Mallcom (India) Ltd
NSE:MALLCOM
Mallcom (India) Ltd
NSE:MALLCOM
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Earnings Call Transcript
Other Earnings Calls
Ladies and gentlemen, good day, and welcome to the Mallcom India Limited Conference Call hosted by PhillipCapital India Private Limited. [Operator Instructions] Please note that this conference is being recorded.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.
I now hand the conference over to Mr. Vikram Suryavanshi from PhillipCapital India Private Limited. Thank you, and over to you.
Thank you, Mike. Good afternoon and very warm welcome to everyone. I'm from PhillipCapital. I'm pleased to welcome you all on earnings call of Mallcom India Limited. We are happy to have the management with us here today for question-and-answer session with the investment community. Management is represented by Mr. Rohit Mall, Associate Vice President; and Mr. Shyam Sundar Agarwal, Chief Financial Officer.
Before we start the call, we'll have opening comments from the management. And now I hand over the call to Mr. Rohit. Over to you, sir.
Thank you. It's a pleasure to welcome you to our earnings conference call for the second quarter and the first half of the financial year 2025. Let me first start off by thanking our host, PhillipCapital, for hosting today's earnings call. I'll begin with some operational highlights for the second quarter of the financial year 2025, after which our CFO, Mr. Shyam Agarwal, will provide a detailed briefing on the financials.
We continued on our growth path in Q2 of FY '25 with strong growth in top line and bottom line. In our effort to provide certified genuine products at list price and to cater to the ever-growing demand for both B2B and B2C, the company has launched a new e-commerce website with encouraging response. The company also launched newly designed single density sole with Docker and Doxle range of shoes, having wider toe caps for the Indian market, which is witnessing a rapid change in product demand with more and more value-added user-friendly products.
The company also participated in various exhibitions held in the U.S.A., Middle East, Europe and Southeast Asia, all well renowned and largely participated by key players worldwide and got very good response, interest and inquiries. On the CapEx front, the first phase of Sanand-II, Gujarat project being set up for manufacturing of Protec is nearing completion as per the schedule and trial run for manufacturing of Dipped Gloves is likely to commence in November 2024.
The company has already invested INR 75 crores against projected investment of INR 90 crores. Additionally, the Phase 2 expansion of Ghatakpukur for setting up a new unit for designing and manufacturing Industrial Safety Shoes with a built-up floor area of 50,000 square feet and a CapEx involving INR 20 crores is also progressing as per schedule with completion expected within FY '25.
Now I will request Mr. Shyam Agarwal, our CFO, to brief you on the financial performance of the company.
Thank you, Rohit, and good afternoon, everyone. Let me brief you on the consolidated financial performance for the second quarter and the first half of the financial year 2025. On a consolidated basis, operating revenue stood at approximately INR 129 crores, reflecting a growth of nearly 90% year-over-year. EBITDA for the quarter was around INR 16 crores, representing a growth of 3% year-on-year with EBITDA margin at 12.24%. The decline in EBITDA margin was mainly due to higher branding and sales promotion expenses, consultancy and other operating expenses.
The net profit was reported to be close to INR 10 crores, showing a yearly growth of 10% with PAT margin at 7.82%. For the first half of the financial year 2025, the operating revenue grew by around 14% to INR 232 crores. EBITDA grew by 2% year-on-year to INR 30 crores. EBITDA margin for this period was 13%. The net profit for the period grew by 5% year-on-year to INR 19 crores with PAT margin reported at 8.03%.
During the period, company made CapEx of around INR 45 crores and will be making additional investment of INR 30 crores during the current financial year against the completion of planned ongoing expansion projects, both at Sanand, Gujarat and Ghatakpukur, West Bengal. As stated earlier, the entire CapEx plan to be sourced through internal cash of the company. ICRA, the rating agency has once again affirmed the long-term credit rating of the company as ICRA A with a stable outlook. Thank you.
With this, we can now open the floor for the question-and-answer session.
[Operator Instructions] We have the first question from the line of Aradhana Jain from B&K Securities.
