Dollar Industries Ltd
NSE:DOLLAR
Earnings Call Analysis
Summary
Q3-2024
Dollar Industries reported solid third-quarter financial performance with a substantial year-over-year increase in income by 16.4%, boosting revenue to INR 323 crores. The company's net profit also soared, displaying an impressive growth of 128.9% to INR 17.7 crores, while gross margins expanded by 375 basis points to 33.9%. Commitment to premiumization and the effectiveness of Project Lakshya have been pivotal for their market expansions, especially in the Southern India region. With sustained raw material price stability and operational improvements, the company projects year-to-date revenue growth of 8.6% and net profit growth of 9.8%, aiming for a robust 11-12% revenue increase for the fiscal year. The cash conversion cycle has improved and advertising expenses are maintained, with e-commerce and Modern Trade channels being scaled up, targeting a contribution of around 8% by FY '26.
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Ladies and gentlemen, good day, and welcome to Dollar Industries Q3 FY '24 Earnings Conference Call hosted by PhillipCapital India Private Limited. There will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Kedia from PhillipCapital India Private Limited.
Good afternoon, everyone. On behalf of PhillipCapital, it is a pleasure to host the management of Dollar Industries for the Q3 FY '24 Earnings Investor Call. There will be an investor presentation from the management followed by Q&A session. From the management side, we have Mr. Ankit Gupta, President Marketing; Mr. Ajay Patodia, Chief Financial Officer; and Mr. Gaurav Gupta, Vice President Strategy. Now I would request the management to please take over the call from here on and address the investors. Thank you.
Good afternoon, and a very warm welcome to each one of you. Thank you for joining us today for the Dollar Industries Q3 FY '24 Earnings Investor Call. Gaurav and I will take through take you through the business and operational highlights of the quarter gone by. While our CFO, Mr. Ajay Patodia, will share the financial metrics. We are happy to state that the company's total income increased by 16.4% year-on-year, reaching [INR 323] crores in Quarter 3 of financial year '24. While the total volume grew by around 30.4% year-on-year on a 3-month basis, and 23.4% on a 9-month basis. Net profit for the quarter grew significantly by 128.9% year-on-year to INR 17.7 crores. We are pleased to see that the company has emerged stronger from the challenges of FY '23. Raw material prices have stabilized and high cost inventory is no longer within the system. This is evident in the gross profit margin, which has increased by 375 basis points year-on-year to reach 33.9% in Q3 FY '24. Quarter 3 in general, is a seasonally weaker quarter, which was further impacted by the delayed winter this year. Revenue growth for our business needs to be seen on an annual basis as there is a significant amount of seasonality in our business due to seasonal products, which invariably impacts sales quarter-on-quarter. Thus an evaluation based on the overall annual performance would offer a more accurate reflection of our performance and growth. To this effect, our year-to-date revenue grew 8.6%, whereas our year-to-date net profit grew 9.8%. Due to the early onset of Eid and continuing penetration of Project Lakshya, we anticipate a robust and promising Q4, hence, we are confident of achieving our target revenue growth of 11% to 12% in the current fiscal year. The cash conversion cycle in Q3 FY '24 improved to 155 days down from 170 days in Q3 FY '23, largely attributed to a 14-day reduction in inventory. This reduction in inventory days can be primarily attributed to the removal of high-value inventory from the system. In Q3 FY '24, our advertising expenses amounted to INR 19 crores whereas in Q3 FY '23, it was INR 20 crores. Our annual target for advertising expenditure remains within the range of 6% to 6.5% of our top line. Modern Trade and e-commerce sales accounted for approximately 7.5% in Q3 FY '24 and 4.4% of our total sales in 9 months FY '24. Our goal is to raise this figure to around 8% by FY '26. Our commitment to sustainability remains a top priority, and we are dedicated to implementing eco-friendly practices across our operations. This includes our focus on reducing our carbon footprint and promoting responsible manufacturing processes. Also with the commissioning of our latest solar power plant, our capacity has increased from 75 lakh units per year to 100 lakh units per year. Thank you. Now Gaurav will give further information on the business and operational highlights of the quarter gone by.
