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Dollar Industries Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '21 Earnings Conference Call of Dollar Industries Limited, hosted by Elara Securities Private Limited. [Operator Instructions] Please note that this conference is being recoded. I now hand the conference over to Mr. Akhil Parekh from Elara Securities Private Limited. Thank you. And over to you, sir.
Thanks, Margaret. On behalf of Elara Securities, I would like to welcome you all to the fourth quarter FY '21 conference call of Dollar Industries. From the management side, we have with us Mr. Vinod Gupta, Managing Director; Ms. Shashi Agarwal, Senior VP, Corporate Strategy and IR; and Mr. Ankit Gupta, CFO. Without taking much time, I'll have it over to Mr. Vinod Gupta for the opening remarks. And [indiscernible] you can open the floor up for Q&A session. Over to you, sir.
Thank you, Akhil. Good morning, and I welcome everyone to this Q4 earning call of Dollar Industries Limited. I hope that you and all your love ones are safe and healthy. We are going through [ uncertainty ] of times right now. The second wave of the pandemic has hit us hard a little bit, larger and deadly impact than the first one. We need to fight this together by following the protocols, as been outlined by the inter-government. We pray for the steady recovery of those who are battling the virus and also extend my helpful gratitude to all the corona warriors who are standing up and working tirelessly making efforts to keep us safe. We all know that FY 2021, it's been a rough year for all of us, and COVID-19 pandemic take a global economic downturn. The global economy tend to standstill during this first quarter of the fiscal, wherein everything was incurred by lockdown. The economy started recovering from the second quarter onwards. The economy had only started moving on the path to recovery, where it was met with the second wave. The current situation has left us all in uncertain environment, where we are trying to balance our life between pandemic and the work. The first have been made to keep us moving with the minimum possible impact on the entire economy and entire working of the company as well. I'm happy to announce that in spite of the adverse situation of the company -- adverse situations, the company has been able to record 30% growth for the fourth quarter and 7% growth for the entire fiscal year. I must admit here that the pandemic has been instrumental in giving more legs to organize business and the cost of unorganized ones. We are now accepted to get this advantage. The company made all the endeavors to make the demand for the Innovia casual wear and continued supplies to its channel partners and the consumers. However, the company did experience [indiscernible] in certain categories of the product like, socks, leggings, [indiscernible] where the demand was muted due to the current pandemic situation. During the year under review, the company has also succeeded in reducing in debtors by 13 days, reducing the total working capital back to about 15 days altogether. The company will continue with the effect to bringing down its working capital cycle further in the current year. The company has put down secure policies around its trade policies where -- which is being accepted by the channel partners. The joint efforts of the company and these channel partners will help to reduce the working capital cycle further. The replacement expenditure for the year 2021 is around INR 79 crores, which is 7.5% of the total sales. By a holistic look, everyone -- the sale would reveal that are out of the INR 17 crores -- INR 79 crores, approximately INR 15 crore -- INR 50 crores has been spent by the company during the year in branding, only due to reengineering exercise done by the company in total overhauling its brand architecture. It's a known fact, and it was also known to everyone during the past 3 quarters, that the company has entered -- had entered into a phase of rebranding, restructuring of its total brand. There was a process for brand architecture which was put in place. The entire purchase of brand architecture was started way back in '19 -- 2019 to '19/'20 year, where we started with this process of brand architecture. And entire, the Dollar itself as a brand was also -- I mean there was a logo change, the entire logo of Dollars was also change, that, that particular process we started in 1920. And it was laid before the entire public at large in the year -- this only in the last year 2021. Everybody is well aware that whenever there is a change for this brand architecture and the logo design, we will have to spend heavily to put it further before the retailers network and the consumers so that everyone is now well aware with the entire logo change and they know that really a change has happened. Because of this entire brand architecture and the logo redesign, we will force to go in further 360-degree exercise so that we restart with the change to the retailers and the consumers in a big manner. And because of that exercise, the company -- I mean we have to spent around INR 50 crores for this rebranding going forward to the retailers and the consumers in 3 subsidiary. So that everyone is well averse of this logo redesign and the brand architecture. So this INR 50 crore rebranding expenditure, we incurred, especially in 2021 as a one-off expenditure for a one-off event, where we had no option but to go with that. And out of that INR 50 crores, INR 19 crores were spending Q4 only, wherein all the INR 90 crores amount we had spent, it was spent in the form of dealers, dealers boats and the ins of branding altogether. We have tried to recognize the advertisement expenditure and reallocation of budget in digital, print and TV media has come in and to meet all that demand. In our [ years ] to cap the advertisement expenditure at an absolute value [ letter ] than linked to the sales, the company has now allocated a budget of around INR 30 crores to INR 40 crores for advertising and around INR 20 crores for branding during the current fiscal year. Now moving on to the joint venture [ Pepe Jeans ] [indiscernible] Project Limited. The JV recorded a sales of INR 17 crores as against the sales of INR 16 crores in the year '19/'20. The growth plan of the entire JV venture cannot be delivered as budgeted due to the pandemic situation, making traveling on the movements restricted. Now I shall hand over to Ankit, our CFO, to discuss the financial performance of the company. Thank you. Now over to Ankit.
