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Dollar Industries Ltd
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Ladies and gentlemen, good day, and welcome to the Dollar Industries Limited Q4 FY '20 Earnings Conference Call, hosted by SMIFS Limited. [Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Saurabh Ginodia from SMIFS Limited. Thank you, and over to you, sir.
Yes. Thank you. Good evening, everyone present on the call today. On behalf of SMIFS Limited, I welcome you all to Q4 FY '22 Earnings Conference Call of Dollar Industries Limited. We are pleased to host the top management of the company.
Today, we have the with us Mr. Ankit Gupta, President Marketing; and Mr. Ajay Patodia, Chief Financial Officer of Dollar Industries Limited. We will start the call with some initial comments on results from the management, post which we will open the floor for question and answer.
I will now hand over the call to the management. Over to you, Ankit Jee.
Good evening to all the participants on behalf of Dollar Industries Limited. We are pleased to share that -- we are pleased to share with you that on this 50th year of Dollar Industries Limited, we have crossed an important milestone of INR 1,356.8 crores turnover in FY '22. Thereby delivering on our mix of growth to all shareholders and stakeholders.
As a special for completion of 50 glorious and eventful years in the industry of Dollar Industries Limited, we have declared a special dividend of INR 3 for the year, subject to approval by shareholders at the AGM.
We thank all our employees, suppliers, customers, management team, Board of Directors, our shareholders and our entire stakeholders who have been an important part of this journey.
We will give you a quick brief on the year that went by. Our teams have hit the ground running post the 2 COVID waves to recover lost ground and take up on all the activities with respect to our sales growth from the traditional business, Project Lakshya targets channel financing, launch of new product lines as well as it starting our first EBO during the year.
The Dollar brand has been gaining fast acceptance in new markets, led by changed brand architecture under the Dollar brand as well as our architecture -- Athleisure segment. We took our branding and marketing efforts a step further during the IPL 2022 by becoming the principal sponsor of the Rajasthan Royals for the current season, associating with the young generation sports product is part of our increasing usefulness of the brand.
With the joint venture with G.O.A.T, in Pepe, we expect to channel our sales in direct-to-consumer segment and also inorganic growth through brand acquisitions in the JV company.
For FY '22, Bigboss contributed 43%; economy range of products, which we call, regular, contributed 35%; Missy 8%; Thermals 8%; Force NXT 3%; Force Gowear 1%; socks 1%; and Campion, which is our Dollar Junior is 1%.
During the Q4,we have also launched our Brasier segment in the states of Ultra Pradesh and East India. And initial response was very positive. In order to make our dollar women brand more powerful, we have signed Yami Gautam as our brand ambassador for womenswear.
Now let me quickly update you on the qualitative aspect of our business strategy and the growth drivers and our target for FY '25. Q4 FY '22 saw a major fluctuation in price of cotton candy, which has increased from INR 75,000 per candy in January to INR 115,000 per candy in May. We are anticipating sharp volatility in yarn supplies, due to which we are stocking up on our inventory of key raw materials to be prepared for supplies with respect to upcoming summer season as well as the festive season.
We have managed to reduce our working capital days from 178 days in FY '21 to 154 days in FY '22. This was mainly due to the reduction in debtor days from 121 days in FY '21 to 99 days in FY '22.
Further, we have increased our distributor under Project Lakshya from 51 at the beginning of the year to 142 as of end of the year. We are aiming to bring 70% of our total distributors under Project Lakshya by FY '25. Similarly from 0, we have brought 150 of our distributors under channel financing and are targeting to bring 60% to 65% of our total distributors under channel financing by FY '25.
We have also increased our active retailers to 100 per distributors and are aiming to increase this to 150 to 200 by FY '25, which will not only increase our reach, but also the range in the market. Our integrated warehouse plan and the expansion of our spinning mills are targeted to be completed by November 22. All of these efforts are aimed to help us reach our revenue target of INR 2,000 crores by FY '25.
I would now like to hand over the call to Mr. Ajay Patodia, our CFO, to quickly brief you on the financial performance aspect.