Hello. Good afternoon, everyone, and a warm welcome to each one of you. Our strong revenue outlook, coupled with stable raw material prices and strong push towards premiumization will help us sustain and grow our margins. Our strategic decision to appoint Saif Ali Khan as a brand ambassador for dollar always has yielded good results, with economic segment revenue increasing by more than 24% year-on-year. Additionally, we have also witnessed remarkable growth in volume in this segment, up by 35% year-on-year. Response to our recently launched Force NXT activewear and woman's athleisure products in the quarter gone by has been overwhelmingly positive. Force NXT grew 60% year-on-year in value and 54% in volume terms, which reinforces our commitment towards growth in higher-margin segment. The strong growth witnessed in Force NXT portfolio gives us the confidence that the premium segment will continue to play a vital role in achieving sustained revenue and profitability growth in the future. Turning our attention to Project Lakshya in Quarter 3 FY '24, we welcome 9 new distributors into this initiative, increasing our total distributor count to 280, a significant rise from 229 distributors we had in FY '23. We are happy to report that Project Lakshya's contribution to the company's domestic sales has grown from 19% in FY '23 to 27% in 9 months FY '24, and 29% in Q3 FY '24. Presently, we have Lakshya distributors operating in 13 states, and our expansion efforts are ongoing. We are aiming for Project Lakshya distributors to contribute 65% to 70% of our revenue by FY '26. Historically, our company has not had a robust presence in the market of Southern India. Nevertheless, following the effective implementation of Lakshya in these areas, we expect a substantial rise in growth opportunities and revenue generation. We are also pleased to share that the Southern India region contributed approximately 9% to our revenue during the first 9 months of FY 2024 driven by the success of Project Lakshya, technological advancements, product launches, strive towards premiumization and overall growth in the industry and the economy, we believe, we are well poised for strong top and bottom line growth in the near future. Thank you, everyone. Now I hand over the call to our CFO sir, Mr. Ajay Patodia, to talk about the finance metrics. Thank you.
Thank you, Gaurav ji. Good afternoon, ladies and gentlemen. Many thanks for joining the earnings call. I will give a brief overview of the financial numbers for the quarter before we open for question and answer. I hope everyone would have got a chance to look at the earnings presentation and the press release by now. While Ankit Ji, has already covered the macro outlook, I will try to explain in a more granular manner, the financial performance of the quarter gone by. Our revenue from operations rose by 16.2% year-on-year which is to INR 332 crores in Quarter 3 FY '24 from INR 285 crores in Quarter 3 FY '23. Gross profit is INR 112 crores, witnessing a strong year-on-year growth of around 30.7%. Gross profit margin for Quarter 3 FY '24 stood at around 33.9% against 30.1% in Quarter 3 FY '23, expanding by 375 basis points year-on-year. The year-on-year margin expansion is indicative of the stability in raw material prices, which had posed a significant challenge to the industry during FY '23. Operating EBITDA in Quarter 3 FY '24 shows strong growth, increasing by 68% year-on-year, reaching to INR 33 crores. The operating EBITDA margin for the quarter expanded by 304 basis points year-on-year to 9.8%. Profit after tax for the quarter witnessed substantially 128.9% year-on-year growth, reaching to INR 17.7 crores with the PAT margin reaching 5.3%. I will quickly run you through the brand wise contribution for the quarter. Our mid segment, Big Boss contributed around 38%. Our economic segment, thermal, regular Lehar brand contributed around 36%. Thermal in this quarter contributed around 10.63%, Force NXT around 4% and Dollar Socks around 3%. Our commitment to strategic priorities and growth pillar remain unwavering as we focus on our long-term objective of achieving sustainable growth and profitability. With a strong quarter and focus on premiumization, we are confident in our ability to achieve robust revenue and profit growth in the current financial year as well as in the near future. With this, we will now open the floor for the question and answer.
We will now begin the question-and-answer session. [Operator Instructions] Our first question is from the line of Devanshu Bansal from Emkay Global.
Sir, our 11% to 12% growth for full year, sort of implying 18% to 19% growth in Q4. So I wanted to check if you could break this growth expectation into volume and realizations for Q4. That will be helpful.