Thank you, sir. Good morning, and a warm welcome to everyone. Moving on to the financial performance. The company's total revenue for Q4 FY '21 and FY '21 stood at INR 310.4 crore and INR 1,040.43 crores as compared to INR 240.52 crores and INR 971.81 crores for Q4 FY '20 and FY '20, a growth of 29% for Q4 FY '21 and 7% for FY '21. The EBITDA of the company for Q4 FY '21 and FY '21 stood at INR 33.24 crores, that is 10.71%, and INR 141.56 crores, that is 13.61%, as compared to INR 24.21 crores, that is 10.07%, and INR 109.29 crores, that is 11.25% for Q4 FY '20 and FY '20, a growth of 37% and 30%, respectively. The PBT for Q4 FY '21 and FY '21 stood at INR 27.07 crores, that is 8.72%, and INR 117.30 crores, that is 11.27%, as compared to INR 16.83 crore, that is 7%, and INR 79.78 crores, that is 8.21%, for Q4 FY '20 and FY '20, a growth of 61% and 47% for Q4 FY '21 and FY '21. The PAT for the Q4 FY '21 and FY '21 stood at INR 19.44 crores, that is 6.26%, and INR 87.51 crores, that is 8.21%, as compared to INR 12.31 crores, that is 5.12%, and INR 58.89 crores, that is 6.06%, for Q4 FY '20 and FY '20, a growth of 58% and 49% for Q4 FY '21 and FY '21. I'm happy to share that the company has started showing improvement in its working capital cycle. For the year under review, the debtor days stood at 120 days, inventory at 112 days and creditors at 46 days. That's a total of 186 days. We saw a downtrend from 200 days and a solid improvement of overall 15 days. If we calculate the working capital cycle for 320 days of working, removing the 45 days of lockdown in the first quarter, the debtor days will stand at 106 days, inventory at 98 days and creditors at 40 days, adding up to 154 days. The cash flow of the company has improved during the period. And there has been a positive cash generation from operating activities. Moreover, the company will continue with its efforts to improve the working capital cycle further. Now moving on to the brand-wise contribution. Q4 FY '21. Big Boss stood at 43%; Champion at 1%; Dollars at 1%, Force Go Wear, 2%. Force NXT, 2%, [indiscernible], 8%, [indiscernible], 24%, [indiscernible], 9%. In terms of product category, we saw that we did really very well this fiscal and contributed around 14% in our total sales. Now a small update on the JV company. The JV company is working on expanding its distribution network pan-India, which was slow in the previous year due to pandemic restrictions and movement restrictions. The total revenue of JVCo for FY 2021 stood at INR 17.18 crores as compared to INR 16.36 crores for FY '19 '20, a growth of 5% for FY '21. The loss from the joint venture for the FY '21 stood at INR 3.89 crores as compared to INR 4.52 crores for FY '20, with our share of loss being INR 1.96 crores this year. I now open the forum for Q&A.
The first question is from the line of Bhargav Buddhadev from Kotak.
Yes. Is it possible to know what is the volume growth for the quarter and for the full year?
Sorry, Bhargav. You just have to repeat the question again.
I was saying, is it possible to know what is the volume growth for the quarter and for the full year?
Absolutely. So I would say that we have experienced 11% growth on a financial year basis. That's the volume growth and 17% for the quarter.
11% for the full year and 17% for the quarter, right? Hello?
Yes, that's correct, Bhargav.
Okay. Secondly, is it possible to know what is revenue at the yarn and [indiscernible] business of yours? Because in your presentation, I see that you also have revenues coming from those 2 businesses.
Yes, absolutely. So yarn and the spinning mill which we are working across, that's the -- revenue is very, very small. Minimal -- very minimal revenue there because, usually, the yarn produced from the mill is also used in for the [ traffic ] consumption. Some of the quantity is definitely sold across the market at large. So that is a very minimal quantity marker. And right now, I don't have that number very handy. We can get an one-to-one call to get that clarified.
But would it be less than -- I mean, 7% to 8% kind of a number is possible or much lower than that?
10%, 7% to 8% is a big number, I would say. The number is much, much lower than that.
And lastly, if you can sort of highlight how was your sort of project on the vector consulting getting rolled out, if you can throw some light on that. And that will be my last question.
