Ladies and gentlemen, good day and welcome to Pearl Global Industries Limited Q1 FY 2027 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shishir Gahoi, Head of Investor Relations of Pearl Global Industries Limited. Thank you, and over to you, sir. Thank you very much. Good afternoon, everyone. I am delighted to welcome you all to our earnings call for Q1 FY 2027. I hope you all had an opportunity to review our press release and the investor presentation, which are available under the investor section of our website, and the same are also uploaded on NSE and BSE websites. To discuss our results, we have with us our Managing Director, Mr. Pallab Banerjee, and our Group CFO, Mr. Sanjay Gandhi. They will take you through our results and business performance, after which we will proceed for question and answer session. Before we start, I just want to highlight that this call may include forward-looking statements based on the company's current views and expectations. Actual results could be different as future performance is uncertain and involve risks that are hard to predict. I will now hand over the call to our MD, Mr. Pallab Banerjee. Over to you, Pallab Ji. Thank you, Shishir. Good afternoon, everyone. I welcome you all to our Q1 FY 2027 earnings call. We continue to deliver a strong top line and bottom line by our focused execution and multi-location presence. During this quarter, we achieved a revenue of INR 1,528 crore, and our EBITDA stood at INR 164 crore which is a 10.7%, and a PAT of INR 99 crore. We shipped 20.8 million pieces this quarter. Some important updates on the key development that's affecting our industry. U.S., our biggest market, has now an MFN plus Section 301 tariff on our apparels. As you know, after Supreme Court judged IEPA tariff as not legal in February, U.S. had implemented a 10% additional tariff under Section 122. This got over on July 24th, 2024 this year. We have an additional 10% and 10% for India, Bangladesh, Indonesia, and a 12.5% on top of the MFN tariff for Vietnam. Following the Supreme Court's decision on February 28th, which struck down the IEPA tariffs, approximately INR 166 billion was collected as duties which became refundable to about 330,000 importers across 53 million entries. U.S. Customs and Border Protection is processing these refunds through the CAPE system, which went live on April 20th this year. U.S. government is in process of providing a refund to these importers. Very few or very small-sized customers that we have passed on these benefits back to their suppliers. In general, we haven't seen any of these refunds coming to us from our customers. Energy volatility continues as Iran war and Strait of Hormuz remain sensitive. Last quarter, we saw almost all Asian countries face the pressure affecting the raw material prices and the timelines. We had to maneuver through these challenges, I would say that we're still going through it. On addition, even before the peak shipping season, we are seeing a shortage of containers and the shipping lines capacity shortages, resulting in delays and high spot prices of freights. On other hand, the Bab el-Mandeb is back in news as it affects one of the choke points of critical shipping lanes. This will also continue to put an additional pressure, both in terms of cost and timeline of transit. Mostly the customers, our customers are paying these freights, and we have FOB terms, but it does put a pressure to our industry. On the brighter side, what we find is that despite all this war and inflation, the U.S. consumer behavior remained healthy. We observed similar trends in other major Western markets as well, like European Union and U.K.. If I talk of now, the retailers and the brands in U.S. are feeling better because they are getting back One side they have the confidence of the customer, they are buying. Also they have the refunds that is coming to them which will make their position much more healthier, and they can pass on more aggressively. Let's say, pricing or their selling strategies. This should have positive impacts on the order books, what we feel. Talking of another different market like Japan, what we are seeing, it continues to raise security concern on the China, Russia, North Korea, whatever is happening there geopolitically Clothing import from China to Japan, which used to be around 65%+, has now fallen down to 50%. It's a 15% drop that has happened, and this is the first time in 31 years. Vietnam is now almost 17.4% of the market of Japan, imports into Japan, and Bangladesh also has gained. It has come to a 4.3%. This is something, the positive news, again, because Japan is one of the bigger market after U.S. and European Union. Talking about the country of our manufacturing, if we talk of India, the implementation of India and U.K. Free Trade Agreement, which went effective on 15th of July 2026, is a significant positive development for Indian exports. Now the focus will be on the implementation of European Union FTA by the beginning of 2027. Such FTAs are generally a major boost to the raw material investments in India as well. What we are seeing is, coupled by the other various schemes from Indian government like the PLI schemes, the PM MITRA Parks, and the competitiveness amongst the states to draw investment, what we feel is that textile and apparel continues to be a focus area in India. Pearl Global already serves several of these markets in European Union and U.K., and have many customers because we're servicing them through other geographies, and we believe that this FTA will further strengthen these relationships as we create more additional sourcing advantage for them. We are proactively positioning ourselves to capitalize on these opportunities by enhancing our factory readiness in India, strengthening the compliance standards to meet some of the different standards of European Union and U.K., expanding the capabilities, and also working closely with our customers on their future sourcing plans. In terms of challenges in India, we did face the challenge of worker availability during the Q1, majorly because of the being a harvest season, school holiday. This time also, we had the West Bengal elections. We saw a lot of labors going missing or absent. Haryana and Noida both raised the minimum wage significantly, 38% and 21% respectively, which caused another ripple into our cost structure. At Pearl, we are having a healthy order book and have better utilization of capacity in India as compared to last year when we had the backdrop of the tariff pressure, which had started around this time. Moving on to Bangladesh. Here our business continues to grow. Again, we witnessed a healthy traction both from the existing as well as the recently added customers. Our ongoing capacity expansion projects in Bangladesh, along with the sustainable laundry operations that we are starting in September, and we should be becoming operational