Thank you, Ankit Jee. The company has posted robust performance for the quarter 4 and for the financial year 2022, backed by the accelerated demand across categories.
Our revenue for the quarter stood at INR 376.82 crore as against INR 310.44 crore, registering a growth of 21.38% compared to the same period last year. The growth was led by strong demand across our product portfolio and increased share of value-added products.
Our EBITDA for the quarter stood at INR 59.16 crores, registering a growth of 78% as compared to INR 33.24 crore during the same period last year.
Our EBITDA margin for the quarter ended, which stood at 15.7%, has seen an improvement of 500 basis as compared to same period last year.
Our quarterly profit before tax which stood at INR 50 crores showed a strong growth of 85% as compared to INR 27 crores for quarter 4, financial year 2021. Profit after tax for quarter 4 FY -- financial year 2022, stand at INR 37.20 crores. We have seen an improvement of 338 basis points in our PAT margin, which stand at 9.85% compared to 6.4% in quarter 4, financial year 2021.
Now coming to our financial year 2022 performance. Our revenue for the financial year stood at INR 1,356.85 crores as compared to INR 1,040.43 crores in financial year 2021 with a growth rate of 30.41%.
EBITDA for the financial year 2022 stood at INR 223.23 crores as compared to INR 141.56 crores in financial year 2021, registering a growth of 58% year-on-year basis.
The EBITDA margin has seen an improvement of 285 basis points, which stood at 16.45% versus 13.6% in financial year 2021. Profit after tax for financial year 2022 stood at INR 145.87 crores as compared to INR 87.28 crores in financial year 2021 with a growth of 67% year-on-year basis.
The profit after tax margin stood at [10.75%] improvement of 236 basis points as compared to 8.39% in financial year 2021.
I now open the forum for question and answer.
Thank you very much. We will now begin the question-and-answer session.
[Operator Instructions]
The first question is from the line of Ankit Babel from Subhkam Ventures.
Good evening, sir, and congrats for good performance, both on top line and bottom line. Sir, a few questions. You did mention that inventory was high due to stocking up of raw materials. Just wanted to understand how is the situation currently? Has it normalized? Or it is still high, sir?
So Ankit, the thing is that the yarn prices have been increasing every day. And there's a lot of volatility in terms of yarn applies also in the market because of the increasing cotton prices every now and then because as I mentioned, like the cotton per candy, which was INR 75,000, in the month of January has increased to INR 115,000. And this used to be around INR 40,000, INR 44,000 in the beginning of the year, right?
So this is kind of increase which we are seeing in the market. This is the kind of uncertainty we are seeing in the market. So that's the reason why the stocking up of yarn is on the higher side. So currently, our WIP stands at around 40%, 45% with respect to the total amount of inventories that we are holding. Nevertheless, we have reduced our overall working -- overall inventory days by 3 days only. It would have been more if this uncertainty or if this volatile market wouldn't be there.
Okay. So have you people taken any price hikes in the month of April and May to pass on this high raw material cost?
Yes. So from first April onwards, we took a price hike of around 4%, 4.5%. And another price hike is due by the -- like mid-June -- somewhere around mid, June.
So will it be enough to take care of your margins considering the current prices of raw material?
Yes. For now, it is. But -- so every purchase is at a different price nowadays. So we can't really say that even after June also, we'll have to take a price hike or not. But currently, this is the situation that in the month of April, we have to take a price hike. And again, we are taking a price hike in -- during mid-June or by the end of the month here.
So have you witnessed any impact on demand due to such steep price hikes in the month of April and May?
Currently, the demand is very sluggish in the market overall. The -- but still, we are managing -- we are overcoming this sluggish demand. So overall, last year also, if you see, we did a volume growth of 9%. In this 30 -- the 30% growth that we have achieved overall, and that the volume growth has been 9%. Even though there was Omicron in the fourth quarter, overall, our volume did not increase much in the fourth quarter. But overall, 9 months ended what we achieved has really paid off and made us achieve -- take this kind of a growth lead basically.
Okay. And lastly, what are your targets for working capital days at the end of FY '23?