Absolutely. I would be glad to take that question, Bhargav. So we have successfully started implementing the project last year [indiscernible] constraint across 5 states. That's Karnataka, Rajasthan, Gujarat, Maharashtra and Telangana plants that we start implementing the [indiscernible] which we have been talking about in the northeast states somewhere in the next months once we have better movement possibilities out there and also in the [indiscernible]. So these are the 2 -- next 2 states. That's the [ second ] stage then, but I would just take note, this as one combination use. So we'll start then the implementation in the next fiscal -- sorry, next month, sorry. If I really look at -- if you look at the presentation which we have put across, in terms of the project [ last year ], you will see that the number of distributors which were there previously when we started in the areas where we have already rolled out the project, you'll see that there's increase in the numbers of distributors which we have appointed there as compared to what we were doing with previously. Similarly, like -- if I have to talk about Karnataka, there were 15 distributors previously. Now we have currently [ 15 ] distributed allocated areas. Rajasthan, out of 7, we have moved to 16 distributors. Maharashtra, the 6 distributors, [indiscernible]. Gujarat, where there were no distributors in the areas where we had no distributors, we have appointed 6 distributors there. Similarly, in Telangana, where there were no distributors in the areas which were vacant, we have appointed another 2 distributors. So this is the way we are identifying the right areas or the areas where we have little or [indiscernible] facilities [indiscernible] regions, we started appointing distributors. Now similarly, if we talk about the retail reach. Now previously, I would say that on an average, depending on the state, the distributors were built anywhere between 75 to 100 or 125 retailers on an average, because majorly their target was to push across the materials to the wholesale model. Now when you see that currently when we have these accessibilities and the insight into the data that was and the billing to the retailers where, and we do not allow any kind of wholesale to be done, you will see that numbers have gone up drastically into the terms of the retail reach. For example, in Karnataka, the 15 distributors on an average 100 retailers, We have some 1,500 moved up to 3,239 retailers. For Rajasthan, where we are taking an again an average of 100 retailers billed by these 7 distributors, from 700, we have moved up to 5,712 retailers. Maharashtra, approximately 125 retailers were billed by the distributors. We have moved up from 750 to 834. Gujarat, where we had no presence in those retail shops, we have again targeted another 951 retailers where we have been built in the last fiscal. [indiscernible], similarly, against [ 351 ] vehicle has been added to our portfolio. Then again, I would also like to talk about the range, we talk about the reach and range expansion. So this was the reach expansion which we are talking about. Now I would want to talk about marine expansion. So previously, when we were billing around about 700 [indiscernible] to our distributors or the distributors were actually [ 7 700 ] [indiscernible] in Karnataka. That number has gone up to 937. That means my rate expansion is happening parallelly to my reach expansion in the market. Rather than 955 [indiscernible] being built by the distributors, whereas currently 1,035 [indiscernible] being built by them. When I say [indiscernible], they do not include the color and the size combination. This is purely -- when I say that it's a of a particular [indiscernible], I exclude all the sizes, small, large, or the color combination there. So it's just typical [indiscernible] we are talking about. SCE expansion will be much, much higher. Master from 525 to 565. Gujarat, from 288[indiscernible], we have moved up to 446 [indiscernible]. Telangana, from 233, we have moved up to 255 [indiscernible]. Basically, if I have to talk about Telangana, there was the number of [ FG codes ] built by us and Telangana. And now we see that in that particular small totality where we have just 2 distributors, we have been able to build 255 [indiscernible]. Now moving on just to say that how this has been working out is like the average -- what we have done is we have taken an average monthly sales. Because all these distributors have been rolled out at a different point of time, so getting up -- summation of the numbers in terms of mismatch of the time period would not be possible. So what we have done is we have taken around, I would say, that average monthly sales, pre rollout and post rollout. So you can see that there has been quite a jump in kind of an average monthly sales than the -- to the -- all these distributors. This is the primary sale we are talking about. So where we were having around about 6,500,000 -- sorry, 65.42 approximately average monthly sale, it has moved on to 109 crore. 97 lakh in Rajasthan has moved up to 1 41 -- 1.41 crore. 31 lakh in Maharashtra has moved up to 51 lakh. Gujarat, 2 lakh has moved up to 22 lakhs. Telangana where this particular this area had no sales -- [ damage has been done ], this has moved up to 8.541 lakhs. So this is basically, I would, say that's the trend which we have now we can produce these data because the sample size has gone bigger. And our plan is to roll this out in terms of -- include more and more states. But unfortunately, the current situation, the pandemic situation is far end reaching steadier as we all know steadier than the previous one. So we have we have in mind the safety and security of our team on ground. And so that is taking a slow pace. It has not been moving into the speed and pace which we would have wanted it to move. So probably by now, as we had discussed in previous calls also, that we would have closed the Karnataka and Rajasthan states completely, this could not be done. The lockdowns, the restrictions and our priority to be ensure that the team on [indiscernible] are secure and safe has actually slowed down this project. But we can see that these results are far and reaching for us and very -- we are and delighted with the results that we are seeing on our way. So we are very, very hopeful that, with the situation under control, once we started it a full fledged manner, we will get better results, and it will show into our balance sheets and P&L.
My just one related question is that in your strongest market, which is North and East, when do you plan to roll out the [indiscernible]?
Which area you are talking about, Bhargav?
The east and the north part of India.
East and north part of the India right now, we are holding it back. North is we are doing as I told you, that we are doing Northeast under the basis next line. And probably, we will right now concentrate more on certain parts, because as we see in our zonal chart, that south is dipping a bit. It's gone by 7%. [indiscernible], it has moved down to 7%. We would want to concentrate on South first before moving to North and East.
The next question is from the line of [ Ankit Babel ] from [ Chakan Ventures ].