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.
Yes, the trials have commenced. So we -- within like -- right now, as we speak, I think this week, next week is when we are doing all these trials. And so hopefully, by the end of the month, we should have successfully set up the infrastructure for the trials and the trials will have been completed, and we would be ready for commercial production of NBR gloves. And the second line we would add is for PU gloves, which will happen right after, maybe by within 1 month or 2 months or so.
And regarding the other product line, I think helmets as well is something we plan to move and start production by December of this year. And the eyewear and other products will follow later. The first is the NBR, the PU and the helmets, which will start within this financial year itself and the others will take more time for development.
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 INR 100 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 INR 100 crores of peak sales to start kicking in?
Yes, I think for the current year, we will see INR 4 crores, INR 5 crores coming from this facility. And the INR 100 crores target should be hit. Hopefully, we are expecting it to hit within, let's say, 3 years' time.
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?
Exports have been -- the demand from the export market has been good, barring some countries which are like Turkey and Argentina, where they had their own internal issues and not being very imported heavily in those countries. The rest of the company have been good. Europe is coming out of the economic issues that they were in last year and with the war and everything. So it's getting better. And because last year, we have also had some of our -- where we couldn't fulfill the orders. So that's also happened and now we are on track. So that has also added. So it's a good place we are in.
And as compared to the competitive landscape, mostly and also because of, I think, Trump winning the American election, a lot of people, especially in the States and the rest of the country -- rest of the world, they are worried about the increasing taxes on Chinese imports into the country and probably they are looking to have a parallel supply chain, and we've had a lot of interesting discussions about this as well with Americans especially, that's also a country where we want to grow. So we are keeping a close watch, and we are hopeful that this will reap some good benefits for us.
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?
Yes. So this is almost like regular business for us. There are something or the other which is happening. Earlier, it was COVID and then this Red Sea crisis and there are container shortages in between also because there are very few shipping lines who are servicing worldwide. So it's a very oligopoly kind of market, and they control the prices, they control the availability. So our hands as a manufacturer are tied, even our importers hands are tied. But we try to ensure that we are able to service our clients, but that definitely leads to longer lead times and the revenue cycle extends for us. But I think this is just part and parcel of the business that we are in.
We have the next question from the line of [Rushabh Shah] from BugleRock PMS.
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 4 to 5 years? And what steps are we taking to add more distributors?
So that number specifically, [Rushabh], I don't have it ready with me. But if I'm not wrong, I think definitely, we would have added anywhere between 15 to 20 or maybe more in the last 4 to 5 years. And yes, we are always on the lookout for adding new distributors. And we regularly -- when we are going to, let's say, these exhibitions or conducting technical seminars, symposiums, we are looking for distributors.
We have a good healthy database and inbound inquiries also coming in for distributorship, and we consider each application properly, but we have a list of criteria, which should be fulfilled. We are also targeting the distributors which have better reach into the markets where we are not present. So these kind of regular activities are taken up on our end to ensure that our reach in the country and outside is covered properly.
So sir, roughly on the top of your head, you said around 15 to 20 distributors in the last 4 to 5 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?
Yes. So we definitely are a little picky with our distributors because a lot of people, not our distributors may also be doing a lot of volume for us, but they may not be, let's say, meeting the criteria. So we are getting it serviced through one of our existing distributors also because for us, as you know that we work on only a cash basis in the market. So that's an important criteria, which especially in India, not all distributors are oriented to this kind of working. So that's why it gets a little picky when we select our distributors, but we would like to follow that.
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?
Yes. So certification is one of the USPs that we have apart from others. And that's definitely something that we would like to propagate more about. And in the last 4, 5 years, the government and BIS has been very active in ensuring that the certifications are followed and ensuring the cheap low-quality uncertified products are not imported or not manufactured or the fake and inferior products are taken out of the market or the market study is being done properly.
So we are definitely seeing a lot of now activity happening as compared to previous years. And we are hopeful that more and more standards will come into the picture and implementation of the standards will get even more stricter. And so -- but there's only a certain level that the government can do. It's also about the users and the purchasers them exercising their rights and being aware about the certification standards. So a lot of awareness also needs to happen with the users and purchasers.
