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Page Industries Ltd
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Ladies and gentlemen, good day, and welcome to the Page Industries Limited Q4 FY '22 Earnings Conference Call. [Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. V.S. Ganesh, CEO, Page Industries Limited. Thank you, and over to you, sir.
Thank you. Thank you so much, and good evening, everybody, and hope all of you are doing fine. It's my pleasure to be with all of you today and look forward to our interactions today.
At the outset, I'm delighted to inform you that we have registered a robust sales growth, which is aided by good growth across all our product categories. The growth was broad-based across distribution, modern trade and e-com. The enablers for this growth are our retail expansion, new product interactions, focus on digital initiatives, the innovation, which we had overall in our business and the segment and agile supply chain.
Our Q4 revenue grew by 26.2% year-on-year, and the volume grew by 8.7% year-on-year. Our FY '22 revenue grew 37.2% year-on-year, with a strong year-on-year volume growth of 28.9%. As of end March, we are present in 110,548 MBOs and 1,131 EBOs. And we continue to aggressively grow our retail footprint.
I'm happy to inform you that the supply chain is back on track despite having huge challenges during the last 2 years. During the quarter, we also faced a very high inflation rate trend, which impacted nearly all the cost, including the price of cotton, packaging, logistics. However, we delivered better margins due to measured price increase and, of course, backed by strong budget and expense control measures and optimum use of our inventories.
Our expansion plans are very much in line with accelerated sales growth that we are seeing. And this is also supplemented by strengthening our relationship with our supply chain partners, between our raw material supply partners and the government supply partners. We will continue to focus on growing all categories as each one of them has a tremendous potential to grow.
As regards to retail expansion, we'll continue to have equal focus for Tier 3 and 4 towns as we have for metros and for Tier 1 and Tier 2. I'm also very happy to inform you that our speed of business has now started to pick up and is getting back on track as the pools are now getting opened up.
I would like to take this opportunity to thank the 27,000 plus team members of ours, all the hard work, which they have done to deliver such an amazing result. Our channel partners were working very closely with us during these very challenging times. And to our supply partners without whose help, our supply chain would not have been in this situation, and it has seen a very quick recovery. So overall, it was a fabulous performance by the team, and we are thankful to all the team associates for contributing to where we are today.
The outlook continues to look very, very bullish, and we are firing all cylinders to continue and sustain our growth. I look forward to your questions after our CFO gives further insights on our Q4 financial performance and the FY '21/'22 performance. I'm also joined by Mr. Gagan Sehgal, our Chief Sales Officer; and by Mr. Rahul Shukla, our Chief Retail Officer, who will be more than happy to answer any questions that you may have in their domain.
Thank you once again for joining into the call today. And I will now request Mr. K. Chandrasekar to take you through the Q4 financial results and the full year financial results for FY '22. Over to you, KC.
This is the operator. Sir, we are not able to hear you.
Thank you, Mr. Ganesh. I'm audible now?
Yes, sir.
Yes. Welcome once again to the Page earnings call, and I'm extremely happy to report the best ever performance in the financial year again, by Page, this top line and bottom line in history.
In Q4, we have about INR 11.111 billion revenues, which compares with about INR 8,808 million, Q4 of last year, a growth of about 26.2%. The EBITDA has been at 24%, which is INR 2,671 million and compares with INR 1,698 million last year Q4. This is a growth of 57.3%. And as far as the Q4 PAT is concerned, it is again 17.1%, which is INR 1,905 million compared with INR 1,156 million in Q4 of last year. This is again a growth of nearly 65%.
The gross margins as we compute post the subcontract cost and direct manufacturing costs are at 43.1% as compared with about 44% in Q4 of last year. So more or less, we are maintaining the gross margins even in Q4. For the full year FY '22, the revenues are the best ever, as I said, INR 38,865 million compares with INR 28,330 million, which is a growth of 37.2%. And the EBITDA is 20.2% compared with 18.6% of FY '21. And in absolute terms, it is INR 7,855 million and compared with INR 5,266 million. of last year. And this, again, is a growth of 49.2%.
FY '22 PAT is at INR 5,365 million, which is 13.8% and compares with INR 3,406 million of last year, a growth of 57.5%. The last year, PAT was 12%. The gross margins for the whole of the year is 40.1%, which compares favorably with 40.9% in FY '21. The cash equivalent at the end of March '22 is down at INR 2,835 million, which compares with INR 4,350 million at the end of last year. And last year -- I mean, this year, we have built up inventory levels, and we have been investing in good quality inventory we are purchasing ahead. And with the fluctuation in the raw material costs, we have been investing in inventory.
The liquidity continues to be robust and very strong as usual. The net working capital because of inventory at the end of March 2022, went up to INR 6,317 million comparing with INR 5,128 million at the end of March 2021. And the net working capital days has actually come down because of revenues to about 60 days.