The thing is that in Q4, we are on track to have 18% to 19% kind of a growth. So that on a yearly basis, our overall growth will definitely stand between 11% to 12%.
No, that I get it, sir. I was just asking if you could provide a breakup of that 18% to 19% into volume and realization, as in what would be the volume?
So overall, volume growth on a yearly basis will be somewhere around 23% to 24%.
On an [indiscernible] the volume, 9 months is also at 23%. So for full year, if you're saying 23% then Q4 will also be 23%, right?
So Q4, I think we will have to do around 25% -- 20% -- 25%.
25%, then the 6%, 7% will be a realization decline. That is the trend which has been there for 9 months. So on this, sir, last year, Q4 base itself was very strong. We did about, if I'm not wrong, 7.2 million pieces, volume, right? So we are expecting another 25% growth on that. So if you could just help me understand because we have never done that such kind of a number in Q4. So how confident are you? And what are the growth drivers that you are seeing that should help you sort of achieve that number?
See, if you see a couple of years back, we had never touched INR 400 crore also. But last year, we did this year, also in Second Quarter, we crossed INR 400 crore mark in Q2, right. So the thing is that in Q4, what will happen is that the distributors who were skeptical before because of the decreasing raw material prices, that is no more there in the market, the sentiments have neutralized. The market has stabilized. The cotton prices have stabilized. And secondly, the Eid is early. So Eid is on somewhere around 8th April. So most of the sales would happen in the Fourth Quarter of this particular fiscal. So that is also a major chunk, which happens around INR 50 crores to INR 60 crores business comes from our Eid sale only. So I think all this taken together and with the Lakshya project also growing at a faster rate. So all these things taken together, I think we should be able to do INR 500 crores business.
Got it, sir. And my checks sort of suggest that there has been a considerable increase in the credit period being offered to the channel partners. So just because the demand environment in the entire apparel retail space has been muted. So are you also sort of witnessing that kind of trend with your channel partners, your outlook [indiscernible].
No, not really. Actually, like March 23, our receivables days were somewhere around 109 days. Currently, they are standing at 105, 106 days. So we don't see that kind of a trend happening, particularly in our industry. Yes, maybe in the garments industry readymade if you talk about textile, there might be some credit period being given, but not in hosiery industry.
And you expect this 105 days to continue for Q4 as well? So that year-end number will be similar at 105 days, March '24?
See, since Q4 is always ready for any industry. So it does -- if you see on an absolute amount, the debtors, so it would be on a similar lines.
Our next question is from the line of Ankush Agrawal from Surge Capital.
Firstly sir, what would be the like-for-like for Lakshya. So what would be the like-for-like growth for Lakshya project during the quarter?
So during the quarter, if you look at Q3 numbers, so the overall revenue contribution, which has come from Lakshya project is around 29% in this quarter and 9 months ended, it's 27% of total revenue contribution.
Yes, I got that number, but what would be the like-for-like volume growth? Like in H1, it was 32%, right? So for the 9 months can you give for the Third Quarter that [indiscernible].
In Quarter 3, it's almost at a similar kind of a level because Quarter 3 witnesses most of the thermal sales. So most of the thermal sales happen in Q3 and most of the states that we have opened in Lakshya project does not sell thermals because it is either west or central or south -- southern part of India. So it's only Rajasthan and Haryana which have sold thermals this year. So that's why the volume growth won't be that much as compared to at a company level, but it's almost at a similar level.
Similar to what? H1?
No. If we talk about 9 months -- so the Lakshya distributors who were present last year also during the 9 months and the same distributors who were here also are doing around 10% kind of a growth as compared to the company average at 8.5%.
Revenue growth?
Yes, revenue growth.
Okay. Secondly, sir, for last couple of quarters, we have been seeing this divergence between the volume growth versus revenue growth which is the price cuts that we have taken. So at what point we will reach that base, where we won't have this negative impact of price cuts, I believe, it should be from Q1 of FY '25. Will that be right?
No, it is -- I think it is from Q2 of FY '25. Q1 FY '24 is the peak.