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?
So it depends on the product category. So some standards, for example, standard for footwear, standard for helmets has been there for a long time, but the implementation was weaker, that's getting stronger. Something like a standard for hand protection, India still does not have it. So we need to make new standards, and there are already talks of making new standards. And a lot of these products, India did not -- like for high visibility clothing for, that was a recent standard that was created for the Indian market. So I think it is in different stages for the product category.
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?
In fact, a lot of steps, and that has been our idea to go into the market where we talk about the products. So we -- like I mentioned before, we do seminars and symposiums where we call safety officers and all the key decision makers and explain them about the standards and certifications and what kind of products will be used for what kind of hazard. We've actually recently partnered with Chacha Chaudhary and Sabu IP, where we are using Chacha Chaudhary and Sabu's character to propagate about safety standards and workplace safety and hazard in general.
And so these kind of activities when we're going into exhibitions, we are talking about these sort of things as well. And even if you follow our social media or YouTube or Facebook, that's what we majorly also talk about. So it's a regular and continuous exercise, and it's, I think, joint approach by everybody in the industry, including our competitors and the government. So these are some of the activities that we are doing to ensure that our users get the awareness.
We have the next question from the line of Kashvi from JRK Stock Broking.
I would like to congratulate the management on a great set of numbers. I have a couple of questions. So as we said, we are aiming for INR 1,000 crore revenue in 3 years' time. Sir, can you please elaborate like what are the specific drivers for the demand growth? And what percentage of growth is anticipated from domestic versus international markets in the coming quarters?
So in terms of demand, I think there is a healthy demand in the export market as well as the domestic market. Definitely, we would like to -- and I think the idea is and what will eventually happen is the growth -- large chunk of the growth will come from the domestic market. But like I said to a previous caller with the kind of landscape in the export market, it seems interesting that the export market will also likely to grow if we are able to meet the requirements for the importers. So on the demand side, I think there is sufficient demand for us to achieve this target. Now it is on us how quickly we are able to ensure that operationally and expansion wise, we are prepared to cater to demand and reach to our target in the defined time.
Okay. But sir, we do not have any clarification on the domestic versus the international demand, right?
Sorry?
But we do not have any bifurcation or any clarification, either domestic or international demand?
So I think it's a 60-40 ratio. I think probably in the next 2, 3 years, this ratio will start moving more towards the domestic. Eventually, we want to go into 50-50, but I'm not sure if that will happen in the next 3 years. But maybe in the long term, yes, , yes, that's where we want to move.
Okay. And sir, can you elaborate on the company's strategy for launching new products in segments like head and hand protection? And how much is the revenue expected out of these new launches?
So in terms of this -- so one, the NBR that we are doing, it's more of a product going into a single product because we're already doing NBR. But, PU, we are launching is a new -- it's a product extension that we are doing. Helmets is also not a product extension, but again, that's because we are adding more designs, more styles to it. Eyewear in the future, yes, will be an extension -- product extension. And I believe from the Sanand plant where most of the new things are happening, definitely INR 100 crores revenue is expected. And also from the Phase 2 expansion that we are doing in Ghatakpukur for shoes, I think maybe around INR 20 crores more additional revenue is what we are expecting.
We have the next question from the line [indiscernible], an investor.
Yes. Congratulations, Rohit, for the decent growth numbers, which Mallcom has done for this quarter. Sir, what would be the white label versus branded share as of now? And what are your thoughts on what Mallcom would like to be maybe next 3 to 4 quarters or when you reach INR 1,000 turnover?
So the split is very much similar as the export versus domestic because largely, we -- in domestic, we are only doing branded and some parts of Southeast Asia and Middle East where we are doing branded. So I think the ratio is largely 60% of private label and 40% of branded that we are doing, give or take a couple of percentage here and there. And going in the future, yes, that's what I said that 50-50 is what we're looking at. Maybe in the next 2, 3 years, it will start gradually moving. Maybe in the 3 years, maybe we see like 45%, 55%, something like that and eventually in 5 years, maybe 50-50 is where we want to.
