Dollar Industries hosted a conference call
on May 22, 2024. In the conference call, the company was represented by Mr Ankit
Gupta –President, Marketing and Mr Ajay Patodia-CFO
Key
takeaways of the call
The company recorded highest ever revenue
for the full year and for Q4FY2024. This is on back of the company’s commitment
towards excellence, innovation and
customer satisfaction in thye ver evolving landscape of the industry.
FY2024
Revenue growth for the financial year
FY2024 was robust on back of healthy demand. For FY2024 total revenue stood at
Rs 1577 crore a growth of 12.7% YoY in line with the target of revenue growth
of 11-12%.
Total volume grew by 21% YoY.
The company has emerged stronger from the
challenges of FY2023, raw material prices have stabilised and high cost
inventory is no more in the system. This is evident in the increase in gross
margin increasing by 256 bps YoY to 32.2%.
Net profit stood at Rs 90 crore a growth of
71.7% YoY.
Brand wise Dollar always contributed 42%,
Dollar Men contributed 38%, Dollar thermals contributed 5% , Dollar women
contributed 9% and premium segment contributed 4% of the total revenue in
Fy2024.
Q4FY2024:
Due to early on set of EID and continue
penetration of Project Lakshya, the company had a robust and promising Q4FY2024
leading to highest ever quarterly income.
Quarterly total income stood at Rs 502
crore in Q4FY2024 increasing by 23.2% YoY.
Total volume grew by 17.6% YoY in Q4FY2024.
Gross profit stood at Rs 153 crore a growth
of 53.6% YoY. Gross margin stood at 30.6% as against 24.5% in Q4FY2023.
Increase in gross margin is primarily due to stabilising of raw material prices
which had posed a significant challenge in FY2023.
Net profit grew significantly to Rs 33
crore in Q4FY2024.
The company’s Force Next active were and
Women Athleisure has been encouraging in the last quarter. In Q4FY2024 Force
Next grew 32% YoY and 53% YoY in volume terms which reinforces company’s
commitment in growth in higher margin segment.
For FY2024 Force Next grew by 42% in value
terms and 52% in volume terms.
Premium segment grew by 28% in value terms
in Q4 FY2024 and 52% in volume terms and for Financial year Fy2024 premium
segment grew by 18% in value terms and 26% in volume terms.
Cash
Conversion cycle: It improved to 150 days in FY2024
as against 159 days in FY2023. This is primarily due to reduction in inventory
days which can be attributed to reduction of high value inventory in the
system.
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expenditure: In Q4FY2024 advertisement expenditure
stood at Rs 22.5 crore and for the whole year stood at Rs 100 crore in line
with the company’s annual target of 6-6.5% of the topline.
Debt: Debt has increased from Rs 166
crore to around Rs 300 crore primarily
due to increase in working capaital requirement and the company targets it to reduce
it to around Rs 120-125 crore by the end of financial year FY2025.
Finance cost is around 7-8% for the
company.
Project
Lakshya: The company added 10 new distributors in Q4FY2024
taking the total the total to 290
distributors from 229 as on Mar 2023.
The contribution of Project Lakshya
distributors stood at 26.3% in FY24, up from 18.6% in FY23. The company targets
Project Lakshya distributors to contribute 65-70% of its revenue by FY26.
In FY2024-25 the company has launched
project lakshya in 3 states including Madhya Pradesh, Jharkhand and Himachal
Pradesh.
Modern trade and e-commerce constituted 3%
in Q4FY2024 and 4% in FY2024. The company targets to increase the same to 8% by
FY2026.
Outlook:
Strong revenue outlook coupled with stable
raw material prices and strong push towards premiumization will help the
company to sustain and grow margins.
The company expects revenue growth of
12-13% in FY2025 and 13-14% in FY2026 primarily driven by volume growth.
The company targets EBITDA margin in the
range of 14%.
Dividend:
The board has recommended a dividend of Rs 3
per equity share of face value of Rs 2 each.
Management Commentary:
Commenting on the results, Mr. Binay Kumar
Gupta and Mr. Vinod Kumar Gupta, Managing Directors, Dollar Industries said: “We
are happy to announce that the company achieved strong all-round growth both in
the fourth quarter and in full year FY24. In Q4 FY24, the company recorded its
highest-ever quarterly income of ₹50,204 Lacs, marking a 23.2% year-over-year
increase. For the full year, total income stood at ₹1,57,677 Lacs, reflecting a
12.7% YoY growth. Additionally, the company saw a volume growth of 17.6% YoY in
Q4 FY24 and 21.4% YoY for the entire FY24.
Gross profit in Q4 FY24 grew 53.6% YoY to ₹
15,305 Lacs, as GP margin expanded by 609 bps YoY to 30.6%, whereas EBITDA grew
sharply by 372.0% YoY to ₹ 5,924 Lacs. EBITDA margin expanded by 872 bps YoY to
11.8%.
For FY24, Gross profit grew 22.6% YoY to ₹
50,588 Lacs, as GP margin expanded by 256 bps to 32.2%, whereas EBITDA grew by 58.4%
to ₹ 16,314 Lacs. EBITDA margin expanded by 298 bps YoY, crossing the 10% mark.
The company achieved PAT of ₹ 3,309 Lacs in Q4
FY24, up by 5,911.8% against the same quarter of the previous year, registering
a PAT margin of 6.6%. For FY24, the company achieved PAT of ₹ 9,020 Lacs,
showing a growth of 71.7% YoY, registering a PAT margin of 5.7%.
We are also happy to announce that the Board of
Directors has recommended a Dividend of ₹ 3 per share, subject to Shareholders’
approval, which is 150% of the face value.
The company remains steadfast in its commitment
towards continued growth and success of Project Lakshya, and we have added 61
distributors under this project in FY24. The contribution of Project Lakshya
distributors stood at 26.3% in FY24, up from 18.6% in FY23. We target Project
Lakshya distributors to contribute 65-70% of our revenue by FY26, and this will
go a long way in increasing our market share and improving margins.
Our company is experiencing robust demand and
an increasing proportion of higher-margin products in our portfolio. This positive
trend positions us well to achieve our desired topline and bottom-line growth
in the near future.”
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