Dinesh Gogna – Director and Sandeep Jain – Executive Director addressed the call:

Highlights of the call:

September 2018 quarter sales grew 16% to Rs 125.80 crore.

PAT fell 55% to Rs 6.93 crore.

Six months sales grew 8% to Rs 185.04 crore.

PAT fell 37% to Rs 13.17 crore.

Cotton sales which stood at above 60% of total FY18 revenue further increased to 68.3% in H1 FY19.

This shows company's shift towards Cotton from Woollen segment

Textile and Kids segment delivered strong growth, contributing higher revenue for the overall business.

Long term benefit of transitioning from unorganized to organized due to GST should happen over a period of time.

Profit margins fell as it sold more of Home furnishing.

Majority of revenues come from outright sales

The company does not require much capex for the next 2 years. During the 2 years growth will be achieved from higher capacity utilization.

Inventory and trade payables remained flat.

It has strong balance sheet with low overall debt.

The company is positioning itself as all fashion brand to reduce seasonality impact.

Sales outside North & East constituted 17% of overall sales during the quarter.

It is focusing on increasing presence in Southern and Western markets.

Woolen segment contribution will be lower in FY19.

MBOs (Multi Brand outlets) contributes major portion of overall revenue and accounted for 53% of sales in Q2 FY19.

Significant increase in MBO in the past is leading to stronger growth from MBO in last few quarters. In FY 2018 it increased MBOs from 2300+ to 2500+.

It is focusing to build a pan India presence and achieve regional diversification.

Will increase branding and promotion to further increase visibility and market share across India.

The company has increased focus on advertisement, as a results advertisement and business promotion expenses have gone up 106.7% during the quarter.

Average maintenance capex to be in the range of Rs 8-10 crore per year for the next two years.

It will also focus on online sales through own portal as well as Tie-ups with e-commerce portals such as Flipkart, Jabong, Myntra, Amazon and Kapsons.

It has three manufacturing facilities in Ludhiana, Punjab. One for woollen apparels and Two for cotton apparels.

It has entered into distribution agreements with some of the leading Indian digital commerce platforms for online sale.

This quarter production was higher than last year. The impact of this will come in December 2018 quarter as higher sales.

Long term borrowing stands at Rs 11.64 crore as of September 2018.

Cash balance stood at Rs 148 crore including cash and bank balance along with current and non-current investments.

The company is expanding presence in western and southern markets as well as expanding its product offerings in home furnishing and kids segments in order to reduce the overall seasonality impact

Sales guidance for FY 2018 is 15% growth. Q3 will see better margins. It still maintained guidance of profit margins being at FY 2018 levels.

Q3 generates highest quarterly revenues in any fiscal year.

Q3 typically involves sale of winter products.

Retail growth was 20% in value terms.

Woolen prices have been stable.

Committee has been formed to decide on buyback and will announce in next 30 days. It is going for Buyback as it thinks that the share price is below what it should be.

Overall annual advertisement will remain at 4% with seasonality during quarters.

Sales in South India are seeing growth of 30-35%.