So last year, we promised to reduce it by 15 days, and we have reduced it by already 23 days. Another place 10 to 15 days is what we are looking forward to. And let's hope that we achieve that, and it will be achieved mainly by making more and more distributors come and join the channel financing scheme, it has really helped us because we have reduced our debtor days from 120 to 99. So it's a big jump. So we are very hopeful that we'll be again able to reduce it by another -- overall, the working capital days, we'll be able to reduce it by another 12-odd days, somewhere around 10 to and yes...
Yes. Okay. And just sorry, one last thing. What's -- any guidance on debt at the end of this year? What are your targets? Because it has increased this year.
We be do not have any long-term debts currently in our books. It's just the short-term working capital loan that we have right now. So we don't intend to take any long-term debts.
No, but even the short-term debt do you plan to -- by when do you plan to become debt-free because that was also one of your guidances historically that if I'm not wrong by the end of FY '23, you people were planning to become debt free?
Actually, we are running to debt free, but the cost of capital is very low. And we provided with around 5% to 6% interest for our working capital demand loan. And we already tried to reduce our debt in sort of capital. So by FY '25, we thought that -- we expect that we are a debt-free company.
The next question is from the line of Prerna Jhunjhunwala from Elara Capital.
Congratulations on strong set of numbers. So I wanted to understand the volume growth for the quarter, what would that be and price increase?
So this quarter, there was no volume growth. I would say there was degrowth of 1.5%, 2% in volume. And Overall, for the financial year, we did a volume growth of 9%.
Okay. And in current scenario, as you mentioned that the demand is muted, can we still expect the volume growth in the coming years? And what will be the factors driving volume growth?
So this particular fiscal, what we have thought of is overall we'll be doing somewhere around 15% to 17% growth. That's the target we have set for ourselves, for the team, for everyone. All of it, the volume growth should not be less than like 9% or 10%.
Sir, will -- the price growth itself will be at least 4% to -- 8% to 9% for sure, given that you've taken 4.5% increase in April and 4% again, maybe in the month of June, and you would have also taken some price hike in December, January, which will also contribute to next year's total price increase. So 15% to 17%, isn't lower given that the price increase will be higher and volume growth actually will be lesser component in that 15% to 17% growth that you are targeting?
So this 15% to 17%, we have not considered the entire price hikes that we'll be taking. It might be like if the yarn market stays volatile, it can be like 15% price hike during the year as well, right?
So we can't predict on that. Currently, what we think is that minimum -- see the actual growth that drives the company that drives the growth in the long run also, which is sustainable also is the volume growth that you get, right? And the change in the contribution by different categories of the product that you have. So for internally, like for the team, for everyone, we have driven -- we really want to achieve a 9% to 10% volume growth and the value growth will be as per the price hike and the change in the category mix.
Okay. Okay. And sir, which brands according to you, are you targeting for this growth, any particular strategy on the brand level? Or it will just be a geographical expansion led growth according to you?
So there are 2 factors. One is Project Lakshya, which will be contributing to it. Because we'll be increasing and -- we are targeted to increase another -- around 200 distributors into this particular project during the year.
Apart from that, Force NXT, we are taking 30%, 35% growth. Athleisure segment, we are focusing on having like 30 -- around 30% growth. We see, again, we are taking a 30% hike this year. So these are -- these new categories and new brands will help us achieve the target in a much faster rate.
Okay. Understood. And sir, in your EBO strategy, how many EBOs are you planning to open this year?
During the fiscal year -- so last time when we came on a call during Q4, like after opening during Q3 call, after opening our first EBO, we made a statement that by the end of March, we'll be opening 8 to 10 EBOs, which didn't happen. Whatever the reason, whether it be the third wave Omicron or we really wanted to watch how the first EBO really worked out. But during this fiscal year, we are aiming to open about 25-odd EBOs. And by the end of fiscal year '25 will be targeting to open around 120, 125 EBOs.
And 20 EBOs in this financial year?
25.
By '25? Okay. Okay. Okay.
No around 25 EBOs in this particular fiscal.
Yes. And 120 by FY '25.
Right. Right.