And are you satisfied with the way things are moving towards '28 when broadly, you have projected INR 1,000 crores?
We definitely like to do better. We -- like if you ask me, we would like to definitely target before the time line comes. That's the best case scenario. But we are very mindful of what we have committed and we are on it. And like I said, it depends on a function of how quickly we are able to expand and how much operational efficiency we can bring to ensure that we are able to capture this demand. So there is -- like I said, there is demand, it just needs to be captured.
And one small follow-up, sir. Do you see the Indian safety sector in terms of statutory regulations improving over time, sir? Or it still remains flat?
So definitely, we are seeing most of the sectors in India in terms of compliances, they're getting better also because the statutory norms are getting stricter. And I think in general, because when the wages increases, the cost of labor is higher, you want to ensure that you're keeping your labors protected. Otherwise, there's a lot of implications and not to mention the cost of replacing that labor as well. So I think because of those kind of issues, it is getting more and more prevalent in the Indian landscape. And I think going ahead, also, a lot of these MNCs will bring in their international standards. So they are also influencing what the Indian MNCs are purchasing. So I think it's a function of all of these, and it is definitely getting better.
And sir, how easy or difficult is it to import these kind of stuff into India, sir?
Not so easy. It's a large country, a lot of different states have a lot of different regulations. Different industries work in different manner, a lot of bureaucracy as well in the country. So it is taking time, it won't come easy, and we have to see.
Is it easy to import safety equipment into the country or maybe something like a helmet or a glove? Is it easy to import? Or are there some restrictions on import of safety equipment?
Yes, yes. So it depends on the product. So the basic rule is if there is an Indian standard to it, then importers and the exporters from the other countries are required to have the BIS license. But if there's no standard, for example, in safety gloves, then anybody can import anything from anywhere. So it depends on, one, there is a standard or not; and two, how strictly they are being followed. Sometimes even with the standard, these things come into the country without any checks. But where there is no standard, then anybody can order anything under the sun.
[Operator Instructions] We have the next question from the line of [indiscernible], an investor.
So broadly, all my questions are answered. Just a quick comment. And sorry, I might have missed your initial remarks. So can you comment, I think this quarter, there was a big drop in our margins. So can you comment on that? And subsequent to that, second question would be, so when we reach our -- you said that the demand is there, market is to be captured. When we reach our target of INR 1,000 crores with all our capacities coming in and fully utilized with operating leverage coming in, so can we go to margins above 15%, 18%? Any thoughts, color on that for this quarter as well as when we reach INR 1,000 crores, what can we look at?
Shyam, if you can address?
Yes. So regarding margin this quarter, yes, definitely, we had a little bit drop in the EBITDA margin because of, as Rohit mentioned, and looking at our future growth plans, and we are now investing into brand promotion and marketing efforts as well as we have appointed a few consultants who are helping us in getting these targets and also some system-oriented issues like production efficiency, we are trying to improve.
So this is there we are investing. So these are -- for this half and quarter, we definitely have incurred some additional expenditure. But going forward, we don't see the percentage might be going down. And yes, definitely to take care of future growth requirement, we are doing this. So because of that, we had a little bit decline in the EBITDA margin.
Okay. And we reach a full-scale achievement?
Yes, definitely. In that case, the EBITDA margin has to improve. This is what we target. And as I mentioned that the effort we are taking now that is sort of investment which we are making and must give us better results and better margins also in the future.
Can it be above 15%, 18% range?
Not 18%, but let's target first 15%. So that will be the first step. And definitely, if we are doing 13%, 13.5% as of now with the operational efficiency, and we are also -- you will see that we are consolidating our operations also. So one big plant in Sanand, one in Ghatakpukur. So definitely, scale will give us some additional benefit also. So yes, let us target first 15%, and then we'll see. So that is achievable, yes, over the period.
We have the next question from the line of Aradhana Jain from B&K Securities.