and execute orders in the second half of this year. These projects are expected to give us almost about 6 million-7 million pieces of additional capacity in Bangladesh. That will take our total group installed capacity to almost 108 million pieces. This eco-friendly washing unit that we are adding, that also will help us in terms of value addition that we are doing to our garments. In Indonesia, the business momentum remains healthy with encouraging demand trends and strong growth from a relatively lower base, which is supported by a continued customer traction, and the focus on the premium clients remains in this country. We remain confident of delivering both top line and bottom line from this geography. In Vietnam, it continues to be one of the world's largest apparel exporting countries after China and is playing a strategic role in serving the high value and fashion-oriented segments for us. The country benefits from favorable trade agreements, including the European Union-Vietnam FTA, and we have benefited the most from ongoing sourcing diversification that has been happening under China Plus One strategy as Vietnam also got the maximum benefit. It remains an important manufacturing hub for U.S. Encouraged by the strong customer traction, we continue to evaluate opportunities for additional capacity expansion in Vietnam. In Guatemala, we have reworked our operating strategy and are seeing encouraging progress. We remain confident of achieving our breakeven during this financial year of 2027. Overall, we believe our diversified manufacturing footprint, diversified market, and the client base, ongoing capacity additions, and our ever-strengthening customer relationships will help us in these geopolitical challenges. As we maneuver through these geopolitical challenges to trade the environment that the trade environment is facing, I feel that Pearl Global is positioned for sustainable growth over the medium term. With that, I would hand over to Sanjay Gandhi, our group CFO to share the financial highlights. Sanjay, over to you. Thank you, Pallab. Welcome all to our quarter one FY 2027 earnings call. I will now take you through our financial and operational performance. Quarter one FY 2027 consolidated performance. Quarter one FY 2027 is a great start of the year for us. We registered our highest ever consolidated revenue, EBITDA and profit after tax for the quarter. Consolidated revenue grew to INR 1,528 crore, up 24.5% year-on-year. This strong growth was driven by strong volume growth across our manufacturing locations. Adjusted EBITDA, excluding ESOP expenses, stood at INR 164 crore, up by 44.1% compared to quarter one FY 2026. This is driven by improvement in product mix and the operating leverage, which we witness in a couple of our geographies manufacturing locations. Adjusted EBITDA margins stood at 10.7%, up by 140 basis points year-on-year. It is pertinent to note that given the current customer mix, product mix, and geographical contribution to revenue and margin in quarter one of FY 2027, we are confident of sustaining this margin in Q1 series of subsequent year as well. PAT in quarter one FY 2027 stands at INR 99 crore, a strong growth of 51.4% on year-on-year basis. Now, talking about standalone financial performance. Total revenue stood at INR 340 crore, grew by 27.4% year-on-year. Adjusted EBITDA, excluding ESOP expenses, stand at INR 22 crore. EBITDA margin at 6.6% versus 7.3% in Q1 FY 2026. The drop in EBITDA margin despite revenue growth is because of higher wage costs in all factories in Haryana, post wage revision by state government. Other highlights. During the quarter, we received a total dividend of INR 5 crore from Pearl Global (HK) Limited, Hong Kong subsidiary company of PGIL. This is in line with the fungibility of cash across group entities. The company shipped 20.8 million pieces in quarter one FY 2027, highest ever in Q1 series, up from 17.2 million pieces in quarter one FY 2026. The Board of Directors have approved, subject to shareholder approval, the issue of one fully paid-up bonus equity share for every one fully paid-up equity share. CapEx update. We continue to build capacity and capability across our group. We have already updated on Bangladesh CapEx. Construction in India, construction for the second manufacturing shed in Bihar has already commenced. We are expecting completion in next couple of months. The land acquisition in Vietnam is also completed in line with what we have communicated earlier. Further, we are in the process of outlining CapEx commitment of approximately INR 200 crore -INR 250 crore for FY 2027 across geographies. We will update you on the detailed CapEx plan in coming months. In summary, we have delivered another strong revenue growth and encouraging improvement in profitability. Q1, FY 2027 performance testament to the strength of Pearl Global diversified business model, strong customer relationships, and enhanced capacity and capability, which has enabled us to carry the momentum built over past several years. We remain confident of sustaining the double-digit EBITDA margin on a full year basis as well. With this, I now hand over to the moderator to open the floor for questions and answers. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Kishore Kumar from Unifi Capital. Please go ahead. Good evening, and congrats to the entire team for the great set of numbers. My first question is related to the U.K.. Sorry to interrupt Kishore, sir. As there is a lot of disturbance, can you please use a handset? [crosstalk] Yes.That's better. Yeah. My first question is related to the U.K. and EU, FTA. Last call also you mentioned about rising customer interest and customers visiting our facility in India. With U.K. FTA already in force and EU possibly by next year, can you share as an update on how it's progressing? If you can quantify the incremental order that we are eyeing or the incremental volume that we can actually get from our existing customers as well as new customers based out of these geographies. Are we going to carve out some portion of our existing facility in India to new customers, or the incremental ones will be enough for now? Thank you, Kishore Kumar. See, what I said earlier also, we have been seeing when these treaties got getting finalized and was coming for fruition for implementation We saw that interest started generating in most of these customers, and they have been talking to us much more intently in terms of more capacity, not only in India but for other places as well. See, it gives them that kind of security that if something happens to Bangladesh or Vietnam and all, that diversification is there at Pearl Global, that immediately the business can shift to the other location. Also the kind of product which is a unique handwriting for India, let's say those kind of products also are available, which earlier the price was becoming a challenge, because