Inventory has gone up to about INR 9,749 million as against INR 5,549 million at the end of March 2021. This is again, 92 days against 71. We are happy with the kind of inventory buildup, which is definitely a lever for giving us the growth in Q1 and beyond.
So with that, I hand over the session for Q&A, please.
[Operator Instructions] The first question is from the line of Gaurav Jogani from Axis Capital.
Congratulations on a good set of numbers. Sir, my first question is with regards to the change in inventory figure in the Q4 numbers. So if you see the change in inventory goods, it's around INR 153-odd crores. My question is with regards to how much of this has helped us -- the lower price inventory has helped us in the margin expansion in Q4? And how much inventory do we have, as you mentioned, that will help us in Q1 as well?
Gaurav, thanks for asking the question. During the pandemic, we did have -- we had to begin to inventory reserves because we did have operational issues. The factories were not operational or outsourcing when the partners were not fully operational, and there were disruptions in even raw material supply chain. So like many other industry, we have -- we were digging into inventories and we had to rebuild, and there were also tremendous growth, which we saw.
So when we were increasing our capacities the sales was also keeping similar pace. So we had to aggressively rebuild our inventories, and that's where we are seeing this healthy sign. I should thank the entire supply chain team for working together. And as Mr. Chandrasekar says, this is a strategic move where we are seeing huge potential. We thought it is good to invest on inventory. And most of this buildup is on very healthy inventory where we -- the bias is more on the core strides of ours, which are the high sending sites.
And we also have built up some strategic stock as far as raw material is concerned. This is for -- to enable us to insulate to some extent from the volatile input price and the inflationary pressures which we are facing as well as the inputs are concerned, especially in cotton. And this is really helping us for Q1 as well because we now don't have the kind of same source or opportunity process, which we had in the past because of lack of supplies even though we did good numbers.
So this is actually helping us to build the momentum and bring in more overall efficiency to the system. KC, if you would add anything?
Yes, I think it is perfect. And also I think there is nothing more to add to this, unless you have a further question, Mr. Jogani.
Yes, sure. So I have just one follow-up question on this actually. So sir, if you can just help us, how much of the price increases have you taken further in Q4 beyond the 8% price increase you announced in December? And just an add on to this, is that -- given the raw material stock that we have, would we need further price increases to be taken given the inflationary pressures we have seen in the cotton prices in Q4 and Q1 now?
So we didn't have any further price increase other than what we had in December. We have maintained the price. And we are closely monitoring the situation. So we -- there is so much we can build as far as strategic stock is concerned. And as KC rightly showed the number of days of inventory is around 90 days. So it's not that it will help us for -- in the long term. So we have been closely monitoring the situation. And if there is a need, we will be touching the prices to ensure that EBITDA is around the 20%, 21% mark.
However, I should thank the efforts taken by the teams as regards to rationalizing the expenses are concerned, the budgetary controls, which are put in place. All this is partially helping us, but what we are seeing is as input prices are concerned, it's very unprecedented. So far, things are under control, but we are closely monitoring the situation.
The next question is from the line of Devanshu Bansal from Emkay Global Financial Services.
Just wanted to check our gross margins have dropped by about 200 basis points in Q4, but still, our EBITDA margins have expanded by nearly 500 basis points. So what are the cost sort of savings that you have achieved in Q4, if you can throw some light on that?
Q4 is largely driven by the price increase of about 8% in -- at the end of the Q3. The gross margins are, as I told you, about 43% in Q4 and about 40% for the year as a whole. And 40% is also -- there is a shadow of the Q1, about 40, 45 days was a pandemic affected in Q1 of FY '22.
And typically, if you go historically, when I talk of gross profit, it includes material consumed and then the subcontract costs and the other manufacturing direct costs like labor and so on. So we are quite happy with above 40% gross margin historically that has been achieved. And as V.S. Ganesh has said, about 20% to 21% EBITDA margin is also obtained. So does it answer your question?
No, sir, my question was slightly different. So I was talking about our gross margins in Q4 are at about 43% versus 45% last year. While our EBITDA margins in Q4 are at 24% versus 19% last year. So despite 200 basis points decrease in the gross margins, so our EBITDA margins have actually expanded by about 500 basis points. So this 700 basis points...
True, true. So that is a good question. The -- because of the much higher volume we have in Q4 this year, obviously, the OpEx as a percentage of the revenue has gone down. And we also not letting the OpEx go haywire, we keep a strict control of the OpEx. So these are basically better recoveries compared with last year where the revenues were much lower.
Sure. And also, I'm wondering if you can share the volume growth for the quarter and full year?
The volumes for -- the volume for last year, I mean, the Q4 last year was 46%, and the volumes for this year, Q4 is 50%. And the volumes for the full year last year was 148% and this year, it is 191%.
