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.

Advertisement 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.”