today, our online contribution to the overall Speedo business is upwards of 35%. And he nce, the our network of multi-brand outlets for Speedo has consolidated to about 700 stores in quarter one. But if I had to consider quarter four as well as quarter one, because typically multi -brand stores/traders tend to build up inventory at the beginning of the season, which for Speedo is typically January, February. If I had to combine the two, it's about 950 odd stores.

Got it. Thank you very much, that's all from my side.

Yeah.

Thank you. Next question comes from the line of Nihal Mahesh Jham with HSBC. Please go ahead.

Yes, hi team. Good evening. Am I audible?

Yes, Nihal.

Yes, Nihal, please go ahead.

Yes, sir. Couple of questions so first one is again on the impact. You did highlight about the second part, which was the undelivered billing. Just to understand the first part. We have ARS being fully in place and as you highlighted it in Q4 also that the channel inventory across all segments is sort of normalized, let's say, close to between 45 days. So with that as a framework, what is the kind of normalization that we are looking at in terms of sales, because generally Q1 is one of the higher quarters, given it's also a back-to-school kind

of a quarter, so just wanted to understand, the first part better in terms of the two impacts that you highlighted.

Yeah, so it's got to do with how we design our schemes across months in the year. You would also have, if you see the last two years performance, you will see how contribution of each quarter to the overall annual number has gotten a little more flatter. Prior to the implementation of ARS, we had quarter one being the biggest quarter of the year, which does, which is not the case in the last bygone year as well. We are trying to see how we can normalize between the four quarters in terms of equal contribution. Obviously, seasonality will play a role, which is beyond what we tend to design. But by design, to make sure that there is no inflation of inventory or any kind of push abnormally in one quarter when compared to the other. That's why we are trying to design our sche mes to ensure that between quarters by design there is normalization.

Understood, Karthik. The related question to this was, you did highlight the impact of three days ballpark, which could have been related to the billing. Now if you just take a very crude of, say, three days' contribution to the quarter, it is like a 3%, 3.5%. And, you know, we were clocking like a 14%, 15% growth in Q4. So, is it fair to assume seeing that, you seeing that underlying momentum of secondary similar that because of this normalization, the 2%, 3% impact in the growth moderation is more related to this normalization and the secondary trends or the tertiary, if you have your EBO data sort of remains similar to Q4?

Yeah. In fact, EBO has been better than Q4. We've seen quarter 1 perform better than quarter 4 when it comes to tertiary level performance and the EBOs as well as distribution secondary. But coming back to your observation on impact on the top line, I thin k you're more or less there in terms of what impact it has had on the top line.

Got that. And final bit on the RM impact side. So incrementally, we would have covered for what proportion of the RM inflation that we are seeing with the second price hike in May also that we've implemented?

Very difficult to put a number or say what percentage of the impact has been offset with the price increase because it's been very volatile. March and April operated at very different levels. We saw further escalation in May, a sharp decline in June, then again gone up towards the end of June. So it's very difficult to put a number and say this portion of -- this amount of increase in input cost has been covered with MRP increase. What I can say for me is that it's only partially covered. It's also got to do with how we are forecasting the RM prices to be and that's a bit of a punt because we don't want to be in a position where we've outpriced ourselves because we don't want to discount the brand later on. And hence, we've seen a trend towards prices coming back not to, let's say, the pre-war situation, but definitely better than what it was in April and May and hence, it's a waiting game as we go

ahead. We are hopeful that it will not escalate to the extent that we need to come up with another price intervention. We believe that with this price intervention, we can operate in our targeted EBITDA range of 19% to 21%. As long as we're able to operate in that space, I think the intent would be to hold prices and drive volumes.

Got that. Thank you so much, Karthik, I'll try coming back in the queue.

Thank you.

Thank you. The next question comes from the line of Sameer Gupta with IIFL Capital and India Infoline. Please go ahead.

Hi, sir. Good evening and thanks for taking my question. First question is basically on the RM side only. So I understand you will not be able to quantify what kind of RM inflation you are facing, but can you quantify the kind of price hikes that have grown and gone in the system?

Yes, yes. So it's about 2.2% weighted average increase that we have taken in the month of May. This is on the back of 2.5%, which was taken in the month of Jan. Jan of course had nothing to do with input price, but the May one, the 2.2% is directly as a result of increase in RM cost.

And just a follow -up on this one. So basically in the first quarter, you still would be having a lower cost inventory given that price escalation only started from March onwards. So suffice to say that as you basically encompass the new price inventory in 2Q, these price hikes will flow through and net-net, we are in a similar situation as in 1Q?

No. See, if you see the number of days of finished goods inventory that we started with, we had some level of pre-war inventory and a lot of March inventory as well and in a way, that is a net- net situation when it comes to Q1 opening. So large portion of our finished goods and to some portion, the raw material that was procured was through April and May. But we also have prepositioning of inventory specifically in raw materials to offset this RM escalation impact. But again, the escalation has been much higher than what we had anticipated. So that impact did flow in, in quarter 1. So the price increase in May should help offset that partially and now that raw material prices are better than what it was in April, May, it should have a net-net equal impact and take us back to early Q1 kind of a scenario.