Our next question is from the line of [ Nida ] from [ Professional Investor ].
So you said peak was Q1 FY '24, I think peak was Q1 FY '23, right?
Yes, yes. Actually, it is -- Q1 FY '23 is the peak and Q1 FY '24, we can -- [things are level].
So from Q1 FY '25, can we expect the price degrowth to stop? Or do you think more quarters will be needed?
So by Q1 FY '25 -- I would like to correct this thing that from Q1 FY '25, we'll see the ASP level being almost equal to Q1 FY '24.
Okay. And going forward, in FY '25, do you think Y-o-Y will be able to build any price growth? Will it we be flat? Or do you expect again more degrowth in FY '25?
So in FY '25, we are aiming for a 12% to 13% kind of a growth at a revenue level. And in that 4% to 5% would be a value growth and rates would be driven by volume.
Okay. Got it. Sir, this quarter, you've had a 30% volume growth. So what is prompting such strong volume growth?
So the volume growth has come majorly from Dollar Man and Big Boss and Dollar Always [Lehar], which is our economy range of products and Force NXT. So we have seen overall in terms of volume, we have seen around 28% growth in Big Boss, while Lehar economy range of products showed a growth of 40%. And Force NXT showed a growth of 54% and thermal is also 19%.
Sir, next year, then why is your volume growth estimate only about at 7%, 8%?
We need to look at one thing that Q2 and Q3 of last fiscal year, the sales were already down. So the base was a bit low. And that is the reason why we are seeing a huge volume growth this particular fiscal year, but at a normalized level and the target that we are aspiring for, which is INR 2,000 crores by FY '26, 12% to 13% growth should do.
And your guidance, you've maintained throughout that around 11% to 12% revenue growth, but you've also said 11% EBITDA margin for this FY '24 which means that in Q4, along with INR 500 crores of revenue, you could deliver about INR 70 crores of EBITDA, which means 14% EBITDA margin. So are you holding on to that guidance? Or are you lowering the EBITDA guidance?
So currently, currently, we -- on a 9-month ended basis, we are at an EBITDA level of 9.7%, and in Q3, we have already done 10.53% at an EBITDA level. So I think 11% is achievable, like 10.5% to 11% is very much doable for the whole year basis.
For the whole year, which would mean Q4, you would have to do significantly higher, like around 14%?
Yes. So if you see quarter-on-quarter basis also, our GP margin is also improving and getting stabilized. So like on -- in Q4, our GP margin was 34.12%. And on a 9-month basis, it is 33.08%. So if we compare it with Q3 of last year, the GP margin was 29.82%. So it's a 4.3% change, I would say.
And the gross margin expansion is happening because your realizations are not going up. So it's happening because your raw materials are getting even cheaper even now?
Yes. So there was a lot of high value inventory in our system, which is now finished because a lot of thermal products were also there. If you look at FY '23 number, the thermal sales were down by 30% -- almost 30%, at that point of time because of very weak winter. And this year also the winter has shifted, but a lot of our channel inventory has moved and high cost inventory of thermal which was there in our books has also been cleared.
Got it. So a couple of more questions on Lakshya, if I may. So first of all, like, can you tell us which are the states where you've been more successful with Lakshya, maybe the south [indiscernible] states, can you name them. And secondly, can you tell us what are the metrics that really -- how are you measuring impact of Lakshya? What are the key metrics that have improved in those successful states?
So the states which are doing the early good for us is Karnataka where we started off this project. Then we have Rajasthan, Haryana, Gujarat. These are the 4 states where we have completed this particular project, and we are seeing a significant growth in terms of volume and in terms of reach also. So the 3 metrics, which we follow, which we look after is the what percentage of enrolled outlet is being built on a month-on-month basis. And on a month-on-month basis, how we are increasing the number of retailers, how many new retailers have been added. The second thing is how are we able to increase the range at that particular retail outlet. So suppose the retail outlet is selling only Big Boss items. How can we add Force NXT or women's article in that particular store. So we monitor them on that basis. Plus, the third thing is the fulfillment of their orders. So we keep a very tight monitoring on the fact that if the retailers orders are getting fulfilled by the distributors or not and on a timely basis or not. So these are few of the metrics, which we keep a close watch on so that proper growth can be monitored.