Sure. And in addition to this, as we are coming out of 2 years of pandemic, which has seen a change in our revenue mix also. So as a onetime exercise, so I would request if you can share the mix of men, women, athleisure, Speedo, et cetera, for full year FY '23, if that's possible.
You know that this -- in terms of the category mix, we do not publish. So the mix hasn't significantly changed is something which I can tell you. During the lockdown period, some of the athleisure mix would have changed. The e-commerce mix would have been better. But in terms of product category mix, it has, by and large, been the same because it's one way to look at the growth of each of these categories, they have been nearly uniform across the non-pandemic months of the past 2 years.
The next question is from the line of Avi Mehta from Macquarie.
Congratulations on this result. From whatever I heard until now, there does not seem to be any one-off in the 4Q numbers. In that case, would you not expect if our FY '23 being higher than the 2021 normalized range and more closer to the 24% seen in 4Q?
Mr. Mehta, are you talking about the EBITDA margins or are you talking about...
Yes, sir. Yes, sir. EBITDA margin, sir. EBITDA margin.
Well, EBITDA margin, we need to discuss some time back, it is something we need to look at very closely based on the input cost. There is huge pressure there, and we actually may have to touch prices if there's a need to do that. So we are closely monitoring the situation. And as a brand, we always want to make sure that we are a value-for-money brand, giving superior products to our consumer and make sure that it's value for money for our consumers.
So we will be balancing between the two and having a close look at it. So whether we can maintain this current number is something -- it's beyond our control, the market forces. We need to keep a close watch on it. So that is what we're actually doing. So if there is a need, we may touch the prices.
Okay, sir. No, I mean, the reason why I said, as you said, demand was bullish. I mean you've been very clear, that's very heartening to see here. But that's why I was just assuming that logically, the pressure on margins should be lesser. It seems like that. And you have inventory also.
So unless -- sir, is it that what we used to see pre COVID, that 4Q used to be a seasonally higher margin because of the way distribution channels work? Is that what has panned out? Should we kind of start is not a quarterly numbers, looking more at the 4Q numbers? I mean just trying to understand so that we can better understand the way we should kind of analyze it as we move forward. That was the only reason why I was posing this question, sir.
So there are 2 things which you actually touched upon. So just to clarify, historically, our Q1 is the best quarter and Q4 is subdued. We have had an amazing quarter in Q4. But generally, if you see -- so even though last this Q4 was a historic second best, Q1 is generally our best quarter. And that is one aspect.
And the other aspect, which you talked about is partially true, yes. The demand is good. And as KC rightly said some time back, this will enable us in ensuring the better absorption of cost. But what we -- but we need to keep a close watch on the raw material prices because whether it can -- or our operational efficiencies and cost controls, whether it can offset this pressure is something only time can answer.
Okay, sir. Okay. Sir, any number you could give -- that's the only last question, just a bookkeeping. Any number on what is the inflation like or what incremental price hike do we need based on whatever has happened on cotton? Just understanding because we don't have an idea or you're not able to appreciate how much the yarn prices would have gone up given that it's not an open market.
Mr. Mehta, if I look at last 14 months, the yarn prices have actually doubled, and that is what triggered the 2 price increases, which we were forced to do like any other brand. And with that and with all the measures we have taken internally, we were able to manage, but we are still seeing further upward trend in prices, certain things we have factored in our budgets. But if this continues, then we may be forced to have a relook at it.
Next question is from the line of Nihal Jham from Edelweiss.
Congratulations for the strong performance. Sir, 3 questions from my side. First, I just wanted to clarify to an earlier question, that in terms of the cost initiatives, is it possible to share what has been the change in our sales and marketing expense? Because looking at other expenses, it looks like maybe that is an item which could have been controlled this quarter.
Not exactly because we have always made sure that the spend on sales and marketing is not curtailed to a great extent because the traction is so high. As you can see with all the reserves, we are performing very well. And there is also quite a lot, which we need to spend as far as the stores' paraphernalia is concerned to support. And these are things -- as we keep doing the retail expansions, these are things which we don't stifle because these are very essential for the brand and to actually capture the shelf space.
So we are monitoring the marketing expenses very closely. Yes, that is right, but we are not reducing it or controlling it because we are very, very bullish about the market and the growth, and there is no need for us to stifle that.
What we have done is to bring in operational efficiencies, wherein how can we produce more with less cost for automation, how can we enable the leadership to manage with less management workforce. So we have got leaner and smarter on those trends. And we also looked at other discretionary spends like travel and other things, which we are making sure that it's all done very essential.
And we have very strong budget controls we've put in place now wherein those spends, which are discretionary in nature are well-controlled. And all essential spends, wherever required, we are going forward and doing it, including spending to strengthen our leadership.