if they placed it in India, then they had to pay higher tariffs. Both these things that we have been seeing is a positive traction. In terms of U.K. business, yes, by end of this year, we will see a significant jump in the U.K. business that we do as a group. Whether this free trade agreement will result into only India growth. When the customer talks to us much more intently and much more strategically, it encompasses all the locations. That's one of the huge benefit that we are getting from this FTAs. Yes, we are getting a traction in India also and other places as well. I think, second part of the question was? Sorry, I missed out. Did I miss out? The second part was. The capacity is going to come. Yes. Yes, sir. No separate factories for European markets. Basically what we do is that our existing factories we have wherever certain requirements were there from some of these customers, which was in addition to what we already had there. Those fulfillments we have done. We are ready to execute the business from these places as well. That way, the readiness is coming across all our factories. Got it, sir. Got it. My second question is related to the revenues. Similar to the EBITDA margin jump, we did see the revenue growth also much higher than our guidance. Is there any one-off delivery that took place in Q1 which led to this growth? Given both moved in our favor is there any revision to our full-year guidance for the revenue? You did mention about the EBITDA sustenance, but on the revenue side? Last year there was a challenge, as U.S. market faced the tariff challenges. There were a lot of conversation and most of the retailers were also going defensive because the prices were going up, how the customer would react, what would happen to the economy. There were a lot of question marks. As that overhang went out, we saw a good traction from the customer. The confidence of the customers and the consumers is definitely resulted into a better order book. It is not a one-off thing that has happened. Yes, if there is a change in the consumer sentiment or the market sentiments in the Western market that might fluctuate but otherwise, I think that the pressure that was there because of tariff that I think got released quite a lot. As I said, the other geopolitical development that is going on, whether it is Japan, whether it is the European Union. Most of these countries what we've earlier faced that the war, when the first Middle East war that was happening in Palestine or before that in Ukraine, were basically creating some kind of negative consumer sentiment. That fortunately what we saw in the last six, seven months or even after this war started in Iran, in March, we didn't see that. That I think is a big differentiator this time that we see. Got it, sir. Understood. Sir, there is a proposal under Section 301 to provide a tariff quota for textile and apparels to I think specific countries, which includes Bangladesh and Indonesia for us. Is that a real benefit, like benefit to prospect given we have to import U.S. cotton and there will be cost related to freight, insurance, all those things? No, you see, the U.S. cotton part is that if any country import U.S. cotton and then make the garment from there, then they get that kind of subsidy that kind of tariff benefit. That's how the U.S. release. That's for every country. There's nothing specific for Bangladesh or for Indian country. Even Indian, our minister also has clarified that. That exists, that is like use of U.S. cotton specifically just to promote U.S. exports. Otherwise, I think every country has got under 301 a 10% additional tariff over MFN. Vietnam and China, those kind of countries have got 12.5%, and it is definitely stacked on the existing penalty tariff that China already has for U.S. Yeah, less a little but yeah, there's some advantage definitely there for India. Okay. Okay. Got it, sir. Sir, are there expenses linked up. Sorry to interrupt, sir. May I request you to please rejoin the queue for follow-up questions? Thank you. The next question comes from the line of Bhavya Gandhi from Bajaj Alternate Investment Management Limited. Please go ahead. Hi, thanks for the opportunity. Couple of questions from my end. First of all, congratulations on a very good set of numbers. First question is regarding the average realization per unit. Historically, we've been doing around INR 600 -INR 650, but this quarter we've done closer to INR 735. Can we assume that INR 700 -INR 750 would be the normalized range, average realization per unit? That is number one. Second is regarding the earlier guidance that you had given. We have already achieved on a current run rate, INR 1,500 is the first quarter revenue, and we had alluded earlier regarding INR 6,000 + crore of top line for FY 2028, but we've achieved in the first FY 2027 itself, basis the current run rate. Would you like to revise revenue guidance going forward? Thank you, Bhavya. The average realization part, this particular season a lot of outerwear definitely gets shipped out. I don't think that we should be focused on the average realization so specifically. Yes, definitely our endeavor is to grow it from INR 600 to higher. As we get better customer more upmarket customer, this will go up. If I get a more volume customer, it will go down. Yes, for this particular quarter, definitely. There is a lot of this value-added outerwear shipments goes. In terms of the top-line guidance, yes, our goal was to cross INR 6,000 crore by 2028. As we said, our capacities and all have been made, we can definitely achieve that. It depends on how the macro factors are or the macroeconomic situation is. If it remains favorable like what we saw in the first quarter, if the rest of the year remains like that definitely. We should be very close to our target with this kind of numbers that we are trending. That's something, it's more of a future statement, I would say. Yes, we are ready. We are, in fact, capability-wise, capacity-wise, we are ready. Let's see how it goes. Sanjay, if you want to add anything further to this. Sure. Bhavya, on the realization part, if you compare quarter one last year also, our average realization was around INR 715. This year it's INR 735. Typically, as Pallab has mentioned about the product mix in this particular quarter our realization is always on the higher side. Last year, we closed an average realization of INR 643 per piece. If we're comparing an average of full year with the quarter one, that's maybe not the right comparison. I think if you look at quarter one of last year to this year, we have improvement of INR 20, which is there. It depends on the product mix, how it continue for the rest of the year to really determine our average realization price. Got it. Sir, just one follow-up, if I can squeeze in. Yeah. On the revenue side, we have been mentioning that our endeavor is to accelerate the milestone revenue, which