So the question is that these are new distributors that you appointed? I mean they were first onboarded under the Lakshya system only or they were existing distributors who you have managed to convert? Because the sense I'm getting from what you're telling me is existing [Foreign Language], you're facing resistance, but it's easier to do it in markets where you're not that strong, maybe distributors are also coming new. So any commentary on that?
Yes. So to answer your question, we have got mixed states with us. If you talk about Southern India, where we have a little less presence compared to the other parts of India. There, we have seen significant growth and the distributors who have not been able to align to this project. We have got new distributors on board. And coming to our markets like -- which are very strong like Rajasthan, it's a very strong market for us. And most of the distributors have been aligned to this project and have been converted from non-Lakshya, that is the regular distribution system to this Lakshya distribution system. They have been educated about this. They have -- we have shown them what are the benefits of the system and they have aligned accordingly.
Okay. So Rajasthan and Haryana, can you tell us what kind of market share gains you've had due to Lakshya, if at all, anything?
Ankit, I think it is about -- Rajasthan is about 10%?
Yes 10% of our total sales. And Haryana is around 6% to our total 6% sales.
That contribution to your sales or market share gains?
So it is a contribution to our total sales. In terms of market share, it would be very difficult to tell because we are replacing the volume growth, which is higher than the usual volume growth that is happening, right? So Rajasthan which used to be somewhere around INR 85 crores, INR 88 crores, this year, Rajasthan will be closing at somewhere around INR 140 crores, INR 150 crores kind of a business. So we are replacing a good volume growth. But since there are a number of unorganized players also present in the market. It would be very difficult to tell to tell that specifically, what is the kind of market share gain we have done in terms of percentage or numbers. So you can't put a number to it, but definitely, we are gaining the market share in the market.
Got it, and the same number for Haryana, please? So INR 85 to INR 140 in Rajasthan and Haryana, what would that change be?
Haryana last year only, we completed the entire rollout. And this year, we are increasing around 40% kind of a growth in that particular space.
40% Y-o-Y sales growth.
Yes.
Our next question is from the line of Anik Mitra from Finnomics Capital.
This is Anik Mitra from Finnomics. So my question is, if you look at the raw material consumption cost, it stood at INR 210 crores in this quarter versus INR 109 crores in the last -- in the corresponding quarter of the last year. So that is 63% of the -- in the current quarter, it is 63% of the top line. And last year, same quarter, it was 38% of the top line. So -- but you say raw material consumption -- raw material costs have gone down. So can you please explain this?
Yes, sir, actually, if you want to compare the gross margin level, then you have to total the cost of net income June plus change in inventory of finished goods and work in process and add the subcontracts action phase. Actually, we have to arrive COGS, cost of goods sold, so we have to add the 3 items, then you gain the real picture.
So that is fine. Gross margin, I can see a 1,400 basis point improvement over there, from 45% to 59%. It is clearly visible. But raw material consumption cost, like it was INR 108 crores last year, INR 109 crores last year, now it is INR 209 crores. So what made the entirety?
You add the change in inventory of finished goods and work in process, sir. If you add that INR 108 crores plus INR 47, is around INR 155 crores. And if we do INR 210 crores, you reduce by INR 73 crores. Can you get the clear picture?
So it is under a similar level, sir.
Okay, under similar level. Okay, fine. My next question is regarding your utilization. Can you give me your utilization level at this point of time?
Utilized in regards with our efficiency level, you want to?
Correct. Correct.
So in our hosiery industry, there is -- we -- our maximum work -- around 70% of the work is through the worker. So there is no installed capacity concept, but we are -- we have the record integration also. So around 20% to 30% of our total manufacturing production right now 70% is on the job. So we are very flexible. We can increase our capacity by 20% or we can reduce our capacity by 20% just by increasing the number of job worker or reducing the number of job worker. So we are flexible in case of our utilization actually.
Okay. Okay. So capacity constraint is not there?