In fact, I'm happy to inform you that we now have onboarded our CPO to our organization, Mr. Ravi Kumar, our Chief People Officer, because as an organization, we need to strengthen these areas, and we need a good mentor, guide and coach. And as we keep expanding our businesses, our leadership further requires strengthening. And our current leaders needs to be building up their competencies. And we are looking at Mr. Ravi's contribution on that trend, wherein he can strengthen the company further as far as creating the culture of learning and development is concerned, culture of customer focus is concerned, and also to build competencies in our leadership and our workforce. So we are not -- we are not holding ourselves back.
Yes. That's helpful. The second question was -- and maybe [indiscernible] but over the last couple of years, we've seen the expansion of around 45,000 to 50,000 retail counters. Just wanted to first get a sense of how does the productivity of these lineup and how has the traction been in terms of repeat orders. Also, and what is the universe as we understand? Because that's a varying number where we have numbers between 1.5, 2, 4 lakh outlets that are potentially available. But I wanted to hear from your...
Sorry to interrupt you, Mr. Nihal Jham. Sir, the audio is very low from your line. Please...
I'm so sorry. Am I audible?
Yes, sir.
Yes, yes.
Sir, I'll just repeat the question. My second question was that over the last couple of years, we've added around 45,000 to 50,000 retail counters. So I wanted to get a sense of how the traction has been in terms of productivity and repeat orders from these counters? And also, what is the universe size that we estimate because the numbers vary from, say, 2 lakh to 4 lakh, like outlets, but just wanted to get a sense from your analysis about what this number can potentially be for Page?
Gagan, you want to take that?
Sure, sure, Mr. Ganesh. So thanks so much for the question, Mr. Jham. Actually, this is -- I think one thing, which as an organization, we are very excited about, the entire expansion in retail, because your question is so right about the productivity. And I think we took a bet during the first year of pandemic when we opened over 14,000 outlets. And these outlets contributed quite significantly to our overall top line, and especially with people moving back to Tier 3, Tier 4.
And our entire distribution expansion has been, keeping in mind where there is an opportunity, it is not an expansion that has happened because we want to expand, and we want to reach a certain number. It is actually bottomed up where we feel that the customer base is there. But our presence is somewhat lesser than what it should be. With a strategic thought process, we go and open outlet there. Also keeping in mind, can this outlet justify the brand, Jockey, right? Because we are a premium brand.
So keeping that in mind, this distribution expansion has done -- has been done, and the repeat order has been over 80%. So the good thing is that all these outlets have come back and not only given repeat orders for the ranges that they have been opened with, but for the other categories and further ranges, right? So their productivity, in fact, in the second year has been excellent. The growth has been much higher compared to the same store because obviously, these are new outlets and we have just seated them.
So we are very excited about this because it is giving us good results. What should be the actual base? Our strategy is that we serve our outlets ourselves through direct distribution. We are not into wholesale. So as and when the outlets have grown, our manpower has also grown significantly, right? But I can confidently say that the scope is there, and we will strategically look at it where we can expand more. I don't see any reason why we should not take it to upwards of lakh 50,000 outlets in the next couple of years, if that answers your question.
The next question is from the line of Saumil Mehta from Kotak Life.
So most of the questions have been answered. Just one question, one of the previous parties -- if I look at the other expense for this quarter, it's about 11%. If we annualize [ one-time use ], it used to be about 16%, 17%. So what particular overheads -- and you also mentioned where we spent on [ budget ] cuts. So what I'm trying to understand is what kind of other expenses have seen a moderation in this quarter? And is this going to be the new run rate for FY '23, '24? Or we should expect a much more normalized 16%, 17% of other expenses?
I can take that, Mr. Ganesh?
Yes, yes, please take it.
So there is no moderation as far as the overhead is concerned because we are in a different league this year and Q4 as far as revenues compared with last year. So all the expenses have grown in absolute terms. But as a percentage of revenue, most of them have come down.
In terms of advertisement, it is more a timing issue. For the full year, we have spent close to over 2.5% in both years in advertisement. In absolute terms, there is no moderation. Even the past salaries have grown, all the other OpEx have grown to keep pace with the growth in volume. At the same time, as a percentage of revenue, they have come down.
So as I mentioned, it is the operating efficiencies and better recoveries of the overhead. That is the prime reason why the margins are good. And of course, the major driver has been the price increase -- selling price increase in -- at the end of Q3.
Sure. And sir, taking from there, I'm assuming the operational efficiencies will obviously be continuing given our bandwidth and our focus on that. And now, because of focus on app leisure and some of the premiumization, we're expecting maybe a higher EBITDA, higher than what usually -- our earlier back was about 20% to 22%, 20% to 22%. Is that possible? Or you would want to keep that back in about 2022 and probably basically pass on to the customer which is a benefit and gain market share.
No. We will be happy with...
What would be normalized...
We will be happy with 20%, 21% EBITDA. Given the steep raw material price increase, the selling price has increased by 5% in Q1, another 8% in Q3. So we would not want to keep on increasing the price and would partially compensate through better operating efficiencies and look at the raw material forecast, which we are about to do shortly, the forecast for the coming year. So that is where we will be focusing.
