Mallcom (India) Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Aradhana Jain - B&K Securities India Pvt Ltd. - Analyst : Congratulations to the team for a good set of numbers. I have a couple of questions. My first question is on Sanand, Gujarat facility. I believe that the trial run for the dipped gloves has commenced as it was to commence in November. If you could throw some light on the time lines for that? And in our previous call, we were told that in that particular facility, we'll also have gloves, both PU and NBR, shoes, helmets and eyewear to be produced. So what's the status on that? That's my first question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 14, 2024 / 6:30AM, MLCM.NS - Q2 2025 Mallcom (India) Ltd Earnings Call

Question: Aradhana Jain - B&K Securities India Pvt Ltd. - Analyst : So what are the sort of revenue expectations that we have from this particular facility? I believe that the peak sales from this particular facility was around INR100 crores that we had projected. So current -- in the current year, do you see some bit of revenue flowing in from this particular facility? And by when do we expect this INR100 crores of peak sales to start kicking in?

Question: Aradhana Jain - B&K Securities India Pvt Ltd. - Analyst : All right. Also, if you could throw some light the export market, how has the demand to be in the second quarter. Also any logistic challenges that you guys see? And how has the competitive landscape developed?

Question: Aradhana Jain - B&K Securities India Pvt Ltd. - Analyst : Sure. That was helpful. And if any logistic challenges that you guys faced, I understand that most of the sales happens on FOB basis. But any issue that you guys would have faced because of the Red Sea crisis still persisting or any sort of issue? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 14, 2024 / 6:30AM, MLCM.NS - Q2 2025 Mallcom (India) Ltd Earnings Call

Question: Rushabh Shah - BugleRock PMS - Analyst : In the last call, we had discussed that we are in the mode of adding more distributors. So how many have we added in the last four to five years? And what steps are we taking to add more distributors?

Question: Rushabh Shah - BugleRock PMS - Analyst : So sir, roughly on the top of your head, you said around 15 to 20 distributors in the last four to five years. Is it because -- the number is low. Is it because the criteria which you have to fulfill for the distributors? Or this is the pace at we add distributors?

Question: Rushabh Shah - BugleRock PMS - Analyst : Okay. Sir, my second question is, since certification is the major differentiating factor for Mallcom than the others. So is the government of India more supportive of it? And how has the support from the government of India changed in the past years for you? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 14, 2024 / 6:30AM, MLCM.NS - Q2 2025 Mallcom (India) Ltd Earnings Call

Question: Rushabh Shah - BugleRock PMS - Analyst : So just a follow-up on that one. You said the standards are already there. The implementation is happening. So as compared to the previous year, were the standards there and implementation was not happening? Or is it changed, the implementation is happening right now and new standards are coming in place?

Question: Rushabh Shah - BugleRock PMS - Analyst : Sir, my last question, and I'll jump back in the queue. You said that product awareness and availability has -- should be there. So as you said, the market is shifting from the unorganized sector to the organized sector. So what steps Mallcom is taking for product awareness and availability?

Question: Aradhana Jain - B&K Securities India Pvt Ltd. - Analyst : Just to follow up on the previous question. So on the other expenses side, like you said that the -- you actually incurred expenses on the advertisement and sales promotion. So could you just give us how much have you spent on that in terms of your percentage of sales and whether going forward, that's going to continue or it's a onetime cost that you've incurred towards selling and consultancy costs? How are we placed on that?

Question: Aradhana Jain - B&K Securities India Pvt Ltd. - Analyst : Understood. Secondly, your inventory has gone up in the first half of the year. So what are the reasons for that? And is there any seasonality angle to your business because of which you put in more inventory in the first half?

Question: Aradhana Jain - B&K Securities India Pvt Ltd. - Analyst : Understood. Just last one -- last question from my end. The e-commerce website that you guys have launched. So any thoughts on that? What's it going to be like? What are you expecting from, it will also cater to B2C or it will also have B2B clients, what sort of expectations are there from the website?

Question: Rushabh Shah - BugleRock PMS - Analyst : I had one question. On the pricing front, can you explain in detail the domestic and the international front? What is the difference in the strategy you use as well as the difference in the price between you and the peers on both domestic as well as the international?

Question: Rushabh Shah - BugleRock PMS - Analyst : Okay. And sir, last thing, I just wanted to ask, there is let's say, on the to November 21 of November 23, there's an exhibition on the premier occupational safety and health event. Is Mallcom coming in?