No, no.
Okay. And sir, what is your demand outlook for FY '25 in terms of economy segment and premium segment?
So we are -- so for FY '25, if everything goes well and if the market is stabilized, no any external factors happening in the industry or the business, we are seeing growth. We are hoping for a good growth in both economic segments as well as for the Force NXT, which is our premium product. So in premium products, we are hoping to have at least 30% to 35% kind of a volume growth.
And also, sir, there is good outlook for the consumer demand also and in interim budget announced by the government of India and so many projects for the rural and the cities. So there is money in the end of the rural India, basically more network in Tier 2 and Tier 3 network. So we get a good result out of this. So FY '25, we have a target to achieve our target by 13% -- 12% to 13% revenue growth.
Our next question is from the line of Gunit Singh from Counter Cycle.
So you mentioned that we would be crossing INR 500 crores in revenues in Q4 and doing about 14% EBITDA margins. So is it fair to expect about INR 70 crores of EBITDA in Q4?
Yes, it's at INR 500 crores operating [indiscernible] will also roll in the higher EBIT actually and operating margin also increased due to higher margin product sales, and we have a target to pay them [indiscernible] our product. So we can -- that's it achieve that around 13% to 14% EBITDA in the next quarter.
And sir, what percentage of product is premium currently?
What percentage of the percent?
Of products are premium products.
Premium products, including our export is around 14%.
In this quarter?
In this quarter.
All right. Sir, can you throw some light on the royalty that we paid to Dollar Private Limited? How much royalty did we pay in this quarter?
It is only 4.3 actually. This is only a minimum amount, which is -- we have prepared, 0.03%.
0.03% of the sales?
Of the sales.
And sir, is royalty paid on sale of every product or only 13 brands?
No, only the product which have the Dollar brand like our premium segment Force NXT, not every Dollar brand. So royalty on the Force NXT is not paid, only on the Dollar brand product we pay the royalty.
So any brand which has Dollar written on it, we pay royalty on that. Not any other brands?
No.
Our next question is from the line of [ Dal Shil ] from Crown Capital.
So a lot of my questions have already been answered. So just wanted to ask, sir, for FY '25, as you will be starting on a lower raw material prices, and we expect to take some price hikes. So number one, will the price hike be in H1 or H2? And as due to the higher premiumization, could we have better margins also going forward in FY '25 because our prices are in control, and we should have some leverage also because -- so just wanted to pick your brain a bit on margin.
So the thing is that we'll be taking some price hike in H1. That's what we are planning for. And secondly, there will be some addition because of the premium products as well. Like Force NXT is doing really well with an ASP of INR 275, which was earlier somewhere around INR 250, and then the athleisure products are doing really good. The contribution coming in from athleisure product is around 12.5% overall, which used to be -- like during COVID time, we launched it. And last year, it was somewhere around 10% to 11% and slowly its contribution to our overall sales is also increasing. So that will also help us increase in the overall ASP of the product. So these are some of the factors which will help us have the value growth and plus volume growth is always there.
[indiscernible] like in March '21 or before that also we were able to clock in 13% EBITDA, so is that a possibility for FY '25 because you've maybe done it in the past as most of our problems of bottlenecks are behind us?
Yes. So by FY '25 on an annual basis, we are aspiring to have 12% to 13% kind of an EBITDA level. And by FY '26, I think it should come between 13% to 14%.
And FY '26, you're targeting INR 2,000 crores, correct, sir?
Yes. Yes, yes.
Okay, sir. That's great to know, sir. And just wanted to ask like, could you just give us what are our ASPs on a season FY '22, '23 and currently, sir?
So overall ASP of our company in FY '22 was INR 71.11 vis-a-vis FY '23, which was somewhere around INR 69. And FY '24 until now it's going at a rate of INR 60 and INR 69.
Okay. So we should be able to come back to FY '22, that won't be like -- that will only give us our later price [indiscernible].
Yes.
Our next question is from the line of Rehan from Equitree.
You mentioned, I think, at the start of the call as well as in the middle that thermal sales haven't been good because of the delay in winter. By any chance do you see a cover-up or a catch-up happening in quarter 4 of this year?