Got a couple of question. If you could please clarify what was the total advertisement and the marketing part in FY '21. And out of that, how much was one-offs? You were discussing some INR 50 crores, INR 60 crores as one-off. So could you again quantify that and repeat that?
Our advertisement cost for FY '21 was INR 78.55 crores. Out of which, INR 50 crores have been spent by the company just for the branding exercise, which was due -- mainly due to the change in the brand architecture and the change of logo. So we had to make a big impact in terms of awareness in the market, because we don't want to confuse the consumer with the old logo and the new logo. As we and the balancing figure was for the advertisement, like the PVC coming also, the Big Boss and Missy, and on the digital platform, as well the holdings and everything.
And what are your targets for FY '22 in totality? I mean, the 78.55%, how much you're targeting in this year?
In FY '22, in totality, we are targeting somewhere between INR 50 crores to INR 60 crores. And out of which, [ but ] INR 30 crores to INR 40 crores would be for advertisement and INR 20 crores will be for purely branding purpose.
I mean the branding for the logo [indiscernible] agent.
Right?
Okay. Sir, my second question is that you had guided for a net working capital of around 130 days for FY '21. In your second quarter con call, but when I'm looking at the results, you actually ended up with 185 days of net working capital. So what is the reason for the same? And what are your targets for FY '20 to end in terms of net working capital?
Well, overall, this FY '21, we have reduced our working capital days by 15 days. And if you -- I think what you're talking about is that kind of what we had said was mainly -- we took into account. Hello?
Yes, yes. I'm listening, sir.
[ 2 ], when we had our call, we took into account -- we deducted the total number of selling period by 45 days, which was under lockdown. I think that was the gap that you're talking about. And if you take 320 days as our sales -- selling period, our working capital cycle is around 164 days as opposed to 201 days last year. But taking full year, like 365 days as a whole, are -- currently, our working capital days, 186 days, which is -- so we see an improvement of around 15 days over there. Going ahead, in this fiscal also, we'll try to reduce our total days by around 15 to 20 days. That is the target that we have taken internally also. And we are quite hopeful that we'll be able to achieve this reduction.
Okay. And what kind of revenue growth and operating margins you are targeting for this fiscal?
So for FY '22, since this second wave has hit us very hard, and there's a pan-India -- like all the states are calling lockdown, since first week of April, the lockdown process has been started in different parts of India. So Q -- I won't say that we'll be able to do very well in Q1. But overall, on FY '22, what we're foreseeing is that we'll be able to achieve around 13% to 15% growth in our sales. And the margin will be somewhere -- we will see an improvement of around 150 to 200 basis points.
So around 15% margins is possible this year, 15%, right?
Yes.
Now that's what we have taken our targets internally, and we are hopeful to achieve that.
In spite of higher raw material prices, you believe that you'll be able to pass it on.
So on the raw material -- all the input price hikes that have happened since the month of October, November, all the costs have been mitigated to the channel partners and the consumers at an appropriate time. And currently, like all the input price hikes have been forwarded to the channel partners and all the prices that the company has taken on the price side. So currently, in the month of April, also the company took a price hike to match the input cost.
Yes. I would also like to mention Ankit, that is if you look at our results this year, that you see that there has been an improvement of 2% into our gross margin. That's been possible because these have been efficiently booked in and the materials which we had been -- we had the raw material at the older price has helped us to get those hikes here, that jump in the net gross margin. So we are very, very hopeful that we can manage this because we have managed it times when it was very, very crucial. The price hikes started right from November and was absolutely at a very upward trend till March. It just went down for some time, but against are driving. So we have been able to manage our situation in such tough times, and I'm sure we will be able to do it further as well. So [indiscernible] EBITDA margin at 15% as a guidance, we don't see [indiscernible] because we have also tapped or we are very, very cognizant of the fact that we need to work on to our advertisement expenses and also take into account the other expenses which are there as a fixed expense. And if you're trying to reach INR 1,200 crores, there would be some economies of scale coming from the fixed expenses as well. So all these things put together, 15% EBITDA should not be a big challenge for us to work there, because we are already [indiscernible].
[Operator Instructions] Next question is from the line of [ Arun Kejriwal ] from [ Kejriwal Research ].
We have witnessed after the onset of the pandemic that a lot of these consumer products are being sold online. What has been our experience? And what kind of sales have you realized from the online channels for the year '21, and particularly Q4 of '21?
So Arun, our online sales have grown by 2 ways, almost 2 ways for FY '21. We saw a very good demand coming in from the online platforms like Amazon, [indiscernible]. And the total percentage of sales coming from online was around 2 -- 2.25% in this particular fiscal, FY '21.
Okay. And in Q4, what would it be?
Sorry?
Q4, Q4, what would be the number?
Q4 has been in line with what we saw in Q2 and Q3 in our online sales. So earlier, our online sales used to be around 1.5% of our total sales, but this particular fiscal FY '21, the contribution was around 2.25%.
Volume, if I have to put it across, Probably, I had 19 lakh pieces being sold in '19/'20, which was a combination of my large format stores and my e-commerce platform. Whereas this particular year, I would say I have for more than 18 lakh pieces just on the e-commerce platform itself.