is specified for FY 2028, and we keep working towards that. Right. Sir, assuming that the 7 million pieces will come on stream, you'll have closer to 108 capacity, right? Our initial guidance for FY 2028 capacity was closer to 130 - 140. Can we expect further CapEx also after 108 million pieces? See, we had said by 2028, we should be having installed capacity of around 125 - 130. That's because we want to grow. Definitely INR 6,000 crore is a point of time, INR 6,000 crore, that we expected that we should cross by 2028 or before. As of now it looks like. That doesn't mean that that's my end goal. End goal will definitely be higher. Yes, you asked the question of are we coming with what is our next three-year vision or something. We'll definitely come out and communicate with all of you on that. Yes, we want to grow. As we said, our main competition have been with these big giants from South Korea and Taiwan and all, who are in multi-billion INR. First goal was INR 6,000 crore. Definitely after that, we have to touch that billion-dollar mark and then move on from there. The capacity will continue to grow. By 2028, we had forecasted that we should be having around 125 - 130 million pieces capacity. Yes, by this year, you will see that 108 number will be crossed in September, October itself. Then we'll continue to grow. Got it. Fair enough, sir. Thank you so much. I'll get back in the queue. Thank you so much. Yeah. Thank you. Ladies and gentlemen, you are requested to restrict your questions to two questions per participant. Thank you. The next question comes from the line of Bharat Gulati from Dalal & Broacha. Please go ahead. Yeah, hi. Thank you for the opportunity. Congrats on the great set of numbers. Just regarding our standalone margins, they've seen a dip of about 70 basis points year-over-year even though we've clocked all-time high gross margins. I'm just trying to understand that, do we expect to enter that 8.5%-9% sort of EBITDA margin range in our standalone business, or will we continue to hover in that 7.5%-8% range? Because that's the only real drag on our consolidated margins. Just to add to that, have we peaked out on EBITDA margins in the remaining geographies, or do we still expect some operating leverage to further push up margins from that side? Yeah. Sanjay, you take this. Sure, Pallab. Yeah. First, on the standalone EBITDA margin decline of which you mentioned. You see, I mentioned in the commentary as well, there has been a revision in wages in the state of Haryana, where we have four factories operating here, and that incremental wage impact has hit the P&L in this quarter, and which has really impacted the EBITDA margin for this particular quarter. Despite the increase in the margin, this is why I mentioned we have a decline. If I just have to for the sake of exercise, and I have to add that number, we should be looking at a 9%+ kind of an EBITDA. Having said that, of course, going forward in the subsequent quarter, we have to keep working on the efficiency and the cost optimization measure to stay competitive and also while working on the EBITDA improvement. Yes, the target is to really have a high single digit and double-digit EBITDA in Indian Operations as well. That's where we should be looking at as we move in the subsequent quarter. That's the journey which is there. On your second question about the overseas location. Overseas location have both potential of leverage, because the new capacities are also getting added especially in Bangladesh. Also Vietnam, we mentioned that we have done a land acquisition. The complete project implementation plan will be shared in the coming months. There is a potential for improvement there as well. Indonesia also has a scope of operating leverage. These are the opportunity in overseas location. As we have guided earlier, our first aim is to really target between 10%-12% by FY 2028, and we are heading very much in that direction. Of course, as and when there is more opportunity coming up for improvement, we'll be in line with our CapEx plan, we'll keep intimating to you. Got it. Thanks a lot, sir. Just on realization from the previous participant. Have we seen a realization improvement in our India geography as well? Or is this more of utilizations improving in Indonesia and Vietnam, which has caused the realization to spike? Just understanding that has overall group realization improved on a broader base, or is this just more of a seasonality we've seen of INR 735 kick in? It is more of seasonality because a lot of this heavyweight outerwear and winter goods goes at this point of time. That has got a higher FOB. That's what we're experiencing. Majority of these outerwear goes from Vietnam and Indonesia, some from India and Bangladesh as well. That's how the nature of this business in this quarter is. Got it. Just lastly, on our consolidated EBITDAs, would we be able to quantify how much was the tariff impact, or is this 10.7% without any tariff impact? I'm just trying to get a like-to-like comparison because last year same quarter, our EBITDA margins on an adjusted ex of tariff impact basis were at 10.7%. Just trying to understand, have we improved from that 10.7% or has it sort of been flattish? This quarter, there is no tariff impact. This entire EBITDA is operational improvement and was driven by the volume growth and operational efficiency, which we have already mentioned in our commentary and answer to the questions. We are pretty confident with the customer mix, product mix, and the geographical contribution given in the quarter one. In the Q1 series for the subsequent quarter as well, we should be able to maintain that and continue working towards improving it to our objective of reaching to the 12% kind of an EBITDA margin. Got it, sir. Thank you. That is it from my side. Thanks a lot, sir. Thank you. Thank you. The next question comes from the line of Sani Vishe from PL Capital. Please go ahead. Yeah, thanks for taking my question. The first part was obviously on the realization, I think, which is already touched upon. I just wanted to confirm. We have been conservative in terms of the revenue guidance, and we have also been conservative in terms of forecasting the realization growth. Anything changes on that? Because we have been considering stable realizations for FY 2027. Do you mean that it is still in line with what you were expecting earlier? In terms of top line, we have been always saying that our CAGR would be in the range of 12%-14%. If you look at better years, we have done more than that. This year, if it continues to be more than that, definitely, I think as of now, it looks like it should be better than that number. To really give a forecast, I think we will create another platform in which we'll talk about we're analyzing and we are making preparation for what should be our numbers and goals. We'll share that with you. As of now, the traction