Sure. And my last question, sir, can you talk a lot more on the stage where we have, obviously, for the last 2 years, basically invested a lot into that venture, what kind of target in terms of retail exports we have? And what will be the growth rate over there over the last 15, 18 months??
Gagan, you want to take it?
If I understood your question, this is about the retail touch points that you're talking about, how many do we intend or target?
Sir, I'm -- no, sir. I'm referring more to the kidswear business, where we have missed significantly. As in what kind of retail touch points we have in terms of kidswear? And how has that business grown over the last 15, 18 months?
So the kids business growth has also been in line with the other categories. We have merged it with the women category so that the expansion in the retail footprint happens, keeping in mind that where the mother is going to shop, she's also going to buy for the kids.
So after merging this business, we have seen a healthy growth in terms of the retail touch points. It's pretty healthy as of now in terms of the total footprint that we have. In terms of percentage, it's anywhere upwards to around 25% of our retail is where our kids business is.
The next question is from the line of Ankit Kedia from PhillipCapital.
Just wanted to understand the growth differential between a metro market and a rural market. Are you seeing some pressure points on volumes in the rural market. And at the same time, can you share some like-for-like growth in the EBOs for a metro versus a rural market?
Yes. So we are seeing overall growth, be it the category or the tiers of cities. In fact, all product categories and all channels have performed well. So we are seeing robust growth on all sides. So I don't think there is a big difference there. The trend is on expected lines.
And I would request Mr. Rahul to clarify on the EBO part.
Thank you, Mr. Ganesh. So like you rightly said, across all segments of city, whether it is metros or Tier 1 or Tier 3, Tier 4, the growth has been phenomenal, and it's kind of Democratic. This is the same level of growth. It is that opportunity that exist, are higher in Tier 3, Tier 4 towns. You will see the largest growth happening in those fronts.
In terms of the same-store growth, without getting into the specific numbers, let me tell you, the EBOs have been registering robust double-digit growth quarter-on-quarter for the last several quarters, except for the period where it was probably affected by COVID. So it's been a robust EBO performance as far as the EBO retail is concerned. Does that answer your question, Mr. Kedia?
Yes. My second question is on the differential pricing. For the rural market, we have started launch products, which have slightly lower pricing compared to the mature markets. So how is the response of the consumer, the rural consumer out there. And are you facing some backlash from the mature distributors or in the EBOs in those cities who might want the same product, but it's not available?
Well, we don't have any specific products, which is targeted for the rural market. In fact, our TG is -- we work on a TG and they just happen to be in the rural market. But the appetite for the product when we see how our products are performing in metros Tier 1, 2, 3 and 4, we hardly see any difference. So we are not feeling any such impact. In fact, we are not feeling the need for coming out this product, which is exclusive for rural market.
Okay. Because in the market, channel check suggests that we have released best for men, which are at INR 399 compared to in the metro markets, those are INR 550-odd.
Well, those products are available in all markets. It's not kind of dedicated or focus for the rural market. And actually, those products are performing well across markets.
Sure. And sir, my last question is regarding the international expansion. We have seen in the Gulf market, we are steadily expanding our EBO presence. So from a 3-year perspective, if you can just outline your international expansion plans and how do we do business out there? Are the stores on franchisee basis, how they are in India? And how does the supply chain work for those markets?
Okay. So I will ask later on, Gagan, to explain further, but just to -- just to give you a brief, we are seeing huge potential as where international market is concerned. And this is one area where we have started working on, and we have now dedicated leadership to drive this market. Of course, yes, as you rightly said, our focus is now more on the Middle East because some of our license between -- the situation is not all that good, it's [ timbering ]. Now you know what is happening in Sri Lanka.
So with those economic situations, we are focusing more on the Middle East side of the business. And our products are well received, and we are seeing huge potential, huge traction there. And today, the business is around 1%. Our international business is around that much. And since the overall business is growing, this would be around those numbers as we move forward. But the growth opportunities are tremendous and we are focusing on it.
Gagan, you want to add more light onto...
No thanks, Mr. Ganesh. I think you've actually covered it. Yes, in terms of opportunity, we do see huge potential in international, and we are currently focusing in Middle East. And we did want to -- in terms of positioning our brands, we wanted to focus on the number of EBOs. So you rightly observed that in terms of our EBO presence, it is expanding in the Middle East, it's gone up from 4% to 8% as of now. And we will continue focus here.
And at the same time, we are evaluating our strategy quarter-on-quarter in the other markets. It is a franchisee-based model as India. We work with a partner who can justify the entire Jockey brand and position it in the right manner. So basically, yes, it is -- the model is more or less same as in India, but just that the partner would manage multiple channels.
The next question is from the line of Bharat Gianani from Moneycontrol Pro.