Okay. Okay. Understood. Sir, in our inventory number that you have mentioned in the balance sheet, how much of that inventory would cover for our total sales. So basically, I would like to under how much of your raw material cover for how many months? At this point in time.
Prerna, out of total inventory, around 40% is our raw material and 60% is the finished goods. And the 40% of the raw material is around for 55 days.
Next question is from the line of Devanshu Bansal from Emkay Global Financial Services.
You mentioned about 1.5% to 2% volume degrowth in Q4. So considering that, the realization growth has been quite healthy at about 23%. So just wanted to check what is the mix between price hikes that we have taken? And what is the contribution of revenue mix improvement in this?
Basically, Devanshu, 21% value growth is mainly due to price hike.
Yes, It should be 23%, right? Because 2% is volume decline.
Yes. Yes.
And what are the drivers for this? It's entirely price hike? Or there has been some mix improvement as well?
There is some mix improvement but more related to the price hike only. Mix is from Athleisure segment, we get the more contribution. Their EBITDA margin is more. Their revenue is more.
Sure. And this 21% to 23% price hikes in Q4, can we sort of divide it by about 5% in each of the 4 quarters prior to Q4?
We can say that last price hike we take in the month of December last week around 5%. And before that, around 15% price hike taken between April to October.
Okay. Okay. And the other thing I wanted to understand, the other expenses have gone down significantly versus last year. So what was the reason for that?
Basically, due to pandemic in the quarter 1, our total advertisement cost is around 5% to 6% only. Last year, it is around INR 80 crores. And currently in absolute term, it is around INR 64 crores, INR 63 crores.
No. So I wanted to understand the decline in other expenses for Q4 versus Q4 last year?
Mainly in the last year, we reconstructed our Dollar brand. Therefore, in last year quarter 4, around INR 26 crores in that quarter. But in current quarter, quarter 1 -- quarter 4 of FY '22, it is around INR 13 crores only.
Sure. Got it. And what were the reasons for gross margin decline? Is it largely attributable to the raw material inflation that we are seeing?
So basically, Devanshu what happened was the cotton and the yarn prices continuously were increasing. But due to the third wave in the month of January, so 1.5 months of the quarter was very much disturbed because of all the rising cases in our country, right?
At that time also in the month of February during our call, we informed that the sales were really muted, and it's not happening at that pace, what we thought of. So keeping that in mind, we were supposed to take -- like all the players were supposed to take a price hike in the month of Feb end or March starting, which we couldn't do. Because of everyone wanted to like complete the targets also and the market was not willing to take that because of the muted demand in the fourth quarter.
So that's why we took the price hike, we postponed the price hike to first April. And this is the only reason why if you see here like quarter-on-quarter, there is a slippage of some EBITDA margin. But if you see -- if you see year-on-year, like quarter 4 by quarter 4, there has been a change of around from 10.1% to 15.71%, yes 5% change.
Sure. That's helpful. I have one more question. So sir, over the last 18 months, if I remember correctly, our price hikes have been to the tune of about 25% to 30% versus the leader in the premium space, their price hikes have been relatively lower. Do you believe that this incremental difference of about 15% to 20% would have sort of reduced the gap between the offering of premium player and our offering?
Sorry, we didn't get your question. I didn't really understand what did you ask?
So I'm trying to ask, we have over the last 18 months, taken about 25% to 30% price hikes. And while the premium player, who is the leader has taken only about 10% to 12% price hikes. Has this sort of reduced the difference between the price offering between you and the premium player?
So by premium player, you mean Page industries, right?
Yes.
So the number of price hikes that we have taken, the number of times that we have taken or our industry has taken is very continuous in nature. Like every 2 months, 3 months' time, we are changing our prices. But when you go to a premium segment where you are more -- most of the sales comes from modern trade or EBOs, it's not really possible to change the prices every quarter, right?
So maybe the number of times they have increased their prices is lower than us, like if we have increased it 5x, they must have increased it twice. But overall, they also have taken a jump of good 18%, 20%. It's not 12%, 13%.
The next question is from the line of Vishal Bagadia from Roha Asset Managers.
Sir, if you could share our average realization for the year?