that we are getting seems to be much better than 12%-14%. In terms of bottom line, I think Sanjay had repeatedly said that we are more confident because as these numbers goes up, get the leverage. Sanjay, you can add further to this. Sure. As we mentioned that we are pretty confident of accelerating our capacity target of [FY 2028] at INR 6,000 crore, and we should be able to achieve it earlier than that. quarter one demonstrate very clearly in that line. We remain confident for the rest of the year as well. As far as the bottom line is concerned, I think that will continue to improve and double-digit margin is here in the business inherently as well. We stated in our last earning call as well, business has reached a stage where inherently it can generate an EBITDA margin between 10%-12%. Now, we mentioned four or five levers for it to reach 12%. Now, the convergence of all this lever will be, of course at a different point in time. Definitely with all this lever kicking in, I think our business should generate EBITDA of between 11%-12%. Okay. On the realization front, this realization that has happened is in line with what we were expecting at end of Q4. Is that correct? Yes. Realization is as I mentioned that if you look at quarter one of last year, which is FY 2026, our realization average has been INR 715. Vis-a-vis we are at INR 735. There is a 2.5%-3% improvement. It is a function of product mix, realization per piece, and we always like to have better product and mix while we do the actual execution. It is also a function of the demand and everything. While we discuss the number with you, we have taken a little bit conservative view because our focus is bringing the volume growth more in all our models compared to the realization, which is a function of multiple things, which is some of the factors under our control, some are not in our control. Yeah, we also look forward to improvement in realization as we go in the rest of the year. Yeah, because last year Q2, Q3, Q4 were also impacted because of the price cuts that we had taken due to U.S. tariff. Is it fair to assume that the realization growth ideally should be much better in Q2, Q3, Q4 compared to Q1? Last year from India, we had some discount that was going on. A double-digit discount was going on to compensate that 50%. Yes, that difference definitely would should come through. For the other markets, it was hardly about 2% or 3%. Yes, from the tariff point of what you're saying, the tariff discount that we have been giving, hopefully that should fade away now or be much lesser. The customers are not talking of compensating this 10% tariff by giving additional discount at this point of time. I think that should help. In general, we are a growing organization. If we get a customer which is a mass volume customer, then definitely the realization prices will be lesser. Whereas, more business comes from the premium segment of the customer base then the realization would be higher. As of now, I think we are more focused on the top line and the bottom line compared to purely on the realization per piece. Fair enough. Yeah, in general, we would love to track and we love to grow that. Yeah. Fair enough. Finally, would you be able to give some idea Sorry to interrupt, sir. May I request you to please rejoin the queue? This is only our second question, and it's a short one. Would you be able to give some idea on how the volumes have fared geographically wise? If not number, at least some utilization numbers. Bangladesh continues to be the biggest, followed by Vietnam, India, Indonesia, and then Guatemala. Bangladesh is tracking close to about, I would say, 45%+ of the group. Vietnam and India are very similar in the range of about maybe about [27%- 22%, 20%-27%] of both of these, and then followed by the other locations. I hope that helps you. Okay. Yeah. Thank you. Thank you. Ladies and gentlemen, you are requested to restrict your questions to two questions per participant. I repeat, you are requested to restrict your questions to two questions per participant. The next question comes from the line of Shardha Agarwal from Asian Markets Securities. Please go ahead. Yeah. Hi. Congratulations to the management team on a very strong quarter. Two questions. First is, what is our capacity in Bihar second unit that we are looking at, and by when do we expect this to get operational? On the current capacity in India, what is the utilization that we operated at in Q1? Bihar, we have two sheds that we are starting with. Out of which one shed was functional with 450 machines at the full capacity. The second shed would be also similar, 450. What we intend to divide is one of them would be more of the woven garments and the other one would be knit garments. The woven part is already operational at this point of time, knit should be ready by, I think October, November, we should start seeing production there. In terms of million pieces Sorry, Pallab ji. Yes. In terms of million pieces of garments, what is the capacity we are looking at including both the units in Bihar? At its full capacity, we should be able to ship about four to five lakh pieces every month. That is once it fully ramped up. At this point of time, it is doing about close to 120,000, 130,000 pieces a month. Over the period of next couple of quarters, it should move towards that full capacity. Right. In India overall, what is the utilization that you operated at in 1Q? That number we have not specifically reviewed at this point of time. We can come back to you. Right. Yeah, I'm just checking. Sanjay, you know the number of India? Yeah. I'll just add. India, we are looking at this quarter capacity of out of the total number of PCs which are available, at around 70% of that have been there. In terms of the efficiency, we are looking at somewhere around 58% of efficiency. In terms of the total capacity when you compare, we are looking at 65%-70% kind of a utilization. Shardha, for example, the Bihar as I said, it is ramping up. When we- calculate the capacity, we calculate it at the full capacity of 450 machines because the shed was operational. Got it. We were ramping up line by line. Yes, in India, I think we are still averaging between 70%-75%, I think we'll see that. Indian efficiency, because we have been doing a lot of fashion garments and all, we are still between 50%, 55%, 58%, in that range, is our efficiency that comes through India. Right. No, sir, I'm just looking at it from a point of view that where will the next leg of growth come from, assuming that the Bangladesh CapEx takes some time to get commercialized. Incrementally, the headroom to improve utilization is only in Bihar, because Vietnam and Indonesia have done quite well from the segmented numbers, if I'm right. In India also, you will see that as these FTAs are coming through, so India will trend towards more core products as well. Earlier India, we were more