Okay. So with the price hike, you will be back to like pre -Q1 assuming that the prices stay where they are today?

Yes, going forward because we've already -- I mean the prices have come down when compared to April and May. If it sustains at this level, we should be okay.

Fair, fair. Second question, very different versus what has been asked. So there has been a minimum wage hike in Karnataka and while garmenting at this point is still out, but we still have a very large workforce which is based in that state. A large numbe r of our manufacturing units are there.

Fingers crossed, but if we were to assume the worst were to happen here, a similar kind of 60% minimum wage hike if it includes garmenting as well, what kind of margin pressure are we looking at? Any indication you can give will be helpful. And another way to look at it would be how much percentage of our employee cost is basically at minimum wage in Karnataka?

So, the first announcement that was made with this regard -- see, by the way, the minimum wage increase for garmenting has already been actioned in the month of April, which was applicable for garment industry. That's already flown into the salaries and it is in a way hit our P&L as well. Now the announcement that was made towards mid-May, which did not affect garmenting industry, still affects us marginally because of, let's say, third-party employed support staff like security, like drivers, like our sales specialists at the stores, all w ithin the Karnataka state. It is only to that effect that this second announcement by the government of Karnataka is going to have an impact, which is not a material impact in terms of the overall P&L. By the way, that also has now been withheld temporarily with the latest announcement made towards the end of July by Government of Karnataka. So as of now -- and the first announcement was challenged and was in the court. Meanwhile, by the end of July, the government has withheld that announcement temporarily. So even if that were to go through, it's not going to have a massive impact because it does not affect employees who are directly related to garmenting. So all of our tailors who are today governed by the minimum wage code do not get impacted by this announcement. Sameer Gupta So you're saying that even like if there was a rollback of the minimum wages, it will still exclude garmenting or the employees which are directly employed at your place, that's what you're saying, right?

Yes. It always was. The announcement by the government anyway did not cover the garmenting industry. For garmenting industry, a separate announcement was made in the month of April itself, new minimum wages announced, and the same was passed on to all eligible employees.

Got it, sir. But subsequent to that in May, I think there is a review committee separately made just to relook at garmenting. And that is why the question, that if we were to assume a similar kind of minimum wage hike that comes in through garmenting, what kind of margin impact are we foreseeing?

Okay, that is something that we have not done, maybe something that we can do when come back with a number. Because the announcement that was made was clear that it was not to do with garmenting. It still affects us like I said for associates who are not directly involved in garmenting, but that did not have a material impact on the P&L.

And just to clarify even that initiative also by the government seems to be going slow because there has been a change of hands with government at the industry level and things are going very slow on that front.

Got it, sir. That's very helpful. Last question if I may squeeze in. I have seen your annual report and in that the ad spends, selling and distribution expenses are down 5% in FY ‘26, and I believe this also includes the commissions that are paid to the third-party e-commerce channels. Now in a year where e- commerce has grown at 60%, I was just wondering why overall ad spends are down 5%. Would it imply that we have meaningfully moved to an outright sale model to e -commerce platforms? And if yes, what is the rationale and if you could gi ve the salience of outright sale and marketplace model within e -commerce? The other implication would be the brand level sales itself has been meaningfully cut down. Again, just wondering why that should happen.

Okay. So within the e -commerce business itself, if you had to look at it between marketplace model and outright model, yes, the contribution has shifted more towards the outright model. And this is largely because of quick commerce. Quick commerce, we cannot operate on a marketplace model. With the large – with the, you know, fast pace expansion of the quick commerce players, all of them operate on a outright model with Jockey, and that's why you see a swing in business tilting towards outright when compared to marketplace. Even with traditional marketplaces, our endeavor is to actually operate on an outright model when compared to marketplace because the last mile delivery and consumer experience happens to be better, because we today operate with two fulfillment centers, on e in South and one in North, whereas most e -commerce players that you can think of operate with a lot more DCs, distribution centers and fulfillment centers, and hence the SLA to the, the TAT to deliver to end consumer is much better and results in a bette r consumer experience. So that's something that has definitely had an impact. In terms of overall brand spends, the difference that you're seeing is because the year before last financial year, we had a large campaign for the World Cup, which was a disproportionate spend, which did not follow through in the last financial year. That's the delta that you see in terms of lesser spends at a brand level. Otherwise, the intent is to continue operating between a 4 to 5 percentage of the revenue towards marketing.

Got it. Just very clear. Just a follow-up here. So basically, going towards an outright model, you also will be losing control of pricing on these marketplaces. Would you be comfortable with that as a strategy?

No, so we are looking to have the best of both worlds. We are in strategic partnership with both of our – with majority of the marketplaces where we are operating in outright to ensure that price governance is maintained and we don't in a way dilute pricing principles to the end consumer. We're fairly confident that that is something that we'll be able to maintain.

Thank you.

Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question-and-answer session. I now hand the conference over to the management for closing comments.

Thank you for being with us today. We truly appreciate your continued interest, confidence and support. While the operating environment continues to evolve, our focus remains clear: serve our consumers better, to strengthen our brands, execute with discipline and build a business that creates enduring value. We look forward to engaging with you again in the next quarter. Thank you, again. Have a good day.

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