- Total Income (FY24): INR1,577 crore, up 12.7% year-on-year.
- Total Volume Growth (FY24): Over 21% year-on-year.
- Net Profit (FY24): INR90 crore, up 71.7% year-on-year.
- Gross Profit Margin (FY24): 32.2%, up 256 basis points year-on-year.
- Quarterly Total Income (Q4 FY24): INR502 crore, up 23.2% year-on-year.
- Quarterly Total Volume Growth (Q4 FY24): 17.6% year-on-year.
- Quarterly Net Profit (Q4 FY24): INR33 crore.
- Cash Conversion Cycle (FY24): Improved to 150 days from 159 days in FY23.
- Advertising Expenses (Q4 FY24): INR22.5 crore.
- Advertising Expenses (FY24): INR100 crore.
- Force NXT Growth (Q4 FY24): 32% in value, 53% in volume year-on-year.
- Force NXT Growth (FY24): 42% in value, 52% in volume year-on-year.
- Missy Brand Growth (Q4 FY24): 10% in value and volume year-on-year.
- Missy Brand Growth (FY24): 7% in value, 9% in volume year-on-year.
- Premium Segment Growth (Q4 FY24): 28% in value, 52% in volume year-on-year.
- Premium Segment Growth (FY24): 18% in value, 26% in volume year-on-year.
- Project Lakshya Distributors (FY24): Increased to 290 from 229 in March '23.
- Modern Trade and E-commerce Sales (Q4 FY24): Approximately 3% of total sales.
- Modern Trade and E-commerce Sales (FY24): Approximately 4% of total sales.
- Revenue from Operations (Q4 FY24): INR500 crore, up 23% year-on-year.
- Gross Profit (Q4 FY24): INR153 crore, up 53.6% year-on-year.
- Gross Profit Margin (Q4 FY24): 30.6%, up 609 basis points year-on-year.
- Operating EBITDA (Q4 FY24): INR57 crore, up 405.9% year-on-year.
- Operating EBITDA Margin (Q4 FY24): 11.4%, up 865 basis points year-on-year.
- Operating EBITDA (FY24): INR159 crore, up 61.5% year-on-year.
- Operating EBITDA Margin (FY24): 10.1%, up 304 basis points year-on-year.
- Profit After Tax (Q4 FY24): INR33 crore, up 5,912% year-on-year.
- PAT Margin (FY24): 5.7%, up 71.7% year-on-year.
- Brand Contribution (Q4 FY24): Dollar Man Big Boss: 39%, Dollar Always Regular: 44%, Thermal Regular: 2.27%, Dollar Woman: 8.17%, Premium Segment: 4.25%.
Release Date: May 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dollar Industries Ltd (BOM:541403, Financial) achieved its highest-ever quarterly and annual income.
- Total income for FY24 stood at INR1,577 crore, increasing by 12.7% year-on-year.
- Net profit for FY24 was INR90 crore, growing by over 71.7%.
- Gross profit margin increased by 256 basis points year-on-year to reach 32.2% in FY24.
- The premium segment portfolio, including Force NXT, Force Go Wear, Thermal, and Pepe, increased by 28% year-on-year in value terms and 52% year-on-year in volume terms in Q4 FY24.
Negative Points
- Sequential reduction in gross margins due to seasonal variations in product sales.
- Working capital has increased despite the contribution from Project Lakshya, with inventory days reducing only slightly.
- Debt position has almost doubled from INR161 crore to INR300 crore.
- Advertising expenses remain high, with INR100 crore spent in FY24.
- Non-Lakshya distributors have shown a higher working capital requirement, impacting overall efficiency.
Q & A Highlights
Highlights of Dollar Industries Ltd (BOM:541403) Q4 FY24 Earnings Call
Q: Can you tell me what was the like-for-like growth for Lakshya for Q4 as well as for FY24?
A: Initially in FY23 March, we had around 229 distributors. Currently, we have around 290 distributors contributing around 26% of our total revenue, which was otherwise 18.3% of our total revenue. The distributor sales growth stands somewhere around 26% to 27% in volume growth and 18% to 19% in revenue growth.
Q: What led to the sequential reduction in gross margins?
A: The reduction is mainly because Q2 and Q3 are seasons where thermal products, which have higher gross margins, are sold. This is the main reason for the reduction in gross margin in the portfolio.
Q: How confident are you that Project Lakshya will contribute 65% to 70% of revenue by FY26?
A: Last year, we added only one state for Project Lakshya. This year, we are adding three new states: Jharkhand, Madhya Pradesh, and Himachal Pradesh. With this expansion, we are confident that we can achieve the target of 65% to 70% revenue contribution by FY26.
Q: What exactly is Project Lakshya, and how will it help gain market share?
A: Project Lakshya aims to increase the reach and range in the market by increasing the number of retail outlets and the range of products offered. It also involves installing a distributor management system and auto-replenishment system to optimize stock levels and gather market intelligence. This project will help in reducing the working capital cycle and increasing market share.
Q: Do you expect gross margins to improve in the coming years?
A: Yes, we expect gross margins to improve. We have guided for 14% to 15% EBITDA margin at a INR500 crore revenue base. The margin improvement will come from product mix changes and operational efficiencies.
Q: Can you explain why, despite increasing revenue contribution from Project Lakshya, we are not seeing improvement in working capital?
A: The overall reduction in inventory days from 108 to 97 days and debtor days by two days is visible. However, the full benefits of Project Lakshya will be more apparent when its contribution reaches 50% to 60% of total sales, which we expect by FY26.
Q: What is the target for revenue and EBITDA margins for FY25 and FY26?
A: For FY25, we are targeting revenue growth of 12% to 13% and an EBITDA margin of around 11.5% to 12%. By FY26, we aim to achieve a revenue of INR2,000 crore with an EBITDA margin of 14%.
Q: What is the debt position, and any guidance on finance costs for the next year?
A: The debt has increased to INR300 crore, primarily for working capital purposes. We expect to normalize the situation and reduce debt by around INR120 crore to INR125 crore. The average finance cost is around 7% to 8%, and we expect it to reduce by 70% to 75% in the current year.
Q: What is the contribution of the premium segment, and what are the targets for the future?
A: The premium segment currently contributes around 27% of total revenue. We aim to increase this to 33% by FY26. The premium segment includes Force NXT, thermal products, women's segment, and kids' segment.
Q: What is the plan for expanding Exclusive Brand Outlets (EBOs)?
A: We aim to open around 100 to 120 EBOs by FY26. The current average ticket size is INR700, and we are working on increasing it to INR1,200 for breakeven.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