focused on the fashion products, and the seasonality was there, because of which the utilization on certain seasons was much higher than the other seasons. Now, our goal would be to have more uniformity across all the four quarters. If that we are able to achieve, then you will see this number inching up in India, because we have a substantial capacity already built up in India. First quarter, definitely you saw that year-over-year, we have a growth of almost about 27%. That's a positive sign. Our endeavor is to continue to do that, get more core products in India as well, and get it done. Core products, normally the margins are sharper. Yes, as the efficiency goes up, again, the margin then becomes better. That's a chicken and egg story that we are going through. Overall, I think we are in the positive direction. Great. Thanks, Pallab. Thank you. Thank you. The next question comes from the line of Abhishek Shankar from ICICI Direct. Please go ahead. Yeah. Thanks for taking my question. Am I audible? Yeah. Thank you. Yeah. Congrats on a good set of results. Just continuing on the bit of utilization, if I heard it right, you had mentioned 65%-70% utilization in India. Can you help me with the utilization rate across Vietnam, Bangladesh and Indonesia as well? Utilization in India, as you said, it is just 70% plus as of now. There's definitely a room. As we do more and more, we can execute more in India. With the positive direction that India is taking in terms of FTAs and in terms of other promotion of India that is happening, I think we are in the right direction. Other locations like Bangladesh and Vietnam, we do have the flexibility of our partner factories as well. That way, if we get more business, we can quickly ramp it up because we can negotiate additional capacity from our partner factories. That way, these two countries, inherently, the numbers would always look better in terms of utilization. Sanjay, you want to add anything to this? Yeah. Just want to mention that in terms of the utilization overall at a group level, we are looking at 75%-80% in overseas locations, if we have to look at a quarterly available capacity. As Pallab rightly mentioned, the partnership facility keep adding in location in countries like Bangladesh and Vietnam. There is always a increase in the capacity which is being available for that particular season and quarterly basis also, and on a full year basis. That's a add-on. In line with what. There was one question by one participant about 120, 125 million pieces. That target will still remain with us in the interim period because there is a lot of opportunity which is there in terms of without incurring the greenfield CapEx, we can have those capacity also getting added. That's how it will span out. Sir, specific to India, if we add the second shed, which is under construction, which should be ready by September, October, the revenue-wise run rate should be close to INR 1,700 crore-INR 1,800 crore, given the full utilization reaching there. We still have a lot of room to grow in India and in Bangladesh as well. There is a good potential to add on the revenue, both on the volume side and accordingly in the sales revenue side as well. Indonesia, as we mentioned, that it's not really fully utilized. The three origin right now have a good opportunity, and Vietnam also have the partnership facility being available as the demand really keeps going up. Those options are always under exploration. In addition to the land, on which we'll do the greenfield project, which will come up in some time. That detailing also we'll share in the coming months with you on the capacity front. Capacity is not a challenge for us to grow even beyond INR 6,000 crore or even INR 6,000 crore in this financial year should this momentum continue, which we'll see in the coming quarters. Okay. Thank you. Thank you. The next question comes from the line of Soham Samanta from Motilal Oswal Financial Services. Please go ahead. Thank you so much for the opportunity, and congrats on the good set of numbers. Just a couple of questions from my side. Looking at the Q1 numbers, is it fair to assume that we expect high teens kind of growth in FY 2027? High teen percentage of growth in FY 2027. That's the question you asked? Yeah. Yeah, with the current run rate, it looks feasible. Of course, the second half of the year, we have to see what happens in U.S. We're seeing the Fed is talking about high interest rates. They might hike further. Let's see what happens to the war. All these kind of things are there, but otherwise as of now, what we have seen in the market, the trend that is there in the market currently, like if it doesn't change, then that should be feasible. The second question is the India, U.K. FTA. After the FTA, it's been almost more than a month. On a quantitative number, how numbers will look like? Is there any incremental order book will come in our plate, or how will it look like on a sector or overall industry basis? Overall industry, if I talk about specifically in India, I think our export to U.K. is in the range of. I think, about one point some two or $1.3 billion. I personally feel that that should definitely grow up significantly. At least it should double within the next two years. Two to three years. Any visibility, sir, as of now, looking at the current scenario? Anything visible, you mean? Yeah. Basically. See, definitely the customers are coming here. Customers have been coming here, and more queries are coming definitely for India. Earlier, if they knew that, okay, this kind of product, if India or Bangladesh is giving the same price, then it is better to place in Bangladesh rather than in India. If the price is advantageous in Bangladesh, then definitely those orders go to India. There are certain group of product where the pricing would be similar both in India and Bangladesh. It was landing 10% cheaper if you source it out of Bangladesh. Those kind of business will start coming into India immediately, because if it's typical India handwriting, the product execution, the product business becomes better if it goes out of India. That particular segment of business, I think, should come to India immediately. If you talk about us, we have been doing certain customers, like U.K., some major retailers. We are definitely seeing a significant growth with those customers. Because as I just explained earlier also, it gives them also confidence. There is another, like we as a supplier are bringing now multiple location where we are maintaining the cost and we are able to give the similar kind of service. That is a huge confidence building for them from a supplier point of view. That benefit we are definitely tracking. Okay. Sir, the growth, 24%, is majorly coming from a It is from old customer or new customer, or how is it like the higher growth for this quarter? Yes. See, from the older customer also, our strategy as Pearl