So average utilization for the year for -- at the company level, 12-month figure is around INR 65.
And for the quarter 4Q?
For the quarter was INR 67.
Not much of difference. And so my other question is on the ad side. What are we expecting in this year? How much of a top line can we spend on ads?
So this year, we spent around INR 63 crores, INR 64 crores because the first quarter was again under pandemic and everything and -- it is the first quarter when we add mostly advertiser products because it's the main season. The summer season is very important for us. So this year, what we have are contemplating is somewhere around INR 90 to INR 100 crores. That's what we are targeting to advertise.
INR 90 crores to INR 100 crores. That would be great, sir. And sir, how are we on the capacity utilization. If would -- if you could quantify that?
As in most of our production takes place through job work. There is no question about capacity utilization. Apart from the integrated -- backward integrated, the factories that we have, they are just fully utilized. So...
Okay. And sir, one last question I had since our CapEx of warehouse and spending is coming in this still. So what kind of CapEx can we guide for the year?
In totality for 2 years, what we have been saying is around INR 120 crores, taking spinning mill increased -- expansion of the spinning mill capacity that's the integrated warehouse that we have. So out of which last year, we have already spent around INR 60-odd crores. Sorry, INR 40 -- INR 30 crores and INR 40-odd crores, and the rest will be spent this particular fiscal year.
So we can say about INR 75 crores, INR 80 crores will be spent in this year.
Yes.
Next question is from the line of Dhiral from PhillipCapital.
Ad spend in FY '23. So I believe this would be almost 100 bps higher than FY '22. So will this weigh on our margins, EBITDA margins?
Pardon, can you repeat your question, sir?
So for FY '23, as we are guiding INR 100 crores kind of a spend on the advertisement side. So I believe this will be almost maybe 80 to 100 bps higher than what we spent in FY '22? So will this weigh on our EBITDA margins for FY '23?
Our EBITDA margin target for the '23 is around 17% and 17.5%.
Okay. So despite of rising, you believe we will see improvement in margins?
Yes. Yes. Yes.
Okay. And sir, for our fast growth in categories like Athleisure, thermal wear as well as womenswear, how was the performance in FY '22? And if you can share the volume and the value growth and the overall contribution to the revenue?
During FY '22, our contribution from Athleisure segment is around 12%, and thermal segment is around 8%. The trunk segment is 32%, brief is 4%, vest is 27% and womens' innerwear is around 12%, womens' leg wear is around 4% and socks is around 1%. And total volume growth is -- total growth is around 30% out of 30%, value growth is 30% and volume growth is 9%.
So these Athleisure, thermal as well as womenswear, how much they have grown on a Y-o-Y basis?
Year-on-year basis, if we talk about womenswear, it has grown by 30%, NXT has grown by 37%. Athleisure, again, has taken a growth of around 28%, 29%. So we really saw a good growth in all the growth driver segments that we have been talking about. And yes...
So how much thermal have grown, thermal?
So thermal, if you see volume wise, it was very flattish because of bad winters that we had this year. And as we told, after the third quarter results also, the thermal sales were not that great as compared to what we all thought it would be?
Okay. And sir, whatever sharp improvement we have seen are in our receivables. So how much is due to the Project Lakshya? And how much is this is due to the channel financing?
So in channel financing, what's happening is we have already unboarded around 150 distributors, half of which is already in project Lakshya, half of the distributors. So the major contribution is due to channel financing and some amount of Project Lakshya distributor. Because if you see -- the company has around 1,100 distributors, all of which 140 distributors are already enrolled into Project Lakshya. So you can -- so we can do the math.
Okay. And sir, lastly, on the JV side, what was the top-line growth that we have seen in FY '22? And now with the new JV partner that is good. What kind of growth acceleration we can see in coming few years?
So for Pepe, after G.O.A.T. has joined in the month of October, October or November.
Pepe -- with joint venture with Pepe is in the month of December. After December in last quarter, we already achieved the revenue of around INR 520 crores and out of total revenue of INR 14 crores. And we expect this year a growth of around 50%. We have the target for this year, planning of around INR 20 crores to INR 25 crores for this year. And other than this, we have also get the guidance from Mr. Rishi Vasudev on D2C consumer -- direct-to-consumer and in this e-commerce side also.