No. Actually, majority of our sales happens in the start from the month of September onwards. So Q2 sees around 40% to 45% of our thermal sales and rest of the sales is covered in Q3. And so we supply to the distributors and thereafter distributors supplied to the retailer. So the delayed winter, which happened in January, no primary sales happens on the company side. But yes, the tertiary sales and the distributor clears up this channel inventory so that is also a good part that the winter has come in the month of January and all the stock has been cleared from the channel partners. So next year, we won't see any blockage happening.
And second question would be on the EBO front. How many more EBOs have added in this [Technical Difficulty]?
So currently, we are standing at 18 EBOs and we are -- we'll be adding in the first half of the next fiscal, some of the EBOS. We are planning to open 5 to 6 -- another 5 to 6 EBOs in some time.
You mentioned 18, 1-8, EBOs are there and 5 to 6 more in coming first half of FY '24?
No, first maybe by first quarter of next fiscal, you should see 5 to 6 EBOs being added.
And they're all [indiscernible]?
[indiscernible].
Okay. And I think I missed the segmental growth for each. Could you help me out with the same on a 9-month year-on-year basis, for Dollar Always, Dollar Man and et cetera, the categories?
So Dollar Man would be like Big Boss, 9 months ended, we saw volume growth of around 12%.
Okay. Year-on-year?
Yes. You can only range our product 35%.
That's Dollar Always?
Yes, that's Dollar Always. Thermals, which is -- Dollar Thermal is 22%. Missy 8%, which is Dollar Women. Force NXT is 52%.
Is a 9-month year-on-year growth, right?
Yes, 9 months year-on-year basis.
Our next question is from the line of [ Iyesh ] from Company [ One Dilwala ] Family Office.
First off, it took us about 4 years to get to a 30-odd-percent penetration in Project Lakshya, and we are now targeting to get to 65%, 70% by FY '26 in another 2 years. So what is giving us the confidence that we'll be able to move significant?
So there are a couple of things. Actually, when we started this particular project, we started off with Karnataka as a pilot rent. Then we took Rajasthan also as a market for piloting because Karnataka was the weaker market, and we also wanted to see the results in our stronger market where all the nuances of generated is happening, whether it's the encroachment of areas, rate cutting, wholesale model. So all of these problems -- but their present in Rajasthan state. So we started off with that, then COVID came. And it took away 1, 1.5 years from us because there was no free work happening and this particular project requires a huge sale book. So that was the reason why we got delayed.
The second thing is that at a similar level, we are 5 players, right, and there are a number of unorganized sales also, which are present in each and every state on a rural basis or a state basis. So a fight for market share or the share space is always there in the market and it's very aggressive. So we don't want to get a dent on our sales, in fact, we have been very cautious and penetrating the gray areas, there are areas where we are weaker and not present to cover up the sales because our distributor generally takes 3 to 4 months to stabilize in this particular project. Since -- till then, that particular area still suffers a bit. So instead of having a sales dent, we have taken a cautious step or a strategy so that we don't lose on our sale share or our market share, in totality.
Got it. And when do we plan on taking the UP market as well as part of Project Lakshya?
So UP is a very big state. And so we take UP or divide into two parts, Eastern UP and Western UP. So maybe after a year, we can plan for Eastern UP, but currently, because UP is a very big market for us, around 16%, 17% contribution is coming from this particular state. So currently, we are not planning to have UP. But if we start UP, we'll start with the Eastern UP first.
Just one last one. You had mentioned there were a few states, Rajasthan, Karnataka, Haryana, where the rollout has been done successfully. So can you quantify in those states, how much of the incremental growth, so the growth above the system level growth is being driven by increasing reach, how much of the growth is driven by reach expansion? And how much has been driven by increasing assortment or increasing shelf space at the retailer?
So currently, I don't have that data handy in terms of percentage as to before Lakshya and after Lakshya, what was the growth in absolute amounts a year from like Rajasthan in a couple of years from INR 88 crores to INR 150 crores. Gujarat, from INR 25 crores to -- we are aiming for INR 50 crores, INR 55 crores this year. So these kind of figures are handy figures, but in percentage term, proper analysis, it's not handy right now, but you can always get back on the [indiscernible].