Global, we are doing almost about seven different categories of product. That means you can say almost about 70, 75% of our apparel store, all the product that is selling, Pearl can give them that. We are not able to provide sweaters and we are not able to provide undergarments as of now. Keeping that aside, I think we almost have the rest of all the products that is there in apparel. If I was with an existing customer, if I was supplying two or three different categories of product, we are trying to get into the balance four and thus increasing the wallet share with the same customer. That is the kind of strategy that plays in Pearl, that is how we have been trying to grow and give them those services, additional services. Like we have on-site location in terms of our product development, creations and all. Have the showrooms in those markets, working full-time with the customer in real time also not depending on these time zones. Those are additional services we provide so that we can get this extra wallet share by providing those seven different categories to them. I think that strategy will continue, that is how once we get a new customer and then we continue to grow with that customer by giving them one after the other, the other categories of products. Got it. Thank you very much, sir. Thank you. Thank you. The next question comes from the line of Pulkit Singhal from Dalmas Capital Management. Please go ahead. Thank you for the opportunity. Congrats on the great set of numbers. My questions are largely very financial related. First is that when we see the gross margin, there's a significant YOY increase from 46 to 51.5%. At the same time, other expenses is up by 51% YOY. Just trying to understand this nuance. Is this a very one-time aspect? Is this going to continue? What is the reason for this, more importantly? Pulkit, thank you. The gross margin and other expenses, there is improvement in gross margin. See, there is a competition with outsourcing production and in-house production. The manufacturing expenses and other expenses has gone high, which means the goods have been manufactured in partnership factory, resulting into higher other expenses. When we go to the gross profit, there is actual improvement in terms of the volume growth led by the high value-added margin product, which we had in overseas location, which has led to improvement in the gross profit. As I mentioned that, given the customer mix, product mix, and the geographical contribution remaining in this quarter, which should continue for the quarter one of the next year and the year after, I think this kind of a gross margin is very much sustainable. Therefore the EBITDA margin and other things will also grow. Other expenses is, as I mentioned, higher because there is a lot of job work and other outsourcing manufacturing expenses have gone slightly higher, in line with the production volume going higher. That's the big answer in that. Therefore, when you do higher job work, should one read it as that's because our own in-house manufacturing facility capacities were not there for this kind of growth, and therefore you had to do it? Or it was a positive thing. More of the accounting practice. See, there are two ways. Even in our own facility, there could be something which is done under, I would say, more of a job work or let's say contract workers route. That also happens. It is a combination of all these. It's just the accounting that you are seeing the heads, where we are paying our own salaries and all that comes under our expenses and then everything else comes under the others. Got it. Second question is finance cost. Far, we've been doing receivable financing, and therefore this cost item usually grows in a certain part of this cost item grows in line with the revenues. Now we have been seeing that to be tapered off. Should I be reading it as receivable days will therefore go up? Or how should I think of it going ahead, this finance cost side? Yeah. Sure. Yeah, first of all, our net working capital days remain same what it was as on 31st of March 2026, around 43- 44 days. The finance cost as an absolute amount remains stagnant, percentage-wise, it has come down to 1.7%. Our receivable financing program continues. It is just that we are using more of internal resources, which is the cash generation for working capital requirement. Wherever the opportunity is there, where we feel that there is a scope for optimization of finance cost and utilization of resources, that is how the cost has come down in that way. How should this line item grow going ahead? How should we think about it? The receivable factoring is already a part of it. Interest on lease amortization, which is a part of it, will continue to be there. We mentioned that finance cost as a percentage of sales should remain at 1.7%-2%. As the scale goes high and the realization keeps coming up, maybe it is to the level of 1.7%-1.8%. Our endeavor is to have it, in terms of the percentage of sales, to 1.7%-1.8%. That is what we are targeting for this year. Got it. Thank you, and all the best. Thank you very much. Thank you. The next question comes from the line of Roshan from Antique Stock Broking Limited. Please go ahead. Yeah, thanks for the opportunity, and congratulations on a good set of numbers. I just wanted to understand the Bangladesh expansion. It's scheduled for September. What utilization capacity in first 12 months, and how quickly the new capacity can achieve margins comparable to the existing capacity? Normally, the scaling up in Bangladesh is faster compared to India. You see, the industry is very focused. It's one city and its outskirts, Dhaka. The labor pool is already experienced, and so is the lower management and the middle management and all. That's why an investment in Bangladesh to capitalize and really utilize the capacity or scaling up of the capacity is, we have experienced in past, is much faster. We definitely would try to do that. Within the next one year, our goal would be to capitalize what will be starting. That's the objective. Let's see how it progresses. Understood. The third question is, despite global disruptions happening, you indicated that there is healthy business momentum. Are you seeing customers increasing their order book visibility or shifting from seasonal ordering to long booking cycles as they diversify the supplier base? What's your qualitative comment available? I'm not sure I could hear your question properly. What I understand is that you mean to say that whether the customer should be placing more longer-term orders or not? Yeah. Is my assumption. Yeah. On the contrary, we are seeing that with so much of forecasting of potential problems, high inflation, negative consumer sentiments and all, which always surveys and economists have been forecasting about. Most of the retailers have been a little conservative in terms of going long-term. They are more