And sir, lastly, how much growth we have seen in the online segment for the full year?
Last year, it is -- total contribution of the sales is around, in modern trade is around 4%. Our growth is around 63% from the last financial year and total contribution in the sales is around 4.33%.
The next question is from the line of Bajrang Bafna from Sunidhi Securities.
Congratulations for a good set of numbers. Yes, just most of my questions are answered. But if you could strategically just guide us in the sense that we are already seeing there is a decent amount of export opportunities, which are emerging in -- from an India perspective because of China Plus One and most of the other countries are also struggling, especially for the cotton side, be it Bangladesh or Vietnam.
So are we seeing some sort of inquiries on these products also from the brands, either in U.S. or in Europe or other developed world and any strategy on that balance, be it through yourself or through JV. So if you could guide us on that side will be really helpful?
Bajrang Jee, the thing is that we took a growth of around 112% this particular fiscal when it comes to exports. We have -- our exports were really good. And when we talk about Bangladesh or Vietnam, emerging as another manufacturing hubs, so the another opportunity that we are seeing, which is coming up is the export of fabrics as well, but we are mainly focusing on the African market currently. And we aim to open another 10 to 12 franchise in West Africa and South Africa in a couple of years. So we'll be increasing our exports and more focus has been placed on export market as well.
Okay. Any new -- anything that has been planned through JV side also because this Rishi has got good capability on -- and connectivity on the export side. So when you talk about INR 20 crores, INR 25 crores kind of revenue, those are very small numbers to think of from the capability perspective of the JV partners.
So any broad thought process or any plans that you have drawn up in terms of hiring the workforce or to get connectivity of the distributors in those markets. So what -- if you could just slightly talk more about the strategy part will be helpful rather than the specific numbers. And how you are going to grow on the export market? What sort of workforce or the connectivity that you'll establish over the next 2, 3 years?
So the thing is currently, we do not have any plans to have a JV or anything, but in future year, yes we are open to the idea. Secondly, we already have a set of people who are settled in UAE, which -- basically Dubai, I would say, who have -- like who have shifted from India with their family to Dubai who are handling our complete export market, whether it be the Africans, because UAE acts -- like Middle East acts as a gateway for the African market as well.
So the whole of Middle East, plus the African market has been handled by them itself, and they are doing a pretty good job. And this year, the kind of increase that we saw like from INR 62 crores to INR 130 crores, this has been the jump that we saw in our exports. So that's why -- before this financial year, like before FY '21 also our export sales were very muted, very flattish.
But now the focus has been placed on that. Two of the people have already shifted to Dubai to increase our export revenue. Thus, our focus towards the African market because the consumption in African market is really very, very high. So we are putting our focus on that so that we increase our base over there as well. And in coming years, in a couple of years, we'll see our export market to flourish more.
The next question is from the line of [Abhijit] from BI Capital.
I have one question. How do you see raw material price shaping up ahead? And do you pass on the benefit to the customers when the raw material price goes down?
Yes. So again, the future, we really can't predict with the kind of volatile the market has become. We really can't predict what's going to happen with the raw material prices. Currently, it's on an increasing trend. When it decreases, generally, it really takes time to decrease the prices also in the market.
So it's a very strategic step because generally, you have raw materials and approved IPs. And if you see our total inventory days throughout the industry, also, it ranges from 95 days to 105 days. So if you reduce the price immediately, you'll be really selling the high cost materials at are low prices. So we really don't want to take that kind of a hit on our margins as well.
Understood. And what kind of response you're getting in the recently opened EBO?
Sorry, the EBO was opened in the month of October, mid-October somewhere towards the end. But after that, the EBO has been working well. We are seeing a good traction in the Athleisure segment. In Athleisure segment also, it's T-shirts, the track pants, they are telling really well over there. And in womenswear also, we are seeing a good traction if we -- when we talk about panties and camisoles, the intimate wear and the bottom wear also.