Okay. My second question would be, cotton yarn prices have gone up significantly. You are a backward integrated player producing your own yarn. What kind of efficiency has that given you in your cost of raw material, if I could ask?
Yes. So Arun, actually, the very right question. You see a margin -- if you take at the gross margin at our company level for the entire fiscal '21 and '20, you can see that we have a jump of around about 2% in terms of our gross margin is concerned. So since we have to produce -- we have to buy cotton, we have to have the stock of cotton as well to produce the yarn, accordingly, we are much more -- I would say, we are ahead of the entire industry in terms of understanding how it would play. The yarns are going to say going forward. Taking this into account and the production, which we are doing at our end has given an edge over us over the competitors. And we want to continue doing that so that we can get more efficiencies out here. The efficiencies can be built in, in terms of reduction -- or in-house production retail. So we get into a better negotiation terms with our vendors as well.
Yes. And I could just squeeze in a small question. Any guidance that you would like to share for growth in '21, '22 in terms of your top line?
Yes. For FY '22, what we are targeting is we see a growth of around 13% to 15%.
The next question is from the line of Shalini Gupta from Quantum Securities.
Ma'am, if you could please give me the growth in the economy, mid-premium payment and women's, like that.
[Operator Instructions]
Okay. So if you can give me the growth in some of the various segments like economy, net premium, premium, commerce and linen segments.
In terms of -- Shalini, the Big Boss, which is a mid-premium brand for us, if we talk that way, in men segment, the growth -- overall growth has been 9% for us. If I talk about my premium segment, that is Force NXT, I have seen a growth about -- around about 19% here. And the best part out here in Force NXT is, which is a premium segment for us again, is like we have sold more number of [ athleisure ] pieces than the [indiscernible], [ athleisure ] has been very well accepted in the market and is having a growing demand there. If I have to talk about my regular, that is economy segment, I have seen a growth of around about 18% in terms of my regular that's immediately the innerwear from men's at lower categories, that they range somewhere between INR 50 to INR 100, it start [ INR 50 ] [indiscernible] level. If I talk about Missy, that's my women's brand, women innerwear segment and the leggings, the bottom wear, sure, unfortunately, as we already R&D, sir, highlighted in the opening statement that the leggings have been seeing a muted demand because the women's are not going much win for shopping here now. So you see a negative growth of 10% out here. But that's majorly because of low demand in the leg wear. If we put that up, we will see that going forward, we are very confident to get this [indiscernible] as well. For most, we have seen a growth of 13% in terms of -- at an overall level, but it forms the 9% of my total sales pie chart. So that has been good here as well now.
Okay. And ma'am, you yes, like a lot of your competitors have said that the reason for the strong growth is that there has been movement from unorganized to the organized sector. Are you also experiencing something like that? Because the unorganized sector, a lot of the players have shut down during the COVID time.
That's true, Shalini. So current situation has made it very difficult for all players to operate and work and produce in the similar fashion, which they were doing it before COVID was there. Currently, getting labors, continuing with the expenditure, they have to incur with the continued production, and having a team to set it up and even then getting once the products are produced, they have to transport and put it across to the distributors. The entire channel is much more difficult to them as compared to the organized players. So right now, we definitely see a vacuum on the sales of the retailers. So we are trying to garner that space. And so that we'll see -- we have not only had a growth in terms of value, but we have also seen a volume growth in my economy segment. So that's something very good for us. But once we can occupy this vacuum created by the unorganized segment, we want to continue occupying the space going further.
Okay. And then my last question, what is the average selling price? And what has been the increase in the average selling price -- and yes, y-o-y increase.
I would say my average selling price on quarter basis has been -- has increased around about 7% to 8% here because we had taken a price hike in the quarter. But at a yearly level, if I talk about, there has not been much of increase in selling price. We will see average around about INR 58, ASP on the fiscal level, whereas currently around about INR 57 at a fiscal level.
So you have declined in ASP?
Yes. In fiscal level, yes, definitely, we declined because of these accounts and team offers to the consumers, retailers and the distributors, the entire channel partners, the discount has increased by a percent out here. And that's the reason you will see the decline in my [indiscernible]. Your question here is that there has also been a shift in terms of my product mix, like for Missy, like leggings have gone down -- so my ASP has decreased sales. For my regular items, even that my mix has gone to more towards the lower selling items than to the high-price items. So the product mix has also contributed to my decline in the ASP here.
Okay. And ma'am, what's your outlook? Hello?
13% to 15%.
Hello?
[Operator Instructions]
So the outlook for the top line growth for the next year is 13% to 15%.
[Operator Instructions] The next question is from the line of Devanshu Bansal from Emkay Global Financial Services.
So we have taken a higher price hike, I guess, versus peers in the premium category. So firstly, on a like-to-like basis, what is the price hike that we have taken? And do you think this would have resulted into a decrease in the price gap of our products with the premium categories? And does that propel customers to go for premium players?
So what I would like here to sanction before I start like overall basis, if I have to say that my price hike has been at around 5%, from a treatment categories of product. Like-to-like in terms -- I don't know whom you're trying to work out here, but as for the other players are concerned ...