Yes, sir. Congratulations for a great set of numbers and -- so sir, my question is on the revenue growth side. So what is the kind of target that you have for the next 2 to 3 years for the revenue growth? And can you please split that number between the volume growth and because of the raw material price? I know it's a bit difficult, but some comments on that side, what could be the pricing growth? And any particular category that you would feel that it could outperform as compared to the overall growth rate for the company over the next 2 to 3 years? That would be my question.
So Mr. Bharat, we are looking at $8 billion by '25, '26 and the -- if we drive our business, we are doing it, we may be able to even accelerate that ambition. In fact, we are now looking at $2 billion and beyond. As a management we have -- we are working on those aspirations, and we are very well poised to conquer those heights, and we are working very hard on that plan.
And it is easily possible for us to dream and achieve those numbers because as you know, our penetration is not that high, and there's so much headroom for us to grow. If you see the men's innerwear segment, we are 16% to 18% market share. And when it comes to women at athleisure, junior, they are single digits. So there is so much we need to do, there is so much potential there. So we are working and firing all our cylinders on all trends to achieve those targets.
As regards to category growth is concerned, we were also talking about price. Price will be based on the overall input costs and other things, so very, very difficult to predict how the price movements would happen. In fact, if you see historically, we have touch prices between 4% to 5% year-on-year. But last year was unprecedented, we did 2 price -- for the first time, I think we did 2 price increases.
So this is to do with the raw material and input price pressures which we are seeing, and we don't know how long it will last. So that part is very difficult to predict as in and now. However, I do see opportunities, and I do see the premiumization happening because even in the men's innerwear category, our consumers are preferring more premium products. So we are seeing tremendous growth on all categories, including men's innerwear. In that, we're also seeing higher growth rates on international collection or international collections and other higher premium ranges compared to the modern classic.
So that is one. And then since our penetration is lower on ISP categories like athleisure, bras, obviously, it will continue to grow on an accelerated rate and that will bring us some premiumization. And we do keep -- we do work on those very, very closely as those are categories which have huge potential.
But we are very happy to see that our men's innerwear is also equally performing and it's well received. Our products are well received in the market and clocking very good growth. So to answer your question, premiumization, definitely, yes, it is happening. Price increase as a percentage is dependent on many factors. And we are -- with the current volatile situation, we are unable to predict and give you a guidance.
Next question is from the line of Himanshu Nayyar from Yes Securities.
Congrats on a great set of numbers. So firstly, if you can just talk about our capacities and the utilization rates and the capacity expansion plans because I believe we were running close to -- I mean, now we might be running close to optimum capacity. So what are our CapEx plans for the next 2 to 3 years, and whether we need to rely more on outsourcing directly to fulfill the current demand?
Well, capacity utilization is close to 80%, our in-house capacity utilization. And we do have the long-term plan, we do have a 3-year plan based on the business growth and we do make our CapEx plans, including expansions in line with our long-term business plan.
So there are expansions happening. In fact, one of our major investments, which is happening in the state of Odisha, that plant is likely to be operational by Q4 of this year. And this is all in line with our capacity expansion.
As regards outsourcing is concerned, yes, as business grows, outsourcing will also grow. But as I see it, it would be around 30% of the overall business and 70% will be through in-house manufacturing. And even this 30% outsourcing, the growth which will happen will be mostly from a current vendor base because we work very closely with the vendor partners. In fact, they are an extended arm of Page when it comes to quality and standards. We manage it very closely.
So we outsource our operations and make sure the products are exactly as what we produce in-house, close monitoring on the standards, the processes and the quality of the product. So it is easier and better for us to grow the existing vendor base rather than explore newer and newer vendors. And therefore, we have strong strategic alliance with the vendor partners. And we have chosen vendor partners who have the ability to reinvest in the business and grow the business along with our growth. So to answer your question, the outsourcing will be mostly around 30%, 33% of our overall volume.
Got it, sir. And secondly, you made a comment in your initial remarks from Speedo. So if you can just share some outlook on that business and the current -- and give us some idea on the current size of that business and in terms of profitability, whether -- I mean, those -- that also generates similar profitability to our existing businesses?
Yes. So Speedo has recovered well. It is mainly because the pools were closed during the pandemic. And therefore, we had -- hardly had any sales, and it has recorded good growth as the pools have started opening up. But it is early days as profitability is concerned because as you know, with hardly any sales in the last couple of years, we need to look at it like a new startup and turn this around very quickly, and that is what we are working on.
And -- but we are looking at this business as a long-term investment because swimming as a sports activity in India is still in its nascent stage, but it's growing steadily. In fact, as per the market study done, India is the fastest-growing spending market. And therefore, we do see the long-term potential in the brand. And we feel it's prudent for us to stay invested, nurture the brand and reap the benefits by being a bit patient there.