So people -- we are seeing the trend changing from like more towards the bottom wear, I would say. So like in womenswear, there's a lot of different kinds of bottom wears, which have come in. So now what we are having is, we're having a direct consumer feedback about our products and what kind of a product do they want. So all this kind of insight that we are getting, that's why we are getting motivated to open more and more stores now. And that's why we have taken around 25 to 30 EBOs target this year and 125 by the end of FY '25.
The next question is from the line of Aarushi Lunia from Hem Securities.
Congratulations on a good set of numbers. I just have one question. Are you looking to venture out the new locations for Project Lakshya?
So in Project Lakshya, what we are doing is we have started Odisha. We have started the entire North East as well. And apart from that, we have started mapping the area of Haryana, Bihar. So all these new states have already been incorporated into Project Lakshya. And by the end of this fiscal, we'll cover most of the areas in these particular states as well.
The next question is from the line of Bharat Gianani from Money Control Group.
Yes, sir. Sir, most of my questions have been answered, only 1 query. So basically, the kind of raw material prices that we have seen. So as you were earlier alluding that the price has kind of a cotton candy has gone up from 40,000 to almost it's about 3x if I see on the current -- from the levels which used to be like of 15, 20 months ago.
So sir, hypothetically, I mean I don't know, it's very difficult, as you said, to kind of predict the raw material price. But if it were to kind of settle at, let's say, like 75,000 to 80,000, which was there, like the level 6 to 7 months ago, so that would itself mean like a 30%, 35% kind of a reduction. So hypothetically, if price were to reduce to that level, so which means that will be our -- in the industry not immediately, but after 1 year or so, we'll probably see the realization going to that level? Is that how the industry functions? So just wanted to understand.
So -- see as I told you, like we take our price hike also gradually step by step, and that's how we'll be taking the -- we'll not reduce the price per se, but we'll give them extra discounts and all in the market. So as to increase the consumers or the retailers' interest towards our product. And the lowering of price will happen really very -- will happen in a very slow and a staggered manner. It won't happen overnight, right? So -- but what we are seeing is in the market that the prices is not going to dip in near future. It's not going to dip.
Okay. I understand. I mean, because the industry has never seen such a sharp increase so possibly the way industry will function after reduction is also very difficult to say, I can understand that. But yes, thanks for insights.
The next question is from the line of [Jatinder Agarwal], an individual investor.
I have just one question. This is related to the women bra segment. There is a slide, I think, #30 on your listing. Can you share some thoughts in terms of, one, how big is that market that you're looking to target? What is the average realization that you are looking to play in terms of the segmentation, and how should we, as outsiders, look at this business over a 3-year period?
So this Brasier segment is really huge, and it's growing at a faster rate as well around I read in particular for this report that it's -- the womenswear is increasing at a CAGR growth rate of 14%. So the market is ever increasing. The literacy rate towards the Brasier segment is also increasing because even if -- even today, brasier is kind of a taboo when you go to Tier 3, Tier 4 or a rural city or a village, right?
And most of the ladies don't even wear that in villages in a rural India. So the literacy rate about the benefits is growing day by day, and we are seeing very positive response. So in the month of March, we launched this in states of Uttar Pradesh and East India, like Bihar, Jharkhand, Odisha, West Bengal. And the kind of response we have gotten from our retailers directly is very positive. They really like the product.
So we -- initially, we have launched with 9 different products. And gradually by the end of this fiscal, we are planning to be available at pan-India level. Plus, we'll be launching another 4 to 5 new products in this particular segment. The average realization in Brasier segment is somewhere around INR 125, INR 130 because there is a mix of both beginners bra to the padded bras. And the proportion of beginners bra and the sports bra post would be higher when we talk about their sales. In 3 years horizon, what we are thinking is or what we have internally planned. This particular segment can be used like from INR 0 crores to INR 25 crores or INR 30 crores.
Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for closing comments.
I take this opportunity to thank everyone for joining this call. I hope we have been able to address all your queries. For further information or any kind of a confusion or any kind of questions which remain unanswered, kindly get in touch with us. Thank you, again for joining in.
Thank you. Thank you.
Thank you. On behalf of Smith Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.