No, no. What I wanted, like for value products, what is the price point, price increase we have taken? For Big Boss, like-for-like, what is the price hike that we have taken?
Big Boss, as to Big Boss, source mix is around about 5%. We have taken a price hike around 5% at -- the MRP has also been increased. The retail price levels, as the distributor price levels. All the hikes have been distributed among the 3.
But you indicated 29% growth for Q4 and 17% volume growth. So in a sense, this 12% is more of revenue mix change as well?
Yes, absolutely. Because as I told you that -- as Mr. Ankit Gupta highlighted in the beginning that athleisure has contributed around about 14% at the company level from all the different categories of the rest of concerned. So Big Boss [ athleisure ], Force NXT [ athleisure ], [ athleisure ] in the women segment, [ athleisure ] in the regular segment, they have all price -- high-priced products. So that increase has come from there. My product mix increase has contributed as well as [indiscernible] both depending on the category we are talking about, we have held with. So my ASP has increased also in my Big Boss segment. Force NXT segment, they have increased the ASPs.
Okay. Lastly, the premium player has also suggested entry into rural India with a separate line of products. So how do you -- is this product already in the market? And how do you see this product impacting us?
So premium products, again, at [ athleisure ], we have introduced just last year itself. So these products have been entering both the urban and the rural market. And with the current situation, in terms of work from home scenarios where people are mostly dressed in casual attires, that's something to relaxed form of working, the required for the relaxed form of working from home, that is something that's having a far and greater reach right now. And in other words, having that's an essential wear, again, you need to have, in a way, irrespective of your place of work. So those are again penetrating. We had R&D far and greater reach in terms of the rural areas are concerned. So for us, the market, it's just more about expanding the retail reach, which we are doing through our project luxury, where we are trying to increase our region rate at a deeper and at level, I would say, trying to be possible.
I get that. My question was specifically to paid industries indicating a separate line of products for the rural India. So how do you see that line of products impacting us?
Until the time they -- I do understand that there will be a competition for us. But later we would wait for the markets to react onto that. Because of that, they would really have to -- their payment terms are stricter as compared to the other companies that already play in the market. And the availability of cash and the relationship which we have created with our distributors along in the entire rural areas is something it would be required to be established for them. Though yes, they -- the brand establishment is already there. But again, let's see how the market and the consumers react to that. And we would be prepared for that to take it over. We are also preparing ourselves in terms of having the right kind of product at the right price for the retail and the rural areas.
The next question is from the line of [ Alan Pujari ] from [ Kash [indiscernible] Research ].
My question is primarily on receivables. So I just wanted to ask 3 things. During pandemic, how have you seen the portfolio of receivables treating? I think was there any write-off? Or how do you treat -- is there a change in the treatment on receivables that's happened? That is one. The second part is, you mentioned about 15 to 20 -- 20 days reduction in receivables. Now in [indiscernible], if I look at luxury, the project luxury, we feel the scope of reduction receivables could be much more in the financial could be introduced. I think last time, you had mentioned about financial being introduced and receivables coming down drastically. So is this project, the receivable project has been, I think, taken up significantly at a senior level? There is a hard number. That 15 to 20 numbers looks broad. But some specific numbers, certainly numbers of distributors and the time frame has been discussed. So there no receivables in align with the pandemic, it's been addressed on a very serious putting manner?
Right, So I'll start with your first question, but have we taken any write-off during this pandemic situation? Otherwise, we are working on an agent market, where the access and coverage that is their insurance to our debtor. We do not have any write-offs into our books. These -- any bad debts, if any, first of all, we do not have any bad debts, but if any, we have is contributed or may go to site agent in charge of that particular state. So the company is look you'll see there will be no write-offs. There's only a provision created as per the guidelines of the government, but write-offs would not be there. #1. #2, as you've mentioned that as the senior management involved in terms of making sure that the payments are realized regularly, the financing -- we talked about channel financing part that has been taken up seriously. Yes, the senior management, right, starting from our [ MD that and the joint MD ] who is ensuring that entire sales and collection partner is being monitored under the direct supervision of them have a personal interest in realization of the debtors and reducing the working capital cycle. As we speak, I'll tell you why we could see these improvements. It's because of the [ first ] -- and we close monitoring put in by then -- and the joint MD we have in the company taking care of the sale. Most however, the project luxury how it really helps us to reduce our working capital cycle is, see, once you have seen the potential, once the distributors see the potential in terms of the reach and range and the number of retailers reserving and this kind of orders he is receiving on a daily basis, he doesn't want to lose that thing. For him, that's a sales loss. which he can see, previously, these sales could not be seen by them now. So if you are -- if they do not make timely payments, the company stops the supply to these distributors.
Ma'am, I have just one question on this. Has this model contradicting to something which the company wants to achieve? Like for ignore ready agent, which is an assurance model, does that give us an impetus to really, really work on reducing your receivables? Because reducing the receivables may -- would also be taking a hit on the sales. So that is one. And the second part is, maybe with the luxury model, where the new distributors in the final penetration is happening. And if you clearly push and that you want to understand it is happening, but you really push the financing angle to it. So all your credit card are get converted to sales, cash sales. So that is the second point time coming up. So there's only 2 points which I have now.