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?
So it is for the period, it is in the range of 2% almost. So how it is happening that there is a consultant cost also in the range of 1%. And apart from that, we have -- as Rohit mentioned in his address, we are attending a lot of fairs and seminars, both in India, outside India. So this time, we attended in U.S., Europe also then Middle East, then South Asia. So everywhere, all the big fairs we are attending. So there has to be cost associated with this. So going forward, yes, this cost has to be there. But with the increasing turnover, definitely, the percentage will go down.
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?
No. So let me tell you this, in our type of business, we are supposed to keep the inventory in the range of up to 100 days. So this quarter and half, the inventory is basically in line with the growth also. So we had 14% growth, and there is an increase in inventory. Apart from that, definitely, as of now, what we have seen that last year also, we had supply chain issues. And because of that, to take care of that and also to increase the operational efficiency and productivity, we are keeping some buffer stock. So definitely, a little bit, not much, but yes, stock is on a little bit high side. But going forward, it should be coming down. But it remains in the range of 90 to 110 days that would be there because type of -- nature of operations we are into.
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?
So we were already on e-commerce marketplaces like Amazon, Flipkart, DMart, et cetera. Now after almost 2, 3 years of having experience from there, we have launched our own e-commerce website. This is in a very initial stage. The idea is to -- because we saw that there was demand from direct consumers for our products as well. So we thought, okay, why not reach out to them directly. So that's why -- this is primarily to cater to the D2C audience, also maybe to small consumers of our products maybe having 10, 20 pairs of orders for gloves, shoes, whatever. They don't want to go maybe through the distributor route as there's no benefit, so they would like to purchase directly.
So it's -- the idea is to capture that kind of a market. And we're very hopeful with our -- we have not done any marketing of this as yet, and we're already getting orders on it. So we are just engaging and improving also the website based on feedback. Hopefully, within 5 to 6 months or a year's time, we'll have more inputs on this.
We have the next question of the line of [Rushabh Shah] from BugleRock PMS.
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?
See, strategy-wise, the export market, we try to focus on each country, on each product category, which country, which product category makes sense for us, where we are competitive against, let's say, the other countries, mostly China and which is based on the raw material, based on duties, based on our expertise. So we filter it like that, and that's how we approach. And we try and target the large importers and brand owners there by visiting them and meeting them in the fairs.
And for the domestic, the idea is to increase the penetration in the market, add more distributors, add more resellers, have exercise done properly and also have a complete basket of product that they would like to buy. So the idea is to basically ensure a good distribution channel and service levels of our product. Obviously, in both cases, quality is the basic criteria that we have to meet. In terms of pricing, that's a very -- I can't make a generalized statement on -- it depends on the market. It depends on the product category. So we -- in the Indian market, brands are definitely not the most cheapest ones but there is a quality to each price, I would say. So it is very specific. It is a case-to-case basis.
Okay. And sir, last thing, I just wanted to ask, there is let's say, on the 21st to 23rd of November, there's an exhibition on the premier occupational safety and health event. Is Mallcom coming in?
Are you talking about OSH in Mumbai?
Yes.
We will be only going as a visitor, not as an exhibitor. We were -- we used to be an exhibitor in the past in that. And now we are not there as an exhibitor. We are participating in a lot more other industry-specific exhibitions, for example, we took part in bauma, which is for construction in Delhi. So we are going into other industries' exhibition more so than our industry's exhibition because that's a more smaller scale as compared to the other industries, which are much, much larger. So our strategy is that.
We have the next question from the line of Manav Vijay from MV Investments.
Rohit, I have, let's say, 2 questions for you. If you could just help us understand, I think you were sounding positive for demand in EU and for U.S. as well. So is it more to do with the outcome of the U.S. elections? Or is it more fundamental in nature because the manufacturing activity is making a comeback in these 2 continents?