Question: Rushabh Shah - BugleRock PMS - Analyst : Yes.

Question: Manav Vijay - MV Investments - Analyst : Rohit, I have, let's say, two questions for you. If you could just help us understand, I think you were sounding positive for demand in EU and for US as well. So is it more to do with the outcome of the US elections? Or is it more fundamental in nature because the manufacturing activity is making a comeback in these two continents?

Question: Manav Vijay - MV Investments - Analyst : Sure. Okay. Second question is, so we have done roughly INR130 crores of sales in this quarter, 20% up Y-o-Y and 26% up quarter-on-quarter. Is there any one-off that you can call out that was there in this quarter, which helped you to have this kind of growth or it was business as usual?

Question: Manav Vijay - MV Investments - Analyst : Okay. So the probability of you, let's say, repeating this quarter number in H2 as well, is the probability is high or that is low?

Question: Manav Vijay - MV Investments - Analyst : Okay. My last question is, can you spell out the CapEx for next year? Because I believe that this year, your second round -- your second phase of Sanand will get done and also the expansion that you are doing in Ghatakpukur as well, that should get over. So what do we have for FY26?

Question: Manav Vijay - MV Investments - Analyst : Okay. And Rohit, if you can also share about the land in Kolkata, has anything happened further on that?

Question: Manav Vijay - MV Investments - Analyst : Okay. And Shyam, this amount of INR27 crores is already there in the cash flow? Or is it yet to come? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 14, 2024 / 6:30AM, MLCM.NS - Q2 2025 Mallcom (India) Ltd Earnings Call

Question: Anik Mitra - Finnomics Solution - Analyst : Sir, can you give me a road map for your INR1,000 crore top line?

Question: Anik Mitra - Finnomics Solution - Analyst : Road map means how we will be arriving at INR1,000 crore top line. So production from the new facilities, what kind of revenue addition from various new facilities from your expansion and how this INR1,000 crores will be achieved?

Question: Anik Mitra - Finnomics Solution - Analyst : And are -- do we anticipate a similar kind of margin like as Mr. Shyam was saying about 15% target margin, EBITDA margin. So at INR1,000 crores, can we anticipate 15% margin? Or are you looking for something -- some addition over there, some further expansion over there?

Question: Anik Mitra - Finnomics Solution - Analyst : Okay. And any ballpark number for -- I mean, saying about in ratio terms, what is the contribution of helmet, gloves and shoes in the top line?

Question: Abdul Qadir - - Analyst : This is Abdul Qadir here. So just a couple of questions, sir. So just wanted to understand now with the US election is behind us, like this China Plus One policy, like what opportunity this could throw for us? So if you could just please explain in terms of numbers, if you can just throw some light on it, like how much opportunity can we expect from this?

Question: Abdul Qadir - - Analyst : So like is it possible to give a sense based on like historical trends, so like in '17, '18 when this thing had happened, so what quantum of growth had come to us? So is it possible to at least get a sense on that?

Question: Abdul Qadir - - Analyst : Understood. Just one more follow-up. Sir, just wanted to understand your point of view, like if there is any acquisition which you guys are contemplating, so to achieve our INR1,000 crore target sales, is there anything on table or if it comes during the course of the year, like is it possible?

Question: Tushar Vasuja - Yogya Capital - Analyst : I have a couple of questions on the new capacity. So firstly, what would be the margin profile of the new products in Sanand facilities?

Question: Tushar Vasuja - Yogya Capital - Analyst : And sir with eye protection?

Question: Tushar Vasuja - Yogya Capital - Analyst : Okay, sir. And sir, how much additional manufacturing capacity will you get after Sanand and Ghatakpukur CapEx? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 14, 2024 / 6:30AM, MLCM.NS - Q2 2025 Mallcom (India) Ltd Earnings Call

Question: Tushar Vasuja - Yogya Capital - Analyst : Okay, sir. And sir, can you give a capacity or revenue breakdown from the, let's say you're saying INR100 crores for the Sanand capacity. What would be the breakup in terms of eye protection, gloves and helmets?

Question: Tushar Vasuja - Yogya Capital - Analyst : Okay. And sir, last question, what would be the utilization ramp-up schedule for Sanand facility?