Okay. So from the first point, that's Delta agri, which you see, definitely, it is not contradicting. I'll tell you why, because the agent is also sitting on a liability if the number of days goes and increasing for a debtor, for a distributor, he is also exposed to this. Rather we make a faster collection is just also reduces drastically. Today, whatever the interest costs would be arising out to beyond a particular point, that would also be went into his account. So he would make sure that the payment has to be done at a speedy level. Realization has to also increase. Moreover, when we are talking about the luxury distribution as, as well the other distribution models, we are appointing new distributors well and where from the day 1, we have been stricter in terms of credit policies that consulting credit deals are concerned. The -- those helped us reduce our debtor days as well. So the point of the recovery, it's there that they do not want to increase in our liability, and we do not want to expose themselves to a greater risk. So speedy recovery also is in safe their favor. Coming to luxury model as well, sure, when we are talking about that they are losing the cash sales basically when they can see that they do not have the stock because the company will not provide a stock to them beyond particular number of days when the receivables have gone very high. They are moving that sales, and that's something that we can see, which previously those distributors were not able to keep them. So here, they would again want to make the payments and a faster payment because -- and to top it up, the realization for them as luxury distributors have been far more greater than the people into the normal trade. So for them to reduce -- for them, it really makes sense to pass on the realization to the company and reduce the debtor. So here, all these 2 parameters put together is helping the company to reduce the receivables. And again, as I said, that the stock management focus and priority is to reduce the working capital cycle. This is taking the top priority in the company, making -- ensuring that we do not take a hit on our sales. Because as we are talking about, we are appointing new distributors. We are expanding the retail and range reach, which is having a far more reaching effect in terms of this being possible. Like -- I can understand, you would have this thought here in the mind that the [indiscernible] are directed in terms of the sales are concerned, as we spoke about the numbers which we have seen in our slide presentation, into luxury as well, that this is not going to take us down. Rather, we would -- we see a map ahead in terms of the those is concerned.
Sure. I hope to see 50 to 20 days of receivables to come down 15 to 20 days. Very much. The company is working on to it, and we are confident that we'll be able to do that.
The next question is from the line of [ Jane Nangia ] from [ Tak Investments ].
I had one question. Like, ma'am, we said that there has been a -- on a Q-on-Q basis, there has been a volume increase, right, if I'm not wrong?
On Q-on-Q basis, just give me a sec, I would say -- please continue with your question, I'll take the answer.
Yes. So ma'am, I'm -- secondly, the yarn prices have gone up. But as I could see, the revenues for the company has declined Q-on-Q. So could you please throw some light on it?
So your question is the volume has increased for the company on a quarter-on-quarter basis, whereas the revenue ...
Revenue might increase -- yes, revenue decline in the revenue. So I wanted to understand, like could you just throw some light where have we taken a hit in the revenues?
Okay. So I would say in the last quarter, I had sold a higher selling -- we have majorly sold e-commerce and the athleisure, in the last quarter, which is the highest ASP selling item.
So is there an ASP decline quarter-on-quarter?
Yes. So in terms of volume, on quarter-on-quarter basis, there was an increase in the volume. But in terms of amount, there was a decline due to the reason that in the month of January, we have changed some of our scheme structure. Earlier, the retail scheme which was there, say, Q3, which used to come in other expenses, as a selling and distribution expense is now being net off with the sales in the top line. So that's why you are seeing a decrease in the amount part. But overall, when we talk about volume, there will then increase.
Okay. Sir, I have another question. So like as I could see, there is a decline in the PBT margins also. And like we had earlier discussed in the con call today only that we have -- we are totally -- we are backward integrated and we have a very good knowledge of yarn prices. So could you please say like where have you taken a hit in the margins?
So in Q4, our PBT has declined due to the only reason that our advertisement costs were really high. Advertisement cost, the schemes that we give in the market in the last quarter, like the target completion of incentives that we gave it to our distributors, that was my -- generally, like if you see Q4 last year also, we had spent around INR 6.5 crores in advertisement. But this year, in Q4, we spent around INR 25.78 crores in the advertising part. It was mainly because of the branding exercise we had to do due to our local change and the brand architecture change. That is the only reason why our PBT was lower than Q3.
Okay. So that is where the margins have been beaten a bit, because of the advertising and restructuring expenses.
Right.
The next question is from the line of [ Ranesh Rady ] from [ JMD Holdings ].
I have 2 questions. One is on the stock contract expenses. If I see Q&C, that has shot up, sir, can you just throw light on that, please?
So our subcontracting expenses were around 20% on a yearly basis, which last year also was around 19 point odd percent. There's not much increase, but there was an increase in our teaching spaces and some processing prices, due to which, our overall cost increased in subcontracting expense.
So I see, your Q3, about 19%, and Q4 were around 22%. I'm comparing Q1 and ...