When you say qualitatively, which do you think has been more important to increasing reach or increasing services, qualitatively? Just qualitatively, which factor has been more important in the growth? Is it the reach expansion? Or has it been assortment for throughput expansion per dealer?
So in Phase 1, what we focus on is the reach expansion, and then we try to increase the range at each and every store. So these are the two basic things that we work on, increasing the reach and range in the market. That is the only way you can penetrate deeper into the market and of course, the service part is always there, like the supply to the retailers on time, supply to the retailer. So that service part is always there. But the two major factors that we depend upon is increasing the reach and the range in the market.
Got it. Just lastly, are we seeing any of the peers rolling out anything similar?
No, not really, actually. We have not heard about anyone coming out with a similar kind of a model. And it's very difficult to replicate also even though if they start thinking, they will take another 2 to 3 years to implement and you always get the benefit of first-mover advantage, right?
Our next question is from the line of Keshav from VT Capital.
My question -- most of my questions have been answered. I just have one question, please. Sir, if you can tell, though, what would happen segment for the company and on a TC and YoY basis?
Yes. Currently, our total working capital days is 155 days, and operation cost -- account receivables around 160, and inventory is around 112 and greater days is around 63. Inventory days is our -- with respect to our year-on-year basis last December '23 -- December '22, total working capital is 171. Currently, we also -- our inventory days is around 112 as the broker inventory for the current quarter [ is about 10% ], so we expect to maintain total inventory level in absolute coming around INR 6,500 crores. Out of it, 63%, 64% is the [ final goods ] and that is the raw material. And we are at trial to reduce tools by 26 to 120 days, overall working capital.
Our next question is from the line of Pallavi Deshpande from Sameeksha Capital.
Sir, just continuing on the previous one, the 112 days, what was the number last December for inventory?
126 days.
Secondly, I wanted to understand how much would be outerwear in the share of total revenue on a value basis?
With the percentage, around 19% of the total revenue comes from the outerwear and 81% from the innerwear.
Right, sir. And in terms of -- I think -- you have given this guidance for working capital target of 120 days. So where will the major improvement comes from inventory days or [ better days ]?
Basically, we have to reduce the database. We also implement the dealer financing scheme, which has also gone very successful. And currently, it is around 106 days in this quarter, but we have a target to reduce it to 65 days by FY '26. Maybe from the receivables. And also, we want to reduce the inventory days at the optimum level of 90 to 95 days.
And just like you said, this inventory on the thermal side, there was a good -- I mean, liquidation of this thing, this should be a year of restocking. Is there a correct way to look at it and as well the guidance that you provided may be conservative?
With regards to thermal inventory, currently, no any such inventory, not in major terms. There is a normal INR 5 crores to INR 10 crores stock is only in absolute terms in the inventory with the thermal products, which are carried forward to next year inventory. And already in this year, we already have that 22% volume growth in the thermal. So all our old inventory, which are in large season, we have to carry forward high-value inventory is already clear in this financial year. And basically, thermal inventory is not the major part we have carried, it will be around between INR 10 crores to INR 20 crores only.
And sir, lastly, on the Missy side, I just wanted to understand the women's wear that's not shown on -- I think there may be some decline in there, and it's not going right. So just wanted to understand what to be any reasons for that.
So in Quarter 3, we saw a muted growth in Missy because of seasonality. In actually in the winter season during the Quarter 3, the Missy sales are always -- the women segment, if you talk about [indiscernible] segment, it's always weak. So yes, this year is a bit weak, but nothing to worry. We'll -- for the year, the whole year -- on a whole-year basis, we are targeting a 20% kind of a growth in this particular segment.
And that's on the revenue or volume?
Volume growth.
Ladies and gentlemen, that was the last question for the day. I now hand the conference over to management for the closing comments.
I take this opportunity to thank everyone for joining this call. I hope we have been able to address all your queries. For any further information, kindly get in touch with us. Thank you once again.
Thank you, everyone.
On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.