in terms of what is selling and read the sales and then place the business. That's the kind of trend that we see. How do you bring down the lead time from order to have goods in store? This repeated disruption that we are seeing in terms of the logistics. Now it has become more of a regular feature. Every year, we are seeing the peak period, the rates and timelines are getting disturbed. Availability of containers are getting disturbed. Those are the kind of things are definitely disrupting the retail planning. Yes, it's basically more a continuous push and pull that is going on. I am not seeing the trend of ordering early as of now. They are putting more and more pressure on the supply chain, how we can be much more reactive and how we can bring down the lead times, so that they can compensate these logistical issues. I understand. That's all from me. Thank you, sir. Thank you. Thank you. We have the last question from the line of Manju Bhashini A from ASK Wealth Advisors Limited. Please go ahead. Hi. Greetings to the management. Congratulations on very good quarter numbers. Two questions from my end. One is on the gross margin part. To an earlier question, you did mention that because of improved product mix, et cetera, the margins which we did at the gross level in this quarter is representative, and there is no reason to believe that it may not continue, and the trend will be similar to what it was in the previous year. Is that the right inference, sir? Yeah. Sanjay, you want to take the call? Yes, Sanjay, go ahead. Hello? Sanjay are you speaking? Yeah, Pallab, you are audible. Yeah. Please go ahead, Sanjay. Go ahead. I said you go ahead. Sorry, your voice was not clear. Yeah, this quarter one, as we mentioned that subsequent quarter also, quarter one series should be able to generate this kind of a gross EBITDA margin, which we just achieved in this quarter, 10.7%. Rather, we'll make an effort to improve as we go step into FY 2028, 2029 onwards. The reason I am stressing on this is because if I see in FY 2026, your Q1 versus Q3 gross margins itself. There is a significant jump. For example, Q1 of FY 2026, you did 46% gross margin, and Q3, despite all the tariff queues noise, et cetera. Being there, the gross margins were 51%. Roughly 600- 610 basis points improvement from Q1 to Q3 at the gross level you were able to deliver in FY 2026. I'm only trying to understand. Now in Q1 itself, our gross margins are 51.5%. Now on this level also, Q3 should be following the same trend as it did in FY 2026. That's what I was trying to get to, sir. I will let Sanjay explain, but I can tell you one thing in terms of product-wise, this Q4 and Q1, these are the two seasons where a lot of outerwear starts shipping. That's the time, this differentiate of product definitely happens from season to season. Yes, Sanjay, go ahead with your details. Pallab, I was about to say the same thing. It's a product mix which has driven this gross margin improvement. If you are purely looking from a gross margin point of view, yes, I think season to season, this should be the trend. As we mentioned that on a full year basis, we are confident of achieving double-digit EBITDA in FY 2027, which means improvement in quarter three as well. To some extent, the trend should continue for improvement in margins. Great. Yeah, that answers it. Thank you so much. The other question is, Mr. Pallab, the initial part of the conversation, you were mentioning about the closing inventory levels country-wise, China, Vietnam, Japan, Bangladesh, et cetera. I missed those numbers. If you may please help us understand that one more time, please. I was talking about Japan. The biggest market is U.S. The other important market is European Union, U.K., and Japan for us. In Japan, their dependence on China was very high. Historically 65% of the total Japan imports were coming from China. What we saw this year or last year, a significant diversion in that. The number came down from 65 - 49. That means 16% of Japan imports actually moved out of China sourcing. That went to markets like Vietnam, to a certain extent to Bangladesh. India so far has not been able to capture it. We have been growing in India also in terms of Japan exposure. That's another significant development that is happening in our industry. I was mentioning that. I mentioned that Vietnam now is about almost 17% + of the Japan share, Japan's total import, and Bangladesh has reached almost about 4.3%. That's the number that I was showing. Okay. We also have a very significant, one of the top five accounts of ours is also Japan based, I guess. Any color incrementally that you would want to share on that particular front? Sorry, repeat your question, please. No, I said for Pearl Global as well, I believe one of the top five accounts is from Japan, as we speak. Yes. Any incremental data points you would like to share with us in terms of ramp-up of that particular Japanese client or where is it currently and what are your target expectations, et cetera, over there? Japan is an interesting market. I feel that Japanese brands like Uniqlo or Muji and all have really become now, even GU, are becoming international brands. If you see the number of big U.S. retailers who have gone international, and then I'm seeing a lot of Japan also has gone international. Like what happens between U.K. and European Union also. If we look at that, then that should be an interesting market and I should have more clients from that market. Yes, we are focused on understanding that market more and more and diversify. Yes, currently we are supplying to one of the clients, which is Muji. We would like to diversify and have more clients there. Not the big ones like Uniqlo and Muji are names that everybody knows, but there are many other names, many other significant retailers out there. We are trying to get into them as well, as a market. Definitely, it's an interesting market for us. Thank you very much and wish you all the best. Thank you. Thank you. Ladies and gentlemen, we take that as our last question for today. I now hand the conference over to the management for closing comments. Thank you to all the participants for joining us today. We are pleased with our strong start to FY 2027 and remain focused on disciplined execution and sustainable profitable growth. We believe Pearl Global is well-positioned to capitalize on emerging opportunity and create long-term value for all our stakeholders. Thank you once again for your continued support and confidence in Pearl Global. I hope we have been able to address all your queries. For any further information, kindly get in touch with Shishir, our Head of Investor Relations or Strategic Growth Advisors, our investor relation advisor. Thank you. Thank you. On behalf of Pearl Global Industries Limited, that concludes this conference. Thank you everyone for joining us, and you may now disconnect your lines. Thank you.