As of March, end of March '22, Speedo brand is available in around 1,340 plus stores. The -- our EBO count is around 26. So it has reduced a bit because 2 years of no business was difficult for many of our partners to manage. So that is something we are providing. And we entered large pharma stores spread over 90 plus cities.
So with this reduction in -- even in EBO, we are able to actually see the same kind of volumes which we are getting off late in the last 2, 3 months. It is as good as the pre-pandemic levels. So when we actually increase our EBO owns and all that, it can be accelerated growth to the Speedo market because swimming -- the swimwear in India is going to be the fastest-growing market. So we firmly believe we should stay invested and nurture this brand. And our outlook as far as Speedo is concerned, it's very positive in the long run.
Thank you, Mr. Nayyar. May we request that you return to the question queue for follow-up questions.
The next question is from the line of Bhargav Buddhadev from Kotak Mutual Fund.
Congrats for the good set of numbers. My first question is that if you look at Page's expansion in FY '22, the MBO footprint has grown by almost 42%, and the EBO footprint has grown by about 21%. Is it possible to share how much of this footprint has been opened in newer markets? And how do we ensure that there is no risk of cannibalization in the existing markets?
Mr. Bhargav, I feel on the MBO, Gagan will be the right person to clarify; and Mr. Rahul would be happy to clarify on the EBO side of it. So can I request Gagan first to clarify?
Yes. Thank you. Thank you, Mr. Ganesh. So to expanding our reach footprint has been a strategy that we thought we really need. But as I mentioned in an earlier question, we did that keeping in mind our existing presence, be it in terms of geotagging all our existing outlets, where are we present, what is our target customer in each city, each town. And are we adequately present there in terms of dealer per lakh? And where we felt that we are underpenetrated or let's say, there is an opportunity to upscale is where when we open in a new retail store, right? So it was not to basically reach a certain number, which is desirable but actually going in a strategic manner where the customer needs our presence and in order to service the customer in a better manner, we have opened the outlet.
To answer your question, these outlets have come out with a very good throughput, and they have given us repeat orders. But at the same time, our other outlets have also continued to grow. So we are getting a very healthy and robust growth from our existing stores and at the same time from the new stores. Because as I said, it is not just to reach a certain number and opening one outlet next to another where you are already available, but keeping in mind where there is an opportunity.
So -- and this journey will continue. We further see this opportunity and this expansion has been equal in Tier 3 and Tier 4 towns as in metros and mini metros because there is an opportunity within metros as well to further scale up. But it's been done in a bottoms-up approach and in a very, very strategic and a scientific manner, if that answers your question.
Sure, sure. So just to continue on that geotagging bit, now that you are using a lot of technology, is it possible to know what has been the volume growth in FY '22 from your outlets, which are more than 2 years old, which includes both MBOs and EBOs?
So as I said, we have -- we captured the segment-wise growth in terms of which outlet give us how much revenue and how much we are growing. And it's healthy across. There is nowhere that we have seen a degrowth or a lesser growth. Even our top outlets, the ones who are very, very significant have also grown with a very healthy double digit number. And at the same time, the bottom outlets have also contributed in a similar manner. So we are capturing both the volume and the value, and we monitor it on a monthly basis.
So add to that, again, Mr. Bhargav, to what Gagan just said, we believe that our sales store performance has been robust and a double-digit like over the last several quarters, which demonstrate that we ensure due diligence when we go out and open stores. So there's a proper scientific process of gap analysis when we go out and open stores.
And of course, we are a multichannel brand. And we exist across e-commerce, MBOs, the exclusive brand stores, our strategy is to -- their consumers who are shopping from various phases and our strategy is to reach out to each channel and occupy a leadership position there. There might be a little bit cannibalization, but in terms of the overall benefit all stakeholders are substantial.
Next question is from the line of [ Omkar Kulkarni ] from [ Shri Investments ].
The first question is regarding the dividend distribution policy.
Dividend, we try to distribute 50% of the PAT as dividends. In many years, we have exceeded. It's also a function of the surplus cash, which we carried in 2019, we declared a special dividend. But overall, the policy is to distribute a minimum of 50% of the PAT.
Okay. Can you talk more about the upcoming expansions which you are doing and the asset turn you are expecting on that?
As of present, the asset turns are close to about 12% to 13%, I mean, the fixed asset turnover ratio as I call it. So going forward, it will vary depending upon the capital, the new facility, which is coming up in Odisha in a couple of years from now. So that will vary. But we will, more or less, in a stable state, we will be around these kind of asset turns.
Okay. So the existing capacity is sufficient enough to take care of the demand and the healthy growth which you are selling?
It is what Mr. Ganesh was answering earlier.
Yes. Mr. Kulkarni, as the volume growth is very healthy. The existing capacity is not enough to meet the demand. This is where we do have expansion plans. So we are -- with our capacities, we are okay. But for the next year and the long run, we need to expand. That's where the investments are being made, both on increasing the sowing capacity for producing more products and also on the backward integration.