So different reasons, I would say. So Trump election has just happened now. But what had happened before is that a lot of people were trying to prepare themselves in case of this eventuality. And if the tariffs are to be increased for, let's say, China-made products. So a lot of people have started this discussion of resourcing. So that's what -- one of the issues is that's what happened. And definitely, the other thing is the increase in the manufacturing activities in these countries. And for Europe, again, they -- it's not as great of a demand as, let's say, other countries because it's a very saturated market and the economy there itself isn't growing as much.
But definitely, they are also thinking of this China Plus One policy. And also for them, a lot of manufacturing that used to happen for the low-cost products from, let's say, North Africa or East Europe, that's also starting to get expensive because these countries are starting to get expensive. So that's why they're looking to move further east into Asia and also increase of their own manufacturing in some of the countries like France because of energy, mostly that's happening. So -- and in Europe also, not all countries have the same kind of demand and economy. It depends on country to country. But yes, there are different factors which are contributing.
Sure. Okay. Second question is, so we have done roughly INR 130 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?
This has been business as usual. And I don't think there's any one specific activity which happened. The only thing that I said in the past is last year, we had faced supply chain issues for our garmenting operations. And I think those back orders are also being cleared. So that's something that has added on to this first half of the year. But other than that, I don't think anything else has happened.
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?
We are trying to stay on this path, and that's the target and that's what we want to achieve.
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 FY '26?
Yes. So as I mentioned, this year itself, we are investing around INR 75 crores by March '25. And for the next year, as of now, there would be only normal capacity addition, which we keep doing. So normal CapEx in the range of INR 10 crores, which is routine CapEx we are doing. No specific further expansion is planned as of now.
Okay. And Rohit, if you can also share about the land in Kolkata, has anything happened further on that?
Rohit, let me answer this. So just look at the notes, which we account. So this year, we have received around INR 27 crores as advance from the JDA. And so what has happened that they have approached us with the proposal for outright sale, which we are still considering and the deal is yet to be finalized. So the idea is that instead of going for partnership thing, we might be coming out of this with an outright sale. And so whenever it happens, we will let you know. And yes, so that is what is happening as of now.
Okay. And Shyam, this amount of INR 27 crores is already there in the cash flow? Or is it yet to come?
Yes, it is already there in the cash flow as on date. So on the debt of the balance sheet that is 30th September, it was INR 17 crores and till date, it is INR 27 crores, which we have already received. And most likely, we will be going for the outright sale of the land. So whenever it happens, we'll let you know.
We have the next question from the line of Anik Mitra from Finnomics Solution.
Sir, can you give me a road map for your INR 1,000 crore top line?
Yes. But I don't understand what do you mean by road map.
Road map means how we will be arriving at INR 1,000 crore top line. So production from the new facilities, what kind of revenue addition from various new facilities from your expansion and how this INR 1,000 crores will be achieved?
See, in terms of markets and in terms of our business, as we mentioned, we -- I think out of that INR 400 crores to INR 500 crores should be from domestic and INR 500 crores to INR 600 crores should from the export market, which is also private label versus branded. That would be the mix. And the Phase 1 of Sanand and Phase 2 of Ghatakpukur should be able to add this kind of revenue. Maybe we'll have to start Phase 2 of Sanand as well for this, but that will only take maybe in a year's time. And the rest of the facilities are already geared up. We are regularly also based on -- and these are the fixed capacities that we are increasing, but there are also a lot of fungible capacities where we can increase -- we can add more lines to stitching.
So we can subcontract also. Those kind of things can also be done too. But those only happen once we see the order book is healthy and it's a sustained order book. So that's what we are trying to -- that's how we are trying to achieve. And also, like I said, the product extension happening and more depth into a product category also happening across product lines. So I think all these activities will help to achieve that.
And are -- do we anticipate a similar kind of margin like as Mr. Shyam was saying about 15% target margin, EBITDA margin. So at INR 1,000 crores, can we anticipate 15% margin? Or are you looking for something -- some addition over there, some further expansion over there?
No, I think as Shyam mentioned that the margin profile, I think will largely remain the same. We are not expecting it to grow. I think because also a lot of this expansion, the product development, the selling expenses are also increasing. So that's where margins also taking a hit. So we are hoping to maintain the same margins with the growth.