See it's a bit lighter in terms of production because from Q4 itself, again, the thermal production starts, because Q2 and Q3 ceased the sale of thermal products. So the production starts from Q4 itself. And in Q3, there's no production of thermal [indiscernible], which is a higher costing product.
Okay. And my second question is on -- in terms of this record concerning, how do you see the milestones over a 3, 5 years period of time in terms of effect to the P&L as well as balance sheet, if we can get -- throw some light on that?
So [indiscernible] consulting, we already have completed 2 years. This is earlier and running and we have renewed that contract. You will see these expenses coming for until December, until the time of the miles till December and, we will take a call how to continue with the [indiscernible]. That also says, the entire last year and even the current year, we have been slowed down due to pandemic, 45 days there. And even after the 45 days of complete lockdown, even if the working this start on a partial level, it was very difficult for the entire team to travel and to make movements, the retail shops are open in some states on a under a complete lockdown position. So all these things have actually slowed down our the project. The milestone, which we had previously targeted, like completion of my Maharashtra and Karnataka by March, we could not do that, starting many more states by March, we could not do that. We are currently setting on an in 5 states, 2 product more in [indiscernible]. All these things have been slowed down with the current pandemic situation. So the milestones which we are working across has -- we are nowhere here there. We are hoping in playing that, yes, we should be able to work this out gathered as -- physically, if we are not able to be on the ground, we are trying to work on to a back end in terms of IT is concerned, ensuring that DMS, ARS, that distribution management system, auto replenishment systems line sales field or automation systems. These things are working in alignment and they are going any [indiscernible]. So that's -- the back end in which we are trying to work on upon, we are also trying to work upon our supply chain alignment is concerned so that we can take that ahead. So instead of basing time on the -- instead of just facing this period, we are trying to utilize it for the benefit of the company and at the back end or the IT and the other stuff. Yes, sales part, we are still slow. We are slower than we expected.
So to understand, how do you look -- going forward, where do you see this affecting the balance sheet of the P&L loss ratio? What are your targets in terms of improving the EBITDA or improving in the [indiscernible]? I'm just trying to understand from that perspective.
The -- As we said that the improvement we are -- for this current year, we are targeting a 12 to 15 -- 13% to 15% of growth is concerned in the top line. EBITDA is another by 200 basis points, we are targeting this year. That's something we are looking forward to. Working capital days, again, 15 to 20 days as improvement, which we are targeting here at an overall basis. So this is just right now for us to talk ahead in terms of 5 years, it's a little too -- I would say, it would be far setting because the current situation of the pandemic where we don't know where we are talking about it till we have to be there. We really should not be focusing on the 5 areas. But our overall company level, if I have to say, 5 years, we definitely want to double our revenue is concerned. That's the target. But again, having said that, right now, we are just working on a 1-year guidance in the budget, which we have currently built in for ourselves. The target that the company has set for the team, the entire management, starting from the NG to the entire team on the ground is concerned. We are looking at -- these are the numbers which we are looking at.
The next question is from the line of [ Sandeep Kumar Mania ] from [ White Core Services ].
I have a question on channel financing. I want to know what percentage of distributors are under the channel financing at the moment. And since past 2 to 3 year, it has been mentioned that the company has been working with a leading banks like [ State Bank of India and Asia ]. And also, I have a -- I want to know that since the peers in these segments are already successfully bought their receivable down under control through current financing model. So I want to understand that. What is the company's plan and the reason?
I would not be able to give them in terms of percentage because I would -- the channel financing has not been widely accepted by my distributors. Again, there have been numbers, as we have been talking about, it's about 5 to 10 distributors who are on board in terms of channel financing is concerned, for [ one. ] In terms of my peer company, I will not be able to comment on to their workings are concerned. But yes, the company is here. What we are trying -- what are the efforts we are trying to make in terms of taking that ahead, I can talk about that. So here, to ensure that there is no loss for this from my distributors, we're also offering them additional discounts in terms, because in channel financing, the company realizes the payment on day 1. So that's an additional benefit that should flow into the distributors. This the company is offering them. How long will it take to convert them? But -- I would say that it should not be much of a time because it's been a long time we have been talking about it. They are not [ concerned ]. With the current pandemic situation as well, they have understood and seen the benefits arising out of it. So we are expecting this rolloff now to spread like fire now, and we should see some numbers, big numbers coming in by the end of this fiscal, which would impact our balance sheet and give us a better understanding in terms of working capital is concerned -- cycle is confirmed. So that's what the expectation of the company is, and that's what the company is working on.
Ladies and gentlemen, due to time constraints. That was the last question. I now hand the conference over to Mr. Akhil Parekh for closing comments.
Thanks, Margaret. I would like -- on behalf of Elara Security, I would like to thank the management of Dollar Industries for answering all the questions very patiently. Thanks a lot. Management, any closing remarks, you can please go ahead.
Thank you, everyone. Thank you for joining in our call. And I hope I have been -- the management of Dollar Industries have been able to answer all your questions and your query have been satisfied. I wish you -- during the pandemic situation, I would wish everyone to stay safe and stay secure. Thank you.
Thank you. On behalf of Elara Securities, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.