Now there is a huge expansion which is happening on the elastic plants of ours. And as you know, we produce our own elastics mostly because this is one of the most vital components to ensure the superior quality of the product which we are offering to our consumers. And there is investments happening, strategic investments happening on all those backward integration projects as well. So expansions are happening. In fact, even on the expansion by way of capacity, there is also investments happening in further strengthening our technologies, the IT investments and also in our leadership.
In fact, Mr. Kulkarni, we you used to tell way back even in years 2018 and '19 that we are making investments for the future. And we were investing heavily on technology and also on leadership, on attracting the best of the talent. Today, we are enjoying the benefits of that. And we will continue to work on those aspects, and we'll continue to invest to grow the business.
And as you know, succession planning has always been in the forefront of the strategic plans. And the speed at which our business is growing, we are in the process of making the organization future-ready for -- in fact, as I told you some time before, it's not now -- we are not looking at $1 billion but we are looking at a journey which is beyond $1 billion for the second -- billion and further.
So in order to be ready for this ambitious growth plan along with capacity expansion, we need to also create a very robust organization. And what we are trying to do is to -- that's where I told you some time back, we have also taken our CPO on board, and we are also having a lot of investment being made on our leadership to take full advantage of the rich talent which we have and to optimize the use of the talent within the company at all levels, especially at the senior level.
And fortunately, we are very, very lucky and blessed to have a very strong leadership team, full of talent, and many of them can do much more than what they are doing today. And we are investing to make sure that they build those competencies, and they can take on more richer and higher responsibilities.
And we believe this restructuring which we have been doing all these years, this journey will continue and this is what is required for us to keep the growth trajectory along with all the investments which we are making on our facilities, the expansion of factories for garment manufacturing and for our backward integration projects.
Okay. So the expansion would be brownfield or greenfield?
Pardon? Mr. Kulkarni, I missed you there.
No, I was just asking -- you just told that...
Sorry to interrupt you, Mr. Kulkarni, may we request that you return to the question queue for follow-up questions.
There is no brownfield. It will be greenfield expansions only.
We'll take the next question from the line of Tejash Shah from Spark Capital.
[indiscernible].
Sir, sorry to interrupt you. The audio is breaking from your line. So please...
Is this better?
Yes.
We can hear you better now.
Yes. Sir, my question pertains to your observation or comment that you've made on penetration awhile back. Very iteratively, someone like me has followed your product portfolio valuation in the last 10 years, it seems that we have got more wardrobe share from the same customer outpacing perhaps the recruitment of the customer. Now since you track a lot of data at the end now, do you think that our customer base expansion is materially lower than our wallet share gain? Or is this observation is misplaced?
Mr. Shah, with the kind of retail expansion which is happening and as we keep opening new doors, obviously, we are also acquiring new customers. And the wallet share is also increasing because of 2 reasons, one, the price which we offer and the comfort and fit, which we offer and the quality. We have many loyal customers. And it is also supplemented by product range expansion. We have much more products to offer today, which will naturally mean that the wallet size increases because there are more options to buy for customers who have been loyal with us for all these years.
So I can say it's a combination of the wallet size increase as well as acquisition of new customers, which is happening because of the exciting products which we are coming with and also with the retail expansion, which is happening on the ground.
Sure. And sir, second question pertains to the current scenario and inflation. And then we are hearing from companies after companies that this has been kind of unprecedented in the recent times. Now keeping that in mind and keeping our long-standing guidance on margins remaining around 20%, 22%, do you think that this kind of inflationary pressure might trigger some form of down trading within the customers? And we might have to at least first -- tactically, we might have to forgo this adherence to this brand for a while to retail market share or to support the expansion that we have done in the recent past?
Not exactly because our products, as you know, are not high ASP products. And our products are essential products. And I think Jockey, as a brand, we are in a sweet spot because our products are relevant across the year. During these times, when there is a pressure on the wallet of our consumers, they may not prefer to buy seasonal products. In fact, we have products, it's multifunctional, multi-utility. So you can wear it in your home, you can also take -- one might walk with that product. And it's not seasonal. You can wear it year around.
So when we have such offerings and value for money proposition and the trust which we have built as a brand over the years, actually, we see this as an opportunity. And that is what we are seeing when we see the response from our consumers are concerned. It's an opportunity for us.
Thank you. Ladies and gentlemen, due to time constraint, we will take that as our last question. I would now like to hand the conference over to Mr. Chandrasekar, CFO of Page Industries for closing comments.
Thank you very much to all the participants. Some really fascinating questions. As always, in every call, I learn more about our own business from the various insights that you give us. And keep encouraging us and keep cheering for us. There is still a long way to grow. Have a good day. Bye-bye.
Thank you. Ladies and gentlemen, on behalf of Page Industries Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.