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?
Yes. So Rohit, let me answer this. So as of now for the current half, the shoe remains the leading contributor, around 42%. Then we have hand safety and garment equally 27%, 28% and the rest coming from other products like helmets. Helmets maybe 2% as of now, but it is growing fast. So this is what as of now we are doing.
We have the next question from the line of [ Rishav] from RSPL.
This is [ Abdul Kadar ] here. So just a couple of questions, sir. So just wanted to understand now with the U.S. 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?
Very difficult to quantify it because we are still going through the phase. And like I said, nothing has changed in business sense, but people are anticipating that things will change. It might also happen that things don't change and the duty structure still remains the same. But we are definitely receiving a lot of inquiries and new inquiries also and from the existing customers also increased inquiries, but very difficult to quantify it at this point in time. Our idea will be to grow and penetrate deeper into the U.S. market. And every year, every quarter, that number should increase for us and the revenue percent coming out of the U.S. should also increase for us. That is what our aim is.
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?
So even historically, U.S. was never a big market for us when in the past also, we are putting our effort, but it was a slow-growing market and because it is a market where it's difficult to get an entry into a customer. But once you have gotten an entry, it's a sticky customer as compared to maybe, let's say, European or South American customers.
So the efforts are still there. We would definitely like to grow in the U.S. in terms of percentage more than what the overall export growth is. So -- because we see more growth coming out of there. And we are also preparing ourselves in terms of the products that they like in terms of the raw materials that they like to ensure that we get the same thing that they are expecting from, let's say, China or any other competitor in India. I am expecting a healthy growth from that market.
So just to add on, we can refer to what is the world market size of PPE. So it is in the range of 60 billion almost. And most of it, so maybe up to 75% of this has been catered by China. So big market, basically, if anyone start talking of shifting it to some other place, just look at the numbers, how big the number can be. But to cater this, you need infra and capacity. So this is what will happen gradually and slowly. So this is what we are looking at trying it.
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 INR 1,000 crore target sales, is there anything on table or if it comes during the course of the year, like is it possible?
Yes. Definitely, we are always on the lookout. If an opportunity presents, we would like to take a look into it. We are not -- we aren't discussing with anyone actively right now, but if there's a possibility, we are open to it.
We have the next question from the line of Tushar Vasuja from Yogya Capital.
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?
Yes. So we expect it to be in the range of -- see, these are all basically the synthetic gloves, which we are planning and helmet we are planning initially. So we have currently margin in the range of 10% to 15%. So we target that -- so up to 15%, it should be, yes.
And sir with eye protection?
Yes, that would be the new product. So let us see. So again, the overall -- you see that it should be in the similar range, 13%, 15% margin we will target.
Okay, sir. And sir, how much additional manufacturing capacity will you get after Sanand and Ghatakpukur CapEx?
So it should be -- both the units should be giving us around more additional turnover of up to INR 200 crores to INR 225 crores turnover in excess of what we are doing now.
Okay, sir. And sir, can you give a capacity or revenue breakdown from the, let's say you're saying INR 100 crores for the Sanand capacity. What would be the breakup in terms of eye protection, gloves and helmets?
Mostly, it would be hand protection. Helmet would be on the -- maybe up to 10% to 20% of turnover will come from helmet, but mostly it would be hand protection.
Okay. And sir, last question, what would be the utilization ramp-up schedule for Sanand facility?
We are just starting. So we target to achieve the top line -- the target turnover within the next 2, 3 years. So this year, we target a turnover in the range of INR 5 crores to INR 10 crores and up to INR 5 crores maybe. Then let us see how it develops.
[Operator Instructions] As we have no further questions, I would like to now hand it over to the management for closing comments.
Thank you all for participating in the earnings conference call. I hope we were able to answer your questions satisfactorily and at the same time, offer insights into our business. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations Managers at Valorem Advisors. Thank you. Stay safe and stay healthy.
Thank you. On behalf of PhillipCapital India Private Limited, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.